Good morning,
MOVIE TIME
While all the attention is on Barbie and Oppenheimer, there are three movies of true events streaming right now, each of which is worth your time:
The Mauritanian. The true story of the capture, interrogation, torture, trial, and apparent innocence of a Guantanamo Base detainee. Originally abducted from the north African nation of Mauritania, this man is imprisoned at Guantanamo, based upon circumstantial evidence and coerced confessions. He is represented by a determined criminal defense lawyer, played by Jodie Foster, and prosecuted by a dedicated military lawyer played by Benedict Cumberbatch.
After watching this movie, showing the horrifying and lengthy period of torture and confinement, all based on nearly no evidence, it is hard not to describe what happened to him as anything other than war crimes committed by representatives of the U.S. government. Holding people for year after year, without much contact with the outside world, engaging in barbaric questioning methods, and submitting them to brutal treatment is horrifically displayed. Besides the extraordinary story and portrayals, I came away with three conclusions:
Even the best actors are capable of bad behaviors in the pursuit of what they believe to be right or patriotic.
Fear will cause people to do things they never would do upon reflection.
We are better than this.
Separate note: I am intrigued at the number of British actors that must shed their accents and adopt what they consider American accents, in order to play parts. Besides Cumberbatch, how about Daniel Craig in the Bond series, Andrew Lincoln in The Walking Dead, Hugh Laurie in House, Idris Elba in The Wire, and Kate Winslet in almost everything she’s in.
Blackberry. It is hard to recall that this device—the first “smart” phone capable of phone calls and texting, was the market maker and controlled over 30% of the market. This great idea germinated in Waterloo, Canada, of all places. It is two stories. First, it is the story of perceiving of a need and filling it. It is the story of breakthroughs required to bring a new product to market, and the struggles of any new idea to gain traction. The second part of the story is of the Blackberry folks failing to evolve with the market. It is the story of missing the next move of the market, unable to understand the vision of the iPhone and how it would bring the existing industry to its knees. Along the way is hubris, questionable illegal maneuvering, and all the typical Icarus-like behaviors as some fly too close to the sun.
Air. The unlikely story of a persistent marketer who saw the value of tying something as prosaic as the sale of athletic shoes to the career of a single unique athlete. Nike takes on and beats the established brands by going “all in” on the endorsement deal with Michael Jordan. You don’t have to love (or even like) basketball to be riveted by this remarkable movie. Matt Damon and Ben Affleck lead this great effort.
Separate note: When Ben, Matt, and Brandon Fraser first came to Hollywood at around 19 years of age, they screen-tested for School Ties. And the lawyer who drafted and negotiated their agreements (and delivered them for signature) was none other than Andrea Sonnenberg!
GOVERNMENT SPENDING IS NOT JUST ABOUT SPENDING
I’ve been railing for a while about the growing U.S. deficit, powered by increased spending. But a huge part of the imbalance in the budget that drives the increasing deficit, is the series of Republican tax cuts. For some reason, people don’t seem inclined to figure these in when trying to ascertain why deficits rise. Tax cuts and breaks, typically targeted at corporations and the wealthiest, reduce potential tax receipts and result in negative budgetary consequences.
Democrats and fiscal conservatives (yes, there was a time when conservative budget hawks walked the Earth, but they apparently no longer reside in the Republican party) have been unsuccessful in pointing out that tax cuts and tax breaks are forms of government spending. Lowering corporate taxes to well below prior levels (and below most other industrialized nations), lowering capital gains taxes to 20% (when they previously were 28% and study after study says there would be no decrease in transaction activity by returning to that level), the carried interest boondoggle, accelerated depreciation, and other give-backs and tax subsidies are killing us.
The report of the minority of the Senate Budget Committee explains the effect of tax reduction on the budget in brief (footnotes deleted):
“Despite 40 years of Republican rhetoric on how tax cuts “pay for themselves” through increased economic growth, there has been one consistent problem: It is not true.
President Reagan’s own Fiscal Year 1990 budget, reported that his 1981 tax cut would reduce federal revenues by $397.6 billion in 1992 alone, a 27 percent reduction. This is the equivalent (as a percent of the revenue base) to a 10-year, $11.5 trillion tax cut today. In fact, Reagan’s tax cuts were so fiscally unsound that, over the remainder of his term in office, he was forced to sign into law tax hikes that would be the equivalent to a 10-year, $6.2 trillion tax increase today.
Not learning the lesson of the 1980s, President George W. Bush came into office promising that his proposed tax cuts would, according to the Heritage Foundation, effectively pay off the national debt by 2011. Facing a recession at the beginning of his presidency, Bush’s response was not temporary stimulus, but rather the massive tax cuts that he had campaigned on – tax cuts that gave as much as 38 percent of their benefits to the top 1 percent and were, for the most part, eventually made a permanent feature of the tax code. Including their various expansions and extension, the Bush Tax Cuts contributed nearly $500 billion to the deficit in 2018. Without the Bush Tax Cuts, the national debt, as a percent of the economy, would be more than 25 percentage points lower today.
President Trump did not have the pretense of an economic slump to pass his tax cuts in December 2017 – it was simply Republican orthodoxy that tax cuts for the wealthy and large corporations would trickle down to working families and would magically pay for themselves. Ultimately, the tax cuts that did pass are projected to add $1.9 trillion to the debt over 11 years and provide more than 83 percent of their benefits to the top 1 percent.11 In all, the Trump Tax Cuts – which coupled permanent corporate tax cuts with temporary individual tax cuts – added $164 billion to the 2018 deficit. “
You can’t cheat the math… Here’s the link to the entire (short) report:
THE OPPORTUNITY COST OF TAX CUTS AND MILITARY SPENDING
While I’ll concede the comparison is imperfect, the report closes with an analysis of what we might have spent money on (I think some of this is overstated, but still, you get the point):
“If we had not spent $935 billion on the military and tax cuts in 2018 alone – or if the costs had been offset – we would have run a $156 billion surplus. That means the federal government could have paid for any of the following proposals – multiple times over for some – in Fiscal Year 2018 and still balanced the budget.
• Very nearly eliminate poverty for all Americans of any age. Estimated cost: $174 billion.
• Pay the one-year average of the 10-year infrastructure funding gap. Estimated cost: $144 billion.
• Provide high-quality early care and education (ECE) for children from birth to kindergarten. Estimated cost: $140 billion.
• Eliminate child poverty by simply boosting the income of all families with children (and children who do not live with their families) over the poverty line. Estimated cost: $69 billion.
• Double the budget of the National Science Foundation, the National Institutes of Health, the Centers for Disease Control and Prevention, the National Oceanic and Atmospheric Administration, and the United States Geologic Survey. Estimated cost: $61 billion.
• Make public colleges and universities tuition free for working families, cut student loan interest rates in half, and allow every American with student debt to refinance at the lowest interest rate possible. Estimated cost: $60 billion.
• Double the $1.40 per-meal allowance in the Supplemental Nutrition Assistance Program. Estimated cost: $70 billion.
• End homelessness in America. Estimated cost: $22.5 billion.”
These numbers seem to me to range from reasonable estimates to true conjecture. But the message is important. When we reduce taxes or divert receipts, there is another societal objective that must take the back seat. I’m not sure we always are making the right choices.
Have a great day,
Glenn
Waste. Together, I.e. increasing taxes on corporate American and reduction of the size of government will put us back on a path to prosperity. 😊
Great commentary today. Thank you. I do believe there is one major piece missing: any increase in taxes must be accompanied by a reduction in government and beaurocratic