Business & Politics Journal

(9.3.16) Due to the highly unusual nature of this presidential election cycle my interest in the national political scene is higher than normal, and I find myself in need of an outlet for my thoughts. So – given the highly personal, and often vitriolic nature of discussing politics with friends and family, I have decided to contain my thoughts to this page. Perhaps the politics side of this “Business & Politics” page will not last much past the election; but the business side should, as I believe the WSJ editorial pages do a wonderful job of highlighting the business side of politics, and I would like to document these articles (along with my thoughts) over time, away from the investment-specific side of 17 Mile.

November 8, 2016


8:22 pm – Have no idea how this election will turn out. Haven’t tuned in yet, so want to get my thoughts down beforehand. Odds obviously favor HRC on paper; but DJT has blown up the electoral map, and I personally believe the political ‘market’ is underestimating the global populist wave that is behind DJT. But who knows.

For all of my harsh rhetoric against HRC, I actually believe she will be a (very?) good president as long as the GOP retains control of the House, and she does not end up appointing 3 highly progressive judges. Legislating via regulation and executive order are probably the biggest risks. My problem is the corruption, and the fact that an HRC presidency simply confirms the global political establishment double standard. It’s nauseating that she is even this close to confirming that it is “OK”. DJT is an idiot – but he represents a massive opportunity to blow up the establishment. It’s really not rocket science. There are enough controls in place to limit the effects of his craziness; and him ‘blowing up’ the system would be a tremendous LT development.

October 25, 2016

Where Clinton Will Take ObamaCare (WSJ 10.18.16)

  • HRC attempted to pass universal healthcare in 1993 – HillaryCare
  • HillaryCare was a comprehensive plan with program details and cost-control measures precisely defined
  • ObamaCare eschewed such details in order to ram-rod it thru
  • HRC’s “Health Security Act of 1993” would have broken the nation’s healthcare system into regional Healthcare Purchasing Cooperatives, which would have collectively set treatment guidelines and implemented cost-control measures
  • HillaryCare lost support once voters realized the loss of freedom, where the government decided the doctor you could see and the services that could be provided

“The decisions of HillaryCare’s National Control Board, which would have determined every allowable benefit and treatment, would have been final—not reviewable by any agency or judge. What finally broke the back of HillaryCare was the provision imposing civil penalties for providing treatments not allowed by the regional cooperative and criminal penalties for accepting a separate payment for providing such care within a cooperative.

“Families were forced to pay into the regional cooperatives and medical providers had to provide all medical care through the cooperatives or operate completely outside them. Since few families could afford to pay the cooperative for health care and then pay for additional care, and few providers could afford to operate totally outside the system, any real health-care choice would have been extremely limited, very expensive and available only to the highest-income families. When challenged to defend the loss of freedom HillaryCare entailed, congressional support collapsed and no effort to resurrect it was made until ObamaCare.

“President Obama left out the politically dangerous details of how the program would be structured and how costs would be controlled. But in the end ObamaCare passed because he neutralized the freedom issue that had killed HillaryCare by lying about the ability of Americans to keep their health insurance. Seldom in any free society has a purposeful lie led to a greater loss of freedom.”

October 24, 2016

Big Cable and Mobile Are Ready to Rumble (WSJ 10.8.16)

  • 2017 should see the collision of the fixed and wireless broadband industries
  • In 2011, Comcast and other Cable cos sold unused spectrum to VZ in return for an MVNO agreement
  • Comcast likely the first to launch a bundle containing a wireless offering
  • Cable cos already have what wireless operators need: a greater number of small wireless access points (Wi-Fi)

“Big mobile’s only realistic competitive response might be quickly to roll out 5G wireless that can compete with, and even exceed, cable in delivering high-speed access to the home. Busted open would be cabledom’s biggest strength in the coming showdown, its oligopolistic safe haven in the domestic retail market.

“Oddly, this burgeoning competition between fixed and mobile has always been predictable and yet has figured not at all in the Federal Communications Commission’s regulatory efforts, which paint the country as descending into an uncompetitive broadband hell.

“A new study by economists Gerald Faulhaber and Hal Singer details how an agency that once prized economic analysis increasingly ignores or disregards economics in its regulatory findings. Why? Because if it acknowledged the increasing competitiveness of the market, there would be nothing to regulate, no favor-factory opportunities for its political sponsors to milk.”

October 3, 2016


I’m not an idiot – I know, and have known, that Trump is a full-blown maniac; but to-date I have been willing to look past that for the sake of blowing up the political establishment, as I believe there are enough checks and balances in place to limit the perceived potential damage of a Trump presidency. After this week/weekend however, I’m not sure I can take it…

The combination of this audio leak of Clinton speaking with donors + Trump this weekend on stage blatantly mocking HRC’s physical ailments is potentially too much. Her tax plan is absolutely horrific on paper, and I believe she is likely to continue the regulatory onslaught against US businesses that Obama has put forth; but maybe, just maybe she will truly operate between “the center left and center right” as she indicates in that leaked audio tape.


September 24, 2016

Obama’s Track Record With Blacks Won’t Help Clinton (WSJ 9.21.16)

  • Obama in 2011 after black lawmakers began criticizing him: “I expect all of you to march with me and press on…stop complaining, stop grumbling, stop crying.”
  • While the black unemployment rate has improved since 2009, it has improved even more for whites, thus furthering the racial gap
  • Obama recently told an audience that Republicans are disenfranchising blacks by promoting voter ID laws
  • 95% of republicans, 83% of independents and 63% of democrats support a photo ID requirement; as do 81% of whites and 77% of non-whites

17M: There are no words to describe the hypocrisy that spews from Obama and his ilk (ilk = black ‘leaders’). Pathetic.

Wells Fargo’s Incentives Go Awry (WSJ 9.21.16)

  • LA Times reported incentive issues at WFC three years go
  • Since, WFC has fired over 5,000 employees and paid a $185 million fine
  • Outside of minuscule revenue from the false accounts, WFC worse off for the scandal, as all it did was create additional cost (paper work and inappropriately bonusing employees)
  • “See Sen. Elizabeth Warren, in Tuesday’s hearing, in Trump-like fashion distorting the nature of the Wells Fargo scandal as if truth and logic don’t matter.”

Trump’s School-Choice Fight (WSJ 9.19.16)

  • During a campaign stop in Cleveland, Trump proposed a $20 billion block grant for states by redirecting federal education money to support charter schools and vouchers; as well as endorsed merit pay for teachers
  • “Most of the $50 billion or so that the federal government spends on K-12 education is targeted to particular programs like teacher training, and rural and STEM education. About $14 billion in Title I funds are earmarked for disadvantaged students. However, this money doesn’t follow kids to private schools, and states often shortchange charter schools.”
  • Trump: “…there is no failed policy more in need of urgent change than our government-run education monopoly.”
    • WSJ: “Judging by the panicky reaction on the left, you’d think he’d proposed eliminating public education.” 17M: HAHAHAHAHAHH
  • HRC: Trump’s block-grant plan would “…decimate public schools across America.” 17M: HAHAHAHAHAHHAHA
  • $20 billion is 3% of what states spend on K-12

17M: Obama, HRC the Left and the unions are hostile to vouches because they do not want to lose control of the education system via charter schools. No rational, logical yuman being can make this stuff up. It’s physically astonishing.

Trump and the Art of Growth (WSJ 9.16.16)

  • New York Economic Club speech by Trump…
  • Set a national goal of 4% economic growth
  • Collapse the individual income tax brackets from seven to three: 12%, 25% and 33%
  • New cap on deductions of $100,000 for individual filers, and $200,000 for joint
  • The House republicans’ “Better Way” plan calls for a capital gains rate of 16.5% versus Trump’s 20%
  • “…Ivanka Trump memorial child-care tax credit and deduction.”
  • 15% corporate tax rate, including pass-throughs
  • Trump wants to kill the Pacific trade deal and renegotiate NAFTA with Mexico and Canada

17M: WSJ editorial board does not like the childcare tax credit and deduction – naturally – but it is EFFING BRILLIANT. Trump is going straight up the gut with his policy proposals, and it will only continue to highlight how outrageously left HRC is from a policy standpoint.

Don’t Raise the Minimum Wage: Trump Has a Better Plan (WSJ 9.15.16)

  • Trump wants to expand the Earned Income Tax Credit (EITC) to offset childcare expenses
  • EITC signed into law by Gerald Ford in 1975
  • The EITC has nothing to do with tax liability but how much an employee earns and how many children he/she has
  • The maximum amount for child care expenses under the Trump plan would be 50% of the amount of an employee’s payroll taxes
    • For married couples it would be calculated via the lower-earning spouse
  • In PA, for a $7.25 minimum wage worker Trump’s plan would raise the effective minimum wage to $9.92
    • After the child care expense transfer payment, this would jump to $10.19
  • EITC benefits totaled $66 billion in 2014

The Child-Care Bidding War (WSJ 9.15.16)

  • Trump has proposed a tax deduction that would let families write off the average cost of child care for up to four children
  • HRC has promised to limit care expenses to 10% of income; raises for caretakers; universal pre-K; and an increase in the $1,000 per child tax credit
  • Annual child care expenses are inflated by what affluent families spend on child care
  • Trump proposes six weeks of paid maternity leave via unemployment insurance

September 6, 2016

Charter Schools Are Reinventing Local Control in Education (WSJ 9.6.16)

  • Nearly 7,000 charter schools across the country; 43 states; almost 3 million students
  • 14,000 American school systems today
    • Starts with an elected board
    • Board appoints a superintendent
    • Schools staffed by a unionized workforce
  • 90 school districts today educate more than 50,000 students
    • Houston: 215,000
    • Chicago: 400,000
    • Los Angeles: 700,000
    • NYC: 1+ million
  • ‘Alternative’ schools operate more like non-profits, via “charter management organizations”
  • Charter schools’ test scores are “all over the place”, and funding is erratic
    • 17M: Statement stands in slight contrast to the charter school data provided in the 8.24.16 WSJ article noted below.

Even Worse Than Clinton’s Emails (WSJ 9.6.16)

“It isn’t so much that Mrs. Clinton set up a personal server so she would not be accountable the way normal political appointees are held accountable. It’s that no one in government stopped her. The inspector general’s report notes that when two IT officers expressed their concern in 2010 that her private email system meant federal records were not being preserved, they were told ‘never to speak of the Secretary’s personal email system again.'”

September 4, 2016

How the Exxon Case Unraveled (WSJ 8.31.16)

  • New York AG Eric Schneider had assembled a posse of state AGs to investigate ExxonMobil’s climate ‘sins’
  • Schnieder started the #exxonknew movement under the idea that, “…through its own research in the 1970s, Exxon knew one thing about climate science but told the public something else.”
  • Holman Jenkins appeared on the NPR show “To The Point” with reported Neela Banerjee
    • Banerjee believes that the uncertainty in climate models such as Exxon’s stems from uncertainty about how much CO2 in the future will be released: “The uncertainties that people talk about…are predicated on the policy choices we make (the inputs of future CO2).”
    • Jenkins: “The whole purpose of a climate model is to estimate warming from a given input of CO2.”
  • “In 2013, the UN’s Intergovernmental Panel on Climate Change assume a doubling of atmospheric CO2 and predicts warming of 1.5 to 4.5 degrees Celsius – i.e. an uncertainty of output, not input.”
  • The above represents an increase in uncertainty over the 2007 reported range of 2. to 4.5

Black Lives Matter to Donald Trump (WSJ 8.30.16)

  • Trump said: “Our job is to make life more comfortable for the African =-American parent who wants their kids to be able to safely walk the streets and walk to school. Or the senior citizen waiting for a bus. Or the young child walking home from school.”
  • Trump went on to promise to restore law and order “…for the sake of all, but most especially for the sake of those living in the affected communities.”
  • Obama advisor Van Jones called Trump’s comments “despicable” and “shocking in its divisiveness”.
  • Black Lives Matter burst on to the scene in 2014 following Michael Brown’s death…
  • …Since, homicides have risen 17% in the 56 largest cities – the largest increase in more than two decades
    • DC: 54%
    • Milwaukee: 73%
    • Cleveland: 90%
  • In Baltimore, 45 people were killed in July 2015, 43 of which were black
  • In Chicago, 2460 blacks were shot in 2015 versus 78 whites…despite roughly equal populations

17M: Van Jones’ response is literally all one needs to know about race relations in America today. Trump is forcefully calling for a firming of America’s law & order in order to create a better inner-city environment for those most highly affected…yet Van Jones is pulling the race card. I have no words – which is precisely why I created this journal…to document my drop-jawwed amazement at American politics over time.

Trump Turned Down the NAACP’s Invitation. Smart Move (WSJ 8.24.16)

  • The NAACP recently called for a moratorium on charter schools
  • It isn’t uncommon for charter schools in a ghetto to outperform affluent white suburban schools on standardized tests
  • More than 42,000 students are wait-listed in NYC
  • Blacks survey respondents support charter schools by 2 to 1
  • And black support for means-tested vouchers is 66%
  • Only 48% of black respondents support the federal push for race-based school discipline

17M: I would argue that abortion and race are the two biggest social issues facing America today. Black leaders are perpetuating the belief that racism is as strong today as it was in the 1960’s in order to retain as much power as possible…yet black voters continue to support them, and in turn the policies that have utterly failed America’s largest inner city problem areas. Amazing. Truly amazing.

Why Trump Is Failing With College Grads (WSJ 8.24.16)

  • In 2012 Romney beat Obama by 14 points among college-educated whites (according to exit polls); Trump is currently trailing HRC by 9 points in this category, and upwards of 14 points according to a Pew Research Center survey
  • In 1988, whites ex. college degree formed 54% of the electorate, whites + college degree 31%, and non-whites 15%
  • The above breakdown is now: 36%, 36% and 28%
  • Trump currently losing to HRC by 21 points among white + college degree in PA
  • “All else equal, areas with large shares of highly educated voters are more likely to deliver Democratic majorities, and vice versa. A recent NPR analysis of Census Bureau statistics found that the 10 states with the highest share of college-educated voters are all democratic while the 10 with the lowest share are Republican.”
  • Differences between the educated and less educated are due to the educated’s view that America is far better off now than 50 years ago, and the uneducated’s view that global trade policy has not benefited them

17M: I wholeheartedly agree with the last bullet. Totally get it. There is emphatically no need to “make America great again”; and frankly, if you believe that you have not benefited from global trade policies over the last twenty years simply because you can no longer work at the local Ford plant for $35 an hour, then you should not be allowed to vote.

But what I fail to understand is why the above leads to a supposedly educated individual voting for HRC. Europe is a living, breathing example of what the hardcore liberal agenda brings over time. As I documented in the Clinton Cash post, I am as ‘liberal’ as they come on fiscal stimulus and healthcare; but the broader attitude toward bigger and bigger government is really dangerous over time, and it boggles the mind that educated folks – supposedly with the ability to logically parse economic history and current events – would lean Democratic.

As noted below – my Power & Utilities friend physically groans over what an HRC presidency would do to the regulatory side of this Nation over time. Of course businesses are going to continue to work, and the S&P 500 will continue to reliably churn out 6-10% a year over the coming decades…but that does not make the thought of 8-16 years of liberal regulatory reign any easier to swallow. Absolute power corrupts – and it is dangerous for any one set of political ideology to rule for an extended period of time.

Regulation vs. The American People (WSJ 8.21.16)

  • Holman Jenkins makes the case that while Obama arrived at the White House with skepticism toward regulation, he quickly pivoted toward regulatory bulldozing, and the American electorate responded in force beginning with the January 19, 2010 special election of Republican Scott Brown in the Massachusetts, historically one of the most liberal states on the map.
  • Jenkins cites the following examples of regulatory bulldozing for government gain…
    • Bank policy that dramatically consolidated an industry the government routinely sues for billions
    • “His consumer-finance agency manufactured fake evidence of racism against wholesale auto lenders in order to facilitate a billion-dollar shakedown.”
    • Airline policy – “urged by labor unions” – led to an oligopoly with rising fares and profits
    • Obama’s FDA is looking to extinguish small e-cig makers for the benefit of Big Tobacco and Big Pharma (smoking cessation franchise threatened…)
    • National Labor Relations Board working for benefit of organized labor to cartelize the fast-food industry
  • Economist James Bessen says that political rent seeking explains the puzzle of rising corporate profits in the absence of job creation and economic growth

17M: By no means do I agree with all of the above. I believe the banking system is far stronger post-consolidation and recapitalization, and that the commodity nature of deposits and lending naturally serves to limit any potential monopolistic tendencies. And I am not privy to the consumer-finance shakedown. But what I do know is that Obama’s agenda was firmly rejected not only quickly but soundly on multiple occasions (2010 and 2014 mid-terms), thus indicating there was not suddenly a nation-wide transformation to a liberal agenda due to ‘too much W’ in 2008. Also – my good friend, a Power & Utilities MD at a bulge bracket firm in NYC, has provided bi-annual updates over breakfast on Obama’s outrageous use of the EPA, and how these dangerous environmental ‘policies’ will take years to overturn…even if a Republican president was elected. In his words, it is game-over from the EPA side if HRC is elected…