Analytics

Monday, November 7, 2016

The Presidential Debates 2016: Round 1

NOTE: This is Election Eve, and because of time constraints, I won't have the time to review the other 2 debates before the election. I will publish my reviews over the coming 2 weeks as time permits, mostly because I want to focus on the policy issues, similar as I do here, and because I want to complete my series. This is a tough series to do because I don't support either candidate. America loses either way tomorrow.

The video of the first debate, embedded below, was available as of the date of this post:



There are multiple transcripts of the debate online; I'll be referencing this one from WashPo.

I thought moderator Lester Holt's question on jobs reflects a wrong progressive perspective:
We're calling this opening segment "Achieving Prosperity." And central to that is jobs. There are two economic realities in America today. There's been a record six straight years of job growth, and new census numbers show incomes have increased at a record rate after years of stagnation. However, income inequality remains significant, and nearly half of Americans are living paycheck to paycheck.
Beginning with you, Secretary Clinton, why are you a better choice than your opponent to create the kinds of jobs that will put more money into the pockets of American works?
It's simply absurd to argue record job growth under Obama; to take one example, Obama's tenure has generally witnessed the lowest labor rate participation rate since the 1970's. Obama has seen millions fewer new jobs than Reagan did in a smaller economy and started off with much worse economic conditions (sky high interest rates, higher unemployment, high inflation). Economic growth was 3 times higher under Reagan. There's also a question of quality jobs, with new positions being skewed towards lower-income, even part-time work. We also need to face the fact that under Obama, net household income and net worth has dropped over most, if not all of his tenure. His ObamaCare "reform" has led to record insurance premiums and arguably worse coverage, a major deterrent to job growth and full-time employment.

Holt's discussion of "income inequality" is also uninformed. The Gini coefficient (on an apples to apples basis) has remained relatively flat since the early 1960's (i.e., vs. the derivative political nonsense about the rich getting richer and the poor getting poorer) There is no doubt that the wealthy invested in the economy will do well as we climb out of recession, but they also lost much of their wealth as the economy dipped into recession, and past performance is not indicative of newer ones. Lester's economic illiterate perspective reflects a nonsensical zero-sum game. Businesses seek growth opportunities, which correlate with population. Supermarkets and most businesses do not get the bulk of their profits and revenues from the top 1%. It's low-paid/low-worth individuals who benefit from the competition for the consumer dollar and relevant lower prices.

Holt fails to understand that government is part of the problem, not the solution, by seizing high taxes from businesses and individuals; government competes for resources, robs workers of the right to compete for jobs (licensing requirements) or imposes burdensome restrictions (e.g., lower wage mandates or high benefit costs). The tacit assumption is that Presidents can "create jobs"; they do no such thing. They can promote the context for growth by lowering the tax and regulatory burden, by getting out of the way of private sector competition, by reducing the high-cost government footprint, by promoting free market principles of free markets, free trade, and liberalized migration. Holt also fails to note that liberalized economies have significantly lifted more people out of poverty (e.g., within my lifetime in India and China) than any regime or ideology in world history.

I know going into the answers, we are going to hear rehearsed stump soundbites;
(Clinton). First, we have to build an economy that works for everyone, not just those at the top. That means we need new jobs, good jobs, with rising incomes. I want us to invest in you. I want us to invest in your future. That means jobs in infrastructure, in advanced manufacturing, innovation and technology, clean, renewable energy, and small business... We also have to make the economy fairer. That starts with raising the national minimum wage and also guarantee, finally, equal pay for women's work...So let's have paid family leave, earned sick days. Let's be sure we have affordable child care and debt-free college. How are we going to do it? We're going to do it by having the wealthy pay their fair share and close the corporate loopholes.
Pure economically clueless rubbish. Government "money" is not "free"; it is siphoned from the far more efficient, effective private sector. Clinton wants you to believe that self-anointed, self-serving elected government officials make better decisions with money earned by others than entrepreneurs and business people who are subjected to the shifting preferences of consumers and market competition. Government is monopoly.

Market economies make winners for all consumers. Today many low-income homes benefit from things like refrigerators, cars, air conditioning and cell phones: conveniences that didn't even exist for the wealthy 100-150 years ago. Medicines and other healthcare improvements have eradicated diseases that afflicted both the rich and the poor. Capitalists make money by serving the needs and desires of an expanding population of consumers.

When Clinton tritely rehearses the same old same old Democratic talking points over the last 40-50 years of government "investments", she is really putting lipstick on the lips of self-serving government and their enabling, special-interest crony capitalists and unionists eager to milk the teat of seized assets from productive capitalists and other hard-working people. It's rich for government to push for infrastructure; this is the same government which raids highway trust funds for other political constituencies and wishes to fund money-losing supertrain boondoggle projects. Clinton simply wants to divert taxpayer money to special interests, like construction workers in related industries. If and when renewable energy is a viable business, it will succeed without government "assistance", just like any other business.

There is nothing "fair" about pricing low-wage people out of a job or absurdly repeating the 77-center anti-woman worker conspiracy, which has been largely debunked when one adjusts for experience, skills, and occupational choices. If there was such exploitation, then capitalists (including female ones) could and would arbitrage any alleged spread.

As for profit sharing, let's point out that excellent managers more than pay their own way by making timely, good decisions and even if you redistributed income (at the cost of company profitability and growth), it would not be that significant. I've often invested some of my income in employee stock plans (I did very well while I worked at Oracle). Employees know that their career growth opportunities improve in a successful, growing enterprise. Companies don't want to lose their productive employees. Under one of my first post-academic privately-held employer, my income went up over 50% in less than 3 years: more than my best offer over 5 years as a college professor. My company had to compete for DBA's in the open market, and they knew my contributions to the business; it was more of a matter of timing in knowing when to ask for a raise.

Companies are in competition for talented people; they don't need a bunch of politicians who can't even make and live within a budget putting their self-interested thumbs on the scale. Compensation takes various forms in a competitive marketplace. If "progressive" companies want to implement preferred policies, they execute on them. Sometimes it backfires, like when Ben and Jerry's wanted to hire a new CEO and their executive-worker pay ratio didn't attract talented executives.

Finally, I'm not wealthy, but I think the Politics of Envy is morally corrupt. This rhetoric of  "having the wealthy pay their fair share and close the corporate loopholes" is disgusting crap; First of all, the fairest tax is low and flat; it doesn't create perverse incentives to seizing an ever bigger chunk of money with each additional dollar of earnings, to the point that workers and companies are working more for the benefit of others than for themselves. If they voluntarily do that, it's virtuous; when government does it at the point of a gun, it's legalized plunder. As for "corporate loopholes", they are that product of corrupt government bestowing benefits to special interests, which multiply as other groups cry out for their own "fair share".of plundered assets.

(Trump). Our jobs are fleeing the country. They're going to Mexico. They're going to many other countries....They're devaluing their currency, and there's nobody in our government to fight them. But we have to stop our jobs from being stolen from us. We have to stop our companies from leaving the United States and, with it, firing all of their people...But we have to stop our jobs from being stolen from us. We have to stop our companies from leaving the United States and, with it, firing all of their people...Under my plan, I'll be reducing taxes tremendously, from 35 percent to 15 percent for companies, small and big businesses.
Trump's trade protectionism/populism is just as morally corrupt and economically clueless as Clinton's policies. The Carrier air conditioner plant closure had more to do with corrupt protectionism, because local producers wanted to cripple foreign competition for expensive parts--and Mexico was willing to allow parts competition. Actually, American producers already produce most of which we consume, and American manufacturing is bigger and more efficient than ever. Some companies ceased operations because they were no longer cost-competitive, and attrition of jobs has more to do technological improvements. Market competition favors the American consumer, not the politically favored that Trump is selling out in favor of; true populism puts American consumers over corrupt union/worker/company political connections.

Trump's position on corporate taxes is superior to Clinton's outright theft of noncompetitive taxation. However, Trump is using both carrots and sticks, which is philosophically inconsistent. Bottom line is that Trump, just like any other corrupt progressive politician, is willing to cut deals that reflect his own political agenda, which is just as evil as Clintonomics.
(Clinton).  Of course, we are 5 percent of the world's population; we have to trade with the other 95 percent...And the kind of plan that Donald has put forth would be trickle-down economics all over again...He started his business with $14 million, borrowed from his father, and he really believes that the more you help wealthy people, the better off we'll be and that everything will work out from there.
Well, on the first point, Clinton is spot on; the problem is that she had pandered as much as Trump is against foreign trade deals, notoriously against TPP, which she strongly advocated as Secretary of State.

"Trickle-down economics" is a trite leftist claptrap pejorative. We have several examples of reduced tax rates revving up growth that more than offsets revenue "lost" through lower taxes due to higher growth. Trump is winning on tax policy, although he didn't call for a territorial tax system, which is better policy.

Trump responded with Clinton's personal attack on his Dad's generous loans. (Actually, she didn't discuss how his Dad vouched for key business deals.) He then makes a bizarre argument that the Mexican VAT was an example of how Mexico manipulates "bad" trade deals. The VAT is not a tariff; it is applied across the board to all products (just like state sales taxes), domestic and international. What Trump's anti-NAFTA illiteracy neglects to tell people is that Mexico is one of our biggest trading partners: "U.S. farm exports to Canada and Mexico grew 156%...Mexico is the top export destination for U.S.-grown beef, rice, soybean meal, corn sweeteners, apples and beans. It is the second largest export destination for corn, soybeans and oils." (Trump doesn't mention that Mexico lowered protectionist high tariffs against American imports.).

Trump starts his clueless charges of currency manipulation, particularly on China. The fact is the yuan has slowly appreciated against the dollar over the past decade, while Chinese exports have increased. If China artificially devalues its currency, it is at the expense of its own citizens standard of living; its imports of raw materials and parts (yes, including American-made) are more costly, hurting already razor-thin profit margins. One of our rapidly diminishing advantages is the fact that the Chinese State is more regulated and heavy-handed. The problem is both Trump and Clinton want to control the economy to a greater, more dysfunctional degree.

(Clinton). That [Great Recession] was in large part because of tax policies that slashed taxes on the wealthy, failed to invest in the middle class, took their eyes off of Wall Street, and created a perfect storm
Okay, I want to use far stronger language, but this is pure ideological crap. No, banking has been one of the most regulated industries throughout American history. This view that Bushism led to a laissez-faire government is the biggest absurdity out there; regulations grew steadily under Bush. He radically expanded federal spending and deficits. Bush only cut higher-level tax RATES (temporarily) by about 10%, the higher-income taxpayers paid a record percentage of personal taxes. The Great Recession was an artifact of bad government policy and perverse incentives, including incentives, mortgage rules in favor of risky low-income groups, easy monetary policy, failed regulation, etc.

Clinton then goes into attack mode on climate change (alleging Trump calls it a conspiracy, which he denied) and proposes industrial policy favoring solar paneling. Trump effectively counter-punches, making an indirect reference to the Solyndra scandal.

Trump argues that Clinton hadn't done anything on policy in 30 years and tries to link Clinton to NAFTA, which is absurd. (She was first elected in 2000.) Clinton argues that she had a more balanced policy on trade deals (which are hardly "free trade" but more liberalized that the protectionist status quo),

Clinton argues her plan would add millions of jobs while Trump would lose millions. She referenced indirectly ONE economist (Zandi) who was not looking at Trump's current tax policy I thought Trump was at his strongest, pressing the need to cut taxes and regulations to encourage growth, but he didn't make the necessary case to cut spending or cite specific estimates on the economic benefits of his policies.

A lot of personal sniping, dominated by Clinton in this segment (e.g., " Well, Donald, I know you live in your own reality.)

ANALYSIS OF THIS SEGMENT: Holt did an abysmal job controlling the bickering and interruptions of the candidates. Poor performance by both candidates. On economic policy, both of them are tragically substantively wrong and misguided. If I had to give a grade, I would narrowly give the edge to Clinton, who had a better grasp of policy and details, came across as better prepared and is more ideologically consistent and portrayed herself as more balanced and nuanced than Trump. She seemed to get under his skin by referencing his dad's wealth. Trump really didn't address how he could get his anti-trade and other policies through his own GOP-controlled Congress, and he didn't counterattack or challenge Clinton's claims, policies or ideology other than to make reference to Bill Clinton or Obama's records (and she quickly sidestepped the purported charge, claiming nuanced differences, e.g., her position on TPP). He also was very vague about how he would reopen past treaties, what he could do as POTUS. Clinton just came across as a better prepared debater; Trump didn't really put her on the defensive and make his case as a change from 8 years of Obama. He really didn't press the point her economic policies were an extension of Obama's and anemic growth under his.

Donald Trump then tries to link Clinton's record to the rise of ISIS her "whole career", although ISIS hasn't been a force until Obama's Presidency and Clinton didn't set policy as a senator or Secretary of State (one could make the case that ISIS is a key unintended consequence of Bush's Iraq intervention, which Clinton opposed as senator). Trump also doesn't discuss why we have a problem with companies bringing overseas profits home, which has to do with double taxation of a noncompetitive worldwide vs. territorial tax system, not to mention a less inviting business-friendly environment. He needs to go beyond alleging his policies would lead to "tremendous" growth; he needs to talk in terms of numbers. Clinton's defense that she is pro-small business is fairly weak, because any exclusions are limited and the deferment of relevant policies discourage long-term growth.

Clinton then talks about more federal meddling in college education "investments", blatantly ignoring the federal government's role in the college cost bubble, with taxpayers footing the bill for abandoned or unmarketable college degrees. To his credit, Trump does a good job trying to link problems to career politicians.

Trump does a good job noting the risks of unaccountable Fed monetary policy interventions, but he seems to focus on the Fed accommodating incumbent politicians and he warns about the vulnerability of the economy to interest rate shocks. But it's not like Trump is advocating letting interest rates float or ending the Fed.

There's then a kerfuffle on Trump releasing his tax returns vs. Clinton's coming clean on deleted emails (re: emailGate). Clinton is trying to milk the uncertainty over Trump's financial statements. Trump unconvincingly responds that he is "smart" to take advantage of  "loopholes". Trump then charges that career politicians are responsible for diverting federal funds to things like overseas interventions vs. 101 other ways to repackage those funds for other domestic priorities. (This is not a principled point; he should be arguing we shouldn't steal from residents to fund unnecessary operations overseas vs. spending them on other things, including state/local responsibilities. He also seems to be willing to spend whatever it takes to defeat ISIS, just as I'm convinced Trump would love easy Fed monetary policy once he becomes POTUS.) Clinton seems obsessed that Trump has not paid his fair share of income (e.g., by carrying forward business losses from earlier years) to squander on ill-spent federal priorities.

The next topic was race relations. Clinton really doesn't explain how the status quo exists after 2 terms of the first black President or how she would improve current policy. She makes some obscure points about federal creep into state/local responsibilities and tries to argue gun control. Trump argues his pro-police policies and talks about the decline of black inner cities (pointing out Chicago), which he attributes to the incompetence of career political leadership. Clinton fights back, arguing Trump's characterization is distorted, that black churches and minority businesses are leading the way and pointing out longstanding declines of violence and property crime nationwide (never mind this fact undermines her gun control arguments). Clinton says that Trump's position advocating stop and frisk is an effective law and order policy, noting it's unconstitutional, in part because it's "ineffective". [Nonsense; If "ineffectiveness" is a constitutional principle, then 99% of government would be ruled be unconstitutional. There's a constitutional issue over arbitrary, unreasonable searches.] She then argues the disparate enforcement of things like nonviolent victimless crime (i.e., drugs), which she fuzzily attributes to "unintended consequences" of government policy. She rightly criticizes mandatory minimum sentences (although this is more of a local vs. federal issue). She tries to demonize crony private prisons as motivating a growing prison population (which is putting the cart in front of the horse: public unions have a vested interest in staffing government prisons, and private prisons were a cost-effective alternative to building and staffing expensive new government facility). She is eager to strip self-defense rights from people who end on the no-fly list without due process (although she offers no evidence that no-fly list people are responsible for crime problems).  She advocated increased funding for the affirmation action industrial complex to improve racial sensitivity of police officers and other public employees.

Trump responds that he, too, is willing to sacrifice individual rights on the no-fly lists, although he takes the opportunity to point out his NRA endorsement. He beats the drum for stop and frisk, arguing it is responsible for reducing violent crime in NYC (which is nonsensical: the long-term trends were in place without nationwide stop-and-frisk policies) Clinton responds by pointing out that the long trend decrease in violence remains intact, despite the current mayor's termination of stop and frisk policies. Trump points out that the Democrats have dominated local-city politics for generations and the black urban communities have deteriorated on their watch. Trump and Clinton take shots at each other over Clinton's taking time off the campaign trail to prepare for the debate.

Holt indicts Trump for undermining Obama with his birther accusations. Trump basically counters saying the 2008 Clinton campaign made Obama's birth an issue and takes credit for resolving the issue by getting Obama to release his birth certificate, something Clinton failed to do. Clinton counterattacks that the Justice Dept. sued Trump in the 70's for not renting to blacks in some of his properties. Trump tried to divert the criticism, saying the suit was settled without an admission of guilt and he was one of many property-owners included in the suit.

Analysis: Trump fails to make the obvious case about the explosion of incarcerations that leave the US as one of the highest proportionate prison populations in the world, including the dysfunctional war on drugs. He also doesn't point out that government policies, like occupational licensing and minimum wage laws, disparately affect minority communities, and the morally hazardous welfare industrial complex has led to a permanent underclass of government dependency. Clinton on the other hand does not make a case for Trump putting liberty under the bus with his pro-police state policy. Overall, I thought the questioning put Trump on the defensive; Clinton showed a more detailed understanding of facts and was more concrete in fleshing out public policies to support her positions. Again, Clinton wins on points, but both candidates were horrible.

The next issue is cybersecurity, and here I am constrained in what I can say by contractual agreements, but it is an issue that as an IT academic and professional that I take very seriously. Clinton's initial response is vague, other to pay lip service on state-based security, particularly Russia (does not mention China) and Trump's admiration for Putin. Trump responds by pointing out his public security official endorsement and basically blames incompetent federal leadership, implying that as a successful businessman he has the ability to manage more effectively than Clinton; he misses a golden opportunity to point out the hacking of Clinton's home server, which held some classified information. Trump riffs off ISIS doing recruitment via the Internet (although it doesn't seem to be a cybersecurity issue, but one involving use of the Internet) and claiming this has happened unchecked on Obama's watch. Clinton uses this opportunity to highlight her experience in dealing with ISIS as Secretary of State.  Trump responds by, among other points, that ISIS has been using Iraqi oil resources for funding on Obama and Clinton's watch, that we should have stolen the oil. Clinton counters by pointing out that Trump himself had blamed Bush for opening Pandora's box with the 2003 Iraq invasion.

Holt then challenges Trump's assertion that he was always against the 2003 war. Trump responds by pointing out he was publicly against the war in 2004 and that Sean Hannity corroborates that Trump was an early opponent of the war. Trump and Clinton argue that the other lacks the necessary temperament to be Commander in Chief (they are both right on this point).

Analysis: This is a topic that somehow got diverted into international policy and security. Trump missed an obvious issue in our crumbling IT infrastructure inside the federal government with insecure legacy systems (e.g., abandonware), not to mention the cases of Manning, Snowden, and recently Xiaoming Gao, federal employees or contractors who violated national security clearance policies; not to mention the hacking into Clinton's private email server. Clinton's best point was that Trump threatened out alliances by demanding protection money from our allies. This was a poor performance by both candidates. I narrowly award this round to Trump, mainly because he was able to put Clinton on the defensive over the status quo and he did a better job of countering Clinton's attacks. Neither Clinton nor Trump really address the military industrial complex or question expanding neocon foreign intervention policies.

The final segment with Trump indicting Clinton for the Iran deal which he describes a bad deal (and he implicitly points to himself as a guru in the art of dealmaking). Clinton notes that she will honor our alliance treaties (not open Pandora's box with our allies) and the Iran deal provided on-site inspections. Trump counters that many current challenges are the result of government incompetence, and Clinton was a part of leadership over that period. This led to a final question over whether the loser would accept the election's results.

Final Analysis: I felt that the entire debate was a poor performance by both candidates, but Clinton won the debate narrowly on points. Trump is a poor debater, just as he demonstrated repeatedly during the GOP primary. Trump did a poor job attacking the Obama Administration, fleshing out the specifics of where he would improve over Obama and Clinton's performance, how a Trump Administration would differ from the status quo, other than changing the leadership at the top: he doesn't mention his 4 to 6 bankruptcies, of course. Clinton was better prepared with facts and specific policies; Trump talks vaguely about how his CEO experience would make him a better President. Both sides engaged in reciting trite soundbites and repeating personal attacks. Clinton seemed to want to provoke Trump into overreacting like he did during the GOP debate, and to his credit, Trump didn't take the bait. The bickering, though, by both candidates was unworthy of the office of the Presidency, and of course, I believe that Gary Johnson should have been at the debate.