Amerexit: Trump’s version of failed Brexit

 Amerexit: Trump’s version of failed Brexit

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Democrats need common platform to oppose GOP

Democrats need common platform to oppose GOP

Core message should unify party

 

Gordon L. Weil

The Democrats like to fight.

But they are getting it wrong.  Instead of fighting against Trump and his MAGA Republicans, they fight with one another. 

Progressives and moderates each argue that their party must adopt their message as its platform.  Each group claims to know what will give Democrats control of Congress, while charging the other side is doomed to lose.

Will Rogers, the prairie humorist, famously proclaimed, “I am not a member of any organized political party. I am a Democrat.”  For many, the thought still rings true.  The party struggles to organize a winning campaign.

The master of forming winning coalitions was President Franklin D. Roosevelt.  He had to unify northern Blacks and blatantly racist southerners behind a common program.   He stressed issues that they shared, while making some concessions to each side.   The result was his 1936 reelection, when he carried all but two states.

Progressives want a more activist federal government, social reform, and political change.  Moderates want to focus on bread-and-butter issues, to avoid social issues, and political restoration. Each side’s commitment to its own beliefs gets in the way of their finding a platform built from issues that both believe are important.

Obviously, the Democrats’ best hope of winning is as the alternative to an unpopular President Trump.  While merely opposing Trump may not be enough to yield a congressional majority, it is their campaign’s basis.  Beyond defeating Trump, his practices and policies, the Democrats lack a unified program based on shared views and concerns.

The party might rally around a platform recognizing the needs and hopes of most Americans and refraining from ideas, however worthy to either wing of the party, that fail to recognize the practical and current concerns of voters.  The Democrats should build on the opportunity Trump has given them and should avoid either looking too far back or too far ahead.

Here’s what a core Democratic platform could include.

Tariffs are a traditional source of revenue and protector of emerging economic sectors, but they have become the president’s political plaything, raising raises costs for consumers.  His policy cuts trade deficits by limiting imports rather than boosting exports.  Democratic policy should stress American strengths and no longer enhance its vulnerability.

The Abraham Accords were meant to foster peace between Israel and its Arab neighbors through cooperation rather than confrontation.  Why not extend that thinking to Iran?  A closer economic relationship could do more to defuse Iran’s threat than futile acts of war.  

Ukraine, Taiwan and Palestine policy should emphasize the traditional American opposition to territorial takeovers, reversing the Canada and Greenland blather.  The U.S. freed the Philippines and other countries and has fought against the territorial expansion of aggressors.  It should oppose attempts to subjugate others. 

Science does not have all the answers, but it has brought much longer lives and much less disease.  Abandoning research harms the American people and makes the U.S. dependent on others.  With a leading role in the sciences, the U.S. is assured of worldwide influence.  Without it, America risks becoming a dependent country.   Saving science is a must for the Democrats.

The judicial system should be based on the concept of justice for all.  Trump packed the Supreme Court to produce a loyal ideological majority, fixed on boosting his presidential power.  The Court’s bias needs to be brought into balance.   A Democratic government should restore a nonpartisan rule of law. 

Americans are losing health care insurance. While “Medicare for all” is too glib to persuade voters, the Democrats can promise coverage for all, which can be done through private insurers as in Germany and Switzerland.

The failure of immigration policy reveals the unwillingness of the parties to compromise.  The country needs both real border security and more immigrants.  The Democrats should declare their willingness to compromise to reach a viable, long-term policy.  They should take the lead in promoting bipartisan negotiations.

It is unrealistic to expect an early return to cooperation and negotiations between the two parties. Their differences are too deep, and the undisciplined use of social media has transformed disagreement and reasoned debate into impulsive fury.  Voters say they want pragmatic compromise, but it’s not likely. 

Voters also want less heated charges and claims.  The Democrats should pledge division without divisiveness. And practice civility.

Disagreements among Democrats are normal.  Congressional elections are not a presidential vote; what wins in New York need not be identical with what works in Georgia.  One wing of the party need not dominate it everywhere, and each can make its case district-by-district while all promote the common agenda.

Moderates and progressives can pursue their agendas and avoid speaking ill of one another.  And all Democrats could now create a unified platform that states their party’s core goals. It’s not an either-or choice.

Saving Social Security before it's broke

 

Saving Social Security through simple tax reform

Planning for the coming crisis

 

Gordon L. Weil

Tax reform.  Everybody talks about it but nothing happens.

President Trump might disagree.  After all, taxes were cut for the wealthiest sliver of the population and partially removed on tips.  Unlike traditional Republicans, he does not promote tax cuts to trickle down to create jobs; it’s simply a reward to the rich.

Trump’s critics say that everybody ought to “pay their fair share.”  Billionaire Warren Buffet says he pays at a lower rate than his secretary.  Paying his “fair share” would increase his taxes.  If the people like him are not taxed appropriately, the cost of government boosts the public debt, ultimately raising the tax tab through inflation.

Government spending could be reduced.  Social Security benefits will automatically be less without reform.  In 2032, its retirement reserve fund will be gone and payroll taxes will only cover 78 percent of benefits, which would have to be cut.  There’s a surplus of talk about the problem and a deficit of action.  The clock ticks on.

The 1986 tax act produced real reform.  Taxes were simplified, loopholes were eliminated, and rates were reduced.  Then, with the help of Congress, the big players went to work gaming the new rates and cutting their taxes.  Simplification was lost, together with real reform.  Renewed tax reform could recover some of the 1986 progress.

Taxes could be simple, with fewer loopholes – deductions, exemptions and special rates.  Revenues could increase with lower rates.  Administering the tax system would cost less.  The wealthiest would pay their fair share, supporting government services from which they benefit.  But the wealthiest would get around a new round of tax reform. 

What worries some people about the talk of tax reform is the language of the most aggressive would-be reformers.  Advocates make the system sound so deeply unfair today, that confiscating wealth would be justified.  These extreme reformers attack “oligopoly.”  In turn, they are attacked as “socialists.”  The result?  Talking about tax reform makes a lot of people feel uneasy.

The temperature of the debate could be lowered by learning a couple of lessons from the current tax system.

Trump falsely claims that he eliminated taxes on Social Security.   Instead, he successfully added a limited, three-year tax cut for many seniors, which he claimed cancelled the tax on their benefit payments.  Though it did not fully cover the tax, Trump successfully sold the temporary measure as a major Social Security reform.   Marketing matters.

Social Security contributions are paid at the source.  The party that pays a person’s income also pays the Social Security contribution for itself and the recipient directly to the government.  It’s a flat rate, with no loopholes.  The contribution base is capped at a specific income ($184,500 in 2026); any higher payroll income is free from any contribution.

Social Security can be saved and taxes reformed with no increase for more than 90 percent of taxpayers by a simple reform.  It would not touch the Internal Revenue Code and could readily be adopted by Congress.

The cap on income subject to a Social Security contribution should be eliminated and the definition of income should be changed.  Income to any taxpayer from any source could be subject to the contribution.

The Social Security contribution is now based only on wages paid to individuals.  The base could include all income paid for wages, government payments and investments.  That way, tax evasion by failing to accept a wage could be avoided.

The annual amount of U.S. personal income above $200,000 is estimated at $7.5 to $8 trillion.  The Social Security self-employed tax rate of 12.4 percent would produce about $1 trillion a year from individuals. That would cover the Social Security shortfall, with the surplus going into general federal revenues to fund debt payments, tax cuts or increased benefits.

(Medicare contributions are not subject to an earnings cap.) 

This reform would increase taxes on the wealthiest without allowing loopholes.  With payments to the government coming directly from the source, the taxpayer would not take any action.  Benefits need not be changed.

Companies could also be made subject to making Social Security and Medicare contributions on their retained profits. No loopholes would be available. If corporations have the rights of individuals, they should be treated like them and be contributors.   These contributions would have to be meshed with existing corporate taxes. 

Major individual and corporate contributors might argue that higher taxes thwart their investment in growth.  Economic studies question that argument.

This reform could be marketed, à la Trump, as “Save Social Security,” reassuring lower-income recipients and getting an indecisive Congress off the hook.  Social Security already has elements of income redistribution, so the reform would be doing nothing new.

This could be one way to deal with deficit spending and Social Security.  It’s worth a look.

 

Trump conducts foreign policy like a business

 

Trump policy: ‘Beat ‘em or buy ‘em’

Foreign affairs as a business

 

Gordon L. Weil

In a competitive world, one rule keeps cropping up. 

The US-Iran Memorandum of Understanding is a prime example.  The rule is “beat ΄em or buy ΄em.”

By any standard existing beyond the confines of the White House, President Trump led the U.S. into defeat in its effort, along with Israel, to strip all power from Iran.  Trump now hopes to extract economic advantage from the ashes of military failure.

He learned this rule in the real estate business.  One way to beat a competitor is to buy it.  Your market share increases and you reduce competition.  You argue that the loser should be happy, because you bought him off generously.   His pride has a price.  Pay it and his pain is lubricated by cash.  If necessary, you can make him your subordinate partner.

The Iran war was sold as a military necessity, aimed at preventing it from acquiring a nuclear weapon to threaten the Middle East.   Its leadership could be forced into submission, ending the country’s support for Hezbollah, Hamas and the Houthis, terrorist groups staging furious opposition to Palestinian subjugation.

From that perspective, Iran was not defeated and could develop a weapon superior to nuclear arms – control of the Strait of Hormuz.  The Iran war revealed the limits of American power.

The MOU alternative to unattainable military victory would tame Iran by investment and economic recovery.  Prosperity may be a better weapon than missiles.  Iran will become more integrated with Europe and North America, reducing it as a threat. 

That’s difficult to accept for MAGA hardliners, who bought the exaggerated tale that Iran’s nuclear missiles could begin flying next week, when the conflict was mostly about power.  In the end, buying them when you couldn’t beat them is the card that consumer discontent with high-priced gas at the pump has forced Trump to play.

This approach explains Trump’s principal foreign policy representatives – Steve Witcoff and son-in-law Jared Kushner.  Both are real estate developers without any diplomatic experience.  Every problem to Trump and his agents can be solved by them as in business, and trained foreign policy or intelligence experts should be ignored.

That way of thinking explains why Trump claimed he could solve Russia’s war on Ukraine in a day.  All Ukraine had to do was give up some real estate, and Russia would settle.  He thought Russia would prevail sooner or later, so Ukraine would save lives by ceding territory.  He did not consider Ukraine’s desire to survive as a nation, which goes well beyond a land swap.

Consistent with his business sense, Trump believed that Ukraine would go along with his plan in return for increased American investment.  He also dabbled with the idea that Russia might be similarly bought off.   The backing of U.S. investors (and profit for American corporations) should be a sufficient incentive to seal the deal.   It wasn’t.

Trump has repeatedly used this buy-it-if-you-can’t beat-it policy.  He sees it as a great success in Venezuela, where American companies may return to exploit its massive oil reserves, and he showed he could topple its leader, if not its regime. 

He sees Gaza, wiped clean by Israel, as ripe for western-style development and the use of incentives to get the Palestinians to move out.  While it may be impossible to suppress Palestinian hopes for their own country, prosperity and emigration might work.  The real obstacle is Israel, whose hardliners simply want the U.S. to leave the land to them.

Greenland is a good example of the policy.  Trump could envisage Denmark, looking at a handsome payoff, being willing to sell the island to the U.S.  It matters less that the U.S. today could have whatever military bases it wants there than that the vainglorious president would get credit for expanding U.S. territory.

Trump’s insulting proposal to make Canada the 51st state is the same policy.  He saw that country as a weak dependency that might easily give up its pretensions of having its own culture and history to get in on his leadership.  Its goods would no longer face the artificial trade barriers he had just created.

In Iran, Ukraine, Palestine, Greenland and Canada, Trump has been confronted by nations that are willing to make sacrifices to preserve their identity.  Just as Old Glory means something to Americans, their flags stir emotions that cannot be purchased or readily suppressed. 

Given the changed nature of war caused by drones, Trump’s planes and his proposed battleship could not impose American will militarily.  Nor can Russia and maybe not even China.  Economic cooperation is far better than military action, but it is taking long and painful conflicts for Trump to understand that.

Still, something’s missing that goes beyond war or foreign policy as a business.  Respect for others.  With that, foreign policy might work better.

Maine primaries show Democrats could win big

 

Maine primaries show Democrats could win big

But RCV unduly complicated

 

Gordon L. Weil

Maine’s unusual primary elections produced expected results, but raised new puzzles.

In the Democratic primary for governor, former House Speaker Hannah Pingree, who had finished second initially, defeated Nirav Shah, the former Maine CDC director.  Her win came thanks to an unusual ranked-choice-voting ticket.  Pingree and two other candidates asked voters to rank them, skipping Shah and Angus King III.

Pingree, former Senate President Troy Jackson and Secretary of State Shenna Bellows, were experienced state leaders and sought to ensure that newcomers Shah and King should not represent the party.  Pingree received more second choice support from others on the ticket to pass Shah.  Voters agreed with the unified ticket strategy.

Proponents of RCV probably had not thought of electoral tickets to the extent this one worked.  Clearly, each of the three wanted a like-minded candidate with a good state record to the point of being willing to risk their own chances.

In the Republican primary, Bobby Charles, the first-round frontrunner, won the election.  A loyal Trumper, he faced competitors whose general election backing seems to be in doubt. He might have lost to more unified opposition.  He may now try to move more toward the center. If his opponents remain cool to him, he’s in trouble, because Pingree does not face defections.

Charles’ win opens the door to Rick Bennett, the moderate Republican running as an independent, who could pick up the GOP defectors.  But he will need independents and Democrats, so he must take votes from Pingree.  She favors ending Maine’s selection of presidential electors by congressional district, so he could differ from her on that issue.

In the Second District Democratic House primary, State Auditor Matt Dunlap defeated Joe Baldacci, the former Bangor city council member who had been endorsed by the Democratic Congressional Campaign Committee.  Though Dunlap is seen as more progressive, he is known as a gun rights advocate.

National Democratic endorsements of Baldacci and Gov. Janet Mills in her failed run for the Senate nomination suggest that the national party ought to stay out of Democratic primary races.  Leaders might suppose they can pick general election winners better than the locals, as Trump does among Republicans, but they can’t, and their meddling can hurt fundraising.

Both the Senate and the Second District races are critically important to the Democratic effort to take congressional control, allowing them to bring Trump somewhat under legislative control. But that significance does not make Washington wiser about Maine politics than the local folks.  It’s not over, but more Maine campaign mistakes will likely be made by outsiders.

The Maine primaries sent a message about the November elections that may be reflected nationally.  While the pundits focus on the redistricting battles meant to reduce Democratic seats, especially those held by Blacks, and on swing districts where seats could flip, they miss the possibility of something bigger.

Twice as many Democrats as Republicans voted in the Maine primaries.  Even if the Second District congressional race contributed, the margin was large nonetheless.  Democrats are fired up and Republicans seem dispirited, possibly because of the high consumer prices resulting from the Iran war and fatigue with Sen. Collins’ support for Trump.

In Texas, the Democratic Senate primary was also impressive.  They may have slightly edged the Republicans in their primary.  This showing is unusual in Texas, a reliably red state. 

If these are omens of political enthusiasm, then a Blue Wave is possible.  Traditional district-by-district analyses could be less useful if the nation has tired of Trump.  As with Democrats in 2024, many unhappy Republicans could stay home.  Big campaign spending might help the GOP, but huge outlays have limited effectiveness past a certain point. 

Trump has succeeded in creating doubts about the honesty of vote counting, though he lacks evidence.  Democrats have gone overboard attempting to counter such doubts.  The Maine primary RCV count was a prime example.  It took ten days between voting and the final count, all because of an overblown effort to achieve perfect accuracy.

Votes are supposed to be counted in the municipality where they are cast.  In RCV, Maine allows only first-choice winners to be counted locally, leaving later rounds to the state. Ballots or electronic data must be transported to Augusta.

But local counts of all voting would let winners be tentatively calculated in a day.  The state count could determine the final numbers, which would not vary significantly from the sum of local counts.  Counting would be quicker and depend less on the opaque operation of computers, reducing opportunities for false claims about vote tampering.

Under the Maine Constitution, plurality voting must be used in races for governor and the Legislature.  Using RCV for federal races and primaries creates confusion.

Maine has created an unduly complicated system.  It treats voters as ignorant or lazy.

The case for immigration; one country decides

 

The case for immigration; one country decides

Swiss voters speak

 

Gordon L. Weil

Mostly overlooked, a Swiss referendum this week made a major statement on immigration that will echo in the U.S. and Europe.  

The vote in Switzerland, a direct democracy where citizens regularly hold popular votes to decide public policy, is proof that immigration won’t go away as an issue, at least in North America and Europe. 

While President Trump has largely made good on his promise to close the door to new arrivals, his policy won’t be the last word.  The Swiss put the question starkly.

Voters were asked to decide if the small country should place a cap on its population.  As the ceiling neared, the government would have to limit immigration, even preventing divided families from re-uniting.  It might have to forego the benefits of access to the EU market if it blocked employment for workers from elsewhere in Europe.

The Swiss vote was a reminder of a key element of the British decision to quit the EU.  One of the prime causes of Brexit was the increase in foreign workers. The European arrivals would take jobs from Brits, it was claimed, and, after they settled, they would reshape the country’s culture, shedding Merrie Olde England and the moribund British Empire.

The pro-Brexit voters believed that their country’s greatness would enable it to profit from going it alone.  The loss of Europeans both in the labor force and in the consumer marketplace did not weigh heavily enough to influence the outcome.  While the British economy did not collapse as a result, its growth slowed.

In Switzerland, the issue was placed before the voters by the largest political party, a right-leaning organization that opposes immigration.  It made several economic arguments that were meant to show that new arrivals would place excessive strain on the country.

It argued that there would not be enough housing to handle additions to the population.  Rural areas would be increasingly “paved over” to accommodate urbanization.  The schools would be stretched and the quality of education would decline.  And there would not be enough support personnel, like doctors, to handle the increase.

These comments assumed that Switzerland could not grow to accept a continual increase in its population.  The proponents did not consider that contributions, professional and financial, that immigrants could make would allow the national economy to grow.  Their position amounted to saying that the country could not prosper if it had a larger population.

The government expressed its opinion, opposing the initiative because it would harm the national economy. It argued that national prosperity would suffer if the country lacked enough labor to maintain and increase production.  Health care and construction, both dependent on foreign workers, would suffer.

The Swiss economy depends on links with other economies, notably the EU.  Ending immigration could isolate the country, potentially ending several international agreements.  The analysis also showed that immigrants contribute more to the economy than the demands placed by them on social welfare programs.

This debate has direct parallels with politics in Britain and the United States.  In Switzerland, under direct democracy, the people themselves got to decide, not politicians seeking to create and exploit fears.

The cap was opposed 55% to 45%.  The electoral defeat came because the large urban areas strongly opposed the proposal to limit population. The Swiss Confederation is divided into state-like “cantons,” and cantons like Zurich and Geneva favored immigration.  Small, rural cantons opposed.  It was the kind of rural-urban, conservative-moderate split seen in American politics.

The result may be explained by more than economic issues.  Proponents also cited the increase in the number of Muslims, making discrimination a factor.

The Swiss referendum reflected a debate about the nature of the world’s economies.  Nations may be so interconnected that the movement of workers is not a diabolical threat, as some claim, but an inevitable effect of the new economic links that extend well beyond national borders.

Nor is immigration the result of a globalization plot, designed to destroy national economies and turn power over to hidden economic rulers.   Supply lines that cross borders and workers whose skills offer value beyond their home countries are organic developments, not the result of sinister schemes.

The Swiss government opinion pointed out that approving the proposal would damage the country’s reputation, which is partly based on its creation and operation of the International Red Cross.  By capping its population, “Switzerland would isolate itself and lose its credibility,” it said.

This is the message of the Swiss referendum for the U.S., as it pursues an America First policy. The Swiss think as highly of themselves as do Americans.  Just as the U.S. serves as a constitutional and economic model, Switzerland serves as a humanitarian and democratic model.

Preserving national “credibility” and its thriving economy should be as important to the U.S. as it is to Switzerland.

A real estate mogul flops: Trump’s foreign policy doesn’t work

 

A real estate mogul flops

Trump’s foreign policy doesn’t work

 

Gordon L. Weil

 Donald Trump gained fame as a New York real estate mogul, wheeling and dealing successfully in one of the most difficult business environments.

He might have been good at New York property deals, which fed his world champion ego, but he is learning that what works in Midtown does not work in the Middle East.  

After making war against Iran with a precise list of demands, he claims success after getting far less than he sought and from what President Obama had achieved, but which Trump killed out of spite.

If Trump could operate in the mean and tough real estate market, why hasn’t he succeeded in dealing with Russia’s war on Ukraine, Israel and Palestine, Iran and even North Korea?   Why did he torpedo long-standing and beneficial relationships with Canada and Denmark? 

New York real estate brings together people who are members of the same tribe.  Major developers share his background and understand the same rules of the game.  He could best them by sheer assertiveness or downright intimidation, and they would readily do the same.

His success came because he would take risks and showed limitless boldness and self-confidence.  He knew how to turn his media appearances into a form of personal advertising.  His reputation grew large enough to make him a favorite of celebrities and politicians.

Trump would win by using other people’s money.  Thanks to his father’s backing, the banks would lend to him. He could slow-pay or no-pay his suppliers. 

Ultimately, only one developer could erect a building at Fifth Avenue and 57th Street.  He got the location, and the result was Trump Tower.  No compromises.

Unlike the metropolitan real estate community, the complex world scene holds multiple tribal histories and is about more than property.  The Russian invasion can’t be settled by bullying Ukraine into ceding territory to Putin.  Trump can’t coerce Canada and Denmark (on behalf of Greenland) to hand over their land to his U.S.   

With his limited education and even more limited understanding, he misses that Gotham is not Greenland.  A critical element is missing – history.

As he came down the escalator at Trump Tower in 2015 to announce his run for the presidency, he had faith that his business and media success could translate into a political career where he would start at the top.  It worked.  Better yet, after winning a majority in the 2024 elections, he crowned himself with what seemed to be absolute power.

At first, other countries fed his ego with fawning appeasement, enhancing his belief that he uniquely understood the world and how it worked.  But this was no real estate market. Previously, he had not cared if he was liked, so long as he won and made money.  Increasingly, the world community grew to dislike him and could keep him from closing deals.

Russia had long dominated Ukraine and treated Ukrainians like the U.S. had treated Blacks.  Putin believed he could restore that relationship, and Trump, sharing his disdain, was willing to help him.  But this was not about territory, because Ukrainians will fight to preserve their distinct nationality.  Trump failed and his role as mediator must either adjust or fade away.

Israel had long enjoyed bipartisan American support, and Trump used it to help Israel pursue the regional power it sought.   But this would involve more than commercial deals between Israel and a few Arab neighbors.  The Israel-Palestine conflict called for an honest broker, not merely a man promoting short-term stunts to win himself the Nobel Peace Prize.

With Iran, Trump thought he commanded such great military power that his opponents would quickly fold, just as they do in cutthroat real estate battles.  But Iran had the resources to resist, and Trump, who claimed to have all the cards, had no idea how to play them.  The Iran agreement is likely to end up with his putting lipstick on a pig.

The president was so greedy for gain, that he turned winning into losing.  In a practical sense, Canada was already the 51st state economically when he went after it.  He did not believe that it could have the resolve to reduce its dependency.  He had what he sought, but what he really wanted was not possible – his name on the building.  Same for Greenland.

He mistakenly ignored domestic policy issues, sneering at affordability.  Instead of bank loans, his funding comes from the people, who grow unhappy and impatient when debt explodes and inflation climbs.  He overplayed his dealmaking, leaving himself the loser at home and abroad.  

He might have been able to outwit his real estate buddies, but he did not understand that his self-promoting persona would not work in the world where New York rules don’t apply.

The lesson for Trump: hubris matters less than history.