Relevant and even prescient commentary on news, politics and the economy.

President Trump Must Release His Tax Returns

President Trump Must Release His Tax Returns

I know, boring boring boring old news. But now that he has had his hind end kicked by the recent off-off election results, it is time to get real. He has managed to cover up massive amounts of crimes and violations of ethical norms because he has violated so many. Nobody could keep track of them. But now that he has his behind kicked, and Mueller is zeroing in on him, it is time for him to deal with his most important violations and ‘fess up.

So, in my view the biggest violation of them all has been his refusal to release his tax returns. Of all the humongously numerous violations of ethical norms and actual laws, this refusal on his part increasingly becomes clear to be the most important. Of all the mistakes the American people made in electing this worst president ever elected, this is the worst mistake of all, electing a person who refused to release their tax returns.

There are two clear reasons why he must release his tax returns, and I call on all media to begin demanding relentlessly and repeatedly, every day, even though the media views this as a dead and boring issue, that President Trump release his tax returns. The way I see it, every day that passes that he does not release his tax returns is another day piling up that he should not only be removed oa as president, but that he should be put in jail for a very long time.

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An Important Centennial

An Important Centennial

Today marks the centennial of the Great October Socialist Revolution, known when I was young in the US as the Russian Revolution, and also perhaps more accurately described as the Bolshevik Coup. On March 8, 1917, people rose up from the streets behind women marching on International Womens’ Day, leading troops to refuse to fire on them, a real revolution, which led to the overthrow of Tsar Nichoalas II and the putting in place of a democratic government eventually led by Alexander Kerensky.  He failed to end the war with Germany, and riding on a peace and “land to the peasants” platform, Lenin led the Bolshevik coup on November 7 that overthrew Kerensky’s regime. Peace was made with Germany, and peasants did take land from aristocrats, even if more than a decade later they would have to give it up during the Stalin agricultural collectivization.  Arguably this taking of land by peasants did constitute a revolution, and certainly a different regime was put in place, the first officially inspired by the socialist ideas of Karl Marx.  Many would say that it would fail to follow ideals laid forth in Marx’s writings, especially the horrors under Stalin, although others would argue that the bad things that followed were inherent or implied in his writings, if not explicitly there.

In any case, given the many Marxist-Leninist revolutions that followed, with the world’s largest nation currently ruled by a party that adheres doctrinally to this view, which has recently been reinforced officially by a party congress, the second Russian Revolution in November is of world historical significance, for better or worse.  It is curious that in Russia itself it is currently viewed with mixed feelings.  There is a special this week on TV on Lenin, which is apparently showing his life with warts and all.  There is also one on Trotsky as well, amazingly enough, although he played a far more important role in the revolution than did his great rival for power, Stalin.

Views of these figures now in Russia are not what one might have expected.  Indeed, both Lenin and Trotsky are viewed as mixed figures, partly good, partly bad.  The figure who is undergoing full-blown rehabilitation with the support of Vladimir Putin is in fact Stalin, now viewed favorably by 50% of the population. Bookstores are full of books praising him to the skies.  Of course it is not his role as a great communist or socialist leader that is emphasized.  It is his role as the leader of the nation in the victorious Great Patriotic War against Germany ruled by Adolf Hitler.

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Saudi Crown Prince Consolidates Power With Anti-Corruption Arrests

Saudi Crown Prince Consolidates Power With Anti-Corruption Arrests

Everybody is against corruption, so it has become the new cool way to concentrate power in dictatorial societies to engage in an anti-corruption drive, as Putin and Xi Jinping have done.  Actually corrupt people may well be arrested, but somehow included in the set of those arrested are rivals of the leader who are conveniently disposed of.

So we now see it in Saudi Arabia, where Crown Prince Muhammed bin Salman has been leading a special anti-corruption committee approved of by the Saudi ulama, and now it has arrested 11 princes accused of corruption.   As in other countries, many of them, possibly all of them are guilty, but included among them are some rivals of Muhammed’s for power, and, indeed the full set of names has not been released.

The most important in terms of being a rival is the now former commander of the SANG, the Saudi Arabian National Guard, which was long commanded by Prince Meti bin Abdullah, son of the long time former King Abdullah.  Before Meti commanded SANG, Abdullah did so for decades and had the HQ of SANG on his own palace grounds within a wall.  SANG has long been the rival military in Saudi Arabia to the regular military under the Defense Department, which has been under the control of the crown prince since his father became king, succeeding Abdullah.  SANG has a base among the tribes, and it was SANG that finally defeated the Muslim Brotherhood (Ikhwan) uprising in 1979 that had led them to seizing control of the Grand Mosque in Mecca.  Abdullah was SANG commander at that time, and he had the reputation of having excellent relations with tribal leaders.  His sone was clearly a threat and rival to the crown prince, and now he is out.  The commander of the Saudi navy has also been replaced, although not clear if he has been arrested.

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The Virginia Governor’s Race

The Virginia Governor’s Race

 I rarely talk directly about specific political races, but I live in Virginia where in less than a week there will be the most closely watched election in the nation for governor.  It is very close, and the Republican, Ed Gillespie, might well win, even though his Dem opponent, Ralph Northam, leads by narrow margins in most polls.  Sound familiar?  Sure, but why am I going on about this?

It is because even the pro-Dem national media seems to have bought into inaccurate characterizations of Northam’s positions.  Most specifically, Chris Matthews on Hardball just had a guest on and they both were repeating the false claim that Northam supports taking down all Confederate monuments in the state, although accurately noting that this is a tough issue in the Commonwealth that Gillespie has been using to effect against Northam.  If Gillespie wins, this issue will be part of it.

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Barzani Out, Puigdemont In Belgium

Barzani Out, Puigdemont In Belgium

It seems that the two recent independence referenda have largely collapsed.  One was in Iraqi Kurdistan, with President Massound Barzani having it done with the eye that it would give him leverage in negotiations with the Iraqi central government.  That did not work, with the referendum triggering the central government to move to seize control of the oil producing areas the Kurds had controlled and quite a bit of other territory they had controlled, especially Kirkuk.  Barzani had not stepped down two years ago when he was supposed to.  Two days ago he announced he will step down from his position.  Looks like this is basically over.

Then we have Puigdemont, the prime minister of Catalunya/Catalonia.  He also put in place a probably badly timed and unwise independence referendum.  This was followed up on the weekend by the Catalan parliament voting for independence, even though many polls suggest a majority do not support independence (although a solid majority voted for the independence referendum, with a a low turnout).  Now the central government has cancelled the Catalan government and imposed direct central rule.  Puigdemont has fled to the Flemish part of Belgium where he has been given asylum.  So, it looks like this independence referendum has also ended up as a disaster.

I note that in my earlier posts I expressed more sympathy with the Kurdish declaration, even as it looked like very bad timing for it.  I had and have much less sympathy with the Catalan one given the level of autonomy they have over so many areas, with the main effect being a selfish economic result that would have them no longer sending money to poorer parts of Spain. The amount of self-righteousness on their part in regard to this I find pretty indefensible. The Kurds have suffered far more at the hands of those who rule them than have the Catalans, even accounting for the old Franco period when indeed the Catalans did suffer vicious repression, although I do not support violence on the part of the Spanish central government to impose their direct control.

Barkley Rosser

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Everything Is Going Great, So Let’s Change It

Everything Is Going Great, So Let’s Change It

Well, the actual headline on the front page of the Washington Post below the fold today reads, “Economy shows strong growth, could provide GOP momentum.”  The strong growth is the 3.0% annual growth rate of GDP in the third quarter (supported by a strong stock market), with the momentum not being the obvious point that this might lead to general popular electoral support in the future for the GOP, but more specifically that this somehow might aid the GOP in Congress to change the current apparently successful fiscal and monetary policies inherited from Barack Obama.  Everything is going great, so let’s change it.

On fiscal policy, of course, this refers to the still not clearly formulated tax change (“reform” in the words of the GOP).  As we know cutting taxes for the rich is the one thing that seems to unite the party, so gosh darn it, they will probably do it, even if it takes a lot of effort.  As expected all those loud fiscal hawks from the Obama period are now fine with adding at least $1.5 trillion to the national debt, which will probably end up being more as some of the revenue increasing parts of the possible plan look like they may not pass.  After all, while Trump says the middle class will gain, indeed everybody, is going to get the hugest tax cut ever and it will pay for itself somehow.  But estimates have 80% of the cuts going to the top 1 or 2%, given the emphasis on cutting corporate taxes.  Anyway, here we have a pretty good growth performance that supposedly justifies a move to change the tax policy and system that has existed while this good performance happened.  Frankly, I do not know what the effect on growth will be as a result of whatever they pass, as they will pass something, although I doubt it will be all that big one way or the other on aggregate growth.

The more amusing part of this is the argument apparently been given by Treasury Secretary Mnuchin and others in the last few days that is decidedly ironic.  It is that the stock market increase we have seen has at least partly been fueled by the expectation of a nice big corporate tax cut that will boost profits, along with all the deregulation that has been going on .  So, the argument goes, if the tax plan (or some tax plan, heck, anything) is not passed, well folks, that nice stock market increase might be threatened.  No tax plan passed, well, maybe a sharp decline of the stock market!  I find this hilarious, although it might be true.  The stock market has begun to look a bit elevated, near the boundary of getting into bubble territory by some measures, so, you had better watch out!

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Marxism-Leninism In China Update

Marxism-Leninism In China Update

The once-every five years Chinese Communist Party conference is now over.  It appears that Xi Jinping has not identified an heir to himself as his two predecessors did at the time of this equivalent meeting during their presidencies.  Furthermore, unlike either of them, Xi has joined Mao and Deng Xiaoping in having his work identified in the Chinese constitution as being an official part of Chinese ideology.  Most observers consider this a sign that even if Xi gives up one or maybe even two of his official positions, he is likely to continue to be the Paramount Leader in practice beyond the next five years.  A key part of his thought is the superior role of the Communist Party and its foundation on Marxist principles, even if a mixed economy is to be followed, “socialism with Chinese characteristics.”  So, the assertion of Marxism-Leninism in China by Xi apparently means a justification for him to remain in power in China for the indefinite future.

The obvious way that Xi could pull off staying in power without changing the constitution would be to hang on to being Party Secretary as well as Chair of the Central Military Commission.  The job that has a two term limit is President, with him just starting his second five year term as that.  In five years he could easily select somebody who  is willing to obey him to replace him as President while he hangs on to the other two positions, which have no term limits to them.  The one rule he will have to break, although apparently it is not in the constitution and merely a recently accepted policy, is the upper age limit of 68.  That is apparently for all positions.  In five years he will be 69, so that would have to go as a rule, at least for him.

Barkley Rosser

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Remembering Black Monday

Remembering Black Monday

The largest single one day decline in percentage terms of the Dow-Jones average (22.6%) happened 30 years ago today, on October 19, 1987.  It was a Monday, hence “Black Monday.”  Although unlike after the second largest such one day decline in percentage terms (12.8%) on October 28, 1929, the US economy did not go into a decline, much less anything remotely resembling the Great Depression.  Indeed, the very next day, after starting to decline further in the morning, the market turned around and starting rising, led by the futures and options markets in Chicago.  Although the market would decline far more between August, 2007 and March, 2009 at the front end of the Great Recession, there was no single day during all that when the market fell nearly as much as on either of these two days listed above.

Robert Shiller has written an interesting column in the New York Times about Black Monday (linked to by Mark Thoma on Economists View).  He did a survey after it happened of participants and found that they were driven basically by pure panic.  The Brady Commission report said that it was about the trade deficit and a possible tax change, and also program trading via portfiolio insurance.  Yes, Shiller says that latter was some of it, but in fact he determined that fear of it was probably more important than the actual program trading.  There was very little going on with fundamentals, but vague rumors and reports set off a huge crash, the biggest one day one ever, even if in the end it did not really amount to much.  But Shiller says it can happen again (and, if he were alive, the late Hyman P. Minsky would probably agree).

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Marxism-Leninism And The Chinese Communist Party Congress

Marxism-Leninism And The Chinese Communist Party Congress

At this moment I am watching live on Bloomberg News the opening speech by President/Party General Secretary/Chairman of the Military Commission Xi Jinping of the once-every-five-years Chinese Communist Party Congress.  This is far more important than what one finds on other TV networks whether pro-Trump right now (how great his tax plan/tromping on immigrants and football players are) or anti-Trump (what is the latest gossip from the Mueller investigation and will Republicans in the Senate stand up to Trump).  A major theme seems to be a reassertion of party power and discipline, with a reinvigoration of the State-Owned Enterprises, with Communist Party cells to operate in nominally private enterprises, socialism with Chinese characteristics, with a reaffirmation of the foundation based on Marxism-Leninism.  Yes, he used that term.

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Iraq Conquers Kirkuk

Iraq Conquers Kirkuk

The central Iraqi government based in Baghdad has conquered oil-rich and ethnically-mixed Kirkuk from its recent Kurdish rulers, who hoped to continue ruling it as part of their recently declared independent state of (Iraqi) Kurdistan, clearly consisting of three provinces, but which they also wanted to include the fourth one of Kirkuk province. This now appears not to be going to happen.

Juan Cole has made an excellent discussion of this, noting 7 reasons why this is not about Iran as many commentators in the US claim. I shall not repeat most of his arguments here but suggest people look at the link. I shall note the crucial point that what looked like it was going to be a major military conflict over Kirkuk thankfully turned out not to be is that the Kurdish Pesh Merga, who were ruling Kirkuk, actually are tied to the main opposition party in Kurdistan, the Patriotic Union Party (PUK) led by the Talabani family,whose old patriarch, once a president of all of Iraq, has just died. The Pesh Merga has simply withdrawn peacefully from Kirkuk, handing a major embarrassment to Massoud Barzani, the current president of newly independent (maybe) Kurdistan, who leads the center right Democratic Party of Kurdistan (DPK). This suggests that while the opposition nominally supported Barzani’s independence referendum, they lack enthusiasm, and Barzani may end up in trouble as things are not going well with this. As I noted in a previous post, Barzani is in a tight position because he canceled an election in 2015, and Kurdistan’s economy has been weak due to low oil prices.

I also add that apparently the fall of Kirkuk temporarily shuts down 350,000 barrels of oil per day production, which will add to the ongoing increase in world oil prices.

Barkley Rosser

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