Saturday, December 31, 2016

Goodbye, 2016

The year 2016 has been bad for a lot of people, on a personal note and on the global scale.  It is funny to think that the turnover of a calendar page would change luck, but it is human nature to reflect on 2016 and look forward to 2017.

2016 went by with many surprises, such as the Brexit vote, Columbia’s rejection of a peace deal, and of course, Trump’s election.  These results went heavily against polls and predictions, although Clinton’s 2.9 million popular vote advantage would have made her the clean victor in any other countries.  As things go, we won't see the actual Brexit and Trump effects until 2017 and later.  Will they be good for a regular Joe?  

Take Trump for an example.  It is hard to tell what what he says means, what he will do, or what he will be able to do.  The first definitive thing he likely does is to repeal ACA, since it is what he says and what the Congressional Republicans avow to do for years and are finally able to do now.  The law cannot be easily repealed, but the Senate will use budget reconciliation to block ACA’s many measures.  What happens next is suddenly unclear.  Is there a replacement, what is the replacement, how soon is the replacement, or nothing at all?  I guess the US healthcare can always go back to 2008, as this debate is truly just about what the country wants to be like.
Then Trump’s economic plans.  He wants to bring back US companies’ overseas cash by lowering taxes.  This 1 trillion dollar extra money can’t hurt, but who will benefit?  The stock market will go up because of certain stock buybacks and dividend hikes, but how much will the inflow help the manufacturing jobs?  If American companies, like Apple, IBM, are not hiring in the US, it is not because they are starved of cash: they have plenty of money in the US already and can always raise more by issuing bonds.  The job market is of a structural not monetary issue, with the extra cash changing little of that.    
Trump also proposes to change corporate taxes, no export taxes, new import taxes, etc.  It is hard to know how they will turn out, because of the Congress and world trade rules.  If the export and import tax changes survive WTO arguments, other countries will follow, trade wars will ensue (not counting the other tariff wars Trump promises).  The net results will likely be that the poorer people in the US will pay more and save less for daily essentials, and the rich people will pocket more.  This same follows repealing ACA and the other, Trump’s income tax proposals.    

In the next four years Republicans will likely move on to cut the social security, Medicare, Medicaid, ostensibly to reduce deficits.  But Trump’s proposals will blow a big hole in the deficit, 1 trillion dollar oversea money coming home notwithstanding.  Here lies a fundamental problem with conservatives’ thinking in the US (the libertarian wing as an exception).  The conservatives preach small governments, want to reduce deficits, but increase military (as if military isn’t governmental), so they have to cut the social safety nets.  Reagan tried that and it didn’t work out, and when did it ever work?  Cutting the social safety nets will eventually hurt the economy and the society.  Of all the frauds the conservative are ranting about social security, Medicare, and Medicaid, they pale way in comparison with those by the Pentagon.  And given a choice between a bomb and bread, how would a guy on a Nebraska street choose?  

2016 has seen a lot of tragedies, wars, bombings, airliners going down, police and gun violence, etc.  One salient point is that female politicians fared badly, such as the Brazilian and South Korean presidents, and Hillary Clinton.  As terrible as Clinton can be, her famous “basket of deplorables” quote has been astute all along.  Since Nov 8 we have witnessed an outburst of racist, sexist, and xenophobic remarks and actions by many Americans, including plenty of officials.  The feelings have always been there, but now they are OK to express openly and proudly, and likely acted upon soon.
With Democrats losing elections in recent years, one has to wonder why.  Perhaps the Republicans have better ideas?  But this is not the case, even if Democrats are no angels either.  R claims to be for small governments and lower taxes, but what they really will achieve is more bombs, 100k tax breaks for a millionaire, maybe $500 for a middle class, and then crumpling social services, like roads, schools, dirty air and water, etc.  R foster a dream that if you work hard enough, being a millionaire is guaranteed, and if you don’t make it, you, and you alone, are to blame.  It might have been closer to reality in the 1800s, but not this day and age.  Because people, and their products, and often their services, are now competing against the globe, against countless individuals, against small and big corporations.  Many things are out of you control now; if something is gone, it is better to let go and try to find something else, instead of staying put and bitching about it.

If ideas are not to blame for D losses, then what?  There are at least three, interconnected explanations.  The first is that gerrymandering.  Clinton losing the election despite winning the popular votes is a prime example, but at the congressional, state and local levels D have been losing the battle for years, even when they got more total votes.  

The second is the R are more ideologically homogeneous, rallied by the Bible, guns, and small government, even though the last part is a plain illusion.  More R will vote against their own interest because of that and unity than for any better ideas.  In Obama years, the S&P500 goes up 2-3 folds, GDP only up 1-2% annually, cities recover better than the countryside, where many R are.  This only hardens them.  D are just a collection of diverse groups, a loosely connected, ideologically lax bunch.  The D base consists of more people, but the enthusiasm is lukewarm.  The joke is that many more R than D will vote for a dog if it is their party nominee.  

The third is that D can be just as corrupt.  If they are in the same position as R, they might not be much better.  At least true at the local level, this helps explain many hard cored R and less enthusiastic D.  Granted, D presidents historically, generally do better for national economies, and there are indeed real differences in recent years in their political stands, but that is mostly due to R turning hard right lately.    
With constituencies’ concentration in cities and a small number of big states, and gerrymandering, D have a systemic trap that is hard to escape any time soon.  The next two years D are powerless to stop Trump and the R Congress.  Only if Trump does something so outrageous will the many R get hurt enough to abandon his ship.  Then it will be anything but Trump, only if the anything is a Republican.  

Lastly, “fake news” has become a fad word following the Nov election.  It is mostly used to explain why Clinton lost to Trump; the story goes like this: R, and perhaps the Russians, were making up news to malign Clinton to help Trump win.   This word, however, is nonsensical, unless it limits only to individuals working alone in a basement writing craps.   The mainstream media have been doing this same stuff for as long as one can remember, either for R or for D or for whatever.  Any readers with memory can see through this, in NYT, WP, Fox, and all the others.  See "Ten commandments in modern societies-6" and other blogs.

Looking forward, 2017 will bring a lot of uncertainties, unknowns, and most likely the outcome won’t be good.  But at least 2016 is over.