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#384 1967 Detroit Riots: Lessons for Cities and Trump Administration

02 Tuesday Jun 2020

Posted by in Causes of the Revolution, Gov't Policy, Lessons of Revolution, Societal Issues, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: I’ve concluded Trump is a lunatic and the administration filled with lapdogs save a couple of people at CDC.  Instead of wasting time commenting on actions by Trump, I thought it more productive to begin discussing what happens in the US once the coronavirus is more under control.  #378 began the series. At this point not sure how many entries.  Comments and suggestions welcome.

The topic of ENTRY #384 was not anticipated.  The civil unrest this past week may become more prevalent than anyone would like. Unfortunately, the unrest likely will continue well past COVID-19, and thus a topic for this series.

ENTRY #384 BEGINS:  The past week there have been rallies in numerous cities protesting the treatment of Mr. George Floyd by Minneapolis Police. More and more of these rallies have evolved into riots with extensive looting and burning of public and private property.  With Trump’s proclamation Monday evening, June 1, that maximum force, including US military personnel, could be used to quell all protests, the number and intensity may increase and the tactics more warlike.

Apparently the Donald forgot to read his history books and skipped classes as well on military strategy.  Using traditional brute force in a guerilla war, which is what is likely to evolve after the proclamation, rarely works, if ever.  The list is long of examples of brute force failing to stop guerilla warfare, including Vietnam.

Watching these riots has been painful. I can tell you from personal experience, it is quite scary to be caught in the middle of the violence itself.

In summer 1967, we were living in a suburb immediately north of Detroit. I was just months into my job at Cadillac Division of General Motors.

One Sunday afternoon our neighbor, a manager of a credit agency housed in Detroit, said he’d heard there was some disturbance downtown and wanted to go check on his office. I offered to accompany him and off we went.

What we got was a whole lot more than anticipated. When we arrived in front of the office, housed in the Fox Theater building, there were people everywhere. A liquor store next to the theater was being looted as was a TV shop next door to that.

We looked to be some of the first “outsiders” to arrive at this location because while we were still in the car, a number of police cars pulled in behind us. No, we weren’t stupid. It was time to get out of Dodge and we left.

Overnight there were more riots in selected parts of Detroit but there was no declaration of an emergency. So, Monday morning I headed to work. The main Cadillac plant was on the west side and several miles from downtown Detroit. Rioting continued as did the fires. Midday Monday a number of us stood on an enclosed walkway between the fourth floors of two different buildings. We could see parts of the city clearly burning.

Cadillac closed the offices and the assembly plant that afternoon and I headed back to the apartment using an alternate route that was even farther west and away from the activity. I returned without incident but was left with the nagging question, “Are we really safe?”

The apartment complex was just on the other side of the dividing line between Detroit and Southfield – 8-Mile Road. The apartment complex was not gated so there was nothing to stop rioters from entering. Fortunately, the rioting did not spread to our immediate area.

Rioting did continue to spread within the City of Detroit. Rioting became so extensive, Governor George Romney (Mitt’s father) asked for Federal assistance and members of the US Army’s 82nd and 101st Airborne Divisions were deployed to Detroit. In addition to light-infantry weapons, the units were supported by heavily armored tanks.

If you’ve never witnessed in real time the firepower of a .50-caliber machine gun mounted on a tank, visualize this. The machine gun is aimed at a sniper holed up in say the 5th floor of a brick building. The first few rounds from the machine gun literally blow away the brick facade and then subsequent rounds penetrate the interior of the building. That scene was fairly common in Detroit as the military attempted to control sniper fire.

Thus, in the span of a few days, much of Detroit became a war zone. The devastation is hard to describe and imagine. Some areas of Detroit have not yet recovered, more than 50+ years later. Yes, Detroit had some other problems as well but I think what tipped over the City was the 1967 riots.

What caused the riots? Was there an incident like George Floyd in Minneapolis or Rodney King in Los Angeles? On the surface, the riots were precipitated by a seemingly innocuous single incident. In the early hours of Sunday morning, the Detroit police raided and closed a blind pig in a black neighborhood (illegal bar often with some gambling as well).

While black residents were frustrated by the raid on the blind pig, residents housed a long-standing frustration with treatment by the Detroit Police Department, then mostly white. Economics was a contributing factor, but much less so than most people think. In the 1960’s, the US economy and especially Detroit’s economy were strong. Many black residents were employed at one of the many new-car/truck assembly plants or component plants in and around Detroit.

Further, all hourly employees in those plants were members of the UAW with extensive health benefits, multi-week vacation and a base wage that was sufficient for full-time workers to be classified as “middle class.” Detroit also had a relatively strong black-owned business community.

What happened to Detroit following the riots? Many whites fled the City for the suburbs. Auto companies gradually closed many of the assembly and component plants, although there were other reasons for that as well. Detroit became a shell of its former self. Only in the last decade, roughly 50 years after the riots, has Detroit started to rebound. New businesses are moving in. Housing is being rebuilt and population is gradually expanding.

What’s the lesson, or the caution, for other cities experiencing riots? While there is no simple answer, at a minimum, city leaders, public and private, need to work closely with citizens and be alert to problems with city services, whether garbage pickup, water quality (as in Flint), or unsavory or unethical actions by law enforcement. Understanding these problems, and making an effort to resolve the problems before getting out of control, will help mitigate the potential for disturbance.

An example of such an effort is the sheriff of Genesee County Michigan, north of Detroit and home to Flint, MI.  The sheriff has been working closely with residents throughout the county.  So far, there have been no unruly protests in Flint and other cities in the county.

Another issue that seems important, and one that does not get discussed enough publicly, is encouraging local residents to become business owners in their community. Maybe more black-owned businesses would prevent some of the insidious looting that occurred during recent protests. Why would you loot a store in your neighborhood that is providing critical services, and owned by one of your neighbors?

Those who loot or encourage looting neighborhood stores should not complain because few, if any, national chains open neighborhood stores. Why should these companies risk capital, if the stores are targeted for looting?

Finally, I think any honest conversation about unfair treatment, discrimination, and associated issues needs to ask the following questions. “How did other ethnic groups overcome what was often overt and brutal discrimination? What did these ethnic groups do, sometimes over several generations, to reduce discrimination and make better lives for themselves?”  The answers could provide some guidance for all sides.  Answers will also indicate solutions are never easy and never one sided.

#382 Religious Institutions: Next Big-Box Stores? (con’t) (We Gotta Get…Part 5)

16 Saturday May 2020

Posted by in Economics, Innovative Thinking: Ideas and Products, Societal Issues, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: I’ve concluded Trump is a lunatic and the administration filled with lapdogs save a couple of people at CDC.  Instead of wasting time commenting on actions by Trump, I thought it more productive to begin discussing what happens in the US once the coronavirus is more under control.  #378 began the series. At this point not sure how many entries.  Comments and suggestions welcome.

ENTRY #382 CONTINUES ENTRY #381: Technology Tsunami Impact. Efforts to address the coronavirus accelerated the implementation of technology in a wide variety of occupations. Going forward many US workers will be affected by what some of us have labeled the “technology tsunami.”

The negative effect on income over the next few years could be much greater than previously anticipated. During COVID-19 “stay-at-home” mandates, organizations realized certain workers were not necessary and other work could be completed using artificial intelligence-based software/hardware. As a result, even as the economy begins to recover, more blue-collar and white-collar workers of all ages are going to be faced with possibly accepting a lower-paying job or no job.

Will workers of different age cohorts be affected differently by the technology tsunami[1]? How will religious institutions be affected? Workers currently age 50+, even though they should have more financial resources, may be hit harder by the technology tsunami since many are less familiar with advanced technology and they have fewer years before retirement to try and recoup lost earnings.

Double-Whammy Tsunami. Another tsunami headed toward US shores is the retirement tsunami. What we as a society don’t talk about and certainly what has not been addressed at the Federal level is how unprepared white and blue-collar workers are for retirement.

The retirement tsunami has been caused in large part by employers eliminating employer-funded defined-benefit retirement programs and transferring to workers the responsibility for accumulating adequate savings for retirement. The potential impact of the tsunami has been made worse by erosion of personal income from the accelerating cost of housing, medical and college tuition. Workers have far less left over to save for retirement.

In a recent poll by Center for Retirement Research at Boston College, 75%, or 3 out of 4 people age 50-62 had jobs that fell into a “non-traditional” category — meaning, those without employer-provided retirement plans and health insurance. According to the report, workers in non-traditional jobs can expect their retirement income to be as much as 26% lower than that of people who spent their 50’s and early 60’s in positions with full benefit packages, according to the center’s findings.

The lower available income will likely affect consideration for contributions to religious institutions. (An article in the NYT 05/03/2020 described how some underfunded retirees are moving in with their children.)

What about the impact of the technology and retirement tsunamis on the finances of younger workers? Don’t they have 30-35 years to recoup lost earnings from a coronavirus economic slowdown? Unfortunately, a greater percentage of younger age cohorts are likely to be even less prepared for retirement than those currently age 50-62.

If costs for housing, medical, education and retirement continue to exceed gains in income, the cumulative effect will erode discretionary income further. Unless there is a fundamental change in funding of health care costs, retirement programs and advanced education, more and more people will be underfunded for retirement. Thus, younger cohorts, already less committed to religious institutions than previous generations at the same age, are also facing even more pressures on discretionary income.

What will make a bad situation worse is a prolonged economic slump associated with the coronavirus shutdowns. The rate at which people have been furloughed is unprecedented – in just two months, 36,000,000 filed new claims for unemployment, and more claims are likely in the next few weeks. In early May 2020 the “official” unemployment rate was 14.7%. However, the unemployment rate does not count those who are not actively looking for work.

The unprecedented increase in the number of people formerly employed has caused many to become so discouraged as to not look for work. These “discouraged” were excluded from the unemployment calculation. Had people who were recently employed but now discouraged been included, the rate would have been 21-22%, approximating the same as the height of the Great Depression in the 1930’s.

Despite proclamations from Trump, few people in business, few economists and few in the general public expect the economy to bounce back once more restrictions associated with the coronavirus are lifted. Even if employment in the manufacturing sector increases over the next 24-30 months as companies begin bringing jobs back to the US, overall economic growth will be very slow and unemployment is likely to remain at >10%.

Some portions of the service sector employment seem likely to experience a permanent loss of jobs. After “stay-at-home” restrictions are lifted, how many consumers will immediately return to restaurants, attend sporting events, go to shopping centers, travel by plane? How many members of religious institutions will be willing to risk infection by attending services, especially crowded during holidays?

Like the general public, members of religious institutions are likely to remain cautious until an effective vaccine has become widely available – on the optimistic side 18-24 months based on analysis of experienced doctors and researchers. Even with the vaccine will the public’s behavior be changed permanently?

During that 18-24 months and maybe forever, how many members of religious institutions will have their economic circumstances negatively affected? Many formerly employed in the service sector will not have employer-funded health insurance and even fewer will have an employer-funded retirement program. Where do these former employees turn for help? Their jobs are gone, or at least not coming back for some time. Finding another job will be extremely difficult since the economy will be growing slowly at best.

While many congregants will remain emotionally committed to their specific religious institution, how many will be faced with lower discretionary income? How many will be able to continue supporting their church, synagogue or mosque?

Eyeballs vs Butts in Seats – Post Coronavirus Behavior. The “stay-at-home” mandate associated with the coronavirus forced organizations to accelerate electronic communications using Zoom, Skype, FaceTime, etc. For religious institutions many people attending services in person pre-COVID-19 are now live-streaming. But what happens post-COVID-19? How many people will forego physically attending services and choose to continue live-streaming?

How many will ask, “Why go through the hassle of getting dressed, fighting traffic, when I can relax at home?” Further, how many will ask, “If I’m going to live stream, is there a service at another location that I would rather attend? I used to live in New Jersey, what about watching the service where I used to go?”

An issue for religious institutions is how to make live-streaming a reason to remain linked to a particular congregation. Live-stream services are somewhat like a media event. The target for live-streaming is capturing as many eyeballs as possible.   The trend toward live-streaming is likely to continue. Think about the difference between generations in comfort level with certain media venues.

While the risk is relatively small now, a concern with live-streaming is whether a religious institution’s service can be “competitive” with larger, more high-profile congregations. For a specific institution, if clergy and/or the Board of Directors has not done so, they should watch services from “higher-profile” congregations, especially those in major metro areas.

Religious Institutions Expense Pressure. Are religious institutions turning into under-utilized big-box stores? If fewer people attend services, whether weekly or during holidays, then do religious institutions need their current facility? Some congregations have expanded main buildings and/or other facilities based on the assumption membership would continue to grow. Part of the rationale has been that a more attractive and functional facility would help attract new members.

The downside of a larger facility is a higher burn rate for overhead, including staff. The larger facility also requires additional non-recurring expense for replacement of equipment and other critical maintenance.

A strategy sometimes employed when expenses exceed revenue is to defer maintenance expense and/or defer setting aside adequate funds for future maintenance and equipment replacement. While such a strategy might work for a year or two, kicking maintenance costs down the road increases the financial burden on future congregants, many of whom may be less prone to support the institution.

Are many religious institutions facing the same fate as many big-box stores? Unfortunately, all indications suggest the answer seems to be “yes.” Big-box stores and department stores, even high-end ones are facing severe financial pressure. The impact of actions taken to slow COVID-19 have merely hastened a trend toward fewer stores and, in many cases, bankruptcy. Well-known department stores J.C. Penny and Neiman-Marcus being a recent examples.

Possible Solutions. Some organizations – for-profit and not-for-profit – have survived major challenges by rethinking how to operate. Religious institutions face the choice – either rethink how to operate or likely disappear.

Survival for many religious institutions seems possible only by starting with a clean sheet of paper. Rethinking how to operate means more than cutting staff. Cutting staff is an incremental change and not a fundamental change. Clergy and the Board of these institutions should remember the adage, “No organization ever saved its way into prosperity.”

An organization needs to consider ideas that many congregants might view as radical. For example, holding talks with another congregation about: (i) a single back-office support staff: (ii) using one of the two buildings for weekly services. The services would be at separate times but use the same building. Holiday services could be at different times and use part of the other building, if necessary; (iii) lease out part of one of the buildings; (iv) plus other ideas.

The radical thinking should include a cash-flow forecast that incorporates such variables as:

  1. Number of existing members by age cohort
  2. Number of members by age cohort over time (some data likely exist)
  3. Distribution of contributions by age cohort – currently and ideally over time. Individual members would be assigned a random number so impossible to link contribution to a specific member
  4. Projected membership scenarios through 2030 and ideally 2050 by age cohort – would include new members and members who leave
  5. Projected revenue scenarios through 2030 and ideally 2050 by age cohort. Scenarios would reflect different attitudes by cohort toward religion and use of electronic communication. Revenue projections would include different approaches – “traditional’ approach to contributions, pay to watch live-streaming or some type of subscription model.
  6. Impact on revenue of different operating scenarios – stand-alone entity, combined facility, use of part of one facility for other purposes, etc.
  7. Expense forecast by year for:
    1. Staff and other recurring expenses as stand-alone entity and combined back-office staffs
    2. Unusual maintenance and equipment replacement – current and joint-use facility
    3. Expenses under the different operating scenarios

Constructing an Excel-type model (and the supporting math) for the financial projections is not particularly difficult.   Often the most difficult barrier is getting the “key executives” and/or committee members involved with the issue to: (i) acknowledge and appreciate the importance of getting ahead of the curve; (ii) begin to truly think innovatively; (iii) put aside excuses and biases and commit to considering practical solutions.

As with most strategic difficult issues, waiting until the problem becomes obvious is waiting too long and makes any kind of turnaround exceedingly difficult and problematic. A high-profile example is the Trump administration’s handling of COVID-19, starting with denial of early warning signs and then refusing to accept opinions of people with experience in key areas.

Over the next 24-36 months – and maybe longer – many religious institutions will face severe cash-flow shortfalls. Waiting until the cash-flow train wreck becomes obvious will result in even more dire consequences. While no guarantee, starting to discuss issues outlined herein and completing a study to assess potential consequences carries no risk. There is no downside to a study. Waiting until the problem becomes obvious has significant risk.

[1] For a more detailed discussion about the coming technology tsunami and possible solutions, download booklet I wrote titled “Technology Tsunami.”

 

#381: Religious Institutions Next Big Box Stores? (We Gotta…Part 4)

09 Saturday May 2020

Posted by in Causes of the Revolution, Economics, Societal Issues, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: I’ve concluded Trump is a lunatic and the administration filled with lapdogs save a couple of people at CDC.  Instead of wasting time commenting on actions by Trump, I thought it more productive to begin discussing what happens in the US once the coronavirus is more under control.  #378 began the series. At this point not sure how many entries.  Comments and suggestions welcome.

ENTRY #381: The future of religious institutions is being influenced by three factors over which the institutions have no control. These exogenous variables directly affect the near and long-term financial viability of many such institutions:

  1. Changing membership demographics, especially less favorable attitudes by younger generations toward religion
  2. Downward pressure on family discretionary income from multiple sources
  3. Migration to more electronic communication, in part because of sustained concern about large gatherings post coronavirus

The pressures will intensify in the coming years. Without some fundamental strategies to address the effects of these pressures, many religious institutions could become financially insolvent and forced to dissolve. Further the pressures are not specific to one or two religions. All religions are likely to be affected.

Demographic Pressure. There are numerous articles and studies (Pew Research, e.g.) indicating younger generations are less attracted to religions of all types. The younger generations also attend services less than previous generations at the same age.

When viewing the data, some believe that as younger generations age they will act more like their parents and grandparents, thus “adopting” much of the behavior of previous generations. By adopting attitudes and behavior of previous generations, these younger cohorts, therefore will become more favorable to religion and more supportive of religious institutions.

The clergy and the “Board of Directors” of a religious institution should not make the assumption re “adopting behavior.” One only needs to track age cohorts over time to realize younger age cohorts do not adopt the attitudes of their parents’ generation when they reach the same age.

Rather than adopting behavior, empirical evidence suggests cohorts “retain” attitudes and behaviors established in their early twenties. Some examples of “retaining” values range from attitudes of different generations toward such social issues as use of drugs, casual sex, age for marriage to preferred brands of vehicles to preferred style of house and furniture. One only has to ask “What happened to the appeal of darker-wood furniture as well as fine china and crystal with the generations under age 40″ to realize tastes and preferences are different?[1]

Pressure on the Revenue Stream.  Since roughly the mid-1960’s each succeeding age cohort has been faced with increased pressure on discretionary income[2]. Every religious institution should assume one or more of these pressures on discretionary income will continue, thereby making it more difficult for families to provide financial support. Pressures are:

  1. Medical costs increasing faster than income
  2. Housing prices (and rents) increasing faster than income
  3. College tuition increasing at a rate much faster than inflation and income
  4. Retirement savings burden being transferred to employees as employer-funded defined-benefit retirement programs have been eliminated

The economic pressures caused by each one of these factors probably could be managed by most families. However, when the increases in all factors are combined – each one has a similar pattern of costs outpacing income – the result is a significant erosion in discretionary income.  

A real-world example of the impact of these pressures was evident during a recent PBS News Hour broadcast. An ER- vehicle technician in New York City described the mental and economic pressures associated with the coronavirus. The interviewer asked the ER technician about salary – about $40,000 per year. As anyone familiar with the cost of living in any of the NY boroughs, $40k for a family is tight. Worse for the technician was that his employer, apparently a contractor to the City of New York, did not provide health insurance.

Here’s the guy taking people to the hospital to get treated for coronavirus (or some other emergency) but who does not have employer-paid health insurance. Even worse the technician can’t afford private health insurance because the Trump administration eliminated many features of Obamacare and eliminated insurance exchanges.

Housing Prices/Monthly Rental. The chart is for price increases of houses and rent compared to growth in median income, adjusted for inflation. While the data are national, people living in some metro areas have faced the problem of housing prices-HOA dues/rents and insurance rising even faster than noted on the chart.

Real estate taxes are also increasing. Although relatively low compared to NY/NJ/CT, housing costs and taxes in many areas are still high and a further erosion of discretionary income.  These costs result is less money available for contributions to a given institution.

College Costs. Since the 1960’s, early 1970’s tuition at public and private colleges has more than doubled as a percent of family income in inflation-adjusted dollars. Costs for elite universities have increased even faster. Even with some assistance, overall costs for higher education are likely twice as high as a percent of family income over the past couple of generations. The impact of the coronavirus may make the disparity worse. Tax revenue in virtually every state has fallen dramatically. To balance future budgets states may need to cut support for higher education.

End of this entry. More next week about the impact on contributions of: (i) technology replacing jobs; (ii) retirement savings shortfall; (iii) electronic “competition” from other religious institutions.

[1] For more analysis of “adoption” and “retention” please download paper I wrote at University of Michigan in 1987 titled “A Nation in Transition.” The paper addressed how differences in attitudes between pre-Boomer and Boomer cohorts could affect how America would view its role internationally. The paper included a comparison of a variety of attitudes. (87 12 08 Nation in Transition) 

[2] Discretionary income is the amount of an individual’s income left for spending after paying taxes and paying for personal necessities, such as food, shelter and clothing. Discretionary income includes money spent or allocated to luxury items, vacations and non-essential good/services, including contributions.

#380: Shopping Centers — Surplus to Stimulating (“We Gotta Get Out…” #3)

03 Sunday May 2020

Posted by in Affordable Solutions, Common Sense Policies, Education Issues, Innovative Thinking: Ideas and Products, Societal Issues, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: I’ve concluded Trump is a lunatic and the administration filled with lapdogs save a couple of people at CDC.  Instead of wasting time commenting on actions by Trump, I thought it more productive to begin discussing what happens in the US once the coronavirus is more under control.  #378 began the series. At this point not sure how many entries.  Comments and suggestions welcome.

ENTRY #380: If one believes COVID-19 will trigger some changes in societal behavior, then what behavior might be disrupted permanently after the immediate threat has dissipated? Last week’s entry discussed how the general public likely will demand more affordable or government-provided healthcare coverage.

This week’s entry addresses how shopping patterns might continue to be affected and the implications of major changes. The “stay-at-home” mandates during early months of COVID-19 accelerated the use of on-line shopping.

While some brick-and-mortar stores were able to generate on-line business for delivery or store-side pickup, many shoppers shifted to such on-line stores as Amazon. The shift affected food shopping as well. Even though most grocery stores remained open, many people ordered on line with curbside delivery at the store or home delivery.

The big unknown is whether consumer shopping behavior has been altered permanently. If it has, how will such behavioral change affect attitudes toward participating in such other large-crowd activities as football games, concerts, restaurants, even religious services? If people are satisfied to watch sporting events at home on large-screen TVs, to shop on-line, to have food delivered, to live-stream religious services on the same large-screen TV, then what happens to the physical structures supporting large-crowd activities?

For the businesses/organizations associated with these activities, what happens to the value of the real estate or the value of the franchise, whether the organization is a chain restaurant, retail outlet, or religious institution? (Interesting, the value of a sports franchise may be less affected since much of the value is not based on the number of fans attending an event but the advertising revenue associated with the media broadcast of the event.)

If the value of the real estate falls, then what should be done with the property? Let’s start with the most obvious real estate – shopping centers. As suburbs were developed following WWII, shopping centers became the de facto downtown for the suburbs. Just as the value of real estate in many downtowns declined as shopping centers proliferated, the value of shopping centers has declined as on-line shopping has proliferated.

Without having any hard data, the United States likely has at least two times the number of shopping centers needed. Some of the surplus shopping centers are large-footprint centers with multi-anchor stores and some more neighborhood centers and/or strip malls. Most larger centers also have a number of big-box stores on the periphery, which are also not needed.

What should be done with these surplus shopping centers and big-box stores? Converting the real estate to office space has been an option. However, following the coronavirus the US may end up with too many office buildings as well. As people were forced to work from home, and the implementation of technology was accelerated, many companies began to rethink requirements for (i) office space; (ii) employees on staff. The result of this rethinking is likely to be fewer office buildings and smaller staffs. (For more information about the impact on employment of the implementing more technology, download Tech Tsunami Booklet with Supplement).

If office space is not needed, then what could be done with these shopping centers? Why not address a national need and convert the shopping center to affordable housing? The coronavirus pointed out the irony that many workers deemed “essential” were also lower-paid workers. Converting shopping centers to affordable housing for these workers also would allow them to live closer to public transportation, which usually is available in larger shopping centers.

The shopping centers could be reconfigured to become true neighborhoods. Many shopping centers have large areas devoted to parking that could be converted to playgrounds, small parks, even neighborhood sports fields. Many centers are ringed with restaurants, dry cleaners, drugstores, etc., which could stay in place following redevelopment. With some creative planning, neighborhood schools could be built as part of the conversion. (School nicknames could incorporate the name of the former shopping center – the Carolinaplace Cougars or the SouthPark Sentinels. Just kidding.)

As a centerpiece of the neighborhood, the schools could be designed with classrooms for the traditional “3 R’s” education, as well as classrooms for introduction to sciences and the arts.

Neighborhood schools would reduce the need for and the inconvenience and cost of busing. Neighborhood schools would encourage children to participate in after-hours extra-curricular activities as well as be available, if needed, for remedial classes. Such here-and-now remedial classes would help students keep pace.

The proximity of the school near students’ homes would reduce the need for parents to spend money on expensive babysitting. Building design could include rooms adaptable for adult education and/or neighborhood meetings.

To help address the problem of limited access to healthcare faced by many lower-paid workers, the redeveloped shopping center could include a neighborhood clinic with office hours tied to non-working hours of neighborhood families. Clinics would serve basic needs, including physicals for children and adults and would be linked electronically to larger medical facilities. Such “preventive medicine” would reduce visits to ER.

Next week. More on post-coronavirus impact on societal behavior, including how religious institutions might be affected. Could some churches, synagogues and mosques suffer the same fate as many big-box stores?

#379: Healthcare Quagmire: We Gotta Get Out of This Place (Part 2)

25 Saturday Apr 2020

Posted by in Affordable Solutions, Benefits of Revolution, Common Sense Policies, Gov't Policy, Possible Solutions, Societal Issues, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: I’ve concluded Trump is a lunatic and the administration filled with lapdogs save a couple of people at CDC.  Instead of wasting time commenting on actions by Trump, I thought it more productive to begin discussing what happens in the US once the coronavirus is more under control.  #379 is the second entry and addresses healthcare cost. At this point not sure how many entries.  Like #378 this entry is a bit long.

ENTRY #379:  At the end of part 1 of this series (#378), I indicated suggestions to help address inequities in society would be forthcoming. Let’s start with what appears to be the closest to a practical solution, affordable health care for everyone.

The chart indicates the increase in medical care cost in the US as a percent of GDP. Since 1960, medical costs have increased from about 5% of GDP to more than 18% in 2018. These percentages include “discounts” offered to insurance companies and Medicare.

The impact of medical costs on a family vary widely. For families with health insurance partly or fully funded by an employer, the costs are relatively low. Yet, even with subsidies from employers, for most every family medical costs have increased faster than family income.

Until the Affordable Care Act passed under the Obama administration, families which did not have subsidized insurance, faced premiums that could be breathtakingly high, especially for those over age 50. In addition, many who had any one of a range of “pre-existing” condition often were unable to secure any coverage for the pre-existing condition.

The Affordable Care Act, aka Obamacare, made considerable progress in filling the “unaffordable insurance hole” in the societal safety net and for getting coverage for pre-existing conditions. While Obamacare included some coverage gaps, in part to ensure passage in Congress, the AFA did significantly reduce the number of people without medical insurance.

For example, immediately prior to AFA coverage taking effect, about 18% of the US population was uninsured. That percentage continued to drop through 2016:Q4. Immediately upon taking office in 2017:Q1, the Trump administration repealed many features of the AFA.

The Trump administration has continued to eliminate features, including many insurance exchanges, through which uninsured people could at least buy some coverage. The result of Trump’s policies has been a sharp uptick in the number of uninsured. While the chart stops at 2018, the latest projection for 2020 is 45-50 million people in the US will be uninsured.

Opposition to broader insurance coverage seems to focus on two issues: (i) potential elimination of the option to buy additional private insurance; (ii) additional taxpayer cost with expanded coverage for everyone. Both issues are solvable, if opponents will listen.

A Medicare-for-All (MFA) type coverage does not preclude availability of private insurance that would offer an additional level of service or benefits. In some metro areas, selected medical practices offer what is promoted as “concierge service,” ensuring quick access to physicians and more private facilities for many procedures.

While the initial cost for a MFA program could be somewhat higher as people formerly uninsured begin to address issues, longer term the cost could be less. Much of the cost savings could be from eliminating “unproductive” costs. While estimates vary because of different assumptions, overhead costs for Medicare appear to be about 50% less than overhead costs for private insurance. (NYT article)

Currently hospital costs and therefore healthcare insurance premiums include some amount for emergency room visits by the uninsured and those without financial resources. ER visits are far more expensive than office calls. In addition, people who have no insurance often wait until an illness or situation becomes extreme before visiting ER, thereby increasing the cost of treatment.

Opponents to Medicare-for-All should think about medical cost in the same way they think about maintenance on their personal vehicle. Routine maintenance, such as changing oil regularly, is much less expensive than doing no maintenance and eventually replacing the engine. In many ways, the human body operates much your car’s engine; preventive maintenance is much less expensive.

Getting Congress to agree to some form of Medicare-for-All should be much easier following the United States’ experience with the coronavirus. There has not been an event in most everyone’s lifetime that has demonstrated the importance of medical care for all citizens. Recent estimates indicate those without insurance infected with COVID-19 will face medical bills of $50,000-$75,000. Even those with insurance could face medical bills of $25,000 or more.

For those who still think the US cannot afford such coverage, the chart lists healthcare costs per capita by country. Note the cost per capita for highly developed countries. The cost in the US is 75% HIGHER than Germany, the next most expensive country. OK, if you’re still concerned these countries don’t offer the same level of care as the US, then buy the additional-cost option.

Addressing the Naysayers. Any effort to implement a Medicare-for-All type system will be met with vigorous opposition from the right. Following are some likely questions as well as suggested answers. I recognize no answer, however logical and supported by facts, will satisfy the hard right. But given how so many people have been affected by COVID-19 so far, and how many are likely to be affected in the coming months, the voice of the naysayers may be heard less and less, especially when facts are presented to support a Medicare-for-All type system.

Comment #1: The US has the best healthcare system in the world. Don’t mess with it! Leave it alone.

Response #1: Let’s look at the expected lifespan in the US compared to other countries. The US ranks 47th behind such countries as Sweden, Germany, China, Taiwan, France, Korea, Canada, UK, Costa Rica, French Guiana and a host of other countries and ranks just one ahead of Cuba. If the US has such a great healthcare system, why does it rank 47th?

Comment #2: Those countries don’t have as many immigrants as the US. Those immigrants are what’s causing the problem here.

Response #2: Take a look at life expectancy among whites, blacks and Hispanics. Whites have the longest life expectancy but the others are not bringing the US total down by much. You also realize that life expectancy in the US declined under the Trump administration, don’t you? The decline was the first since WWII.

Comment #3: Why should I pay for someone else’s healthcare? There are lots of slackards out there who don’t pay income taxes. Paying for their medical care is not fair to me.

Response #3: First, anyone who has worked, whether or not they pay income tax, contributes to funding Medicare. In addition, the vast majority of Medicare recipients paid while working and continue to pay a monthly premium in retirement.

Comment #4: Medicare-for-All will create another inefficient government bureaucracy. The private sector is always more efficient. Why waste my hard-earned dollars?

Response #4: The bureaucracy supporting Medicare already exists. Plus, overhead for Medicare is substantially less than for private insurance. While there are different estimates for overhead, there is almost universal agreement that overhead costs for Medicare are substantially less than for private insurance. Most estimates are savings for Medicare of 50% or more. Medicare is more efficient at administering care than private companies. Why should people have to pay 2x the administrative costs for private insurance as they do for Medicare?

Comment #5: How are the doctors going to make any money? Medicare screws them on pricing.

Response #5: One adjustment with Medicare-for-All might be to weight payment to doctors more toward prevention rather than procedures. The change should also generate cost savings. In addition, if necessary, fees to doctors could be increased. The area needs further analysis.

SUMMARY: Some form of “Medicare-for-All” with an option for additional-cost coverage seems an ideal solution to help us address “we gotta get out of this (healthcare quagmire)  place.”  Obviously there are some issues to be worked out in order to implement a Medicare-for-All type program. However, most of the issues have been solved with existing Medicare programs and the Affordable Care Act prior to the Trump administration cuts.

Enough discussion for now about a practical solution to addressing healthcare costs. Likely more later.

 

#378. US Societal Quagmire: “We Gotta Get Out of This Place” (Part 1)

19 Sunday Apr 2020

Posted by in Causes of the Revolution, Gov't Policy, Societal Issues, Uncategorized

≈ 7 Comments

Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: in a couple of preceding entries I tried to address the seemingly endless number of inconsistencies in information from the Trump administration about the spread of the coronavirus and/or actions to mitigate the spread. After some reflection, I decided that was futile.  Trump is a lunatic and the administration filled with lapdogs save a couple of people at CDC.  Instead of wasting time on Trump, I thought it more productive to begin discussing what happens in the US once the coronavirus is more under control.  At this point not sure how many entries.  The first one is a bit long.  

ENTRY #378 BEGINS: In the 1960s, there was a song by The Animals that included the lyrics, “We gotta get out of this place if it’s the last thing we ever do.”   While not written as a protest against the Vietnam War, the song was often used as a protest against the US participation in Vietnam.

Even though the song is more than 50 years old, the title seems appropriate today. The place we have to get out of is the economic and social quagmire in this country. The economic and social quagmire has been gradually getting worse with each decade. And while the Trump Administration has not been the sole cause, decisions by Trump with the support of the Republican Party have made the quagmire far worse.

Another perspective on the same situation is the US is sitting on an economic and social time bomb with the timer clock getting close to zero hour and ready to explode. What’s creating the time bomb is pressure from multiple sectors:

  1. Decades of limited earnings growth for middle and lower-income workers. The result has been greater income inequality.
  2. More medical risk. Fewer employers are providing company-paid medical insurance, thus leaving families to fund their insurance.
  3. Less job certainty. The uncertainty has been growing for some time as more organizations hire workers as contractors. Organizations are also automating an ever increasing number of functions of blue-collar and white-collar workers.
  4. More societal polarization with focus on one’s political party rather than with focus on solving problems. The shift began with the Reagan administration, when Reagan repeatedly declared, “Government is the problem, not the solution.” Trump’s public animosity toward anyone who does not support his views, however controversial, convoluted and even unconstitutional, has taken party loyalty over policy to an unprecedented level.

The four forces squeezing the US population are like hands squeezing a balloon. The coronavirus has intensified the squeeze, leaving little time before the balloon bursts. Reactions to state governors’ actions to control the spread of the coronavirus generally have been positive although some on the far right have protested. Apparently far-right Republicans think they have immunity to the virus.

The stay-at-home directives, closing of businesses and social distancing seem to have allowed the nation to pause and begin rethinking previously held assumptions. For example, prior to the coronavirus, certain jobs were considered relatively unimportant and, therefore, not worthy of much compensation. Such jobs included non-degreed healthcare workers, grocery store staff, transit workers and workers at food-processing plants.

Interestingly, the coronavirus changed those assumptions. People began to realize how important these jobs were to a functioning society. During the coronavirus those working in healthcare, grocery store and food-processing, among others, were categorized as “essential.” At the same time, many college-degreed, higher-paid white-collar jobs, including many executives, were categorized as “non-essential” and mandated to work from home.

Further, many “non-essential” businesses were ordered to close. The result was a huge spike in unemployment. Over a four-week period ending mid-April 2020, more than 22,000,000 workers in the US filed for state unemployment benefits. Over the next few weeks, the total will likely increase significantly since many unemployment offices were overwhelmed and furloughed workers unable to file.

How many of those currently furloughed will be re-employed post-coronavirus is uncertain. At a minimum, there likely will be a major disruption to the pre-virus job-status hierarchy. Many lower-paid “essential” workers could receive a pay increase and many white-collar workers deemed “non-essential” could be reclassified to lower-paid positions or jobs eliminated.

The COVID-19-related shutdown of the US economy has brought to the forefront social and economic inequities. Prior to COVID-19 these inequities often were discussed in the abstract since most of the people discussing the inequities were not affected directly. COVID-19 has reframed the conversation. Most of the public now realizes how fragile their jobs are and how the safety net for furloughed workers has a huge hole, starting with unemployment benefits and medical coverage.

Now that this “hole” in the safety net has been discovered, what steps will elected officials take to make repairs? The task of repairing the hole may be more complicated than policymakers realize. While anyone losing a job or being furloughed without pay suffers economically, the impact of that loss may be markedly different for different age groups.

Historically, as workers aged their families had been able to accumulate financial resources that could help cushion economic downturns. Thus, older workers furloughed because of COVID-19 should be in a better position economically than younger workers. But are workers today, older and younger, able to weather an economic downturn?

How do economic resources of today’s workers compare to workers at the same age say 25 years ago? Do today’s workers age 45 have the same relative assets as workers who were age 45 in 1995? What about assets of workers say age 25 in 2020 compared to those age 25 in 1995? Are workers today, older and younger, at a disadvantage economically compared to previous age cohorts? The answer is, “yes.” And that disadvantage has grown with each generation.

Over the last 50-60 years, there has a fundamental deterioration in affordability of key factors that help a family accumulate assets. Since roughly the mid-1960’s each succeeding age cohort has been faced with:

  1. Housing prices (and rents) increasing faster than income
  2. Medical costs increasing faster than income
  3. College tuition increasing at a rate much faster than inflation and income
  4. Retirement savings burden transferred to employees as employer-funded defined-benefit retirement programs have been eliminated

The economic pressures caused by each one of these factors probably could be managed by most families. For example, since 1960, when adjusted for inflation, housing prices have increased about 125%, rent about 75% and income only 25%.  However, when the increases in all factors are combined – each one has a similar curve – the result in a significant erosion in disposable personal income.

A story that hit me like a 2×4 to the forehead was an interview with a family trying to survive under the crush of these economic pressures. The interview was during the recent PBS News Hour. The subject was an ER- vehicle technician in New York.

The technician was describing the mental and economic pressures associated with the coronavirus. The ER technician earned about $40,000. As anyone familiar with cost of living in any of the NY boroughs, $40k for a family is tight. He also had a second job. What really struck me was the ER technician’s employer, apparently a contractor to the City of New York, did not provide health insurance.

Here’s the guy taking you to the hospital to get treated for coronavirus (or some other emergency) but the ER technician does not have employer-paid health insurance. Even worse he can’t afford private health insurance because the Trump administration eliminated many features of Obamacare and eliminated insurance exchanges. So, Trump and Republicans, the guy taking you to the hospital to save your life is risking his life and risking financial ruin if he contracts the virus from you. Does that seem fair?

Longer term, the impact of the coronavirus on the United States will likely end up changing permanently a number of aspects of society. The post-coronavirus United States will likely be forced to address the medical and economic inequities that have been building for the past 50-60 years. In addition, the US might begin to address the need retrain workers as more technology is integrated into the workplace.

The likely result of the coming technology tsunami? Many blue-collar and white-collar workers of all ages are going to be faced with possibly accepting a lower standard of living. (See booklet titled Technology Tsunami for more discussion and possible solutions.)

Will workers of different age cohorts be affected differently? Workers currently age 50 and older, even though they should have more resources, may be hit harder by the technology tsunami since many are less familiar with advanced technology and they have fewer years before retirement to try and recoup lost earnings.

But the technology tsunami is only one tsunami facing current workers. Another tsunami headed toward US shores is the retirement tsunami. What we as a society don’t talk about and certainly what has not been addressed at the Federal level is how unprepared for retirement workers are.

The retirement tsunami has been caused by the elimination of employer-funded health and retirement programs. The potential impact of the tsunami has been made worse by erosion of personal income from the accelerating cost of housing, medical and college tuition. Workers have nothing left over to save for retirement.

In a recent poll by Center for Retirement Research at Boston College, 75%, or 3 out of 4 people age 50-62 had jobs that fell into a “non-traditional” category — meaning, those without employer-provided retirement plans and health insurance. According to the report, workers in non-traditional jobs can expect their retirement income to be as much as 26% lower than that of people who spent their 50’s and early 60’s in positions with full benefit packages, according to the center’s findings.  (Update: NYTimes article about older workers without adequate retirement savings moving in with children, 20 05 03 NYT Underfunded Retirement Parents Moving in with Children) 

What about the impact of higher costs and the technology tsunami on younger workers? Don’t they have 30-35 years to recoup lost earnings from a coronavirus economic slowdown and the technology tsunami? Unfortunately, a greater percentage of younger age cohorts are likely to be even less prepared for retirement than those currently age 50-62.

If costs for housing, medical, education and retirement continue to exceed gains in income, the cumulative effect will further erode disposal personal income. Unless there is a fundamental change in how health care costs, retirement programs and advanced education are funded, more and more people will be underfunded for retirement.

What will make a bad situation worse is a prolonged economic slump associated with the coronavirus shutdowns. The rate at which people have been furloughed is unprecedented – 22,000,000 in four weeks and likely another 10,000,000 in the next four weeks.

Few people in business, few economists and much of the general public does not expect the economy to bounce back once the restrictions associated with the coronavirus are lifted. Even if employment in the manufacturing increases over the next 24-30 months as companies begin bringing jobs back to the US, overall economic growth will be very slow.

Some portions of the service sector employment seem likely to experience a permanent loss of jobs. After “stay-at-home” restrictions are lifted, how many consumers will immediately return to restaurants, attend sporting events, go to shopping centers or travel by plane – and especially take cruises? Consumers are likely to remain cautious until an effective vaccine has become widely available – probably as long as 18-24 months. Even with the vaccine will the public’s behavior be changed permanently?

During the next 18-24 months and maybe forever, how much of structure of service sector will change? Many formerly employed in the service sector have no employer-funded health insurance and even fewer have an employer-funded retirement program. Where do these former employees turn for help? Their jobs are gone, or at least not coming back for some time. Finding another job will be extremely difficult since the economy is growing slowly at best.

Now you see why the theme of this entry is “We gotta get out of this place if it’s the last thing we ever do.” This place is a dead end. We’ve got to find something new. The pressure to “get out of this place” seems like the spark for the Revenge Revolution.

The hardships associated with coronavirus seems to be awakening the middle class to realize how long they have been screwed by Republican policies of tax cuts for the wealthy and denying affordable medical care for all. Workers over 50 are realizing the need to return to employer-funded retirement programs and/or increased Social Security retirement benefits. Such programs are widespread in other developed countries so there is no excuse for not implementing.

When will the Revenge Revolution start? I think we’ve started. The coronavirus seems like an event that could trigger a revolution. The pace and magnitude of the job losses are unprecedented. The Revenge Revolution could spread as quickly as the coronavirus.

As more and more people realize “we gotta get out of this place” the more pressure on Washington to address the social and economic inequities. People are not going to be satisfied with Trump blaming China, the WHO or someone else for the coronavirus. People want concrete steps to fix the hole in the safety net, help train people for the coming technology tsunami, make healthcare affordable for everyone and make sure people have adequate resources for retirement. (Next few entries will offer some solutions.

#377. What’s the Con Man Hiding?

05 Sunday Apr 2020

Posted by in Back Asswards Thinking, Diversions, Post Trump Presidency, Stupid Is as Stupid Does, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: there is an endless number of inconsistencies in information from the Trump administration about the spread of the coronavirus and/or actions to mitigate the spread. For this blog entry we take a look at trying to understand why Trump behaves the way he does.  What’s really behind his behavior?

ENTRY #377 BEGINS:  Last week I ended the entry expressing hope that the experience and sacrifices associated with the coronavirus would help bring the US populace closer together. Being closer, in turn, would reduce the severity of the likely Revenge Revolution. Behavior by most of the public this past week seems to reinforce that hope.

What is far less clear is understanding the behavior and decisions by Trump. You have to ask yourself, “Why such behavior?” It makes no sense.

My training in undergrad and grad school and most jobs in my professional career have been to analyze data and then forecast events/outcomes. The challenge with forecasting is to articulate reasonable, actionable actions before the situation becomes obvious and more difficult to control. In addition, recommended actions that provide the most lead time often are necessarily, but also may be based on seemingly disparate data points.

Those who make predictions understand their forecasts are almost always wrong. Naysayers and “Monday-morning quarterbacks” love to nitpick and point out errors in the predictions. However, those who make decisions based on predictions understand that a good, actionable prediction doesn’t have to be 100% correct. A good prediction only needs to presents reasonably accurate outcomes for the most relevant variables before the situation becomes obvious and actions to control the situation less effective.

With that background, let’s turn to the behavior of Donald Trump as president. From my perspective there is something or maybe a set of variables driving his behavior that is not obvious. If one steps back and analyzes the possible consequences of the behavior, the likely outcomes of Trump’s actions seem contrary to the best interests of the United States. So, why such behavior?

Yes, Trump’s narcissistic. Yes, Trump’s crude, rude and a bully. Yes, he’s under educated and lazy. And, yes, he’s a wannabe Mafia Don. But none of those traits explains his decisions in certain key situations and his relationship with certain people.

Following is top-of-mind list of behavior and/or decisions that to me are inexplicable. With a bit of work, the list would be at least five times as long. Here’s the very short list:

  1. Post-inaugural closed-door meeting in the White House with the Russian ambassador, a known spy. After the meeting the transcript was destroyed. Why?
  2. Public and intense alienation of NATO allies while publicly courting Putin. Why?
  3. Refusing to release tax returns. Then, when ordered to provide tax returns to a Congressional committee, which is written in the tax code, refuses to do so and takes case to court. Why?
  4. When signing the $2 trillion coronavirus stimulus, adding an “executive exclusion” that claims the House of Representatives does not have the right of oversight for the expenditures and that he, Trump, will provide oversight. Why?
  5. Overruling vigorous protests by the FBI and CIA and issuing son-in-law Jared Kushner a top secret clearance. The agencies indicated Kushner’s behavior and associations disqualified him from such a clearance. What about the son-in-law’s behavior is so shady?
  6. Praising Navy SEAL Gallagher and then awarding him the Presidential Medal of Freedom when there was overwhelming evidence of criminal wrongdoing. Why go against the recommendations of the military?
  7. Trash-talking Navy Captain Brett Crozier of the aircraft carrier Theodore Roosevelt for trying to protect his crew from the coronavirus. Unlike Gallagher, Captain Crozier was praised as a hero by officers and enlisted sailors. Why praise Gallagher and trash-talk Crozier?
  8. Appointing cabinet officials with clear conflicts of interests, starting with General Flynn and his interactions with Russia and Turkey. Trump was informed of Flynn’s conflicts before the appointment, yet went ahead. Most of the Cabinet appointees have little or no experience in the department. In addition, Trump has consistently appointed “acting” staff members, apparently to avoid having the person be subjected to review by the Senate. Why?
  9. Claiming that he (Trump) had influenced the Saudis and the Russians to agree to raise oil prices. Just a few days before claiming he helped raise oil prices, Trump claimed that lower oil prices were like a tax cut for consumers. Whatever Trump offered the Saudis and the Russians didn’t work since the “deal” has been delayed. What was in this for Trump?
  10. Refusal to have the federal government take the lead in coordinating a response to the coronavirus. Only after extreme pressure did Trump invoke the Defense Production Act, which forced companies to make certain products and then sell the products to the Federal government at a certain price. But rather than the Federal government taking possession, Trump directs the companies to ship the products to private distributors, who are allowed to resell the products to the various states, often at 10x the price paid by the Federal government. Why?

There are many other examples, including the behavior of Attorney General Barr. But in each case one must ask, why? If any of these actions were part of a presidential campaign platform, would Trump have been elected? Obviously not. Who would vote for a candidate, for example, who says, “I’m going to insult NATO allies, and especially insult the English, French and Germans. Then I’m going to cozy up to a known enemy of the United States, the Russians.”

Here’s my take on Trump’s behavior and no one should be surprised. The Russians, for sure, likely the Saudis, and maybe the Chinese have Trump by the short hairs. Why? Because of backroom unreported financial deals, which likely involve laundering money. Recall, the only bank that would lend Trump money after his series of bankruptcies and defaulting on payments was Deutsche Bank. Which bank has been indicted and fined for laundering money? (Guess Deutsche Bank.) Who did Trump appoint as Commerce Secretary? None other than Wilbur Ross, the former chairman of Cyprus Bank, a bank notorious for laundering money.

Don’t be fooled by Trump’s bluster and claim that he’s tough on the Russians and Chinese. Look behind the curtain and see the sanctions against the Russians are a farce. The tariffs against Chinese goods are more show than substance. Think about this. Could the tariffs have been part of a deal where Trump agreed to walk away from the Trans-Pacific Partnership? The agreement would have strengthened America’s influence in Asia. By walking away, did Trump let the Chinese begin to dominate trade in Southeast Asia in exchange for some payment to Trump?

Even without his tax returns, there’s enough evidence to indicate Trump is up to his eyeballs in debt. Trump, Jr even bragged at the private club Trump bought north of Charlotte that the Russians were the source of money for many Trump projects. There’s enough evidence to suggest the Saudis have also provided cash to Trump.

Before the coronavirus, cash flow at many Trump properties was declining, and in some cases, cash flow was negative. The drop-off in cash flow associated with the Coronavirus has made the situation much worse. On April 4, the Trump Organization announced layoffs of 1,500 people. And more layoffs are likely to come.

Let’s pause for now and just ask ourselves, why in Trumpland does everything seem backwards? Why in Trumpland does black look like white? Why in Trumpland does down look like up? Why is irrational considered rational? And endless other dichotomies.

Over the next week, step back and view Trump’s remarks in the context of the questions raised and why everything seems backwards. Stepping back might provide some interesting insight, or at least raise more questions. To be continued.

#376. Trump’s Stupidity May Help Save the Country

29 Sunday Mar 2020

Posted by in Benefits of Revolution, General Motors, Post Trump Presidency, Societal Issues, Stupid Is as Stupid Does, Uncategorized

≈ Leave a comment

Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: there is an endless number of inconsistencies in information from the Trump administration about the spread of the coronavirus and/or actions to mitigate the spread. For recent blog entries I’ve selected a few that are representative but not necessarily the most egregious.

ENTRY #376 BEGINS:  When it became clear the coronavirus had turned into a pandemic, the White House dropped claims the virus was a hoax and established a task force to help coordinate something, although no one was quite sure what.  The task force began a daily press conference to provide the public with updates on the spread of the virus, actions being contemplated – emphasis on contemplated – to help mitigate the spread and guidance from CDC doctors about steps to the public could take to avoid getting infected or infecting others.

Once Trump realized the task force’s press conference was being viewed widely, he insisted on VP Pence playing second fiddle and Trump becoming the lead spokesperson. Since joining the daily briefings, frequently Trump has spoken for 45-60 minutes, often rambling incoherently about a wide range of unrelated and irrelevant topics. The rambling regularly includes an incredible number of lies and totally fabricated stories and claims. 

Even in a crisis, Trump cannot tell anything resembling the truth.  Since the beginning of his term, the frequency and magnitude of the lies has increased dramatically, even by Trump standards.  The daily press conferences seem to be two, sometimes three different events. 

  1. Press conference featuring Trump’s incoherent rambling and lies.  The remarks almost always include pointing fingers at someone else, claiming the other person/group is at fault, and not Trump.  An example is Trump claiming the Governor of New York should have known that the Federal government had stored ventilators in New Jersey.  Even though the Federal government didn’t know, Governor Cuomo of NY should have known the ventilators were in New Jersey!  Seems logical to me.
  2. Press conference updating info from the task force.  Lots of claims of progress and projections but very little hard data.  During the press conference the contrast is shocking between statements from Pence, who constantly praises Trump, and live reports from doctors and nurses in hospitals in say Brooklyn or Queens.  While Pence has fewer gross misstatements than Trump, Pence has not been a credible source of information.
  3. Press conference with doctors from CDC, especially Anthony Fauci, a 79-year-old, Brooklyn-born straight shooter with extensive experience in communicable diseases.  Fauci has become a trusted “voice of reason” in this crisis.  Fauci also frequently, but diplomatically, corrects Trump’s claims.  The contrast between Trump and Fauci is striking, both in stature and credibility.  The little guy Fauci is a credible giant.

Unfortunately, for Trump’s hard-core supporters, none of Trump’s behavior seems to matter.  For them Trump can never be wrong, no matter how egregious the claim or no matter how much data support the truth.  Trumpsters have made it a habit of never checking the facts.  Why should they when they have “alternative facts” to support their position?  If one is able to hold something akin to a conversation with a Trumpster, the least bit of a challenge to one of Trump’s claims will result in the Trumpster making irrelevant and usually disproved claims, usually about Obama or Hillary Clinton. 

Trump’s lies, and the refusal within the Trump Administration to address real problems – recall as late as March 3 Trump claimed the coronavirus was a hoax – has made it even more difficult to address the many logistical and medical equipment availability problems associated with the coronavirus.

An example is limited availability of ventilators.  While the percentage is small of people contracting the coronavirus who need a ventilator, the vast number of people who have or will contract the virus results in the need for ventilators far in excess of existing capacity.

Increasing production of ventilators is it good example of how, in the Trump administration, no good deed goes unpunished. When projections indicated that demand for ventilators would far exceed installed capacity, General Motors offered to work with Ventec Life Systems, a ventilator company based in Bothell, WA and help the company increase production.

That proposed relationship was announced March 20, although likely most of the agreement had already been reached. Under the agreement GM was to help the company increase production from about 150 per month to 1,000 per month and then 10,000 per month with total production up to 200,000 ventilators.

Within a few days of the announcement that GM would help, which received decent press coverage, there was another announcement published in the technical press.  That release received very little coverage.  The “technical” press release indicated details about the ventilator design. Knowing the details presented a completely different picture of the problems GM faced in increasing production than the supposed problems claimed by Trump.

If you were not familiar with manufacturing, the details in following paragraphs might not seem to be so important. If you are familiar with manufacturing, your jaw might drop and hit the table.

For reference, think of a ventilator as a somewhat more elaborate HVAC system that’s in your car or truck. Both the ventilator and HVAC have a pump, tubes to push the air, vents that open and close and sensors to monitor air flow and other conditions. The ventilator also includes a facemask to help concentrate the airflow for the user. Otherwise the ventilator and the HVAC system are roughly the same.  Since GM makes millions of cars and trucks every year, all with some form of HVAC, one would think that GM should be able to take the ventilator company’s design and ramp up production within a few days.

Alas, the unforeseen problem. I don’t know the exact percentage, but I’ll bet 90% of the key components are the same for every HVAC system installed in GM cars and trucks. Yes, between body styles the tubes might be a different length and the mounting brackets might be different, and the pump on a big truck will be larger than a small car, but fundamentally the components are all about the same.

Well, manufacturing experts, the ventilator design would not pass DFM 101 (design for manufacturing). The report I saw in the tech press indicated there are 1,400 specific parts. That sounds outrageously high so let’s cut that by 75% and say there are 350 specific parts. The tech press also indicated the parts were sourced in at least 10 different countries.

Thus, what GM encountered was not a manufacturing problem which it could solve simply and quickly, but a supply chain problem, which can take much longer to solve. No one, and I mean no one, who understands one iota about manufacturing would allow such a crazy design to go into production. For GM, the problem then became how to find parts, including parts in a number of countries also inflicted with the coronavirus. Nonetheless, GM apparently found enough parts to be ready to begin ventilator production at a plant in Kokomo, IN that is outfitted for “clean production.”

What did Trump do to help alleviate the ventilator shortage? Trump, who knows absolutely nothing about manufacturing and apparently is either too lazy or too stupid to learn, likely both, blames GM for not meeting a Trump-set production goal, even though GM was ready to begin production and waiting for Federal government approval. In addition, rather than approving the request to begin, Trump said GM should begin production at a Lordstown, OH assembly plant that GM no longer owns.  (Bloomberg article.)

OK Donald, let’s not take responsibility for not preparing the country for a likely pandemic – your administration was informed formally by China January 3 and then later you claimed you always knew it was a pandemic.  No, instead of taking responsibility, let’s blame the Good Samaritan GM for stepping up and trying to help.

In addition to chastising General Motors for not meeting a nearly impossible production schedules, Trump claimed GM was charging too much for the project. Of course, Trump had no data points to support his claim. In a widely-watched interview, Governor Cuomo of New York stated that each ventilator cost the State of New York roughly $25,000.

Trump told GM to build a minimum 40,000 ventilators asap.  Gee, the last I looked 40,000*$25,000 = $1,000,000,000.  Where’s the premium you claim GM is charging?  There appears to be little, if any reimbursement to GM for engineering hours, travel expenses and assembly time.  What’s being charged is the transfer price from the existing company.

There’s an old saying, “When the going gets tough, the tough get going.”  Well, Trump’s refusal to lead and to take responsibility for delaying any type of Federal action to help thwart the effects of the coronavirus is a perfect example of someone who talks tough but isn’t. 

Ironically, Trump’s lame, narcissistic, stupid behavior may somehow allow the US to avoid a more serious 5th revolution.  The Revenge Revolution will still occur but the outcome, if patterns continue, will be positive.  People are starting to understand and appreciate the importance of sharing and sacrifice, the importance of being honest and helpful, the importance of duty, honor, country.  Trump has none of these characteristics.  In a very obtuse way, his negligence and ineptness has forced the country to reassess its behavior.

I’m optimistic the US will be a better country once we get through this phase of the coronavirus.  It’s truly unfortunate so many people had to die prematurely because of Trump’s behavior.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

When it became clear the coronavirus had turned into a pandemic, the White House dropped claims the virus was a hoax and established a task force to help coordinate something, although no one was quite sure what.  The task force began a daily press conference to provide the public with updates on the spread of the virus, actions being contemplated – emphasis on contemplated – to help mitigate the spread and guidance from CDC doctors about steps to the public could take to avoid getting infected or infecting others.

Once Trump realized the task force’s press conference was being viewed widely, he insisted on VP Pence playing second fiddle and Trump becoming the lead spokesperson. Since joining the daily briefings, frequently Trump has spoken for 45-60 minutes, often rambling incoherently about a wide range of unrelated and irrelevant topics. The rambling regularly includes an incredible number of lies and totally fabricated stories and claims. 

Even in a crisis, Trump cannot tell anything resembling the truth.  Since the beginning of his term, the frequency and magnitude of the lies has increased dramatically, even by Trump standards.  The daily press conferences seem to be two, sometimes three different events.  #1 event is Trump’s incoherent rambling and lies.  The remarks almost always include pointing fingers at someone else, claiming the other person/group is at fault, and not Trump.  An example is Trump claiming the Governor of New York should have known that the Federal government has stored ventilators in New Jersey.  Even though the Federal government didn’t know, Governor Cuomo of NY should have known the ventilators were in New Jersey!  Seems logical to me.

#2 press conference is the task force report.  Lots of claims of progress and projections but very little hard data.  During the press conference the contrast is shocking between statements from Pence, who constantly praises Trump, and live reports from doctors and nurses in hospitals in say Brooklyn or Queens.  While Pence has fewer gross misstatements than Trump, Pence has not been a credible source of information. 

#3 press conference is the doctors from CDC, especially Anthony Fauci, a 79-year-old, Brooklyn-born straight shooter with extensive experience in communicable diseases.  Fauci has become a trusted “voice of reason” in this crisis.  Fauci also frequently, but diplomatically, corrects Trump’s claims.  The contrast between Trump and Fauci is striking, both in stature and credibility.  The little guy Fauci is a credible giant.

Unfortunately, for Trump’s hard-core supporters, none of Trump’s behavior seems to matter.  For them Trump can never be wrong, no matter how egregious the claim or no matter how much data support the truth.  Trumpsters have made it a habit of never checking the facts.  Why should they when they have “alternative facts” to support their position?  If one is able to hold something akin to a conversation with a Trumpster, the least bit of a challenge to one of Trump’s claims will result in the Trumpster making irrelevant and usually disproved claims, usually about Obama or Hillary Clinton. 

Trump’s lies, and the refusal within the Trump Administration to address real problems – recall as late as March 3 Trump claimed the coronavirus was a hoax – has divided the country further and made it even more difficult to address the many logistical and medical equipment availability problems associated with the coronavirus.

An example is limited availability of ventilators.  While the percentage is small of people contracting the coronavirus who need a ventilator, the vast number of people who have or will contract the virus results in the need for ventilators far in excess of existing capacity.

Increasing production of ventilators is it good example of how, in the Trump administration, no good deed goes unpunished. When projections indicated that demand for ventilators would far exceed installed capacity, General Motors offered to work with Ventec Life Systems, a ventilator company based in Bothell, WA and help the company increase production.

That proposed relationship was announced March 20, although likely most of the agreement had already been reached. Under the agreement GM was to help the company increase production from about 150 per month to 1,000 per month and then 10,000 per month up to 200,000 ventilators.

Within a few days of the announcement that GM would help, which received decent press coverage, there was another announcement published in the technical press.  That release received very little coverage.  The “technical” press release indicated details about the ventilator design. Knowing the details presented a completely different picture of the problems GM faced in increasing than the supposed problems claimed by Trump.

If you were not familiar with manufacturing, the details in following paragraphs might not seem to be so important. If you are familiar with manufacturing, your jaw made drop and hit the table.

For reference, think of a ventilator as a somewhat more elaborate HVAC system that’s in your car or truck. Both the ventilator and HVAC have a pump, tubes to push the air, vents that open and close and sensors to monitor air flow and other conditions. The ventilator also includes a facemask to help concentrate the airflow for the user. Otherwise the ventilator and the HVAC system are roughly the same.  Since GM makes millions of cars and trucks every year, all with some form of HVAC, one would think that GM should be able to take the ventilator company’s design and ramp up production within a few days.

Alas, the unforeseen problem. I don’t know the exact percentage, but I’ll bet 90% of the key components are the same for every HVAC system installed in GM cars and trucks. Yes, between body styles the tubes might be a different length and the mounting brackets might be different, and the pump on a big truck will be larger than a small car, but fundamentally the components are all about the same.

Well, manufacturing experts, the ventilator design would not pass DFM 101 (design for manufacturing). The report I saw in the tech press indicated there are 1,400 specific parts. That sounds outrageously high so let’s cut that by 75% and say there are 350 specific parts. The tech press also indicated the parts were sourced in at least 10 different countries.

Thus, what GM encountered was not a manufacturing problem which it could solve quickly, but a supply chain problem, which can take much longer to solve. No one, and I mean no one, who understands one iota about manufacturing would allow such a crazy design to go into production. For GM, the problem then became how to find parts, including parts in a number of countries also inflicted with the coronavirus. Nonetheless, GM apparently found enough parts to be ready to begin production at a plant in Kokomo, IN that is outfitted for “clean production.”

What did Trump do to help alleviate the problem? Trump, who knows absolutely nothing about manufacturing and apparently is either too lazy or too stupid to learn, likely both, blames GM for not meeting a Trump-set production goal, even though GM was ready to begin production and waiting for Federal government approval. In addition, rather than approving the request to begin, Trump said GM should begin production at a Lordstown, OH assembly plant that GM no longer owns.  (Bloomberg article.)

OK Donald, let’s not take responsibility for not preparing the country for a likely pandemic – your administration was informed formally by China January 3 and then later you claimed you always knew it was a pandemic.  No, instead of taking responsibility, let’s blame the Good Samaritan GM for stepping up and trying to help.

In addition to chastising General Motors for not meeting nearly impossible production schedules, Trump claimed GM was charging too much for the project. Of course, Trump had no data points to support his claim. In a widely-watched interview, Governor Cuomo of New York stated that each ventilator cost the State of New York roughly $25,000. Trump told GM to build a minimum 40,000 ventilators asap.  Gee, the last I looked 40,000*$25,000 = $1,000,000,000.  Where’s the premium you claim GM is charging?  There appears to be little, if any reimbursement to GM for engineering hours, travel expenses and assembly time.  What’s being charged is the transfer price from the existing company.

There’s an old saying, “When the going gets tough, the tough get going.”  Well, Trump’s refusal to lead and to take responsibility for delaying any type of Federal action to help thwart the effects of the coronavirus is a perfect example of someone who talks tough but isn’t. 

Ironically, Trump’s lame, narcissistic behavior may have actually allowed the US to avoid a more serious 5th revolution.  The Revenge Revolution will occur and the outcome, if patterns continue, will be positive.  People are starting to understand and appreciate the importance of sharing and sacrifice, the importance of being honest and helpful, the importance of duty, honor, country.  Trump has none of those characteristics.  In a very obtuse way, his negligence and ineptness has forced the country to reassess its behavior.

I’m optimistic the US will be a better country once we get through this phase of the coronavirus.  It’s truly unfortunate so many people had to die prematurely because of Trump. 

#375 Leadership in a Crisis: Chaos or Confidence?

21 Saturday Mar 2020

Posted by in Causes of the Revolution, Economics, Federal Budget, Gov't Policy, Stupid Is as Stupid Does, Uncategorized

≈ Leave a comment

Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: there is an endless number of inconsistencies in information from the Trump administration about the spread of the coronavirus and/or actions to mitigate the spread. Rather than beat a dead horse, I’ve chosen a few that are representative but not necessarily the most egregious.

ENTRY #375 BEGINS: During the Great Depression FDR understood that instilling hope in people would help bring the country together and help reduce the likelihood of societal chaos. FDR started his first term by stating, “The only thing we have to fear is fear itself.”

FDR followed his inaugural address with a series of “fireside chats,” during which he outlined problems and proposed solutions. (If you’ve never heard any of the “fireside chats,” they’re available on the internet.) The fireside chats helped build confidence in the capabilities of the Roosevelt administration and a foundation of hope in a time of great uncertainty.

The umbrella for recovery from the Great Depression was called the “New Deal.” The New Deal included a series of programs to provide work and income (and self-respect) for all types of unemployed workers. The New Deal work programs – WPA, CCC, and many others – included significantly expanding infrastructure in the United States, which laid the groundwork for economic growth for many decades to come.

The lesson of FDR’s understanding of creating hope and maintaining self-respect seems to have been lost on the Trump Administration. Whereas the cause of society’s uncertainty today is different than during the 1930’s, the importance of instilling hope in society and avoiding instilling fear remains the same.

Unfortunately, since day #1 in office, Trump has promoted chaos and fear. Even cabinet members who were selected because of a relationship with Trump, have been cast aside for daring to disagree with Trump. As noted in several previous entries (#374 is an example), the result of Trump‘s management style has been a cabinet that is filled with incompetents.

Trump has also consistently displayed incompetence on substantive issues. The combination has reduced people’s confidence in the ability of government to manage crises. What about the public’s confidence in the competence of the White House in dealing with the coronavirus? Did Trump take the approach of FDR and layout problems and proposed solutions?

In a press conference March 20, 2020, a reporter asked Trump and Mike Pompeo, Secretary of State, when the administration first learned of the extent of the coronavirus problem in China. Pompeo asked the Homeland Security director to answer – the reply was “January 3.”

Did the Trump administration convey such information to the public? Did the administration take any action to ensure critical medical supplies would be on hand should the virus spread to the US? No, not even outside the public purview. As recently as March 3rd – two months after learning about the major problems in China – Trump declared publicly the coronavirus was a hoax.

When cases started appearing in the US, Trump claimed there were only 15 cases (there were at least 60). And of the 15 cases, Trump claimed only one or two were serious. A few days thereafter, Trump declared the virus would magically disappear, like some miracle. According to Trump, the US, unlike other countries, had the coronavirus under control.

On March 19 information became available that the Senate Committee on Intelligence had been briefed on the severity of the problem in February. The chairman of the committee, Richard Burr (R-NC), used the information to sell stock in industries that might be affected and to warn a small group of high-dollar donors about the growing problem. Did Burr inform the public? No. (Gee, I wonder what the outcry would be from Fox News, Lindsey Graham and other Trump lapdogs if Burr were a Democrat?)

Despite declarations from King Trump, the number of people infected in the US kept increasing exponentially. Then after several governors and mayors had implemented severe restrictions on travel and gatherings, King Trump declared, “I always knew this would lead to a pandemic.” Right Donald – liar, liar, pants on fire.”

Aside from the bonehead declarations by the president, the performance of the Trump administration this past week or so has been better, but remains mixed. Public confidence in the Center for Disease Control (CDC) seems to have improved as doctors have begun telling the truth about the intensity of the coronavirus and how citizens should behave. Comments from CDC personnel often have directly conflicted with claims made by Trump, even when Trump is standing next to the CDC spokesperson.

In addition, state and local officials have continued to provide guidance. Examples include governors of Michigan and Washington as well as governors/mayors in the New York tristate area. There are still some bumps in these declarations and differences of opinion but action is being taken.

As far as calming fear, Trump might have convinced the hardcore supporters he’s competent, but no one else seems convinced that he or key White House staff/cabinet officials knows what to do. Once the public began to understand more about they could be affected by the virus and then began to understand proposed government programs to respond, mild panic set in.

People rushed to buy food and staples. Stocks of toilet paper were depleted because people were concerned the material used to make facemasks would stop production of toilet paper. A simple explanation of manufacturing capacity for TP, and lead times from factory to food stores would have mitigated most concerns. A similar explanation for many food products would have helped. But as of this date, nary a word from the White House about supply chains.

The uncertainty also spooked investors, who hate uncertainty. The result has been a frenzy with huge daily swings in the market, mostly down. The major indexes, Trump’s personal barometer of job performance, have declined to a point where all the gains realized since inauguration have been wiped out. In less than two months the major indexes have fallen 25-30%.

The near freefall of the stock market has affected consumer confidence as has the projection of a double-digit drop in GDP in 2020:Q2, and double-digit unemployment. The trifecta hit on confidence will exaggerate the virus-related slowdown in purchases of durable goods as well as home sales and construction.

The run-up in the stock market proceeding the recent crash also left the public with another headache – an additional $1,000,000,000,000 Federal debt. The 2017 tax cut was essentially a wealth transfer program to the rich, making them even richer. Think of it as socialism for the rich. Little, if any of the tax cut actually filtered down to the middle and lower-income categories.

The end result was the rich got considerably richer and everyone else got stuck with the bill — $2,700+ for every man, woman and child in the US. For a family of four, they should think of the tax cut as their gift of more than $10,000 to the very wealthy. (For more about the fallacy of trickle-down economics, which was used to justify the wealth transfer, see blog entry xxx.)

While an economic stimulus will help some people pay bills in the short-term, the real issue is mitigating the effects of the virus. Because currently there is no vaccine (forget Trump’s claim) and no known cause, there is no way to stop infections. The government’s plan is to “flatten the curve” of the rate of infection so the number of people needing hospitalization stays within the capacity of the hospital system.

Actions to “flatten the curve of infection” include restricting the number of people who can gather together. In some areas, the restriction is 100 people, some areas it is 50 people and some areas 10 people. Surprisingly, as of 03/18, about 10 states had no restrictions, including Texas.

The flip side of restrictions on crowd control is the negative impact on commerce. Restaurants, bars, hotels, gyms, movie theaters, theme parks and even religious institutions have been ordered to close. Sporting events have been canceled or delayed. Airlines have cut back flights by 50% or more.

Even such mundane tasks as garbage pickup have been affected. In our neighborhood, the sanitation department also picks up twigs, leaves and other yard waste. This week the yard-waste truck was about an hour late because, according to a man on the truck, they could not take off because of the 50-person restriction and had to wait for the sanitation workers to leave the building. (Yard waste pickup has now been suspended.)

The effect of these restrictions will be a significant increase in unemployment and decline in GDP. Although some believe the jump in unemployment will be temporary, my belief is that any rebound in employment will leave many unemployed as organizations realize how to operate with fewer employees by implementing more technology. The depressing effect on employment could last for a number of years. (For more information about the effects of technology on potential unemployment, see ”Tech Tsunami Booklet with Supplement” )

While both economic and medical programs are needed, most proposed actions by the White House seem more focused on the economy and less on ensuring medical care is available for those affected. An example is the proposed payment of $1,000-$2,000 per family for some period. The intent seems worthwhile, helping to address income shortfalls for many service workers.

The effect of such programs on confidence is more problematic. The proposed program would link the amount of payment to family size and family income. Thus, the more income one earned (there’s a cap), the bigger the check from the government. Does anyone in the Trump administration or the Republican Senate understand basic economics? People with lower incomes who get laid off have no savings. At least give everyone the same amount.

Doubtless the irony of the proposed economic program has been lost on the White House and the Republican Senators. Isn’t giving away money directly to families socialism? Only a couple of weeks ago Republicans were characterizing as socialism any Democratic proposal for income support or student-loan forgiveness. Or, as often stated by Trumpsters, maybe such programs were really like communism. Well, aren’t socialism and communism the same?

Okay, the idea of supplementing income in the short-term makes economic sense. But there’s no need for a tax cut for corporations. In case Trump and Republicans don’t understand, taxes first require revenue and then a profit. If the public is not working there’s no demand and no revenue – and duh, no profit or tax due.

The proposed programs also have a flip side. #1, the proposed program would increase the federal debt in FY2020 at least another $1,000,000,000,000 and closer to $2,000,000,000,000. Thus, by the time Trump completes four years in office, the Federal debt will have increased more than $3,000,000,000,000…and likely more. The increase is remarkably high given that unlike Obama, Trump inherited a very strong economy that should have resulted in a smaller annual deficit and possibly annual surplus. Like I asked earlier, does anyone in the White House, Trump’s cabinet or the Republican Senate understand basic economics?

So where have all the Republican fiscal conservatives been while Trump ran up the federal debt? Apparently in hiding and waiting for a Democratic president so they can begin screaming about the level of federal debt. The scream will be the Federal debt needs to be reduced with cuts to payments for Social Security and Medicare.

Another area that can contribute to the thinking-public’s lack of confidence is the Trump administration’s effort to eliminate Obamacare. During the 2016 presidential campaign and then during three years in office, Trump has made every effort to kill Obamacare. Any Obamacare-like program was bad — oops until the coronavirus. Now many programs being proposed by the Trump administration are absolutely consistent with the purpose of Obamacare and suggest that the US would be better off with a national healthcare system. Such change in policy will only increase frustration among the populace as well as increase the lack of confidence in government.

Adding fuel to the “no-confidence” fire was Trump’s claim at a oppress conference Friday, 03/20/2020 that his administration inherited a broken healthcare system from the Obama administration but that he (Trump) had fixed it. Obviously, not everyone agreed. The lead doctor at CDC put his head in his hand as Trump spoke.

Where does all the inconsistency and uncertainty lead? Uncertainty, as discussed in a number of previous blog entries, is often a precursor to a revolution. The US might get lucky and avoid a 5th revolution by voting out Trump and most of the Senate in the November 2020 election.

As of today, even though the coronavirus crisis is still in the early stages, the public seems more than willing to accept Depression-era types of programs to help stimulate the economy and begin to help reduce the income inequities that currently exist. Such programs are more consistent with the Democratic Party and would seem to bode well for the election of Joe Biden.

However, if for whatever reason Trump is re-elected, then the level of chaos and uncertainty experienced during the first term is likely to intensify. While the hard-core Trumpsters might be satisfied, the majority of the population will not be. The extreme discord between the hard-core Trumpster and rational people will increase the probability of a 5th US revolution.

As described throughout the blog, the revolution will be some type of revenge against the elite that Trump continues to support. The revolution – the Revenge Revolution – also will include many of the hard-core who finally wake up to the reality of how much Trump has screwed them.

#373 Where Do We Go from Here?

01 Sunday Mar 2020

Posted by in Gov't Policy, Stupid Is as Stupid Does, Uncategorized

≈ Leave a comment

Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

ENTRY #373 BEGINS.  Some readers are old enough to remember the TV show “Laugh In.” The show included a segment titled, “That Was the Week that Was,” which was a satirical review of recent news.

“That Was the Week that Was” seems to have returned, unfortunately not as a spoof, but as a series of real actions by the Trump Administration.  In a classic example of “stupid is as stupid does,” the White House, and Trump in particular, played down the potential impact of the coronavirus.  The virus has been spreading rapidly worldwide.  Yet Trump proclaimed the spread of the virus was under control in the US.  Further, according to Trump, the virus was just like a miracle, and would disappear one day.

During an evening press conference this past week designed to address concerns about the virus and outline plans to mitigate risk to the US populous, the White House staff, better named the Gang-that-Couldn’t-Shoot-Straight, apparently did not coordinate who was going to say what.

Trump, who spoke first and rambled endlessly, kept claiming there were only 15 cases of coronavirus in the US.  Then, Trump suggested, most of those had been cured or not serious. So, in fact there were only a couple real cases, and maybe just one.  You know, whatever.

The CDC doctors who followed, preceded by an interlude featuring Trump naming VP Pence the corona czar – virus, not beer – followed by Pence praising Trump for his leadership, said they knew of 60 cases. Furthermore, according to the doctors, everyone should prepare for many more cases.  The issue was not if the US will be impacted by the coronavirus, but when the US will be impacted and how severely.

In typical Trumpian rationale, the president claimed the public hysteria associated with the virus and the plunge in the stock market – more than 10% in a week – was the fault of the media and the Democrats. Republican stalwart Rush Limbaugh told listeners that the virus was nothing more than a common cold.

On top of these brainless statements, the White House initially proposed funding any extra costs associated with addressing the virus by diverting funds from programs aimed at helping the poor. The poor you know, must really have been the cause of the virus and, therefore be punished.

What kind of idiotic Administration is running the country? The craziness is never ending.  Yet, most Republicans don’t seem the least bit concerned by such events as Trump’s truly incoherent statements during the press conference or, by his even more incoherent claim about the virus being under control in the US.

Worldwide, major events are being canceled. The Geneva Auto Show being but one of many examples. While the US has restricted travelers from certain countries from entering the US, the State Department allegedly overrode a recommendation of the CDC and allowed people who had been on a cruise ship and considered highly contagious, to enter the country, then head home without being quarantined. Why did these people get special treatment? Apparently phone calls from the White House.  If true, who knows the real reason?

On another mind-numbing note, the White House acting Chief of Staff, Mick Mulvaney, chastised the media for, among other things, not reporting more about Trump’s positive relationship with his son Barron. Barron’s mother, also known as the first lady, had asked the press to continue the long-held tradition of not reporting most activities of presidential children.  But, oh, why would the Acting Chief of Staff, or anyone in the White House and the Trump Administration want to spend five minutes to check just a bit of history?  Doing so would be such a waste of time.  History is such a boring topic.

Normally, I get concerned but don’t rail about many actions taken by the gang of incompetents in the Trump Administration, the most notable incompetent being the president.  Doing so would consume much of the day and be too depressing.

However, what does seem worth railing about is why and how so many people continue to support Trump and don’t seem to appreciate or understand what a risk his actions are to our democracy. As noted in several other blog entries, these people seem to have been brainwashed.  What can we do to get them out of their fog and wake up to reality?  Where do we go from here?