Let’s Start A Rumor

According to James Freeman at the WSJ:

Mr. Trump said under questioning from Mr. Cruz that his tax returns have been getting audited continually for 12 years, and speculated afterward on CNN that it might be because he’s a “strong Christian.” The audits apparently began around the time that Mr. Trump was preparing to marry for the third time.

If we believe The Donald’s fuzzy assertions that he is still getting auditing and it started after a divorce then the conclusion must be that this is a criminal investigation of The Donald’s taxes.  According to FindLaw, the IRS generally has three years to assess taxes but may extend that to six years under certain circumstances.  So at least six and perhaps nine of the twelve years are gone.  If, however, there are criminal violations like fraud, there is not statute of limitations.

The second piece of evidence supporting this rumor is his divorce and third try at matrimony.  High stakes divorce means that a subject must attest to his net worth.  The IRS needs a beginning net worth to a proceed.  Divorces are a great source of a beginning point because the person has signed a legal document to that effect.  Even better for the IRS, these folks often underestimate their net worth to reduce the divorce settlement.  That means that it is easier to show unreported income.

We hope we are not stuck with Herself versus The Donald this summer and fall.  But if we are we hope they are both defending themselves in court.

Fault-Lines And Priorities

There are fault-lines within conservatism and between conservatives and liberals.  Then there are priorities.  Rod Dreher’s coinage of Crunchy Conservative revealed some of the the challenges to us.  Home school?  No thanks but we would not stop you.  Second Amendment?  We are supportive but it is not a priority.  Organic food?  Only if there are no other alternatives, e.g., if we need a kiwi and the only one in the store is organic then we would buy it there rather than go elsewhere.

We are, at least in part, Kudlow Conservatives:

But I say inequality is not the problem. The problem is a lack of growth. Middle-class people who haven’t seen a raise in all these years don’t want to punish success, and they’re not jealous of those who have done well. They just want their piece of the pie.

The fault-line is between inequality and growth.  We not sure Larry is right on how the middle-class feels but we know how to encourage growth with a lighter regulatory  touch and lighter taxes or even moving taxes to consumption from investment.  Why would we want to reduce inequality and how would we do it?  Isn’t it better to double everyone’s income rather than “improve” the Gini coefficient?  If you decide to reduce inequality how do you do it?  Do you reduce or increase taxes?  Do you reduce or increase the minimum wage?  If you think throwing poor people out of work will reduce inequality can you explain exactly how that will happen?

The second fault-line is climate change and reforming entitlements.  There is no obvious reason why this is a fault-line between the left and right but it is a fault-line.

Sidebar: Well, of course there is a reason.  It is the left’s thirst for power.  Climate change gives them an opportunity to seize power.  So will the bankruptcy of Social Security and Medicare.  End sidebar.

Folks interested in “fighting” climate change are rarely interested in reforming entitlements.  Entitlements have gotten so large that reforming them is the only way to attack the deficit.  Ignoring climate change will help with growth and allow us to focus on the serious issue of reforming entitlements.

The third fault-line is immigration and free trade.  Free trade tends to be a left-right fault line but the immigration fault-line runs through both camps.  We are for unilateral free trade but it is not going to happen.  Instead we are settling for enforcement of the immigration laws and perhaps some movement towards free trade.  Sure we would like a review of the immigration laws but that can wait.

So our priorities are growth, reforming entitlements, and enforcing immigration laws.  Yup, appointments, defense, and foreign policy are important too but first things first and appointments will be correlated with the first three.  There is a large list of actions we would like to see but you gotta prioritize.

Good News?

The University of Missouri Board of Curators terminated Melissa Click.  They have done the right thing.  Time will tell if they did it the right way.  At any university due process is a critical issue.  We don’t know much about exactly how this happened but it will come out.  Here is what faculty leaders have said so far:

The Columbia campus faculty council chairman Ben Trachtenberg denounced the dismissal in a statement as “terrible,” saying Ms. Click was entitled to “a fair process.” Faculty council member Angela Speck told the Missourian newspaper that it was “ridiculous” that Ms. Click could be fired “without due process.” Both said at a Thursday meeting that the decision violated Ms. Click’s First Amendment rights, according to the Missourian.

It looks to be another disappointing display for faculty leadership but all the data is not yet in.  We hope that the Board of Curators have acted appropriately and that we can just be disappointed in the two faculty members above.

We were involved as a reviewer in a situation where a faculty member was terminated.  We found process problems and the termination was reversed and the faculty member was eventually tenured.  It was the right decision but with the wrong process and that almost always loses at the university.  We take no position on the process as of yet but support the decision.  Professor Click deserved to be terminated for her actions.  We hope the faculty will investigate the process and, if appropriate, support the decision.

If Professor Click’s termination holds up we will have an interesting quasi experiment.  What will be Professor Click’s marketability post-termination?  Will her next job be up or down the food chain?  That will tell us about universities at this point in time.

Herself Versus The Donald

We are not supporters of The Donald (except for the general election) but David Harsanyi at NRO has lost his mind.  His title says it all: Why President Trump Would Be A Bigger Disaster Than President [Hillary] Clinton.  He seems serious.

We are willing to agree that The Donald is completely untrustworthy.  You don’t know what you will get with him.  Harsanyi is optimistic that gridlock will stop Herself.  Does he mean like it stopped the current President?  She will galvanize conservatives.  Like now?

Even though he is untrustworthy, there are two reasons to think that The Donald will help conservatives.  First, he might stop illegal immigration.  It is his issue.  Second, he will nominate better judges than Herself.  We don’t know how good but they will be better.  It is likely that four Supreme Court Justices (Scalia, already vacant, Ginsburg (b. 1933), Kennedy (b. 1936), and Breyer (b. 1938)  will be replaced in the next eight years.  As the last three presidents have all been re-elected despite challenges, you should expect the 2016 winner to win in 2020.

Don’t vote for The Donald in the primaries but do vote for him in the general.  He deserves our support in the general if he is nominated.  It would not be a good choice but it would be the best choice.



Kudos And A Comment

Neo-neocon has a great post on the state of the race for Presidential nominations.  We agree that it has been particularly cruel.  The Republicans started out with perhaps the most impressive field in history … and they will end up with Trump?  The Democrats never had a chance but that has been true all along.  It is depressing but we are somewhat more optimistic than her final paragraph:

It strikes me, and not for the first time, that the Trump candidacy may represent the death knell of conservatism, probably for a long time in this country, maybe forever. Conservatism has long been a hard sell, swimming against the tide of so many cultural influences and against the gimme-ism inherent in human beings. But I don’t count it out yet.

We are more optimistic because trouble is coming down the pike and the country will need conservatives to fix it.

Sidebar: We commented earlier on Christie’s interest in reforming entitlements.  How could he endorse Trump?  End sidebar.

Personalities like Obama and Trump that ignore the gathering storm will mean that there will be an opportunity for conservatives (Churchill in this analogy) to come in and fix it.  And like Sir Winston, they might be thrown out after they save the country.  There is still space for pessimism but electorates, including ours, that have made foolish choices have come to their senses before.

State Of The Debate

We know it is from Facebook but it still represents the state of the debate:

“Let us be clear about our choices.  When we raise taxes on the wealthiest Americans, no one dies.  When we cut Social Security and Medicare, people die.”

GOP candidates have been reluctant to emphasize economic issues.

Sidebar: What are economic issues (or is economics an issue)?  Growth is obviously one.  Is the deficit one?  Are Social Security and Medicare two more?  As we see it they are all tied into economics and it is a problem with debates.  We no longer watch debates because they are so uninteresting.  We need to know about priorities especially about these large issues with so many interconnected issues.  End sidebar.

The reluctance of candidates, other than Christie, to put any emphasis on Social Security and Medicare (SSM) leads to silly statements like the quote above not being laughed off the planet.  Raising taxes probably does kill folks but it would be hard to establish 100% causality.  On the other hand failure to cut SSM will kill people.  The Social Security money runs out in about 20 years (well, almost, 2034).  The cuts will be severe and life threatening then (25%).  If the cuts are made now they can be much less severe and based on means testing.  We would much prefer ownership of accounts but means testing seems like the politically viable solution for Social Security.  Nobody dies because of means testing.  It will probably take a few iterations to get the means testing right so start now and ramp up over time.  It is an easy fix compared to all other problems with the federal government.

It is a similar story with Medicare exacerbated by the lack of market mechanisms.  The current bankruptcy date is 2030.  There is more uncertainty about the exact date because changes in the price of medical care are more difficult to predict than the other variables like retirements and death.  The lack of market mechanisms makes Medicare a much more difficult fix than Social Security.

For reasons that are not entirely clear, Democrats are allowed to be foolish about SSM.  The country cannot afford for the GOP to be equally foolish.  Unfortunately, that is the state of the debate in February 2016.  Perhaps one of them will receive wisdom after they get elected but Congressional action is still required.  We need debate to shape action rather than the head-in-the-sand attitude of the quote.

Facebook Fun

We’re not sure what is wrong but the title doesn’t show up.  It is Facebook Fun.

From a Facebook post: “Employed Americans paid into Social Security with every paycheck.  Our benefits aren’t some kind of charity or handout!”  Then it goes on to complain about benefits for Congress Critters and say that that is welfare.

It helps us understand why The Bernie and Herself are the only Democrat choices and The Donald leads on the Republican side.  There are lots of folks out there that are not well informed.  Social security is run on a cash basis.  It is welfare.   Unfortunately, welfare, like fascist, has become an insult.  For a long time, the federal government took money from MWG and gave it to others.  Now the situation is reversed.  Soon the government will need to reduce the payouts or increase the payments received.  We often talk of the unfunded liability of the federal government related to Social Security and so on but it is not a liability because the government can choose to reduce the payments or eliminate payments to certain individuals.

On the other hand, pensions earned from the government are a liability of the government.  The government cannot choose to reduce pension payments unless it is specified in the contract.  For example, in the state of Wisconsin, post-employment increases caused by market increases can be rescinded if the those market increases are undone.  If these obligations are not paid then the worker has a legal right to proceed in court.

It would be great if we could have privatized Social Security but we failed.  It would have been expensive but the two trillion dollars the current administration wasted could have gone a long way towards fixing Social Security.  You can envy the benefits of the Congress Critters but they are what they are.   We could reduce the benefits for future Critters.  Our Social Security payments are welfare or transfer payments or whatever term you find least offensive.  We hope that the government starts means testing soon and includes us.  Social Security payments and taxes are a political problem rather than a legal obligation whereas pensions are a legal obligation.

It would be nice to have a serious discussion of the important economic issues of growth, spending, and taxing in the run for the presidency.  We are not encouraged so far.

Apple And The FBI

Apple and the FBI are in the news:

The furor stemmed from a judge’s order this week requiring Apple to help the Federal Bureau of Investigation circumvent a passcode protection system on the phone used by Mr. Farook. Apple has said it will fight the order, setting the stage for what both sides expect will be a precedent-setting case in an era of ubiquitous smartphones.

It is one of those lightening rod issues for conservatives with Kevin Williamson on Apple’s side and Charles Krauthammer and Tom Cotton on the FBI’s side.  All three (“deplorable”, “dead terrorist privacy”, and “hurray for Tim Cook”) are in take no prisoners mode.  Let us consider an alternative: Apple is doing the right thing but they should accept a solution eventually.  Apple’s position is similar to a tax preparer when the IRS requests information about a tax payer.  The tax preparer has a responsibility to give his client the right to fight the subpoena.  In Apple versus the FBI, it is different but similar.  It is different because it is not clear the accused is Apple’s client.  It is similar because we the people want an outsider, in this case the court, keeping tabs on the federal agency.

We are not always fans of court proceedings but it this case we are an enthusiastic supporter.  Apple has a responsibility to fight the order but at some point it needs to accept some court’s guidance.

No Dilemma

William Galston at the WSJ is trying to beat the drums for the Democrats:

Some leading Republicans have quietly told me that they would break ranks if Mr. Trump wins their party’s nomination. A few have said so publicly. Unless a viable alternative emerges soon, every Republican will face the same dilemma.

It is no dilemma given the folks running for the Democrat nomination.  We don’t want The Donald to be the GOP standard bearer but he is an easy choice over Herself or The Bernie.

Where Are The Faculty?

The recent reigniting of the Missouri dust-up over Melissa Click is the umpteenth (sorry to use such a technical term to avoid looking up links) example of problems at a university where the faculty have squat to say or try to get everyone to wait but never, as a faculty, get around to saying anything.

Faculty have substantial influence over the activities of a university.  For example, Lawrence Summers was forced out as President of Harvard by the faculty.  Universities vary in the influence that a faculty can bring to bear but in almost every American university the influence of the faculty is substantial.  The control curriculum, have an enormous impact on staffing, and have a large impact almost everywhere else.  Yet when individual faculty members and others act in reprehensible ways the faculty cannot bring itself to respond.  The same is true when students behave badly, e.g., Yale.

Faculty have failed themselves and forfeited their birthright as intellectual leaders.  We recognize that these events happen at both private and public universities but they all set the stage for budgeting at the state level.  Is it any wonder that faculty find little support for state budgeting?