Archive

December 10th

A government of, by and for corporate America

    President-elect Donald Trump promised to punish U.S. companies that ship manufacturing jobs out of the country. Instead, judging from the way he has handled Carrier, he plans to reward them. Quite handsomely, in fact.

    As should be standard practice with Trump, pay attention to the substance, not the theater. United Technologies, the parent company of air-conditioner maker Carrier, has been threatening to move more than 2,000 jobs from Indiana to Mexico. Trump addressed this specifically during his campaign, vowing to hit the company with a punitive tariff.

    "If they're going to fire all their people, move their plant to Mexico, build air conditioners, and think they're going to sell those air conditioners to the United States -- there's going to be a tax," Trump said on "Meet the Press" in the summer. "It could be 25 percent, it could be 35 percent, it could be 15 percent, I haven't determined."

    As it turns out, how about zero percent?

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Why the U.S. Education Department never dies

    Ever since President Jimmy Carter created the U.S. Department of Education in 1979, conservatives have been trying to abolish it. Rick Perry, the Texas governor who in a 2011 presidential debate couldn't remember all the U.S. agencies he wanted to shutter, had total recall over one -- the Education Department.

    Will conservatives finally get the job done? Donald Trump, who also calls for the agency's demolition, will be in the White House, and Republicans have a majority in Congress. Betsy DeVos, an activist for school vouchers and critic of public education, has been nominated for education secretary.

    Before answering that question, let's run down what the department does. Its discretionary budget is all of $68 billion. Of that, $22 billion is for Pell Grants, awarded in amounts up to $5,800 to 8 million financially needy college students. If the department disappears, some other body would still need to determine eligibility for the grants and ensure their proper distribution.

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Trump's business is hardly too big to sell

    Donald Trump took to Twitter on Wednesday to hint at how he will avoid conflicts of interest after he trades in his hat as the Trump Organization's chief deal-maker for that of the U.S. commander in chief.

    Trump said he recognizes that it's "visually important, as president, to in no way have a conflict of interest." To that end, he said, "legal documents are being crafted which take me completely out of business operations." He plans to unveil how he'll go about this at a press conference on December 15.

    This shouldn't be too difficult. Trump can either appoint an independent third party to oversee the Trump Organization's business portfolio, or simply sell all the company's holdings.

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Trump's anti-regulation era has already begun

    When a federal judge in Texas last week froze a regulation extending overtime pay to thousands of workers, the holding had an extra sting. The hit to President Barack Obama's legacy came from his own appointee, not a Bush-era holdover. And the decision will make it much simpler for President-elect Donald Trump's Labor Department to scrap the regulation than it would have been without the judge's activist ruling.

    The regulation in question interprets the 1938 Fair Labor Standards Act. The law sets the federal minimum wage (currently $7.25 an hour), and says that employees who work more than 40 hours a week are entitled to time and a half -- that is, overtime.

    Section 213 of the act allows exemptions for employees "in a bona fide executive, administrative, or professional capacity." Because the law doesn't define those terms, the Department of Labor issues regulations that do. As amended in 1961, the law actually specifies that the overtime terms may be "defined and delimited from time to time by regulations."

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Trump wrecking crew on its way

    Elections have consequences. We've said it before, but it's never been truer than it is today.

    Yes, elections have consequences, as Donald Trump is now proving by filling each and every cabinet post with a man or woman whose sole mission is to roll back every advancement made over the last eight years under President Obama.

    Start with Rep. Tom Price (R-Ga.), who was tapped by Trump to be the new secretary of Health and Human Services. Since March 2010, the primary mission of the HHS secretary has been overseeing implementation of the Affordable Care Act. Not Tom Price. For the last six years, his primary mission has been to repeal Obamacare. Now he'll have his chance.

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Trump is surrounding himself with generals. That's dangerous.

    More than any other president-elect in recent memory, Donald Trump has sought out military brass to populate his inner circle. Trump met Monday with retired Army Gen.David Petraeus, a contender for secretary of state. He is also considering retired Marine Gen.James Mattis as a potential defense secretary, retired Marine Gen.John Kelly for secretary of state or homeland security, and Adm. Mike Rogers as the director of national intelligence. His national security adviser-designate, Michael Flynn, retired from the Army as a lieutenant general after decades as a military intelligence officer. And CIA Director-designate Mike Pompeo graduated from West Point and served during the Cold War as an Army officer.

    There is a great American tradition of veterans holding high political office, from Presidents George Washington and Dwight Eisenhower to senior officials such as Secretary of State Colin Powell and Veterans Affairs Secretary James Peake in the George W. Bush administration, and Veterans Affairs Secretary Eric Shinseki and national security adviser James Jones in the Obama administration. A typical administration, though, starts out with few recent generals in key positions. Filling as many slots with retired brass as Trump is poised to do is highly unusual.

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December 9th

Trump and the Carrier plant: Smart politics, unsustainable economics

    Once, on a visit to the French countryside, I visited the most beautiful, picturesque little country farm I'd ever seen. The farm produced an organic yogurt for the market and, ever the annoying economist, I asked my host how this boutique operation could compete with factory farms. "We couldn't possibly do so," he told me. The farm never came close to profitability and survived only because of deep subsidies.

    This revelation led to the inevitable compare-and-contrast discussion between the proud French farmer and efficiency-oriented American. The punchline of that conversation came back to me Wednesday for a topical reason I'll reveal in a moment. The farmer explained to me that the way to think of his operation was that of a nonprofit that the public willingly supported in order to enjoy truly organic food and the existence of a quaint, non-corporate farm (it was open to visitors, which was how I happened to be there).

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The 'trigger warning' test you can't fail

    "Trigger warnings" on U.S. college campuses have become easy targets for ridicule, but that doesn't seem to have dampened enthusiasm for them. Professors issue these warnings on their syllabuses or during class when the material studied turns to sex, race or violence. To some, this is a reasonable way to protect students who might take offense at what they read or see. To others, the warnings encourage young adults to be overly sensitive victims of political correctness imposed by self-appointed "elites."

    Since this campus craze has spread and become a contentious subject in U.S. politics, let's make sure we know what we're talking about. One way to do that is with a 10-question practice test. Here goes:

    1. Why the word trigger?

    A. The warnings originally applied to representations of gun violence.

    B. Images and stories cause traumatic reactions suddenly and uncontrollably.

    C. To a survivor, troubling content has the fearsome power of a pointed gun.

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The OPEC deal sells fake news for real money

    It's hard to blame Russia for using its propaganda machine to help build a post-fact world when its economy depends on a post-fact market -- the oil one. The market's reaction to news from the Organization of Petroleum Exporting Countries highlights its spurious mechanics.

    Bloomberg News reported recently that Russia as a country made $6 billion just by talking to OPEC about cutting its oil output: News about the negotiations drove up the price. Now, Russia has agreed to a cut by 300,000 barrels per day by January "if technically possible." It looks like a lot -- a quarter of the total cut OPEC members have agreed among themselves -- but then Russia's output increased by 520,000 barrels a day between the end of August and the end of October, reaching an absolute record level. Russia has been making money on the increasing price while growing production -- the best of both worlds thanks to some deft news manipulation and nothing else. Now, even if Russia cuts output by about 2.7 percent of the current level, as it has promised, it will still reap a profit if the price of crude holds at the current level -- about 7 percent higher on Thursday morning than three days before.

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The False Liberator

    Say what you want about Fidel Castro, in Africa he was a liberator. His aid to the South African anti-apartheid struggle will forever be remembered as a grand stroke of moral leadership, in great contrast to American policy.

    That's the theme of various sympathetic postmortems for the Cuban dictator, who died at 90 on Nov. 25.

    Castro's detractors express an "American-centric" view, the New York Times' Pentagon correspondent, Helene Cooper, noted Sunday on "Meet the Press": "The Castro that I grew up knowing as a child growing up in Liberia was a Castro who fought the South African apartheid regime that the United States was propping up."

    To be sure, it would be hard to exercise unchallenged rule over a country for nearly half a century without doing anything admirable. So stipulate that Castro's Cold War-era backing of Nelson Mandela's African National Congress, and his army's war against South African troops in nearby Angola, belong on the plus side of history's ledger.

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