The Cold Between written by Elizabeth Bonesteel is a sci-fi novel. I picked this up at the Beaverton City branch of the Washington County Library. It has been recently released and is apparently the first novel by Bonesteel. The cover was a bit deceiving as it was subtitled "A Central Corps Novel" which led me to believe that this was one of a series of books. Although searching now I find that the library does have a second novel by Ms. Bonesteel listed in the catalog.
I would give the book 3 out of 5. Certainly the story was interesting, although it seemed to take about 50 pages for it to develop any kind of a hook to it. Once it got going, it was nicely paced action steadily to the end. The universe that the story is set in seems well thought out and relatively rich in detail. The characters are relatively believable. Although here, we have a lot of inner thoughts bandied about in a way that I certainly did not really enjoy. There was a flavor of trashy romance novel in the first part of the book which does eventually subdue towards the end.
Speculative technical science fiction this is not. It uses technology at the level of what you would see in Star Trek: The Next Generation. But, while TNG often did episodes around philosophical questions, there is not really any of that done here. There is a wormhole, and it leads somewhere, but the location of the end point in time and/or space is never revealed despite the hints that it's not where you would expect.
I am doubtful I will read any further work by Ms. Bonesteel. However, if you like a mix of nerdy and romantic, this book will likely please.
Thoughts on politics and policy and whatever else strikes my fancy. Currently looking at Presidential documents issued by the current administration, previously a section by section review of the Oregon State Constitution.
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Thursday, June 8, 2017
Friday, June 2, 2017
Analysis of the President's Budget Message
The President released his FY2018 budget on May 23rd, 2017. In this post, we will review the President's message and I will provide commentary thereon.
At this point, an eight point agenda is laid out to express the key policy aims of the administration and also to discuss briefly how these are achieved through this budget. Up first is Healthcare. The idea that Amercians can "buy the healthcare they need at a price they can afford" is the trick required. Currently, Americans cannot do that. The government does not and will never actually provide healthcare except for Veterans. Most people cannot absorb the consequences of a negative catastrophic health event and need to have insurance. The government largely does not provide insurance other than Medicare and Medicaid. Often right-wing opinion leaders invoke government-run health care or health insurance to argue extreme libertarian positions. This is a straw man argument because if we ever get to universal coverage in the US, it will be because Congress has provided a legal framework that assures that everyone gets coverage although the insurance and services will be provided by private parties. This works in other countries, why not here?
Here, I have to agree with the idea of simplification of taxes, specifically income taxes. Surcharges, tax credits, tax deductions all have been used as a way to implement social policy through tax policy and every administration has been guilty of doing this. However, I strongly feel that the tax burden does need to increase, although the distribution of the tax burden needs to be looked at. I do not see any issue with a marginal tax rate of 80% for income over $1,000,000 (although I admit it is easy for me to say because it will never affect me personally). Further, since the 1980's, I think that the idea of supply-side trickle down economics is largely debunked.
The policy here is to restrict immigration into the US. There is an attempt to use an economic argument to cloak the true motivations: bigotry and xenophobia. Between attracting the world's best and brightest and needing young people to mitigate the ongoing demographic shift, there are good reasons to increase immigration.
Oddly, this statement is actually oxymoronic. Currently one of the drags on the American economy is actually the low price of oil. Many companies in the oil and gas sectors are reducing personnel and cutting back on capital expenditures because current and future projects will not provide a return on investment unless the price of oil rises somewhat. Yes, this will increase the price of gasoline and electricity, but it is not a 1:1 relationship. Stimulating the Energy sector to pump more oil and gas and create more electricity will lower oil prices because demand will remain flat. Because of the recent increases in energy efficiency and the relatively small size of the manufacturing sector, reduced energy costs will not swell manufacturing significantly or drive down prices for manufactured products.
It is a good thing that this proposal is a pipe dream and just a political document. It is wrong in so many ways. Because of the 52-48 split in the Senate, getting a budget passed will be really difficult. There are other financial legislation needed as well such as continuing resolutions and raising the debt ceiling. I think that having a government shutdown within the next couple of years is going to be 50-50. The country is too divided. We need a unifier, but is the gap too great for anyone to be able to step in?
This Budget’s defining ambition is to unleash the dreams of the American people. This requires laying a new foundation for American Greatness. Through streamlined Government, we will drive an economic boom that raises incomes and expands job opportunities for all Americans. Faster economic growth, coupled with fiscal restraint, will enable us to fully fund our national priorities, balance our budget, and start to pay down our national debt.Here in this second paragraph of the message, we see some stated goals of the administration and it defines what the administration is looking to achieve with the release of this budget. Indeed, talk of a balanced budget has long been missing from Congress and the Whitehouse. During the 2006-2008 financial crisis, it was deemed necessary to do whatever is required to avert the possibility of a new Great Depression with high unemployment, deflation and mass suffering. The President at the time did what had to be done, damn the consequences to the debt, to keep the greater economy from crashing even though the financial markets had. But in some ways, the previous Presidents failed because in rural American, de-industrialization continued, small towns and family farmers suffered when unlike their urban cousins whose lives did largely return to normal, these rural residents quietly applied for government aid and sometimes resorted to alcohol and drugs when the psychic pain proved to be too much to handle.
In the press, the budgetary control aspect has been described as overreaching as well as cruel. I concur. However, are we on a path that will lead soon (possibly before 2020) to a further financial crisis because of the US Government debt? I have memories of the early 1990's where one of the memes at the time was a hyperinflationary spiral in the style of Zimbabwe besetting the US due to increasing budget deficits. In the past eight years, it seems that there has been a complacency that has set in with regards to government deficits. One would have thought that the Republicans who controlled Congress since 2010 could have negotiated some progress on reducing the deficit, but this has not happened.
Our moral commitment to replacing our current economic stagnation with faster economic growth rests on the following eight pillars of reform:
Health Reform. We need to enable Americans to buy the healthcare they need at a price they can afford. To this end, we must repeal Obamacare and its burdensome regulations and mandates, and replace it with a framework that restores choice and competition. This will lower the cost of care so that more Americans can get the medical attention they need. Additionally, Medicaid, which inadequately serves enrollees and taxpayers, must be reformed to allow States to manage their own programs, with continued financial support from the Federal Government.
At this point, an eight point agenda is laid out to express the key policy aims of the administration and also to discuss briefly how these are achieved through this budget. Up first is Healthcare. The idea that Amercians can "buy the healthcare they need at a price they can afford" is the trick required. Currently, Americans cannot do that. The government does not and will never actually provide healthcare except for Veterans. Most people cannot absorb the consequences of a negative catastrophic health event and need to have insurance. The government largely does not provide insurance other than Medicare and Medicaid. Often right-wing opinion leaders invoke government-run health care or health insurance to argue extreme libertarian positions. This is a straw man argument because if we ever get to universal coverage in the US, it will be because Congress has provided a legal framework that assures that everyone gets coverage although the insurance and services will be provided by private parties. This works in other countries, why not here?
Just one other point. So many people were up in arms because of the individual mandate where everyone has to get healthcare insurance, but yet everyone seems to be fine with requirements for liability auto insurance. That is hypocritical.
Tax Reform and Simplification. We must reduce the tax burden on American workers and businesses, so that we can maximize incomes and economic growth. We must also simplify our tax system, so that individuals and businesses do not waste countless hours and resources simply paying their taxes.
Immigration Reform. We must reform immigration policy so that it serves our national interest. We will adopt commonsense proposals that protect American workers, reduce burdens on taxpayers and public resources, and focus Federal funds on underserved and disadvantaged citizens.
Reductions in Federal Spending. We must scrutinize every dollar the Federal Government spends. Just as families decide how to manage limited budgets, we must ensure the Federal Government spends precious taxpayer dollars only on our highest national priorities, and always in the most efficient, effective manner.
This is the opposite side of the coin from the Tax Reform bullet point above. Republicans have long argued, especially on the libertarian wing, that the US government has become involved in too many facets of everyday life and that it is issuing too many rules and regulations (see below). To achieve a balanced budget, you must reduce spending, increase taxes or a combination of both. I think there is a need to have a look at the effectiveness of spending and do something about programs that can be clearly shown to be ineffective, but this budget makes assumptions wholesale and cuts everything in sight.
Regulatory Rollback. We must eliminate every outdated, unnecessary, or ineffective Federal regulation, and move aggressively to build regulatory frameworks that stimulate—rather than stagnate—job creation. Even for those regulations we must leave in place, we must strike every provision that is counterproductive, ineffective, or outdated.
What is the yardstick to be used? There are regulations relating to the disposal of lead. These lead to companies that utilize lead having higher costs and substitute materials are more expensive to incorporate into processes and products. Should these regulations be repealed because this would stimulate job creation? What of environmental clean-ups and health care costs when factories be toxic to their workers and the surrounding flora and fauna? Do we add these to the additional jobs column as well? And yet regulations were passed because it was determined that the costs in human life, suffering and degradation of the environment, although they cannot be measured in dollars and cents, were more than some number of jobs that were lost.
This approach invariably privatizes the profits but socializes the costs. At some point when plant is shut down and quarantined as a site contaminated by hazardous materials, the corporation will bail and leave government to deal with the mess.
This approach invariably privatizes the profits but socializes the costs. At some point when plant is shut down and quarantined as a site contaminated by hazardous materials, the corporation will bail and leave government to deal with the mess.
American Energy Development. We must increase development of America’s energy resources, strengthening our national security, lowering the price of electricity and transportation fuels, and driving down the cost of consumer goods so that every American individual and business has more money to save and invest. A consistent, long-term supply of lower-cost American energy brings with it a much larger economy, more jobs, and greater security for the American people.
Oddly, this statement is actually oxymoronic. Currently one of the drags on the American economy is actually the low price of oil. Many companies in the oil and gas sectors are reducing personnel and cutting back on capital expenditures because current and future projects will not provide a return on investment unless the price of oil rises somewhat. Yes, this will increase the price of gasoline and electricity, but it is not a 1:1 relationship. Stimulating the Energy sector to pump more oil and gas and create more electricity will lower oil prices because demand will remain flat. Because of the recent increases in energy efficiency and the relatively small size of the manufacturing sector, reduced energy costs will not swell manufacturing significantly or drive down prices for manufactured products.
Welfare Reform. We must reform our welfare system so that it does not discourage able-bodied adults from working, which takes away scarce resources from those in real need. Work must be the center of our social policy.
This statement is dogma disconnected from reality. U3 unemployment rate is at near record lows. The reason why the population participation rates are so low is because of all the old people who have retired but have not died yet.
Education Reform. We need to return decisions regarding education back to the State and local levels, while advancing opportunities for parents and students to choose, from all available options, the school that best fits their needs to learn and succeed.
This statement is a dog whistle to conservative Christians who wish that their schools which include the inculcation of students with unscientific religious based prejudices should also be able to get Federal funding. Words fail me to describe just how destructive this would be if passed.
To unleash the power of American work and creativity—and drive opportunity and faster economic growth—we must reprioritize Federal spending so that it advances the safety and security of the American people.
This Budget, therefore, includes $639 billion for the Department of Defense—a $52 billion increase from the 2017 annualized continuing resolution level. This increase will be offset by targeted reductions elsewhere. This defense funding is vital to rebuilding, modernizing, and preparing our Armed Forces for the future so that our military remains the world’s preeminent fighting force and we can continue to ensure peace through strength. This Budget also increases funding to take care of our great veterans, who have served their country with such honor and distinction.
Echoes of 1984 (the book by Orwell) where war is peace. It is nonsense to try to achieve freedom through a police state. Incarceration rates are the highest in the world and to top that off, recidivism rates are also very poor. With all the extra money pouring into the military there will be reasons to push to use the capability as well. And as it has been discussed above, some of the actions and priorities will decrease the security of the American people rather than increasing it because of unintended consequences of the simplistic thinking that has been applied.
The Budget also meets the need to materially increase funding for border security, immigration enforcement, and law enforcement at the Departments of Homeland Security and Justice. These funding increases will provide additional resources for a southern border wall, expanded detention capacity, and initiatives to reduce violent crime, as well as more immigration judges, u.S. Immigration and Customs Enforcement officers, and Border Patrol agents. The Budget also invests significant resources in efforts to combat opioid abuse.
This strikes me as a move towards a police state. The resources applied to combat the effects of opioid abuse are probably law enforcement and not for prevention or treatment. The administration seems to think that the only solution is to lock up people who have done something wrong, no matter how small. This is headed towards East Germany in many ways.
In these dangerous times, our increased attention to public safety and national security sends a clear message to the world—a message of American strength and resolve. It follows through on my promise to focus on keeping Americans safe, keeping terrorists out of our Nation, and putting violent offenders behind bars.
It does not send a message of strength and resolve. This sends a message of fear, hatred of others and of a new introversion. The unintended consequence of all of the additional law enforcement and military is to instill fear in the population. Yes, there are bad people out there, but not significantly more now than 8 years ago. When the conversation is all about wrong-doing, it ends up being self-fulfilling and one of the things that might drive up crime statistics from their relatively low levels currently is that more people will become desperate. Some of the policies and priorities listed in the budget will have unintended consequences of creating desperation because of cutbacks in the social safety net and other things.
As this Budget returns us to economic prosperity, it will also allow us to fund additional priorities, including infrastructure, student loan reform, and initiatives to help working families such as paid parental leave. We will champion the hardworking taxpayers who have been ignored for too long. Once we end our economic stagnation and return to robust growth, so many of our aspirations will be within reach.
As has been mentioned in the media, the concept that this plan will get us back to a balanced budget is a complete fiction based on bad assumptions and bad math. Based on what has been legislatively achieved in the first 4 months, there is serious doubt that any intricate measures will actually be able to be passed by Congress and signed by the President. "The hardworking taxpayers" that are championed by this budget proposal are not the people who voted for Trump. They are not the urban middle class that voted in high proportions for Clinton. They are the 1% who have disproportionate influence on the politicians. The policies of this administration are not strongly fostering growth, in fact a budget such as this one will actually reduce GDP because it is reining in spending. If the budget were to spend $400 billion less next year, to maintain the current anemic 2% growth, private industry or consumers will have to increase their spending by $400 billion. If they do not, then growth will come in at 0%.
It is now up to the Congress to act. I pledge my full cooperation in ending the economic malaise that has, for too long, crippled the dreams of our people. The time for small thinking is over. As we look forward to our 250th year, I am calling upon all Members of Congress to join me in striving to do big and bold and daring things for our Nation. We have it in our power to set free the dreams of our people. Let us begin.
Monday, May 29, 2017
Book Review: Norse Mythology
Neil Gaiman has recently released a new book entitled Norse Mythology. This book, per the introduction, is a labor of love on Gaiman's part and he is trying to share his love of story as well as demonstrate how many stories are really very old, they are just retold in slight variations with new names for the characters. However, I fear this ends up being his "Silmarillion": bookish, pedantic and missing the crafting required to have made it a whole rather than a collection of parts.
More fascinating are the characters of Thor, Loki and Odin. Thor is powerful, but yet makes bad choices and falls victim to his hubris (actually reminds me a lot of a certain current politician). Loki causes trouble simply because he is bored. He lies so well to people he does so just to see if he can get away with it. Odin is wise and thoughtful but somehow never seems to lead action: Thor and/or Loki are always taking care of the business at hand. We also have a lot of giants of different types that are involved in the stories and as a result few humans. But in many ways the gods (the Vanir and Aesir) and the giants are of recognizable human archetypes. If one thinks of these as stories told to children, then adults who would exhibit the behaviors in the story could appear to be giants, so in a way it fits.
I found it to be disjointed, fairly pedantic (I mean at a few points, family history was being explained to the extent I thought I was reading Deuteronomy), and a struggle to keep my interest. The end where Ragnarok was explained, (and this is the point: it was explained rather than it being a story told) it seemed a list of unrelated events. Your mileage may vary and perhaps if you have already been submersed into this ethos, his re-telling might be splendid. Gaiman has made a brave try, but unfortunately, I have to give it a C.
Between Muspell and Niflheim was a void, an empty place of nothingness, without form. The rivers of the mist world flowed into the void, which was called Ginnungagap, the "yawning gap".Gaiman has tried to piece together a set of myths into a whole story. In my opinion, this does not work terribly well. There are a bunch of episodes, almost like a sitcom that nearly resets at the end of each episode. A few events have consequences later in the book, but relatively little. I kept having flashbacks to a rendition of "You're a good man, Charlie Brown" as one parallel to this book.
More fascinating are the characters of Thor, Loki and Odin. Thor is powerful, but yet makes bad choices and falls victim to his hubris (actually reminds me a lot of a certain current politician). Loki causes trouble simply because he is bored. He lies so well to people he does so just to see if he can get away with it. Odin is wise and thoughtful but somehow never seems to lead action: Thor and/or Loki are always taking care of the business at hand. We also have a lot of giants of different types that are involved in the stories and as a result few humans. But in many ways the gods (the Vanir and Aesir) and the giants are of recognizable human archetypes. If one thinks of these as stories told to children, then adults who would exhibit the behaviors in the story could appear to be giants, so in a way it fits.
I found it to be disjointed, fairly pedantic (I mean at a few points, family history was being explained to the extent I thought I was reading Deuteronomy), and a struggle to keep my interest. The end where Ragnarok was explained, (and this is the point: it was explained rather than it being a story told) it seemed a list of unrelated events. Your mileage may vary and perhaps if you have already been submersed into this ethos, his re-telling might be splendid. Gaiman has made a brave try, but unfortunately, I have to give it a C.
Sunday, May 28, 2017
Executive Order 13784:Opioid Crisis
What the Executive Order Says
Executive Order (EO) 13784 is entitled "Establishing the President's Commission on Combating Drug Addiction and the Opioid Crisis." This EO was originally issued on March 29th, 2017 and it has 9 sections.Section 1
This section defines the policy as combating drug abuse, including opioid abuse. There is a mention of 50,000 deaths due to this "public health crisis". It is unclear whether this means drug abuse in general or just opioids. On the commission website, it mentions 33,000 deaths due to opioid overdoses.Section 2
This section establishes a commission. The commission is chaired by Chris Christie and will closely coordinate with Jared Kushner according to the website. The website has a statement to "check back soon for updates regarding the Commission and its upcoming meetings." There is also available a commission charter document. This document was created April 24, 2017 and is quite vague although its unclear whether that is by design or because no work is being done.Section 3
This section makes vague statements as to the membership of the commission. In a May 10, 2017 press release the intent to appoint individuals to the commission was announced.Section 4
This section defines the mission of the commission. There are 6 subsections. In summary the mission ends up being to summarize where we are and recommend where we should go from here.Section 5
This section defines that the commission should work under the Office of National Drug Control Policy (ONDCP). The commission members will not be paid other than travel expenses.Section 6
This section defines that spending by the commission will come out of the ONDCP budget. I have not read the recently released President's proposed budget to see if ONDCP is up or down next year.Section 7
This section defines the requirements for reports. First, within 90 days an interim report is to be issued and by Oct 1, a final report is to be issued. The 90 day deadline is coming up fast.Section 8
This section provides a sunset clause for the commission such that it is dissolved automatically 30 days after submittal of the final report.Section 9
This section includes the necessary legal fine print to ensure the constitutionality of the EO.My commentary
The drug abuse problem is a real tragedy. It is disgraceful that so many people ended up being addicted to pain pills and from there moved onto other drugs while making large profits for drug manufacturers and other entities in the health care sector.It appears that the proposed members of the commission are relatively serious people. I imagine that the commission will not come back with a recommendation to build a wall along the Mexican border as has been proposed during the presidential campaign.
While Opioids, especially synthetic variants, are relatively new, I don't see that there is anything that fundamentally changes what we have been doing for the last 30-40 years (or longer) with regards to fighting drug addiction. There is both a demand and a supply side. On the demand side is education, treatment and just getting people not to use drugs. On the supply side is cracking down on the manufacture and distribution of drugs. Actions taken on either side have unintended consequences on the other side. The problem is complex and often drug addition is just a symptom of other underlying problems such as physical/sexual abuse or undiagnosed mental illness. Also, there are proponents of legalization vs. prohibition to consider along the lines of when alcohol was prohibited for that short time in American history. There will not be a magic bullet and therefore the solutions are difficult to craft, effectiveness will be difficult to measure and all of this will leave an impression in the general public of civil servants arguing over minutiae that really does not matter.
It is disappointing that this problem and the commission are not getting the attention, budget and urgency of what is probably one of the most significant social problems facing the USA. I am still hopeful that some good will come out of the commission, but it could certainly also result in nothing.
Saturday, May 27, 2017
Executive Order 13785: Enforcing Antidumping Duties
What the Executive Order Says
Executive Order (EO) 13785 is entitled "Establishing Enhanced Collection and Enforcement of Antidumping and Countervailing Duties and Violations of Trade and Customs Laws" and it has 6 sections. This EO was originally issued on March 31, 2017.Section 1
This section defines the policy of the administration. It notes that there are $2.3 billion of duties owed to the government that are uncollected. It does not specify whether this is current accounts receivable or if this is just what has been written off as bad debts. Also, to put it in perspective, compared to the trillions of dollars of imports annually, this is a rounding error. The section goes on to mandate risk based bonding requirements.Section 2
This section provides definitions for "importer" and "covered importer".Section 3
This section directs that the Secretary of Homeland Security provide a plan within 90 days for implementation of risk based bonding requirements on covered importers.Section 4
This section discusses cracking down on violators of trade and customs laws generally, but specifically with regards to "knock-off" products. It also promises to share information with rights holders regarding violations that occur.Section 5
This section directs the Attorney General to give prosecution of trade violations high priority.Section 6
This section includes the usual fine print to ensure the constitutionality of the EO.My Commentary
I do not know how much resources were allocated to detecting and pursuing trade violations including those regarding "knock-off" products prior to the issue of this EO. My opinion is that adding to these resources is not value for money although large corporations who have trademarks and those industries who have been battling with lower priced imports may feel better because of the issuance of this EO.First, there is a process already for filing for a review of whether something is being dumped on the American market. If you search in the Federal Register for "antidumping", there are thousands of notices of investigations that are in process and have been performed for specific products. Of course these are all initiated after the fact once the goods are already released through customs. Application of duties or penalties on the importer after the conclusion of the investigation is where some or all of the mentioned $2.3 billion comes from. If the importing company has little or no assets and if the exporting company does not have a presence in the US, then there is nothing that the government can do to collect the money, it just shuts down that importer. You can see how this might end up in a game of whack-a-mole. I do not imply that this kind of behavior does not cause harm. Certainly any anti-competitive behavior can harm small businesses.
Second, focusing enforcement efforts here will likely not yield significant results and if the risk-based methodology that is adapted is overly broad it can result in being a deterrent to trade and could be perceived as a reason for retaliation against US exports by other countries.
Finally, the end result of success with regards to the actions being initiated by this EO will result in higher prices paid by consumers and end users of the goods that end up in the dragnet. Higher import tariffs mean higher prices. The argument that would be made is that it will stimulate domestic supply, but in many cases, such as stainless steel pipe and tubing, new production is capital intensive since you have to first build a steel mill. It may certainly allow domestic production to rise a little, but my opinion is that there have been a lot of costs to be able to get to that point which would outweigh any benefits.
Sunday, May 21, 2017
Executive Order 13786: Trade Deficits
What the Executive Order Says
Executive Order (EO) 13786 is entitled "Omnibus report on significant trade deficits" and has 3 sections. This EO was originally issued on March 31, 2017 and there have been several additional EO's regarding the topic of trade since then. In the commentary I will do a bit of a review of the subsequent EO's and try to summarize and critique the theme that is being pursued by this administration.Section 1
This section outlines the policy of the current administration. They feel that the trade deficit needs to be eliminated. Some of the perceived benefits of this include more domestic manufacturing and hence more well-paying jobs. The causes of the deficits include perceived unfair trade practices by other countries.Section 2
This Section mandates that a report is produced to determine the causes of the trade deficit and identify specific countries which may be using unfair trade practices that are exacerbating the trade deficit. Also, the report needs to review the defense industry to assure that trade practices are not creating national security vulnerabilities.Section 3
This section has the usual fine print to assure that the EO is constitutional.My commentary
To start, I want to throw out a disclaimer. I am not an economist, so I may well have some of this wrong, but I have tried to think it through to the best of my ability.The stated $700 billion trade deficit represents about 3.5% of GDP. To eliminate this, either imports have to drop or exports have to rise. If you are going to reduce imports, that can be accomplished in one of two ways. Either prices paid by consumers have to rise to a level such that domestic manufacturing of those items is profitable, or domestic manufacturing has to be subsidized or labor costs have to be reduced to the necessary extent so that it is price competitive with imports. Raw material cost is assumed to be equal for both domestic and foreign manufacture because markets for materials are largely global and variances in costs are due to local taxes. If you let prices rise, this is inflation and correspondingly, it will create pressure to raise wages...there is danger there that it could spiral out of control. If you start to subsidize industries that are not competitive, this starts a trade war and is antithetical to the concept of a free market. Subsidies have to be paid by taxes, so here you end up with a tax hike. Trying to raise exports runs into similar problems, so there is no magic bullet in terms of policy that can shift the balance without suffering in some way. Perhaps some measures for both sides can result in some shrinkage of the trade deficit, but any attempt to capture the full 3.5% in a short period will be an economic shock. There is an article in the Economist Magazine of May 12th that discusses this at some length.
One of the knock-on effects of the trade deficit is that foreigners are trying to find a safe place to stash all the US dollars that they are earning. This has resulted in foreign ownership of a large part of the bills and bonds by which the Federal government has financed the budget deficits over the past 20 years. If this in-flow of money were to stop, interest rates paid on US Treasury bills and bonds would rise significantly leading to a budget crisis and potentially hyperinflation.
Innovation and productivity growth appear to be the best ways to address the labor cost imbalance between the US and other countries. However, this is trending towards automation of manufacturing processes (for example using robots) and the net result of that is a loss of jobs. Without government intervention, the trend will be towards a two-tier society of have's and have-not's.
This topic has been the subject of several other subsequent EO's and this was a theme of the election campaign for the current administration. I've written about these here, here and here. Creating jobs through the government's levers of action is difficult, short of just directly hiring more people, but the President also has to fight the headwinds of the conservative movement who want to stop government intervening in the economy. Clearly the President's team has no real underlying policy plan nor even an underlying philosophy that would inform the generation of a policy plan. The ideas that have been floated have come from across the spectrum of thought: leaving NAFTA, reducing taxes, infrastructure stimulus but using other people's money. It is incoherent populism signifying nothing and now with the political turmoil paralyzing Congress, unlikely to achieve anything either.
Update on previous post
Update regarding EO 13800 on Cybersecurity: I received and email from the Social Security Administration (SSA) that they are adding a second method of 2 factor authentication for logging into the SSA website. Now you can select either a cell phone text message or as of June 10, 2017, a code sent to your main email address. Of course, using the email message method, people need to realize that they should use different passwords for pretty much every single account. Keeping track of all the various passwords can become a hassle and there are various methods I have seen. One is to have a notebook to write all this stuff down in. Some browsers have add-in password managers. One person I know has a password protected and encrypted XL sheet that they keep all their passwords in. Nonetheless, this is a good step forward and if you have not done so, you should turn on two factor authentication.Saturday, May 20, 2017
Executive Order 13787:
What the Executive Order Says
Executive Order 13787 is entitled "Providing an Order of Succession Within the Department of Justice" and has 4 sections.Section 1
This section further defines the order of succession for the position of Attorney General and lists 3 specific US Attorneys who would be in the line of succession. These are the US Attorneys for the Eastern District of Virginia, Eastern District of North Carolina and Northern District of Texas.Section 2
This section lists three exceptions, one being that if a person is in an acting capacity, then they cannot become the acting attorney general. The second being that the person also has to meet the requirements under the Federal Vacancies Reform Act of 1998.Section 3
This section revokes a previous EO (13775 to be specific).Section 4
This section includes a legal caveat to assure the constitutionality of the EO.My Commentary
This is the kind of thing that EO's are appropriate to. Who these specific people are is a matter of Republican party internal politics. I have included this in my blog for the sake of completeness.
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