ANOTHER ONE FOR AMERICA

A while back, I wrote a piece on My Republican Hero*  I've decided to add another one - Dan Coasts.  As our President continues his obsequious attention to Vladimir Putin, Dan Coats, Director of National Intelligence, has kept the record straight and doesn't pussyfoot around.  Now he is in trouble because he laughed when told at Aspen that President Trump had invited Putin to the Oval Office.

I'm also giving Christopher Wray an Honorable Mention at this time and will probably upgrade him later

Wray has stood up to pressure to fire senior FBI officials and refused to hand over some information related to the federal probe into Russian interference in the 2016 election.

"I think if we start exposing sources and methods, we are setting a dangerous precedent," Wray said.

*  http://stopcontinentaldrift.blogspot.com/2018/06/my-hero.html

** https://www.nbcnews.com/news/us-news/fbi-director-wray-hints-he-considered-resigning-restates-belief-russian-n892631

TRUMP: DICTATOR OF THE WORLD

In his role as Global Dictator Trump, he loves to use the words (all caps) IMMEDIATELY and DEMAND.  remember that we (U.S.). were to discontinue naval maneuvers off North Korea IMMEDIATELY and "I DEMAND an investigation into the FBI infiltration into his run for president?   Well, he is at it again:

Trump Tweet July 11, 2018:
What good is NATO if Germany is paying Russia billions of dollars for gas and energy? Why are there only 5 out of 29 countries that have met their commitment? The U.S. is paying for Europe’s protection, then loses billions on Trade. Must pay 2% of GDP IMMEDIATELY, not by 2025* (underlining mine)

Actually, the Russian pipeline is a matter of some concern as it was so in the Obama Administration, although I am surprised that Trump mentioned it.  While it is true that, if you equate all the gas from the pipeline to German consumption, it does become 60-70%; however, the gas is brought all over Western Europe and the amount bought by German companies (not government) is about 20%.**

Unlike the Eastern European countries, Germany has a very diverse energy structure and most of the gas is bought by companies outside of Germany.
Through these pipes, 55 billion cubic meters of Russian gas per year can flow from Russia into Germany. From Vyborg, the gas is sold to utilities, energy companies and chemical manufacturers through Europe’s increasingly interconnected pipeline network to end points across the European Union.**
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This pipeline system, Nord Stream 2, would indeed carry a great deal of gas from Russia to Germany. Trump is, in fact, expressing the American government’s policy of opposition to the pipeline — opposition that his administration shares with the Obama administration, when then-Vice President Joe Biden said: “Nord Stream 2 is a bad deal for Europe.” And, they are, in fact, building a new pipeline.

But, like too many of the president’s pronouncements, what starts with a grain of truth becomes distorted into something else entirely. First, Germany currently receives about half its gas supplies from Russia — if the new pipeline were to replace other sources of gas on a one-to-one basis, it could indeed rise to 60 to 70 percent. However, gas makes up less than 20 percent of Germany’s energy mix for power production, with renewables, coal and nuclear making up the balance.**

* https://www.cnbc.com/2018/07/11/trump-demands-nato-countries-meet-defense-spending-goals-immediately.html
** https://www.politico.com/magazine/story/2018/07/11/what-trump-should-have-told-germany-about-russian-gas-219000

WAGES - 2018

I can understand the plight of the white male wage earner;  They feel that the Democratic Party shows too much favoritism to women, minorities, and gays so they shifted to the Republican Party even though they know that the Republican Party feels they are overpaid.

They have tried to take over the Republican Party with which they are more emotionally attuned, but their leader - Donald Trump - has said on at least two occasions that he feels the American worker is overpaid.  They are capable of feeling he didn't mean it.

The results are, however, that the average hourly wage growth is poor (see figure)r and is eaten up by inflation, though inflation is unusually low.  It is true that the white laborer shifted long before the economic Armageddon of 2008-2009, strangely they didn't blame the Republican Party for the steep decline in their wage gains from it.

Though the Democratic Party emphasis is on women, minorities, and gays (who feel that the Democratic Party hasn't done enough for them.), the white male laborer would have still benefitted from the increase in the minimum wage the Democratic Party would have instituted if they were in power that would have sent a ripple of increasing wages up the scale.  As it was, wages began a climb again in 2013 and got above 2% in 2014 and have averaged 2.6% since (not adjusted for inflation).*

Democrats would also have given a higher priority to an infrastructure program.
And of course, Democrats offered an infrastructure program as did Trump.  The white workers should have known that their best hope for such a program would be with the Democrats because Republicans haven't been for that type of thing.  Sure enough, infrastructure came in third priority in the Trump programs and probably will never be gotten to.  An infrastructure program now would generate good wages because of the low unemployment.  The white male worker opted to vote against their economic best interests.**

Perhaps lastly, workers wages have declined with the decrease in unionization.  For all the faults of unions, they are the only hope for workers in negotiations on wages.***

It seems to me that workers who were so mad about things prior to the 2016 election, now are remarkably understanding and things are probably going to get even worse as tariffs ease in.  Interviews I've heard on TV show people saing they understand why they have to be laid off.

(Click on figure to enlarge)

Worker pay in the second quarter dropped nearly one percent below its first-quarter level, according to the PayScale Index, one measure of worker pay. When accounting for inflation, the drop is even steeper. Year-over-year, rising prices have eaten up still-modest pay gains for many workers, with the result that real wages fell 1.4 percent from the prior year, according to PayScale. The drop was broad, with 80 percent of industries and two-thirds of metro areas affected.****
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The answer is, largely, in the companies' coffers. Businesses are spending nearly $700 billion on repurchasing their own stock so far this year, according to research from TrimTabs. Corporations set a record in Q2, announcing $433 billion worth of buybacks — nearly doubling the previous record, which was set in Q1. ****

Complacency is not with the white working class alone.  Farmers, for example, are feeling the bite from President Trump's tariff war, but even though many farmers admit to greatly decreased profits (e.g. soybeans), they still say they will vote Republican. (https://www.cnbc.com/2018/07/18/trump-tariff-policy-affects-pennsylvania-amid-house-midterm-elections.html)

*https://www.marketwatch.com/story/whats-the-matter-with-wages-2018-05-09
** http://stopcontinentaldrift.blogspot.com/2017/09/doing-something-for-fears-and-concerns.html
*** https://www.huffingtonpost.com/2013/09/18/union-membership-middle-class-income_n_3948543.html
**** https://www.cbsnews.com/news/worker-wages-drop-while-companies-spend-billions-to-boost-stocks/
https://www.washingtonpost.com/opinions/wages-arent-rising-these-theories-could-explain-why/2018/07/11/eeb938f4-8529-11e8-8f6c-46cb43e3f306_story.html?utm_term=.8df7340df90a

DO WE REALLY WANT GERMANY TO REARM?

Currently, Germany is investing about 1% of its GDP in NATO.  Trump is urgently bullying Germany to up its investment to 2% of GDP (or maybe even 4%).  At 2%, Germany would have the largest military in Europe by far.  Now think about that for a second.  Do we REALLY want Germany to rearm?  REALLY?  Germany that caused two world wars?

Angela Merkel wouldn't cause a World War, but it is said that her hold on the as leader of Germany is rather weak and there are right-wing forces ready to take over the country.  Do we trust them?

Let sleeping dogs lay, as they say.  Germany, you are doing just fine, and, oh, by the way, Its all right to spend just 1% of your GDP on NATO.

COUNTRIES ARE RULED BY MINORITY GROUPS

I became curious about countries being ruled by minority groups, especially religion, because in America:
...approximately 69% of the Americans identified themselves as Christians, with 45% professing attendance at a variety of churches that could be considered Protestant, and 20% professing Catholics beliefs.*  In addition, a maximum percentage of the population that is Jewish is estimated to be 2.6%)

Why do Protestant Presidents select Catholic and Jewish jurists for the Supreme Court?

Since Protestants are more than twice as abundant as Catholics, I found it surprising that in the ultimate political division of the U.S., the U.S. Supreme Court, five of the nine members are Catholics (55.6%), three are Jewish (33.3%), and only one may be Protestant leaning but was brought up a Catholic.

Doesn't this seem strange that there are no declared Protestants on the Supreme Court?  It is not as if there are few Republicans in the Protestant faiths.  Certainly, there are 10s of millions.  Besides, Protestant Democratic President Obama followed suit.

Please don't get the idea that I am some Catholic and Jewish hater.  I am sure that all the members are well qualified and maybe even the most qualified.  This asks the question, why aren't Protestants better at law?  For a long time there was an anti-Catholic view in America and, of course, Jews face anti-antisemitism the world over.  Perhaps this is the reason for a more serious interest in the politics of law.

When you are denied the opportunity to join clubs, live in "good" neighborhoods, eat in certain restaurants, or even work in certain businesses, you get interested in law in a very serious way.  If this is so, we can expect a "Black" wave coming?  It is well within my lifetime that African Americans could go into just any restaurant.  I was a post-doc at Carnegie Inst. Wash. when restaurants were integrated in Washington, D.C.

I've heard that Republicans are more interested in the court system than Democrats, but only 37% of Catholics are Republicans whereas 44% are Protestants (with 19% being independents or other). and 26% of Jewish people say they are Republican with 64% saying they are Democrats (with 9% saying they are independents or other)***

Presidents are something else with only one having been Roman Catholic and looking at the statistics, it is no surprise that he (John Kennedy) was a Democrat.  In addition, only one vice-president has been Roman Catholic - Joe Biden also a Democrat though Mike Pence has described himself as Catholic.  Two Roman Catholics have been nominated for president but lost the election - Al Smith and John Kerry, both Democrats.  A string of Roman Catholics have been nominated for Vice-President by the Democratic Party beginning with Bill Miller in 1964, through Ed Muskie, Tom Eagleton (forced to withdraw) and Sarg Shriver in 1972, then Again Geraldine Ferraro in 1984 (also the first woman nominated for vice-president).

In addition, the Speaker of the House, Paul Ryan, is Roman Catholic and so was his predecessor, John Boehner.

Admittedly the Leader of The Senate, Mitch McConnell, is Baptist, plus the makeup follows closely with the percentage of the population with 58% of the Senators expressing Protestant beliefs and 24% Roman Catholic and 8% Jewish.****

Maybe it isn't strange.  Think of Iraq, for example.  For a long time, Iraq was ruled by Sunni Muslim dictators even though the predominant population was of Shiite Muslims.  Then in Syria, the reverse is true with the country ruled by a dictator family of a minority Shiite Muslim group whereas Sunni Muslims are the predominant group.  Maybe sometime I will investigate this further.

 * https://en.wikipedia.org/wiki/Religion_in_the_United_States
** http://stopcontinentaldrift.blogspot.com/2018/06/who-is-protestant-member-of-supreme.html
*** http://www.pewresearch.org/fact-tank/2016/02/23/u-s-religious-groups-and-their-political-leanings/
**** https://en.wikipedia.org/wiki/Religious_affiliation_in_the_United_States_Senate
(Note: The most Republican religious group is Mormon with 70% saying they are Republicans and on 17% saying they are Democrats with 11% saying they are independents or other.  The most Democratic religious group is the African Methodist Episcopal Church with only 4% saying they are Republicans and 92% saying they are Democrats with only 4% saying they are independents or other)

I REALLY DON'T CARE, DO YOU? - II

Melania Trump took a trip to the border to one of the facilities housing the children.  I heard a recording of her talking to the management but when she allegedly went in to see the children, there were no cameras or sound.  I assumed she did see some of the children and tired to come up with a reasonable response to her jacket where she really did care for the children. (http://stopcontinentaldrift.blogspot.com/2018/06/i-dont-care-do-you.html)

So Melania now has made a 2nd trip to the border by herself.  The main purpose of the trip, apparently, was to bolster the spirits of the Federal employees, but she did see some children, supposedly also with reporters.  Still no pictures of Melania with children, however.  This center mainly contained teenagers who crossed the border by themselves, but six were separated from their families.
https://www.usatoday.com/story/news/politics/2018/06/28/first-lady-melania-trump-makes-second-trip-visit-immigrant-families/741075002/

ECONOMY, TARIFFS, AND STOCK MARKETS - JUNE 2018

Though all the effects of the tariff war are not in place, let's take a look at the situation so far.

The economy is continuing to do very well with low unemployment, record corporate earnings., and a continued slow rise in hourly wages (https://data.bls.gov/timeseries/CES0500000008).  There is concern, however, about the effects of our tariff war.

STEEL
I heard that the price of steel had risen by30%, but when you look at the figure for steel prices over time you see there was a dip in late March of the year. When you look at 2017, however, there was also a dip in early April.

Overall the trend for steel in 2017 was an irregular increase in prices before any tariff war (see figure below).*  Actually, the price of steel in June of 2018 is actually somewhat lower than it was at the beginning of the year.  A sharp peak occurred in price in January with an overall decline thereafter.

SOYBEANS
In contrast to steel, the price of soybeans has dropped alarmingly (see 2nd figure below) in reaction to the imposition of a steep tariff by China and may cost U.S. farmers $624 million.**  The huge Chinese market may be lost forever if China can replace the American crop with those in Brazil and elsewhere.

STOCK MARKETS
I worry about the stock market and have been lightening up my holdings.  I've sold some things that were running a nice paper profit (Netflix, for example, that had more than doubled).

Things that bother me:

(A) The yield on the 10 yr treasury has been falling, even as the Fed is increasing short-term rates, that makes it look as if people are shifting money into Treasuries.  In other words "They" are scared.

(B) One thing helping the stock market is companies buying back a LOT of stock with their proceeds from the tax cut and bringing money home from overseas.

Companies repurchased $178 billion of shares during the first quarter, up more than 42 percent from the same period in 2017, according to S.&P. Dow Jones Indices. That was the largest amount ever repurchased, topping the previous record from the third quarter of 2007.***

(click on figure to enlarge)

Apparently Mergers and Acquisitions (M&A) are also increasing:
M&A volumes doubled in Europe in the first quarter, while the United States was up 67 percent and Asia was up 11 percent.**** (Underlining added for emphasis.)

When CEOs get too much money they tend to expand their company into new areas through MandA.  Usually some years later, the companies find they want to "return to their core business" and spin off the acquired companies, usually at a considerable loss.  So expect many of the mergers and acquisitions being done these years to eventually be spun off with a lot of money wasted.

Incidentally, the tax cut is being done on the cuff (something "they" are careful not to tell us), In other words, the government is borrowing money so companies and taxpayers can have a tax cut.  This Is Republican?  Actually, Republicans are only for balanced budgets when Democrats are in power.

My opinion is we can't go into a recession this year because there is just too much money sloshing around, but in spite of that the DJIA is down for the year (other main indices are positive, however, for example, the SandP 500, Russell 2000, and the NASDAQ Composite.

* https://tradingeconomics.com/commodity/steel

** https://www.usatoday.com/story/money/business/2018/06/17/china-tariffs-u-s-soybeans-could-cost-iowa-farmers-up-624-million/708477002/?utm_source=feedblitz&utm_medium=FeedBlitzRss&utm_campaign=usatodaycommoney-topstories
http://markets.businessinsider.com/commodities/soybeans-price
*** https://www.nytimes.com/2018/05/18/business/tax-cut-stock-buybacks.html
8888 V 
****
https://www.reuters.com/article/us-deals-review/global-mergers-and-acquisitions-reach-record-high-in-first-quarter-idUSKBN1H60EC