In Brief
- Major tax reform nears. A Senate-House Conference Committee is working to resolve the differences between the bills. Be prepared for surprising changes. Passage by Christmas now looks likely.
- Revelations about the sins of sex abuse and sexual harassment will just keep on confronting the land. Expect many more surprises. Who will be the judges and juries? What are the rules and standards? Will the hysteria extend to other forms of “sin”? Beware ye who live in glass houses as public hysteria is not easily controlled.
- Special Counsel Mueller, the FBI and DOJ are all now under their own clouds of bias and wrong-doing. It will be difficult for Mueller to get any conviction from a jury on any charge that has a partisan political aspect to it.
- The Trump announcement of a move of the American embassy to Jerusalem is just a confirmation of old policy and has manifested only sputtering protest in Palestine.
- The International Monetary Fund [IMF] reports that China’s banks have insufficient capital and face rapidly mounting credit risks.
In-Depth
Elections
I had intended to continue my series on elections in different regions of the US, but there is so much other news I must analyze for you there just isn’t room. I’ll come back to the series very soon.
Alabama
Judge Roy Moore [R] has slipped back into about a 4% lead in the polls over Doug Jones [D]. This is within the margin of error, but it is likely the lead is somewhat larger than that as some respondents undoubtedly found it difficult to say they were planning to vote for a candidate labelled as a pedophile.
This is, in effect, a political trial, in addition to being an election.
Some Democrats and the media expect to be able to use Moore, if he wins, as a hammer against Republicans in 2018. There are two people solidly creating a firewall and blocking much success of such an effort. They are Bill Clinton and his enabler Hillary Clinton. She also destroyed the women now acknowledged to have been accurately accusing Bill. And then, there are Franken, Conyers and many more to come. Both parties live in glass houses.
Former Judge Moore, who was removed from the Alabama Supreme Court for failing to follow the law, is an extremist and will certainly cause the Republicans problems if elected to the Senate. But, it is questionable he can be denied a seat if the people elect him.
Minnesota
Al Franken gave a non-apology apology and a non-resignation resignation speech last week. He said he’d resign in a few weeks but there are skeptics who think he thinks he can survive, especially if Roy Moore wins in Alabama.
If he does resign, which appears likely the Democratic Governor of Minnesota will appoint a temporary successor. There will be a primary for nominations and a general election for the remainder of Franken’s term next November.
Minnesota is a state in political transition much like most of the Great Lakes states.
It has been a solidly Democratic state for generations but is moving toward partisan parity. Consider:
- Clinton beat Trump just 46% to 45%.
- The “conservatives” on the ballot [Trump, Johnson and McMullin] got 50% to the liberals [Clinton and Stein] 48%.
- In the eight MN US House races the Ds won the total vote by just 51% to 47%.
So, the Franken Senate seat is not a sure “hold” by the Democrats. Who gets chosen by the Governor and who gets nominated in the primaries becomes very important.
I’ll look at MN in detail when I resume my regional politics series soon.
Major Legislation and Policies
Tax Reform
The Senate and House have both passed tax reform bills, but they are somewhat different and need to be reconciled if ever to become law. Such reconciliation occurs in a Conference Committee with reps from both houses. It is now unofficially underway.
Don’t assume, in this step, that the modus operandi will just be to just split the differences that exist. Some will just be split, but other compromises will go off in unexpected directions
Also, in this step, before final votes on what must be identical bills in both houses, new features not in either house’s version can be introduced.
THERE WILL BE SURPRISES.
There are many…many…moving parts. Taking ANY single change in isolation is unwise when you think about your own tax bill.
Passage of tax reform is highly likely but not guaranteed before Christmas. The biggest threats are the votes of Susan Collins of Maine who is holding out for a parallel bill reallocating money for insurance companies to subsidize out-of-pocket expenses of those on the Obamacare exchanges and Marco Rubio who is holding out for the Senate’s higher {$2,000] child tax credit. The Republicans can afford to lose one of the two in the Senate but not both. Collins is iffy while Rubio will throw away any chance he has of ever being President or a major national leader if he single-handedly defeats 2017 tax reform over $400 in child tax credits.
Stay tuned but don’t hold your breath as drama and changes will come for at least another week or two.
This legislative process has been rushed through and mistakes and judgement errors are going to be made in adjusting the hundreds of important elements of the tax code. Don’t be surprised to see a “corrections bill” sometime during 2018.
Also, President Trump has hinted at further tax cuts and reform to come in future legislation, as have congressional leaders.
Predictions
No changes this week.
Political Predictions – Elections
- The chance the Rs will lose at least a few seats in the 2018 House elections is 80 to 90 percent.
- The chance the Rs will lose their 241-194 House majority in 2018 is 10 to 20 percent.
- The chance the Republicans will still control the Senate after next year’s elections is 90 to 95%.
- The chance the Ds lose three or more of their 48 Senate seats in ’18 is 85 to 90 percent.
- The chance that Donald Trump will be the 202o R nominee is 90 to 95 percent.
- The chance that Trump will win a 2nd term is 80 to 85 percent.
Policy and Legislative Predictions
- There is an 90-95% probability the Congress will pass and Trump sign major tax reform and tax cuts for most by early 2018.
- There is a high probability that Obamacare will be very substantially changed by the tax reform bill under consideration and other legislation that will follow in the next month or so.
Trump and the White House
Wither Special Prosecutor Mueller, the FBI and DOJ
Some on the far right are screaming that President Trump should fire Special Counsel Mueller. Others like Karl Rove point out the political damage of doing that and strongly recommend against.
A third way to look at the issue is to understand the current facts and see where they take you.
Those facts include:
- There has been no credible evidence of Trump Team-Russia pre-election collusion. [Such may not be true of Clinton Team-Russian collusion.]
- The Mueller investigation now seems focused on obstruction of justice, not collusion. [There is serious legal doubt the President can obstruct justice and James Comey himself said publicly that Trump had every right and authority to fire him for whatever reason.]
- The most important, recent events and facts reveal that senior Mueller team, DOJ and FBI officials, have proven, egregious biases against Trump. By legal definition and guidelines, that contaminates anything, process or evidence, they had a role in anywhere in any legal process connected to this case. These people include Peter Strzok, Andrew Weissman, Bruce Ohr, Andrew McCabe and many others.
- Federal legal standards of evidence and procedure require any prosecutor to disclose exculpatory or impeachable information to criminal defendants and to “seek a just result in every case”. [One wonders if General Flynn got such information.] DOJ guidelines require its prosecutors to disclose evidence of witnesses’ biases, animosity toward defendants or toward a group to which they belong. Such standards make it likely that every step taken by the Mueller team and the DOJ and FBI is contaminated and could be ruled inadmissible.
- There are now numerous Congressional committees investigating the actions of the Mueller team members, and DOJ and FBI personnel in the Trump case and many other “political” cases. Many highly questionable actions by the Mueller team, DOJ and FBI personnel have already been documented, not just asserted. Many more are likely to surface.
- Existing facts call into serious question much of the evidence in this inquiry including the evidence that was used to justify the inquiry in the first place.
Now let’s jump ahead and imagine an actual trial of someone on Trump’s team. [Remember, Trump himself can only be indicted [impeached] and tried by the Congress.]
- Imagine the pre-trial motions and in-trial motions if all or almost all of the evidence was proven to have been processed in some way by a prosecutor or investigator proven to be biased against Trump. Also, imagine the consequences of the legal process itself having been so contaminated at one or more steps. What would the judge allow to be admitted? Would the judge even allow the case to proceed? Would a grand jury indict based on such evidence?
Put aside the legal niceties for a moment and recognize that this entire process is not just a legal one but a political one. Every juror is going to know that, be they trial juror or grand juror.
- Given the discrediting of the Mueller staff and those of the DOJ and FBI already proven and sure to be bolstered further how is any FAIR JUROR, Republican, Independent or Democrat going to vote to convict? And, we have seen many recent cases of juries making decisions based on politics or ideology rather than the law and facts.
In light of these facts I don’t expect Trump to fire Mueller or do much other than officially and scrupulously cooperate while also lobbing testy tweets into the tweetosphere pointing out biases.
There is an old rule in politics. When your enemy is destroying themselves bid them continue.
Supreme Court Travel Ban Ruling
A hugely important Supreme Court ruling came down last week effectively telling federal judges that the President has full Constitutional power to regulate who comes into the US.
It got very little attention in the press because they didn’t like the ruling or implications.
I have predicted this outcome as have many conservative and independent analysts since the first Trump travel ban was promulgated. From the beginning the bans were constitutional. In a 7-2 decision with two liberal judge’s votes the Supreme Court has signaled, strongly, that the President has the almost absolute authority here under the Constitution. All five conservative judges stayed the contrary ruling of the lower courts as did liberal Justices Breyer and Kagan. As usual, Justices Bader-Ginsburg and Sotomayor were way out in left-field.
I will speculate that one of the reasons Breyer and Kagan voted the way they did is that they realize that a future Democratic President will require such clear and unambiguous power.
Bader-Ginsburg and Sotomayor seem to live only in the immediate and rule accordingly, with little regard for the precedents they might be setting.
Only one person in our system, can be responsible for the security of the nation. Any other answer is functionally unworkable. It doesn’t make any difference if it is Obama or Trump, it has to be the President.
Democrats
Impeaching Trump
Last week the US House voted on a Democratic resolution to impeach Donald Trump. It lost 364 to 58 with all Republicans voting against as well as most Democrats, including the Democratic leaders.
The leaders argued it was premature to move on the issue.
But Trump is highly unlikely to ever be impeached and it is virtually impossible that Senate will ever vote to remove him from office.
Let’s take two scenarios, in both of which Trump commits egregious acts that fit the label “high crimes and misdemeanors”. That is what the Constitution requires for impeachment [equivalent of indictment] by the US House and removal [trial and conviction] by the US Senate.
Scenario #1 is the Rs holding the US House majority in the 2018 election. This scenario is highly likely from my analysis and if it occurs the probability of Trump being impeached [indicted] is negligible.
Scenario #2 is the Ds gaining a small House majority in 2018…at most, something like 220-215. Many Ds know Bill Clinton was politically STRENGTHENED by the impeachment process in 1998. It made him a political martyr.
And, not one Democrat in the Senate voted to remove [convict] him.
It is very unlikely the Ds will ever vote to impeach Trump unless he does something ridiculous.
And, even if they did impeach him the odds of any significant number of Republican Senators voting to remove and to get to the 67 votes necessary are virtually ZERO.
So, it is all political theater and a pipedream. Trump fans should just relax, and Democrats need to “get real”.
Media
The Media Dilemma About Sexual Harrassment Continues and Expands
This is repetitious but worth serious contemplation and thought…
As sex abusers and harassers are appropriately called out, the mainstream media has a real dilemma.
Who do they want to destroy… and who to save?
Who gets sacrificed? Who do they attempt to save or hide?
What are the standards and the rules?
Right now, the media, politicians and the society as a whole have NO CLEAR ANSWERS.
Don’t forget the Tuchfarber 30 Day test—when you get upset about something in the news, ask if it is likely to be IMPORTANT IN 30 days or so. Only seldom will it be so and you can usually ignore it.
Global Politics
US Embassy to Jerusalem
President Trump officially started the process of moving the US embassy in Israel from Tel Aviv to Jerusalem. That has been the US’s stated policy for decades, but Trump is the first to act on it where Clinton, Bush and Obama campaigned on it but reneged.
Of note here and in many other areas, regardless of whether you like his campaign promises, Trump keeps most of them.
Many proclaimed the “sky is falling” … as always.
What actually transpired?
To understand the answer a few background facts are in order.
- The Palestinian cause have become marginalized because they have been totally unreasonable in their demands for decades. And, for most of the Sunni Arab countries destroying Israel is no longer a goal.
- In fact, there is now a strong Sunni Arab-Israeli alliance in existence, although it has only been partially acknowledged. It is an alliance against Iran and Shiite Islamists in the Middle East.
- The Islamic countries had to issue pro-forma protests. They did.
- The anti-Israel European countries were sure to urge the continuation of the unproductive status quo. They did.
- The Palestinians were sure to protest with violence as they always do. The questions were how much and how long?
After three days of moderate violence the Palestinian rage weakened greatly on Saturday and on Sunday…
No, the sky is not falling and once again Trump has punctured the status quo. That does NOT mean things will surely get better, but it does mean something new is being tried. The status quo has been a failure for decades. Why continue it?
China’s Politics and Economy
China Watch
- The International Monetary Fund [IMF] reported last week that China’s banks have insufficient capital to weather a credit or debt crisis. The problem is widespread but especially focused in the rapidly exploding “wealth management “arena and in the broader shadow banking arena where the authorities have not been able to keep up with “innovative” approaches by a variety of financial actors.
- Last week also, Reuters published a detailed story outlining huge amounts of fraud in the Chinese mortgage industry.
- China is becoming more and more authoritarian, forcing its tech companies and US tech companies to monitor Chinese citizens and make the results available to the government.
- The US and Europe are increasingly unwilling to let China flout the World Trade Organization rules it pledged to abide by when admitted is 2001.
- China is trying to get more serious about regulating its shadow banking industry, and especially investments known as “wealth management products”. These are sold by financial institutions, including many banks, as investments. Technically they are NOT guaranteed by the seller or the government, but Chinese investors have assumed they are. The government is now making clear these products are not guaranteed by the government or major banks owned by the government. Such reform is essential but will inevitably substantially slow economic growth as less credit will be available to spur economic activity. And, credit has been the main fuel for Chinese growth since 2009.
Musings
“MUSINGS” is a new section dedicated to keeping true to the facts but also speculating a bit.
Sexual Harrassment… Hysteria… and Glass Houses
As I muse about the current political and societal crisis surrounding sexual harassment and abuse let no one doubt I believe that Harvey Weinstein, John Conyers [D], Matt Lauer, Al Franken [D], Kevin Spacey, Trent Frank [R], Charlie Rose and Joe Barton [R] are getting their just due. Their “sins” are recent, clear and egregious.
There will be many thousands of others in politics, public life, the media, and in private businesses brought down by similar behavior.
Serious, recent and egregious sexual harassment and abuse are unacceptable in American society.
But… I offer three cautions for all to consider as we move forward:
- Let’s be clear about what the standards, rules and “legal” procedures we are going to apply to past and future behavior. Mob justice, kangaroo courts and lack of a rule of law are very dangerous for the well-being of our society.
- Let’s not get into hysteria like societies have done in the past…let’s avoid witch trials, anti-group pogroms, McCarthy style tactics or kangaroo courts.
- Let’s be careful that hysteria doesn’t take us unwisely and willy-nilly into additional hysterics over other areas of morality such as illegal drug use, infidelity, abortion or domestic abuse. Think about the secondary and tertiary effects of what you are doing if you are in a position of power over any of the people that get accused in this societal crisis.
There are many slippery slopes we are nearing.
And…a caution to many…PEOPLE IN GLASS HOUSES SHOULD NOT THROW STONES.
Imagine every male and female, including you, being forced to answer these questions:
Did you EVER sexually harass any male or female?
Did you EVER cheat on a spouse?
Did you EVER do illegal drugs?
Did you EVER lie or steal?
Did you EVER abuse anyone?
How many of us would be left with a job if all the answers had to be NO?
Think about it…
Until next week…
Al Tuchfarber
Professor Emeritus of Political Science, University of Cincinnati