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Bill Owens: Confounding And Confusing Events 9/16/19

A paper by Dr. Shawn Rosenberg speaks to the issue of how the human brain reacts to self-rule. His principal conclusion is that self-rule/democracy is in danger because citizens are not developing a critical understanding of the issues and lack the ability or are too lazy to expend the necessary energy and time to analyze the issues. He feels that this could be a death nell for democracy. Justice Gorsuch has also recently taken a similar view to Professor Shawn Rosenberg’s. In a recent interview, he indicated that he had concerns about the engagement of the American public on an intellectual level in the democratic process. Of interest, to me, was his statements that we all had to be prepared to listen to the other side, and to stop listening to only those who agreed with us. He seems to enjoy the raucous nature of politics. He also stresses that this requires work and sacrifice, not just in the military sense, but rather in time, energy and commitment to studying and understanding the issues, comprehending your opponent’s position and then seeking to come to the best resolution. I am not sure he actually practices the latter, as he seems to have certitude in his opinions.

On the China trade war front, China has reduced the reserve requirement of its banks in the amount of $126 billion. This, of course, frees up those institutions to make loans, and presumably, to make loans at relatively low interest rates. Clearly, this is an effort to spur their economy, and looks a little bit like TARP in 2008-2009. China is clearly taking every step possible to offset the impact of the tariffs imposed by the Trump administration by growing their internal consumption and decreasing costs to business for capital, which should have the effect of decreasing the cost of production overall, and thus, prices when goods are sold to the US. An interesting strategy, and what will be in the Trump Administration’s response be?

China announced late in the week that it would reduce or eliminate tariffs on certain goods, but it did not reduce them on pork, nor soy beans. Obviously, the Chinese want to keep the pressure up in one of POTUS’ political strongholds. Immediately after this move, POTUS announced a delay in his recently announced tariff hikes until October 15, 2019.

President Trump was successful in North Carolina in getting Mr. Bishop elected, by 2 percentage points. It is very clear that Mr. Trump’s rally the night before had a significant impact on the outcome, and POTUS is taking all the appropriate bows.

On a happy note, a heartwarming video appeared on the internet this week with an African American toddler and a white toddler running to one another joyously yelling, screaming and ultimately hugging each other. It showed them subsequently dancing together, snacking together and playing together. You get the point, its together and both of them are colorblind, which is what we all should be.

The New York State Tax Department has taken a new approach to determining whether or not an individual is a New York resident for tax purposes, finding that an executive who lived in New Jersey, worked in New York City (and paid taxes on all of that income earned while he was in New York) had a vacation home in the Adirondacks which the state characterized as essentially a year round residence was subject to tax on all of his income, irrespective where earned, thus, making him liable for New York State tax. This decision was rendered by a tax tribunal judge who is, in fact, an employee of the New York State Tax Department. We’ll see what the Courts do, but it seems to me this is a stretch.

Scientists have found a substantial number of Neanderthal foot prints in Normandy, France, including those of children, teenagers and young adults, along with some adults. This discovery was made in Normandy, and appears to capture these human footprints from 80,000 years ago, which is a period when Neanderthals were the only human kind in western Europe.

Then, of course, we have the ongoing saga of the altered weather map. It seems to me that although Mr. Trump did not keep up with trends of hurricane Dorian, he at least had a basis for his commentary about the potential to hit Alabama. It would have been much more Presidential had he simply said, “I received some early reports that indicated that Alabama might be hit, and I am delighted that they weren’t, and he left it at that. Instead, it’s turned into a multiple day story that makes him look incredibly foolish and petty, and unfortunately, the media looks equally as silly.

In the Wall Street Journal Letters to the Editor, a writer commented on a proposal to issue long-term debt, that is 50 to 100 years until maturity for the purpose of paying down our debt. The author of the letter took the position that essentially allowing inflation to eat-up the debt was a better solution, which from a practical perspective may make sense. Nonetheless, the debt would remain on the books, while the long-term payoff of the debt would overtime eliminate it. It took us 50 years to pay-off the debt from World War II, so a 50- or 100-year bond doesn’t seem implausible to me. I would note, I introduced a bill when I was in Congress to issue 50-year treasury notes for the purpose of paying the debt down, however, the legislation contained conditions including a requirement for balanced budgets going forward, giving those who purchased the debt the opportunity to demand full repayment should Congress and the President fail to adhere to balance budgets. We clearly need some ideas to help solve this problem.

Mark Sanford announced his potential candidacy for President, and Republicans quickly closed ranks by attempting to shutdown primaries in several more states. This raises a whole host of interesting issues for the Republican Party, including transparency, its ability to sell itself as a populist entity when it restricts primaries, etc. Of course, the real question is can Mr. Sanford or Mr. Walsh gather sufficient traction to have any impact on the process. I think not. By the way, I know both of these gentlemen, Mr. Walsh better than Mr. Sanford, and my view is not intended to cast dispersions on them, but simply facing reality.

Trade between China and the US continues to decline, if not plummet, as the tariffs take a bigger and bigger bite out of trade. There is little information coming out of either government to indicate how they intend to solve the problem while still saving face. The Chinese culture is steeped in the concept of saving face, and of course, Mr. Trump has never committed an error in his thinking or actions, so the pathway seems very, very narrow to me.

On Tuesday, September 10th, John Bolton quit or was fired? I assume it depends on who hit “send” on the Tweet first. The number of departures from the administration continues to mount, and even someone as out of the main stream as John Bolton was unable to maintain his position in the administration. It sounds as if it came about because he imposed a rational analysis on one or more t national security issues.

Mr. Owens is a former member of Congress representing the New York 21st, a partner in Stafford Owens in Plattsburgh, NY and a Senior Advisor to Dentons to Washington, DC.

The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.

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