Courage and Commitment on Trade

A lot is being made of the 25% tariffs that President Trump has imposed on $200+ billion of Chinese imports.

Trump originally imposed a 10% tariff on these goods last September as a way to get the Chinese to the bargaining table. Sources say that the Chinese had agreed to a comprehensive trade deal in those talks only to renege at the last minute. This led Trump to turn up the heat on the Chinese some more with the higher tariff rate.

Another $300+ billion of Chinese goods that are imported to the United States have not been included in the tariffs. These include phones, shoes, apparel, auto parts and other items. Trump continues to hold this back if he needs more leverage.

China's economic power has grown over the years with its one-sided trade views. China effectively closed off imports of U.S. goods for decades. To do business and get access to its huge consumer market the Chinese government forced many U.S. companies to commit to manufacturing sites there, in addition to requiring them to provide their most valuable intellectual properties in order to have an entry into the Chinese market. What intellectual property China did not obtain legally they stole illegally.

At the same time, China began flooding the U.S. with imported products fueled by cheap labor and lax environmental and labor standards.

Republicans and Democrats alike did nothing about the inequity or the illegality. Our elected representatives literally gave away substantial portions of our domestic economy by thinking short-term rather than long-term. They had the advantage of having the most attractive market in the world and yet they gave it away and did not get anything in return.

China grew and got richer with each passing year. At the same time, the United States saw millions of high paying middle class manufacturing jobs lost. This change also caused a further worsening of the social and economic divide between the college-educated service class and the high school educated worker class.

Only one man really stood up and questioned the wisdom and fairness of it all. That man was Donald J. Trump.

It is not easy negotiating with the Chinese on trade because they have had it so good for so long. No one wants to give up an extremely advantageous situation easily. The Chinese are no different.

The mainstream media seems to be portraying all of this as another example of an unhinged Donald Trump who is going to do great damage to the American economy and consumer.

Here are a few headlines in the wake of the tariff announcement.

Source: NPR

Source: Bloomberg

However, as I have written before in these pages, Trump understands the big picture. He also understands the long game. Trump also understands that to win you have to fight and take calculated risks. Of course, it is easier to do that if you have less to lose than the other guy.

Trump has been derided in the past for stating that "trade wars are good, and easy to win."

I don't know that is always true but it is a lot easier to win a trade war when your country is importing a lot more than it is exporting. And that is the case with the United States today---by a wide margin.

Beyond thinking about the long term, rather than the short term, Trump understands that in order to do deals and reach agreements, you need to understand your strengths and weaknesses. You also have understand the strengths and weaknesses of your adversaries. You also have to be able to apply leverage when you have it. Most everyone on the planet is driven by enlightened self-interest. There are not many who have something that they are going to give up willingly.

It might require a little bit of short-term pain to get the right long-term deal with China but I think a lot of the media scare mongering is overplayed.

Late last year I pointed to an analysis by a group of European economists who projected that most of any tariffs on Chinese imports would be borne by Chinese producers not American consumers.

U.S. companies and consumers will only pay 4.5 percent more after the nation imposed 25 percent tariffs on $250 billion of Chinese goods, and the other 20.5 percent toll will fall on Chinese producers, according to authors Benedikt Zoller-Rydzek and Gabriel Felbermayr.

Did we even notice any effect on prices from the 10% tariff already in place? Inflation is still running below 2%.

On the other hand, there has been a noticeable effect on the U.S-China trade balance since the tariffs were implemented.

Consider this report from the AP in which it was reported by the Commerce Department that the trade goods imbalance with China dropped 28% in February.

Exports to China rose 18.2% to $8.4 billion.

Imports fell 20.2% to $33.2 billion.

That is a pretty big change in a short period of time.

President Trump is also threatening tariffs on all foreign auto imports to correct the trade imbalance in this sector. That is also getting media push back. In this instance Trump is using the threat of tariffs in order to bring pressure on the EU and Japan to negotiate better bilateral trade agreements.

The rationale for this is that U.S. auto research and manufacturing are "vital to national security interests." That was a finding of a recent Commerce Department report. The same logic was used to justify tariffs in the steel and aluminum industries earlier and it is hard to disagree with that conclusion. The United States would be very vulnerable from a defense standpoint if it did not have metal and vehicle producing manufacturing plants.

Autos are another sector that the United States has given away large segments of the U.S. market and has gotten very little in return. $200 billion of cars/light vehicles are imported into the United States annually. That is almost four times what the United States exports.

The EU currently levies a tariff of 10% on all car imports. The similar U.S. tariff---2.5%. In addition, every car in the EU is also subject to the imposition of value-added taxes in individual countries that average around 20%. There is no corresponding value-added tax in the United States.

The EU exported $37 billion of vehicles to the United States in 2018. The United States only exported $7.7 billion to the EU the same year.

Japan has no tariff on cars entering its market but it has historically put many non-tariff barriers in place to protect its automotive market such as special standards, discriminatory taxes, and bureaucratic entry procedures. The result is that the average American car costs thousands more dollars in Japan than in the United States.

Japan argues that buyers in that country don't want U.S. cars and the U.S. automakers have just not made the effort to win buyers over. However, those automakers have been beating their heads against the wall trying to gain entry to that market for years which has made it difficult to put the dollars into making that effort worthwhile.

To give you an idea of how large the trade imbalance in autos between the United States and Japan is, consider that U.S. automakers currently sell only 15,000 cars a year in Japan. Japanese automakers are selling over 6.5 million cars in the United States of which about half are manufactured in the U.S. and the balance imported. Does that seem right?

Credit: The Wall Street Journal

Keep all of this in mind as you see news reports that try to paint Trump as unbalanced, unhinged or unreasonable.

Does it look like the United States is playing on level playing field in trade?

In the first few decades after World War II there were good reasons for Europe and Japan to want to protect their markets in order to allow them to rebuild their manufacturing base.

The same held true for China as it attempted to get beyond its status as an emerging economy.

Those days are gone.

It is long past time to have free and fair trade that goes both ways.

Fortunately, we have a President that understands all of this and is willing to hold those to account who don't want to play fair.

Would any other politician have the commitment and courage to do what he has done?

Those who like to criticize Trump should consider that question and think about what real leadership is all about. They may not like all that he does but doesn't an honest person at least have to recognize how much Donald Trump has singlehandedly changed the conversation on trade (and immigration) in a few short years. If nothing else, it is real testimony to what one man who believes in something, and is willing to back it up with courage and commitment, can accomplish.

Based on what I have seen, I think the Chinese and others would be wise to take him seriously.

Eyes On Your Eats

The weekend is coming up and I would wager that there is a good chance that a few of you are going to eat out at some point in the next few days.

That is a pretty good bet because Saturday is the most popular day to eat out.  Friday is the next most popular and Sunday is third.

If you tell me where you live I would also have a better than average chance of guessing what type of restaurant you might eat at.

How would I be able to do this?

Google provides the answer.

Google recently did an aggregated, anonymized data set based of all users who had opted to use Google Location History to show what types of restaurants people had eaten in different locales around the United States.

Yes, Google knows all the answers.

Here is the national map that The Pudding put together from the dataset.

Who knew that pizza had such a stranglehold in the heart of the Midwest?

Sandwiches seem to be the king only in the area radiating out from the Philly Cheese Steak capital in Philadelphia.

Steakhouses only seem to be packing them in where men are men---Montana, Wyoming and Alaska.

There is little doubt that those in Wisconsin like those butter burgers.

The data set also allows you to see just how popular each restaurant cuisine is by region.

Here is the pizza popularity heat map.

Compare that to the BBQ popularity map.

The Mexican map. I am talking about Mexican food, not the number of illegal immigrants from Mexico. However, there is probably a pretty strong correlation between the two..

How about the coffee map? What is it about the West and coffee?

Google also provided the top 10 metro areas for each cuisine type. It should be no surprise that Memphis is #1 for BBQ, San Antonio for Mexican or Seattle for Coffee. However, Detroit is #1 for Pizza and Washington, DC is the Burger Capital of the United States?

Google's dataset actually can drill down to restaurant visits by neighborhood.

Here is the neighborhood view for Washington, DC. You can see all those burgers being consumed in the heart of DC near The White House and Capitol Hill. You only see pizza, seafood and Chinese becoming more popular in the outskirts of the District.

Where do all the lobbyists wine and dine our legislators? Five Guys?

Bon appetit this weekend!

Necessary and Proper?

In my last blog post I wrote about the concerns that Alexandria Ocasio-Cortez has about the United States Postal Service.  She seems to think that its financial struggles are most directly caused by the fact that it must accrue and account for its massive retiree pension and health care costs.

Never mind that this is what every prudent private sector business is required to do based on generally accepted accounting principles. Never mind that this is also a key worker protection requirement.

AOC also teamed up with Bernie Sanders last week to suggest the the USPS should expand its business to include banking services. To that end, Sanders and AOC have introduced a bill to have the USPS offer basic banking services as a "public option" for what they refer to as "underserved Americans"

“Post offices exist in almost every community in our country,” Sanders wrote in a blog post. “There are more than 31,000 retail post offices in this country. An important way to provide decent banking opportunities for low-income communities is to allow the U.S. Postal Service to engage in basic banking services.”

Some of the proposed services a postal banking system could offer include low-interest loans, checking and savings accounts, debit cards, check cashing, bill payment, ATM services, online banking services and electronic money transfers. The measure was framed as a way to prevent lower-income Americans from falling victim to predatory payday lending practices – and from having to rely on Wall Street’s largest institutions.

Credit: The Nation

A government-owned bank competing with private financial banking institutions?

Isn't that a national bank?

We have been down this road before. There are great advantages in the lessons of history.

Alexander Hamilton was the first Secretary of Treasury serving under George Washington. In 1791 her proposed to Congress that the United States form a national bank. He quickly got both Houses of Congress to pass the law.

However, James Madison (a Congressman from Virginia and who many consider "the father of the Constitution") opposed the legislation as did Thomas Jefferson who was serving as Secretary of State for Washington. They argued that the formation of a national bank was unconstitutional and that Washington should veto the bill forming a national bank.

There is an excellent article on this episode in U.S. history entitled "The National Bank: An Exercise in Constitutional Fidelity" at www.thepublicdiscourse.com.

Their dispute turned primarily on the meaning of the Necessary and Proper Clause. The Constitution certainly does not authorize the creation of a bank in express terms. Such a measure could only be justified as an exercise of an implied power of the federal government. The source of such powers flows from that provision of the Constitution that follows the main enumeration of federal powers and authorizes Congress to “make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”

According to Jefferson, this language could not justify a national bank because the bank was not really necessary to executing any of the government’s enumerated powers. A bank might be a useful or convenient tool for executing, say, the government’s taxing, spending, and borrowing powers. It was not, however, necessary in the sense of being indispensable.

This, Jefferson argued, was the true interpretation of the term “necessary” in the Necessary and Proper Clause: It only authorized those measures without which the federal government’s enumerated powers would be “nugatory,” or without which they would amount to nothing. Jefferson, moreover, contended that any broader interpretation, such as could justify the bank, would be not only wrong but also dangerous, insofar as it would open the door to unlimited government and thus render the Constitution a dead letter. 

Isn't that interesting? I guess we don't have to wonder what Jefferson or Madison would have thought about how "necessary and proper" it is for the USPS to get into postal banking, or for that matter, how "necessary and proper" it was for the federal government to establish Obamacare or taking over the student loan debt market?

In the end, Washington sided with Hamilton who argued that the "necessary and proper" language should be construed more liberally to mean "useful".

Washington did sign the bill into law and a national bank was established in the United States in 1791. However, it was ultimately disbanded in 1836 when Congress refused to renew its charter due to opposition from President Andrew Jackson and complaints from the private banking sector about its federal ownership and control.

Postal banking was actually put in place by Congress in 1911 at a time when there were far less options for banking and a true national economy did not exist-especially for those east of the Mississippi. However, after World War II there was little need for these services as private banking services proliferated and nonprofit credit unions were also introduced to supplement the private banking system.

The fact that most credit unions are now open and available to all potential customers raises an additional question of how "necessary and proper" a USPS bank is as a non-profit public option. A non-profit option already exists for the public. Why is that not sufficient as an option against the evil banks and their profit motive?

There are almost 6,000 credit unions with 21,000 branches in existence across the United States.

This is in addition to 87,700 bank branches in the private banking system.

What exactly is the USPS going to do that is not already being done?

Why do we need additional bureaucracy and costs from a government entity that is already running in the red?

Do Sanders and AOC have any idea of the technology and other costs that would be necessary for the USPS to get into the banking business? ATM machines. Web-based banking services. Back office operations. Retrofitting post offices for the necessary security measures. Where is the added value to the economy? Where does the money come to provide this duplicative services for the American public? How is any of this "necessary and proper"?

I do not understand it.

Of course, there is little that Bernie Sanders and AOC say or do that I understand.

The biggest thing I don't understand is how a guy who never held a real job until he was 40 years old, when he was elected Mayor of Burlington, Vermont, and a woman who was working as a bartender two years ago, believe they can run the United States and its economy better than anyone else.

A Lot of Garbage

It is truly mind boggling how very little Alexandria Ocasio-Cortez knows or understands about anything.

What is even more mind boggling is that she has millions of acolytes who hang on her every word and believe she knows what she is talking about.

Last week she was on her Instagram account saying she didn't know what a garbage disposal is. This is a 29-year old woman who was elected to Congress?

OK everyone, I need your help because I just moved into this apartment a few months ago. And I just flipped a switch and it made that noise and it scared the daylights out of me.

“I am told this is a garbage disposal. I’ve never seen a garbage disposal. I never had one in any place I’ve ever lived.”

“This DC apartment is bougie and has things I’ve never seen before. Is this what social mobility is? Using kitchen appliances you never saw growing up?”

Of course, she went on to ask whether this contraption was "environmentally responsible". I guess she is looking for other things to ban in her Green New Deal. (By the way, garbage disposals are generally favored by environmentalists for the food waste that they prevent from ending up in landfills.)

Perhaps she never had a garbage disposal when she was growing up but she didn't even know it existed and what it did? Talk about living under a rock.

You would think that saying something that crazy might slow her down. However, AOC was showing her utter lack of knowledge later in the week arguing that the GOP was causing the Post Office to fail because the law requires the US Postal Service to fund their retiree promises to its employees. She seems to think that the USPS should not have to accrue retiree costs as they are incurred.

Note that this inane tweet got 9,500 retweets and over 50,000 likes. That is not only mind boggling, it is downright scary at the same time.

Despite what AOC says, prefunding pensions decades out is what prudent businesses do. As employees perform the work that will eventually result in a future pension the employer should be putting money aside for that future obligation currently. It is not prudent to put this expense on the business in the future. In fact, accounting principles dictate it and private businesses are required to do it based on the Employee Retirement Security Income Act (ERISA) of 1974. It is a "worker protection" law. Isn't AOC concerned about protecting workers?

The GOP "business model" that AOC seems to be referring to is a 2006 law that requires the USPS to fund their gigantic retiree health obligation which is a separate obligation from pensions. Again, private business have been required to accrue these costs since Financial Accounting Standard 106 was issued in 1990. FAS 106 requires that post-retirement benefits be accrued as an expense during the years that the employee earned the benefit rather than accounted for on a pay-as-you-go cash  basis during retirement.

The fact is, that the USPS like many government entities, ignored this fundamental accounting principle for many years. As a result, they did not properly account for current expenses and kicked the can down the road. You can see this readily by looking at the funding levels of most governmental pension and retiree programs today. Taxpayers are currently on the hook for over $6 trillion in state and local government pension plans according to a recent study by the American Legislative Exchange Council.

The reality is that what has really hurt the USPS is email, electronic bill payments and more and more businesses advertising through social media than using direct mail or advertising circulars. It was not the Republican party "business model" or an accounting provision that has done it.

Look no further than the fact that the USPS is handling about 30% less mail pieces today than it was a decade ago as explained in this article on the USPS's financial condition.

79% of the annual costs of the USPS are in labor and benefit costs. The USPS has responded to the decrease in mail volume through attrition by not replacing employees who have retired or left. (It would be unheard of for a government entity to actually layoff workers). This has resulted in a reduction in employment from 800,000 a few decades ago to 500,000 today. However, the USPS now has 600,000 retirees receiving a pension and retiree health benefits.

The pensions and health care benefits for those retirees (and future retirees) are currently underfunded by over $100 billion. If the 2006 change in the law had not occurred, the amount underfunded would be close to $150 billion. AOC thinks this would be a better business model?

You can also see in the chart below that, contrary to what AOC wants people to believe, the USPS has been running a loss (or is barely above break-even) even if retiree health expenses are excluded from its profit and loss statements.

It solves nothing to think you can ignore the obvious as AOC suggests. There are 600,000 retirees today and that number will undoubtedly grow as the USPS has to further shrink its workforce. What good does it do to just kick the can further down the road and allow the USPS to get further in the red when only massive future postage increases or a large federal government bailout of its retiree obligations can save it?

On her Instagram post AOC also said this about her garbage disposal. (You can see it yourself.)

"...It is terrifying. I don't know what to use it for or what its purpose is."

My answer to AOC would be this.

A garbage disposal would be very useful for you to use to deposit your policy proposals and other random statements you are prone to make on how the world works.

You simply have no clue about what you are talking about most of the time. What you say is not only dishonest but dangerous to those who believe your garbage,

Please be courteous and dispose of this garbage properly. By doing this you will also stop spreading this garbage to others.

You also will have the added comfort of knowing that it has been disposed of in an environmentally sensitive manner.

Words That Work

About ten years ago I was invited to speak at a seminar in Washington DC on strategies for businesses to better promote health and wellness in the workplace.

Frank Luntz was the headline speaker at the program and he also facilitated a question and answer panel that I was on during the day.

Luntz is famous for the focus group panels he often puts together and facilitates during the political season as well as the best-selling book he wrote in 2007, "Words That Work".

I thought about Luntz and his book when I recently came across an interesting article on TheVisualCapitalist.com that did a survey on word sentiment and the power of various positive and negative words.

For world leaders, journalists, CEOs, or anyone who has ever had to explain a dicey report card, word selection can have an enormous impact on how a message is perceived.

Does it make any difference whether a presentation went quite good versus pretty good, or if an earnings report is described as awful versus poor? According to a new survey from YouGov, word sentiment isn’t as cut-and-dry as one would expect.

The big takeaway from the survey---"Certain words more precisely communicate positive and negative feelings." 

Here is an infographic that shows the sentiment score of negative and positive words on a continuum. Note that the size of the hump shows where the most people were in agreement on where each word fell on the positive-negative scale.

Consider that "Very bad" is more negative that terrible, dreadful, abysmal or appalling.

Why? I think a big reason is that it is much simpler to understand.

Note the second hump for abysmal in the graph at about the "5" level. I attribute that to a fair number of people who probably don't know what the word means. If you are in doubt on a 1-10 scale survey you mark it down as a "5".

Another word that must have thrown some people was appalling.  Look at the number of people who gave a positive score to appalling.

On the other side of the sentiment scale, perfect is more positive than excellent, fantastic, incredible, superb or awesome. Perhaps Millennials should say "perfect" rather than "awesome" at times.

The lesson here is that you will not be misunderstood if you say something is perfect. There is nothing else that can be done. You can't get more positive than that.

In the middle of the sentiment scale, I found it interesting that "alright" is better than "ok" and "not bad" is better than fair, average or mediocre.

Although they share the same language, those in the UK perceive the same words in the English language differently than their brethren in the USA.

Here is the sentiment scale for the Brits.

Those in the UK clearly know what abysmal and appalling mean and they believe it is more negative than being "very bad".

Perfect is still the most positive word you can use in the UK as well as in the US.

The Brits have more defined "humps" in the graph indicating that there is more agreement where each word falls on the graph. Is it due to a better education in the English language in the UK?

I did not really understand how the word "great" is seen by the Brits as just a little more positive than good and it is actually not as positive as really good or very good. I see the sentiment progression on the American list as making more sense---good, quite good, really good, very good, great. (Is that because I am an American?)

On what word do both Americans and Brits have the most agreement on where it falls on the sentiment scale---AVERAGE. It was nearly dead center on both scales and there was also the most agreement by people on its overall score.

I hope you don't see this as an average blog post.

It may not be perfect but how about an "Excellent" or "Outstanding"to describe it to make my week?

Can You Believe Anything They Say?

Do you remember the doom and gloom predictions the Democrats made right before the Trump tax bill was voted on in December, 2017?

Chuck Schumer of New York, the Democrat leader, said this according to the New York Times.

 As the final vote approached in the Senate, Chuck Schumer of New York, the Democratic leader, gave his closing argument against the bill and scolded his Republican colleagues for talking during his remarks on the floor.

“This is serious stuff,” Mr. Schumer said. “We believe you’re messing up America. You could pay attention for a couple of minutes.”

That was relatively tame compared to what Democrat Nancy Pelosi had to say about the bill.

Pelosi called it "the worst bill in the history of the United States."

Of course, Bernie Sanders also weighed in at the time.

"..today is the day of one of the great robberies, criminal activities if you like, in the modern history of this country, because the federal treasury is being looted tonight."

I wrote at the time (right before Christmas, 2017) that we ought to refer to them as "The Democrat Grinches".

Not one Democrat in the House or Senate voted for the tax reform package.

So how has this all worked out almost a year and a half later?

Is the country messed up?

Was it the worst bill in the history of the United States?

Was it a criminal robbery unlike we have ever seen in the modern history of the country?

Here are a few recent economic indicators.

The unemployment rate is 3.6%. That is the lowest in 50 years. Further, the unemployment for women is 3.1% (the lowest since 1953), for Hispanics 4.2% (the lowest since this was first tracked in 1973), and for those with only a high school degree 3.5% (lowest since 2000). The unemployment rate for Blacks is 6.7%.  It was 8.0% in November, 2016 when Trump was elected. The all-time low (5.9%) was also set in the Trump administration in May, 2018. That is almost a full two percentage points lower than it ever was in the Obama administration.

5.8 million jobs have been added to the U.S. economy since President Trump was elected.

Wage growth over the last year has been 3.2%. Year over year wage growth has exceeded 3.0% for 9 straight months. Before 2018 (when the Trump tax bill took effect) there had not been wage growth in excess of 3.0% in any rolling 12-month period since March, 2009.

Inflation (measured by CPI) is at 1.9% over the last 12 months meaning that we are seeing real wage growth.

Can you believe anything they say?

In addition, despite what Bernie Sanders called the criminal theft of the federal treasury, taxpayers (especially middle income taxpayers) are keeping more of what they make rather than being forced to turn it over to the federal treasury. Why do they always think it is their money, not ours?

A recent report by H&R Block, which included an analysis of all the tax returns it filed for its clients (most of which are middle or lower income filers),  found that overall income tax liability was down 24.9% compared to last year.

Refunds were up 1.4% compared to the prior year.

By the way, H&R Block prepared 20 million tax returns in its most recent reported fiscal year. That is a pretty good sample size of working class taxpayers.

I found this data particularly interesting in that we saw so many stories in the mainstream media during tax filing season that middle income taxpayers were not seeing any benefit from the Trump tax bill. Of course, a lot of that narrative was fed by Democrats who continue to repeat the falsehood that only the "rich" benefited from the tax bill.

Why did so many middle income Americans believe this falsehood?

H&R Block explains that most people ignored the increase they got in their take home pay once the W-4 withholding tables were adjusted in March. They only considered their tax refund when they filed their return. The average reduction in tax liability for H&R Block clients was $1,200 but the average refund was up by just $43.

In effect, the money was in their pockets the entire year rather than being held in the Treasury. That money in the hands of the American worker and consumer has had a big impact on the economic numbers we are seeing right now.

I thought this was a particularly interesting chart in the H&R Block report in that it shows the average tax liability decrease by state.

Why do I find it interesting?

Look at which states showed the largest tax decreases.

New Jersey (-29.1%), Massachusetts (-27.6%), California (-27.1%).

These are all very liberal states where you heard a lot of noise about the limitation of the state and local (SALT) tax deduction for those who itemized.

As I wrote when the tax bill was being discussed, this provision hit higher income earners and those with high property taxes disproportionately. It was the best way to skew the greatest tax benefit to the middle class.

Limiting the SALT deduction clearly had very little effect on middle income and lower earners. Taxpayers in these deep blue states with high state and local taxes actually benefited more from the Trump tax bill than any other states. This is the exact opposite of the narrative we keep hearing in the media.

Of course, none of these facts are stopping the Democrats from continuing to rail about the Trump tax cuts.

Joe Biden was on the stump this week and said this.

"First thing I'd do is repeal those Trump tax cuts."

Really?

I guess Joe is not aware of the facts.

Is he really going to repeal the 25% cut the average H&R Block client got this past year and take an average of $1,200 out of everyone's paycheck?

I thought he was middle class Joe. I have to think if he does that the average taxpayer might figure out rather quickly that Trump really was on their side.

My advice for the Democrats is this. If they truly believe what they say, what are they waiting for ?

Nancy Pelosi and the Democrats control the House of Representatives.

Article 1, Section 7, Clause 1 of the U.S. Constitution states that all bills for raising revenue must start in the House of Representatives.

All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

If it is the worst bill in the history of the United States, why wait? Why not vote on a bill to repeal the Trump tax law right now? There is nothing to stop them. After all, not one Democrat voted for it in the first place. It should not be a difficult vote for them.

Have had it.

What could go wrong?

Could it be that the Democrats might really experience the doom and gloom they were talking about in December, 2017 if they actually have their way?

Can you really believe anything they say?

Logic Rules Our Brains

How often do we hear it said today?

He is a racist. An Islamophobe. An anti-Semite.

She discriminated against me. She is prejudiced.

They are biased. They pre-judged me.

We are told this is flawed humanity in full view. Humans letting their emotions control rather than objectively assessing others.

If only humans were robots and logic ruled their decisions.

Then along comes this headline to burst our bubble.

This is from the story that accompanied that headline.

Embracing stereotypes or even forming a simple opinion about others may seem like a trait exclusive to humans, but a recent study shows that robots can develop prejudice and even discriminate in similar ways to people, too.

You might think that’s because they’re programmed that way, but the research by computer science and psychology experts at Cardiff University shows that robots and machines using artificial intelligence are capable of generating prejudice on their own.

How can this be? Aren't robots always supposed to be logical?

Robots are logical. The same goes for our brains. Due to that fact, bias is built into our brains.

Bias exists all around us. We stereotype. We profile. We discriminate. What troubles me is that we seem to be incapable of accepting this fact of life. We can't change the bias in the brain. You can only affect the experience that creates the bias that gets built into your brain.

What they are finding with robots should show us how true that is.

The fact is that we all stereotype because all of our brains use shortcuts to make decisions. It is the way the brain is wired. These shortcut pathways make decision making easier. It is the logical way to do things.

Our brain is a wondrous thing. A good portion of the calories we burn in a day goes to fuel this enormous power plant. Therefore, the brain always tries to make decisions that use the least amount of effort and energy it can. These shortcuts are called heuristics.

It does not mean that the decisions based on these shortcuts are always right. But they have generally served the human species well for the most part because it helped us to adapt and survive. We could make quicker and more efficient decisions even if we weren't right all the time.

For example, we learned early on that it was dangerous to go outside the cave at night because a higher percentage did not return as compared to when others left in daylight. We learned to avoid the plant with the funny looking berries. Uncle Abner made that mistake, may he rest in peace. Once we found a "safe" place we tended to stay there despite the fact that had we ventured over the hill we very well may have discovered an even better place.

If you are human you use heuristics, bias and stereotypes every day. If you don't know better you are going to start with a default position as you assess things. For example, if you are looking at a product you are not familiar with and you have two items to choose from, you are going to assume the expensive option is better. Experience has taught you it usually is. If you move to a new city and need to open a bank account, you are going to assume that the bank with 50 branches and the skyscraper downtown is better than the bank with one office. After all, if they got that big they must have done something right.

Credit: ABC

In both cases, a closer and detailed look may show you are totally wrong, but you will undoubtedly have an initial bias based on prior experience. Your brain is not going to start from ground zero when there are previous neural paths in your brain to rely on. There is bias built into your brain based on your experiences since you were a baby. That bias is not based on emotion. It is based on prior experience. It is logical to use it in making your next decision.

That is the reason my brain led me astray when I saw the recent story on a high school athlete running a sub-10 second 100 meters dash in Houston. I quickly assumed the athlete was African-American because times like that almost never come from anyone else. It was logical. However, I was wrong. That was the subject of my last blog post.

Prior to the 1970's, Asians who lived in the United States were stereotyped as cheap, poor, uneducated laborers. Products from Asia were derided as nothing more than cheap junk. That stereotype no longer exists. It literally has been turned on its head. Our actual experience has shown the prior generalization was wrong. It has been replaced with another stereotype that is also an overly broad generalization.

Today, students in high school and college cringe when they see Asian-Americans entering their classrooms on the first day of class. American businesses have also learned some hard lessons from their Asian counterparts. The old stereotype is gone. That change did not occur because people just started to think differently one day.  It changed because people were forced to change their thinking because of what they experienced and the behaviors and results they saw from greater and greater numbers of Asians they came in contact with.

Any bias that the police may have in dealing with young, black men is rooted in their brains. It is based on their experiences in their field of duty. Look no further than the crime statistics if you have any doubts why a police officer might be quicker to draw a gun against a young black man compared to a White or Asian man.

The incidence of arrests for Blacks is over twice what it is for Whites on a per capita basis.

Blacks commit almost 5 times as many violent crimes (murder, manslaughter, rape, robbery and aggravated assault) per 1,000 population as Whites according to FBI data based on arrests for violent crimes.

Blacks commit eight times more crimes against Whites than Whites do on Blacks.

Consider what President Obama said about the very grandmother who supported and raised him.

"...my white grandmother – a woman who helped raise me, a woman who sacrificed again and again for me, a woman who loves me as much as she loves anything in this world, but a woman who once confessed her fear of black men who passed by her on the street, and who on more than one occasion has uttered racial or ethnic stereotypes that made me cringe."

Was Madelyn Dunham a racist?  Of course not.  She loved for and cared for Barack Obama when his own mother could not or would not as she pursued her own life. His race did not matter to her, she loved his soul.

Her bias was not rooted in racism that lived within her brain. It was based on the life experiences she had in her brain. It was not right. However, that is where her brain led her based on her prior experience despite the facts she was raising Barack Obama in her own household.

It seems it is no different with robots.

Take a futuristic robot which is charged with monitoring shoplifting in a retail store. If the experience of that robot is that almost all of the thefts are being perpetrated by teen age males would you not expect the robot to start looking closer at every teen age boy who walked in the store?

If a robot is programmed to replace TSA agents in the future, and it consistently finds guns and knives in the carry-ons of Middle Eastern men in their 20's, would it be logical for the robot to be pulling over elderly African American women for additional searches? For example, would a robot have patted down 75-year old Diana Ross at the New Orleans Airport to point she was brought to tears. Is that the brain at work or something else?

If a robot takes over at Starbucks and sees a person with long hair, lipstick and eye shadow, would you not expect the machine to address that person as m'aam? It would not be wondering whether that person actually is self-identifying as a male.

Logic rules our brains.

We would do better if we all recognized that fact.

Bias can be overcome. However, it can't be done by changing the heart or appealing to emotions. It has to be done through the brain. Bias gets turned on its head when opposing reinforcing experiences get burned into the brain every day and in every way until the logic of the brain accepts a new stereotype. That is the way the human brain works. We now come to find it is not much different in how a robot works in assessing similar decisions.

White Lightning

When I heard that an 18-year old sprinter in Houston had recorded a new national high school record in the 100 meter dash this week I was expecting to hear that it was accomplished by a young man named Darius, DeShawn, DeAndre, Trevon or Terrell.

These were among the most popular names for African American baby boys born in the early 2000's.

Why would I assume that the 100 meter record high school record would be broken by a black athlete?

These are the 23 fastest men ever timed in the 100 meter dash. They are all black athletes. They also all trace their heredity to West Africa. There have only been a handful of white runners worldwide who have ever run a sub 10.00 meter dash.

Source: Wikipedia

That 18-year old in Houston ran a 9.98 last week. That time that would have qualified for the finals in the 2016 Olympics. Although it was aided by a 4.2 m/s wind, and therefore will not be considered the "official" high school record that sets 2.0 m/s as the maximum the wind can aid a run, it still would convert to a 10.07 non-wind aided time.

Here are the top 40 yard times at the recent NFL Combine. Every one of these athletes is black except for Andy Isabella.

We are accustomed to see black athletes dominate the positions in football where speed is most critical (running back, defensive back and wide receiver).

Knowing all of the above is why I assumed that the record had been set by a young, talented black athlete in Houston.

My brain could not have led me further astray.

The high school record was actually established by a young man named Matthew Boling. I can assure you that it does not appear that he traces his lineage to West Africa based on this picture of him.

It might be worthwhile remembering that name. You likely will hear more about him.

Credit: AP via The Daily Mail

Boling is not just a one-event standout. He also has the second fastest high school time in the 200 meters this year and also has the best long jump---26' 3.5". He high jumped 6'7'' as a sophomore and feels that the 400 meters could potentially be his best potential event. My guess is that the decathalon might also be in his future.

What is also interesting is that Matthew attends what I know to be an elite private Jesuit high school in suburban Houston---Strake Jesuit.

That is not the hardscrabble environment you would think that might be the incubator for the drive and desire that is required to attain this level of performance.

Is all of this talent inherited?

His father says he has no idea where Matthew's speed comes from.

“I would love to be able to claim that it’s genetic – but he just has a work ethic that I’ve never seen from anybody,” father Mark Boling told CBS News.

Matthew Boling with family the day he committed to a track and field
scholarship with University of Georgia
Credit: Heavy.com

There undoubtedly is a good deal of genetic component at work here even if his own father does not know where it comes from. There is also no doubt that any type of innate running talent that Boling does possess is not solely responsible for this type of performance. I wrote about this previously in "Nature of Nurture?"

You do not get elite athletes and performances without 100 percent nature and 100 percent nurture. Without both great genes and great work effort you simply do not get elite performance.

What makes Matthew Boling tick? That is a question that I would really like to know more about. From the fast twitch muscles that he must have in his body to the strong-willed mind that directs everything he does with it. He appears to be what Malcolm Gladwell would call an "outlier."

As I wrote in "Nature or Nurture" which draws heavily on David Epstein's book, The Sports Gene.

The reality of the gene pool is that most of us have talents and potential that are little different than almost everyone else on the planet. What differentiates those that succeed versus those that do not is purpose, passion, perseverance...and practice.

As one scientist remarked in the book, when it comes to the gene pool the biggest gift that you can receive is the will to want do something.

All the best to this young man as he moves forward in life. May he move ever faster and teach us even more in the process on that path.

Our brains do lead us astray at times. However, they can also propel us to unimaginable places. Look no further than this video of Matthew's 9.98 race. (click here if your browser does not play the video below).

You should also know that Boling has already picked up a nickname---"White Lightning".

That nickname might have some legs if Matthew keeps running like this.

Not Born in the USA

There are 44.5 million people living in the United States today that were born outside the country.

That is 13.7% of the population. That is the highest it has been in over a century.

Over a quarter of the total number of immigrants living in the country were born in Mexico. An amount of people equal to almost 10% of the population of Mexico was born there but is now living in the United States.

The foreign-born population in the United States is not distributed equally. For example, almost 40% of the population of New York City is foreign born. There are 3.3 million foreign born immigrants living in New York City alone. That number by itself would make it the third largest city in the United States.

500,000 of the immigrants in New York City were born in just one country---the Dominican Republic. There are 140,000 people who were born in Guyana living in New York City. Guyana only has a population of 700,000 in total. Is there anyone in Guyana who does not have a relative living in New York City?

This map shows the percentage of foreign-born immigrants living in each state according to the U.S Census Bureau's most recent Community Survey.

It ranges from 27% of the population being foreign-born in California to 1.6% in West Virginia.

Other states with high percentages of foreign-born immigrants are New York (22.9%), New Jersey (22.8%), Florida (20.9%), Nevada (19.9%), Hawaii (18.6%) Texas (17.1%), Massachusetts (16.9%) and Maryland 15.3%.

If you want to know why Democrats do not want to do anything to reform our immigration laws you do not have to look any further than this map.

If you look at the 2016 Presidential election results, 194 out of Hillary Clinton's 232 electoral votes came from states where foreign-born immigrants make up more than 10% of the population.

On the other hand, Trump won only four states where immigrants make up more than 10% of the population---Texas, Florida, Arizona and Georgia.

It is probably not a surprise that Mexicans make up the largest immigrant group in 32 of the 50 states according to the Census data.

A few of the states where Mexicans are not the largest immigrant group--New York (Dominican Republic), New Jersey (India). Florida (Cuba),  Hawaii (Philippines), Massachusetts (China), Maryland (El Salvador), Virginia (El Salvador).

However, where is the largest foreign-born population from in each state if you exclude those from Mexico?

These might surprise you.

Indians are the second largest immigrant group in the USA.  They are the largest in New Jersey, Connecticut, Ohio and Pennsylvania. They are second in 17 other states. Ironically, many of these states are where there were large American Indian populations 300 years ago.

Ethiopians in South Dakota? Guatemalans in Alabama and Nebraska? Germans in New Mexico? El Salvadorans in Arkansas? Filipinos in Wyoming? Immigration patterns are much different than they used to be.

All of this information raises the question again. Yes, we are a nation of immigrants.  However, at what point can we no longer intelligently assimilate these masses of people into our country and our unique culutre without damaging what prior immigrants created?

Crowded and Crazy

Joe Biden recently became the 20th Democrat to officially announce that they are running for President in 2020.

It is the most crowded field to ever vie for a political party's nomination.

Why are so many running?

I think a big reason is that running for President in the media-driven world we live in today is an easy way to build a political brand while at the same time providing the candidates a way to line their own pockets. The visibility they get in running increases their name recognition and opens opportunities for speaking fees, book deals and the like.

Look no further than how Bernie Sanders leveraged a failed Presidential campaign to become a millionaire after losing to Hillary Clinton in 2016.

Here is a pictorial of the Democrats that are now in the race shown in the order in which they announced their candidacy.

Don't feel bad if there are names you don't recognize. I am a political junkie and I had to look up the bios of a couple of these candidates myself.

Credit: ReutersGraphics

One interesting factoid is that three of the candidates (Gabbard (38), Buttigieg (37), Swalwell (38)) are literally half the age of Bernie Sanders (77) and Joe Biden (76).

Biden and Sanders lead the current polls of the Democrat party who increasingly seems to love nothing better than to blame old, privileged, white men for every problem the country has. It will be interesting to see how this plays out as we move forward.

Here is the most recent polling data done by Monmouth which shows the polling strength of the announced candidates above as well as other candidates that may yet declare (DeBlasio, Bennet) and others who were rumored to be considering a run but have taken themselves out of the race (Brown, Holder, McAuliffe).

As you can see, the two old white guys right now are preferred by nearly half of the Democrat voters who were polled.

The Mayor of South Bend, Indiana Pete Buttigieg has had the fastest rising star among candidates over the last few months. Mayor Pete has gone from 0% to 8% in polling over the past three months. He seems to have primarily siphoned support from Harris (-3%), Warren (-2%) and O'Rourke (-3%).

Looking at this you have to ask whether we are really ready to elevate a 37-year gay Mayor from a city of 100,000 population to the highest office in the land?  However, being the "fresh face" has generally been more important than experience and competence with Democrat Presidential primary voters in the past. Look no further than the Obama vs. Hillary race in 2008. Or Democrat candidates like McGovern, Carter, Dukakis and Clinton. It even applied to JFK who bested old hand Hubert Humphrey in 1960.

It is way too early for me to start handicapping this race. There are a lot of televised town hall forums and debates to come to assess the candidates. The candidates are also each going to need to raise a lot of money to be able to stay in the race. The crowded field will make fundraising very important as there are only so many dollars to go around.

Most of these candidates have also never had to undergo the scrutiny of a national race. Who knows what that scrutiny turns up?

At this point I would think Bernie Sanders has the best chance for the nomination. He has been through this before. He starts the race with the biggest fundraising operation. There are also a lot of supporters who believe he was cheated out of the nomination in 2016 by the DNC. However, in the end, will Democrat voters nominate a 78-year old unabashed Socialist (he is not officially a Democrat in the Senate) as their nominee?

I have similar doubts about Biden. He will turn 78 shortly after the 2020 election. He also has the reputation as a gaffe machine. He had to drop out of the 1988 Presidential race because of evidence he plagiarized political speeches as well as in classwork he did in law school. He has also been found to have a penchant for exaggerations, embellishments and distortions about his background.

The sheer number of candidates assures us of a crazy campaign.

It will be even crazier due to the policy proposals that this group of Democrats has already set forth.

These are just a few of the crazy ideas that have been put forth by these candidates.

Support  for The Green New Deal and its trillions of spending and the proposed elimination of all fossil fuels, airplanes and cows

Cancellation of up to $1.6 trillion in student debt

Taxpayer funding of free public college tuition to anyone who wants it

Reparations to descendants of slaves of over $100 billion

Establishment of "Medicare for All" and elimination of all private health insurance

Abortions legalized up to and through the birth of the child

Taking down any border wall between the United States and Mexico and refusing to extradite any illegal immigrants that get into our country

Banning guns by executive order in direct defiance of the 2nd Amendment

Provide the right to vote for all felons currently in prison (including such model citizens as the Boston Marathon bomber).

It will be crazy.

I actually think the best line I have heard from any of the Democrat candidates is from Seth Moulton.
When asked what he thought he brought to the race and what differentiated him from the other candidates, he said,

"I'm not a Socialist. I'm a Democrat."  

I guess we will eventually find out if the Democrat party is really still controlled by Democrats or whether it has been completely taken over by the Socialists.

The Democrats may even make this a crazier year than when 17 Republicans set their sights on the GOP nomination in 2016.

If I need to remind you of why it is not wise to make predictions about possible Presidential nominees right now, consider this Quinnipiac polling data from the last week of April, 2015---exactly 4 years ago.

Source: Quinnipiac University Poll, April 23, 2015

Where is Donald Trump in that poll? Nowhere. He was not even mentioned in the polling question because his candidacy was considered such a long shot. Trump did not formally announce his candidacy until June 16, 2015.

This ought to tell all of us we are long way from knowing where we will be a year from now.

However, you can be assured it will be a crowded and crazy path ahead.

A Tornado Tally and A Tale

Those that argue that man-made climate change is a scientific reality that requires a massive government response usually also state that our weather is already getting more violent and unpredictable.

In his 2006 film, "An Inconvenient Truth", Al Gore predicted that we had ten years to get things right on earth or face catastrophe. He stated that our weather would get increasingly warmer. As a result, our climate would become more severe with more hurricanes and tornadoes. And that by the summer of 2015 the Arctic sea would be ice-free.

13 years later, none of these predictions have proven true.

Alexandria Ocasio-Cortez is now saying that we have 12 years before the world is going to end because of climate change.

Now that we are at the height of tornado season I thought it might be useful to show a chart that USA Today published recently that shows the number of violent tornados (over 166 mph) in the United States since 1950. 

Interestingly, contrary to what Al Gore and AOC would like you to believe, there was not one violent tornado in the United States in 2018. That has not happened since 1950.

Credit: USA Today

You can also see from the data in the chart that the number of violent tornados have actually decreased compared to the 1950's, 1960's and 1970's.

Since 1950 there have been increasing levels of carbon emissions released into the global atmosphere.

Based on the thesis of the climate alarmists this should have resulted in increasing levels of warming temperatures and violent weather. That is what they claim is the "science". However, look at the graph above and show me what the facts show.

I know something about violent tornados. I survived one exactly 58 years ago today when I was 11 years old.

I wrote about that experience 8 years ago in these pages.

Stay safe and don't believe the hype. The climate change alarmists like to talk about science. However, their "science" really involves nothing more than models and predictions. The past predictions and models have not proven out. They then ignore facts like those above that directly contradict the predictions they claim as "science".

Note that when I wrote the blog post below in 2011 we were experiencing a spike in tornado activity. Climate alarmists jumped on this at the time but the tornado activity quickly settled down.

Could it be that man has nothing to do with the weather?

Am I crazy in believing that it is in God's hands?

I needed to believe that 58 years ago today. 

A Tornado Tale

(Originally published 4/25/11)

50 years ago today I came close to death.  I was in a house that took a direct hit from an EF4 Tornado (winds of 207-260 mph) in Eaton, Ohio.  It was shortly before 4:00pm on a late April afternoon and I was in my bedroom organizing baseball cards with my best friend.  My mother was visiting a neighbor with my younger brother.  I looked out the back window and looming straight ahead about a half mile away was a tornado dancing back and forth right in front of my eyes.  It appeared to be on a direct path to our home.

I remember seeing details that you normally don't pick up in photographs.  I clearly could see lumber, shingles and other debris swirling around near the top of the twister.  We made a quick call to my friend's home to warn them of the approaching tornado and headed for the basement.  We bounded down the stairs. We heard the sound of a car's horn racing down the main road that was parallel to the tornado's path.  We later learned it was the family who operated the farm behind us who had decided to run for it rather than go to their basement.

A few seconds later the tornado hit. It was a deafening roar.  It was as if you were standing right by the railroad tracks and a train was going by at enormous speed. I coveried my ears with my hands because of the roar.  I remember my friend and I shouting at each other at the top of our lungs but you could not hear a word over the sound.  Suddenly it got even louder and it sounded as if the entire house was caving in. I remember looking up at the floor and joists above me and thinking that this was it.  I fully expected to be soon buried alive.  Time did slow down.  I remember thinking I had just turned eleven years old and this was the end of the road for me.  It then became deathly quiet.  The floor had held and my friend and I checked each other to be sure we were all right.

We cautiously started up the basement stairs.  The door would not open but we both put our shoulder to it and pushed hard. We got it about half way open and slithered out the basement door.  Staring at us through the adjoining door to the garage was a steel beam that had been thrown around like a tooth pick. It had penetrated almost a foot through the door into the house.  The windows on the back side of the house that faced the tornado were all broken.  The draperies hung in tatters and were now blowing in the wind.  The windows on the front of the house were intact but were caked with dirt and grass that looked like it had been sprayed on. The dirt was so thick you could not see through the windows at all.  All through the house lay debris. Drywall from the ceiling was laying all over. You could look up and see the sky through the open roof.

I tried to make my way back to my bedroom but I couldn't navigate the debris that littered the hallway.  My friend and I went out the front door and we could see the tornado continuing on its way to more destruction down the road.  The tornado looked much better from the backside.

I did not have shoes on but I began running toward the house where my mother was.  It had been spared but for some minor damage.  It was a debris field of 2x4's, downed electric wires and protruding nails to get to her. I saw some hay straw blown straight in to some siding as if it was a nail. I reached my mother and looked back at our house for the first time.  I almost could not believe the sight.  It looked as if our house had been bombed.  I had a hard time choking back tears as I saw our house.  I kept saying to my mother, "Look at our house".  She just kept repeating, "It is ok.  You are alive". Even after 50 years, you do not forget a day like that.

Photographs and other background on the tornado of April 25, 1961

Photo taken of the tornado by a local photographer at close to the time it destroyed our house.

Photo of what was left of the Turner farmhouse that was directly behind our house.  Witnesses said that when the tornado hit the 2-story frame house it lifted it straight up and the house exploded. The entire remains of the house was deposited in the basement as debris.  Fortunately, the Turner family did not go to the basement for shelter.  Mr. and Mrs. Turner started for the basement but their 20-year son did not feel the house could withstand the tornado.  They jumped in their car and made a run for it.  That decision undoubtedly saved their lives. It was their car horn I heard in the basement right before the tornado struck.

Our house was totally constructed out of stone.  I was in the basement on the left side of the house as you look at this picture.  The people are on top of debris that used to be the garage and a back porch that were on a slab.  It was the sound of the collapse of this part of the house that had me thinking the entire house was coming down on me. You can also see that the entire roof on the side of the basement in was in was destroyed.

The house as it looked shortly after construction in 1957 (4 years before the tornado). I was in the bedroom looking out the window on the far right side of the house when I first saw the tornado approaching.

The house from the right front showing the collapsed garage.  I was in the basement near this corner of the house when the tornado struck.


Through April 24, 2011 according to the National Weather Service, there have been 438 confirmed tornadoes in the United States. Only one has been an EF4 similar to the Eaton tornado of 1961.  We have already seen 306 tornadoes in April, 2011. This is the highest April total ever.  The previous record was 267 in 1974. The average number of April tornadoes is 163.  Keep your eyes on the sky and take shelter immediately if one of these terrible twisters heads your way.