The View from Right Field

Break

As I said at the end of the last post, I will be on break until early August.  In the meantime, Go Cubs!

The Stock Market: Real or Addicted? – A Follow Up

This is a follow up on last Friday’s post, “Is the Stock Market for Real or Just Addicted to Low Interest Rates and Easy Money?”  In writing it, I realized I have been saying the same thing for years.  In looking back at my past posts on the economy, I found I even used the “Christiane F.” analogy, about the problems the stock market would have trying to kick its addiction to low interest rates, before. 

Which gets to the first point of this post: Maybe I’m wrong about the economy.  Maybe things have changed.  Maybe low interest rates are appropriate, and maybe the stock market is for real.  You would have lost a lot of money betting against the stock market over the last ten years.

President Trump’s Foreign Policy Claims Are Often Bizarre, But It’s Not the First Time We’ve Seen That

The foreign policy follies (and worse) of Donald Trump are so bad, it sometimes makes us forget bizarre positions that prior administrations have taken.  For example, in 2011, when the United States was involved in the bombing of Libya (because, inter alia, Moammar Gaddafi was threatening to massacre Libyan civilians), the question of the War Powers Act arose.  The War Powers Act was passed over President Nixon’s veto in 1973.  It provided that presidents are to get Congress’s approval or authorization within 60 days¹ after they send troops into hostilities.

The Obama administration, however, did not want to seek Congressional approval of our operations in Libya.  But it also did not want to say, as other presidents have said, that the War Powers Act was an unconstitutional limit on the President’s power.² So, the State Department legal advisor, a politically appointed position, came up with the theory that the War Powers Act did not apply to the bombing of Libya because we were not engaged in “hostilities” since the other side could not effectively shoot back at us.  (See here and here,)

Is the Stock Market for Real or Just Addicted to Low Interest Rates and Easy Money?

Federal Reserve chairman Jerome Powell indicated in Congressional hearings on Wednesday that the Fed could be cutting its benchmark interest rate later this month – and the stock market promptly went up.  So, a “Powell Put”?  (See here.) 

In addition to a possible U.S. rate cut, interest rates in Europe remains at historic lows.  The European Central Bank’s rate for overnight deposits by banks is -0.4% (where it has been for over three years), which means you would get back less than you put in.  In June, five-year bonds issued by mortgage banks in Germany were priced at -0.2%, which means you would have to pay the bank in order to lend them money.¹  And in Denmark some banks are even offering mortgages at negative rates,¹ which means … well, you get the idea.

The 2019 Political World - In Two Cartoons

The one on the left is from Tuesday's Financial Times.  The one on the right is from today's Wall Street Journal.

Climate Change: A Bonus Question

This is to follow up on Tuesday’s post, “Climate Change Is a Two-Part Question.”  In June, The Economist wrote about “Green New Democrats” and in particular about Joe Biden’s and Elizabeth Warren’s plans for climate change.  While neither of them has endorsed the “Green New Deal,” they both have big dollar/big concept environmental plans. 

After reading the article, however, my question is this: How can you seriously claim to have a plan for climate change and not address a carbon tax or some kind of a plan for carbon pricing?  I know that cap-and-trade couldn’t pass the Democratic Congress of 2009-10, that the Liberal/National Coalition (i.e., center right) in Australia won re-election twice after repealing Australia’s carbon tax (here and here), and that the "yellow vests" in France were protesting a gasoline tax increase that was part of a climate change program. 

Climate Change Is a Two-Part Question

The Democratic debates, the European heat wave (not to mention the 90 degrees in Anchorage), et al, are getting people to talk even more about climate change, assuming that is possible.  Many of the Democratic presidential candidates support the “Green New Deal.”  Even those that don’t, have their own plans for dealing with climate change (and getting votes from those for whom this is the number one issue). 

The thing to remember about climate change, however, is that it is a two-part question.  Just because you’re right about mankind affecting the climate through increased CO₂ emissions, etc., doesn’t mean you are right about what the solution is.  The second question is not whether we need to reduce emissions.  The second question is how we reduce emissions – and how much we need to reduce them.  Do we need to reduce emissions to zero or can we just reduce annual emissions to 25% of current levels?  Or do we need to get them to below zero, because we need to reduce the amount of CO₂ in the atmosphere?

Here’s Why Self-Driving Cars May Be a Long Way Off

A column in Wednesday’s Financial Times by Brooke Masters noted:

“Consolidation is sweeping through the self-driving cars sector like the last dance at a high school disco – everyone seems to be grabbing a partner or two for fear of being left out.”¹

Car companies are joining with each other and/or with technology companies in a race to get to the size necessary to compete in the self-driving race.  But I wonder how soon self-driving cars are really going to happen for one reason: lawsuits.

Does President Trump’s Hard Line Go Away in Person?

An article in The Washington Post this morning, with the headline “Trump’s hard line approach appears to soften in meetings with world leaders,” starts out:

“President Trump entered his meeting with President Xi Jinping over the weekend promising to take a tough approach on trade negotiations and pressure his Chinese counterpart into a sweeping deal.

But the meeting did not produce an agreement – and Trump’s stance seemed to only soften as he announced he was relaxing limits on Chinese telecommunications giant Huawei and delaying new tariffs on Chinese goods in hopes of restarting trade talks with Beijing.”

Helping People Takes More Than Just Raising Taxes and Spending Money

Taxes are going up in Illinois tomorrow.  The gas tax is going up 18 cents a gallon, and there are probably other taxes going up, too.  Also, there will eventually be new taxes on things like marijuana and sports gambling.¹  I understand why taxes have to go up.  Illinois has spent more than it has raised in taxes for so long that the time has come to start paying up.  I am not sure, however, that enough of the tax increases is going toward the unpaid bills and funding the pension promises the legislators have been making for years.  Actually, I am sure.  Enough isn’t going for these things.  But that is not what I want to talk (spelled “r-a-n-t”) about today.  I want to talk about how the Illinois spends its money.

One of the problems with the politicians we have in Illinois is they seem to think that, once they have passed the programs and appropriated the money, their job is done.  They think that all they have to do is spend money and problems will be solved.  Which is just so far from being true.

Foreign Policy in 2020: We Need a President Who Has Thought These Things Through.

While the world looks at the possibility/risk of war between the United States and Iran (understandably), let me suggest that I hope we have people thinking about Russia, China, and our future relations with them.  I doubt very much that President Trump is doing this or that he has asked anybody to do this.  However, perhaps people such as Secretary of State Mike Pompeo and/or National Security Adviser John Bolton are having it done at the staff level.

As for the Democratic candidates for President, maybe some of them are thinking about this, though it seems most of them are focusing on how to stand out among the twenty-some candidates running.  And in-depth foreign policy analysis isn’t the kind of issue that is going to separate you from the crowd.  (I don’t know how you tie foreign policy to “free” stuff, which seems to be what many of the Democrats are talking about.)  Still, hopefully some of them are actually thinking about this some – because it is important. 

@BernieSanders Wants to Forgive All Student Debt. Buying Votes from the Left.

(Here.) Which means that anybody who scrimped and saved to get through college with as little debt as possible was silly.  And anybody who didn’t go to the most expensive school and take out the most loans possible was foolish.

Also, it looks like the price of a vote has gone up from the time when a Chicago precinct captain could buy a vote for a new garbage can.  But I guess that is inflation for you.

Finally, more subsidies for the upper middle class and above.  I'm beginning to wonder how much the Democrats care about the poor anymore.

Making Inequality Worse By Lowering Interest Rates?

While the Federal Reserve did not lower interest rates on Wednesday, they did indicate they might do so later this year.  Which caused interest rates on bonds to go down, and stock prices to go up.  Once again, making those who are already well off (and have money in the stock market) better off.  And perhaps making inequality an even bigger problem?

@Cubs Baseball: Records and Other Things Unusual

Instead of posting about politics, etc., today, I thought I would do some baseball, about some of the more interesting/unusual games I have been to over the {many] years.

People have asked me what the longest game was (in terms of innings) that I have ever been to.  While I am not sure, I think it is 16 innings, which worked out okay on the Cubs scorecard at the time because they had room for eleven innings, plus columns for AB, R, H, RBI, and E, which makes room for 16.

Is “Tariff Man” Messing Up the Economy?

At one point in his dealings with China (which continue), President Trump called himself “Tariff Man” – apparently because he likes tariffs and thinks they are good things to impose and/or to threaten other countries with.  Which brings me to the tariffs that President Trump threatened to impose on Mexican imports into the United States if Mexico didn’t do more to stop people from entering the U. S. illegally. 

I have commented previously on President Trump’s arguably rogue or unilateralist approach to foreign policy.  I am not a fan of it.¹  I don’t think it’s good in the long run – or the short run – but I also don’t think it does any good for me to complain about it again and again.  And it gets tiring.  Therefore, this post.

But I think President Trump’s threat to impose tariffs on imports from Mexico in this case causes a different kind of problem that I haven’t commented on before, at least with respect to President Trump, so I wanted to do so. 

Fine-Tuning Probably Works Better on Pianos Than the Economy

The Federal Reserve has shifted course recently.  Previously, it indicated that interest rates would stay the same for a while (which was itself a change from indications last year that rates would going up this year).  Now, however, the Fed is signaling that, if the economy weakens because of “trade wars,” it might cut interest rates.

Some are calling this shift the “Powell put,” in memory of the “Greenspan put” in the 1990s/early 2000s, when then-Federal Reserve chairman Alan Greenspan cut interest rates, and kept them low, to try to keep the economy growing.  While Alan Greenspan’s low rates may have worked in the short run, some see those low rates as one of the factors causing the 2008 financial crisis.

Republican Versus Trumpian

Back in the middle of May, Janan Ganesh, a columnist for the Financial Times, said, per the headline of his column, “Trump needs more Trumpians in the White House.”  According to Mr. Ganesh:

“Between them, [national security advisor John] Bolton and [acting White House chief of staff Mick] Mulvaney stand for the kind of Republicanism that Mr Trump was meant to have slain in 2016. …

Mike Pompeo could be the secretary of state in a Republican government of yesteryear.  Treasury secretary Steven Munchin could have served any recent Grand Old Party president.  It is much harder to name members of this administration who are truly in President Trump’s distinct image.

Is an Attempt to Impeach President Trump Coming – And Who Will It Help?

I never thought I would sympathize with House Speaker Nancy Pelosi, and I still don’t.  But if ever I was going to sympathize with her, we are getting close to when it would happen.  Two people who might sympathize with her are a couple of her predecessors, John Boehner and Paul Ryan.  Messrs. Boehner and Ryan understand the problems that Ms. Pelosi is having with the impeachment wing of her party because of the problems they had with the right-wing crazies in their caucuses.  The members of the “Freedom Caucus” and others among the House Republicans seemed to have this theory that somehow it was better to hold out for 100%, and wind up with nothing, than to agree to accept 70%.

The impeachment wing of the Democratic caucus is causing Speaker Pelosi many of the same problems – and maybe even more because it appears to be bigger than the right-wing crazy group in the House Republicans.¹ 

Parents Need More Than Just a Few Months After the Baby Is Born

Pilita Clark wrote in Monday’s Financial Times about the difficulty some men have in taking parental leave when their child is born.¹ In the UK, parents can share up to 50 weeks of leave, most of it paid.  But, apparently, in many companies, while women can take leave without a problem, many men feel the company’s culture doesn’t let them do so.  Ms. Clark notes that some managers are encouraging men to take their share of the leave, too.²

But while parental leave when a child is born is important, I think there is more to it than just that.  Here is a letter I wrote to the FT with my thoughts:

“Pilita Clark talks about the need for men to take more leave when a baby is born.  Back in the dark ages of 1984, our daughter was born on Sunday, we came home from the hospital on Monday, and I went back to work on Wednesday.  Obviously, that would be viewed as unacceptable today.  But the key to the jobs I had was not the number of weeks or months I could take off when our daughter was born (and our son 20 months later).  Rather, it was the time I was able to take over the next 18 years.

President Trump Is So Bad Anything Is a Reason to Get Rid of Him – Or At Least Some People Think So

Democrats are upset that Attorney General William Barr has authorized an investigation into whether the law enforcement and intelligence communities had proper basis for investigating the Trump campaign during the 2016 presidential campaign.  The main point they seem to make is that Donald Trump is so bad that, of course, there were proper grounds.  It’s sort of like the Robert Mueller investigation.  When it started out, the Democrats, et al, “knew” Mr. Mueller would find evidence that then-candidate Trump, or at least the Trump campaign, colluded with the Russians – because, after all, Donald Trump is bad, so how else could he have won.  When Mr. Mueller didn’t find evidence of collusion, they pretty much decided that Russian interference was the same thing as collusion in terms of justification for getting rid of President Trump.¹ 

They are also upset that Attorney General Barr has been given authority to declassify information in connection with this investigation.  Because they say he will do it, without regard to national security, in order to help President Trump.  Of course, many of these same people want to breach laws and ignore privacy concerns with respect to the redactions in the Mueller report (also here), so consistency doesn’t really seem to be a real issue here – other than “President Trump is bad” and nothing else matters.