Trump Was Elected To Produce Change -- Rebutting The NY Times

An Op-Ed by Peter Wehner in today's NY Times titled "Declaration of Disruption" goes far in explaining why HRC found 25% of Americans "deplorable." The elite are petrified of change. It means they are at risk of losing their hold on power and the economy.

"whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness."

The American people elected Donald J. Trump President of the United States. Many Americans are not happy with that election. Others are not happy with its consequences. President Trump was NOT elected to carry on business as usual nor was he elected to carry out incremental change. He was elected to bring large change to Washington. Wehner's article, like HRC's deplorables comment, is a reaction to the prospects of that very change. What the NY Times did today was make it public -- the elites are petrified of what may come next.

Wehner starts from the premise that change must be predictable, orderly, and planned. His first value is stability. "Stability is easy to take for granted, but impossible to live without." Mr. Wehner seems to have no understanding that more than half of all Americans do not believe their lives are "stable." They struggle to make ends meet. They worry about their children -- their health -- their retirements. They see a Washington composed of self-satisfied people (like Mr. Wehner) who know nothing of their daily struggles.

No Mr. Wehner the present "stability" is unjust, unkind, and discriminatory. It works to benefit the elites at the expense of most Americans. It would be easy to live without. Thank you.

Mr. Wehner hates the ubiquity of Trump in the media. "a president who thrives on disruption and chaos is impossible to escape. Every shocking statement and act is given intense coverage. As a result, the president is omnipresent, the subject of endless coast-to-coast conversations among family and friends, never far from our thoughts." What at least 40% of America realizes (and what Wehner refuses to address) is that the President is under attack by that same media who shower so much attention on him. The President is adept at holding up a mirror to the techniques of the press and using it to his advantage. The coverage may be very upsetting to those who dislike or are opposed to the President, but that same coverage reassures and strengthens his base. (HRC would call that "deplorable.")

The desire for change and the ubiquity of the President have combined to cause significant national debate on many topics. Debate is unsettling. It erodes stability. It suggests change is in the air. GOOD.

Americans have devoted more thought to what they want from healthcare in the past few months than they did in the past six years combined. The failure of the healthcare bills reflects the inability to reach consensus. Sorry, Mr. Wehner, that is a good thing not bad. Consensus cannot be forced. Some consensus items have emerged: there must be coverage for pre-existing conditions, young people need to have access, old people need to have access, costs must come down. Let the "instability" produce an honest debate about HOW we achieve these things.

We need a similar debate about taxes. Here I would suggest a caveat: changes based on "theory" need safeguards to avoid unintentional consequences. An example: Trump and many Republicans believe that tax cuts to the wealthy will spur the economy. To most Democrats and many independents, cutting the burden on the wealthy is a HUGE gamble. The President believes it will cause them to spend more on the very things the economy needs. Note, the President is acting on instinct. There is no hard data which can tell us either way. Trump's "beautiful" tax cut, may be just that or it may be the beginning of a horror show - massive deficits, inflation, and a stubborn economy.

The problem with tax cuts for the wealthy is that many believe that their "magic" - the spending supposed to occur - is nothing but "magical thinking." Not a whole lot different from the magical thinking of "if you like your healthcare plan you can keep it" or "we can invade Iraq, and the war will pay for itself." Magical thinking tends to lead to many billion dollar-sized headaches.

There is a way to force that magical thinking into happening. The plan is rather simple. If the rest of us are going to get a 5% tax break, then the wealthy should also be limited to a 5% tax break. They should not be allowed to realize a net tax payment decrease which exceeds 5% of their average taxes paid during the past three years. The rest of the money they would have saved should be invested in a new kind of US Government infrastructure bond - new because these bonds would only pay back if the economy actually grew at a compound rate above 3%. That is how we force the magical thinking to happen. No increase in growth, no repayment of the bonds. There is precedent for this - much of the insurance industry is financed by reinsurance and catastrophe bonds which work in similar ways.

The proceeds of the bonds would be used to fund the $100 billion-plus infrastructure needs we are currently ignoring every year. Both Trump and the Democrats agree we need to make this investment. They disagree about how to pay for it. The answer is to let it be paid for by the "magical thinking." The bonds would mature 10 to 30 years out, bear a zero coupon, and have an implicit interest rate equal to the current yield on like term US Treasuries sold in the open market. But these infrastructure bonds would have a unique twist: in each maturity year, the amount of principal and interest due to be paid back would be limited to the ratio calculated by comparing the cumulative growth of the economy to a baseline growth of 3%. In no year would the payment exceed what was nominally due, but, if cumulative growth fell short, then the payout would be limited. Losses from denied payouts would NOT be deductible from income (to avoid the taxpayers paying one-third or more of what had been avoided). This scheme has many advantages:

  • it generates the money we need to pay for infrastructure improvements now - without an impact on the budget or an increase in the deficit
  • it pushes the cost out to a point in time when the infrastructure investment should be producing a positive effect on the economy
  • it has no "crowding out" effect on other investments since it is using monies which right now the wealthy are paying in taxes
  • it allows the wealthy bondholders liquidity in that the bonds can be freely sold
  • it gives pension funds a liquid investment directly tied to the growth of the economy
  • it removes the "theory" part of the argument -- if the growth effect theory is wrong then the wealthy are the ones who pay -- not the average American

Nor have we been wanting in attentions to our [elite] brethren. We have warned them from time to time of attempts to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. 

To which Mr. Wehner replies: "this, in turn, leads to greater polarization, to feelings of alienation and anger, to unrest and even to violence." Yes, sir. Almost half of America [or more] feels alienated from the attentions, affections, and actions of the elite who claim to govern. Wehner quotes Andrew Sullivan: “A free society means being free of those who rule over you — to do the things you care about, your passions, your pastimes, your loves — to exult in that blessed space where politics doesn’t intervene.” Half of America wants the elite to butt out of their space. They are sick of the "we know better" telling them how to run their lives.

Wehner writes: "Mr. Trump acts as if order is easy to achieve and needs to be overturned while disruption and disorder are what we need." Yup. Disruption and disorder are exactly what we need.

We need infrastructure to be repaired and rebuilt. We need health care -- care not insurance -- care. We need a growing economy. These things require a government without a vested interest in the status quo.

Wehner captures the fears of the elite very well. Change will be disruptive.

Let's get on with it.

for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor

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