Power To the Powerful

Trump won his following by talking a populist game, but he is in danger of enacting something only elitists could love. Mario Cuomo said you campaign in poetry but are forced to govern in prose. Trump campaigned on lies and fantasy, but he is going to have to govern in a world of hard truths. Global warming is not a Chinese hoax. An increasingly diverse nation is not going to turn majority white, no matter how hard he deports. And steel mills and coal mines are not the future. Worst of all, the promises he made will cost money and his own party may not be willing to pay for them.

As I noted last time, the Trump voters down at my neighborhood barbershop are happy to indulge in Big Brother’s “two minute hate” of the press and immigrants, but as the contentious town hall meetings around the country have shown, regular Joes actually care most about jobs, taxes, and affordable healthcare.

It is likely a Trump presidency will rise or fall on its performance in regard to kitchen table economic issues. Will the donor-pleasing Republicans in Congress devise solutions that will do a damn ting to keep the wolf from the door of the guys in the barbershop? Don’t count on it.

House Speaker Paul Ryan drank the supply-side Kool-Aid long ago and is drafting a tax plan that aims to provide huge cuts for corporations and taxpayers in the same bracket as the Trump cabinet billionaires. Average people will see little benefit unless the money trickles down from the fat cats.

If corporations get a windfall, they may share it with shareholders, but rarely with their workers and certainly not with the unemployed. They are more likely to buy foreign operations or domestic competitors and realize cost savings by cutting overhead, i.e. jobs. Or they may invest in automation. Still no jobs.

Billionaire investors given a huge capital gains break will buy more stocks, not necessarily in American companies. None of these beneficiaries are motivated by the good of the USA, but by the size of their ROI.

The Ryan plan is also founded on fool’s gold since it would generate $1 trillion to offset the tax cut by imposing a border tax. In the isolationist age of Trump, this may sound like a good idea since the tax would be on imports from villains like Mexico and China and would not affect exports by good, old made-in-the-USA goods.

Alas, things are not so simple. The border tax has generated a firestorm of complaint from American companies like Wal-Mart which sell huge quantities of goods manufactured abroad. They will have to raise prices to cover the tax. So American consumers would see prices rise on everything from TVs and smart phones to the avocados they eat and the clothes hey wear. Wal-Mart customers are already feeling an economic squeeze so will hardly relish a 20 percent pop in retail prices.

Not surprisingly the chances for passage of this wrongheaded plan grow dimer every day. And if the border tax is scuttled, Ryan is back to the usual supply-side fantasy — cut taxes for the rich and growth will take up the slack. It didn’t work for Reagan and it won’t work now. Instead it will balloon the debt and crimp the prospects for the children and grandchildren of the barbershop crowd.

The contemplated fixes for Obamacare are equally out of touch with reality. One notion is to reduce the tax deduction for healthcare spending by employers. According to a Wall Street Journal report, some economists claim this will discourage employers from offering “too-generous health coverage…that leads to excessive health spending.”

This is an idea only an economist could come up with. In the real world, do people really take advantage of “generous” health care benefits? Does anyone besides plastic surgery addicts like Joan Rivers go to the doctor for fun? Surely most people have health care that is not affordable enough, rather than too generous.

People weeping at town hall meetings from the fear of losing Obamacare aren’t greedy pigs at the trough, but suffering humans trying to survive their ills.If there is greed and excess in the healthcare equation it is on the part of insurance companies, doctors, hospital corporations, and big pharma, not patients. No plans have been anunced to address that.

William Galston of the Brookings Institution warns that over 10 million beneficiaries of Obamacare are poor people who have received care due to the program’s expansion of Medicaid. Ryan wants to boot them off the plan and let states worry about their health. He would offer states a reduced stipend from the federal government. This would allow Ryan to book a cool one trillion dollars in savings in federal outlays over the next decade. Again, this may help him get the books to balance, but it will hurt millions of people.

Galston notes that Trump carried 13 states that have accepted the Medicaid option under Obamacare and nine of them have Republican governors and 12 have Republican legislatures. Will they welcome the chance to raise state taxes to replace the money for Obamacare Ryan wants to take away? It’s that or refusing access to healthcare to a wole lot of their citizens and constituents.

Virtually all of the Obamacare fixes proposed by Ryan and his cohorts would be good for employers but bad for employees, good for the well-to-do, bad for the poor and working class, good for the tax cutting-small government crowd, bad for the health of their fellow countrymen.

Some Trump voters have already begun to show up to ask Rep. Tom Cotton (R-Ark.) why government supplied heath care is good for him, but bad for them, or to warn Sen. Chuck Grassley (R-IA.) that repealing without replacing Obamacare will be the equivalent of the death panels he used to hyperventilate about.

Apparently even Trump voters are worried that the tax and healthcare plans the Republicans are hatching won’t make America so great for them.

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