Raid on Trump’s home

Commentators on Fox News were making all kinds of claims of how outrageous this action is, while other commentators on other cable stations were stressing that Trump often acts in defiance of the law, as if he should be given special privileges.

The Department of Justice does not comment on on-going investigations. Neither does the FBI, which would normally sign off on the search warrant as a necessity for their investigation. If it an unreasonable search, the law is on Trump side. Nothing gathered in an illegal search can used in any court case.

The former president’s protection against unreasonable searches comes from the Fourth Amendment. Prosecutors must convince a judge that the search warrant is justified based on current information. The fact that Trump’s home has been searched does not mean he has violated any law. The AG may find there is insufficient evidence to hold Donald Trump personally responsible for the removal of documents.

The Attorney General does not owe Congress an explanation as to why Trump’s home was searched. I do not believe the AG should testify in front of Congress in either an open hearing or closed session. Important information on the investigation will leak out. The Justice Department should move as quickly as possible to either bring charges or close out the investigation.

Per Bloomberg news: “All of a president’s official papers, no matter how trivial, are considered public property, not his alone, according to the Presidential Records Act of 1978. When the president leaves office, those papers go to the National Archives and later as part of a presidential library.”

Also, the article goes on to state: “Theft or destruction of federal records is a felony punishable by up to three years in prison — and disqualification from federal office. But it’s unlikely that the law applies to the office of president, because those qualifications are set out in the Constitution.”

I also have great trust in FBI Director Christopher Wray, a Trump appointee, and AG Merrick Garland, in following all the rules in obtaining and executing the warrant.

The independence of the Department of Justice and FBI is critical. They did not inform the White House, and that is exactly correct.

Stay tuned,

Dave

What’s wrong with this recession?

I know this is not a particularly exciting topic. If I had done a piece on International Beer Day, which as everyone knows was August 5, then perhaps there would be a lot more interest. And yes, I’m sure that as I write this blog, there are still some people celebrating. International hangover day is January 1.

Can one word have more than one definition? I caught a bit of Sean Hannity show on Fox News, and it seemed he really had difficulty with this idea. His favorite definition is two quarters of negative GDP growth. And, so by this definition, we are in one. He really made a big deal that the Democrats were hiding something big. They weren’t and he is wrong.

There is a second definition, which is also real simple. The National Bureau of Economic Research (NBER) panel of 8 economists makes a formal declaration that the country is in one, using all the relevant data. This hasn’t been done yet. They meet in secret. Economic data always lags behind the actual events, so economists at NBER back date the onset or end of recessions.

There’s No US Recession Until an Obscure Panel of ‘Eggheads’ Says It Is So

Case in point is the 2020 recession created by Covid-19 health restrictions. With health shut down, economic activity was cratering in February to March 2020. Unemployment of course was soaring, as businesses shut down or restricted the number of people inside their business. However, NBER had to wait for the jobs data. So, on June 8, 2020, they announced a recession had begun back in February. Of course, by then, it was obvious to just about every living sole who worked in the hospitality area, we were in a recession. Then, 17 months later, on July 19, 2021, the NBER declared the recession had ended in April 2020. Yes, you read that right! So, the June 8, 2020 announcement, the NBER was declaring we were in a recession, when it had already past. Don’t believe me- read the following links:

It’s official: The Covid recession lasted just two months, the shortest in U.S. history

Ok. The nice way to avoid the topic is to admit that economic contraction is likely, then change the topic quickly to something everyone can agree on, like why International Hangover day is not on August 6, immediately following International Beer day.

The second quarter GDP decline was only 0.9%, as reported on July 28, 2022. The second quarter is from April to June 2022. So, it is likely economists are looking at other data, including unemployment. If we are in a recession, then unemployment should be going up. Latest numbers show the unemployment rate is slightly lower.

US Job Growth Surges, Tempering Recession Worry and Pressing Fed

Sean Hannity is a Fox News commentator, who enjoys bashing Democrats. Incumbent presidents rarely get re-elected if there has been a recession within 2 years of their re-election. Donald Trump had the misfortune to be running for re-election in 2020, during the Covid recession.

See link: All the U.S. Presidents Who Won Re-Elections During a Recession

See link: U.S. recession ended in April 2020, making it shortest on record

So Hannity’s rant was pure politics.
But, there are real concerns. Inflation is real, and with high gas prices, consumers may spend less. So, a contraction in the economy, brings down inflation. But, it should cause unemployment to increase. So be careful what you wish for. Do you want gas prices back to $3.50/gallon or job security?

Stay tuned,

Dave

The Build Back Better Plan

Biden’s “Build back better” package is very close to passing. Senator Joe Manchin, Senator from West Virginia, has been in negotiations with Senator Chuck Schumer, to find a way to pass this bill. If it passes, it may have been stripped of very critical elements.

The bill is hated by Republicans. They will immediately point to the enormous cost of the bill. Democrats counter by saying they have closed tax loopholes in the bill so it pays for itself. At least it does as initially proposed.

Link from the White House summarizing the bill. It is a combination of many programs, including extension of child care credits, measures to combat climate change, expand health benefits, reduce prescription drugs costs and expand educational programs beyond high school. I call them the “goodies” and others would call them social benefits.

All eyes are now on Senator Kyrsten Sinema, to see if the bill passes. If Sen. Sinema goes along with the plan, the Senate would be divided 50:50, and VP Kamala Harris could vote to break the tie. The two holdouts are quite different. Senator Joe Manchin is quite vocal on what he doesn’t like in a bill, and has worked with the majority leader to find a compromise. Not so with Senator Sinema. She doesn’t talk to the press.

It appears from the trickle of news, she’s onboard with all the social benefits in the program. She is from Arizona, so unlike Joe Manchin, there is no climate change issues. (Manchin is from West Virginia, known for its coal production). It’s the self funding part of the bill. The claim of Republicans is that it would be absurd to make a massive increase in government spending at a time when the country is on the brink of recession. I admit, they have a point.

The apparent objections from Kyrsten Sinema, are the minimum tax rate of 15% for corporations and the carried forward interest provision. Many corporations have sufficient write-offs so they pay no federal tax.

See link: Sinema Seeks to Keep Private Equity Break, Curb Corporate Tax

So, as the Bloomberg article suggests, if the Democrats satisfy Sinema and reduce the applicability of the minimum tax rate, they lose Manchin. They also will be immediately shown as hypocrites, because they claimed the package was self funding.

The bill will repeal Trump’s personal tax cuts in 2017, the so-called “welfare for the rich,” where rich is defined as those with income over $400,000. So far, leaked reports are that Sinema objections are on the corporate tax benefits (or loopholes), which is still a big piece of the self-funding claim.

I don’t know if we have a “humpty-dumpty” moment, where through the compromises needed to get Manchin and Sinema onboard, we lose the vital elements of the package, one of which is the increase in renewable energy. Trump put us behind for four years, with climate change deniers and fossil fuel advocates. I hoped Biden could reverse this, and bring internation cooperation together again, as Obama was trying hard to do.

I guess the real solution is to elect a few more Democrat senators, so two senators can’t change the bill, so it does not provide what it should (Manchin’s cuts) or is not funded properly (Sinema’s cuts). The Republicans in the end, may celebrate, with a bill that does not deliver the goods, particularly in reduction of fossil fuel consumption and is not self funding. A win for oil companies and corporate America.

Global warming is here. California wildfires continue to grow. Yes, Washburn which threatened Yosemite is under control, but the McKinney fire, right on the California/Oregon border is only 10% contained, and has destroyed 57,000 acres. Horrible injuries and loss of lives with homes and wilderness destroyed.

We can do better than this.

Stay tuned,

Dave

Humpty dumpty reference:

Something beyond repair. from a children’s rhyme: Humpty Dumpty sat on a wall, Humpty Dumpty had a great fall, All the king’s horses, And all the king’s men, Couldn’t put Humpty Dumpty together again.