On TAP: Kuttner + Meyerson


The Trump hath tweeted, and proclaimed that he wants to subject Guatemalan imports to tariffs, and to subject the remittances that Guatemalan immigrants in the United States send back to their families in Guatemala to a tax. 

What, you may ask, has the little Central American nation done to deserve such treatment? Simple: Its Supreme Court has struck down the nation’s president’s agreeing to Trump’s insistence that the it must stop all Honduran and El Salvadoran refugees passing through Guatemala en route to the United States and compel them either to stay in Guatemala or to return from whence they came.

In other words, Trump is giving Guatemala a choice between death by shooting or death by hanging. The small and impoverished nation clearly has no capacity to house, employ, and provide services to hundreds of thousands of asylum seekers. Nor can it weather the imposition of tariffs on its exports to the U.S., which comprise 40 percent of all its exports. And it would fairly reel from a tax on remittances, which amount to 13 percent of the nation’s GDP. 

But if the Guatemalan high court doesn’t think the president there has the authority to accede to Trump’s demands, what would American courts say about Trump’s authority to punish Guatemala because he’s mightily pissed at it. POTUS can surely slap tariffs on a nation without congressional approval, but I have no idea whether he can slap a tax on individuals sending a portion of their wages across borders to their families. 

If the courts were to uphold such a tax, however, it could open the door for taxing what amounts to a real drain on U.S. resources—as the remittances to Guatemala decidedly do not. I’m referring to the more than trillions of dollars that U.S. corporations send abroad, to nations with lower tax rates and/or cheaper labor, and the billions that many super-wealthy Americans have secreted in such nations as well. While remittances to Guatemala have no effect whatever on the U.S. economy, and immigration from Central America has minimal effect on this nation of more than 320 million souls, the expatriation of investment, profit, and income that our corporations and mega-rich have engaged in has devastated much of our industry, reduced our tax base and concomitant public investment, and contributed greatly to the wage stagnation that has beset us for the past 40 years.  

Slapping a tax on Guatemalan remittances is pure Trumpian nationalism—that is, racist, symbolic posturing. Putting a progressive tax on dollars sent abroad rather than invested here at home, by contrast, is genuine economic patriotism. Which is why it will never be the subject of a favorable Trump tweet. 


In 2019, it's still the case in America that if you deposit a check or have funds wired into your bank account, it can take up to five days for you to access your money. This puts the United States behind such advanced economies as India, Poland, and Kenya, the latter of which has had real-time payments through mobile phones for some time. In fact the Federal Reserve does offer real-time payments, but only to commercial bank accounts, not individual ones. 

This hampers poor and vulnerable families operating without a safety net who need access to their money as soon as they get it, leading to billions in overdraft fees. It has also given space to big banks and tech companies to enter this space, potentially charging customers for something that the government is eminently capable of providing. The Clearing House, a coalition of 24 major banks, has developed its own (for-profit) real-time payment system. Fintech firms like Venmo have also jumped into the void, along with Facebook, whose Libra digital currency is touting real-time payment services.

As Representative Ayanna Pressley expressed to Fed Chair Jerome Powell last month, the central bank's foot-dragging on real-time payments has created this frenzy. The Fed has spent years studying real-time payments but mostly deferred to the private sector. After that hearing, rumors that the Fed would announce a real-time payment system set the big banks' hair on fire, even though the Clearing House system is not yet operational.

Now some progressive politicians are getting involved. Today, Pressley, along with Chuy Garcia in the House and Elizabeth Warren and Chris Van Hollen in the Senate, announced the Payments Modernization Act, a short bill that would require the Fed to create a real-time payment system. This sounds like a small matter but would be a life-saver for low-income families who need their money immediately. The Fed's delay in implementation is ridiculous, which has allowed large corporations to potentially profit off what should be a public good. Congress weighing in will put pressure on the Fed to finally act in the public interest. The technology is there; Pressley and her colleagues are finally supplying the will. 



This month, CNBC came out with its annual list of America’s Top States for Business, a ranking on which states don’t move up or down very much from one year to the next. Which is why attention must be paid, as Americans for Tax Fairness has pointed out, to one massive exception to this rule. On this year’s list, Kansas placed 19th—which is a full 16 places higher than it placed last year.

How to account for this Bob Beamon–esque leap? Simple: Kansas has finally rid itself of the ruinous trickle-down tax policies of its former governor, Republican Sam Brownback.

In 2012, with the backing of the state’s overwhelmingly Republican legislature, Kansas completely eliminated income taxes for more than 100,000 businesses and greatly reduced taxes on the wealthy. Invoking classic supply-side nonsense, Brownback predicted the cuts would more than pay for themselves. Instead, they devastated the state’s economy. Revenues fell so precipitously that school years and school days had to be considerably shortened, public construction projects ground to a halt, and Medicaid benefits were greatly reduced. In consequence, the state’s economy ceased producing jobs and Kansas fell behind its Plains States neighbors by virtually every economic index.

By 2016, Kansas voters—including Republicans who objected to seeing their children’s educations shortchanged—revolted. As the Prospect’s Justin Miller reported at the time, Republican primary voters, joined by Democrats, ousted legislators who refused to repeal the tax cuts, and in 2017, the new legislature overrode Brownback’s veto of a bill repealing the cuts. In 2018, voters elected Democrat Laura Kelly as their new governor, and today, with adequate funding restored, Kansas has resumed its support for education, infrastructure, and the basics of civilization. Hence, the state’s leap upward on CNBC’s list.

The “logic” that underpinned the Kansas cuts was invoked again by President Trump and his Republican stooges as they made the case for the Great Federal Tax Giveaway to Corporations and the Rich Act of 2017–18. In consequence, share buybacks have soared to new heights while wages and infrastructure investment have barely risen, when they’ve risen at all. The federal government, of course, can run deficits, while states are constitutionally prohibited from doing so—which is why the Trumpistas have chiefly engaged in targeted rather than across-the-board cutbacks in federal spending. (The targets, of course, have been the poor and minorities.)

Brownback was politically run out of town on a rail—resigning early in 2018 to become the Trump administration’s Ambassador at Large for International Religious Freedom. (Unlike Tsarist Russia, our government lacks a position like Procurator of the Holy Synod, a sort of directorship of pogroms, though Stephen Miller at times seems to have become that position’s functional equivalent.) Is it too much to hope that American voters relegate Trump to history’s dustbin as their Kansas compatriots did to Brownback?


The New Yorker’s indefatigable Jane Mayer has written the definitive piece on the Franken affair. In it, she conclusively establishes that Franken’s main accuser, Leeann Tweeden, of the 2006 USO tour incident, was acting as a right-wing operative, a birther no less. Tweeden, Mayer documents, had participated in identical Franken skits involving fended off kisses several times before and had registered no objection.

The photo of Franken with his hands hovering over the breasts of a sleeping Tweeden was a sight gag. The joke was that everyone on the USO tour was wearing flak jackets. Again, Tweeden never objected until it was part of a well-orchestrated right-wing takedown of Franken.

Was Franken guilty of anything? He was guilty of horsing around, and Mayer tracks down three women who felt their space was violated. That’s it. She also gets seven Democratic senators who voted to request Franken’s resignation to express deep regret on the record.

Meanwhile, Donald Trump, who has been a serial abuser, rapist, and mocker of women, continues to be president. Joe Biden, whose loose hands were far more of a problem than Franken’s, continues to run for president. 

The reliably opportunistic Kirsten Gillibrand, who started the Franken lynch mob and who insisted there are no shades of gray when it comes to sexual harassment, is running a joke of a presidential campaign stuck in first gear. At least there is a shred of justice there.

Since this episode, Franken has not just been a disgraced ex-senator. He has been treated as radioactive, as if anyone who allows him to write or perform will be branded soft on sexual abuse. 

Mayer, author of the definitive book on the Clarence Thomas/Anita Hill disgrace, has impeccable credentials on sexual harassment. Maybe Mayer’s piece will revive a conversation that will allow a good and public minded man to reclaim some semblance of his career.


Bolton, Trump, and American MEMRI. The Middle East Media Research Institute, better known as MEMRI, calls itself a hate-speech watchdog, translating Arabic, Farsi, Turkish, and Urdu sound bites into English and posting them for mass consumption. Mideast watchers know it as a hawkish, fear-mongering nonprofit that cherry-picks the most extreme voices from Arabic talk shows while ignoring just about everything else. Yet news agencies and government bodies regularly cite MEMRI’s sensationalist clippings.

MEMRI has never once published a translation that put Arabs or Muslims in a positive light. And as a result, many might believe that these embellished posts are indicative of every single program or article in the Middle East’s media ecosystem. (They’re not.) 

It’s not surprising then that Trump’s National Security Advisor John Bolton has been a longtime MEMRI board member. What is shocking is that, even while serving at the White House, Bolton maintains his seat on MEMRI’s board of advisors. Indeed, MEMRI proudly amended his identification on the group’s list of board members to reflect Bolton’s elevation to national security adviser. 

It appears, however, that Bolton forgot to add his MEMRI gig to his executive branch personnel disclosure, which details all “positions held outside of government” [pdf]. He does list his other board memberships, including the far-right Gatestone Institute, in the filing.

As MEMRI’s ostensible raison d'être is to highlight racism, bigotry, and anti-Semitism, one wonders whether the organization ought to train its sights on the Pennsylvania Avenue public building where Bolton now works. In our current political moment, where the American president spouts racism on a daily basis, it would be easy to imagine. Indeed, an Arabic monitor of the U.S. media modeled on MEMRI might have a field day translating the hate speech of Sean Hannity or Ben Shapiro or Sebastian Gorka, who have hosted Trump officials like Secretary of State Mike Pompeo on their broadcasts. It might highlight the raucous white nationalists who attended President Trump’s social media summit last week in the Rose Garden. And it could easily highlight the racist swill routinely produced by Trump himself.

White House Counselor Kellyanne Conway’s nativist comment to a Jewish reporter yesterday (“What’s your ethnicity?”), clearly reflects the normalization of bigotry in today’s Trumpified Republican Party. If John Bolton cared about democracy, pluralism, and tolerance, as he claims to, he’d need to go no farther than his workplace to amass a collection of hate speech suitable for a MEMRI that focused on the United States. 


Facebook's Faltering on Libra. I previewed the week's hearings for Big Tech today on the website, and I wondered whether Silicon Valley would have any allies on Capitol Hill left. It turns out they have a few, but not nearly enough. 

David Marcus, a vice president of Facebook, testified at the Senate Banking Committee today about Libra, the proposed digital currency. And it became clear from the opening moments, when Sherrod Brown in his opening statement compared Facebook to a toddler playing with matches and committing arson, that Marcus was in over his head.

It took Marcus four asks from Brown on whether he would accept his own compensation in Libra before saying he would. Mike Crapo, the Republican committee chair and not exactly a knee-jerk anti-business zealot, pointed out a contradiction in Marcus' testimony: He stressed that Facebook must be allowed to create this currency or "some other country" (read: China) will, but Facebook set up the association for Libra in Switzerland, home of famously lax banking laws.

Republican Martha McSally bluntly said "I just don't trust you guys." Democrat Brian Schatz wondered why Facebook was starting on currency when it hasn't fixed all the other problems with its regular operations, perhaps out of "Silicon Valley grandiosity" and "boredom." Republican Pat Toomey, one of the more supportive senators, wondered how Libra could be called a nonprofit when the reserves would generate substantial revenue that would be distributed as dividends to initial investors. Democrat Kyrsten Sinema, perhaps the most pro-bank senator on that side of the aisle, laid out how Libra would be a paradise for scam artists. When the folksy John Kennedy cited the "flagrant displays of bullshit" on Facebook, the referee should have stepped in.

It was a bloodbath. Marcus was woefully unequipped to explain how Libra would comply with regulators, how it would prevent bank runs, or really anything beyond a surface level. After the hearing, Crapo said that Libra should be a catalyst for a comprehensive data privacy bill. The strong likelihood is that the currency never rolls out and the proposal spurs additional regulation on Facebook. Slick work, Zuck.


Legal, Safe, Rare—and Bad Advice. The Times just published another piece urging Democrats to temper their support for reproductive rights. This piece, “Democrats Shouldn’t Be So Certain About Abortion,” by one Michael Wear, a political consultant on religious issues, is a classic of cherry-picked poll numbers and disingenuous reasoning. Read it with care.

In fact, as Pew’s polling shows, support for keeping abortion legal has actually increased slightly in recent years.

As I explained in a post last month in response to another misleading Times piece, Americans are ambivalent about having abortions but a healthy majority supports a woman’s right to choose whether to have one.  

The longtime phrase—legal, safe, and rare—still describes how most voters feel about abortion and the right set of public policies. As I wrote in that post:

Americans have been personally ambivalent about whether and why to have an abortion ever since Roe v. Wade. Nobody is eager to have an abortion.

At the same time, majorities of Americans have long believed that the decision of whether to have an abortion, however reluctantly, belongs to the woman. Most Americans are not ambivalent about the policy.

Is this all that complicated? The only thing that has changed is that anti-abortion groups, looking to far-right courts, have come up with one subterfuge after another to make abortion almost impossible to obtain, and have thus muddied the waters.

Republicans have succeeded in making abortion less legal, less safe, in the hope of abolishing it altogether. They’ve also been successful at persuading some strategists and commentators that progressives and Democrats should try to meet anti-abortion activists halfway on the premise that this is where public opinion is.

That would be a huge mistake. It would be giving in to salami tactics, and the anti-abortion right will only keep moving the goalposts.

Most voters are squeamish about late-term abortion. But the idea that we need to ban late-term abortions, on the premise that some women use them as a form of belated birth control, is a total canard. Late-term abortions are invariably performed because the fetus is horribly deformed or the woman’s health is at risk. 

But fake imagery spread by the right and Trump’s claim of a baby “ripped from the mother’s womb moments before birth” animates efforts like Wear’s op-ed to persuade progressives to meet conservatives halfway. 

Wear, who served as Obama’s emissary to religious groups, wrote this: 

If a Democratic presidential nominee held and communicated views that reflected the median Democratic voter, that nominee would support and defend Roe v. Wade, but express moral reservations about abortion itself; offer openness to additional restrictions on abortion, including a ban on late-term abortions with limited exceptions; and call for a set of policies with the purpose of reducing the abortion rate in America, such as paid family leave, workplace protections for parents and pregnant women, increased access to birth control, and a strengthened social safety net.

It’s a huge mistake for progressives to “express moral reservations about abortions,” which only plays into the hands of the religious right. Wear is evidently a foe of abortion, though he is cagey about coming right out and saying it. That makes him an unreliable strategic adviser to Democrats.

Almost inadvertently, Wear is right about one thing. Democrats, when asked should not just flatly declare they are pro-choice. They should take the occasion to explain “legal, safe, and rare,” and what it takes to make abortions rare consistent with a woman’s right to choose, as well the opposition of much of the anti-abortion lobby to birth control. And they should explain the Republicans’ insidious tactics of chipping away at Roe v. Wade as well as the class consequences (rich women will still get abortions.) 

Beware of zealots pushing their own views posing as friendly strategic advisers.


Large Crowd Rallies to Stop Private-Equity Hospital Closure in Philadelphia. Health professionals, patients, and lawmakers savaged private-equity baron Joel Freedman for the proposed closure of Hahnemann University Hospital at a noontime rally in Center City, Philadelphia, today. What looked to be over a thousand supporters and activists turned out, shutting down part of Broad Street and condemning Freedman as a "coward" and a "disgrace" who is prioritizing a lucrative real-estate scheme over the lives of patients.

The Prospect has a feature story today about this closure. Hahnemann, a 171-year-old hospital that primarily serves low-income patients (over half of them are on Medicaid), has been marked for closure 18 months after Freedman bought it. He split the hospital from the real estate and is poised to sell the buildings to the highest bidder, presumably for the conversion into luxury condos in a "gateway" community for gentrification.

I spoke with several health-care workers at the hospital who were furious with Freedman for scooping up Hahnemann and selling it off so quickly. "It's just so messed up that this is all happening," said Lauren McHugh, a registered nurse for 17 years with Hahnemann. "The city needs this hospital. I just heard that there are 800 pregnant women that have to find a new place to deliver their babies. We have frequent patients that have cried, 'Where am I going to go?' They don't know. No one knows."

Dawn Andonian, a career nurse, has spent four years in the Hahnemann operating room. "I thought it was strange how quickly the plug was pulled, only a couple weeks ago we were business as usual," she said, holding a sign about Freedman that said 'lock him up' on it. "Maybe [Freedman's] real estate firm is pushing him."

Speakers at the rally excoriated Freedman as heartless. "How many lives will we sacrifice over a business decision?" asked one doctor who spoke. Members of the Philadelphia City Council and the state legislature pledged to do whatever they could to stop the closure.

The situation is among the first instances of a private-equity firm selling off hospital property for real estate. This could feed a trend by the industry to find hospitals in urban areas attractive to developers and strip the assets.

"I don't know how he sleeps at night," said McHugh. "This seems to have been his plan all along, to buy this place, let it fail, and shut it down. It's sick, is what it is."

I also spoke with Maria Garcia-Bulkley, a cancer patient who has been receiving chemotherapy treatment at Hahnemann since February. "I would like to complete my last round of chemo in August so I could be with the people that I trust and that have taken very good care of me." Through tears, she told me about the amazing care she's received at the hospital. "They're the best."



Another Stop Sign for Self-Driving Cars. Elon Musk is unhappy: Somehow his grand vision of allowing every Tesla owner to sleep in the back of the car while they're whisked around to work and play hasn't come to fruition. According to an article at The Information, Musk has fired several top managers working on Tesla's "Autopilot" feature, including the group's leader, over frustrations with the failure to create a fully self-driving car.

Maybe the problem isn't with the engineers but the concept. I have a file of links going back a year with false starts and missteps on self-driving cars. The concept seems rather simple, but not all roads are created equal. In particular, Musk's anger stems from the software being slow to adapt from highway to city driving.

It may not surprise you that it's easier to program in driving 65 miles per hour on a long straight road, rather than moving through one-way, narrow, jagged-angled streets in a busy urban environment, with delivery trucks and Ubers and pedestrians and everything else getting in the way. "The system often doesn't know how to recognize parked cars because it is not a common feature of highway driving," the article notes, which seems somewhat necessary.

My concern has always been that Tesla or other self-driving car barons will sell cities and states on putting public money into the mother of all infrastructure projects to accommodate the vehicles, basically rebuilding cities from scratch, or dedicating special lanes to the products of private companies. There are lots of better things we can be doing with the enormous sums that would have to be put to that task. Meanwhile, all the major self-driving car companies are consolidating, narrowing to a few leaders that will maintain outsized economic and political power. That makes the nightmare of a public bailout for private automated vehicles more likely.

Musk has promised a fully automated, self-driving Tesla by 2020, and now he's starting to realize that he cannot deliver. It's becoming a problem for a company whose stock has fallen 25 percent this year. Maybe a big-talking techbro who never follows through on his grandiose claims isn't the savior America needs?


Trump’s Clumsy Dance With the Federal Reserve. It’s hilarious to watch the three-way dance between the economy, the stock market, and Trump’s hapless effort to fill two open seats on the Federal Reserve. Or, it would be hilarious if the stakes were not so high.

Alert readers will recall that Trump has been badgering the Fed to push interest rates even lower, despite the fact that they are near historic lows, as is the unemployment rate. The stock market, which behaves perversely relative to the real economy, has been hitting new highs, because of the expectation that the economy will soften, giving the central bank a rationale for cutting rates.

But, oops, the June jobs report, released this morning, showed a healthy gain of 224,000 jobs, which means that the Fed is less likely to cut rates, and of course the stock market tanked.

Meanwhile, Trump has turned to two nominees to fill the open seats, after his two earlier nominees, Stephen Moore and Herman Cain, suffered humiliating rejections by Senate Republicans, as crackpots. The two new nominees are Christopher Waller of the St. Louis Fed, a supporter of low interest rates, and Judy Shelton. 

Of these, Shelton is not just a crackpot but a shameless opportunist. A chum of White House economist Larry Kudlow who served on the Trump transition team, Shelton is best known as an advocate of a return to the gold standard. But she has been born again as a proponent of very cheap money.

The two positions are completely contradictory. The gold standard is the epitome of tight money. Nations went off the gold standard in the 20th century because it artificially constrained the money supply and prevented the economy from reaching its potential.

The combination of crackpot, self-contradictor, and opportunist makes Shelton a perfect fit with the Trump White House. But she is not likely to be confirmed. Pro-Wall Street Republicans may also be opportunist and willing to make a pact with the devil (Trump) on most issues, but they don't like crackpots on the Fed.

So the Fed, unlike the Supreme Court, continues to survive as island of semi-autonomy from Trump. He can tweet until he is blue in the face, but that’s not likely to change soon.