Archive for the ‘Economics’ Category

Visiting sunny tropical Iceland

April 23, 2018

Years back we made the mistake of visiting Washington, D.C., over Christmas. It was bitterly cold. I vowed no more icy vacations!

My wife’s windblown selfie

So this time we chose . . . Iceland. Well, how cold could it be in April? And wet, and windy? I didn’t realize it’s supposedly the third windiest place on Earth. The other two are uninhabited.

But it was fun. Long underwear helped.

Iceland is a small country, and sparsely settled; population only a third of a million (about equal to Anaheim’s). Partly because it is indeed fairly inhospitable. Its first settlers, in the Ninth Century, could just barely eke out survival. They came from Norway. How awful must Norway have been?

During Iceland’s next thousand years things only got worse. They quickly consumed all the island’s trees, thereafter making do with driftwood. And it grew colder.

The only saving grace was self government, of a sort, embodied in the Althing, an annual gathering for making laws and settling disputes (which seemed to be legion), presided over not by a king but the “law speaker.” Iceland’s Althing continued more or less continuously since the year 930; today the parliament still bears that name. We visited the place where the ancient Althings were convened.

Luxurious traditional Icelandic homes

But otherwise Iceland’s history was grimly depressing. Windy though the place is, the winds of progress passed Iceland by, and the Middle Ages continued there until the middle of the Twentieth Century. Epitomizing this is the language being virtually unchanged over the millennium. Try reading or understanding Ninth Century English (if you could call it “English”).

Also, Iceland never developed the modern convention of people having last names. Instead, Bjorn’s son Eric goes by Eric Bjornsson; his daughter Ingrid is Ingrid Bjornsdottir. (I suppose transsexuals change both their names.) This makes it fun trying to look someone up in a phone book.

Iceland was finally blasted from a medieval existence into modernity during World War II. A possession of Denmark, which was occupied by the Nazis, Iceland was preemptively occupied by the Brits and Americans. Then it took the opportunity to declare independence from Denmark in 1944. Foreign investment, and tourists, poured in, and Iceland, in a few decades, vaulted into First World ranks.

Seeking some breakfast our first morning in Reykjavik, we went into what looked like a very modest little place. A chocolate covered croissant seemed tempting until we saw it was $17! Such prices are very typical, showing how “advanced” Iceland has become. The Economist has a “Big Mac Index” gauging how over- or under-valued a nation’s currency is by reference to the local price for a Big Mac. That’s a universal commodity — except in Iceland, which has no McDonalds restaurants. But according to one analysis based on comparable burger prices, Iceland’s currency is actually the most overvalued in the world (i.e., its prices are the highest).

Nevertheless, its people are imbued with a very positive attitude. We got a wool-making demonstration, by a gal named Harpa who characterized herself as “hyper.” She was so animated and bubbly that it made this wool demonstration a highlight of the trip for me.

Speaking of positive attitude, my wife’s, as always, greatly enhanced the experience. She enthusiastically appreciates everything and never complains about anything.

Me, under a waterfall

Another trip highlight was our glacial lagoon boat ride. That glacier is the biggest in Europe. The lagoon had only just unfrozen, and was still full of ice crunching under our open rubber boat. We were encased in rubber ourselves — looking like astronauts in space suits. Getting suited up took longer than the boat ride. And it didn’t keep us from getting wet in the cold rain. But . . . you had to be there.

We also visited the Eyjafjallajokull Volcano, whose 2010 eruption messed up European air travel. Actually, we couldn’t see the volcano itself; but a farm at its foot had set up a visitor center, showing a really excellent home-made film about the eruption’s impact on them. Our visit was just about the last before the facility was closing so the family could get back to full-time farming.

Then there was the Blue Lagoon, touted as the world’s biggest jacuzzi. It’s heated by geothermal action and clouded with silica and other minerals. It was a weird sensation to have one’s body in hot water with the head (slathered with mineral goop) exposed to a cold breezy drizzle, while the whole scene is enveloped in a steamy mist (so I couldn’t see much of the bikinied babes). But, again, you had to be there.

The one key attraction we missed was Reykjavik’s Penis Museum. Maybe next time.

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It’s your economy, stupid

March 25, 2018

Presidents are usually judged mainly on the economy, which most voters care most about. (“It’s the Economy, stupid.”) Yet in truth a president’s economic performance is mainly just luck. He doesn’t run the economy; his actions normally have very little impact on it.

The start of Obama’s term was a rare exception, an economic crisis where he was looked to for leadership. Influencing the economy more than the actual measures he took was their psychological effect. You can argue all day about those measures, but they did combat pessimism, which shaped people’s behavior, and thus boosted the economy. So it’s fair to give Obama some credit.

Trump came into office lucky on the economy. It was doing great. And the prospect of tax cuts and deregulation added to the fizz. All Trump had to do, really, was not screw things up. Which — given a president’s limited ability to actually impact the economy — should have been a piece of cake.

But Trump is a poster boy for the Dunning-Kruger effect I’ve written about: the dumber people are, the less they recognize their dumbness. Trump understands nothing about the global economy while feeling certain he understands everything. A deadly combination.

And he managed to find the one thing within his power to screw up the economy. He can’t set interest rates, regulate the money supply, or by himself make tax and spending policy. But he could start a trade war.

I’ve explained before why this is so dumb. It doesn’t take a PhD in economics to understand that import tariffs — virtually always — hurt more people than they help and weaken the overall economy in multiple ways. U.S. businesses mostly become less competitive, consumers pay higher prices, jobs are lost not gained, interest rates rise, our exports become costlier and hence fall, so our trade deficit is more likely worsened than improved.

And that’s even without other countries retaliating. When they do, as China and others are, that hurts U.S. businesses, jobs, consumers, and our trade position even more.

But do those other countries also take a hit? Oh yes. Tariffs make the whole world poorer. It is a “beggar thy neighbor” policy. An overall poorer world is not good for America — not for our economy, nor our national security.

It’s true that China is guilty of bad things in the realm of trade and commerce (like stealing intellectual property, to name just one). But the self-inflicted wounds of tariffs are surely not the right answer. A far better one would have been the Trans-Pacific Partnership trade deal, which America had negotiated with 11 other Asian nations, precisely to combat China on trade. Trump pulled out of TPP on his first day.

His tariffs make Trump like the character in “Blazing Saddles” who took himself hostage by pointing a gun at his own head. Trump has pulled the trigger.

Dow down another 1150 points.

The tariffs: economic nationalism or economic madness?

March 2, 2018

Trump is slapping stiff tariffs (i.e., taxes) on steel and aluminum imports. He says it’s to protect our “vital” steel and aluminum industries from foreign competition. Which he calls “unfair” and “disgraceful” (two of his favorite words) because foreigners sell the stuff cheaper than us. So unfair!

This is part of Trump’s “America First” economic nationalism. Here’s why it’s idiotic:

1. It protects American aluminum and steel companies — a very small part of our economy (we no longer make much steel) — at the expense of businesses that use aluminum and steel — a very big part. Their aluminum and steel supplies get costlier. Making them less competitive against foreign manufacturers. Studies have shown that in such cases, we lose many times more jobs, in all those affected industries, than are “protected” by the tariffs.

2. It raises prices for consumers, on all items made with aluminum or steel. That reduces consumers’ living standard and purchasing power, causing a reduction in other things they might otherwise have bought, which in turn costs jobs in all those industries.

3. The higher consumer prices raise inflation, and thus interest rates, which also flow through to consumers and make U.S. businesses further less competitive. And given the huge national debt, every bump in interest rates costs taxpayers a bundle, and worsens our already dire fiscal situation, weakening America.

4. Higher interest rates also push up the Dollar’s exchange rate vis-a-vis other countries’ currencies, making all our exports more expensive to them, thus reducing our exports and related jobs.

5. Other countries will likely retaliate by slapping tariffs on stuff we export, thus causing us yet more job losses, even threatening a broader trade war. (Which Trump moronically calls “good” and “easy to win.”) We’re antagonizing our foreign friends, making fools of ourselves, and undermining our international influence and standing.

Understanding all this doesn’t take a business genius (stable or otherwise). No economist disputes it.

Trump, and the aluminum and steel guys, say fair trade is fine, but China isn’t playing fair, it’s cheating. How? By making too much steel  and selling it too cheap! Adam Smith said in 1776 that if another country wants to sell us something too cheap, we should take advantage of the bargain. Rather than trying to compete with them on steel, we should instead concentrate on other industries where we have what economists call our own comparative advantage. Every country doing that makes the world richer.

Adam Smith

Flouting this logic doesn’t “protect” our economy, but harms it. Tariffs always hurt the nation imposing them. That will be true of those retaliating against us with tariffs of their own. They’ll hurt themselves too. But they’ll probably do it anyway, to teach us a lesson, and also because they (and their voters) are not always so smart either.

Protectionism is politically seductive because some people get big benefits, while the vastly greater number who get screwed don’t realize it.

Trump’s view of trade centers upon the old-time mercantilist fallacy that imports exceeding exports is bad (which Adam Smith labelled “absurd”). Trump says China “rapes” us by selling us more than it buys from us. If that’s true, I get raped by a lot of coin dealers. But in fact we make such purchases because it’s advantageous. Walmart buys things from China (and I buy coins) to make money. Consumers buy them to save money. Trade is not a zero-sum game, it’s win-win. A no-brainer.

Too bad we have a no-brain president.

Wall Street gave its verdict on Trump’s tariffs, the Dow promptly plunging 420 points.

Stock market drop

February 10, 2018

I didn’t grasp how much the market had fallen till I received this account statement in the mail from my brokerage:

 

Of babies and bathwater

January 15, 2018

Libertarians tend to be skeptical toward government because it too often uses sledgehammers to kill ants, throws babies out with bathwater, and punishes the many for the sins of a few. (Like TSA, incapable of smart targeting, punishes all air travelers; confiscating, because of some past liquid bomb plot, the coffee bottle my wife forgot was in her bag.)

Advocates of free market economics do not actually call for “unfettered” capitalism. Just like we’re all subject to laws against jaywalking and murder, etc., the same principle applies to businesses, to protect us from harm. But there can be too much of a good thing.

India is a clear lesson, having suffered, since independence, from its founders’ infatuation with the idea of socialism, producing an excess of government and regulation. It’s been called the “Licence Raj.” Whatever notional harm this thicket of rules supposedly protected the public against, that was far outweighed by suffocating the economy and thereby keeping Indians a lot poorer than they need have been. (Another sardonic Indian expression for this was “the Hindu rate of growth.”) Thankfully, India started undoing all this after a 1991 financial crisis, and Narendra Modi’s government, elected in 2014, promised to do more to let business do business.

But two recent episodes show that India hasn’t unlearned its bad habits.

Government’s main economic role should not be constraining businesses, but facilitating them, by creating the conditions for commerce to thrive. For example, a sound judicial system wherein legal disputes can be fairly and efficiently resolved. Another critical role is providing a money supply, the lubricant of commerce.

Modi’s government thought it had a problem with tax-evading business people hiding cash. Maybe it did. Its answer was an attempt to catch them out by invalidating, on short notice, the highest value banknotes — 86% of the money in circulation! Economic chaos ensued with citizens queuing for hours outside banks trying to exchange their old notes — with strict limits — for new ones that were in short supply — prompting a mad scramble to find other ways to buy, sell, and get paid. While many poor people lost savings.

Punishing the many for the sins of a few; a sledgehammer to kill an ant; a baby thrown out with bathwater. (Meantime, it doesn’t even seem that black marketeers were inconvenienced much. Unsurprisingly, they found ways around the restrictions.)

Now a second Indian tale. Another problem is rampant car crashes, often caused by drunk driving. India’s latest brilliant answer: a Supreme Court ruling barring alcohol sales within 500 meters (about 1500 feet) of a state or national highway. Location near a highway used to be advantageous for such businesses. No longer. Indeed, the ruling could potentially close 100,000 bars, costing a million jobs.

Punishing drunk driving makes sense. Punishing an entire legitimate industry– indeed, the entire country — does not. More sledgehammers and ants; babies and bathwater. The victims of this insanity also include state and local governments, which stand to lose billions in alcohol taxes. But many are taking evasive action, by hastily reclassifying state highways into district or municipal roads. Some wags say the true reading of the new rule is “No road shall be classified as a highway within 500 meters of a bar.”

Maybe India will next literally require throwing out babies with bathwater. As a population control measure, of course.

America’s state capture

December 24, 2017

               “The world sees how bad the United States is.”

                                           — Donald J. Trump, 2017

The tax bill is heralded as Trump’s big legislative win. In fact — having built his fortune as a grifter — it’s his biggest scam. At over a trillion dollars, probably the biggest heist in history.

Republican lawmakers duly performed a leader-worship extravaganza sickening for a democracy. One commentator called it ring-kissing; but what was kissed this Emperor’s clothes don’t cover. These sycophants do it because Trump laps it up. Foreign governments too have figured out how flattery turns him to jelly.

“State capture” means looting the state for private benefit. The term was coined in South Africa, where President Jacob Zuma and his business cronies, the Gupta brothers, hardly even bother to hide their corruption.

Zuma

Zuma was the example I cited when, after our 2016 election, I wrote that giving bad men power never makes them better. That such men have a golden opportunity to prove doubters wrong, and become heroes. But they never do. Creeps only become creepier.

The latest is Zimbabwe’s Mnangagwa. Following one of the baddest baddies ever, he too had a golden opportunity.

Mnangagwa

So awful was Mugabe that it wouldn’t have taken much for Mnangagwa to look like Gandhi by comparison. And he promised a new leaf. But already it has the same putrid stench as the old leaf.

In South Africa, Zuma’s presidency has nearly ruined the achievement of the country’s transition to democracy. But there’s hope. The ruling ANC party met recently to choose Zuma’s successor, and he failed to swing the vote to his ex-wife (or to derail it). The winner — by a whisker — is Cyril Ramaphosa — just possibly a good man.

Trump is not. He too could have proven naysayers wrong; instead he’s proven we underestimated his badness. Yet a third of Americans still love him. Compare Brazilian President Temer’s approval rating of just three percent. Three! And he’s much less bad. But the difference is that Brazilians see clearly, not blinded by the disease afflicting America: partisanship trumping everything.

And so we get this tax bill — probably the foulest legislation in U.S. history, combining cravenness of intent with hugeness of impact. Looting the Treasury to the tune of over a trillion, mainly to benefit fatcats like Trump himself. His saying it will actually cost him money — “believe me, believe me” — is a stupendous lie. Among the bill’s biggest beneficiaries are what are called “pass-through” business entities. Of which Trump owns approximately 500.

And in the debates, Trump said the “carried interest” loophole, which also benefits him, should surely be scrapped. Was it? Of course not.

The entire bill is one big lie. No, two. First the lie that it’s a gift to “the American people” when it’s overwhelmingly for corporations and the richest, ultimately paid for by the rest. And the lie that it will pay for itself, and benefit the less affluent, by stimulating the economy.

Mnuchin’s teeth

No serious economist agrees. Treasury Secretary Mnuchin lied through his teeth (literally; his normal speech mode) about his own department’s analysis of the bill’s impact.

As both economic and social policy this is insane. Republicans railed against Obama’s 2009 stimulus bill as a budget buster, at a time when the economy was desperate. Today’s economy is, in contrast, humming nicely, with unemployment less than half, yet Republicans slate an even bigger unneeded stimulus. One that in fact will eventually harm the economy by increasing the megatonnage of our national debt bomb.

I mentioned social policy. Ever hear the word “inequality?” Trump was elected, in large part, because of middle- and working-class economic anxiety. Yet it’s the rich this tax bill coddles.

And it sets the stage for worse to come. Targeted next is “entitlement reform.” Indeed, the long looming fiscal hemorrhage of Social Security, Medicare, Medicaid, etc., is worsened by the tax giveaway, making reform even more imperative. What’s needed is curbing welfare for the rich. But will Republicans do that? If their tax heist is any clue, they’ll instead use that very legislation — which slashes the money available for social programs — as a pretext for a “reform” cutting those programs for the neediest while preserving hand-outs for the people who . . . donate to their campaigns.

Merry Christmas! Make America great again!

The Founder — what is business for?

December 16, 2017

Ray is a middle-aged guy with a history of dicey, failed business schemes. Now he’s on the road pitching a super milk-shake machine to restaurants, promising it will boost their sales. Nobody’s interested. (And when eating at these joints, he hates the lousy service and food.)

Then he learns that a San Bernardino eatery has ordered eight machines! Curiosity impels him to drive across the country just to see it. There’s a long line outside. “Don’t worry,” he’s told, “it moves fast.” At the window he gives his order. Seconds later he’s handed a paper bag. “What’s this? he asks.

“Your meal.”

“But I just ordered.”

“Right.”

Disoriented, Ray sits on a bench, and bites into his burger. It’s the best he’s ever tasted. The look coming over his face reminded me of the prehistoric tale, Quest for Fire, when Naoh, the leader, is gobsmacked seeing the girl from a more advanced tribe demonstrate what he’d never imagined: making fire.

Ray is Ray Kroc. The year: 1954. The restaurant: a solitary local establishment named McDonald’s.

The rest, as they say, is history; told in the movie, The Founder, with Michael Keaton as Ray.

The restaurant’s owners, two brothers named McDonald, give Ray a tour, explaining how, with scientific attention to detail, they’ve created a unique system for delivering food both fast and good. Blown away, Ray hits on the idea of franchising it. The McDonalds say they’d already tried that, and failed, because they couldn’t master quality control from afar. Ray thinks he can, and persuades them to join with him.

They sign a contract and, overcoming some tribulations, Ray builds the empire with great success. But tensions with the McDonald brothers grow. The film portrays them as virtuous, but too virtuous; their refusal to agree to Ray’s sensible business ideas comes across as unreasonable. Finally, Ray buys them out for what seems an extremely generous cash settlement.

The settlement includes removing the McDonald’s brand name from their own restaurant. Eventually, the brothers are driven out of business altogether . . . by competition from a nearby McDonald’s. A text screen at film’s end also notes Ray’s dishonoring a handshake promise of 1% of future earnings.

Along the way, Ray meets smart and comely Joan, wife of a franchisee. Uh oh, I said to myself, will the movie now devolve into a messy marital saga? Happily, no. Ray’s first wife is swiftly dispatched, with Joan seen again only fleetingly in a final flash-forward scene.

Hollywood is dominated by people on the political left, with anti-capitalist, anti-corporate bents. Its films reflect this. Maybe strange, since after all they are produced by corporate types making lots of money working for big businesses. Yet they do portray business in a relentlessly negative light. In movies from It’s a Wonderful Life to Erin Brockovitch to Avatar to Robots (and, yes, Super Size Me), the villain is typically a ruthless, greedy businessman or corporation, criminally trampling human values. So pervasive is this theme in popular culture that it’s no wonder so many people revile the whole idea of business and commerce.

The Founder is, unusually, a more balanced and mostly positive portrayal of business. Ray is chiefly a sympathetic character. Even when he plays hardball with the saintly McDonalds, we see why he’s kind of right to do so (except for that final bit about the percentage). Though aiming to make money, Ray, and the McDonalds, were impassioned primarily by their vision for giving people excellent products and service. That could not be accomplished without the business earning a profit.

Steve Jobs too exemplified this: he made a lot of money, but saw that only as empowering him to make great products. It was the products, not the money, that he cared about.

This is the fundamental concept underlying business in general. You profit by giving customers something they value more than what they pay. But that idea gets submerged amid all the anti-capitalist, anti-corporate messaging, infecting even business people themselves

The PBS Newshour recently featured famed glass artist Dale Chihuly and his art-producing “factory.” The interviewer confronted him with criticisms that it is indeed “just” a money-making operation. Chihuly couldn’t answer except by agreeing (only when prompted) that the enterprise, with all its employees, could not continue unless it made money.

Chihuly and creation

He should have said: “What’s created here gives pleasure to people who buy it, own it, view it, and experience it. They value that more than the money they pay (or else they wouldn’t pay it). So yes, we make money, but we make it by making a better world.”

Inequality, wage stagnation, and free stuff

December 6, 2017

Recent years have seen much agitation about inequality, and the seeming fact that middle-income earnings have risen very little, if at all, in recent decades. Some see this as the rich “hogging” all the societal wealth gains.

Inequality is a real concern. Society is ever more bifurcated between the well educated and the less educated.

However, there are a number of reasons why that ostensible wage stagnation is not what it seems. First, wage comparisons over time must factor in inflation. But most economists know that government inflation indices are themselves inflated, overstating the true fall in the dollar’s value. Compounded over decades, this significantly understates the current worth of today’s pay.

Also, such wage numbers generally omit fringe benefits, which are increasingly important. The biggest one is health benefits which have risen greatly in both cost and value over decades. When that too is factored in, today’s workers are again seen to be earning more.

A further factor was highlighted by a recent piece in The Economist, which really made me sit up and take notice. It’s the value people get out of the internet. This adds to living standards and the quality of life one has with a given income level. And it’s more significant than you might guess.

The Economist reports how some researchers made estimates of the value of web goodies based on how much money people would demand, when asked, to give them up. These are necessarily crude estimates, yet they are eye-popping.

It’s $900 a year for YouTube and other video; $2800 for maps; $750 for Facebook; and a whopping $16,600 for search engines. (The Facebook estimate seems very low to me in comparison to the others; it may reflect that many people have a love-hate relationship with Facebook, considering it a sinkhole of time). Anyhow, this again gives at least some idea of the value of these services, to the average American.

We get these goodies essentially free. Of course, we do “pay” by giving web businesses data they use to target ads at us. But it’s a very one-sided deal. The Economist notes that, as against the $750 estimated value of Facebook to an average user, Facebook eked just $4.65 in ad revenue.

True, this has still made Mark Zuckerberg very rich. But it points up the fundamental fallacy of the rich getting their wealth at the expense of the rest. Zuckerberg provides users with value over a hundred times what he gets. That indeed is the essence of commerce: businesses profit by selling things for less than their value to buyers. That’s how the whole world gets richer.

New depths of depravity

December 3, 2017

“Believe me,” he says, “believe me.”

A constant verbal tic. As if his subconscious knows he won’t be believed. You might think a man widely called a liar might try to avoid lies. But au contraire. He shoves his thumb in our eye.

“Believe me,” he said, regarding the tax bill, “This is going to cost me a fortune. This is not good for me. Believe me.” He said the “wealthy and well connected” aren’t benefiting and are actually mad at him because the bill is ending a lot of their loopholes. “I don’t care,” he said.

All huge lies. Does he think people are fools? Well, his supporters, yes.

Or does he delude himself that having concealed his tax returns he can now deny the nevertheless obvious fact that this legislation will benefit him personally, to the tune of hundreds of millions of dollars? What mental disorder is this?

But the big lie is claiming to help the middle class. In reality (yes, reality still does exist) middle class people will get crumbs at best, many will actually pay higher taxes, while the wealthiest, and corporations, make out like bandits. Moreover, while the latter give-aways are permanent, the benefits for the less wealthy expire in five years, so most of them will be paying more. This will happen, conveniently, in the next administration. Do they imagine the next president will get the blame?

It’s also a brazen political hit, targeted against wealthier states like New York, California and Massachusetts, which happen to have higher state and local taxes — and happened to vote against Trump.

And the idea that the tax cuts will trickle down to the less wealthy because businesses will hire more and pay more is another big lie. American businesses are already sitting atop piles of excess cash. And meantime, whatever stimulatory effect these tax cuts might have will be cancelled out by their blowing up deficits and national debt, which will ultimately wreck our economy.*

Then Trump re-tweeted stupid phony videos disseminated by an extreme right-wing British hate group to smear Muslims. Talk about fake news! A disgusting witless act by the President of the United States. Almost the entire British nation (including even Nigel Farage!) came together in shock to condemn it. (In response Trump tweeted an insult at Britain’s prime minister.)

The irony is that if he’d wanted to show Muslim atrocities, instead of this fake garbage he could have used pictures of children tortured by the Syrian regime; or James Foley’s head sawed off; or the Jordanian pilot burned alive; or, for that matter, 9/11; and the New Jersey Muslims celebrating it. (Oops, that was another Trump lie.)

Even more disturbing is that, despite everything, Trump’s approval rating still holds in the high thirties. In any other country, or in our own past, a leader behaving so egregiously would have forfeited all support. But today’s America is afflicted by extreme partisan tribalism.

Fools will say I should just shut up already, give it up, suck it up (and what about Hillary). Sorry, this is not normal politics. My beloved country is being defiled, and it breaks my heart.

* Only one Republican senator, Bob Corker, had the sense and integrity to vote no — literally the last man standing.

The Republican tax plan: “A big beautiful Christmas present” or coal in our stockings?

November 4, 2017

The real question: why?

Why this Republican tax proposal? Well, it’s billed as “reform,” and God knows our federal tax system is an ungodly mess crying out for reform. But this bill isn’t it. Fewer brackets means nothing. Admittedly, eliminating some deductions and, particularly, the Alternative Minimum Tax would be significant simplifications. Yet in other ways, new complications are actually added. Trump’s saying nine out of ten would be able to file on a postcard is a lie even biglier than usual for him.

It’s also a lie to call it the biggest tax cut in our history. It would be true if Trump had added the words for corporations.

And why cut taxes? Because they’re too high? When for decades government spending has exceeded taxes by hundreds of billions of dollars yearly? When the federal debt now tops twenty trillion?

Republicans — supposedly the party of fiscal conservatism — originally were supposedly aiming for a revenue-neutral reform — that is, making up the cuts by getting revenue elsewhere, like capping 401Ks. But of course taking any benefit away from anyone is political poison. So predictably, they jettisoned any notion of paying for the cuts. The budget they passed recently (with virtually no debate) permits them (due to arcane rules) to now enact a tax cut costing a whopping $1.5 trillion, over 10 years, with only 50 Senate votes, rather than an impossible 60.

But even with that giant window, making the math work is very hard. Especially with corporations getting most of the $1.5 trillion available. Additional fat cuts for fat cats necessitate compensatory tax increases for many middle and upper middle class folks. At best, some less affluent people will get peanuts, while caviar is served to the richest and, especially, corporations.

After decades of Democrats caricaturing Republicans as caring only for the rich, the GOP is now shamelessly proving it. When economic inequality has been a growing concern, to propose a tax bill that will significantly aggravate that inequality is disgraceful.

But they say the aim is to stimulate the economy, spur growth, and create jobs. Producing so much more income, and thus more tax revenue, that the cuts will pay for themselves. They’ve been making this argument for forty years. It has never proven true. A tax cut might be stimulative if it put money in the pockets of Joe Sixpack who’ll spend it. But not when most goes to the rich who’ll just save it. And corporate hiring simply has nothing to do with how much tax they pay on profits.

Meantime, the whole growth stimulation idea ignores the impact on deficits and debt. Which are set to explode in years ahead as ever more older people collect pensions and benefits while ever fewer work and pay taxes. We can finance the gap by borrowing, as long as interest rates remain at historic lows. But if ballooning debt spooks the financial markets, interest rates will spike up, and we won’t be able to afford much except interest payments. That makes cutting taxes suicidal economic insanity.

And snuck into the bill is this hidden stinker: repealing the Johnson Amendment, which bars churches from partisan politics. A terrible idea. (Read about it here.)

No wonder they want to ram this through quickly, without any pesky hearings or debate. Before anybody can really figure out what’s happening. Just like they tried to do with health care. Rushing such a hugely complex and consequential plan is also disgraceful and crazy.

But finally, for Republicans, the real reason behind all this is not economic policy. It’s more like religious belief. Tax cuts are a matter of faith, comparable to belief in God for Christians. Never mind economics, reality, or sanity.

Will it pass? Very doubtful. Likely it will get watered down into something insignificant — which Trump will nevertheless call a “big, big win.”

Huuuge!”

(Note, my family would benefit significantly from the GOP plan. And I was a Republican myself until recently. This tax plan epitomizes why I quit.)