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Do you trust the CDC?

Now that President Trump is back in office and RFK, jr is head of HHS, people are being asked if they trust the CDC (Centers for Disease Control). I think the relevant question is to ask if people have ever trusted the CDC. I know that the CDC lost credibility during Covid. Did that distrust lessen with the arrival of Kennedy? Apparently not. There are ones that are dismayed over some of the new directives from the administration to the CDC regarding immunizations and research. One in particular that I find disfavor in is the directive that explicitly forbids CDC scientists from working on “identifying and documenting worse health outcomes for minority populations.” I have stated before that this is a wrong direction to take. 

One of the contradictions of this administration is the acknowledgement that on the one hand there are differences between males and females and on the other hand differences do not exist – either by sex or by race. So males should not be allowed to share intimate spaces with females. There are only two genders – regardless of what gender they say they possess. So defund research focused on gender. Also defund research into racial differences. So we are different but we are not different? Is the administration in denial that minorities have worse health outcomes in cardiac disease, diabetes, kidney disease and others and we are not to find out why and remedy those differences? This is a disservice to millions of Americans who happen not to be white males.

Sure Kennedy has gotten awful press, some of which is deserved. The CDC is a mess as he is cleaning house and redirecting its priorities. Not a bad thing either. What does the public think? There is a partisan divide.  For instance with regard to the warning about Tylenol, 60 percent of democrats polled thought the statements were false while 56 percent of the republicans thought they were true. This is more likely a “hate Trump – like Trump” divide. Physicians continue to reiterate that it is the safest medicine to take in pregnancy, when untreated fever or pain can cause other problems. Does this means that a large segment of the population does not trust physicians either?

I know of plenty of people who have always distrusted the CDC, physicians and the AMA well before the advent of Trump and Kennedy. The agency has in the past made recommendations and then withdrew them. The CDC has had a precipitous decline in public trust under Kennedy who has been called by former surgeon generals as a threat to the nation’s health. One said “They’ve dismantled the agencies that had real scientists who provided information and instead replaced it with ideology. We’re already seeing diseases that we usually don’t see coming back, like measles. People will die and the ramifications are significant.” 

Moreover, given Kennedy’s track record on vaccines, the legions of antivaxxers are growing. The president has even chimed in on vaccinations. People may be motivated to make decisions based on whether they like or dislike the president, rather than any rational thought.

Former CDC leaders Rochelle Walensky and Dan Jernigan have stopped short of saying that do not trust their old agency. But they did say it has been harder to trust CDC guidance under the Trump administration and that physician groups should step up to fill the void. Really? Who do you trust for health advice? I discount virtually every pronouncement from the AMA. I firmly believe that its obsession with wokeness in medical schools endangers the nation’s health. Where do you go get information about medications and medical advice? I know that I have challenged some of the advice given to me by my own physician. She expects that given my penchant for researching almost everything dealing with my own health issues. But what do “normal” people do? How do you make decisions regarding your own healthcare?

Right now the CDC is in turmoil. More than 1,300 employees have been terminated, some permanently. The fact is that the firing of vaccine experts and cutting off research funding does not engender trust and it has served to erode my trust ever farther. Of course, Kennedy does not see it that way. In an editorial in the Wall Steet Journal, he said that his actions were restoring trust in the CDC. He contends that the CDC lost the public’s trust with its unscientific mandates during Covid. He wrote “Bureaucratic inertia, politicized science and mission creep have corroded that purpose and squandered public trust. That dysfunction produced irrational policy during Covid: cloth masks on toddlers, arbitrary 6-foot distancing, boosters for healthy children, prolonged school closings, economy-crushing lockdowns, and the suppression of low-cost therapeutics in favor of experimental and ineffective drugs. The toll was devastating. America is home to 4.2% of the world’s population but suffered 19% of Covid deaths.” Whoa! Excuse me, but wasn’t all this on the president’s first watch with Fauci who first said no masks and then one mask and then two masks? Fauci later admitted that there was no scientific basis for many of the restrictions taken during Covid certainly played a role in a lack of trust in the CDC. Now critics of Kennedy are saying that the recommendations from the CDC are not evidence based. Are we now to believe the critics? What a mess.

Kennedy writes that the CDC has wandered away from its mission and only “half of the CDC’s budget supports its infectious-disease mission. Fewer than 1 in 10 employees are epidemiologists. That drift explains much of the agency’s disastrous pandemic response.” So Kennedy says that the president wants him to restore the CDC to its original mission and restore its focus on infectious disease. Will this restoration bring with it a credible CDC? Whether his actions are doing this will be the subject for continuing debate. The president is fond of saying “wait until next year” to see the benefits from his policies. Well lets wait until next year to see if Kennedy has indeed restored the public trust in the CDC.

Tariffs: Manna from Heaven? And a modest suggestion to reopen the government

Some time ago I raised the question as to whether the president knew that he could not unilaterally use the revenue from the tariffs on any project that he desired. He promised that tariffs would make us rich as hell. It was as if tariffs would be manna from Heaven. A wonderous outflowing of billions into our coffers to solve all our fiscal problems. But since tariffs are paid by the domestic importer and not the foreign exporter, they were akin to raising taxes – and increased taxes have never made any nation rich as hell. Estimates are that the tariffs will effectively decrease real household income by $2,000. Again, the fiscal effect of tariffs is akin to transferring money from one pocket to the next. But the impact is an overall negative one on GDP. Most estimates of GDP (outside of the administration’s estimates) are for a slowing of GDP growth due to the tariffs.

Regardless, the president said that he would use the tariff revenue to maybe give us a $5,000 rebate. Maybe he would give the farmers $28 billion. Maybe he would reduce income taxes. Maybe he would pay down the national debt. Maybe he would use it to pay the troops. He even said that maybe it could be used for nutrition assistance. Maybe. Maybe. Maybe.

Remember when China stopped buying US soybeans? The president said “We’re going to take some of that tariff money that we made, we’re going to give it to our farmers, who are, for a little while, going to be hurt until the tariffs kick in to their benefit. So we’re going to make sure that our farmers are in great shape, because we’re taking in a lot of money.”

Well if the president is going to use any of the $200 billion or so currently from tariffs, he is going to have to get an act of congress to allocate the money. That is because tariffs flow into the general fund at the Treasury and only the congress can approve its allocation or reallocation. Granted the president has exercised his power by freezing funds already appropriated by the congress (subject to judicial approval) but he lacks the authority to raid the nation’s piggy bank. One republican member of congress politely reminded the president of this when he said “So while I’m certainly interested in the White House and President Trump’s suggestions, there’s the necessity of Congress acting to implement that suggestion, if that’s the conclusion of Congress.” One of the president’s officials admitted that it would be nice if it weren’t so but “I mean, listen, when the tariff money comes in, it goes to the Treasury of the United States. And Congress has to tell it — has to authorize it and appropriate it — right?” Right.

The vice president who is prone to speak while not being briefed on matters had said that during the shutdown the tariffs would be used to fund military pay. Wrong. That pay is coming from other funds says the Office of Management and Budget. Instead of waiting on congress to authorize payment to farmers out of the tariffs, the administration instead is going to use money from a Department of Agriculture emergency fund. It has even found money laying around to fund nutritional assistance.

If the administration did get the congress to write a bill authorizing the use of the tariffs from the general fund, what would it look like? Would it be a Christmas tree bill using the money in hundreds of different ways? Would there be a different bill for each proposed use? Regardless, the republican leadership is probably hesitant to bring any bill up for authorization because of what the democrats might do. You can be certain that they will want to use the tariffs to fund their own priorities. 

Now a modest proposal: I am actually surprised that those in congress or the president haven’t thought of using the tariffs to address the current standoff over Obamacare subsidies. The Congressional Budget Office (one of my old employers) estimates that the cost of continuing the Obamacare subsidies will be $350 billion over ten years. Well that is “only” $35 billion a year and the tariffs have already brought in $200 billion and are estimated (ceteris paribus) to bring in $4 trillion over that same 10 year period. Currently some republicans are starting to feel the heat because they have constituents who have become hooked on the Obamacare subsidies. So why not just use the tariff money to solve the shutdown farce and reopen the government?

BTW, I am categorically opposed to the costly, inefficient Rube Goldberg machine that is Obamacare and wish for its repeal. I am just offering up a possible solution to the shutdown using the tariff (which I also oppose) monies.

Temper tantrums galore

Perhaps it’s the stress in Washington that has led to a total breakdown in decorum. First, Pam (Blondie) Bondi went on the offensive and traded insult for accusation at a Senate hearing. Then Karoline Leavitt and Hakeem Jeffries needed a referee to step in and call time out. Maybe it is the pressure stemming from the government shutdown but Jeffries had not so nice things to say about Trump’s press secretary. He said “You’ve got Karoline Leavitt, who’s sick. She’s out of control. And I’m not sure whether she’s just demented, ignorant, a stone-cold liar, or all of the above.” And what had prompted this remark? It was Leavitt who had said likely about the demonstrators in the latest “No Kings” demonstrations “The Democrat Party’s main constituencies are made up of Hamas terrorists, illegal aliens, and violent criminals. That is who the Democratic Party is catering to — not the White House, and not the Republican Party, who standing up for law-abiding Americans. Not just across the country but [also] around the world.” Ho boy. And here is what Jeffries retorted “But the notion that an official White House spokesperson would say that the Democratic Party consists of terrorists, violent criminals, and undocumented immigrants makes no sense, that this is what the American people are getting from the Trump administration in the middle of a shutdown.”

I wish – to no avail – that everyone on both sides would cool it. We have had the left call the president, his supporters and republicans in general every vile name in the book. The tradition has been for the republicans to take it. No more. Its now insult for insult. Members of congress are coming close to blows as tempers boil over. We had not yet resorted to fisticuffs and duels but it seems that we are getting close.

Speaking of no kings, did you see where there was a no kings rally in London – where they actually have a king? I wonder what King Charles thought about it?

The rallies in the US appeared to be mostly peaceful. I guess we had one in Knoxville but I am not certain.

Did you see where Portland’s city council voted unanimously to codify its sanctuary city status and instructed its police department not to assist ICE? Trump has called Portland “war-ravaged” and claimed federal facilities, including ICE sites, are “under siege” by Antifa and “other domestic terrorists.” It is evident that Portland’s elected officials and by inference its residents want to harbor the illegals and resist any effort by federal officials to deport them. Doesn’t the Supremacy Clause take precedent here where the federal laws supersede any local or state law? I wonder why Trump hasn’t just threatened to throw the entire Portland city government in jail?

The president seems to think that George Soros is the funding source for all that’s on the left and has threatened to sic the IRS on Soros’ organization accusing them of RICO violations. I thought RICO was an anti-racketeering law.

The president’s war on Venezuela is couched on drugs but that’s just a ruse. The Navy’s presence in the eastern Caribbean is there to harass Maduro and not particular to stop the flow or drugs, since most of that goes through Columbia into the Pacific. It obvious that the president wants a regime change in Venezuela but Maduro has so ingratiated himself with his military that a coup seems unlikely. Meanwhile, the flow of drugs is progressing finding new avenues to transport it to the buyers in the United States. Well at least, the Navy got in some live fire exercises to keep sharp.

Speaking of drugs, the president has now turned his sights on Columbia calling its president a drug dealer – something he also called Maduro. Since Columbia is the primary source of drug production its about time that decisive action is taken. Is the president threatening to deal with Columbia like he is dealing with Venezuela? Is he going to send the navy into the Pacific to interdict drug smuggling from Columbia? Well not quite. First he is just ending any payments to Columbia to aid in their fight against the drugs calling them a long-term rip off. Second, he is threatening to shut down the drug production if the Columbians won’t do it saying that they had “better close up these killing fields immediately, or the United States will close them up for him, and it won’t be done nicely.” So now the president has threatened to invade both Venezuela and Columbia.

I can’t help but think that the president just likes being a bully picking on those who really cannot fight back. Hence threatening Venezuela and Columbia. Yes Maduro is a bad actor but cocaine and heroin account for only about 25 percent of drug deaths annually. Last year it was around 30,000 deaths. But opioids account for almost three times as many deaths. So why hasn’t the president threatened to invade China to shut down the manufacture of fentanyl? Absent that rather than threaten them with tariffs, how about a complete embargo of Chinese goods and ban Americans from doing business with China until the flow of fentanyl stops? Why doesn’t he rattle his sword at China or is all this just for show?

A Shakeup in the Senior Command

The admiral heading the US southern command abruptly resigned. Admiral Alvin Holsey who was on the job less than a year announced his retirement. The impression is that the admiral was not totally on board with the administration’s war on Venezuela and the bombing of the drug runners. This is ironic to me because when I first saw his name, that of Admiral Bull Halsey came to mind. Bull Halsey was the rare 5 star admiral during World War II and commanded the aircraft carrier Enterprise and was the fleet commander in the South Pacific. Somehow I don’t think Bull Halsey would have resigned like Alvin Holsey.

Holsey’s tweet to the troops and sailors regarding the resignation said “The SOUTHCOM team has made lasting contributions to the defense of our nation and will continue to do so. I am confident that you will forge ahead, focused on your mission that strengthens our nation and ensures its longevity as a beacon of freedom around the globe.” Defense secretary Hegseth will undoubtedly find an admiral eager to take command and execute the president’s wishes regarding the actions in the eastern Caribbean. 

On a personal level I have deep feelings regarding Admiral Holsey and had pride in his elevation to the Southern Command. The admiral was from Fort Valley, Georgia home of my mother’s alma mater, Fort Valley State University. He graduated from Morehouse College which is located in my home zip code in Atlanta. Morehouse offered me (and my brother) early admission scholarships during our high school years. Our pastor was on the Morehouse faculty and I would have gone and been a “Morehouse man” if not for the University of Georgia.

Hegseth’s tweet was “On behalf of the Department of War, we extend our deepest gratitude to Admiral Alvin Holsey for his more than 37 years of distinguished service to our nation as he plans to retire at year’s end. A native of Fort Valley, Georgia, Admiral Holsey has exemplified the highest standards of naval leadership since his commissioning through the NROTC program at Morehouse College in 1988.”

Nonetheless, it is not surprising that the entire warrior class is not on board with the operation against Venezuela. The Wall Street Journal reports that inside the Pentagon some have raised concerns on the basis for the strikes and their legality. Some have written their concerns well as the legal implications for military personnel. I personally hope that these officers and civilian personnel are not fired because differences of opinions should always be tolerated. But it is equally important that the senior officers faithfully execute the commands of their bosses – or else resign. Thie is the old conundrum of “my country right or wrong.” Do you in good conscience obey orders that are contrary to your core beliefs. Of course the extreme would be troops ordered to execute crimes against humanity. But that is not the case here.

Running parallel to Holsey’s retirement was Chairman Xi’s firing of China’s number two general, He Weidong, along with eight other high ranking officers. General He was a vice chairman of China’s top military command and a member of the Politburo and was dismissed from the party and the military for “severe disciplinary violations and abuses of power.” He and the others will be court martialed. What is interesting and somewhat parallel to the dismissal of high ranking officers by Hegseth is that Xi feels that China’s senior command has gotten complacent and its military is not combat ready. Xi has replaced dozens of generals with officers that he considers to be more professional and politically reliable. He also overhauled the military’s command structure to put himself more firmly in control. His avowed goal is to modernize his military and to create a more nimble, 21st-century force that can integrate air, sea and land operations, project power and wage war in the digital age.

Doesn’t that sound familiar? Didn’t Hegseth and the president say as much when they called in all those senior officers to a come to Jesus meeting at Quantico? 

Random thoughts #76

Venezuela

Are we at war with Venezuela? We just blew up another boat killing 6 people. That brings the total to 27 fatalities thus far. The president has claimed that the boats were running drugs and the people were members of Tren de Aragua. I am not aware of any evidence that substantiates this claim but hey, who needs evidence. Right? Regardless the Venezuelans can do little about it. The Navy has beefed up its presence in the area and only a fool would venture out in a speedboat to test the accuracy of naval weapons. At a press conference the president said that the strikes saved more than 100,000 lives. “Every boat that we knock out we save 25,000 American lives so every time you see a boat and you feel badly you say, ‘Wow, that’s rough;’ It is rough, but if you lose three people and save 25,000 people.” Well there he goes again. About 75,000 people died from drug overdoses in the US. So Trump’s airstrikes have saved twice the number of people that would have died had he done nothing. Well we know that the president has trouble with math.

I am not going to venture into the legality of it all but the strikes are illegal under maritime law. Picky. Picky. Trump doesn’t like Maduro so the law is irrelevant (to him). Moreover he has just authorized CIA interventions in Venezuela itself. He has also hinted in conducting land operations as well. What type of covert operations are we talking about here?

Also returning the 600,000 or so Venezuelans in this country back to their homeland is intentionally destabilizing. But what can Maduro do? He is moving some troops to the coast and says that  the “U.S. is a rapacious Nazi-like state that wants to dig its claws into the country’s oil wealth but that the Venezuelan military, the National Bolivarian Armed Forces, are positioning to repel any invasion.” Sure. More fundamentally, I would hate to be a Venezuelan fisherman. Thus far we have at least eight warships and one submarine in the eastern Caribbean. We also have an assault read group with 2,500 marines as a rapid response force. So what happens next? Again is there legal authority to do any of this. Regardless, the congress won’t try to stop him – at least the republicans won’t even try.

Racial gerrymandering

I have written before about the Louisiana racial gerrymandering case currently being heard before the Supreme Court. Seems that the constitution allows gerrymandering so long as it isn’t racial – as defined in the Voters Rights Act. So we have weird looking congressional districts to reduce the number of representatives in a particular party and weird ones to assure a district that is majority minority. As I have said before, I wonder why white voters have not filed suit in California where they are grossly underrepresented. The Supreme Court is likely to rule racial gerrymandering unconstitutional. Some have bemoaned that this will strip blacks of representation and give the republicans at least 19 more seats in the House. Yet a majority of black congressmen represent districts that are not majority minority. So the concern is a bit overblown.

One way to get rid of gerrymandering is to go to a system of proportional representation. Other countries do this in various ways. But let’s keep the total number in the congress fixed a 435. Leave the same number in the states but instead of dividing each state into districts with winner take all, make the districts larger, say only three in Tennessee and allocate the seats by votes. So if the republicans get 60 percent of the votes in east Tennessee, the democrats would still get 40 percent of the seats. And this would be done by party and not by race because that assumes that the vast majority of any race only votes for one party. The same could be said of religion or any other distinguishing demographic factor.

DEI research

The administration is shutting down funding for research projects that study gender, race and other demographic factors. Diversity grants have been terminated where scientists engaged in biomedical research found their grants canceled. So a grant to study psychiatric disorders that are more prevalent among minorities loses funding. Grants for underprivileged first generation students from rural areas have been terminated, even if the recipients are white. An HHS spokesman said that the grants “no longer align” with agency priorities or the president’s executive orders “eliminating wasteful, ideologically driven DEI initiatives.” Recall that the president instructed the entire federal government to end programs that promoted diversity, referring to them as “shameful,” “immoral,” and an “immense public waste.” One researcher noted that she was researching specific genes that make some people more susceptible to diabetes, and who don’t respond well to existing treatments. She said “In my research, I use genetics to help find better drug targets so we can find medicines for people who don’t already have therapies that work.”

I am well aware that many of us think that a good deal of research funding is wasted. For example HHS canceled $350 million in projects for such things as studying “multilevel and multidimensional structural racism, “gender-affirming hormone therapy in mice” and “microaggressions.” One project was “Assessing intersectional multilevel and multidimensional structural racism for English- and Spanish-speaking populations in the US.” The project included work to create an “intersectional, multilevel, and multidimensional Structural Racism Measure” in order to “eliminate health disparities and discrimination” for racial minorities. Some might think this is useless but recall my posting on kidney failure. It was found that the metric used to determine transplants consistently put blacks into a lower less critical category than warranted resulting in more adverse outcomes. The resulting research changed that metric to account for racial differences which has saved lives. That research would have not been funded by this administration.

But I am not smart enough to know whether much of diversity research is beneficial or a waste of time and money. Many life-saving therapies have come from projects that sounded totally inane. I am also left to wonder if my pioneering research in lending discrimination would have been funded. Studying the accept/reject decision on mortgages and their pricing might have been considered frivolous as many could find superficial justifications for denying mortgages to minorities. My work resulted in many changes in how we test for discrimination and resulting laws and regulations. Only goes to show you that you don’t have to be on the left to investigate whether there are differences in behavior by certain groups or by sex. Yet the NIH has even canceled projects studying autism because they involved diverse populations, with differences in race and gender. Pardon me, but this is naïve overkill and may be life altering. Just like there are gender differences, there are racial ones too. The administration needs to be smarter and not reject and defund projects simply because of the name. The bottom line is  “Is it racist to address racism”?

Gold, silver and Bitcoin: canaries in the economic coal mine?

Will Trump heed the markets? Gold is setting records. Bitcoin continues to be above $100,000. Silver is up more than 70% this year. Trump was confident – maybe too much so – that the sheer size of the American market would force every country in the world to heel and bow to his tariffs. Their exporters would pay the tariffs and we would become “rich as hell”. Surprise. Not happening. Trump’s response is that of losers saying “wait until next year.” He says that manufacturing is going to come back. Wrong. Manufacturing and the complex supply chains are not coming back. The president is a short timer and the hundreds of billions of dollars needed to do what he wants are not forthcoming. Instead, agreements are being written among other countries excluding the US. China is finding other markets for its goods and those manufacturers who are making US specific goods are going to have to retool for those other markets. Somehow I don’t think that much of the America-specific goods will sell elsewhere.

The president’s policies are tanking the dollar. Early on he expressed a desire to lower the dollar’s value in world markets to discourage imports by increasing their prices and boosting exports. He has succeeded. Commerce secretary Lutnick – not one of my favorite people – defended the weaker dollar saying “the dollar declining sort of softens tariffs completely.” Of course, but decreasing imports is contrary to Trump’s other insistence that that foreign exporters will pay the tariffs thereby not affecting the demand in the US for imported goods. Yet foreigners are using the cheaper dollar to buy more gold and silver. I am sure that they aren’t complaining. Foreign governments are decreasing their dollar holdings and are buying gold. The dollar is no longer a “safe haven.” What is interesting is that the president has changed his tune a bit when he says that he is “never going to let the dollar slide.” The only way that could happen is “if you have a dummy” as president. Whoops! But the dollar is at two year lows and no stoppage in sight . What now Mr President?

The president had first said that the Fed should lower the Fed funds rate because there was no inflation and to help bolster a flagging job market. He then later emphasized that if the Fed lowered rates, the interest on the national debt would fall allowing him to keep up government spending. Well inflation is rising and the president and Treasury secretary Bessant seem to not realize that a falling Fed funds rate will actually increase the cost of financing the national debt. Only 21 percent of the debt is in short term Treasurys and only that portion will fall if the Fed funds target rate falls. The increase in the money supply will further increase inflationary expectations calling holders of longer term Treasurys to demand higher returns. This will increase the debt burden rather than decrease it. The sliding dollar also complicates Fed policy in that If the dollar declines further, the Fed will be pressured to hold the Fed funds rate steady or even increase it through the end of the year. The October meeting of the Open Market Committee should be interesting.

The dollar slipping as a safe haven? What has Trump wroth? Trump’s policies have weakened the dollar with the dollar falling around 10 percent. That is intentional. A weaker dollar means that exports are cheaper and imports are more expensive. Since the tariff negotiations have resulted in US tariffs on foreigners being higher than foreign tariffs on the US, then imports are curtailed while exports are supposed to rise. US multinationals should be delirious. They should be able to export more. They would have less competition domestically which will allow them to raise prices. And when the proceeds from foreign sales are repatriated into dollars, they will get back more dollars than before Trump’s actions. The president knows this. He has said “You make a hell of a lot more money with a weaker dollar,” he told reporters recently. “When you have a strong dollar, you can’t sell anything. It’s only good for inflation, and it’s good psychologically. It makes you feel good.” BTW, the 100 largest companies listed on the tech-heavy Nasdaq exchange generate about 45 percent of their revenue abroad. So what is it? A weaker dollar or a stronger dollar? I don’t think even the president knows which he prefers or does that preference change daily?

The high tariffs and the weaker dollar cause foreign capital to start flowing to other markets. Is there a reason to keep investing in the US dollar? Can the weaker dollar keep the dollar as the world’s reserve currency? The answer is likely yes but to a lesser extent. There is really no currency in the world to replace it. But as canaries are used to signal danger in coal mines, gold may be the canary in the US economy’s coal mine. Gold prices may be foretelling real turbulence in money and financial markets leading up to the mid-term elections. All that is happening now in the economy due to the president’s policies and will remain due to his stubbornness. His mantra of “wait until next year” may spell trouble to the republicans. The democrats have no message other than “resist” but the impact of the president’s initiatives may be enough to give the House back to the democrats.

The markets fear that the president will try to inflate the country and increase the national debt. Gold and other fixed valued assets become a safe haven as investors and the public flee the falling dollar. By 2034 most forecasts have the ratio of GDP to debt at over 125 percent. Only those who work for the president have this ratio falling. Greece anyone? Trump’s relentless attack on the Fed’s independence only enforces the market’s perception that Trump will try to inflate away the country’s debt and exacerbates the run away from the dollar.

These are basic concepts that virtually every finance student knows. But apparently the president thinks that his policies can prove to be the exception. Maybe the president will change course but I am not holding my breath. Again, if you disagree with any or all of this please counter these points. I would like to know where I erred and if I am wrong.

Lastly, congratulations to the president on his Gaza peace agreement. No other politician could have pulled this off. Getting Turkey, Egypt and Qatar to force Hamas into an agreement that they did not want was masterful. Let’s hope that the peace holds, that Israel will stop its aggression in the West Bank and that the Palestinians can be ruled by groups other than those that advocate for the eradication of Israel.

Phonics, Phonics, Phonics: The Mississippi Miracle

Years ago I went to the superintendent of public schools here in Knoxville. A local philanthropist had shown me the remarkable improvement in reading proficiency of second graders using a method called Direct Instruction. That method utilizes phonics and its computer-based instruction is called Funnix. The philanthropist wanted to fund the use of Direct Instruction in the poorest performing schools in the system and had literally guaranteed that within three years, those schools would become the highest performing schools. One of my acquaintances told me that the method would never be adopted because there was no way that they would allow three mostly poor black schools to out perform the mostly white schools. I was naïve. I thought that once the parents at other schools saw the performance in the poor schools, they would demand a change in method because even the best performing schools in Knoxville have embarrassingly poor reading scores.

The superintendent knew about the results from using phonics yet rejected the proposal using the excuse that the state accreditation board would not allow the reading program because it contained too much reading. Instead, under pressure from the county mayor, he allowed me and several retirees to tutor difficult second grade learners in an afterschool program. At the end of the school year all our kids could read anything you put in front of them. Our reward was that we were not asked back. I am convinced that neither the superintendent nor the local school board have any interest in teaching our kids how to read.

In 2011 only one in five Mississippi fourth graders could read at grade level. The state ranked consistently at the bottom of all states. Remember the saying “Thank goodness for Mississippi?” Well that has changed. In 2013 the state adopted a reading program based on phonics and today when adjusted for socio-economic factors, Mississippi’s fourth graders have the nation’s best reading results. You see it is rather simple. We all know that our public schools are a model of how not to educate our children. They have been pushed by their unions to be more interested in social grooming than in the education basics or reading, writing and arithmetic. Our students do not know civics or geography. But they do know that there are at least 72 genders. in Minneapolis, high schoolers are required to take lessons saying that capitalism is a pillar of white supremacy alongside slavery and genocide. Mind you the system is run by white people who obviously hate themselves. Go figure. We graduate illiterates. If education were a private enterprise it would long be out of business. But this is a result of a government monopoly where failure is rewarded rather than punished. We need a return to the basics and teach reading, writing and arithmetic. All else is garbage. There is a curriculum in Washington state that says that “mathematical knowledge has been appropriated by Western culture” and that “math has been and continues to be used to oppress and marginalize people and communities of color.” Do you want these fools teaching your children?

The problem lies in the method of instruction. Direct Instruction is the only proven method that allows kids who come to school deficient in reading and mathematics to catch up with those who are proficient. This is an important point for conservatives have been strong advocates for charter schools and vouchers. Yet neither will increase proficiency of the vast majority of students who are deficient. Consider that in Knoxville, the charter schools are part of the public school system and are limited in the innovation of teaching method. The education industrial complex is solidly against Direct Instruction and only if states step up and insist on a change in method, like Mississippi, can all children learn to read at or above grade level. Today more than half of black fourth graders in Mississippi read at grade level compared to 28 percent in California. Tennessee has made some strides in addressing this problem too with mixed results. What needs to be done is for the state to force the change on the school systems, teachers’ unions and change the accreditation standards.

Mind you there will always be defenders of the old method of instruction. There will be those who nitpick the Mississippi statistics. For instance, Mississippi schools like many across the country have a problem with chronic absenteeism. Nearly a quarter of public school students are absent at any time. Consequently, it is doubtful that those students were tested for proficiency. The state needs to address the problem of truancy. Nonetheless, those students who were tested showed tremendous improvement. But chronic absenteeism is not just a problem in Mississippi, post-pandemic nationwide fully a quarter of students are absent from school. These students are the ones responsible for missing instructional time and the major source of the dismal reading scores, nationwide.

It should be noted that many of the charter schools that have shown progress have been able to innovate in teaching method. Again I have written on education innovation and will not repeat that here. See my essay Robert Woodson’s “Red, White, and Black: Rescuing American History from Revisionists and Race Hustlers” entitled “Bring back the Rosenwald Schools” in which I advocate setting up a school system completely separate from the current ones. I say “Children are smart and can be taught. They are stuck in failing schools using a failed method of instruction…It is time to recognize that the education of our children is too important to be left to the government.”

The chart below shows the reading proficiency for Knoxville schools. The vertical axis is third grade reading proficiency. The horizontal axis is percent children on free lunch programs. First, you don’t want to be below the line which is the statewide average. Most of the Knoxville schools are below the line. The highest performing school is in a wealthy area has proficiency of 83 percent. Eight percent of its students are on free lunches. The outlier is a school with 44 percent on free lunches but a reading proficiency of 80 percent. What is disheartening is that the school superintendent has not and apparently is not interested in finding out what works at that school which uses the failed method and imposing it on the rest of the schools. Still, the school with 83 percent proficiency means that 17 percent do not read a grade level. Under Direct Instruction, virtually all students will be proficient unless they have a learning disability.

As one educator said “We know how to teach reading,” she said. “We just have to do it.” Mississippi, for one, holds students back in third grade if they cannot pass a reading test but gives them multiple chances to pass after intensive tutoring and summer literacy camps. The state requires every K-3 teacher, elementary principal and assistant principal to take a 55-hour training course in the science of reading. “We have to break that cycle of generational poverty. One of the best ways to do that is to make multiple generations of readers.” One teacher said that in college she didn’t learn a thing about teaching kids to read. One wonders what do they teach in our colleges of “education?” 

Moreover, I have long advocated that colleges of “education” should not offer undergraduate degrees. Potential teachers should have real majors such as business, mathematics and language. Then in order to be certified they should get that certification from graduate programs offered in the college of “education”. However, it is noteworthy to question the value of certification. University professors need only the requisite degrees and not any other certification that supposedly teaches them how to teach raising the question of the value of certifications period.

More random #75

Letitia James indicted

The president’s new interim DA for eastern Virginia took all of a week to bring an indictment against another one of the president’s adversaries, New York DA Letitia James. She is accused of mortgage fraud (naturally). The indictment says that James on a mortgage application for a home in Norfolk, VA said that she was going to use the home as a vacation home but instead rented it. Wow! I am certain that such a serious charge is punishable by death. Seriously, who doubts that the reason Trump’s hatchet man Bill Pulte head of the Federal Housing Finance Agency dredged up the charge is because Trump has declared retribution on his most prominent enemies? The indictment charges that by putting down “vacation home” the terms were such that James would save a whopping $19,000 over the length of the term. One former prosecutor said that it would be exceedingly rare for such a circumstance to even merit an indictment and “The amount of loss in this case is small peanuts, period.” Another former prosecutor said “The idea that someone would expose themselves to federal fraud charges for so little money doesn’t really make any sense.” This was another instance in which the prosecutor that Trump fired had said that the merits of the case did not rise to an indictment. Another former prosecutor said “I would be shocked if this thing makes it to a jury trial. I fully expect the judge to grant a motion to dismiss based on vindictive prosecutions.” James, herself, says that she made an error that was quickly corrected. 

John Bolton is probably next on the pay-back list. What about Adam Schiff(less)? Didn’t Joe Biden pardon him?

Environmentalists now like nukes?

In the “Surprise, Surprise” category, some environmental groups are now lobbying to keep nuclear plants open. There are actually protests in Belgium to keep a plant slated for closure open. However, the operator says it wants to exit the nuclear business and is intent on shutting it down. The Greenies have finally figured it out that nuclear is emission free clean energy. Yet their zealotry has closed plants all over Europe and now they are reaping what they have sown in expensive “green” energy, sans nuclear.

Speaking of nuclear, another one of the reasons for its resurgence is AI which is notoriously energy thirsty. The demands of AI threaten the energy grid and would significantly raise the cost of energy to everyone if it tries to glom onto the existing grid. AI companies will in many cases will have to build their own energy plants.

A little sport talk

I am not a pro football fan but I read about it. So I am wondering what has happened to the Kansas City Chiefs who lost to the Jacksonville Jaguars, the Philadelphia Eagles who lost to the New York Giants and the Baltimore Ravens who got wiped out by the Houston Texans. All the winners are bad teams. It is hard to imagine the embarrassment of losing to them. It would be like Alabama losing to Vanderbilt.

The New York Yankees just lost in the playoffs to Toronto. Some have written that Aaron Judge who will win another MVP (sorry Cal Raleigh) is being wasted for playing 10 years and not winning a championship. Well at least his team has made it to the playoffs. Think about poor Mike Trout who for a period was the best player in baseball and has never been to the playoffs. Trout is a rare being. Everyone else, including his once teammate Shoei Ohtani, would have long ago requested a trade.

The Yankees typically have one of the highest payrolls in the league (I guess the cost of living in New York is high) but are a model of frustration. Their last championship was 16 years ago. The highest payroll teams generally make the playoffs but rarely win a championship – last year’s Dodgers are an exception. But 90 percent of those who win a championship are in the upper half of all payrolls. So it is great to see bottom half teams – Milwaukee, Detroit and Seattle – go deep in the playoffs.

So what about those future rate cuts?

At least two members of the Fed’s Open Market Committee have started to express reservations about lowering the Fed funds rate lower expressing concerns over rising inflation. I know we are no longer getting data – albeit poor data – from the BLS with this government shutdown, but private sources show inflation at over 3 percent and climbing. Remember that the Fed’s target is 2 percent which is long in the rear view mirror. It will be interesting to see what transpires at the next Open Market Committee meeting on October 28-29. I would bet that the president’s man Stephen Miran will again push for a 50 basis point reduction and should be laughed out of the meeting. Some will vote for 25 basis points, likely the two Trump appointees Waller and Bowan while the rest will probably vote for no change.

A lot of people are pointing to the rise in the stock markets as evidence that the economy is strong. Yet statistics indicate that at least 22 states are in recession with either zero or negative growth. Moreover, the increase in the stock market is being fueled by tech stocks and AI and not by consumer based stocks. The president is adding new tariffs on consumer goods such as furniture and drugs and will further dampen consumer optimism and spending. 

If tariffs are making us rich as hell, then why are we getting poorer? The president keeps saying that his tariffs will bring manufacturing back to the US. Well manufacturing as a share of GDP is now falling because of the tariffs. The president seems not to know that close to 50 percent of what we import are used as inputs to American production of goods. For example, steel in the US is almost $1,000 a ton compared to $440 in the rest of the world. Gee thanks Mr President.

The rise in the markets came to a screeching halt when the president unilaterally increased China’s tariffs by 100% in retaliation to their restricting the export of rare earth minerals. The president also threatened to cancel his upcoming meeting with Chairman Xi. The president criticized the Chinese restrictions as “a rather sinister and hostile move” and countered with one of his own. The president said that the tariffs would be 100 percent “over and above any Tariff that they are currently paying,” as well as American export controls on “any and all critical software” — both of which would begin on November 1, “or sooner, depending on any further actions or changes taken by China.”

The S&P 500 dropped 2.71 percent, the Dow fell 878 points and the tech heavy NASDAQ fell 3.58 percent. The president said “Some very strange things are happening in China! They are becoming very hostile, and sending letters to Countries throughout the World, that they want to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they can think of, even if it’s not manufactured in China.” Hum, doesn’t that sound a bit like what Trump, himself, is doing?

Only China and Canada have retaliated Trump’s tariffs. Stay tuned to see who blinks first. But curtailing the rare earths will severely hamper the production of the magnets which are so crucial in virtually all high tech products. I wonder what impact will this have on the Open Market Committee meeting?

Happy Columbus Day, America

It is Columbus Day, although my Mac calendar says it is also something called “Indigenous Peoples’ Day.” What is irritating about the Mac calendar is that you can’t edit it. So you are stuck with things like Indigenous Peoples’ Day, Ashura and Eid al-Adha. So what is an “indigenous people”?  My AI says “Indigenous peoples are the original inhabitants of a region, often with distinct cultures, languages and traditions that differ from the dominant society.” This means that there are no “original” inhabitants because they are probably all extinct. There are no more hominins, no Australopithecus left, no neanderthals or Cro-Magnons. They are all gone. 

The president has weighed in on the matter and said:“Columbus, obviously, discovered the New World in 1492. He was a great Italian explorer. He sailed his three ships—the Nina, the Pinta, and Santa Maria—across the Atlantic Ocean, and landed in what’s today the Caribbean. And this is a particularly important holiday for Italian Americans who celebrate the legacy of Christopher Columbus, and the innovation and explorer zeal that he represented.”

I beg to differ. How could Columbus “obviously” discover the New World if there were already people here who were already here before his arrival on these shores? That very observation was the cause of my very first “C”. In my economic history class at the University of Georgia where I was its first black male freshman and the only black in every class I took for four years, the professor the first day asked “Who discovered America?” The students in the class (unlike the president) knew it wasn’t Christopher Columbus and were afraid to venture an answer. I – who always sat in the front row on the end seat farthest from the door – apparently had a smile on my face. The professor (who turned out to be a member of the John Birch Society) looked at my smile and literally sneered “I guess you know who discovered America.” I said “Yes, the Indians.” He said “I meant white men” and I responded “Who cares about white men?” He then refused to call on me from that point on. He put a “C” on all my papers and exams which I just knew deserved A’s. He refused to say why and when I went to his office, he kicked me out and told me never to come to his office again. He refused to acknowledge my presence in his class. I complained to the department head who said I could drop the course without penalty. I refused and told him I would not give the professor that satisfaction. He gave me that “C” which kept me off the Dean’s list that quarter. But when I returned to campus in the fall, the professor’s name was no longer on the faculty roster. I asked the department head what happened to him and was told “I did not want that SOB on my faculty.”

I know that many on the left want to purge Christopher Columbus from history. They are fools. Columbus and the explorers from his era should be celebrated. Anyone fool enough to sail into the unknown on rickety ships for months out of the sight of land must be admired. But they will persist in calling it “Indigenous Peoples’ Day. Even Investopedia, one of my favorite sites said “We’ll be taking a short break for Indigenous Peoples’ Day. We will return on Tuesday.” Shame on them. My credit union had a sign up saying that they were closed on Columbus Day celebrating Indigenous Peoples Day. Good Grief. Regardless, I highly recommend the reading of Christina Thompson’s “Sea People: The Puzzle of Polynesia.” It is a wonderful telling of the story of a remarkable, courageous and incredible people – indigenous or not – who in their canoes populated the Pacific. I think we should have a Polynesia Day too.

Well the president issued a proclamation that October 13^th was Columbus Day not IPD. Take that you anti-Italian left wing kooks! Here is what the president proclaimed:

“Today our Nation honors the legendary Christopher Columbus—the original American hero, a giant of Western civilization, and one of the most gallant and visionary men to ever walk the face of the earth. This Columbus Day, we honor his life with reverence and gratitude, and we pledge to reclaim his extraordinary legacy of faith, courage, perseverance, and virtue from the left-wing arsonists who have sought to destroy his name and dishonor his memory. Outrageously, in recent years, Christopher Columbus has been a prime target of a vicious and merciless campaign to erase our history, slander our heroes, and attack our heritage. Before our very eyes, le”-wing radicals toppled his statues, vandalized his monuments, tarnished his character, and sought to exile him from our public spaces. Under my leadership, those days are finally over—and our Nation will now abide by a simple truth: Christopher Columbus was a true American hero, and every citizen is eternally indebted to his relentless determination.”

Bravo! Well said and of course Columbus Day is when Columbus discovered Ohio.

Random thoughts #74

Chicago Marathon

The Chicago Marathon is Sunday October 12^th. It goes through immigrant neighborhoods and Chicago’s mayor says that there will be upwards of 40,000 participants, 3,000 from Mexico. I wonder what will be the presence of ICE at the race and whether many participants will chose not to run this year because of their immigration status. I have visions of ICE personnel in combat boots, flak jackets and full gear running after folk clad only in running shorts and a singlet jersey. BTW, I have run in 13 full marathons and have the t-shirts to prove it. That was before my knees gave way to arthritis dooming me to walking on a treadmill and gaining 40 pounds.

Accreditation equals monopoly

Texas just became the first state to end ABA accreditation. Halleluiah! The American Bar Association has become a woke joke. It has forced race-based ideology into law school curricula. Although membership in the ABA has dropped significantly, graduation from an ABA accredited law school is still required to take the bar exam in most states. (Tennessee substitutes state licensing in which graduates from non-ABA schools can take the bar). Also in order to receive a federal student loan, the law student must be enrolled in an ABA accredited school. President George W. Bush was the first president to discontinue the ABA’s screening of judicial nominees. President Trump followed suit. President Trump issued an executive order explicitly criticizing the ABA for its DEI practices and ordered the Department of Education to hold accountable through denial, monitoring, suspension, or termination of accreditation recognition, accreditors who fail to meet the applicable recognition criteria or otherwise violate Federal law.” Then why does the ABA have any accreditation power at all?

The ABA mandates “educating law students on bias, cross-cultural competency, and racism” and suggests satisfying the requirement with “courses on racism and bias in the law.” Note: my uncle in Cincinnati never attended law school. He did not have the money. Rather he clerked at a law firm and read the law and when he felt prepared, he took the bar and passed it. Perhaps we should only require passing the bar and omit the law school requirement entirely. In Texas, its supreme court will decide the criteria by which a person can sit for the bar. Florida and other states are moving to follow Texas’ lead. Presumably the candidate still must attend a law school.

I think it is time to call into question all accreditation and licensing boards. They all operate in constraint of trade. Why not just require proficiency and knowledge to work in a profession? Here in Tennessee we have the famous instance of hair braiders being required to go to school and get a cosmetology degree which is completely unnecessary. The ones who argue that licensure is necessary to “protect the public” are those already in the profession who want to limit competition. I have long argued that accreditation boards are mainly responsible for limiting innovation in teaching our kids. I never will forget that when I proposed that the Knoxville school system adopt a program demonstrated to raising reading proficiency that the superintendent told me that the state’s accreditation board would reject it because it contained too much reading.

There he goes again

Remember when President Trump demanded that Microsoft fire a person that it had hired who had been in the Biden administration and led some of the investigations against him? Well I wonder what is he going to say about Peter Marks, the top vaccine regulator at the FDA joining Eli Lilly to oversee molecule discovery and infectious diseases after being fired by Robert F. Kennedy in March? Revolving door anyone?

Illegals

Total border apprehensions in fiscal year 2025 were 237,565. That sounds like a lot until you realize that the yearly average was 2.2 million during the Biden years. And I thought Biden said he needed a change in the law before he could limit the flow of illegals?

Again, I wonder why the democrats have decided to fight to keep all the illegals from being deported. I guess they say that they brought them in and they want to keep them here. But isn’t it silly that the dems rejected the continuing resolution to keep the government money following for seven more months when they had voted for the identical bill seven months before? Now they want to add permanent funding for Obamacare subsidies that were put in as a “temporary” measure during Covid. Although this will add a minimum of $450 billion to the budget over 10 years, there are rumors that the president is willing to talk compromise. I’m shocked.

Although several states – you can probably name them – have attempted to add illegals to their Medicaid rolls, most illegals do get medical care legally. It is in the emergency room where hospitals cannot deny treatment. The Emergency Medical Treatment & Labor Act requires hospitals to provide care to anyone experiencing a medical emergency regardless of legal status. So far the republicans have made no effort to change this law. BTW illegals are prohibited from receiving federally funded health insurance, including Medicaid.

Gold and the greater fool

Gold just reached $4,000 an ounce. One indication is that the policies of the president have caused the dollar to no longer be a safe haven. Central banks are now replacing dollars with gold. The value of the dollar keeps going down. The deficit keeps rising. Longer term Treasury rates keep rising in anticipation of inflation caused by the tariffs and by the Fed’s lowering of the Fed funds rate with more decreases anticipated in the future. I think gold, like bitcoin, is venturing into the greater fool territory and if you had previously bought either, I think it is time to think about selling. Yes both will probably still go up in the near future because Trump is too stubborn to change course and the Fed is finally succumbing to political pressure but I would not buy gold (or bitcoin) at these prices. The only reason to do so is that you think that there is a bigger fool out there who will pay more for these trinkets than you did. Proceed with caution.

Kristi Noem strikes again

The head of Homeland Security (nee: Border Barbie) must be the PR person for Antifa. She just elevated their status by declaring that “Antifa is just as sophisticated as MS-13, as TDA, as ISIS, as Hezbollah, as Hamas, all of them. They are just as dangerous.” Really? Is Antifa now doing drug trafficking, murder and extortion like M-13 and TDA (Tren de Aragua)? Is Antifa as dangerous as ISIS, Hezbollah and Hamas? Don’t be silly. Antifa is a bunch of rowdy thugs who love to engage in protest activism, civil disobedience, property damage and harassment. But on the level of ISIS, Hamas and Hezbollah? Not even close. They pale compared to the Weather Underground.