New Year's predictions 2018

January:  Doug Jones will be sworn in as the new Senator from Alabama.  He will have to dodge Roy Moore, who will run in and try to snatch the Bible off the table and administer the oath of office to himself.

February: Justin Timberlake will perform at Super Bowl halftime, fourteen years after the infamous 'wardrobe malfunction' in which he ripped Janet Jackson's outfit and exposed her breast.  This time he will surprise people and invite Jackson back on stage, but this time,  in this year of #TakeaKnee and #MeToo  , when Timberlake tries the same thing again he will  'take a knee' from Janet to the nether regions.

March:  The start of baseball season will include a pitch clock. A major scandal will erupt when the Red Sox get caught speeding up the clock when the Yankees are pitching. Donald Trump will send a tweet blaming Hillary Clinton and reminding people Massachusetts is a blue state, even if they do call their team the Red Sox.

April:  The Trump administration announces that entry fees to National Parks will rise again, to well over a hundred dollars for top National Parks.  When it is pointed out  that this might make it too expensive for a family to visit Yosemite,  White House Press Secretary Sarah Sanders Huckabee says,  "Well, then, they can go to Six Flags and see Yosemite Sam instead !"

May:  A few months after passing a tax bill that raises the deficit, Paul Ryan and Marco Rubio will cite the skyrocketing deficit as a reason to cut entitlements (as they already have said they will.)  Social Security payments will be cut only slightly for present retirees.  Future retirees will be promised a t-shirt saying, "I paid thousands into Social Security but all I got was this lousy t-shirt."  When somebody points out that immigrants are overwhelmingly young people who could help stabilize Social Security and Medicare, conservatives will drown it out with chants of "build the wall, build the wall."

June:  Six months after moving the U.S. embassy in Israel to Jerusalem, citing reasons of 'convenience,'   the Trump administration will announce they are moving our consulate with the Palestinian Authority to an abandoned oil platform off the coast of Louisiana,  also citing 'convenience.'

July:  The GOP effort to privatize Social Security by ramming it all through  in a matter of days that began in May will fail in the Senate.  Donald Trump will respond with a series of angry tweets attacking Hillary Clinton.

August:  The record breaking drought continues around the southwest.  In southern California and Arizona, mold is added to the 'endangered species' list.

September:  The Trump administration will announce a solution to the Confederate Monument controversy. They will all be relocated to Puerto Rico to serve as windbreaks for families who are still living out in the open with no heat or shelter a year after Hurricane Maria.  He will praise himself for helping bring 'a great success' to Puerto Rico.

October:  The Mueller investigation issues a final report several weeks before the election, concluding that there is evidence that Russia was in close collusion with members of the Trump campaign to ensure Trump's election.  Rather than indicating any concern about a foreign power being involved in our election, Republicans derisively criticize former FBI director Mueller and start wearing  Putin masks at Halloween parties.

November:  Democrats decisively win control of the House, many Governorships and despite the terrible Senate map, are able to pick up a 50-50 tie for control of the Senate.  Trump sends out a tweet calling the election results 'fake news.'

December:  On Christmas morning, the nation wakes up to find that the White House is buried under hundreds of tons of coal, with a reindeer poop on top of it.  Donald Trump will blame Hillary Clinton.

Trump's contradictory speech about international relations

Today Donald Trump spoke about how the U.S. would continue to engage in international leadership,  while criticizing 'revisionist' powers Russia and China.

Two questions this brings up.  First, what is a 'revisionist' power?  If Russia lost the Cold War, does that mean they will always be no threat to the U.S.?  No more than Germany stopped being a threat to France after it lost World War I.  History continues forward and it is foolish to assume that because of an event in the past (be it a military victory or whatever) that the future is thereby settled.  At best the immediate future is settled, but never history going forward.  By claiming that Russia is a 'revisionist' power (presumably meaning they want to reverse the outcome of the Cold War) it seems that Trump lacks a serious understanding of who they are.  OF COURSE Russia would like to reverse the Cold War. Vladimir Putin, a former KGB man who once called the collapse of the Soviet Union 'the greatest tragedy of the twentieth century'  has simply taken off the uniform and replaced it with a suit.  Out with the Hammers and Sickles and in with Tsarist trappings.  Out with one candidate elections and replace them with multicandidate elections in which the media are completely controlled by Putin and his allies, allowing only one candidate to be heard.

Like the Chinese, the Russians have undertaken limited economic reform,  'privatizing' state enterprises and instead allowing them to fall under the leadership of corrupt oligarchs and of Putin himself.  His raw territorial ambition and his quest to return to the world stage as great power have been shown by his invasions of parts of Georgia and the Ukraine (including all of Crimea) and more recently by his active intervention to tilt the Syrian civil war in favor of old Moscow ally Bashir al-Assad.

But the Chinese have even gone beyond this.  Doing much of the same in the way of 'reforms' as Russia (though China is still officially a communist country)  and bullying its neighbors to the southeast and east, China has also become a military power.  But beyond that,  the Chinese situation brings up the second question.

That question is this:  With the United States withdrawing from everything from the Paris climate accords to trade deals around the world, China has eagerly jumped in to replace the U.S. as a leader.  Showing leadership means to engage.  Now, it is certainly true that there have been some bad trade deals and I supported Trump's withdrawl from the proposed Trans-Pacific partnership;  Not, mind you, because it was a bad deal.  I don't know whether it was or it was not.  The reason I don't know is because the whole deal was negotiated in secret and even people who saw drafts of the deal were sworn to secrecy to where they could say nothing about what was in it.  The secrecy behind the TPP is what doomed it in the end, as many people felt (as I did) that the practice of negotiating that kind of a deal behind an opaque wall and saying nothing at all about it was itself  unacceptable, so we chose not to support it.

However, it is also true that where there is a vacuum, somebody will fill it.  TPP aside, the Trump administration has withdrawn the U.S. from MANY international treaties and deals,  leaving the game wide open for China to step into the leadership role and they have already been working out trade deals and inserting themselves anywhere the U.S. has stepped back from.  Heavy Chinese investment in Australia (formerly a reliable U.S. trading partner but less so anymore)  and even in Afghanistan (where American soldiers have died while Chinese companies have stepped in behind them and opened mines that develop the local economy and feed raw materials back to China) are cases where the failure of the U.S. to engage economically has created an opportunity for China.

Before making these grand (and contradictory) pronouncements about the U.S. engaging with the rest of the world AND opposing 'revisionist powers' (whatever that is supposed to mean)  perhaps the President should consider what it takes to do both of those things-- and balance them against each other as so far he has not done.

Afghanistan-- what the heck are we still doing there?

If current reports are accurate, the Trump administration (remember Trump ran on a neo-isolationist policy in which while he promised to get rid of ISIS, otherwise pledged to reduce our involvement in foreign wars) is about to get us in deeper in Afghanistan.  The Afghan war, which began in October 2001, a month after September 11 and less than a year into the Bush administration, lasted through the rest of that administration, then through the entire Obama administration and now is into its third administration  (arguably its fourth;  recall that on August 18, 1998, eleven days after the African embassy bombings the Clinton administration launched cruise missiles in an attempt to get bin Laden in a meeting he was known to be attending that day;  unfortunately the meeting ended early, before the missiles arrived and we now know that among the topics discussed during the meeting was the plot that eventually became 9/11. )

Given that the 9/11 terror attacks were hatched in Afghanistan (not to mention the African embassy bombings and the attack on the U.S.S. Cole in Yemen) and the Taliban government was at the time giving refuge to bin Laden, it made sense to go in originally because if we hadn't then bin Laden and al-Qaeda would have continued unimpeded in their quest to kill Americans.  However, after an offensive in January and February of 2002 drove bin Laden from his hideout in Tora Bora and drove the Taliban into a small sliver of Afghanistan, George Bush, Dick Cheney and Donald Rumsfeld made a fateful decision.  The Taliban was almost gone, but instead of finishing the job and taking the final sliver of the country they held onto, the Bush administration put Afghanistan on the back burner and then used 9/11 as a rallying cry to invade Iraq, a country a thousand miles away that had nothing to do with the September 11 attacks.  An invasion of Iraq had been on Bush's agenda since taking office after his father had made the decision not to finish off Saddam Hussein in the 1990-1991 Gulf War,  and since then Saddam had continued to cause problems for the U.S. and other countries in the region. 

By putting the situation in Afghanistan on the back burner, the Taliban were allowed to regroup and grow back, and by then were learning how to fight more effectively against the few Americans remaining;  roadside bombs, suicide bombings and ambushes, especially in populated areas (the same tactics used later on by Iraqi insurgents after Bush claimed 'mission accomplished' a few weeks into the Iraq war.)  By this time bin Laden had fled to Pakistan,  so we were in effect fighting on one side of a civil war (and propping up a corrupt government then led by Hamid Karzai, which was known to be dealing, just as the Taliban were, in opium poppies that were smuggled out and into the world drug market.)

President Obama, like President Trump, ran on a platform that included getting American troops out of harms way.  Only it didn't happen, and in fact eight months into the Obama administration (and on the eighth anniversary of September 11) I wrote a blog post critical of the Obama administration's Afghan policy.  It seemed then that the Obama Afghan policy was really little different than the Bush policy.  Obama's "Afghan surge" only got us in deeper and didn't ever seem to resolve anything.  Yes, Americans and our allies might win battles and take territory, but just like any guerrilla war, once they left the territory it reverted back to the control of whoever had the support of the local populace (think about it-- HOW MANY times since the Afghan war began in 2001 have you heard about Americans backing allied Afghan government forces driving the Taliban out of strongholds in Helmand province?  As soon as we leave, the place reverts back to Taliban control and we don't have the manpower to physically occupy all of it.)  With bin Laden dead and al-Qaeda fragmented, clearly there is no threat from al-Qaeda in Afghanistan anymore.  Of course now you keep hearing about 'ISIS in Afghanistan.'  It's not like a bunch of ISIS fighters somehow traveled from Syria to Afghanistan. It's the same locals we have been fighting who are now calling themselves an affiliate of ISIS. And at some point we have to ask ourselves why we are still there.  Does anybody even know what exactly a 'victory' in Afghanistan would be?  No administration-- not the Bush administration, not the Obama administration and apparently not the Trump administration, has said what exactly the objective is in Afghanistan.  If we are going to stay there then don't we owe it to our troops to state exactly what our purpose is and what we are trying to achieve?  Vacuous statements like 'a stable Afghanistan' are useless as an objective.  How do you measure 'stable'  in a country that has been at war now for over forty years?  And how do we plan to create it?  If we can't answer these questions then we should GET OUT. 

January 20, 2009-January 20, 2017. The Record of the Obama Economy.

Eight years ago I wrote a post entitled, January 20, 2001- January 20, 2009: The Record of the Bush Economy

As Donald Trump begins his term in office, it is fair to hold President Obama to the same standard. The metrics that were available on that date were the stock market close, the euro exchange rate (in that if it costs more dollars to buy a euro that is both a sign of a lack of faith in the U.S. economy and an indication that it will be more expensive for Americans to either travel or buy goods that are produced outside the country,) net job creation, price of crude oil and national debt.  Later the January unemployment rate was also added as a metric.

Here are how the numbers stood after January 20, 2009.

Dow Close: 7,949.09 (a loss of 2638.51,  or - 25%.)
Euro exchange rate: $1.32 to buy 1 euro (an increase of $.38)
Price of of one barrel of West Texas crude: $34.20 (an increase of $8.22/barrel.)
National Debt: $11.8 trillion (an increase of $6.0 trillion.)*
Net Job creation: + 3.8 mllion jobs (which decreased to + 3.0 million jobs when the January jobs report was added in)
January 2009 unemployment rate: 7.8% (up from 4.2% on January 20, 2001.)

*-- NOTE regarding the national debt :  Generally, the deficit (and corresponding increase in the national debt) for each fiscal year is assigned to the previous President. For example, had 2009 been an ordinary year, then FY 2009 budget (which covers from midyear 2008 to midyear 2009) was passed in early 2008 (though in fact it was a series of continuing resolutions that effectively continued spending levels set in past years) and signed by President Bush.  HOWEVER, as we know, FY 2009 was anything but an ordinary fiscal year.  The actual budget was dwarfed by two massive spending packages: TARP ($700 billion, which was passed and signed by President Bush but was spent equally by Presidents Bush and Obama) and the Stimulus ($890 billion, which was signed and spent exclusively during the Obama administration.)   What this means is that you will see estimates of the share of the national debt run up under each President all over the board, especially as given by people who have an agenda and are being intellectually dishonest.  To ensure consistency, in 2009 and again with this post, I am using a National Debt clock (which to a degree I don't like because it mindlessly keeps track of spending regardless of the source,  but at least it is a consistent way of measuring using the same metric.)  I am not sure which National Debt clock I used in 2009 but they are pretty much all the same.  The one that is being used as a source for this post is http://www.nationaldebtclocks.org/debtclock/unitedstates .

The Obama record:

Let's start with the Dow.  The Dow closed today at 19,827.25 .  This is up 11,878.16 points, or an astounding + 149 %.  In other words, if you'd put your money in the Dow (say by purchasing an index fund) on the day President Obama was inaugurated, by today it would have increased to be worth more than two and a half times what it was then. In fact if you had invested when it hit its bottom on March 9, 2009 (at 6547.05) then you would be up 203 % (in other words you'd have tripled your money.)

The Euro exchange rate today is that $1.07 will buy you one euro.  While this is still worse than it was when Clinton left office in 2001, it is much better than the $1.32 it was eight years ago.  To be sure, part of that is due to the collapse of the European economy, in which the dollar was seen as a safer currency.  BUT that is exactly the point-- the U.S. has been navigating in exactly the same world economic straits as anyone else.  Yet the Obama administration has steered our economy into a path of increasing prosperity that has eluded other countries.  Not only Europe, but also Brazil, China, Japan and other nations have all experienced economic pain.  Considering how difficult a course this has been, it is clear that under President Obama's leadership, the U.S. has come through the Great Recession in significantly better shape than most other nations.

The price today for March delivery of one barrel of West Texas crude is $53.24.  Probably no single commodity is more important in terms of affordability for the economy than the price of crude oil (which is used to produce gasoline, jet fuel, heating oil, fertilizer and plastics, among other products.)  Among its many uses, gasoline is the single biggest product and the one that most people recognize as either being a strain on their budget or not.

The growth in the price of crude oil overall was slightly faster than the net growth from start to finish of the Bush administration.  However, as was noted in the post eight years ago, the price of oil underwent a large degree of volatility during the Bush administration, rising to over $150.00/barrel in June 2008.  It was at times volatile as well during the Obama administration but never reached the degree of boom and bust that the price went through under Bush.    It is true that defenders of oil production will say (and correctly) that the expansion of hydraulic fracturing (a.k.a. 'fracking,') a procedure opposed by many on the left, has increased the supply of crude oil and helped keep the price down.   They will also point out that the President banned fracking on federal lands.  And on both of these points they are absolutely right.  However, the other side of the coin is that the President did not ban fracking elsewhere (though he could have, as some state governments have done) and further it is true that while fracking increased the supply, there are two sides to a supply/demand equation and on the other side, the President decreased demand.  He did this by sharply increasing CAFE fuel efficiency standards on automobiles (such that the new vehicles on the road today have much better fuel mileage than they did a few years ago;  as an example, I have both a 2010 and a 2016 Nissan Versa, and for the same make and model of vehicle, my gas mileage is over 10 mpg higher in the newer car than in the older one.) Also, when he included 'cash-for-clunkers' in the Stimulus package, President Obama specifically made sure that the old inefficient vehicles that were being traded in had their engines destroyed so that they could not be resold on the aftermarket.  This had the net effect of taking fuel wasting vehicles off the road and replacing them with vehicles that used less fuel. SO while it is certainly true that there were reasons beyond anything the President did that helped keep crude oil prices reasonable, it is ALSO true that he did do some things that also helped keep them low.

The national debt is today $19,968,000,000,000 (19.968 trillion dollars.) See the note earlier in this post about sourcing and consistency regarding obtaining a fixed figure for the national debt.  It is certainly true that this rounds to $20.0 trillion, and further it is also true that the increase of $8.2 trillion during the Obama administration is more than not only the dollar increase during the Bush administration but in fact than the dollar increase during ANY previous administration.  Again though, this does not in a snapshot give us the whole story.  Yes, during his first year in office President Obama did spend a lot of money between TARP II, the Stimulus and other measures designed to help the economy. Regardless of what others might say in hindsight, this was absolutely necessary spending;  the risk of a complete economic collapse was very real and in fact, many economists argued that the Stimulus was too small.  Luckily the nation did not suffer a complete collapse and the fire was put out.  In fact, since the disaster in 2008 (which the cost of TARP and the Stimulus hit in fiscal 2009) the deficit has gone down to the point where it is now less than half of what it was then. Obviously a half trillion dollar deficit is still a whole lot of money but it's still important to know that the direction of the Obama deficit has been to generally get less over time.   The fact that it is not even lower is a reflection of the fact that there are still tax cuts in place that reduce revenue even faster than one could reduce spending. For example, President Obama extended the original Bush tax cuts until 2012;  then during the 'fiscal cliff' deal only the highest rate was raised;  most of the Bush tax cuts remained in place.

Beyond this, it is also worth noting that there is one commercial that you didn't hear during this campaign.  That is the claim that President Obama had 'added more to the national debt than every other President combined.'  This claim, which has been standard fare during any campaign in which it applies, was certainly used (and correctly, as Bush had doubled the debt) in the 2008 campaign, to try and tar John McCain by tying him to Bush on the debt.   But while the Trump campaign had a lot of negative advertising they used against Hillary Clinton and tying her to Obama, doubling the debt was not one of them.  That's because it's not actually true.  The debt under Obama grew by 69%;  This is slower than the rate of growth under most previous administrations, and as shown before, was growing by a lesser amount later in the term.

I won't claim then that the Obama record on the deficit is a smashing success, because obviously it's not.  But it's also not the catastrophic failure that some would have you believe.  It will be interesting to see what Trump makes of the debt, given his pledge to push for massive tax cuts that will certainly blow up the deficit, at least in the short term and quite possibly in the long term (keeping in mind that the 2001-2012 tax cuts produced anything but great prosperity during the time when they were in effect.)

Jobs and unemployment numbers were delayed until the January jobs report from the Bureau of Labor Statistics and show a final unemployment rate of 4.8 % (down from 7.8% in January 2009.)  The jobs creation numbers (from February 2009 through January 2017; historical data here) show  11,501,000 net jobs created.   Yes, if I were going to wave the flag unabashedly for Obama then I would begin counting in March 2010 (and give Bush 'credit' for 4,320 million net jobs lost during the first thirteen months of Obama's Presidency and point out that Obama has created nearly 16 million jobs since then) but fair is fair -- I used the same metric for Bush (February 2001-January 2009) so Obama is stuck with those numbers.  The only adjustments may be minor as it is routine for the Bureau of Labor Statistics to make minor adjustments in the two preceding months (which would be December and January) in subsequent jobs reports as more data becomes available;  If the adjustments are positive then Obama will be able to claim 11.5 million net jobs created. The February 2017 jobs report will be the first one credited to Trump,