Blog

Random Thoughts #52

Trump’s cutting off some funds to Columbia University is finally rousing some faculty out of their slumber. Many of the grants terminated were going to the sciences whose ranks are filed with Jews. While the professors professing solidarity with the pro Hamas crowds are mainly from liberal arts, the grant recipients are mainly on the science side of campus. However, one grantee was active in the protests, neuropsychologist Jennifer Manly. She has received over $100 million in grants over 20 years concentrating on the “social determinants of heath thesis saying that racism, sexism and homophobia can cause brain disease in black and “Latinx” communities.” She also contends that racism can cause Alzheimer’s disease and blames “historical patterns of segregation” for higher rates of dementia among blacks. I guess there are race grifters in the scientific world as well. How much you want to bet that Manly gets no more NIH grants for the next four years?

Did you know that several universities such as Stanford and Washington University St Louis have as many administrators as students? At Stanford there are 15,750 administrators, 2,288 faculty and 16,937 students. At Washington University there are 17,012 students and 21,247administrators and faculty. In contrast the University of Tennessee has 11,491 faculty and staff and 38,728 students.

This is why there is all the howling at “elite” universities over Trump cutting the overhead on grants to 15%. Harvard currently adds on 60 % to its grants. Guess you have to pay all those DEI folk.

Scott Bessant the Treasury secretary says that every country will be given a reciprocal tariff, some high and some low and will have until April 2 to decide what to do.  Bessent said the Trump administration will consider policies including currency manipulation, industrial subsidies and labor conditions when calculating a country’s new tariff rate. Does this mean that lowering their tariffs will not be enough to satisfy Trump? So it seems because I was wondering what Trump would do if Canada suddenly eliminated all their tariffs.

The ambassador from South Africa has been expelled. Expelled? Yes expelled. The State Department’s spokesperson Tammy Bruce (remember her from Fox?) made the announcement. Relations with that beautiful country have been icy starting with South Africa’s accusing Israel of genocide at the International Court of Justice. Then Elon Musk tweeted his opposition to a new law that seemed to allow the South African government to confiscate the land of white citizens. Trump tweeted his displeasure and moved to cut off all aid to the country. Trump then offered white South African farmers a “rapid pathway” to US citizenship should they choose to emigrate. Whites make up 8 percent of the population and own 75% of the land. They are mostly Afrikaners, who once ruled the country during apartheid. However,most white South Africans rejected Trump’s offer with a  leading group saying “Emigration only offers an opportunity for Afrikaners who are willing to risk potentially sacrificing their descendants’ cultural identity as Afrikaners, the price for that is simply too high.” The group also opposes the cutting off of aid to the country. Another group Solidariteit, represents two million Afrikaners and includes a trade union, said that “repatriation of Afrikaners as refugees is not a solution for us.”

For Trump the last straw was when the ambassador, Ebrahim Rasool, said that Trump was a white supremacist. Secretary of State Marco Rubio said that Rasool was a” race baiting politician” who hates Trump and expelled him. Pretty dramatic, eh? I wonder how that affects travel and trade with South Africa. I have been on three bow hunting safaris and absolutely love the country and its peoples, black, white and mixed. They do have very serious problems that hopefully will be fixed. Note however, that South Africa did not expel the US ambassador and is moving to replace Rasool calling his comments “regrettable.” 

Trump goes after the PhD Project

I used to hear employers say that there were no qualified blacks for a particular job. The same was true at universities. Well affirmative action and DEI compelled them to broaden their search. But what if the pool of minority candidates were small as is the case in some areas of the university such as engineering or business? The question is how do you increase that pool? One way has been the PhD project, which is currently being assailed by the Trump Administration.  

KPMB started the PhD project in 1994 to grow the pool of minority PhDs in accounting even though the company itself hired very few PhDs. It later expanded to include other areas in business. I was asked to help facilitate bringing in more Finance PhD candidates. I did so gladly because there were precious few minority PhDs in Finance and the pool of graduate students was pitifully small. What I, and others, did was to put a space for research papers and ideas of students in the PhD project in our annual meetings. I was an officer in one large association and the editor of the journal in another. Mind you, the PhD project was encouraging students to get PhDs in business and providing them with counselling and assistance. Students had to apply and be accepted in a PhD program. The PhD Project provided mentoring services. When they were awarded the degree, they were then available to be in the pool of candidates hired by universities. The link with the academic associations provided universities with access to the students in the PhD Project. Since the annual meetings are often the recruiting market for the disciplines, the universities’ pool of candidates is greatly enhanced. The search costs for qualified minority candidates are greatly lowered.

Go to phdproject.org. and there you will see that their mission is to broaden the pool of business school faculty to “encourage, mentor, and support tomorrow’s leaders”. This is important because it will show bright young minds what an academic career entails and its attractions both financially and intellectually. I was the only black in my PhD program at Ohio State and my professors could not recall if another had ever been in the program. There was one in finance but we never had a class together.

During my years as a professor there have been precious few minorities in my classes – except for the year spent at Howard University. I have always mentored students both black and white and encouraged them to include academics in their career decisions. I admit I have probably tried harder to get minorities and women interested in a PhD. The PhD project has been successful in expanding the pool. Ninety percent of its students earn a PhD and 97% accept a faculty position. Over 1,800 new faculty have been mentored in the PhD project. There are now chaired professors and deans that otherwise might not have considered a PhD who are contributing to business education.

Now the Trump administration has sent notice to the university partners of the PhD project in its never ending quest to stomp out everything that is DEI. As a result some universities are now terminating their relationship with the organization. NPR reports that “The U.S. Department of Education has launched investigations into 52 universities in 41 states, accusing the schools of using “racial preferences and stereotypes in education programs and activities. The department’s Office of Civil Rights said that the schools violated the 1964 Civil Rights Act by partnering with the PhD Project, a nonprofit that helps students from underrepresented groups earn doctoral degrees in business. The program focuses on supporting black, Latino and Native American students.” The PhD Project responded “Our vision is to create a broader talent pipeline of current and future business leaders.” “This year, we have opened our membership application to anyone who shares that vision.”

I want the PhD Project to continue its good work. It is interesting that Trump has vowed to get rid of the Department of Education and yet it is that department that is seeking to terminate the relationship between the universities and the PhD Project. I hope it fails. I would hope that the underrepresented groups served by the PhD project would expand to include first generation white students and those from economically depressed areas such as Appalachia. Perhaps that would satisfy the Trump zealots. The PhD project has proven to be the most effective source in expanding the pool of minority PhDs. May it continue to do so.

The New Era overlap caps

Opening Day was March 18 in Japan. The Los Angeles Dodgers beat the Chicago Cubs or should I say the Los Angeles Dolaers beat the Chicago Cubs? You see every so often New Era releases a new set of baseball caps. This year the release of their “overlap” caps created so much controversy that the cap for the Texas Rangers was immediately pulled from the stores. When I looked at the caps I wondered why the Astros cap was still available. But soon it too was pulled along with the one for the Los Angeles Angels. The Texas cap with the “T” imposed in the center spelled Tetas which is a Spanish vulgarity referring to a woman’s breast. But look at the Astros’ cap. It spells As-H-os. Some would say that is appropriate given their sign stealing scandal of a few years back. The Angels’ cap is An-A-els which means “God’s grace”. I don’t know why that is offensive. But so be it. But what about the Bo-B-on Red Sox? The Los Angeles Do-LA-ers seems appropriate given that they are trying to buy another World Series title. Then there are the Seattle Ma-S-ers, The Philadelphia Phi-P-ies, the Miami M-M-mi Marlins (stutter anyone?), De-D-oit Tigers and the Washington Na-W-als Nationals.

Those lucky enough to have bought the Astros and Rangers caps before they were pulled are now selling them for $1,000+ on ebay.

Democrat leadership, Jewish Voice for Peace

Part of the democrats problem is that both of their leaders in the House and Senate are from New York. In the House the republicans’ leaders are from Louisiana (Mike Johnson) and South Dakota (John Thune). In the House, Mike Johnson (Louisiana) is speaker, Steve Scalise (Louisiana) is majority leader, Tom Emmer (Minnesota) is whip and Lisa McClain (Michigan) is conference chair. For the democrats Hakeem Jeffries (New York) is minority leader, Katherine Clark (Massachusetts) is whip and Pete Aguilar (California) is caucus chair. All the republicans are from the heartland. All of the democrats are not. Couldn’t the democrats find someone from middle America or the south?

In the Senate, John Thune (South Dakota) is majority leader, John Barrasso (Wyoming) is whip, Tom Cotton (Arkansas) is conference chair, Shelley Moore Capito (West Virginia) is policy committee chair and Tim Scott (South Carolina) is senatorial committee chair. For the democrats Chuck Schumer (New York) is minority leader, Dick Durbin (Illinois) is whip, Amy Klobuchar (Minnesota) is policy chair, Cory Booker (New Jersey) is strategic communications chair, the vice chairs of the conference are Elizabeth Warren (Massachusetts) and Mark Warner (Virginia). Only Warner is from a southern state while Durbin and Klobuchar are from middle America. Interestingly, these three were right in the middle of senate democrats who voted for Trump’s nominees. There were 6 democrats who voted for 10 nominees and 8 who voted for only one. Durbin voted for 5, Klobuchar voted for 7 while Warner voted for 6. So I guess you would call them “moderates.”

Isn’t it interesting that all the blow back on Schumer’s voting for the continuing resolution is coming from the usual loud voices on the left and from democrats in the House. We have heard from the usual suspects, Jasmine Crockett and AOC but nothing from the senate side. Chris Murphy – who only voted for one of Trump’s nominees – usually one of the loose cannons in the senate said that he still supports Schumer as leader.

Did you notice that one of the leading groups in the pro Hamas demonstrations is something called Jewish Voice for Peace? It has been especially prominent at Columbia University and lead the protest at Trump Towers in support of Mahmoud Khalil. I know that Jews are divided between Zionists and non Zionists. I know that some like Chuck Schumer have called for Netanyahu’s resignation. But I can’t conceive of a Jew shouting “intifada!” and “from river to sea!” which advocate the erasure of Israel. Since Jewish Voice for Peace does these things, I was wondering if there were any Jews in Jewish Voice for Peace? That organization is pro Palestinian and supports the boycott, divestiture and sanction campaign against Israel. Not surprisingly the Times of Israel says that JVP is neither Jewish nor for peace. Consider that in response to the attack on Israel by Hamas on Oct 7, Jewish Voice for Peace said that “the source of all this violence” was “Israeli apartheid and occupation — and United States complicity in that oppression” and that Hamas’s actions were consistent with “Palestinians’ right to resist.” It is difficult to imagine a Jewish group tweeting that. Here is a statement from them about Trump’s efforts to deport noncitizen students who are engaged in pro-Hamas activities.

Donald Trump is reportedly planning to continue his violent crusade aimed at gutting freedom and democracy with an Executive Order today calling for the deportation of non-citizen anti-war activists, with a particular focus on students. This is a vile attempt to sow fear and crush political dissent to the U.S.-backed Israeli genocide of Palestinians in Gaza, as well as to further the far-Right’s broader anti-immigrant agenda. Should there be any attempt to enforce this authoritarian, unconstitutional, and violent executive order, we call on elected officials, university administrators, and all people of conscience to boldly reject these orders. 

Polls indicate that they have very little support amongst Jews themselves. Yet there are a number of American Jews who question Israel’s war effort. While 89 percent of American Jews support Israel’s fighting Hamas only 62% find acceptable Israel’s war conduct.

Still I wonder if members of JVP wear Star of Davids or signs of their Judaism in these protests? Can a Jew in JVP walk to class at Columbia without being harassed? 

Did you see where several Columbia professors canceled classes to show support for Khalil? Beats me why this shows support. One even canceled an exam and gave every student an “A”. So much for academic excellence at one of our former “elite” universities. One professor tweeted “Given that the College and Columbia University has neither issued a public statement with any clear explanations as to why or how this arrest was allowed nor offered any serious reassurances for international students who might be targeted further, many professors feel it is unsafe to continue teaching as usual. Many students are afraid to go on or even near campus. To ensure the safety of all, I am canceling classes this week.”

I guess any international student involved in violent demonstrations should be afraid and rightly so. But “unsafe to continue teaching as usual?” Hey, he probably wanted to get a head start on spring break. 

Trump’s threats, the autopen and the Congo

Is it just me thinking that the major predators on the world scene are all leaders of failed economies? Vladimir Putin, Xi Jinping, Kim Jong Un and Ayatollah Ali Khamenei are belligerent bullies rattling their swords. 

Trump just threatened Iran over the attacks on American ships and planes by the Houthis. Trump tweeted on Truth Social “Every shot fired by the Houthis will be looked upon, from this point forward, as being a shot fired from the weapons and leadership of IRAN, and IRAN will be held responsible, and suffer the consequences, and those consequences will be dire!” 

Trump loves exclamation points and CAPS! But isn’t it a bit incongruous that he tweets on “Truth” Social? Shouldn’t he go back to Twitter now that his bud Elon Musk owns it?

The democrats love to say that Trump is a Russian agent. The Hill says “the former head of Kazakhstan’s intelligence service, Alnur Mussayev claims that Donald Trump was recruited by the KGB in 1987, when the 40-year-old real-estate mogul first visited Moscow.” Other KGB operatives have said the same fueling democrat claims. All of the left leaning media sites gleefully report the claims yet to be substantiated.

What does Bernie Sanders say? Shouldn’t he and all those on the far left be overjoyed with Trump’s relationship with Putin? Didn’t Bernie honeymoon in Russia? Sanders was reported to have said on that trip “Our housing in general is better than yours, but people are paying 40 percent of their income for housing. The quality of your housing is not good, but we appreciate the fact that people are paying 5 percent.” That has to be one of the all time dumbest statements ever. That reminds me of the comment made by a Canadian to me when I was on a bear hunt. He criticized US healthcare and said that while Canadian healthcare was worse at least he did not have to pay very much for it.

Whatever the truth, I don’t think that there is any doubt that Trump likes Putin. He has treated him with kid gloves. In the talks about the war in Ukraine, Trump has been harder on Zelenskyy than on Putin. When Putin did not agree to the cease fire terms, Trump did not threaten him like he did Zelenskyy. Anyone else he would have immediately imposed more sanctions and a 100 percent tariff – or 200% as on French wines.

Speaking of which, who hasn’t – other than Putin – Trump threatened?

I still don’t understand why Zelenskyy did not offer to pay for US military aid to keep the weapons and intelligence flowing.

Trump is saying that the pardons granted by Biden are invalid because of the possibility that they were signed with the autopen. This would have to be decided by the courts. However, if the courts rule that use of the autopen is invalid then many of not most of the laws and other things signed by presidents since Geroge Bush the First will be invalid. Presidents have so many documents to sign that the autopen is often used. And yes, I know the issue is whether Biden knew what was being signed. But there is zero chance that any action taken by Biden during his time in office will be thrown out due to senility.

Remember when Trump referred Haiti, El Salvador and other countries as s-hole countries? Well it is true for Congo where 10 percent of my DNA is from. The Congolese have always gotten the short end of the stick. From the brutal oppression of the Belgium where millions died to having to dig cobalt for our cell phones and EV batteries to the mystery disease that is now killing scores of people, half of whom die within 48 hours of showing symptoms. The disease causes uncontrolled bleeding, vomiting, diarrhea and other symptoms of hemorrhagic fever. The World Health Organization says that this may be a new disease from a previously undiscovered virus. I wonder if any of the USAID frozen funds were to go to Congo? Meanwhile, Rwandan-backed rebels are seizing control of Congo’s eastern cities and are one of over 100 armed groups vying for control of the mineral rich east whose mineral deposits are valued at over $24 trillion. The new disease only adds to the misery of the Congolese. Last December, the country said a flulike disease linked to malaria sickened more than 400 people and killed at least 31. Congo is also battling an outbreak of Mpox with more than 55,000 cases and 1,200 deaths since the beginning of last year. Also a couple of years ago Congo experienced the world’s second-deadliest Ebola outbreak, which infected more than 3,400 people and killed 2,280.

Can you imagine sitting on top of $24 trillion in mineral wealth and still be among the poorest countries in the world?

Congo has over 5 million people living with HIV and has been called the rape capital of the world.

Again, my Congolese ancestors who were shackled, put on slave ships, survived the harrowing eastern passage and were enslaved in America were better off than their “free” bothers and sisters who remained in Congo. Today’s Congolese are only marginally better off. They face disease, semi-slave conditions mining cobalt, civil war and a subsistence lifestyle. To make matters even worse, the government has stopped the export of cobalt for four months citing an oversupply causing prices to fall. This hits the 200,000 small artisanal miners many of whom are children especially hard whose mining is their sole source of income. Please shed a tear for Congo.

US Debt. Is the sky really falling?

I know that many will have a visceral reaction to this post. But as always, prove me wrong and I will adopt your view.

I have a friend who is Mr Doom and Gloom. He is probably disappointed every day that the dollar is still the world’s reserve currency and hasn’t been replaced by the yuan, that the country has not gone bankrupt, that we are being run by a political mafia, that the Fed has to continually “print” money to pay our bills, that unfunded liabilities are off the chart and that one day the markets will quit buying our debt and that “we can no longer dig our deep hole deeper.” I sent him some political jokes that everyone else found amusing. Everyone but him. He says “by any mathematical or legal analysis this country is technically bankrupt.” I would argue that we might be morally bankrupt but as a country we are not either mathematically or legally bankrupt. But I guess it depends on how you define “bankrupt.”

Bankruptcy simply means that you cannot pay your debts when they come due. So bankruptcy means insolvency of which there are two types. First is cash flow insolvency where the debtor does not have the liquidity to pay debt when due. However, the debtor does have assets but they have not been converted to cash. Then there is balance sheet insolvency when the existing assets are not sufficient to pay the debt. Clearly, the country does not have cash flow insolvency. It can always “print” money to pay its creditors. What about balance sheet insolvency? Here there are unfunded liabilities do not appear on the nation’s balance sheet. Consider that the national debt is around $34 trillion. That is debt that has to be services now. Currently the interest on the debt is projected to be $1 trillion. That’s a really big number in that the amount spent on defense is $880 billion. But since the government has the power of the purse there is zero likelihood that the government will not pay its debt in a timely manner. One factor that is overlooked is who owns the debt. Over 35% of the debt is held by the Federal Reserve and by the US government. It is logical to assume that even if there were a repayment crisis that the government could choose to restructure that part of the debt that it owns while paying in full the other debt holders. Crisis averted.

What about the unfunded liabilities? Social Security is $60 trillion and Medicare is $103 trillion. These too are really big numbers  and are the promised payments less the projected income streams. Well just like any insurance company, so long as the payments do not come due in amounts that dwarf the income stream, those unfunded liabilities will not provoke a financial crisis. However, if the payments are greater than income, then benefits would have to be cut, or contributions increased or the difference financed through taxes. But in no case would the unfunded liabilities cause a bankruptcy. BTW if Social Security were not linked to wage indexing but to price indexing it would be in surplus rather than deficit. More on that in a later post.

Please don’t misunderstand. I am not pooh poohing the debt. I just don’t know when the debt is binding and will threaten our very existence. In 2005 the ratio of debt to GDP was 36%. Now it is 131 percent. Yes that is large but keep in mind the ratio was in Japan it was 216%. The Japanese debt ratio has been above 100 percent for over 20 years. The Japanese economy is still chugging along albeit at a very slow rate of growth. While many in the US point to the aging population and the increased payments from Social Security and Medicare as creating a debt crisis, that has not occurred in Japan which has an older population and a higher debt ratio than the US. However, Japan has been mired in a recession, slow growth and negative interest rates. Yet its economy keeps limping along with no default or bankruptcy in sight.

For me the biggest problem with the ever increasing debt is its impact on inflation, interest rates and private investment. Economics tells us that government borrowing “crowds out” private investment spending as interest rates are higher with the government in financial markets. The higher interest rates mean that there are fewer projects with positive net present values so there is less investment that would occur otherwise. This means slower growth and a lower GDP. The way to reduce the debt ratio would be to reduce government spending which would lower interest rates and increase economic growth which will in turn increase GDP. And of course, increased GDP along with reduced government spending means a smaller debt ratio.

Also the dollar is the world’s reserve currency and there is no viable candidate to replace it. When the euro was introduced there were some rumblings that it might replace the dollar but it has not as the EU keeps shrinking and is now only 60 percent of the US GDP. Some have worried about the yuan but so long as China is communist and is untrustworthy, that will never happen. China has 1.5 billion people compared to the US’ 350 million but its GDP is only 65% of the US. China may be a threat militarily but it is no threat economically. Also the Chinese are secretive. Its debt burden is likely higher than that of the US with its reckless domestic spending. The dollar makes up over 60% of the world’s reserve currencies. The yuan is not even in the top 4 trailing the euro, yen, pound sterling and Swiss franc.

Yes the BRICs countries have talked about instituting a new currency like the euro to replace the dollar in their trading with each other. Recall that Donald Trump aka the Tariff Dude, has threatened imposing with 100 percent tariffs to protect the dollar from a Brics currency. But then again Trump has threatened every country (except Russia) with higher tariffs. US tariffs do pose a danger to the dollar as countries will look for ways to circumvent the tariffs. The dollar has fallen as a result of Trump’s tariffs as countries will enter into agreements to pay for trade in currencies other than the dollar.

A major danger to the dollar lies in US inflation which weakens the value of dollar holdings. If tariffs cause higher inflation then look to other currencies such as the Swiss franc to increase its position as a reserve currency. But given the size of Switzerland, its franc will never replace the dollar. US inflation has historically been lower than the inflation worldwide making the dollar a safe haven currency. Although Trump is fixated on US deficits, the deficits actually help maintain the reserve currency status as the US imports goods and exports debt which contributes to worldwide liquidity and keeps the dollar king. Maybe if we called trade deficits US exports, Trump will stop his tariff silliness.

New California? Eastern Washington? Greater Idaho?

Most of what Trump is doing is temporary. The defunding of agencies, the firing of federal employees, the claw back of appropriated funds will have no lasting effect. Trump wants to abolish the Department of Education but cannot do that without 60 votes in the senate which he will never get. At best he can zero out its budget and let it lie dormant until the next democrat president resuscitates it. The same can be said for all the mayhem caused by Elon Musk and DOGE. It is all temporary. I tell my Trump-hating friends to chill. Trump is actually doing them a favor. By having the courts ultimately decide the limits of executive power Trump is increasing the power of the next democrat in the Oval Office. Shouldn’t the dems be supporting Trump rather than opposing him?

If Trump and the republicans really want to shake things up then why don’t they pursue changing how states can be formed. The western counties of Virginia want to join West Virginia. Thirty three Illinois counties want to leave for Indiana. Counties in California, Oregon and Washington want to leave their states either to form a new state (California and Washington) or to join a neighboring state, eastern Oregon with Idaho. Currently there are twelve successionist movements within the “United” States. There has even been a not so serious resolution by Georgia’s Marjorie Taylor Greene to split the so-called red states from the so-called blue states into separate countries. But that doesn’t address the red counties that want to join blue states and vice versa. Oregon counties would still be stuck in Oregon . Illinois counties will be stuck with Chicago dominated Illinois rather than finding sanctuary in Indiana. The interior counties of California will still have to deal with the progressive coast and the lunatic fringe that rules the California legislature. There are even counties in New Mexico and Colorado that want to join Texas. And what about those poor souls in New York state that have to deal with New York City? Even Saten Island wants to secede from the city. And I’m not even talking about movements that want their state to secede from the entire country because of the burdens imposed by the federal government. There are movements in New Hampshire, Texas and Louisiana that want to make their state an independent country.

So why doesn’t Trump lead a movement to make it easier for counties to either form new states or to merge with neighboring states? The last new state was West Virginia and was formed illegally. The Constitution is the main impediment. First, Article IV Section 3 of the Constitution says that only Congress can create a new state.

“New States may be admitted by the Congress into this Union; but no new State shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.”

This makes it almost impossible because in order for the counties to leave one state for another, both state legislatures would have to consent as well as the congress. There is virtually no way that Illinois will set their counties free to join Indiana, or Oregon letting its counties go to Idaho or Washington allowing its eastern counties to become the state of Eastern Washington.

These movements are doomed and their advocates are wasting their time. The last state to be formed out of another state was done so illegally. When the western counties of Virginia voted not to leave the Union at the beginning of the Civil War they were outvoted in the Virginia legislature. However, Lincoln and the north did not recognize the succession. The western Virginia counties formed their own legislature which Lincoln recognized as the true legislature of Virginia rather than the one in Richmond which then was a legislature within the confederate states. In 1861, the rogue legislature in Wheeling voted to join the Union and the congress agreed allowing the new state of West Virginia to be created in 1863. In 1870 Virginia sued to get its counties back. The case was Virginia vs West Virginia and was heard by the Supreme Court where Virginia had no chance of winning. The court in this case and one in 1911 ratified the existence of West Virginia as a state.

What Trump and the republicans should do is to try to amend the constitution to allow an easier path to counties leaving one state for another or for new states to be formed. I am not certain if such an amendment can get two thirds approval in both the House and the Senate and get 38 of the 50 states to agree. But at least they can start the conversation and who knows, maybe a change might be a-coming.

Has anyone dominated the news more than Trump?

Well Kara Lawson’s Duke women’s basketball team won the ACC. Congratulations Kara! While at UT she was in my class and was a Finance major. I hear from her occasionally. One of my life’s many small world stories occurred when my other half and I were visiting the Big Island. One day we took our rental from Kona around the island to Hilo to go to Volcanoes National Park. We stopped to eat lunch at a local restaurant. We were asked to sit at the bar until a table came open. I was wearing a Georgia cap – like always – and a man sitting at the bar said “Go Dawgs.” I said “You know the University of Georgia?” “Most everyone else wonders why the Green Bay cap is red and black and not green and gold.” He said that he was from California and the only reason he knew it was a Georgia cap was because his niece went to the University of Tennessee. Naturally I said that I was on the faculty at UT. He then said “You are not Dr Black are you?” We nearly fell off our seats. I said yes and how did he know that. Then he said “You were my niece’s favorite professor.” His niece was Kara Lawson.

When Ontario threatened to impose a 25% tariff on electricity it exports to the US, Trump immediately said that he would raise the tariff on aluminum and steel to 50%. Ontario backed down. Then France imposed a 50% tariff on American whiskey and Trump immediately threatened a 200% tariff on French wine. Well Trump got Ukraine to agree to a cease fire and Putin rejected it. Only silence from Trump. Why didn’t he just as fast threaten Russia with a 200-500% tariff? Only silence. What’s up with that? Does Trump only threaten our erstwhile friends? Come on Donald, get as mad at Putin as you have done with Ontario and France. Doesn’t Putin know that resistance is futile?

Now the democrats are also learning that resistance is futile. They were going to oppose the budget bill in the Senate and filibuster it. This was stupid. They should just vote against it and let it pass since Kentucky’s Rand Paul will be the only republican to vote against it. What’s with these Kentucky republicans anyway? Will Trump rant and rave about Paul like he did Massie? In the end 10 democrats including Schumer voted to end any filibuster and let the bill advance. Now passage is certain. If the dems had caused a government “shutdown” the onus would have been on them, not Trump. They have shown the American public that they support keeping government spending growing. They are against cutting waste. They support the terrorist sympathizers like the one at Columbia University. One hundred democrat congressmen signed a letter supporting Khalil. They want open borders. They favor transgenders over women. These are all losing issues yet the democrats are lock step against the majority of Americans. The only reason why they don’t collapse entirely is that many of their constituents also hate Donald Trump.

Trump has made the democrats stupid. This is a short term funding bill. They should have just vote against it and let it pass. Then they can negotiate on a long term bill in which perhaps they can get a few crumbs of their own included. But “shutting” down the government never results in a shutdown. The democrats would actually help Trump who could have declared workers as “nonessential”. As before, when the public realizes that it functions just fine with the government “shut down” then it just gives Trump more cover for his actions.

But what would a “shut down” have entailed? Workers designated as “nonessential” would be laid off and not paid. But if a worker is nonessential then why is he employed anyway? The dems realized that this would give Trump an excuse to permanently eliminate that position. Before, after the last shutdown there was no reduction in force and the laid off employees came back and were given back pay. I recall that the military keeps working as does law enforcement and Social Security checks keep coming. The last time they closed the national parks and museums. Also one of the nonessential parts of the government, the Congress will still get paid. 

The democrats recognized this and folded. However, the ones in the House screamed. Hakeem Jeffries had said that the dems had the republicans on the run. Huh? Jeffries seems clueless. Maybe the dems need new leadership in the House. Pelosi said “America has experienced a Trump shutdown before – but this damaging legislation only makes matters worse. Democrats must not buy into this false choice. We must fight back for a better way.” AOC went after Schumer and essentially called him a traitor. It will be interesting if Schumer can continue as minority leader. It will also be interesting to see if he gets primaried when he is up for reelection in 2028. Will AOC run against him? Let’s hope so because she will have to give up her House seat.

I presume that Trump would not support the repeal of the Jones Act which requires that cargo shipped between US ports must be on US ships, made in America, owned by Americans and crewed by Americans. Republicans have long sought the repeal of the act because it raises costs to American consumers. Obviously the act was to protect Americans from foreign competition. But only 3 percent of the global commercial fleet are Americans and there are only 93 ships that move cargo between American ports. Trump with his America only policies is not likely to support a repeal of the Act.

Remember Trump’s vicious attack on Chip Roy? Well he has turned his ire on another conservative republican, Thomas Massie of Kentucky. Massie announced that he would not vote for a continuing resolution. He would only support a bill that cut spending. When he voted against the current one Trump ever the statesman tweeted “Congressman Thomas Massie, of beautiful Kentucky, is an automatic ‘NO’ vote on just about everything, despite the fact that he has always voted for Continuing Resolutions in the past. HE SHOULD BE PRIMARIED, and I will lead the charge against him. He’s just another GRANDSTANDER, who’s too much trouble, and not worth the fight. He reminds me of Liz Chaney(sic) before her historic, record breaking fall (loss!). The people of Kentucky won’t stand for it, just watch. DO I HAVE ANY TAKERS???”

Yet another presidential piece of tweeting diplomacy from our leader.

Massie then used the Trump tweet to solicit funds for his next campaign. “Why don’t more Representatives stand on principle? Because telling the truth can get you in hot water. I’m going to need your help. I will run again because we need at least one person in Congress who won’t cave. Can you show support by contributing now?” He raised $400,000. I am certain that a large number of the contributors would never have contributed to Massie in any circumstance other than opposition to Donald Trump. Watch out Rand Paul!

Is Chuck Schumer really a Palestinian?

Spring break 2025

When I was teaching I hated spring break. It would literally wipe out two and a half months of learning. It takes time for the students to get used to me. My methods are different than what they generally see. I link every lecture to current events. I send them stories from the financial press that supplement the book. I post current statistics and compare them to the ones in the text that are usually 4 years old. I call on them to answer questions at every class. If they don’t know the answer I tell them to guess. I tell them that there will no multiple choice true false exams only essays short answers and problems and they cannot use a calculator. Some drop immediately. After the first exam, more will drop. In this class I started out with 59 students. Seven dropped after the first class. Seventeen more did not come back after the first exam. The ones that remain are now used to me. The classes are more focused and no longer am I the only one having fun. 

And now to ruin it all and set me back comes Spring Break. When the students return from Spring Break, they don’t want to be back in school. They have spent a week in the sun, drinking, being rowdy and doing who knows what (I know). They are mellow. The last thing they want to do is to sit in a classroom and listen to lectures of systematic risk and immunization of portfolios. It is back to square one. Some never readjust. It is worse if they are graduating seniors. All they want to do is to graduate and leave. Spring break makes it worse. They don’t want to be there and the class now becomes a boring burden.

For me, the only saving grace for spring break arriving used to be BikeWeek which comes right after the Daytona 500. We used to go most every year. Spring break always begins when BikeWeek ends. The people in Daytona used to say that the BikeWeek crowds were their favorite. They were polite. Maybe they rode load Harleys on the street but they were quiet in the hotels. We no longer go. The vibe has completely changed. Once it was mostly older riders who went to the shops on Main Street and to the vendors at the Daytona Speedway. We would go to the races at the track as well. Then the kids on their sport bikes started coming. The crowds got rowdy and the cops less tolerant. The hotel where we always stayed stop allowing trailer parking after changing ownership, raised their prices and ended their happy hour. We used to have get togethers with riders with the same bike – then a Honda ST1100. That ended as well. It was not the same so we quit going.

This year for the first time, I am looking forward to spring break which is the week of March 17^th because I need the break. This has been an interesting semester. There are some very strong students but in the main, they have been tested using multiple choice true false which has yielded mainly students who cannot think and cannot reason. Although I park in the lot closest to the classroom building, it is up a fairly steep grade and my knees are perpetually sore. I am now walking like an old man. I have still not seen another professor when I venture up to talk to the secretary versed in the new technology. This generation considers the university as just a job and not a service. I could not be on such a faculty. This is a one off.

So I am looking forward to being able finally to go chill out at the farm, cutting up fallen timber, doing tractor work, moving my blinds and sitting on the front porch with a hot cup of tea, a good book and a cigar. I need the break.

Yes Karoline, it is a tax

There is now a silly debate going on. Trump’s spokesperson Karoline Leavitt shut down a reporter who asked why if Trump wanted to cut taxes was he raising taxes on American consumers by imposing tariffs. Leavitt was miffed. She said “He’s actually not implementing tax hikes. Tariffs are a tax hike on foreign countries that, again, have been ripping us off,” Leavitt said. “Tariffs are a tax cut for the American people, and the president is a staunch advocate for tax cuts.” The reporter responded that tariffs “don’t get charged on foreign companies, they get charged on importers.” Leavitt of course was wrong and dug herself deeper in a hole by saying that tariffs would increase wages and revenues for Americans and then she said to the reporter “I think it’s insulting that you’re trying to test my knowledge of economics, and the decision that this president has made,”

Well Karoline, he did not insult you . Tariffs are indeed a consumption tax. Tell Trump to think of them as the dreaded value added tax he so despises. Tariffs are collected at the port of entry and are paid by the importer and not the exporter Karoline. Who then pays? The American consumer as imported goods become more expensive. And what is this about increasing American wages and revenues? You are awfully young so probably don’t remember the impact of the Tariff Dude’s tariffs in his first term. The Tariff Dude loves tariffs on aluminum and steel. In his first term he levied a 25% tariff on steel and a 10% tariff on aluminum. He also levied tariffs on China, on solar panels and on washing machines. Studies show a drop in US GDP of $1.5 billion a month, an increase in consumer costs of $51 billion annually and a household tax increase of $625 per year. The prices of washing machines rose by 12 percent. A research paper at MIT found the tariffs had limited positive or negative effects on employment in the sectors protected by tariffs, and hurt employment in other sectors, including agriculture. Moreover, global investments in trade-related sectors declined by a $1 trillion.

I know that press secretaries must back their boss 100 percent even when they are wrong. Leavitt probably knows the truth but cannot admit it. That was especially evident in the last administration, Karoline is likely aware of the consequences of tariffs during Trump’s first term. Trump knows but doesn’t care. He undoubtedly knows that this time around his tariffs will have a larger impact in that they are larger and more comprehensive and target the entire globe rather than just our allies and China. There will be greater costs and global retaliation. Trump imposed tariffs on $380 billion of goods in his first term and now $1 trillion in his second term. Trump’s first term tariffs reduced employment by 142,000 jobs, reduced GDP by 0.2 percent and capital by 0.1 percent while increasing prices. Now imagine the damage that will be done by these tariffs. Estimates point to an equivalent tax of around $2,000 per household.

Now we have silliness going on. The cult of Trump is forced to argue that tariffs are not a consumption tax while the Trump detractors are arguing the opposite. This is one of the few times that republicans are defending a tax increase (albeit while denying it is an increase) while the Trump haters (nee democrats) are arguing against a tax increase for perhaps the first time in modern history. It is a tax increase – perhaps the largest in history – and will have dire consequences if fully enacted. I hope I am wrong. I hope all the economists from Adam Smith to me are wrong. But history and the data say otherwise.

But Trump is no fool. I think it should be apparent that Trump does not just want to equalize tariffs between countries. He is using fentanyl as an excuse for his tariffs on Mexico and Canada. Even if they stopped fentanyl he would still impose the tariffs. He wants to minimize or even end all imports. He wants to force the automobile companies to move production from Canada and Mexico into the states. He wants to end the importation of Canadian electricity, oil. steel, aluminum and lumber. He makes it no secret that he wants to cripple the Canadian economy. I guess he also wants the avocado industry to return from Mexico to California. So yes there will be slower growth, there will be increased job loss, there will be inflation and there will be a recession. Trump is set on building a wall around America. No allies. No alliances. Trump is only going to be around for this term and will be gone. What of the republican party? People have been asking if the democrat party currently in disarray will survive. Well a relevant question is whether the republican party will be able to survive Donald Trump a k a the Tariff Dude, current hero worship aside.