Post Trump

Over the 250-year history of the US, the country periodically finds itself in turmoil, while it reinvents itself. The last time this happened was during FDR’s time, when the depression was followed by the Great War. During these times of crisis FDR was admired by many and feared by many. This was followed by 50 years of cold war and quiet long-term growth, which included the civil rights era and most important, the increased power handed over to the federal bureaucracy. The first step in reinventing is the violation of the norms and this can be heard in the way Trump is defined. He is not presidential meaning he is not like other presidents. He upset the republican party, the democratic party and the US relations with the rest of the world. Roosevelt also broke the norms and, in many cases, broke the laws but the country survived and grew. The current turmoil will continue for several more years and even after Trump is out of office. Some will desire to return to the world before Trump but going back will not work. Too much will have changed not the least of which is the effects of AI. The next ten years will see the greatest changes and growth in US history. Get ready young people.

Netherlands

The US income tax system has a special carveout for investors. The top income tax rate on earned income (wages) is 37% but the top tax rate on unearned income (investments) is only 20%. It has often been proposed to do away with the special break for investors and the Netherlands recent did the equivalent. They passed a law to tax the unrealized gains on investment. In the past the tax on gains would not take effect until the investment was sold. You buy stock for a dollar and year later it is worth 2 dollars but there is no tax until you sell then the gain of one dollar would be taxed at 20%. The Netherlands new law says that you will pay the tax even if you don’t sell and it will be at 37%. This in essence, removes the special tax status from the gains. If the US would adopt this then the special status for investment income would no longer exist. It would hit mostly higher income people and bring in about $10 billion per year. On the downside it would discourage investment.

National debt

Since 1950 prices have increased by 3.5% each year while government spending has increased by 7% resulting in a $37 trillion-dollar national debt. Public assistance programs including federal and state have increased by 6%. Raising taxes to reduce debt doesn’t work because when the government gets new income it spends the money on new programs. People believe that tax increases can lower the debt but polls show that people do not want their taxes raised. 70% favor taxing the rich. It is the old story, don’t tax you, don’t tax me, tax the man behind the tree. The US currently has the most progressive tax system in the world and most people want to tax the rich even more. History has shown that just increasing taxes will not reduce the debt. The answer is to reduce spending but that is very unpopular especially among people who receive public assistance. Politicians know this so it is just about impossible to stop the increase in benefits. Benefits include not only welfare (public assistance) to the poor but tax breaks for the rich, things like the home mortgage interest deduction. Once in a great while a politician will campaign on raising taxes but they do not get elected. The most famous case is the Mondale campaign against Reagan in 1984. During his 1984 presidential campaign, Democratic nominee Walter Mondale famously pledged to raise taxes to reduce the federal budget deficit, stating, Mr. Reagan will raise taxes and so will I. He won’t tell you. I just did. His plan aimed to raise $85 billion, primarily targeting corporations and wealthy Americans. Reagan won 49 states and 525 electoral votes, the most in history. He barely squeaked out a victory in his home state of MN by 3,761 votes….1,036,364 to 1,032,603. Reagan dramatically lowered taxes but he increased spending by far more and the debt ballooned from 33% of GDP to 53%. Today it is 120%.

Europe's obit

In 1941 the US stepped in to save Europe from self-destruction but today Climate change is writing Europe’s obituary. Starting about 40 years ago various climate activist groups like Greenpeace took control of the government. They believed they were saving the world by going all out to eliminate fossil fuels. It was an emotional response void of real science and pushed forward by false science. Even though the goal was carbon free they decided to close the nuclear plants which was one of the results of acting on emotion. This same lack of thinking things through, led them to believe that solar and wind could be their sole energy sources, only to later discover that Germany, the economic engine of Europe is not that sunny or windy. In 1993 they formed the European Union and turned the government over to the bureaucrats in Brussels, who saw their job was to write regulations to promote green energy. This had the effect of bringing any new innovation or industry to a grinding halt. Google AI says it this way: There is a strong consensus among business leaders and analysts that Europe is heavily burdened by regulations, which some reports suggest stifles innovation, slows competitiveness, and imposes high compliance costs. Europe, since WW 2 has depended on the US for national defense and they used their funds to build high speed transportation and social programs, often pointing out that they had national healthcare. Then came the Ukraine War and the cheap gas from Russia disappeared. At the same time the US, carrying $37 trillion in debt told Europe, they would have to increase their defense spending. To make things worse Europe is not replacing its population. In 2023 3.7 million babies were born in Europe and 4.7 million people died. The result is that Europe is deindustrializing while America is reindustrializing.

SAT

The College Board is a non-profit group that deals with the SAT and ACT entrance exams. It has been around for a hundred years and many times shown to be biased toward a certain class, mainly white and higher income. This caused many schools to do away with the SAT and revert back to GPA’s but those had suffered from grade inflation and were a poor substitute for testing. Now some schools are reviving the SAT. The College Board which is a $1.3 billion business is the only game in town. They have now moved into determining what kind of course work high schools should have and highlight Advanced Placement (AP) courses. The teachers teach to the test and many students purchase past test to review. No matter what changes they make, the more affluent and whiter the student is the better the performance. In one attempt to rectify this, the College Board started an AP class called African American Studies, which included topics like critical race theory (CRT), intersectionality and queer theory. Recent attempts to help, including Common Core and No Child Left Behind, have only caused headaches for teachers and confusion for students. The test score gap between whites and minorities continues to widen. Recent changes in the economy, based on new manufacturing jobs and AI, may move students away from college and required skills not measured by mental acuity test but more toward practical learning.

Trump right or wrong

Most people are not aware or have forgotten that Trump talked about a run for the White House going back to the late 1980’s and the was the butt of many jokes. In the White House Correspondents Dinner in 2011, Obama became famous showing off his comedic skills as he skewered and mocked Trump. He had the crowd roaring with laughter. Only a few years later the laughter continued as Trump announced his candidacy and was welcomed on programs like Morning Joe where he was roundly made fun of as he expounded on his unusual views of popular subjects. James Fallows claimed that the chance of a Trump nomination was exactly zero. Ben White said he would eat a bag of rusty nails if Trump won. Peter Fenn doubted Trump’s celebrity would translate into a primary win. Even experts in his own party considered him a joke as George Will dismissed his chances. The people who spent their lives becoming experts in the field of politics, were totally baffled by Trump and yet these people still maintain their positions as political guru’s. Every time Trump does something they immediately announce how it is the wrong thing. They seem incapable of reevaluating their original position regardless of how many times Trump makes the right move. To many readers these guru’s have lost credibility. No politician always makes the right move but sometimes they do. Trump has more right and wrong moves than most politicians because he makes more moves. He has so many irons in the fire that the press can hardly keep up.

North Korea

North Korea used negotiation time to develop a nuclear bomb. They increasing their nuclear capabilities using technology from Russia leading up to their joining the Nuclear Proliferation Treaty (NPT) in 1989. They failed to pass inspections by the International Atomic Energy Agency (IAEA). This triggered a nuclear crisis in 1994 when they would withdraw from the NPT. The negotiation continued while they were building up their nuclear program. Meetings continued and in 2006 they tested their first nuclear bomb. Iran was following the same plan hoping to build up their military while developing the bomb. Iran allegedly started the AMAD Project with the aim of developing nuclear weapons in 1989 and it ended in 2003. In 2006 they resumed their uranium enrichment. Four US presidents Bush, Obama, Biden and Trump were involved in some type of talks with Iran over a 25-year period. During these years Iran was providing assistance to groups like Hamas and Hezbollah and aiding in the attack against US soldiers. On several occasions the people of Iran took to the streets to protest against their government only to be put down by their leaders.