Trevor and I worked together on the supply of antennae for keyless go automobiles including Chrysler, Mercedes, BMW, Skoda, etc. I had met him while working in Germany as the Purchasing Manager for North America. He was representing a German/Czech company.

I spent time traveling around Germany, Switzerland, and the Czech Republic. Partook of Czech Budweiser beer which is many steps up from the American version. We have been exchanging words on the situations and conditions in England, Europe, and the US. It sounds as bad as the US; although, I would like to think we are far worse than what Europe is experiencing. This exchange was started with a short comment I made on Facebook:

A few racist remarks by the Pres and suddenly the imprisonment of immigrants seeking asylum from violence in their homelands is forgotten along with the poor conditions under which they are being held.

The squad of four is tough enough to take the abuse. They have heard worse. We should be angry at Republicans and Trump’s purposeful comments in an attempt to deflect our attention from the crisis on the southern border and his continued abuse of people.

Bill,

We live in scary times, some comments by your President and our possible new Prime Minister seem to echo the 1930’s in Europe!

Trevor,

My English associate, I am sure you and your country men and women will rid yourselves of Boris as soon as you can do so. For us, it is a bit more difficult as we have actors of democracy placing party and politics above country and the general welfare of this country. We do not make much of a safe or dependable ally in the world today either.

Bill,

I sincerely hope so, I see too many parallels with the rise of Hitler in our current European political environment, calling for sovereignty and blaming immigrants for the ills of a nation are not the way forward. But this kind of rhetoric appeals to the less thoughtful amongst us. I listen to people telling us that the UK must leave the European Community because of their control over us, but 95% of the legislation put before the European Parliament during the last 5 years was voted through with very close to total support of the UK MEP’s. I am watching the most divisive split of the UK driven by the media and a few MP’s who appear to be stupid. It is just unbelievable, you could not make it up. Then we have Trump who appears capable of gross stupidity, and has crowds cheering him and chanting for democratically elected senators to be sent home! It is all very scary!

I trust you are well!

Trevor,

I have been reading and watching. This is highly unusual for Europe in this age. Hungary appears to be off the rails also with Orbán as is Poland too. Radicals have also reappeared in Germany, And the US has its blood and soil marchers who are further radicalized by the stupid remarks of our President. Politicians of his party are condoning his racist hatred which empowers and mobilizes others to do stupid things. It has gone beyond verbalization.

Yes, yes, blame the poor and the weak, the different culture and color, who come to America having other languages and looking for safe haven amongst us. Instead they are portrayed as a class level lower than the poorest of the white American, taking advantage of our economy. This has kept the population from concentrating on the disproportionate, and growing, distribution of wealth and income in the US. For the lower white class, an allowed luxury, a place in the hierarchy and a sure form of self esteem insurance.

The political economics of it have certainly led to bad and violent reactions towards immigrants. We are not a small country. At the most only 10% of our land mass is occupied. New people keeps our median age lower, which is good for labor, and most have assimilated into society over the generations.

I am hoping with “a little patience, we shall see the reign of witches pass over, their spells dissolve, and the people, recovering their true sight, restore their government to its true principles (Jefferson).”

This bastard occupying our presidency must go.

Perhaps a couple of more Budweisers in Prachatice to dull our thought on the current events????

Bill,

I wrote this to a Brexiteer friend who I just cannot believe fails to see the reality.

Yes a difficult area as the public are not fully informed, however, there is already far too much anti immigration feeling in this country, it is clear that without immigrants our NHS would not function. The media has a great deal to answer for, during the last 20 plus years they have printed distortions and blatantly biased articles against immigrants, and indeed against the EU.

The rise of the likes of Farage and Trump with their, in my view distorted views of the world, claiming they only want to reclaim their countries for the people is dangerous rhetoric, I thought that with the end of the Second World War we had moved on from demonizing and blaming particular races of people for damaging a country.

Indeed there is the moral dilemma of ensuring that we do not create poverty, but our current crop of politicians has spent and is indeed spending multiple millions of our tax money on foolhardy adventures, HS2, PFI and yes Brexit. These same politicians, whilst cosseted in their parliamentary roles have made costly decision after costly decision without a care for those in genuine need.

Universal Credit is an absolute fiasco, it is causing immense levels of poverty for both indigenous British people and immigrant alike, just look at the rise in food bank use, also consider the absolutely appalling numbers of children living in poverty. The claims of children unable to go to school as they have no shoes are true, just ask my daughter who works for a charity.

I am no socialist or indeed liberal, I believe in freedom for the individual to make the best of their lives, I also believe in the free market. But, and this is a big but, I also believe in helping those in genuine need, the low paid workers who contribute much to society for little reward. For example those earning the UK minimum wage who are trying to feed and house themselves.

So I do not believe in squandering tax £’s on vanity projects, or things like PFI, or as I said earlier Brexit, the bill to date on this alone is in excess of £900 million in the last financial year, with 5,000 civil servants diverted from their real jobs and numerous fat cat consultants from the big four consultancy practices creaming £ millions of Tax £’s. All whilst the self-serving egotistical politicians argue amongst themselves about a deal that needs to be agreed by 27 other countries.

You can tell that I feel very strongly about the situation to which the media has misled us, I am ashamed of my country when I see homeless people on the streets, and when I see the use of food banks increasing on a daily basis, and when I hear that we have staggering numbers of children living in poverty. This is supposed to be the 5th largest economy in the World, but our politicians are squandering our Tax pounds without a care for their country.

Me: I do not believe in mislaying the people I get to know while traveling. We have issues globally and similar concerns by the sane.

June consumption was strong, while production was weak

Well by attacking the group Trump got the press to completely forget about the refugees on the southern border.

You would think that after all this time the media would learn to deal with his misdirection.

Congress has been busily working on a much-needed way to improve Middle Class savings and growth over the span of their employment to boost their retirement.

Dueling bills to restructure IRAs and 401ks appear to be redundant. Better known as the “Setting Every Community Up for Retirement Act” (SECURE Act) H.R.1994 and the Senate has a similar bill, the “Retirement Enhancements and Savings Act” S.792 (RESA). Both bills were passed with bipartisan support.

For the ultra rich? A major outcome of the Trump tax bill were tax breaks for the wealthy and corporations. Besides much of the resulting income increases going to 1% of the household taxpayers, the same 1% were given the ability to shelter large amounts of income in gifts to their heirs. It is a great time to be rich in income and have the ability to shelter it by making gifts of it to your heirs’ tax free!

A little history on why Congress might take this up

From 1979 to 2017, the average annual income for the 1% of the household taxpayers has increased 156%, the top 1 hundredth of 1% income increased 343%, and the average American’s income did not increase at all. In spite of increased education from 1970 when half of Americans 25 years and older had a high school degree compared to today when the proportion of Americans having a college degree tripled, income has been stagnant for much of America. Even with the increased education, as Nick Hanauer in a recent Atlantic on this topic stated, the “Education is Not Enough” or was not enough to build, to build a vibrant middle class. Nick is also reiterating what Tom Hertz said in 2006 in his article; “Understanding Mobility in America.”

“The first aspect is the question of intergenerational mobility, or the degree to which the economic success of children is independent of the economic status of their parents. The second aspect is the short-term question of the amount by which family incomes change from year to year. One very clear conclusion is children from low-income families have only a 1 percent chance of reaching the top 5 percent of the income distribution versus children of the rich who have about a 22 percent chance.”

All the education in the world may not make a bit of difference in upward mobility as Nick and Tom Hertz concluded unless the income and the status is already there. A successful middle class with good income has to be present.

What Congress is doing.

The House passed the SECURE Act with an almost unanimous bipartisan 2nd vote. Prior to the first vote, Republican NC Representative Patrick McHenry made a motion for an affirmative vote (page H4147) stating they stand together against the anti-Semitic BDS movement. How this applies to the average citizen’s IRA is beyond me. It is a tagalong to the SECURE Act with the hope it would pass. It lost with 222 in opposition.

A few things about the House “Setting Every Community Up for Retirement Act (SECURE).

• It lengthens the amount of time a person can contribute to an IRA beyond 70.5 years of age.
• Raised the required minimum distribution (RMD) age to 72 from 70 1/2 years old.
• Increased the Safe Harbor percent from 10 to 15%.
• Allowed long-term, part-time employees to contribute.
• Put in place an small employer tax credit for enrollment.
• Revised how benefits are paid out to a non spousal from 5 to 10 years (page H4234).
• Allowed automatic enrollment.
• Etc.

“The House SECURE Act would eliminate the current rules allowing non-spousal IRA beneficiaries to use (stretch IRA) minimum distributions (RMDs) from an inherited account over their own lifetime (and potentially allow the funds to grow for decades). With the SECURE Act, all funds from an inherited IRA would have to be distributed to non spousal beneficiaries within 10 years of the IRA owner’s death (The rule would apply to inherited funds in a 401(k) account or other defined contribution plan, too.).”

Other than the elimination of the Stretch IRA, these changes were needed and they will improve the amounts accumulated for retirement. As I mentioned earlier, much of America has not incurred the same income increases as the 1% or the 1 tenth of 1% of the household taxpayers. Pre-inflation YOY income growth for non supervisory Labor has been ~3%. Subtract out inflation of 2% and income has grown by 1% for much of America not leaving a lot to put into a 401k. I am waiting for the next shoe to drop of increasing the age of when people can take SS.

The Senate RESA bill is similar in content except for a provision buried in it taking aim at the Middle Class. The Senate’s RESA Act shortens the time period for non-spousal beneficiary withdrawal who have inherited an IRA with greater than $400,000 (IRA, Roth IRA or 401k). RESA exempts the first $400,000 inherited to a life time of RMD withdrawals and then it forces beneficiaries to cash out over a 5-year period any amount greater than $400,000. It could have tax implications if the amount over $400,000 was large or one’s income tax bracket was high.

As one reader pointed out, many people with 401Ks have less than $400,000 in their accounts when they retire. Then too with little growth in income occurring (mentioned earlier), one can see why people are not saving for retirement and why there is less in their 401ks.

Under today’s Stretch IRA rules, heirs of IRA owners were allowed to extend the taxable distributions of an inherited IRA over their lifetime, hence being called “stretch IRAs.” The proposed Senate bill labeled RESA—allows $400,000 of aggregated IRAs to stretch per beneficiary, but chops the cash-out period down to five years for the balance greater than $400,000.

What are the implications in the Senate bill? As I said it affects non spousal beneficiaries of the heads of families who have accumulated money greater than $400,000 over their lifetime to pass on as inheritance to their families. Non-spousal beneficiaries on inheriting sums of money greater than $400,000 could have a substance portion of the inheritance taxed by Uncle Sam and also end up in a higher tax bracket as a result. Ok, I said it enough times.

Similar would hold true for the House bill which eliminates the stretch IRA, does not have an exemption for 400,000 of inheritance, and forces a beneficiary to use up inheritance funds in 10 years rather than a lifetime or RESA’s 5 years. The proposed Acts do not impact spousal beneficiaries or minor children named as beneficiaries until pf a majority age, children with disabilities, etc.

The forced 5 year annual distribution of these savings and retirement plans by beneficiaries is the primary revenue vehicle (taxes) of RESA. Senate Finance Committee Chairman Chuck Grassley, (R-Iowa), who proposed the bill, said on the Senate floor recently that the RESA bill “is paid for” by this provision (as he takes his agricultural benefits resulting from tariffs).

No worries for the 1 percenters.

Back to the 1-percenters, Trump’s Tax Overhaul law doubles the estate-tax exemption to $22 million a couple and possibly avoiding taxes in dynasty trusts. The new law doubles the amount that can be passed to heirs without worrying about estate and gift taxes, to about $22 million for a married couple (redundant, I know). But the thresholds are in place only until 2025, and the ultra-rich are turning to a key tool — the dynasty trust — to secure the financial futures of their children, grandchildren, great-grandchildren, and beyond.

Assured wealth and income giving descendants a place on the ladder of mobility as being necessary to move upwards on that same ladder by Tom Hertz and Nick Hanaeur.

Run75441 (Bill H)

A Half Century Since Apollo 11 Launched To The Moon

by New Deal democrat

The consumer vs. the producer economy

Prof. Edward Leamer wrote over a decade ago that, in a consumer led recession, first housing turns, then vehicle sales, then other consumer goods.

What do home and vehicle sales tell us now about the economy, vs. corporate profits? This post is up at Seeking Alpha.

As usual, clicking over and reading puts a penny or two in my pocket.

Mark Thoma has a post up on Facebook. Apparently, Trump intends to nominate Dr. Judy Shelton to the Fed. I knew Trump was bat-sh*t crazy and now he has confirmed he is bat-sh*t stupid too (if you did not already know this). It is hard to know which is worse as they come in a daily stream of excesses.

I do not necessarily agree with my former Econ Prof (not Mark) from time to time; but, he does have a deeper knowledge on the topic than I, to which I listen even though the politics of it may differ from mine. I do get the impression he is deeply concerned as is Mark Thoma and disappointed with the present administration and their impact on the nation, its financial status, and the economy.

Dr. Judy: “How can a dozen … people meeting eight times a year decide what the cost of capital should be versus some kind of organically, market supply determined rate? The Fed is not omniscient. They don’t know what the right rate should be. How could anyone?”

Given the alternatives of Congress or the President determining national economic policy, I would stick with the dozen. I can figure out what they are doing. Crazy and/or political people are off the books. I will not get too deep into this as you can read the article “Protecting the Federal Reserve” at Money Banking yourself. Some of Judge Judy (first thought which came to mind), er Dr. Judy’s thoughts:

– “Following the 2007-2009 recession, during the weakest post-WWII recovery on record, with inflation below the Federal Reserve’s stated target, she argued against ‘suppression of interest rates’ (see quote above). By contrast, despite the lowest unemployment rate since the 1960s, in recent weeks she has argued for cutting rates ‘as expeditiously as possible.‘ This apparent willingness to pander to President Trump’s preferences, rather than setting policy to meet the Federal Reserve’s longer-term goals of stable prices and maximum sustainable employment, would diminish the Fed’s independence,”

No comment on my part as either action has a negative reaction given the environment.

– Dr. Judy “argued for replacing the Federal Reserve’s inflation-targeting regime with a gold standard, along with a global fixed-exchange rate regime. In our view, this too would seriously undermine the welfare of nearly all Americans.”

– “Should Dr. Shelton become a member of the Board, and should President Trump win re-election in 2020, there is a chance that she could become the Chair of the Federal Reserve when Chairman Powell’s term ends in 2021. Given her unsuitability for the Board, making her Chair would seriously undermine Fed independence.”

– Dr. Shelton has proposed eliminating the Fed’s key tool (in a world of abundant reserves) for controlling interest rates—the payment of interest on reserves (for a description of the Fed’s current operating regime, see here). She argues that the Fed doesn’t know what the correct interest rate is (see citation). But that ignores the constant learning process—based on observations about the state of the economy and financial conditions—that allows the Fed to make rapid policy corrections to achieve price and economic stability. U.S. central bankers are credibly committed to their legal mandate to promote “maximum employment, stable prices, and moderate long-term interest rates.”

I do not Tweet, I do not read Tweets as they are the lowest form of communication outside of a belch. Trump tweeted his intention to nominate Dr. Judy Shelton to the Board of Governors of the Federal Reserve System.

He can choose Scotland or Germany (although neither want him — I wonder where he is hated more — Scots tend to be lefty and very good at hating). I won’t go back to my own country — Hungary — because I can’t stand Viktor Orban and can’t learn the language (I have never felt as foreign as I did when looking for my grandmother’s old apartment).

But he directed his go back to their own country racist xenophobic attack at, among others, Alexandria Ocasio-Cortez and Ayanna Pressly. Ocasio-Cortez’s family came to New York from Puerto Rico so her country of last detectable origin is … the USA (I know Donald Trump doesn’t accept that as he defines American as anglo white but it is still true).

Ayanna Pressly is African American. Most African Americans are descended from people who were in the USA when it was founded (and long before any ancestors of Donald Trump or Robert Waldmann). Now it is true that some very prominent African Americans aren’t — Barack Obama, Kamala Harris, Colin Powell and Eric Holder come to mind. I will now google (I already checked to be sure that Ocasio-Cortez’s family came from Puerto Rico). OK no hint of any immigration at all in the Pressley family history. Note the USA is not a country of immigrants. Immigration is a voluntary act and most African Americans are descended from people kidnapped and brought here in chains. What is her own country if it isn’t the USA. Even she doesn’t know (and it sure wasn’t organized as a country when her ancestors were kidnapped).

It is clear, as it always has been, that Trump’s nationalism is racism. A woman whose ancestors were in the USA when it was founded should go back to her own country which can’t be America because the genuine US population is white, white, and white.

Sorry for stating the obvious and proving what has been clear for decades.

Also of course, Pelosi said it better

Pelosi stood up for the congresswomen.

“When @realDonaldTrump tells four American Congresswomen to go back to their countries, he reaffirms his plan to ‘Make America Great Again’ has always been about making America white again,” Pelosi tweeted. “Our diversity is our strength and our unity is our power.”

WARNING: another “debt ceiling debacle” is looming, and could cause nearly immediate recession

In 2011, as a result of the impasse, US creditworthiness was downgraded from AAA to AA. Consumer confidence plummeted:

Note the next largest spike downward occurred during the government shutdown at the beginning of this year.