Author: haroldblackphd

No new bills is a threat? Jones Act. Bondi in hiding.

No new bills – please!

The president has threatened not to sign another bill until the congress passes the SAVE Act. This may be the best news I have seen this year. Earlier the president threatened to implement the SAVE Act all by himself via executive order. But A federal judge in 2025 blocked that attempt that sought to require proof of citizenship for voter registration. Of course, the president actually doesn’t have to sign a bill for it to become law. If congress passes a bill and Trump takes no action for 10 days while the congress is in session, the measure becomes law without his signature. So what the president needs to do is say he will not sign a law and if congress passes one, he will veto it. I have a modest proposal: why don’t we declare the rest of the month “new law-free March?” Recall Gideon Tucker’s famous saying: “No man’s, life, liberty or property are safe while the legislature is in session.” That was true when Tucker said it in 1866 and it is true now. So please, please, please (to quote James Brown) Mr President, NO NEW LAWS!

The only way to pass the SAVE Act is to dump the filibuster. The republican leadership is loath to do so even in the face of mounting pressure from the president. Senate majority leader Thune knows that once you open this door then all sorts of mischief can happen – although he probably thanks Harry Reid for lifting the filibuster on Supreme Court nominees, else no one would ever get confirmed in this fractured political environment. But the breaking news is that John Cornyn is showing his desperation to get reelected and has had a miraculous epiphany and now supports ending the filibuster in order to get Trump’s endorsement in his race against Ken Paxton.

Repeal the Jones Act

Hawaii has the second highest gas prices in the country – or should I say out of the country. Sounds reasonable given that it is an island and all their oil must be shipped in. California is first due to all the silly rules and high taxes. But Hawaii even with its own brand of leftwing politics could see lower gas prices just by getting an exemption from the Jones Act. This is an act that Trump probably loves. It mandates that anything shipped from one US port to another must be made via a US built ship that is US owned and crewed. The act – formally the Merchant Marine Act of 1920 – is pure protectionism. It was intended to protect American ships from foreign competition. It also was to protect American shipbuilders. To put it mildly, the act failed on both accounts. American shipbuilding is in the tank and the American fleet is pitifully small. There are hardly any US flagged ships. There are only 92 Jones compliant US ships and 55 are oil tankers. There are 93 other US flagged ships but they are foreign built and are therefore non-Jones Act compliant and cannot carry cargo between US ports. Isn’t this stupid? Only the 55 can transport oil between US ports but again the cost of transporting oil from a US port to Hawaii is more expensive than shipping it from a foreign source. It costs more to ship oil on US tankers from the Gulf to Hawaii than from the Middle East to Hawaii. To deliver gas from say the Gulf of Mexico or Alaska to Hawaii, it can only be done on American ships. The result is that all Hawaii gas gets shipped from foreign ports on foreign ships.

American shipping is in decline because all the costs, environmental laws and regulations make building a US ship five times more expensive that one built in China. Also U.S. ship operating costs are estimated at nearly 3 times foreign costs. So it is cheaper not to build the ships in the US despite the Jones Act. Why Hawaii isn’t exempt from the Jones Act has long been a mystery to me. BTW, the same applies to Puerto Rico. Why not just repeal the darn thing?

Bondi in hiding?

Attorney General Pam (Blondie) Bondi has move into a nondisclosed military base housing. Bondi, along with Secretary of State Rubio, Trump advisor Stephen Miller, Kristi (ex-border Barbie) Noem and Defense Secretary Pete Hegseth now live in military housing somewhere in the DC area. I don’t know where but I am certain we are not talking about barracks. All are doing so for security reasons. Apparently the administration is taking seriously threats against all of them. I am somewhat surprised that this is not true for some of the Supreme Court justices as well. When I was in DC, at least three justices lived either in or near my neighborhood. We all knew where they lived and sometimes there would be a picket or two outside their homes. Recall the threat on Justice Kavanaugh? I presume that these homes are now being protected by law enforcement. So one asks “Why can’t the same be said for Bondi and the other Trump officials? BTW, I don’t recall this happening during other administrations.

Its Spring Break

It is spring break. When I was teaching I hated spring break and lobbied unsuccessfully that instead of spring break we just shortened the semester by a week. For me spring break was a disaster and would undo all the hard work of getting the students used to my demanding style. I would force them to participate, write papers, take essay exams with no aids (no cellphones, no laptops allowed). Then they would go off to the beach, drink, party and who knows what else. They would come back to class all tanned and mellow and have no desire to think about present value, strong form efficiency or asset pricing models. Attendance was terrible and attitudes were worse. Maybe the solution was that if I couldn’t get spring break cancelled maybe I should have gone to the beach too.

A case for TPS. Who’s your congressman? 

A Case for TPS

I know that the president hates the Temporary Protected Status (except for white South African farmers) but if there were ever a need for TPS it is the Christians of Nigeria. Over the past 15 years, an astounding 56,000 Nigerian Christians have been killed. Saying that Nigeria is the most dangerous place in the world to be a Christian is an understatement. Well known is the menace of Boko Haram which has killed, raped and kidnapped Nigerian Christians since 2009. But now there is persecution by radical Fulani Muslims. President Trump has sent 200 troops to the country to consult with the Nigerian military and has appointed West Virginia republican Rep. Riley Moore to investigate the situation and report back to him – which is simply flabbergasting. What does Moore know about Nigeria?

Moore has recommended the U.S. and Nigeria form a “bilateral agreement” to “protect vulnerable Christian communities from violent persecution, eliminate jihadist terror activity in the region, further economic cooperation, and counter adversaries in the region, including the Chinese Communist Party and Russian Federation.” Whoopie. Well isn’t this a perfect situation for TPS? Why don’t we offer sanctuary to a selected number of Nigerians who are most at risk?

Our intellectually challenged representatives

I feel sorry for those living in Tennessee’s sixth district. They have Andy Ogles as their representative. Ogles, who has never distinguished himself intellectually now is firing off tweets targeting Muslims. Ogles tweeted that “Muslims don’t belong in American society. “Pluralism is a lie.” So much for religious freedom. Ogles plans to propose legislation to ban entry to the U.S. from a set of Muslim-majority countries. Of course, he may be speaking for the president who has restricted entry into the country for 39 nations. Trump has been especially harsh toward Rep. Ilan Omar and her fellow Somali-Americans, calling them “garbage” and saying he wanted them sent “back to where they came from” – which is Minnesota. Not a good look for the president of this country.

Of course the republicans have been quiet. Not so the democrats. Hakeem Jeffries tweeted “Andy Ogles is a malignant clown and pathological liar who has fabricated his whole life story. Disgusting Islamophobes like you do not belong in Congress or in civilized society. And that’s why House Democrats will defeat you in November.”  But Ogles is not alone. Florida’s Randy Fine, another towering intellect posted: “If they force us to choose, the choice between dogs and Muslims is not a difficult one.” Rep. Andrew Clyde, R-Ga., has pushed for immigration changes, posting: “No more Islamic immigration. Denaturalize, deport, repeat.” Gee thanks guys for making republicans proud.

So much for comity in the House of Representatives. Undaunted Ogles responded “To Hakeem Jeffries, Gavin Newsom, and the high-ranking Democrats flooding X to condemn me: A Muslim shot and killed three Americans in Texas. Two Muslims tried to blow up New York City…again. Meanwhile, all DHS counterterrorism programs are unfunded because you shut them down.”

Although I condemn radical Muslims who commit violent acts and seek to impose Sharia law, it is sheer bigotry to damn the Muslims writ large. It is akin to labelling every Hispanic a member of the Sinaloa cartel, or every Chinese-American a Chinese spy. It was not long ago where every violent act from a black was shouted by southern racists as being typical of the entire race. Blacks were labeled with all sorts of scandalous names and caricatures. Black men were a “menace” and a threat to white womanhood. It came as no surprise that when the University of Georgia realized that they were going to lose their case not accepting black students, that they said they would accept only the woman – Charlayne Hunter – and not the man – Hamilton Holmes (who graduated Phi Beta Kappa in chemistry. I wonder what Ogles, Fine and Clyde think about the shootings in Chicago?

These republicans are doing the same with all Muslims. This is disgraceful. They should all read Betrayal of Command: My Marine Corps Journey (Afghanistan 2001-2004) by Lt. Colonel Asad “Genghis” Khan. If they have any decency – which I doubt – they would all be ashamed of their Islamophobia when they read this story of a modern American hero. The congress has long been noted for its lack of intellectuals. I guess that Ogles, Fine and Clyde balance out AOC, Omar and Tlaib.

God is non-binary? Prasad out at FDA. Mississippi State on probation?

God is non-binary?

Somehow Jasmine Crockett lost a double digit lead and her primary to a little known state representative who opines that there are 6 genders and God is non-binary. I kid you not. James Talarico a really progressive Presbyterian seminarian, was dismissed by Crockett as “just another white man of privilege.” As expected, Crockett got 80 percent of the black vote but Talarico got 60 percent of the white vote (mostly college educated). He also got 60 percent of the Latino and Asian vote. His rather progressive interpretation of Christianity was not an issue in his campaign as he stressed in his Spanish language ads “faith and family and jobs and bringing people together.” 

But you can be certain that whoever wins the republican runoff will hammer to death that Talarico does not oppose boys playing girls sports, he says that abortion is justified in the Bible, he favors gender surgeries and therapies for children and says that God is “non-binary.” Don’t forget that Talarico is a seminary student and justifies his views based on his interpretation of the scriptures. During a debate to stop gender-altering surgeries, he commented “In committee, I listened to 15 hours of testimony about this bill. The worst part, for me, was the number of Christians who used scripture to justify hurting children. Even on this floor today, a member tried to justify a hateful amendment in the name of God’s law.” I bet there are a bunch of people all of a sudden wishing Jasmine Crockett had won.

Trump who has stayed silent is probably being pushed to endorse Cornyn in the runoff against Paxton. But Paxton has a significant lead over Cornyn in the polls (if that means anything anymore). If Paxton beats Cornyn, the democrats are sure to make this a race about character – of which Paxton is sorely lacking. Talarico will lean hard into a populist, anti-corruption message. He already argues that America’s affordability crisis is a direct result of corruption and wants billionaire money out of politics (save George Soros?). He calls Paxton “the most corrupt politician in America.” So Texas politics, like the past presidential elections will face a Hobson’s Choice. Come on, can’t we do better than this?

Prasad out at the FDA

The Wall Street Journal may have gotten Vinay Prasad, head of the FDA’s biologics division ousted (again). Prasad was fired once and then brought back. The Journal had reported that Dr Prasad had withdrawn approval of UniQure’s gene therapy treatment for Huntington’s disease for lack of a placebo control test. Huntington’s disease afflicts about 40,000 patients in the U.S. and there are no current treatments that slow its progression. But UniQure’s therapy slowed progression by 75% compared to the natural course of the disease. However, UniQure could not conduct a placebo trial as demanded by Dr Prasad because recruiting patients with a rare and debilitating disease for a placebo trial can be difficult if not unethical. Under Prasad the FDA has rejected at least 23 rare disease therapies. UniQure said Monday it aims to seek approval in Europe and the U.K., so patients may have to leave the U.S. to get treated. But maybe with Prasad forced out, the FDA will exercise some regulatory flexibility. Like over at Commerce, the advisory committees on vaccines and rare diseases were fired and replaced with folk sympathetic to the views of RFK jr. So Prasad was making decisions without the advice of experts in the field – which seems to be par for the course under Kennedy. It will be interesting to see how his ouster affects decision making at the FDA.

Mississippi State should get the death penalty!

Mississippi State (the other bulldogs) has broken the NCAA rules governing special benefits. Not once but twice! Shouldn’t it get the death penalty? One violation was that it hosted three golf recruits at a golf outing where the recruits played a round of golf. Mississippi State paid the $150 cost of the outing – a clear violation of NCAA rules. The second violation was that a recruit for the men’s track and field team brought his girlfriend on an official visit. She was not an approved guest and was provided lunch on the visit. The cost of the meal, $22.54, was a clear violation of NCAA rules and had to be paid back by the recruit. Mind you, LSU has just been reported to be paying its football team over $40 million which is just fine – so long as the school didn’t pay for the lunch of a wide receiver’s girlfriend at McDonald’s.

Lastly, I would be remiss if I ignored the 250^th anniversary of Adam Smith’s The Wealth of Nations. My favorite book of all time and one of the most influential books of all time.

The Straits of Hormuz. BLS reporting.

The shutting down of the Straits of Hormuz

Question: If our diesel comes from the Gulf of Mexico, then why did the price per gallon jump by a $1 over the past two days?

Iran firing all those missiles and drones at all their neighbors is creating a lot of anger levied at both Iran and the US. One report said that the Saudis were starting to use their own air force to bomb Iranian targets.

Iran shut down the Straits of Hormuz when four of its drones hit oil tankers traveling through the straits. Brig Gen Ebrahim Jabbari, a senior adviser to Iran’s revolution guards, said “We will attack and set ablaze any ship attempting to cross.” Maritime insurers promptly started canceling insurance. Twenty million barrels travel through the straits every day. Iran is threatening to fire missiles at any ship going through the straits. Larger quantities of food also go through the straits. Insurance companies are starting to drop insurance from the tankers operating in the Gulf. Trump has said that he will have the military force safe passage through the straits. But can he really? Currently the straits are effectively shut down with hundreds of ships stuck in the Persian Gulf. Iran has missiles to dissuade shipping and also can mine the straits if need be. Oil prices are now above $100 a barrel and analysts are saying the global economy is in danger of going into a recession. Of particular interest is that almost 50% of China’s oil goes through the strait. So what will China do?

I find it a bit interesting that the Saudis would shut down their Saudi Ras Tanura oil refinery, the country’s largest just because two drones were intercepted over the site. Qatar halted liquefied natural gas production due to a couple of drones. Isn’t that an overabundance of caution?

Trump says he as a work-around bringing more supplies online. Venezuela anyone? But when? And how is that going to get those 700 ships in the Persian Gulf to their ports? What is Iran’s new supreme leader, Mojtaba Khamenei, son of the slain previous supreme leader, going to do? I would think that the younger Khamenei would be wise to zoom his meetings.

Somewhat overlook but almost of equal importance is the fertilizer that goes through the straits. Did you know that the Persian Gulf is a primary source of the world’s fertilizers? Fertilizer is produced in the region and shipped around the world. It will have an impact on food production in the Ukraine – Europe’s breadbasket. everywhere. Iran, Saudi Arabia, Qatar, the United Arab Emirates and Bahrain supply more than a third of the world’s urea, an important nitrogen fertilizer, and nearly a quarter of ammonia. And they all use the Strait of Hormuz to export their products. Prices for fertilizer have increased almost 35 percent. Food, like oil, will get more expensive. If this war goes on for much longer we will surely see inflationary recession, which Iran is counting on. Who blinks first?

Jobs. What jobs?

The latest job report revision came out and the stock market fell 900 points indicating that a lot of misinformed dumb people are in the market. The press said that markets fell because of the dismal jobs report and economists were predicting modest job gains. Well those economists give the profession a bad name – if that is possible. We should know by now that the initial jobs reports are nowhere close to reality. Recall when Trump fired the head of the Bureau of Labor Statistics for not reporting favorable job numbers claiming that she was a democrat and wanted to make him look bad? Well how does he look now? His Commerce secretary Lutnick also promptly fired the members of the two advisory boards at the Bureau because I guess they were made up of too many democrats. Well, when the Bureau releases its job data, they are from a survey of businesses and are then revised. Invariably the revision is downward. The markets should be used to this so when the market reacts to a release, it is admitting that it was duped. 

Consider that last year the jobs report said that 147,000 jobs were added in June. The White House issued glowing press releases and Trump was running around doing high fives. Karoline Leavitt was crowing about the Trump economy. The market went up. Well in August the numbers were revised to show a growth of only 14,000 jobs. So maybe the larger number was a misprint? Then the final revision was made last month and lo and behold, instead of a gain of 147,000 jobs, the reality was that there was a job loss of 20,000 jobs! How could this be? Shouldn’t Trump fire these guys too? The sobering number is that over the past two years job “growth” has been overstated by one million jobs.

The January report showed a gain of 126,000 jobs. Again the White House was jubilant. But virtually all the jogs were in healthcare or state and local governments. One wonders what the actual numbers are after they get revised? The February jobs report says that the US lost 92,000 jobs. The market was expecting a gain – again showing the fallibility of those in the markets. The Wall Street Journal’s survey of experts expected 50,000 more jobs. Maybe the Wall Street Journal should find some other “experts.” Mind you, if the initial survey shows a 92,000 job loss then what will the revisions show? These numbers will cause Trump to put even more pressure on the Fed to lower its Fed funds target rate at its March 17-18 meeting. However, the Fed expected to hold due to the inflation numbers going up. Trump’s guy at the Fed, Stepen Miran is back at his old job at the National Economic Council and Kevin Warsh has yet to have had hearings. I don’t think there will be a single vote on the Open Market Committee to lower short term rates especially because of the pressure on prices that will soon be reflected due to the jump in gas prices. The bottom line is that no one should give credence to the preliminary survey numbers reported by the BLS. The fact that some people do never ceases to amaze me.

Noem out. Is Bondi next?

Kristi Noem is out at Homeland Security. Seems that the republicans were more upset over her spending $200 million on self-promotions than they were with her bungling of the ICE operations in Minneapolis. Trump has moved her to something he just seemed to have just made up – the Special Envoy for The Shield of the Americas, Trump’s new so-called security initiative in the Western Hemisphere. Even before it begins the initiative is being mocked. Jared Moskowitz, D-Fla., said “Let me congratulate the former Homeland Security secretary on her appointment to be the Shield of the Americas, which I’m pretty sure the president came up with when he watched the last Avengers movie.” Ted Lieu (D-CA) said “Thank you to Trump for promoting Kristi Noem to Special Envoy for the Shield of the Americas, a position that Trump literally created a few hours ago. Pleas also promote Pam Bondi to be Special Attorney General to the Shield of the Americas.” I guess this goes with the so-called Board of Peace. The Shield of the Americas is to target drug trafficking, the cartels and illegal immigration. 

Now that Noem is out, the democrats will set their sights on ousting Pam Bondi and Stephen Miller next. They may get some help with republicans on Bondi who has been sharply criticized for her bungling handling of the Epstein files. That seems to have upset republicans more than her mismanagement of the “Justice” Department. 

As to Stephen Miller, the democrats will get no republican support to oust perhaps the most odious of all presidential advisors. Miller is the key architect of Trump’s deportation policies and was a vocal advocate of using military force to acquire Greenland. Even Trump said of Miller that he (Miller) wouldn’t stop until everyone looked like him – white and bald? Miller has been called every name in the book by those on the left – and some on the right. Racist, bigot, callous, sinister, malevolent, cruel, heartless, venomous, toxic, dangerous, depraved, fascist, brutal and unbalanced are only a few. Yes, perhaps to all of these. 

But there is literally no republican support to remove him. In fact, republicans are more likely to defend his actions. Lindsey Graham says “People can disagree with Stephen on rhetoric and they can disagree with him on policy but the question is, ‘Is Miller in jeopardy in Trump World?’ Absolutely not. It doesn’t matter what a senator thinks about a president’s adviser, as long as the president has confidence in that adviser.” More than a dozen Republican senators have praised Miller and pushed back against those who want to diminish Miller’s clout at the White House including Tennessee’s Bill Hagerty who says “Stephen has effectively pushed for policies that are making America safer, like in Memphis in my home state of Tennessee, more prosperous, and more respected around the world”.

One of the few vocal republicans critics of Miller is North Carolina’s Thom Tillis who of course is not seeking reelection. Tillis is also a critic of Trump seeking to indict Fed chairman Powell on charges of lying to congress. On Miller’s remark about Greenland, Tillis said “Look either Stephen Miller needs to get into a lane where he knows what he’s talking about or get out of this job.” On the senate floor Tillis said “I’m sick of stupid. I want good advice for this president, because I want this president to have a good legacy. And this nonsense on what’s going on with Greenland is a distraction from the good work he’s doing, and the amateurs who said it was a good idea should lose their jobs.” Tillis even called Miller a “sycophant.” Saying “A sycophant is more than just a ‘yes-man.’ It refers to someone who acts excessively servile toward someone important in order to gain an advantage.”

The senator compared Miller to Tolkien’s Grima Wormtongue from “The Lord of the Rings,” who is an adviser to a king. “He uses whispers and false flattery to control the King’s decisions, all while secretly serving Saruman,” the North Carolina Republican continued in his post. “He is a classic example of a sycophant who uses his position to poison a leader’s standing for his own benefit.” Actually, by invoking Wormtongue, the wicked counsellor who whispers evil counsel direct into the king’s ear, Tillis is actually complimenting Miller.

I am sure that Tillis knows that in this and most administrations, being a sycophant is more the rule than the exception. But Miller is by no means a unique feature in the political arena. He is probably no more of a Svengali as say James Carville, who was the evil persona of the Clintons or Lee Atwater to Reagan.  Aristotle said that ‘tyrants are always fond of bad men, because they love to be flattered’, establishing a connection between misrule and bad counsel. The same is true for non-tyrants as well. But the evil counselor serves as a useful foil to the political leader as foes can concentrate on the advisor as a proxy for attacking the leader. And when that advisor’s use life has expired, they can be jettisoned rather than the leader removed (see Kristi Noem). That time has not yet arrived for Stephen Miller.

Fewer federal workers yet more debt

It was to be expected that in his second term, the president’s cabinet would be engaged in producing chaos – but disarray? That they have done at every level. The cozy job security of federal employment has disappeared. Those deemed disloyal have been fired and the mission of virtually each agency has been rewritten. Department of Labor (DOL) data show that, by the end of 2025, federal civilian employment had fallen to the smallest share of the employed workforce on record in data going back to the 1930s. The Department of Education has been gutted with much of the funds routed to the states. I am totally in favor of this. The “Education” department has never been about education. Likewise, the “Energy” Department has never been about making the country energy self-sufficient. The Department of Justice has literally been gutted with around 80 percent of the department’s personnel being laid off or reassigned. The Commerce Department fired the members of its advisory boards and replaced the statisticians who report labor, employment and inflation data with people who generate results more favorable to the administration. The Department of Agriculture (USDA) experienced a larger decline in staffing in a matter of months than in any year since at least the 1970s. The President’s budget proposed cutting National Park Service (NPS) funding by 37 percent in 2026 and cutting National Science Foundation (NSF) funding by 57 percent. FEMA staffing was cut by 14 percent. The National Oceanic and Atmospheric Administration (NOAA), which hosts the National Weather Service, suffered a 19 percent cut in staffing. Farm Service Agency staffing was cut by almost 22 percent. The National Park Service, which had a workforce roughly 12 percent smaller in September 2025 than a year earlier. The Consumer Financial Protection Bureau was dismantled.

The Administration appears to have already exceeded its public goals in some agencies, such as Defense (data are for civilian workforce only), Health and Human Services, Justice, State, Treasury, Veterans Affairs (VA), and EPA. In other agencies, such as Agriculture, Education, HUD, Labor, and SSA, it appears to have gone most of the way to achieving the proposed reductions. And agencies like Commerce and Transportation saw significant losses even though the President’s proposed budget called for no staffing reductions. All total, there are now over 400,000 fewer federal workers now than when Trump took office. Do you miss them? The mere fact that we generally do not miss them is a testimony to how bloated the Federal government was – and still is.

You would think that with the diminution in the federal workforce and with republicans in the majority in the House and the Senate, there would a push to lower the deficit. But during Trump’s first year back in the White House the administration added $2.25 trillion to the deficit. Remember DOGE? It was disruptive but what good did it do? Elon Musk showed he cared more about the political limelight than he did for new car sales and his efforts turned out to be more for show than for substance. As of Jan 1, the national debt was $38.4 trillion. Do I hear $40 trillion by next January 1?

The president used to make clucking noises about lowering the deficit. Remember when he promised to eliminate the federal debt in 8 years? No more. He is proposing to increase the defense budget by $500 million. This was even before the war on Iran. Yet I bet that he gets very little of that. The few budget hawks left will demand offsets on the discretionary side but won’t get it because the democrats will once roll out the tired “You are balancing the budget on the backs of the poor!” Anyway few republicans have the stomach to cut the budget either. Consider where the administration’s proposals for fiscal 2026 ended up.  The administration asked for a 54% for the EPA and got 4%. It asked for a 41% reduction for the Centers for Disease Control and Prevention and got 1%. It asked for a 28% cut from Health and Human Services and got almost nothing. There’s no reason to think anything different will happen this time. Of course, since congress loves to spend more for “emergencies” maybe there will be more defense spending authorized on an “emergency” basis.

CBO (one of my old agencies) says that if we keep going down this path the deficit will be $56 trillion by 2036 or 120 percent of GDP. Since that is only 10 years away odds are that I may still be alive. Do you want to bet that CBO is wrong? I wouldn’t. Right now we are paying $1 trillion a year in interest on the current debt. It will be double that in 2036 and will amount to two thirds of federal borrowing. This is not sustainable. 

The president had been making noise about the Fed lowering the cost of borrowing by artificially lowering the Fed funds target rate. But since the bulk of Treasury borrowing is in the 10 year notes and not the 30 day bills, he needs to look elsewhere for lower rates. He should look in the mirror because his policies lead to higher long term rates as I have detailed many times in the past. The increase in the debt will also lead to increase in borrowing costs as inflationary expectations rise, the value of the dollar falls and bond holders demand higher rates given the higher risks.

Wouldn’t it be nice if the administration got serious about control of spending and paying down the debt? Wouldn’t it be nice if the president were to go on the air and tell the American public what is the plan to do this. Wouldn’t it be nice if he sat down with the members of both parties to lay out his vision and dare them to oppose it? I have long advocated how to do this. I have said that if we limit the growth in the budget to that of long term GDP to no more than 2.2 percent per year, that would be a start. Also since taxes stay around 20 percent of GDP no matter how the code is manipulated, I have proposed that the best plan for fiscal stability is have spending set at 18 percent of the previous year’s GDP. That would mean that the president would have to propose a budget within these limits and the congress would have to adhere to these limits. It will take some adjustment because as of now spending on the nondiscretionary side is almost equal to tax collections, meaning that everything else in the budget has to be paid for by borrowing. 

But apparently there is no plan – at least not an obvious one. The president did not even mention the national debt in his state of the union address. His economic message was “I don’t know why you feel so bad because things are better than they ever have been – and anyway it’s all Biden’s fault.” This is not encouraging. The debt is becoming unsustainable and in the famous words of Rev Jeremiah Wright, “These chickens will come home to roost.”

Trump’s war

How many rockets does Iran have? Reports are that the Iranians have only 2,500 ballistic missiles. I say “only” because if you believe all of the panicky news reports, it sounds like they have 25,000.  The US and Israel are targeting the missile launch sites, which is smart. But I thought that we were told that the launch sites were destroyed in the June attack? Of course those were hardened sites when I guess there must be mobile launchers capable of launching a ballistic missile. Given the reported destruction of the June attack (which now seems overstated) and all the missiles currently being fired, the Iranians must be very good at missile production.

The ballistic missiles have a range of 2,000 kilometers (1,240 miles) which is considerable. The Iranians seem to be trying to sow panic within that range with a missile here and a missile there type of strategy. Most are actually drones. There was one fired at Cyprus, one shot toward Turkey, two at Azerbaijan, others at Saudi Arabia, Qatar, UAE, Jordan, Kuwait and Iraq. But for all the shouting there have been relatively little damage and only a few deaths – even in Israel – from the attacks.

The United Arab Emirates Ministry of Defense said that out of 941 Iranian drones detected since the start of the war, 65 fell within its territory, damaging ports, airports, hotels and data centers. Again this sounds like the gang that couldn’t shoot straight which points to psychological warfare being conducted by the Iranians.

Then there are cruise missiles and of course the famous Iranian attack drones. The cruise missiles and even the drones (surprisingly to me) have a range similar to that of the ballistic missiles. I presume that the Iranians launch all three at targets they deemed of value to complicate interdiction. Iran may have 1,000 cruise missiles and up to 80,000 drones while producing another 400  drones per day. These seem to be more a problem than the traditional missiles.

Interdiction prompts some questions if  Iran is waging a mass drone campaign unleashing waves of low-cost ($50,000), one-way attack drones against Western-linked targets to impose an exponential cost on the U.S. This forces the targets to utilize expensive interceptors on low‑cost drones while creating a psychological burden on military and civilian populations. Air defense systems used by Gulf states and Israel can cost between $3 million and $12 million per interdiction according to U.S. Department of Defense. This cost discrepancy raises a serious issue for Iran’s enemies: Air defense systems have finite numbers of defense missiles, with each target intercepted representing a valuable asset expended. But of course two can play this game as for the first time the US has made extensive use of its own drones in attacking Iran.

So apparently, the Iranian strategy is that their enemies will run out of interceptors before the Iranians either run out of drones or before Iranian facilities are completely neutralized.

One friend of mine who knows these things said that the Iranians likely fired off all their outdated missiles at Israel first to deplete the Israeli defenses and then would attack with more sophisticated weapons.

We are using s ophisticated and expensive sophisticated THAAD and Patriot Systems air defenses to counter the low cost drone attacks. In Ukraine, the slow moving drones have been shot down by machine gun fire and Zelenskyy has offered to help show us how it’s done. The US Navy has also deployed a dozen Arleigh Burke-class Destroyers to the Gulf and the eastern Mediterranean. These are air defense destroyers which can shoot down drones and ballistic missiles. They have already proven effective in the Red Sea against the Iranian-backed Houthi rebels in Yemen. Between 2024 and 2026, the US intercepted nearly 400 Houthi drones and missiles. And of course jet fighters can shoot them down as well.

Trump says that Iran will not be another Iraq squandering US lives and treasure. Yet he says there may be a need for boots on the ground. My friend (and military experts agree) that Iran’s complex geopolitical environment, rugged geography and demographic density make an invasion impractical. The old way of fighting wars with tanks and massed infantry will not succeed in Iran – like it didn’t in Afghanistan. Remember the old saying about generals are prepared to fight yesterday’s war? There is little evidence that the US is prepared to fight modern wars. I predict that if that if Trump uses ground troops, the republicans may lose 70+ seats in the midterms and also lose the senate. Americans have no stomach for another ground war in the Middle East. So in a way, this may be a war of attrition. Which sides runs out of missiles and air defenses first.

Maybe Trump thought that the Iranian military capability was so degraded that this current attack would end quickly especially after the killing of Khamanei and other Iranian leaders. He said “The hour of your freedom is at hand,” he declared, as U.S. and Israeli warplanes pounded Iranian cities and the compound of the country’s supreme leader. “When we are finished, take over your government. It will be yours to take. This will probably be your only chance for generations.”

He appears to be mistaken. First, there is no way that the Iranians were not prepared for the attack and dispersed their armaments throughout the country. Their strategy has been called “centralized planning and decentralized execution.” Second, he also seems to have hopes that the Iranian people will overthrow a weakened government. He made be mistaken in that regard as well. I bet he was surprised at all the masses of people who demonstrated grief over the killing of Khamanei. Yes there were celebrations in Iran but mourning as well. As my knowledgeable friend has said, the resistance lies primarily among the young in the urban areas. However, rural Iran is conservative, strict Muslims and supportive of the mullahs. Sound familiar?

Hey Mahmood, let’s try Zoom next time

It is almost inconceivable that Iranian leadership would physically meet again given the attack that killed Khamanei and members of his leadership team. I wondered if they had ever heard of Zoom and that they had to be the dumbest people on the planet. It is evident that the Israelis have compromised Iran’s leadership. Well it happened again. Iran’s Assembly of Experts actually physically gathered in Qom Tuesday to select a new supreme leader. Israeli warplanes struck the Assembly killing and wounding many of those present. One report said that “Israel struck while they were counting the votes for the appointment of the supreme leader.” The strike underscored the depth of Israeli intelligence penetration inside Tehran. No fooling.

Trump loses another one

The president testing the limits of the executive, just found out that he cannot shut down law firms he doesn’t like. Recall I had earlier reported that the president was issuing executive orders ending all government business with law firms that had argued against actions taken by the administration. Those orders would also have the government not do business with any company that engaged those same law firms – sounds like the “supply chain risk” designation for Claude AI. Well lo and behold, the “Justice” Department lawyers told the U.S. Court of Appeals for the District of Columbia that they were no longer interested in pursuing the cases and were asking the court to dismiss them. When the president issued the threat nine firms capitulated and reached deals with the administration. Four firms did not and sued instead and received favorable rulings from district court judges.

When the president issued the orders it was first against the firm defending Jack Smith and the second was against a firm involved in the Russia hoax. I was appalled saying that the right to counsel was guaranteed by the Constitution and Trump was trying to silence the opposition. Although I am not a lawyer, it was not surprising that a district judge agreed. She said “The executive order sends little chills down my spine,” and the administration had sent a clear message, “Lawyers must stick to the party line, or else.” The orders, she wrote, were “an unprecedented attack” on foundational constitutional principles.

Netflix bows out, CNN freaks out

Netflix just told Paramount that it can buy Warner Bros. Discovery. One very interesting sidebar is the question “Will this affect CNN?” CNN is part of Warner Bros. Discovery. It also owns CBS. When Paramount bought CBS last year, it instituted all sorts of changes in leadership and in staffing. Paramount is headed by David Ellison, Larry Ellison’s son, and an ally of Donald Trump. The new head of CBS leadership is Bari Weiss a long-standing critic of progressive politics. Weiss’s first decisions made headline news. She pulled a report harshly critical of Trump’s anti-immigrant crackdown hours before it was scheduled to broadcast on 60 Minutes. It was later aired with a revised introduction. As a result there was an exodus of personnel from 60 Minutes. CBS is in turmoil with journalists resigning and interviews being blocked. And insiders say that its being done to aid Trump. Well don’t you think its about time? Many at CBS say that there is now a “climate of fear” at the network. Anna M Gomez, a democrat commissioner at the Federal Communications Commission (FCC) said “This is yet another troubling example of corporate capitulation in the face of this Administration’s broader campaign to censor and control speech.”

So this question is now “Is CNN next?” Yes the old “Clinton News Network” is said to be in panic mode and “freaking out.” Like what happened at CBS, will the same happen at CNN? Will it modify its far left, anti-Trump posture and move more toward the center? Stay tuned.

Are Trump’s new illegal tariffs illegal too?

After his loss in court, the president invoked a universal 15 percent tariff for 150 days under Section 122 which allows the tariffs under “large and serious United States balance-of-payments deficits.” Oops, there is no such thing as a “balance of payments deficit.” The balance of payments is always in balance because of double entry accounting. There can be deficits and surpluses in the components of the balance of payments. Hence the balance of trade (between goods and services) can be in deficit but not the balance of payments. Section 122 was written when there were fixed exchange rates (gold standard) and has not been relevant since the US went to flexible exchange rates after Bretton Woods in 1973.

When the US dollar was pegged to gold and foreign currencies were pegged to the dollar, surpluses and deficits can occur because currency prices are fixed and not determined by the market. So when there is a deviation in the price set by the market from the price set by governments, there can be imbalance in the balance of payments deficit. So for instance, if the mispricing caused countries to convert dollars into gold it could seriously drain US gold reserves creating a deficit in the balance of payments. But again that can no longer happen under a regime of flexible exchange rates. So if there cannot be a deficit in the balance of payments then Trump’s actions under Section 122 are also illegal.

Hegseth vs Claude. State of the Union

Pete Hegseth, probably taking his boss’ lead decided to bully Anthropic to drop their barriers on the use of its AI, Claude. Do you use AI? I actually use Claude after trying Chat and Grok among others. BTW, what’s up with Siri? It is dumb by comparison. Apple should be ashamed. Anthropic and the Defense Department had a small dustup over its use by the military. Hegseth, with the president’s concurrence, wanted Anthropic to remove its restrictions on domestic mass surveillance and fully autonomous weapons systems from Claude. Hegseth demanded that Anthropic equip the Pentagon with an AI model “free from usage policy constraints that may limit lawful military applications.” If not then he would label Claude a “supply chain risk,” a designation for foreign adversaries, meaning that anyone wanting to do business with the US military could not do business with Anthropic. (Maybe he thought Claude was French). 

Hegseth said that he might even nationalize it. Anthropic refused. Trump, as is his wont, went ballistic saying “We don’t need it, we don’t want it, and will not do business with them again!” The United States of America will never allow a radical left, woke company to dictate how our great military fights and wins wars! The Leftwing nut jobs at Anthropic have made a DISASTROUS MISTAKE trying to STRONG-ARM the Department of War, and force them to obey their Terms of Service instead of our Constitution. Their selfishness is putting AMERICAN LIVES at risk, our Troops in danger, and our National Security in JEOPARDY. Therefore, I am directing EVERY Federal Agency in the United States Government to IMMEDIATELY CEASE all use of Anthropic’s technology.” Good grief.

Actually, federal agencies were given six months to eliminate doing business with Anthropic. Ironically, the military’s action in Iran relied on Claude for intelligence assessments, target identification and simulation of battle scenarios.

The company said that “designating Anthropic as a supply chain risk would be an unprecedented action – one historically reserved for US adversaries, never before publicly applied to an American company.” Anthropic also said the “designation would both be legally unsound and set a dangerous precedent for any American company that negotiates with the government.” The company had voiced its constitutional, ethical, and technical concerns about unleashing AI capable of surveilling American citizens at home and executing people abroad according to its own judgment instead of a human being’s.  Surely they aren’t implying that the federal government would ever spy on its own citizens, would it? I presume that the company will sue the Defense Department. Certainly the designation will have an adverse impact on Anthropic business. Some say it would be a death blow. Amazon, Google and other partners would have to cease doing business with the company currently with a market valuation of $380 billion.

Incidentally, after banishing Claude, the Defense Department entered into a contract with OpenAI on the same terms as the one Antrhopic had insisted on making one wonder if all the dustup was just a personality issue between Hegseth and Anthropic.

State of the Union

Did you watch the State of the Union address? I didn’t. Nielsen says that 32.6 million people watched which is down from the 36 million last year. Since there are 36 million registered republicans, this means that it is likely that few democrats or independents watch the speech. But only a paltry 3.1 million watched the democrat response. Does this mean that we are getting more apathetic to politics? Trump’s 2017 speech had nearly 48 million viewers. President Bill Clinton had 67 million viewers in 1993.

The after speech media coverage was pitiful. Those on the right exhorted that the president had knocked it out of the ballpark and had exposed the democrats for what they were. One would have thought that the polls would have shown a mass migration of voters to the MAGA side. They didn’t. On the other hand, the left wing media fact checked the speech and called it overlong and partisan. One would conclude that meant a mass migration of voters to the democrat side. That didn’t happen either.

Neither happened. I could have predicted that only hardcore MAGAs would tune in and everyone else would tune out. It was a missed opportunity for the president to lay out his vision of economic recovery, immigration status and vision going forward, Instead, it was a political speech with Trump preaching to the choir. The democrats and independents either tuned him out or didn’t tune in at all. As pollster Scott Rasmussen said “In terms of its impact on public opinion and the midterm elections. I can say with a high degree of confidence, there won’t be any.”

By the way, Trump continued the tradition started by Ronald Reagan in having people in the gallery to be recognized. He had the men’s hockey team. The women were invited but said they had a conflict. I would have had every American medal winner there as well.

Trump’s interesting surgeon general nominee

Did you know that the president’s nominee for surgeon general Casey Means is not a licensed medical doctor? Means does have a medical degree from Stanford and is described as a “holistic doctor and entrepreneurial wellness influencer”. Is that the modern equivalence of a medicine man? Could be because Means has consulted with spiritual mediums and participated in a full moon ceremony. At her confirmation hearing she focused her testimony on the rise of chronic disease and the need for “restoring wholeness for Americans – physically, mentally, and societally.” Well if not a medicine man then a faith healer? She said “Our nation is angry, exhausted and hurting. If we’re addressing shared root causes, we’re going to be able to stop the whack-a-mole medicine that’s not working for us.” Where have we heard “root causes” before?

Originally Trump’s nominee was Fox contributor Dr Janette Nesheiwat whose nomination was withdrawn over questions about her certification and schooling. Nesheiwat’s public profile on Linkedin listed an M.D. degree from the University of Arkansas, when she actually received her medical degree from American University of the Caribbean in St. Maarten. That Laura Loomer person who is said to influence Trump also opposed Nesheiwat not because of her degree but due to her support for the Covid-19 vaccines during the pandemic.

The MAHA folk wanted Means instead of Nesheiwat in the first place and got the president to nominate her. But Means is controversial – no kidding. Besides not having a medical license she has operated outside the bounds of traditional medicine having delved into psychedelics. Like RFK, jr she endorses raw milk – after meeting the cow. “I want to be free to form a relationship with a local farmer, understand his integrity, look him in the eyes, pet his cow, and then decide if I feel safe to drink the milk from his farm.” Oh boy. She also says that conditions from dementia to erectile dysfunction can be reversed with the help of quizzes and recipes.

Means is a bud of Kennedy’s and has served him as an advisor. She is 100 percent MAHA and is completely on board with his criticism of the use of the Hepatitis B vaccine for newborns and the blanket use of the vaccine for babies. Means has even said that the use of Hep B on babies is a crime. She even repeated almost verbatim what Kennedy has said regarding babies and vaccines “I think there’s a nuanced conversation that American families are looking to have about shared clinical decision making with their doctors about specific vaccines that their children may not be as seriously at risk for.” 

So what does the surgeon general do and is it important? The U.S. surgeon general is the nation’s leading spokesperson on public health matters and oversees the U.S. Public Health Service Commissioned Corps (PHSCC), which has more than 6,000 health professionals dedicated to protecting and promoting the nation’s health. Jerome Adams, who was surgeon general in the first Trump administration, and who opposes Means’ confirmation wrote the following.

“Throughout history, the surgeon general has been a beacon of scientific integrity and public health advocacy. In 1964, Luther Terry issued a groundbreaking report linking smoking to lung cancer, a pivotal moment that catalyzed the nation’s anti-smoking efforts. In 1986, C. Everett Koop released an historic report on AIDS, challenging stigmas and promoting education. More recently, in 2018, I issued an advisory urging Americans to carry naloxone, a lifesaving medication for opioid overdoses. Subsequently naloxone dispensing increased 400%, and we are now seeing declines in overdose deaths. These initiatives were successful not because of the individuals behind them, but because of the trust and respect that the Office of the Surgeon General commands.”

He goes on to say “The qualifications for this esteemed position are not merely formalities but essential to its credibility and effectiveness. Traditionally, U.S. surgeons general have been career officers in the Public Health Service Commissioned Corps (PHSCC), with advanced medical training and often additional qualifications in public health or related fields.” Means falls short on almost every criteria. She is only being nominated because of her relationship to Kennedy. Adams finds it “incomprehensible” that she is even being considered for surgeon general. Hey, maybe she will issue an advisory on doing jigsaw puzzles to arrest dementia and erectile dysfunction.

Not surprisingly, she does not have the votes for confirmation. Yet the nomination of Means is in a way consistent with Trump’s intent on disrupting things. HHS is in chaotic disarray because of Kennedy and his allies overturning the apple cart. It is certainly not business as usual. The question is whether all this is doing good – or doing bad.

By the way, Kennedy, who says he has a parasitic worm in his brain, is having the National Institutes of Health fund a study on whether ivermectin can cure cancer. Kennedy also touted ivermectin as a treatment for Covid – to the horror of the medical establishment which characterizes ivermectin as “a cheap, off-patent anti-parasitic deworming drug.” I can guarantee that Means is on-board with this study.

What do you think?