The EPA and Department of Labor

If you dislike the minimum wage and regulations on business generally, you should be all for Andrew Puzder, the CEO of the company that owns Hardees and Carl's Jr.: 

Mr. Puzder will arguably have less experience in government than any labor secretary since the early 1980s, when President Ronald Reagan appointed a longtime construction executive named Raymond J. Donovan. Mr. Donovan’s tenure was marked by an easing of numerous regulations.

The Reagan era was a lousy time for labor.

Mr. Puzder is also hostile to minimum wage increases and Obamacare.  Many argue that minimum wage increases will hurt the economy and that kicking people off of welfare will force them to pull themselves up by their bootstraps.  Many others argue that's a bunch of bullshit. 

Meanwhile, Scott Pruitt will be the new head of the Environmental Protection Agency.  Mr. Pruitt does not write his own letters:

As Mr. Pruitt has sought to use legal tools to fight environmental regulations on the oil and gas companies that are a major part of his state’s economy, he has also worked with those companies. A 2014 investigation by The Times found that energy lobbyists drafted letters for Mr. Pruitt to send, on state stationery, to the E.P.A., the Interior Department, the Office of Management and Budget and even President Obama, outlining the economic hardship of the environmental rules.

The close ties have paid off for Mr. Pruitt politically: Harold G. Hamm, the chief executive of Continental Energy, an Oklahoma oil and gas company, was a co-chairman of Mr. Pruitt’s 2013 re-election campaign.

(emphasis added mine)

If you think that global warming is a Chinese hoax, or just a naturally occurring phenomenon we can't do anything about, then you want a man like Mr. Pruitt at the helm.  Hey, I mean, global temperatures do just rise naturally with time, right?  It's not as though the rise of temperatures in the past 100 years is completely unprecedented and directly linked to CO2 emissions.

In conclusion: Carl's Jr: Fuck You. I'm Eating.

Honest-to-Goodness Fascism and more Carrier talk

So. First of all, consider reading this article about the brutal extra-judicial killings occurring in Rodrigo Duterte's Philippines currently.

There's been a lot of talk about pending fascism in the United States recently.  Well, in the Philippines, they've got fascism.  The state authorizing police (and also low-level bounty hunters) to kill drug users willy-nilly.  If you're of the opinion that drug users should be gunned down in the streets, then you'll approve of what Duterte is doing.

Duterte claims that Donald Trump has voiced his support for the killings, saying (allegedly), "[they] are doing it as a sovereign nation, the right way".  Perhaps this is a spurious claim on Duterte's part, but neither Donald Trump nor any voice of his administration has denied this claim.

2,000 or so people have died in this manner since Duterte took office on June 30, 2016.  Duterte has pledged that 20,000 to 30,000 more people will die this way, that every drug user in the Philippines will be slaughtered.

A comparison of the United States, where drug laws tend to be somewhat severe, with the Netherlands, another majority-white first world country where drug use is legal and regulated, reveals that the negative externalities imposed by drug use in a society where drugs are legal and regulated are fewer than elsewhere.  It would suggest, perhaps, that Duterte's fascist approach to a societal drug use problem is not the only possible approach.  It should suggest to our President-elect that the iron boot may be a less effective tool than the hand up, and that men like Duterte should not be given a thumbs up.

Duterte has referred to President Obama as the "son of a whore," so verbally at least, he has some commonalities with the President-elect.  If you want to learn more about Duterte and his general M.O., read this article.

***

I wanted to circle back around to the Carrier deal, which has been a political success for Donald Trump.  I previously gave my congrats to the President-elect for saving these jobs - 1,100 of them.  Well, it turns out that's not the real number being saved, and it also turns out there's a lot more to mull over in this deal, not of all of it good.  Could it be that Donald Trump - a more typical politician, perhaps, than he is ordinarily depicted to be by both Right and Left - has painted a rosier picture than grim reality to score political points? Who would have thunk it!  Let's take a look at the nitty gritty.

United Tech (which owns Carrier) CEO Greg Hayes gave a refreshing candid interview concerning the deal which Business Insider has done a top-notch job of summing up.  There's also good coverage of the deal in the Washington Post and I'll be quoting both articles below.

First of all, the Trump administration will not be saving 1,100 jobs.  Emphases added mine:

[President of the United Steelworkers 1999 Chuck Jones] wondered why the president-elect appeared to be inflating the victory. Trump and Pence, he said, could take credit for rescuing 800 of the Carrier jobs, including non-union positions.

Of the nearly 1,700 workers at the Indianapolis plant, however, 350 in research and development were never scheduled to leave, Jones said. Another 80 jobs, which Trump seemed to include in his figure, were non-union clerical and supervisory positions. (A Carrier spokesperson confirmed that 800 factory jobs once earmarked for Mexico are staying.) And now the president-elect was applauding the company and giving it millions of dollars in tax breaks, even as hundreds of Indianapolis workers prepared to be laid off.

That's $7 million in tax breaks over 10 years.  Given that around 800 jobs that were going to be relocated to Mexico will be staying (not 1,100), that amounts to approx. $875 per recused worker per year.  That's a pretty good price, really, and it should pay for itself in the form of payroll taxes paid by each worker. However:

The result of keeping the plant in Indiana open is a $16 million investment to drive down the cost of production, so as to reduce the cost gap with operating in Mexico.

What does that mean? Automation. What does that mean? Fewer jobs, Hayes acknowledged.

From the transcript (emphasis added):

GREG HAYES: Right. Well, and again, if you think about what we talked about last week, we're going to make a $16 million investment in that factory in Indianapolis to automate to drive the cost down so that we can continue to be competitive. Now is it as cheap as moving to Mexico with lower cost of labor? No. But we will make that plant competitive just because we'll make the capital investments there.

JIM CRAMER: Right.

GREG HAYES: But what that ultimately means is there will be fewer jobs.

The general theme here is something we've been writing about a lot at Business Insider. Yes, low-skilled jobs are being lost to other countries, but they're also being lost to technology.

Additionally, engineering jobs - which will be kept in America - were not in much danger of moving to Mexico in the first place.  It is assembly line jobs that are at risk of moving to Mexico:

So Mexico has cheaper labor with a much more dedicated workforce, and these are the kinds of low-skilled jobs most people don't find that attractive. Elsewhere in the interview, he made clear that United Technologies intended to keep engineering jobs in the US and that these higher-skilled jobs were not at risk of being moved overseas.

It appears the CEO Hayes also knows what side his bread is buttered on, and that if he plays ball and helps Trump save face regarding some of these jobs being sent to Mexico, he can expect good times ahead:

GREG HAYES: So, there was a cost as we thought about keeping the Indiana plant open. At the same time, and I'll tell you this because you and I, we know each other, but I was born at night but not last night. I also know that about 10% of our revenue comes from the US government. And I know that a better regulatory environment, a lower tax rate can eventually help UTC of the long run.

It will be interesting to track the development of the Carrier deal and to see if the number of jobs being saved continues to be revised downwards.  The deal has come in for criticism as "crony capitalism" from a variety of figures, including, in a stunner, Sarah Palin. In the meantime, Donald Trump, understanding he has a political winner on his hands, is now verbally lashing Boeing.  

I wonder what kind of deal Boeing will get!

Attacking Donald Trump vs. Attacking the Trump Administration

If you dig Republican orthodoxy, it's a fantastic time to be alive.  The incoming Trump cabinet is stacked with hardliners at various positions.  Sure, Trump is unorthodox on the issue of tariffs, but the GOP-led Congress might well gently shelve that issue:

But big tariffs appear too much to abide. Both Mr. Ryan and Senator Mitch McConnell, Republican of Kentucky and the majority leader, supported a bill that gave Mr. Obama and his successor special “fast track” authority to negotiate trade agreements, and are proponents of reducing tariff barriers.

“Tax cuts and deregulation will make the American economy great again, but tariffs and trade wars will make it tank again,” David McIntosh, president of the conservative group Club for Growth, said in a statement, adding, “The majority leader is right to caution against protectionism and to urge a robust debate on free markets and trade.”

House leaders want to tackle the problem of companies’ moving operations overseas with a broad rewriting of the corporate tax code, which they say will make American manufacturing more competitive without resorting to punitive measures on individual companies.

“Tough talk plays well with his base and is arguably even long overdue,” said Brian Walsh, a Republican consultant and former official at the National Republican Senatorial Committee. “But ultimately, the legislative focus will be on tax reform and deregulation versus tariffs and trade wars. I don’t believe Republicans will let a golden opportunity to finally pass comprehensive tax reform fall victim to intraparty squabbling.”

(emphases added mine)

So the incoming Trump administration looks fairly set to be - rhetoric aside - not at all unique from any other given GOP administration.

Which leads to an interesting question: if one opposes the GOP generally, including Donald Trump, how does one go about opposing the Trump administration?  Does one treat Donald Trump like an uniquely terrifying and unique figure in American history, or does treat him as yet another right wing con man?  Does one fixate on Trump personally or what the Trump administration plans to do?

If the focus is to be on Trump personally, then the Left is already doing fine work.  Actors are taking Donald Trump on quite publicly, and Trump is reacting in kind.  People are getting all worked up about the world's random nutjobs reacting to fake news involving pizza.  The Weimar Republic / Hitler comparisons are in full swing.

People are engaged in "epic tweetstorms", taking Donald Trump down.  You may recall that Elizabeth Warren engaged in an epic tweetstorm taking on Donald Trump during the election, and now, Hillary Clinton is our President-elect.

In general, focusing on character appears to be a winning strategy for opponents of a given administration.  Remember when people were convinced that Barack Obama was a closet Muslim, and Mitt Romney was elected President in 2012?  Jon Stewart and SNL's hilarious skewering of George W. Bush and his mangled language led to Bush's defeat at the ballot box in 2004, and of course, Bill Clinton's infidelities led directly to the election of President Bob Dole in 1996.

I concur with this LA Weekly article's take on "the eviscerati," the political comedy talk show hosts of the world in particular :

The Evisceratti love to paint right-wingers as racist, home-schooled, evangelical idiots — meanwhile, these are the guys who seem fairly capable of effectively mobilizing, organizing and putting aside beefs (remember how for the last 18 months the Republican Party was one splinter away from shattering entirely?) to achieve a group goal. You know, democracy.

Precisely.  Laugh your way to the grave, or organize and go kick ass. 

Also, let's stop pretending that Donald Trump is a wholly unique Republican.  Ronald Reagan employed coded racism heavily, and he's the grandfather of modern conservatism.  Trump may lack politesse, but what he's saying isn't fundamentally any different from what Reagan or George W. Bush said before him.

Hillary Clinton ran her campaign in large part on the premise that "moderate Republicans" would cast off their candidate and vote for someone with some dignity.  The Clinton campaign was convinced that Trump's "uniqueness" would damn him:

Hillary Clinton ran her campaign on this. Her team rooted for Trump as nominee, because they were certain his outréness would make him easy to beat (a strategy endorsed by Jonathan Chait in one of the low points of his career, which is saying something). When they got their wish, they ran against Trump by separating him from “normal” Republicans, hoping to peel off moderate suburbanites grossed out by his odiousness. Those suburbanites voted for Trump.

It was a losing strategy.  There is, arguably, no such thing as a moderate Republican anymore.  Sure, some big-city Republicans might blanch at the homophobia, overt racism and xenophobia of the Republican base, but when it comes time to vote, they'll think about the economic ramifications of the incoming cabinet and set all qualms aside.

Opponents of Trump can spend eight years reacting with OUTRAGE to every little thing he does, or they can let Trump tweet into the void.  They can also learn from recent Italian history, which was dominated by Italian proto-Trump Silvio Berlusconi, and take to the streets:

The first term was brief because of a massive mobilization against his proposed pension reforms (i.e., cuts). A general strike in October 1994 brought three million into the streets of 90 cities; a month later, a million turned out in Rome. Berlusconi fell in a matter of months.

Of course, opponents of Trump would also do well to learn the follow-up lesson of recent Italian history:

[Berlusconi] was succeeded by a series of technocratic and center–left regimes, which imposed even more severe pension cuts, austerity, and attacks on job security. (Over the next five years, fiscal policy was tightened by a savage 7% of GDP.) The unions and center–left went along with it all in the name of preventing a return of Berlusconi. Unemployment hovered between 10% and 11% for six years. Discontent brought Berlusconi back in the seventh.

That means saying sayonara to the Clinton/Obama "technocratic" wing of the Democratic Party and the "eviscerati" aspect of modern culture and really going for it for once.  A full-throated endorsement of leftism without any apologies.  Stop trying to find the moderate Republicans; they will close ranks with their party.  Stop trying to appease them; they cannot be appeased.

If you're a conservative, my congrats to you; it's champagne time.  If you're a liberal, I strongly encourage you to read the LA Weekly article linked-to above as well as this article by Doug Henwood (another writer you should consider following daily, or at least weekly) detailing the Berlusconi years and hypothesizing about the incoming Trump administration and how prominent Dem figures will deal with it.

Feed the outrage beast and pay the price.  Ignore Trump's character entirely and assail his policies and the actions of his administration?  We'll see how midterms go.

"Junk Science," Big Tobacco, and the Environment

I promised a regular reader of the blog I would take a stab at dissecting this Guardian article on industry attempts to malign science, so I'm going to do that.

First of all, I'm not going to add any special insight here, just summarize the article, which concerns the faux-science concocted to fight climate change activism.  If you have the time, read the original article! That said, here at the salient points.

You may hear the phrase "junk science" bandied about, especially by certain organizations that claim that global climate change in not caused by mankind.  Many of these organizations are paid by the ExxonMobil corporation to deny inconvenient reality.  Here's the list.

Bookmark the list.  Next time you hear someone claim that global climate change science is dodgy, or might not be proven, or constitutes "junk science," etc., double-check the list.  Are one of these organizations listed therein being quoted as an authority?  If so, you may be dealing with a bullshit claim.

A lot of these organizations have names that sound academic, such as the Centre for the Study of Carbon Dioxide and Global Change.  If I get drunk and hit on your wife while I'm dressed like a priest, I am not necessarily a priest.

Many of these groups rely on a grain of truth and then run with it, ignoring all else:

This is not to claim that all the science these groups champion is bogus. On the whole, they use selection, not invention. They will find one contradictory study - such as the discovery of tropospheric cooling, which, in a garbled form, has been used by Peter Hitchens in the Mail on Sunday - and promote it relentlessly. They will continue to do so long after it has been disproved by further work. So, for example, John Christy, the author of the troposphere paper, admitted in August 2005 that his figures were incorrect, yet his initial findings are still being circulated and championed by many of these groups, as a quick internet search will show you.

(emphasis added mine)

The article goes on to discuss the history of bogus tobacco science advanced by Philip Morris and others back when, more or less identical in character and spirit to the climate change denialism of today.  And hey - turns out some of the same people are involved!

But the connection goes further than that. TASSC, the "coalition" created by Philip Morris [to deny the science of the harm caused by second-hand smoke], was the first and most important of the corporate-funded organisations denying that climate change is taking place. It has done more damage to the campaign to halt it than any other body.

Suffice it to say: when faced with two contradictory claims, it pays to follow the money.  I'm not sure I can actually bring any new insight to the topic beyond this.  If you don't believe that global climate change is caused primarily by man at this point, you have been successfully swindled, and while you don't need to cop to that publicly - no one likes to be embarrassed - it behooves you to bear in mind that ExxonMobil has its bottom dollar in mind, not well being, not the well being of your children or the locale where you live.

It seems that the professional swindlers are currently winning the public debate, however.  Most Americans do not believe that global climate change is primarily caused by mankind.  However, seemingly contradicting that point of view, most Americans also favor aggressive action to combat climate change.

On a side note, all of Trump's EPA candidates are truly awful, people who should not be running the EPA.  It's called the Environmental Protection Agency, not the Fuck The Environment Agency.  There are elements of the pending Trump Presidency that deserve the benefit of doubt, some caution, a fair debate, etc.  This is not one of them.

I'm off to drink bleach for now, but as always: we'll find out!!!!!!!!!!!!

James Mattis and Iran

It's been a long week, followed by a long weekend, for yours truly.  There's much to discuss with Trump as always, but I thought tonight would be a good time to look at our new Secretary of Defense, James Mattis, and his grudge against Iran.

I have heard from a Marine who has a good deal of respect for Gen. Mattis, and indeed, Mattis comes off as very intelligent and well-read, traits which are not always guaranteed for a cabinet-level pick.  Being a non-military man, when I hear from a well-spoken Marine that Mattis is a good choice for the Sec Def position, I tend to listen.

On the other hand, I look at Mattis' hardline stance on Iran and I feel very troubled.

Look at a map of the Middle East for a second.

There are a lot of shades of grey that are omitted from this overly-simplistic map, but given the dearth of geographic knowledge of your average American (it's not just the young), this is a fine introductory map to the region as it stands today.

See that big pink splotch in Northern Iraq and Syria up there?  More or less, that's ISIL/ISIS, the current psychotic terrorist regime of the area.  ISIL/ISIS is composed chiefly of Sunni extremists, not Shia extremists (Iran is a Shia power, purple in the map above; Saudi Arabi is a Wahhabi/Sunni power, beige in the map above).  Contrary to what Mattis asserts, Iran is not backing ISIL/ISIS; Iran is backing the Shiite-led government in Baghdad which is currently attempting to retake Mosul from ISIL/ISIS.

ISIL/ISIS has claimed responsibility, at least as an inspiring force, for all of the recent terrorist attacks in Western countries including the United States.  Iran has not.  Why is Iran the enemy?

The sworn opponent of Iran in the region is Wahhabi/Sunni power Saudi Arabia.  Saudi Arabia has long cultivated the extremist ideology that led first to Al Qaida and more recently to ISIL/ISIS.  You may recall that Al Qaida extremists killed thousands of Americans on September 11, 2001; neither the Revolutionary Guard nor Hezbollah nor any other Iran-backed actor planned and executed those attacks.

Given that Iran is engaged in a feud with the power ultimately responsible for most of the terrorist attacks on the West, including the defining attack that led to the War on Terror era, is not Iran de facto our ally in the Middle East?  Is our goal in the Middle East to defeat Islamic terrorists, or is it to defeat the enemy of these terrorists?

This is not to say that Iran is being run by especially nice guys, or that Iran doesn't have a history of terrorism to brag about.  It most certainly does.  It is also a demographically very young country with a powerful reformist streak.  The best way to punish reformers in Iran and make sure they do not succeed is to lend credibility to their opponents.  Iran opened its airspace to the United States during the initial invasion of Afghanistan to dislodge the Taliban.  Does this sound like the action of a country that is unwilling to do business with the United States?

Now I can certainly understand that someone who has gone up against the Revolutionary Guard might have a bit of a hard-on for them.  But consider Iran's position.  The countries where Iran sticks its fingers into are more or less its neighbors.  This is not all that different, geopolitically, from how the United States has treated Latin America and the Caribbean over the years.  Iran is not, currently, inspiring wack-a-doos in the United States and Europe to go massacre random, innocent people.  It is Iran's enemy, ISIL/ISIS, which is doing that.

Mattis' anti-Iran stance is also out of sync with Trump's other plans in the Middle East.  Trump has more or less thrown in with the Assad regime and its patron, Russia.  The Assad regime has long been propped up by Iran.  So: what's it going to be?  Take on Iran, and, logically, one would think, its client Syria and ally Russia, or throw in with them?

Perhaps what the Trump administration is thinking is that they can have it both ways: support an Iran-backed regime in Syria while taking the fight to Iran itself (a fight that didn't work out so well for Iran's neighbor back in the day).

Or, perhaps, the Trump administration is not thinking.

I want to end on a positive note: Mattis has stated that the US-Iran nuclear deal should not be scrapped.  That's a solid position to maintain, because without the deal, the odds that Iran goes full nuclear is pretty damn good.  He also appears to be very respectful of Islam generally, which sets him apart from the rank-and-file Republican of today.  He appears thoughtful, like a man who won't fly off the handle.

All that's reassuring, but when it comes to getting tough on Iran, anyone who has played any board game ever can tell you that attacking a player you may not like who is nonetheless actively pursuing your main opponent is a quick way to hand the game to your main opponent.

Anyways, that's enough on Mattis for now; we'll see how it all plays out.  For now, have a lovely evening, and if Sunday Night Football isn't your thing, consider professional deceit instead.

Climate Change

Should we talk about the weather? Should we talk about the government? HAR HAR, I'm a cornball. Let's talk climate change.

Things certainly look like they could get even grimmer for ol' planet Earth with Donald Trump at the helm of the US of A.  However, nothing is set in stone, and perhaps it won't be that bad after all, or such is the gist of this article from the NYT.  Do I necessarily buy into the premise that it might not be that bad after all?  Not really, but the article is worth examining regardless.

First of all, a recent report points out that the progress thus made on reducing carbon emissions has come more from the evolution of industry than from government diktat, and that as long as the Trump administration takes a hands off approach, to a certain extent, that won't change:

Ted Nordhaus and Jessica Lovering, in a report published on Tuesday by the Breakthrough Institute, pointed out that real progress on reducing carbon in the atmosphere has been driven so far by specific domestic energy, industrial and innovation policies, “not emissions targets and timetables or international agreements intended to legally constrain national emissions.”

It’s certainly possible that a Trump administration will drop the Clean Power Plan and renege on the Paris accord. But as long as it keeps the nation’s nuclear power plants online, continues tax incentives for wind and solar energy and stays out of the way of the shale energy revolution, Ms. Lovering and Mr. Nordhaus write, “the U.S. might outperform the commitments that the Obama administration made in Paris.”

(Emphases added mine, throughout).

Regardless of Donald Trump's rhetoric, his promises to bring coal jobs back, coal may just plain get its ass whupped by natural gas.  Now, natural gas is still a dirty energy source, but it's cleaner than coal.  Trump has talked up natural gas as well as coal, and it's quite possible coal will be sidelined, despite the hopes of many who voted for Trump.

In the past, nations have sped ahead of their own emissions targets...

Striking a meaningful deal on climate has proved an elusive goal. The first try, in Kyoto, Japan, in 1997, committed advanced nations to reduce emissions between 1990 and 2010. But they actually achieved more in terms of reducing dependency on fossil fuels in the decade before the agreement than in the decade after.

However, much of that decline in carbon emissions had to do with a global economic collapse that reduced demand for carbon.  Should Trump Make America Great Again, and perhaps the world with it, that demand will increase, and so will carbon output.

Is Donald Trump actually committed to energy independence, as he has stated he is?  If so, the best thing for him to do might be to simply not rock the boat:

Most importantly, climate objectives could mesh with Mr. Trump’s goal of energy independence. According to the 2016 edition of the International Energy Agency’s World Energy Outlook, the United States could pretty much become energy independent by 2040 — reducing its annual oil imports to 1 million barrels a day from 6 million in 2014 — as long as Washington sticks to current policies.

Part of this has to do with rising shale oil and gas production. But the main driver would be efficiency. The Trump administration only has to maintain the Obama administration’s CAFE standards, which require the average fuel economy of cars and light trucks to rise to 49-to-50 miles per gallon by 2025, from 34 today.

So!  It's possible that Donald Trump might not be so bad for the environment after all. 

With all that said, if the upside is that the Trump admin just leaves everything currently in place be, that's still unlikely to cut it:

A recent analysis by scientists at the Massachusetts Institute of Technology concluded that the promises made in Paris would reduce the concentration of greenhouse gases in the atmosphere at the end of the century to 710 parts per million from 750. That is still far from the 450 p.p.m. ceiling needed to tip the odds in favor of staying under the temperature threshold scientists consider safe.

According to the International Energy Agency, the commitments made in Paris will cap the growth of greenhouse gas emissions between now and 2040 to 13 percent. The 450 p.p.m. target requires them to fall by 43 percent. Getting there will require rich countries like the United States to help finance much of the transition for poor countries. The role of global diplomacy will rise.

Paris, like Kyoto, is only a beginning.  Every real climate scientist knows we need to get serious about climate change not tomorrow, not now, but yesterday, to speak rhetorically.  The article concludes thus:

“If a Trump administration lasts only four years, the process could maybe absorb that,” said Oliver Geden, head of research at the German Institute for International and Security Affairs.

The bomb is ticking, but the world still has some time.

There is a rumor that Ivanka Trump wants to make climate change one of her "signature issues".  She seems like an odd emissary, but hey, if she wants to give it a shot I'm all for it personally - better than nobody in the Trump administration making climate change a signature issue.

Even if Donald and Ivanka Trump surprise us all with clean energy initiatives, there remains China to worry about.  It was previously thought that last year's 3 percent decline in coal production was a signal that China had reached its peak of coal production and now its coal production would go into absolute decline.  Instead, some forecasters are saying China's coal production won't peak for another ten years.

It appears the speculators may have pushed up the price of coal in China.  The magic of the market!  Not just the magic of the market, but official government-sanctioned financial rules to boot:

But developments were coming together to push prices up. Chinese investors piled into Chinese commodities markets, betting prices would rise. This became a self-fulfilling prophecy, as more speculators rushed in and bought more coal when prices rose.

An unusually hot summer and early autumn added to power demand. China’s banking regulators decided to let banks release a flood of mortgages to home buyers to bolster economic growth. That produced strong demand for electricity from the steel and cement industries.

Make China Great Again? 

Financial Promises

It's been a tremendously busy week at work and I haven't touched on the many, many articles that are worth touching on.  It's relatively calm right now so I'm going to focus on this nice little rundown from the NYT on the incoming Trump administration's tax plans and economic growth, and their public statements concerning same.  Let's cruise through it:

In [the Trump campaign's tax proposal] plan, middle-class families would see a 0.8 percent increase in their after-tax income, according to an analysis by the Tax Foundation, while the top 1 percent of taxpayers would see a 10.2 to 16 percent gain. Another group, the Tax Policy Center, calculated middle-class families would get a 1.8 percent boost in after-tax income, while the top 0.1 percent of earners would see a 14 percent gain and a tax cut worth an average of $1.1 million.

1.8 boost to a household isn't nothing.  My wife is an optometrist and I'm a legal secretary in Midtown Manhattan.  Our household income by New York standards is fine and by national standards places us in the upper class.  For our household, a 1.8 percent tax cut would net us around $3,500 extra per year, which is absolutely nothing to sneeze at.  Median income of the average American household is around $56,000 annually, and a 1.8 percent tax cut for that household amounts to around $1,000.  So such a tax cut is not nothing, although either of those sums could be gone pretty quick if you're paying medical fees whose cost increase outpaces your salary, for instance.

There's also, of course, the moral and economic questions raised by the much larger tax cuts being awarded the top 1 percent of taxpayers.  What will they do with that newly-freed wealth?  If they create jobs with it, great.  If they use it on financial speculation, in an era when it appears that the people who largely were responsible for the last financial crisis are going to be writing the rule book, then, perhaps: not great.

Even many reform-minded conservatives wanted Trump to pick a different Treasury Secretary, someone like House Financial Services Chairman Jeb Hensarling or former BB&T CEO John Allison for the job. Both have strong views on increasing bank capital requirements and fighting so-called “Too Big to Fail” institutions. It’s much less clear that [incoming Treasury Secretary Steven Mnuchin] will do anything to make life difficult for large banks.

It appears that the Trump administration may be relying a good deal, as Republicans are wont to do, on "dynamic scoring".  Acquaint yourself with "dynamic scoring":

Mr. Mnuchin and Mr. Ross suggested that the plans would not widen the budget deficit thanks to “dynamic scoring,” or forecasts that assume tax cuts will release much faster economic growth and therefore pay for themselves.

This is similar in some ways to the old Laffer curve, an idea which, apparently, will never die.  It originated during the Reagan era.  A lot of claims are made about the Reagan era that happen to be false.  Reagan era GDP growth looks fantastic, real China-like numbers, until you adjust for inflation:

Real GDP increased at an annualized rate of 3.4% from Q1 1981 to Q1 1989, under President Reagan, and at a 3.4% rate under President Carter from Q1 1977 to Q1 1981.

Paul Krugman has a little more on "dynamic scoring" here.  Dean Baker discusses it here.  If it sounds like a spurious turn of phrase, it might in fact be a spurious concept.

Trump may face demographic challenges in meeting his promise of 3-4 percent economic growth annually:

The speedy growth of the last century was helped along by the enormous baby boom generation entering the work force, and more women joining the ranks of the working. Now, the baby boom is retiring and the proportion of women working is stable.

For those reasons, the Congressional Budget Office projects that the United States labor force will grow by 0.6 percent a year over the next decade. By contrast, from 1949 to 2000 it rose by an average of 1.7 percent a year.

Another complication to the Trump team’s predictions? Mr. Trump has promised tight controls on immigration, the one lever that could increase work force growth.

Now there's always the "underemployed," who are not accounted for in the official employment rate.  However, underemployment has come down from its 2010 peak, to a rate of 9.5 percent of he labor force.  So how much slack does Trump really have to achieve 3-4 percent economic growth?  Demographics are not necessarily destiny, but if Trump is relying on regressive tax cuts generally to get the job done; well, his administration will be a big test of that sort of taxation, won't it?  

As made clear by this article, tax cuts skewed toward the rich worked - in terms of raising the median income - for Reagan, as did reversing those cuts, in part, for Bill Clinton.  In fact, it worked even better for Clinton than Reagan.  Big tax cuts did not work for George W. Bush and though Obama's legacy is mixed, he did let certain tax cuts expire, and that didn't seem to work either (again, with regard to median income growth.  Employment growth: Clinton #1, Reagan #2, Obama #3, and a huge drop off to George W. Bush in last place.).

We'll see how it goes.

A lot more to come tomorrow!