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Archive for the ‘Economy’ Category

What in the world happened to Paul Ryan? He used to be smart, principled, thoughtful and gracious.

Ryan was ridiculed after his tweet which made it sound like a $1.50 a week increase in a secretary’s paycheck was good news! Oh, yes, her Costco membership for a year is now covered!

He later deleted that tweet. I thought I’d keep it alive here.

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My post titled Stock Market under Obama and Trump of June 2017 attracted a number of comments from an anonymous reader. While I usually don’t respond to posts by readers who do not identify themselves with a name (Hopeyouarentafinancialadvisor), this one had enough substance that I not only thought it warranted responses, but further research and discussion here.

My argument in June was that, yes, during Trump, the economy, as measured by stock market value increases, has been booming, but I wanted to bring back some credit to Obama, where that boom actually had started back in 2009. I used this chart to illustrate that point.

In subsequent exchanges, the reader said I picked a random starting date for both presidents. Well, the day of inauguration is not all that random. The reader suggested I should use the dates of election, and it would show a different picture. So let’s do that and add to this chart:

[click to enlarge]

Source: Macrotrends.net

My point of the original post was that Trump could not alone take credit for a rising stock market. The stock market had been rising since 2009 at a steady clip, without major dips that we experienced in the Bush years. My point also was that Obama entered during freefall, whether you look at his date of election or inauguration. Yes, if you look at the election dates, due to the timing of the Bush freefall, and subtract the two, the election date difference is smaller than the inauguration date difference.

And yes, looking at the graph 6 months later, one year into the Trump administration, it is visible that there is an inflection point at Trump’s entry and the curve has increased to a steeper slope, particularly in the last six months. I give credit to Trump’s approach of opening regulation and pro-business general policies.

However, if you look at a president’s first year in office alone with respect to the Dow, measuring in percentage gains, not point gains, there is a surprising statistic. Trump is only third in history, beaten by FDR and – surprisingly – Obama. This was well illustrated in the USA Today of January 22, 2018:

[click to enlarge]

Here is another view that shows that Obama’s gain during his first year in office was larger than that of Trump. I know Hopeyouarentafinancialadvisor will argue that this should have been done using election dates rather than inauguration dates, and the numbers would be smaller. However, skewed smaller, because since Obama took over during a freefall, we certainly can’t penalize him from the continued drop before things, thankfully, got caught on the bottom.

So I reassert – given the economic conditions of where Obama started – in a mess – he did alright. I wish it had grown faster, too.

Trump keeps saying he took over a mess. He did not. He took over when things were going quite well, and had been going upward steadily for 8 years. That’s not a mess, even if Hopeyouarentafinancialadvisor might argue that it could have been better.

The real numbers, of course, will be those of the next few years under Trump. Will this trend continue? What will a full four or eight years show?

 

 

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I have never liked the ubiquitous supermarket reward programs we have in this country.

When I go to the supermarket, I want to pick my groceries at the posted prices, go to the cash register, pay and leave.

Instead, many of our local stores, like Vons and Ralphs (and many others) ask whether I have my rewards card with me. When I say I don’t, they ask for my phone number, because my number is associated with my account, and presumably me, and they can use that to look me up. Of course, since I don’t have an account, my phone number won’t work either.

So I do not get the best price. I pay more, sometimes significantly more, for my articles.

Why?

I do not pretend to know all that is behind this strategy, but obviously the stores want to know my identity to they can track my buying habits. I don’t cooperate because I am not a card-carrier and I object to being tracked. (Yes, I know, it’s  ridiculous, since I conform in many other areas…)

But here is my point: Whatever the stores are intending with this is not working. That I know for sure.

When I was at Ralphs the other day buying Christmas wrapping goods, my bill came out to be $10.58. The cashier asked me for my rewards card. I didn’t have one. He was nice to me, so he pulled out his own key chain and scanned his card for me. That reduced my bill by a total of $2.00. Not an insignificant percentage, just for carrying a card!

I was happy. I “saved” $2.00.

When I left the store I looked at the receipt:

My friendly checkout clerk has a rewards number ending in 8826 (blue box). By giving me my discount of $2.00 (green box) he added 8 points to his own rewards account (red box). I don’t know what that means, but I am sure it eventually results in some discount or other benefit.

This cannot be the intent of the Ralphs rewards program. They have no idea who I was and what I bought, but they gave me the discount, and they gave their employee the rewards points.

I prefer grocery stores that give everyone a good price without these crazy games.

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Rumination on the Trump Tax Cuts

Congress has passed the Trump Tax Cuts. The current administration and cabinet are the wealthiest in history. Our middleclass and poor have elected a government of billionaires and a president who has not published his own tax returns.

Now they have passed a tax reform that is a dramatic shift of wealth from the poor and the middleclass to the very rich and to corporations. And the Trump voters are somehow happy with this. They are told that this is good for the country, and they appear to believe it. The cuts for the wealthy and for corporations are permanent. The cuts for the middle class are temporary and small.

Congress makes it out to be adding “only” $0.448 trillion to the debt. Analysts claim numbers between half a trillion and $1.5 trillion, depending on whose numbers you want to trust.  That assumes that the current bubble of the stock market will continue to remain intact for a decade, which, of course, it won’t. Long after Trump is gone, and long after the current GOP Congress has been voted out, the middle class will still suffer, and the rich will still get richer, including the Trump clan. What a genius con, and Trump voters seem to be okay with that.

After slamming Obama for adding to the debt for many years, all of a sudden the debt does not seem to matter so much. Wait, however, for the next action of Congress, after the tax cuts are signed into law. Then, suddenly, they will be worried about the debt, and they’ll be all too eager to slash those pesky “entitlements.” They mean the Social Security I have paid into for 40 years, our money they have borrowed in previous years to keep up military spending. Suddenly, they will need to cut Social Security, and subsidies for medial insurance, to make up for the money they just gave to the rich and to corporations.

I might add here that I myself am the CEO of a corporation and the cuts to the corporate tax rates will result in significant benefits over the upcoming years. My company will benefit by putting the burden of more debt on my children and grandchildren, decades down the tunnel of time. Long after I am gone, my descendants will be paying for the debt created by Trump and his ilk.

I cannot speak for all companies. However, I can assure you that less tax payments are not affecting our expansion plans or hiring strategies. These factors are driven by market conditions, not by how much cash we have in the bank.

Even though we’re all getting a small tax relief in the next few years, I consider it immoral that our current kleptocracy has the audacity to suck up our current resources, without fixing the core problem of massive overspending on the military, and putting the burden on future generations of Americans.

We are no longer a democracy.

And to top it all off, the current populace seems happy with all that.

Thievery, it is!

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The Tax Cut Thing

I talked to my CPA about taxes. He thinks they are too high. I agree with him. Lower taxes are good. But you can only lower taxes if you lower spending. I do not see any less spending in the budget. The 57% we spend on defense is even going up. If we are lowering taxes (revenues) and not spending, we are increasing the dreaded debt we blame Obama for.

I just don’t get it.

The Bush tax cuts put vast amounts of money into the pockets of the wealthy. The middle class got one-time checks for $200 or so. This drove up the national debt tremendously, and eventually the economy nearly collapsed.

Then Obama bailed out, and in the process added $10 trillion to the debt. Obama didn’t spend more money. Look at the budgets. The additional debt that occurred during the Obama years was to undo damage created during the Bush years.

Now Trump wants to cut taxes again. The budget office calculates that the Trump tax cuts will add $5 trillion to the debt.

Seriously?

We just blasted Obama for adding to the debt, and now we’re adding more to the debt? And that is called fiscally responsible?

I get a kick out of Trump popularizing the estate tax he wants to get rid of. He talks to audiences of his supporters and calls it the “death tax.” The estate tax is a 40% tax on estates after the first $5.5 million for individuals and $11 million for couples. I venture to say that there is not a single couple in those Trump rally crowds that has a net worth of more than $11 million for whom the abolishment of the estate tax would make any difference.

However, there are a lot of individuals in Trump’s cabinet who would benefit from it. And there is Trump himself.

He has convinced the American electorate that the abolishment of the “death tax” is a good thing for them.

A con man Trump is.

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Yesterday I received a slip from the U.S. Postal Service at my door. It indicated they had tried to deliver a registered package. I didn’t expect any registered mail, so I was curious.

I went to the post office, stood in line, and eventually got this package:

Odd. I didn’t order anything from Mumbai, India. I don’t know anyone at the American School Of Bombay. And especially not anything that would require registered mail.

Then I checked the back:

This didn’t help either. The description said it was a Vector. It was checked as a gift. And the postage to mail it was Rs 131. When I looked that up it was 131 Indian rupees. A rupee is about $0.015. So mailing the package cost him about $1.96.

I didn’t want to open this. All I could think of was anthrax or a bomb or something else nefarious. I had just moved to this address. Who would even know what it was. And particularly Scott Amitron in Mumbai. I decided to let this sit there unopened until I figured it out.

Then it dawned on me. I checked my Amazon account:

Sure enough, the last time I was on Amazon it showed me a razor handle. Like men are wont to do, I am stuck with the type of razor and blades that I used 30 years ago. I won’t upgrade to the fancy razors of today, with five blades and twenty-dollar handles. I just like my old Atra Plus double blades that have worked for me for decades, even though the blades are hard to find and my one remaining handle is getting pretty rusty and sketchy. So when I saw this replacement handle, I clicked on it and ordered it for $4.90, free shipping.

Not in my wildest dreams did I think that somebody in Mumbai in India would then fulfil my order and send me a razor blade using registered mail and pay 131 rupees, packaging and handling not included.

I could have gone to the local drug store and bought a razor and spent a lot less time than I did waiting in line at the post office to sign for a registered package from India.

Oh, the mysterious ways of Amazon and global commerce.

I can’t wait to try my brand new Mumbai razor tomorrow morning.

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“The country, we took it over in 20 trillion you know the last eight years they borrowed more than it did in the whole history of our country. So they borrowed more than $10 trillion. Right? And yet we picked up $5.2 trillion just in the stock market. Possibly picked up the whole thing in terms of the first nine months. In terms of value. So you can say in one sense, we are really increasing values and may be in a sense, we are reducing debt. We are very honored by it and very, very happy by what’s happening in Wall Street.”

Donald Trump in Hannity Interview

The self-proclaimed king of debt argues that since the stock market rose by $5 trillion, that somehow offsets the national debt.

The stock market enriches corporations and investors. The national debt is carried by the people. You can reduce debt by spending less, or raising taxes, neither of which Trump is suggesting. He is pounding on Obama for increasing the debt, yet his proposed tax cuts are bound to skyrocket the debt.

That’s just not how it works, Mr. President. Trying to dumb America down some more?

And Hannity, thanks for the “tough” question. Definitely dumbing down America.

 

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The Administration and the GOP are now heading for tax reform. They want to cut taxes. I read that to mean:

  1. Lower taxes for the rich and Trump’s cronies
  2. Burden the country with more debt to account for those tax cuts
  3. Give the middle-class a one-time check of a few hundred dollars that is enough to pay for one trip to Costco – just to make them feel good.

Trump supporters want lower taxes, and they believe their hero that those couple of hundred dollars (IF THAT) is their fair share.

To support this initiative, Trump tells his supporters that the United States has one of the highest tax burdens in the world. That is simply not true whatsoever.

Trump lies.

It takes about 5 seconds to google and see the reality:

[click to enlarge]

Source: Taxfoundation.org. Check this site for a wealth of more information.

This shows that the United States is actually below average.

I am not saying that paying taxes like they do in Belgium or Germany is good. I am just saying that Trump lied to his followers, whom he obviously considers too lazy or stupid to look up the facts for themselves.

Trump wants to cut taxes for billionaires. And the middle-class, the unemployed coal miners, “the milk people,” the Carrier workers that just lost their jobs in Indiana, they are still supporting Trump.

Trump is raiding this country for himself, his clan, and his cronies in the fossil fuel business, and the Russian mob, and the American people are blind to it and somehow think this is good for them.

One day, after 2018, or after 2020, we will all wake up with massively more national debt, less jobs for the lower and middle class, less education for all, and we’ll realize we have been duped. That is if we’re not in some new massive war with a new adversary like Iran or North Korea that he starts just to crank up the military industrial complex.

Trump is Making America Stupid Again.

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Well, you know, we’re going for 15 [percent]. We’re going to see, and we’ll see. But, you know, I don’t want to say anything about negotiation. I mean, we are asking for 15 percent, and we think we’re going to grow tremendously. So I deal with foreign countries, and despite what you may read, I have unbelievable relationships with all of the foreign leaders. They like me. I like them. You know, it’s amazing.

So I’ll call, like, major — major countries, and I’ll be dealing with the prime minister or the president. And I’ll say, how are you doing? Oh, don’t know, don’t know, not well, Mr. President, not well. I said, well, what’s the problem? Oh, GDP 9 percent, not well. And I’m saying to myself, here we are at like 1 percent, dying, and they’re at 9 percent and they’re unhappy. So, you know, and these are like countries, you know, fairly large, like 300 million people. You know, a lot of people say — they say, well, but the United States is large. And then you call places like Malaysia, Indonesia, and you say, you know, how many people do you have? And it’s pretty amazing how many people they have. So China’s going to be at 7 [percent] or 8 percent, and they have a billion-five, right? So we should do really well.

But in order to do that — you know, it’s tax reform, but it’s a big tax cut. But it’s simplification, it’s reform, and it’s a big tax cut, 15 –

— Donald Trump, Wall Street Journal, July 25, 2017 in the Oval Office – Read the full transcript here.

This shows how well Trump understands how economies work. How that man got rich is beyond me. Was it all money laundering, stiffing contractors, and walking away from failing projects?

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After pulling out of the Paris Climate Accord, Trump and Pruitt have been announcing that this would create lots of American jobs.

On Meet the Press on Sunday, Pruitt said that since the fourth quarter of last year to most recently, we have added almost 50,000 jobs in the coal sector.

This statement is completely wrong. There are only about 51,000 jobs in the entire coal industry in the U.S. Last month, 400 coal jobs were added. The entire U.S. mining sector added 7,000 jobs last month or 50,000 since the 4th quarter of 2016. Perhaps that was the figure Pruitt was quoting, but he carefully misquoted it so the numbers were vastly inflated.

Trump and Pruitt seem to be building up fossil fuel industries as massive job creators, which is just flat wrong. In comparison, just look at Tesla, just one company, which has over 1,800 job openings in the U.S. right now. Tesla is not known for its exciting benefits and great wages, but their high-pressure jobs in factories must be at least as good as coal mining jobs. If you had to pick a job, working in a coal mine or working for Tesla, which would you pick?

Coal is dead. It’s a dead industry, and no amount of deregulation is going to bring it back. Trump and the EPA can do whatever they want, we’re going to be buying less and less coal, and coal jobs will continue to disappear. The people are deciding, not Trump.

It’s all bluster.

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I saw this post by a “Bob Clark” on Facebook today. I don’t know him. But his point struck me.

He is completely wrong on his facts. But he writes them as if they were facts. The stock market went from 7,949 to 19,827 under Obama, and now to 21,206 under Trump in his first five months. Averaging this out over eight Obama years, this is not a rally, it’s just the continuation of Obama’s slope.  How Trump can take any credit for this is beyond me. How Trump supporters bolster their arguments is dumbfounding.

June 2, 2017: 21,206 – Today under Trump

January 20, 2017: 19,827 – day Obama left office

January 20, 2009: 7,949 – day Obama took office

The DOW more than doubled under Obama. When Obama took office, it was in freefall. We were worried about total economic collapse. Remember?

Now Bob Clark is acting like Obama left an economy like Bush did. Seriously?

Here is the graph:

This looks to me like the slope of the graph has simply continued the way it was going under Obama.

The current rally in the stock market is mostly due to tech stocks, like Amazon and Apple. I am not seeing any rise in oil or coal, but granted, defense contractors, like Lockheed and Boeing are going to see bumps from the Saudi arms sales.

So I don’t know what Bob Clark’s ticker looks like between 2008 and 2017, but here is mine.

And calling Trump a racecar?

Really?

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Here is Trump rolling back progress in keeping our federal lands protected, our air clean, and our heritage intact. And he is proud of it, telling the coal workers behind him that they’re getting their jobs back. This makes no sense to me whatsoever.

First, as the Washington Post article suggests, the action will not make any difference in the number of coal jobs. Coal production and consumption in the United States has gone from about 820 million tons in 2000 through about 2007, and have steadily declined to below 600 million tons long before Obama’s freeze on federal coal leasing in 2015. Demand has been well below supply for the last 15 years. Trump’s ceremonial undoing of Obama’s regulation will not make any difference in this trend. We’ll burn less coal, and that’s a good thing.

Trump and his cronies paid by the coal industry are reveling in the admiration of the coal workers.

COAL WORKERS, for heaven’s sake! Coal is one of the dirtiest industries. There is no such thing as clean coal. Not only does it pollute the environment, our water, our forests, coal mines are ugly and leave scars upon the land that will be there for millions of years. Coal workers get sick and die years, sometimes decades earlier than their contemporaries. Read Sons and Lovers by D.H. Lawrence and then tell me you want to work in a coal mine! But Trump and his billionaire cronies think they are doing these coal workers a favor by sending them back into mines. And the coal workers seem to be lapping it up. This is so wrong.

The coal workers should be going to school and learn about solar power. That’s where the money is. That’s where the jobs are.

source: Forbes

This chart shows there are more than four times as many jobs in the solar industry as there are in the coal industry. Even wind energy jobs are more plentiful than coal.

When coal demand goes down to 400 million tons in the next ten years, those are the skills they will need.

Trump will ride into the sunset of his life then, much richer, living in his golden tower, and the miners will still be unemployed, dreaming about working in coal mines, and admiring their billionaire benefactor.

This makes no sense to me at all.

 

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I for one do not agree with your military spending, and the need for increasing it. We spend way too much on the military, and from THAT program, we’re not getting the results we expect. Taking meals from seniors and school children to pay for another fighter jet is ludicrous, despicable, and immoral.

It was immoral under Reagan, under Bush, under Clinton, under Bush, and under Obama.

It is still immoral under Trump.

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Back in June of 2011 I predicted that the once popular Todai Sushi Restaurant in Mission Valley would go out of business. Here is the blog entry I wrote then.

This is what it looks like today:

todai-graffiti todai-graffiti

It has obviously been out of business for a few years. I read that someone recently bought the property, is cleaning it up now in order to launch a new restaurant venture.

It was Lehr’s Greenhouse Restaurant and Florist between 1980 and 1987, and I remember going there once for a Sunday brunch sometime in 1986 for some memorable event, like a birthday or Mother’s Day.

Ruins now but memories remain.

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social-security-trust-fund

Ok, I disagree with Bernie. This makes no sense to me.

We have talked about income taxes. I agree that taxes should be proportional. A person with $10 million salary a year should pay the same proportion in taxes as a person making $50,000. Well, if you take away loopholes, and shelters, and tricky accounting, and fraud, the person with the $10 million salary is likely paying a higher rate than the person making $50,000 already.

Social Security is not a tax. It’s meant to be a fund you pay into during your working life to get a pension later. It makes sense. The only argument conservatives often have is that people should be allowed to save their own money and then use that later. Why trust the government with it?

Well, I can honestly say that if I hadn’t had to pay Social Security all my life, I would not likely have saved the same amount. So I think, at least in my case, it worked. I paid in.

When I reach the correct age, I can start withdrawing based on what I paid in. If I had made $10 million a year, and paid in $1 million every year, would I get out several million a year in “Social Security” now? Of course not.

What Bernie is suggesting here is making Social Security just another tax.

That makes no sense to me. I don’t want rich guys to pay so I can have Social Security benefits. I paid in all my life, and entrusted the government with my money. The government now owes me that money. It is my money. It is not an entitlement. The government has no right to touch it — even though I know it did, and that’s why it wants to play shenanigans with it now.

No, Bernie, I am not with you.

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