We Can Always Use Some Bitter, Cynical, Gallows Humor, So Here’s A Kudlow Post

Larry Kudlow is the pure distilled essence of a Trump appointment, the type specimen of the breed, and the perfect expression of the state of Republican “thinking” on not just economics, but any matter in which actual knowledge and a respect for empiricism might help.

Via Wikipedia, we find he is barely educated, at best, in the fields in which he now works:

Kudlow graduated from University of Rochester in Rochester, New York with a degree in history in 1969. Known as “Kuddles” to friends, he was a star on the tennis team and a member of the left-wing Students for a Democratic Society at Rochester.

In 1971, Kudlow attended Princeton University’s Woodrow Wilson School of Public and International Affairs, where he studied politics and economics. He left before completing his master’s degree.

I’ll admit that Kuddles is kinda cute, but an unfinished masters degree in a policy school is not one you’d usually associate with economics acumen.

He went on to a stellar business career, managing to get fired repeatedly for substance abuse on the job, including a claimed $10,000/month cocaine habit that got him canned from Bear Stearns in 1994. (It’s interesting to note that a frantic effort is underway today to diminish such inconvenient truths on Kudlow’s Wikipedia page.)

Fortunately for Kuddles, he cleans up well, dresses nicely, and can tok gud. So he was able to revive his career as a TV gasbag, with a series of appearances and then shows on CNBC, the network that figured out the markets could be covered like sports teams.

Unfortunately — for the rest of us, if not for the ever-failing-up Kudlow — he’s been wrong about almost every key economic call since Methuselah was in diapers.  He is a Laffer disciple, a supply-sider whose faith that there is no tax that is too low, no plutocrat whose needs must not be served, is impervious to any test of reality.

Consider this:

In 1993, when Bill Clinton proposed an increase in the top tax rate from 31 percent to 39.6 percent, Kudlow wrote, “There is no question that President Clinton’s across-the-board tax increases … will throw a wet blanket over the recovery and depress the economy’s long-run potential to grow.” This was wrong. Instead, a boom ensued. Rather than question his analysis, Kudlow switched to crediting the results to the great tax-cutter, Ronald Reagan. “The politician most responsible for laying the groundwork for this prosperous era is not Bill Clinton, but Ronald Reagan,” he argued in February, 2000.

And this:

Kudlow firmly denied that the United States would enter a recession in 2007, or that it was in the midst of a recession in early to mid-2008. In December 2007, he wrote: “The recession debate is over. It’s not gonna happen. Time to move on. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). The Bush boom is alive and well. It’s finishing up its sixth splendid year with many more years to come”. In May 2008 he wrote: “President George W. Bush may turn out to be the top economic forecaster in the country” in his “‘R’ is for ‘Right'”.

And this:

When Obama took office, Kudlow was detecting an “inflationary bubble.” That was wrong. He warned in 2009 that the administration “is waging war on investors. He’s waging war against businesses. He’s waging war against bondholders. These are very bad things.” That was also wrong, and when the recovery proceeded, by 2011, he credited the Bush tax cuts for the recovery. (Kudlow, April 2011: “March unemployment rate drop proof lower taxes work.”) By 2012, Kudlow found new grounds to test out his theories: Kansas, where he advisedRepublican governor Sam Brownback to implement a sweeping tax-cut plan that would produce faster growth. This was wrong. Alas, Brownback’s program has proven a comprehensive failure, falling short of all its promises and leaving the state in fiscal turmoil.

The reviews are coming in. Via the BBC:

David Stockman, Mr Kudlow’s former boss during the Reagan administration, told the Washington Post in 2016 that Mr Kudlow’s prediction that tax cuts would lead to growth was “dead wrong”. Instead, he said the cuts led to budget deficits.

More recently, he has warned that Mr Kudlow would not be able to rein in the president.

“As much as I love him … Larry’s voice is exactly the wrong voice that Donald Trump ought to be hearing as we go forward,” he told CNBC.

Liberal economist and New York Times columnist Paul Krugman has been sharply critical, noting that Mr Kudlow missed signs of the housing bubble and recession.

“At least he’s reliable — that is, he’s reliably wrong about everything,” Mr Krugman tweeted.

Indeed in December 2007 – just as the recession was beginning – Mr Kudlow wrote in the National Review: “There’s no recession coming. The pessimistas were wrong. It’s not going to happen.”

It is interesting that Kudlow himself doesn’t seem to disagree with his predecessor on the issue that got Cohn out. From a quick take bylined by him, Laffer and Stephen Moore (another stellar, always-wrong econ public intellectual) here he is on Trump’s tariff announcement:

Tariffs are really tax hikes. Since so many of the things American consumers buy today are made of steel or aluminum, a 25 percent tariff on these commodities may get passed on to consumers at the cash register. This is a regressive tax on low-income families.

I wonder how that squares with the new job. ETA: I know how it squares. It’s already been forgotten. We’ve always been at war with Eastasia.

But that’s just SOP in the circles in which Kudlow travels:  intellectual rigor doesn’t actually matter.  He’s under no obligation to be consistent in any of his pronouncements, and he certainly doesn’t have to be right about anything as long as he provides cover for the true Republican (n.b.: not just Trumpian) policy goal: the transfer of more and more of our society’s wealth to those who are already wealthy — and hence, in the GOP/Rand/Sociopath view of the world, those who are virtuous enough to deserve such riches.

For all of you who’ve wondered why the US can’t be more like Kansas — we may now we get to find out.

Image: Thomas Shields Clarke, A Fool’s Fool,  c. 1887.



Grifters All The Way Down

Here’s what I don’t get.  Trump’s Treasury Secretary, Steve Mnuchin, is a rich guy. Seriously rich: on the order of a half a billion in net worth, w. a cool $70 million in 2016 earnings.  If he wants to check out a cool event — a total eclipse, say, a desire I wholly understnd — he can afford to do so at any level of comfort he chooses, and never miss the lucre.

Instead, he scams:

Last week, Treasury Secretary Steve Mnuchin took Mitch McConnell, some other Republican lawmakers, and his wife, Louise Linton, to Kentucky, ostensibly to touch large piles of gold at Fort Knox. Coincidentally, Kentucky also happened to be one of the best places to watch the total solar eclipse, which happened to occur on the day of their trip.

This trip had already attracted a bit of unwanted attention (back in those halcyon days before Melania’s stiletto adventures) after Linton instagramed the following:

“Great #daytrip to #Kentucky! #nicest #people #countryside,” Linton wrote, according to a screenshot of the now-private post, before tagging the labels she was wearing “#rolandmouret pants, #tomford sunnies, #hermesscarf #valentinorockstudheels #valentino #usa.”

Nothing says populist like that kind of fashion profile, eh?

Now, however, it turns out that drawing eyes to the family outing might have been more than a mere PR flub:

The U.S. Treasury’s Office of Inspector General is reviewing the flight taken by Treasury Secretary Steven Mnuchin and his wife, Louise Linton, last week to Louisville and Fort Knox, Ky., following criticism of their use of a government plane on a trip that involved viewing the solar eclipse.

“We are reviewing the circumstances of the Secretary’s August 21 flight . . . to determine whether all applicable travel, ethics, and appropriation laws and policies were observed,” counsel Rich Delmar wrote in a statement to The Washington Post late Thursday.

“When our review is complete, we will advise the appropriate officials, in accordance with the Inspector General Act and established procedures,” Delmar added.

Yo! Mnuchin! Pay attention here.  The Air Force is not your personal air taxi service. You want to take a day off? Fine. You’re the boss. You can play hooky to join millions jazzing on the sun’s waltz with the moon.  And you can pay for it your own damn self, just like I did, my brothers, and everyone I know.

More seriously:  someone who actually takes public service as service knows not to give even the appearance of putting one’s hand in the cookie jar.  And it’s not as if this puts Mnuchin through any hardship.  As noted above, he is far and away rich enough to pay for all his pleasures; there’s no meaningful gain to him to sleaze a little grift off the top.  But apparently, he can’t help himself.

These guys!

Scum floats — but how can you tell when it’s scum all the way down?

Image: Elihu Vedder, Corrupt Legislation (detail), mural in the Library of Congress, 1896.



The Republican Health Care Plan: ER’s For The Poor

In their ongoing effort to make America sicker and to ensure that more Americans die before their time, Trump and his Republican party have decided to spend more money to cover fewer people less well in Florida:

The shift involves funding that the federal government provides to help hospitals defray the cost of caring for low-income people who are uninsured. Under a deal with the State of Florida, the federal government has tentatively agreed to provide additional money for the state’s “low-income pool,” in a reversal of the previous administration’s policy.

The Obama administration balked at providing more money to help hospitals cope with the costs of “uncompensated care” for people who could be covered by Medicaid. If Florida expanded Medicaid eligibility, the Obama administration said, fewer people would be uninsured, and hospitals would have less uncompensated care.

This is, of course, not a health care policy. It’s simply the latest accomplishment in the fundamental goal of Republican politics since 2009:  anything the Black guy did must be undone.

“Florida is just being paid by taxpayers not to expand Medicaid,” said Andrew M. Slavitt, the acting administrator of the Centers for Medicare and Medicaid Services from March 2015 to January of this year. “The low-income pool is essentially a slush fund,” Mr. Slavitt said, “and it’s a really inefficient way to pay for medical care.”

But hey, maybe it could it work, right?

Come on! This is the Florida Republican establishment we’re talking here.  If it ain’t nailed down, it’s getting stolen:

Two House Democrats from Florida, Debbie Wasserman Schultz and Kathy Castor, said that after receiving the commitment of federal funds, the Florida Legislature was now moving to adopt a budget that includes cuts in state Medicaid spending. “It’s outrageously irresponsible,” Ms. Wasserman Schultz said.

Ms. Castor said that “it would be more efficient to expand Medicaid so people would have coverage, rather than running up huge bills at hospitals that need to seek reimbursement from the low-income pool.”

Ladles and Jellyspoons:  your modern Republican party.  It’s better to pay more money to achieve less than it is just to make government work with the tools it has.  There is no compromise with these folks.

Ni shagu nazad!

Image: Sebastian Vrancz, Soldiers plundering a farm during the Thirty Years’ War, 1620

ETA:  Sorry, David, for poaching on your patch!



Newsworthy Items That Have Slipped Through the Cracks: We’re Doomed

I don’t mean to panic anyone, but the US breached the debt ceiling on March 16th and the current extension on the Fiscal Year 2017 continuing budget resolution runs out on April 28th. Given the dysfunction within the majority caucuses in the House and the Senate, the fact that the new Administration’s skinny budget has been declared DOA upon its arrival in Congress, and the fact that NO ONE ANYWHERE – INCLUDING THE WHITE HOUSE, CONGRESS, MOST OF THE NEWS MEDIA, AND APPARENTLY MOST AMERICANS!!!!!!! – seems to be paying any attention or talking about this, perhaps we should be just a wee bit concerned.

Have a nice evening!



All Hat, No Cattle

 

Too f**king little awfully late in the game, but the Grey Lady has come up with another good story on the long-con that is Donald J. Trump.  Ross Buettner reports:

…an examination of his tax appeals on several properties, and other documents obtained by The New York Times through Freedom of Information requests, shows that what Mr. Trump has reported on those forms is nowhere near a complete picture of his financial state.

pietro_paolini_-_card_sharps

The records demonstrate that large portions of those numbers represent cash coming into his businesses before covering costs like mortgage payments, payroll and maintenance. After expenses, some of his businesses make a small fraction of what he reported on his disclosure forms, or actually lose money.

Donald Trump got his start in life with his dad’s money. The rest of us helped him out by paying his taxes for him for almost two decades.  Shafting his subcontractors and partners helped build the kitty.  And he still can’t actually make (much) money at his supposed vocation.  I loved this bit:

On the financial disclosure forms that Donald J. Trump has pointed to as proof of his tremendous success, no venture looks more gold-plated than his golf resort in Doral, Fla., where he reported revenues of $50 million in 2014. That figure accounted for the biggest share of what he described as his income for the year.

But this summer, a considerably different picture emerged in an austere government hearing room in Miami, where Mr. Trump’s company was challenging the resort’s property tax bill.

Mr. Trump’s lawyer handed the magistrate an income and expense statement showing that the gross revenue had indeed been $50 million. But after paying operating costs, the resort had actually lost $2.4 million.

Donald Trump is a bigot, a thug, the kind of man whom women know all too well.

He’s a braggart, a bully, and the least self-made alleged rich guy short of the Walton kids.

And through it all, he’s crap at the stuff of which he claims to be the world champeen.  Would you trust the coffee fund, much less the national budget, to this guy?

But time and again, what the form presented as income did not match what was reported in other documents. Mr. Trump also runs several publicly owned attractions — the carousel and ice rinks in Central Park and a golf course in the Bronx — under agreements with New York City.

Mr. Trump’s disclosure forms reported income from the Wollman and Lasker ice rinks of just under $13 million last year, and $8.6 million the year before. But accounting figures provided by his company to the city show that those figures represent gross receipts…Recent figures were not available, but a 2011 city audit showed that for the previous three years, an average of $25,340 a year for both rinks was left after expenses.

With Logan Airport charging roughly eight bucks a gallon for Jet-A fuel right now, that would pay for barely more than a quarter of a tank of gas for The Donald’s aging jet.  He’s a bust-out artist, not a businessman.

Last word to the magistrate who heard Trump cry poor on his misbegotten Doral Golf Course purchase:

“So he spent $104 million to lose two and a half million dollars a year,” Mr. [Leonardo[ Delgado said. “I know how to lose that money without having to spend $104 million. How ’bout you, Murry?”

I’d laugh, except for the non-zero (though still small) chance that this lying sack of ferret fæces could be President-elect next week.



Flint and lead screenings

One of the things that puzzled me about the Flint lead poisoning is why the problem took so long to identify.  Medicaid gives strong incentives to managed care organizations to test their pediatric members for lead poisoning.  Michigan has their own lead policy:

All Medicaid enrolled children are considered to be at high risk for blood lead poisoning. In accordance with the Centers for Medicare and Medicaid Services guidelines, Michigan Medicaid policy requires that all Medicaid enrolled children be blood lead tested at 12 and 24 months of age, or between 36 and 72 months of age if not previously tested.

Public Act 55 of 2004 required that by October 1, 2007, 80% of Medicaid enrolled children were to have been blood lead tested. MDCH designed a report, theMedicaid Blood Lead Testing report, to monitor compliance with this law.

The January 2013 report showed that there were 3,000+ kids in Medicaid under the age of 2  in Genesee County.  70% of those kids had a lead screening.

Someone should have been screaming that the Medicaid pediatric population was seeing a massive lead level spike.  It should have been either at the provider level, or more readily, at the insurer level as they should have been seeing the claims for follow-up visits after positive lead tests started to come back in high numbers.  And if the providers and insurers were not screaming their heads off, the Michigan medicaid administrative offices should have been as soon as they started to see the claims come across their data encounter system.

Unfortunately, it looks like the state of Michigan put their head in the sand (via the ACLU)

In a posting Monday on the website FlintWaterStudy.org, Virginia Tech professor Marc Edwards accused the state of neglecting the lead-poisoning issue even though Michigan officials knew as early as summer 2014 that there was a problem.

“They [Michigan Department of Human and Services officials] discovered scientifically conclusive evidence of an anomalous increase in childhood lead poisoning in summer 2014 immediately after the switch in water sources, but stood by silently as Michigan Department of Environmental Quality (MDEQ) officials repeatedly and falsely stated that no spike in blood lead levels (BLL) of children had occurred,” wrote Edwards

Lead poisoning is something that should be picked up through multiple systems.  I can’t figure out why the public health system failed so obviously.



Risk Corridors, asset valuation and favoring incumbents

Nicholas Bagley at the Incidental Economist  argues that insurers will eventually be made whole on risk corridor payments even if the money is never appropriated by Congress.

At Rubio’s insistence, Congress in 2014 passed a budget bill prohibiting the administration from using other funding streams—the budgetary equivalent of looking under the couch cushions for change—to make up for any shortfall.

Rubio’s bill has now come back to bite the administration. On October 1, HHS announcedthat, for 2014, health plans were owed substantially more under the risk corridor program than they paid in. Unprofitable plans will thus receive just 12.6% of what they were supposed to….

there’s another option, one that hasn’t received much attention. When Congress creates an entitlement directly in legislation, the person who’s supposed to get the entitlement can file a lawsuit in the Court of Federal Claims to recover what she’s owed.  That’s why plans should still be able to get their cost-sharing reductions, even if the House of Representatives prevails in its case over whether an appropriation exists to cover the cost-sharing reductions.

The same principle holds (1) where Congress vests a federal agency with the power to obligate the United States to make certain payments and (2) the agency welches on those obligations. Here, the ACA instructs HHS to create a risk corridor program requiring the government to pay health plans a given amount of money. If the past is any guide, plans should be able to sue if HHS doesn’t pay them in accordance with the program. That’s so whether or not Congress has appropriated money to fund the program.

If I am understanding the argument correctly, PPACA tells HHS to pay, money is not appropriated, but the money is still owed, so the full faith and credit of the United States government comes into question if the government does not pay. Therefore, once insurers start suing when it is obvious that they will not be made whole for 2014 risk corridor payments, they’ll win easily in court and the government will pay.

That is good news in the long run for well capitalized insurers.   It is bad news for everyone else. Read more