09 August 2020

Congressional Bailout: President Trump Drop Kicks The CCPVirus "Relief" Can Down The Road

In keeping with the prevailing attitudes for 2020, President Trump has extended the bailout philosophy to the United States Congress, effectively taking them off the hook for a potentially disastrous second crash of the economy by letting key provisions of March's CARES Act expire.

After a week of stalled negotiations between the White House and Congressional Democrats over such relief measures as the eviction moratorium (which expired on July 25) and the FPUC stipend of $600 per week (which expired on July 31), President Trump signed a series of Executive Orders to unilaterally address these items.

The new orders will:

  • Eliminate the payroll tax
  • Extend unemployment benefits by $400 per week, down from $600
  • Defer student loan repayments through the end of the year
  • Extend protections against evictions

Democrats Cry "Foul"

In a move that surprised exactly no one, the Democrats reacted with their reflexive high dudgeon over all things Trump. 

“This is not presidential leadership. These orders are not real solutions,” said presumptive Democratic presidential nominee Joe Biden. “They are just another cynical ploy designed to deflect responsibility. Some measures do far more harm than good.”

House Speaker Nancy Pelosi (D-San Francisco) and Senate Minority Leader Charles E. Schumer (D-N.Y.) called on Trump and Republicans to return to the negotiating table to work out a bill.

“We’re disappointed that instead of putting in the work to solve Americans’ problems, the president instead chose to stay on his luxury golf course to announce unworkable, weak and narrow policy announcements to slash the unemployment benefits that millions desperately need and endanger seniors’ Social Security and Medicare,” the Democratic leaders said in a statement. The payroll taxes Trump targeted fund Social Security and Medicare.

In doing so, the Democrats employed a staple of modern political rhetoric: fuzzy math. It is at the very least disingenuous to accuse President Trump of "slashing" unemployment benefits when his Executive Order means that Federal Pandemic Unemployment Compensation recipients will be receiving $400 more next week than they did last week. The unmentioned conceit is that, since the FPUC stipend had already expired, one full week of benefits were paid out without the $600 stipend that had been included in the CARES Act passed earlier in the year.

With as many as 30 million unemployed Americans receiving compensation, the expiration of the stipend amounted to the abrupt withdrawal of $18 billion in consumer spending from the American economy. For those wishing an example of the term "demand shock", such a drop-off in spending is exactly that.

The Democrats are also conveniently ignoring the 2.3 million Americans suddenly at risk of eviction for unpaid rents, once the CARES eviction moratorium expired. President Trump's Executive Orders restored the moratorium for the time being.

While Executive Orders are not at all any form of permanent resolution to these isues, the Democrats claim that Trump has "slashed" benefits is politely described as "horse hockey."

Republicans Discover The Constitution

In a move that will also shock no one, Senate Republicans are fretting over the Constitutionality of the President's Executive Orders.

Sen. Ben Sasse (R-Nebr.), who has largely spoken out against the government spending large sums of money in coronavirus legislation, offered one of the party's more cutting rebukes, calling the theory behind the move "unconstitutional slop."

"The pen-and-phone theory of executive lawmaking is unconstitutional slop," Sasse said in a statement issued by email and obtained by The Hill. "President Obama did not have the power to unilaterally rewrite immigration law with DACA, and President Trump does not have the power to unilaterally rewrite the payroll tax law."

While the good Senator's criticisms are not entirely without merit, they lack a certain moral gravitas given Senate Majority Leader Mitch McConnell's willingness to take a back seat in negotiations with Congressional Democrats, preferring the Trump Administration to do all the heavy lifting.

"Wherever this thing settles between the president of the United States and his team that have to sign it into law, and the Democrat -- not insignificant minority in the Senate and the majority in the House -- is something I'm prepared to support, even if I have some problems with certain parts of it," Republican McConnell told reporters on Capitol Hill.

Nor is it as if President Trump did not telegraph this move well in advance. In the middle of last week, with negotiations at a standstill, Trump said he was looking at doing these measures via Executive Order if the Democrats did not bend and negotiate in good faith, and that was an escalation of his earlier rhetoric about using Executive Orders to address the eviction moratorium, about which he made his position quite clear:

"I could do that if I want, and I want to do that. I don’t want people to be evicted," Trump told reporters about whether he would suspend evictions. A federal moratorium on evictions, which was passed in March’s CARES Act, expired last month.

Regardless of the Constitutionality and legality of the President's Executive Orders, the Republicans had ample time to both a) register their objections to them, and b) craft an actual piece of compromise legislation with the Democrats. They declined to take either option seriously.

A Win, Politically

As alternative-media commentator Mike Cernovich observed after the orders were signed, the move was a clear political win for Donald Trump:

There is little doubt that Trump's political base is energized and encouraged by the executive orders, and there is equally little doubt that Congressional Democrats have few good options available to oppose them. The simple mathematics of the orders is that, regardless of Constitutional strictures, forcing the orders to be rescinded is tantamount to subjecting over 2 million Americans to imminent eviction and snatching $400 per week out of the hands of every unemployed person in the country. Optically, that puts the Democrats in the position of "slashing" benefits.

Moreover, as Cernovich points out, even a rebuke by the courts can be a political win for President Trump. In the wake of Chief Justice John Roberts' undeniably politicized ruling aborting President Trump's efforts to end Barack Obama's unconstitutional DACA program, President Trump's voter base is quite willing to believe the Supreme Court is a nakedly political body, and not a neutral arbiter of the Constitution. A rebuke from the Supreme Court would be received by many Trump supporters as yet another case the Court got completely wrong.

President Trump ran as a populist, and his rhetoric has been steadfastly populist. Regardless of their legality, it should surprise no one that populist measures are going to be well received by his political base.

Economically, A Loss

While the optics on the EOs are undeniably favorable to the President, their economic consequences to the country are unlikely to be entirely benign, and arguably they are counter-productive.

The eviction moratorium, while undoubtedly popular, particularly with lower-income voters, does nothing to address the costs and financial obligations landlords incur even as it shields renters from the consequences of non-payment of rent. In very practical terms, the moratorium is an additional (and significant) regulatory burden on landlords, greatly increasing their costs and turning rental properties into a money-losing proposition:

Trump emphasized that halting evictions and keeping people in their homes has become a priority. A big part of the problem is that letting people remain in the property without paying rent does not stop the bills a landlord must pay from coming due. This rapidly makes being a landlord a money-losing proposition.

The FPUC stipend, on the other hand, is extremely problematic for one simple reason: It is not much of an economic stimulus.

A big part of the problem with the stipend is that, for many Americans, it amounts to an increase in income over their previous wages, and thus for them is a significant disincentive to look for a job.

Under the Pelosi policy, 5 out of 6 unemployed workers are getting paid more NOT to work than to return to the job, according to the Congressional Budget Office. We estimate that most workers who earn $30 or less are financially better off staying off the job -- even as the economy improves. Many workers can get twice as much for staying unemployed. Workers are supposed to lose unemployment benefits if they are offered a job and don't take it. But workers know how to game the system. They can pretend to be sick, and employers are loath to bring a contagious worker back in the office or factory.

Conservative thinkers blame the stipend on the odd economic phenomenon of America having some 5 million unfilled jobs, some 25 million unemployed, and no one is rushing to take one of those 5 million jobs. 

Nor is this a criticism per se of workers. Those that are acting in the way described above are merely rationally attempting to maximize their income. While some might accuse them of gaming the system, the sober reality is they are playing the game by the rules laid out by Congress. That the rules arguably act as a disincentive to employment is a sin of Congress, not of workers.

More crucially, however, is the glaring hole in the entire political strategy of providing "relief": a complete lack of serious efforts to encourage job creation and new business formation. With 71,500 businesses advertising on Yelp! have closed their doors permanently, when 80% of restaurants in San Francisco and 50% of mall businesses are closing or are about to close permanently, there is a clear need for encouragements to start up new businesses to replace the closed ones.

Nor does the stipend confront the reality of current increasing joblessness. During the first week of August continuing jobless claims rose by 1.3 million--almost the same amount as the number of jobs created in all of July (1.8 million or 1.4 million, depending on whose numbers you are prepared to believe). That rise in continuing claims comes on the heels of the previous two weeks' increases in initial jobless claims--indicating that joblessness began rising before the FPUC stipend expired.

Nor has President Trump been able to extend or renew the Payroll Protection Program, a forgivable loan program intended to keep people on a payroll in some form or fashion that expired on August 8.

As was shown after the 2008-2009 recession, extending and increasing government benefits does not stimulate the economy over the long term, and there is considerable evidence that the American economy resumed economic contraction during July:

Just as the FPUC stipend initially failed to mitigate these issues, Donald Trump's executive orders also fail to address these issues.

Kick The Can

Ultimately, Donald Trump's Executive Orders do little more than kick the economic can down the road. The renewal of the stipend forestalls the demand shock that would have attended upon an abrupt withdrawal of some $18 Billion in spending per week from the economy. The eviction moratorium staves off a potential crisis in homelessness. Congress, for its part, is able to negotiate without pending economic crisis hanging over it like the mythical Sword of Damocles.

Yet kicking the can down the road is all these EOs provide. It is all these EOs can provide. The real issues remain unresolved (and even unaddressed). Lunatic lockdown orders persist in many parts of the country, and are dragging the economy down even as they fail to reduce the spread of CCPVirus.

The EOs quite possibly will fail to even sustain the economy, and do little to prevent further economic collapse.

Aside from President Trump, the only group that clearly benefits overall from these EOs is Congress itself. With a stroke of a pen Donald Trump has removed a major Congressional logjam and spared them the growing humiliation of seeing their supine legacy media outlets grill them persistently about the relief bill and what Congress has to say to those people who's benefits were all but obliterated at the end of July.

For the rest of America, the need is still crystal clear. The country needs jobs--lots of jobs. Until such time as there is a mammoth effort to replace the tens of millions of jobs lost, measures such as these EOs will remain but half-measures of little to no positive economic impact.

08 July 2020

Speech Or Silence: Free Speech Is A Moral Imperative

I have said it before and I will say it again: Free Speech is a moral imperative.

I will keep saying it, because it needs to be said. It needs to be heard. So long as the Big Tech social media platforms believe they can silence and suppress dissenting voices with impunity, it needs to be heard.


Because YouTube banned Stefan Molyneux, accusing him of "hate speech", while the legacy media absurdly characterized him as "far right" (proving that they have not studied any of his content), it needs to be heard.


07 July 2020

Justice Kagan's Accidentally Correct Opinion: The States Elect The President

As the Supreme Court finishes out the 2019-2020 term, it ruled on two small, barely noticed cases from the 2016 Presidential election. Indeed, the cases were noteworthy more for having received a unanimous vote from the Court than from any contentious debate over finer points of Constitutional law, and from the fact that the two cases were heard separately, as Justice Sotomayor had to recuse herself from one case but not the other.

However seemingly minor the cases appear to be, arising from two lawsuits over a state's authority to bind Presidential electors to a specific voting preference, the ruling reiterates an important aspect of Presidential elections that has all but disappeared from political discourse and debate in this country: A President is elected not by the people but by the States. In issuing their per curiam opinion in Chiafalo, et al, v Washington (591 U.S. ___ (2020), Docket 19-465), the Supreme Court laid down a legal reminder of the Constitutional order of things.

04 July 2020

Decent Respect To The Opinion Of Mankind: Declaring The Why Of Independence

Decent Respect To The Opinion Of Mankind: Declaring The Why Of Independence
When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

Every Fourth of July, Americans celebrate one of the world's most remarkable documents. On that day, in 1776, the Second Continental Congress issued a declaration of their intent to be free from British rule, and by so doing made real a radical proposition that hitherto had only been a quaint abstract concept: that political authority, and the right to govern, descended from the people of a nation.

We are rightly awed by the majesty of Thomas Jefferson's rhetoric. We are properly impressed by the hope and humanity of the ideals he set forth. From that first Fourth of July until now, America has struggled imperfectly to measure up to the premise of universal human equality at the heart of the Declaration of Independence.

Yet the Declaration of Independence is more than its ideals. It is more than a mere assertion of inalienable rights. It is also an homage to humanity.

18 June 2020

Roberts DACA Ruling: An Act Of SCOTUS Repugnant To The Constitution

Roberts DACA Ruling. An Act Of SCOTUS Repugnant To The Constitution
The legacy media could scarcely contain its glee when Chief Justice John Roberts elected to ignore the Constitution and the rule of law to block President Donald Trump's efforts to end Barack Obama's unconstitutional Deferred Action for Childhood Arrivals (DACA) program. Here was proof, they claimed, that the laws are not what Donald Trump says they are, but whatever the Supreme Court says they are.

What the legacy media gets wrong is the same thing Chief Justice Roberts gets wrong: the only standard of law is the Constitution. No act of government which goes against the Constitution can ever enjoy force of law. No act of government which contradicts the Constitution can ever be considered part of the law.

All acts of government repugnant to the Constitution are null and void. That includes Presidential orders and Supreme Court rulings.