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The Plunder Capitalism of the US Republican Party

With this newest Republican Tax Bill and FCC vote against “internet neutrality” we see once again that so many Republican pieces of legislation are often destructive acts of donor class greed - an enduring monument to the Republican Party's disregard for the majority of American people it has decided NOT to serve.

It is worth taking a step back and marvel at the sheer insanity of what the Republican Party is doing.

The GOP is full of people who want to stick it to Democrats, the Gay community, college professors, investigative journalists, women, and poor people more than they want to make policy that will actually help people, or at least not make their lives demonstrably worse.

They are willing to ruin their constituents and ruin the lives of millions of people so that they might back-slap each other for a few minutes in the Rose Garden in the company of a demented charlatan President who will either end up humiliating and destroying them anyway or collapsing American society around himself and eating ice cream on top of the ruins.

The current Republican Party is run by the most selfish and greedy ideologues to lead this country in 150 years and every day they find new and innovative ways to debase and invite ridicule on themselves. They make the corrupted elitism-lite of the Democratic Party look like the Girl Scouts. 

The only comfort right now is imagining the future that awaits these arrogant Republicans - that is if the Trump voters finally figure out that their angry gullibility has actually further filled the "Swamp" with more toxicity and crony tax revenue plunder - i.e. a bogus tax dollar economic stimulus plan they will not see a dime of.

The Republican Party's reward for kowtowing to their God-complex edonors and their anarchistic evangelical base - assuming that the United States does not accelerate down the road towards Trump's desire to create a Russia-like domestic police state - will hopefully be a series of stinging, comprehensive electoral defeats.

After three more years of the vile Donald Trump (if he makes it that far) and one more year of callous leadership of the current Republican Party, we can only hope their deceptive populace ideology will be decimated as an organized force in American politics for a generation.

They will have sacrificed themselves, their principles, their reputations, and their constituents for nothing more than greed, grandiosity, and their addiction to abusing poor people. They will forever be remembered as the enablers of a trash-heap president who is literally losing his mind in front of us and who may very well succeed in erasing a 240-year-old republic.

But in the end, if there is any justice in the universe, voters will crush them in the next three election cycles, sweep them and everything they believe aside, ignoring the lamentations of their vanquished press secretaries as the Nation embarks on a balanced progressive bender that will make Republicans wish they had just made their peace with sane health care and middle class tax reform and acted like the principled opposition they pretend to be.

Some Republican politicians will be gone before their legacy of toxicity becomes undeniable even to their most die-hard supporters. But others will live long enough to read the first chapters in the history books documenting their cowardice, greed, and stupidity, how they plundered the republic rather than entich it, how they prioritized their narrow political interests over basic human decency, again and again and again.

And in that moment, we can only hope, they will process the words describing their own depravity and they will understand that they have wasted their careers in the service of avarice and sociopathic greed. 

Americans have to make a very important decision very soon: Choose between an public service problem solving leadership that uses science, intelligence and compassion and for the benefit of all Americans - or continue to support an ideologically greedy and partisan capitalism that blames the "others" for our country's increasingly widespread economic and social problems.

www.SoberMoney.org

“Trickle Down Economics” - The Art of the Steal

In my humble yet educated opinion, “trickle down economics” is possibly our Nation's most enduring political economy scam consistently perpetrated on American voters and taxpayers.

Here’s the theory: If we cut taxes for big corporations and the rich, the elites will take the saved tax money and reinvest in their businesses - which creates not just jobs but good paying jobs - to stimulate the US economy. The problem is: It’s mostly BS! 

Here’s the reality: The rich and big business mostly hoards the tax cuts for themselves. Or, they buy back company, stock which primarily rewards company executives and their biggest shareholders. Or, company's take the money and increases stock dividends in an attempt to keep current shareholders - often because poor management or a failing supply and demand economy no longer supports the company’s growth.

In a testament to concentrated economic and political power in the US, 90% of tax cuts for the rich are held in passive accounts that have little effect on national job creation or growing the wealth of middle and lower income Americans.

In harsher terms, the American elites really only care about the financial health of middle and lower class Americans when they can use or manipulate the latter's fear and anger to get votes or to consume their products and services. 

President-elect Donald Trump is a perfect example of the perennially recycled "Trickle Down" elite politician. During his campaign, Trump chastised Hillary Clinton for taking huge amounts of money from Goldman Sachs.

Less than a month after winning the Electoral College, Trump then appoints an ex-Goldman Sachs executve and housing foreclosure specialist. Almost immediately thereafter, he appoints a billionaire ex-Goldman Sachs hedge fund crony to the position of US Commerce Secretary. 

It looks like the "swamp" Trump was campaigning against was actually drained and he found most of his Cabinet members at the bottom!

History shows during every election cycle how politicians have no qualms about blatantly lying to voters by promising how much they care about taxpayer money and how they will reinvest the money redistributed to the elites so it will end up back in the average American’s pockets. 

These false campaign slogans end up being nothing more than bogus political promises that dupe voters into electing them - with the hope that by the next election cycle voters will forgot how they were duped the last time.

Given the current leadership of the US economy i.e. under the Republican Party majority, Trickle Down policies are once again the free market "hope and change" saviour economics. Yet, the national politicians, primarily market fundamentalist “evangelicals” like Paul Ryan and Donald Trump, continue to preach this false hope "elite economics" blind faith.

The stock market has certainly recovered from the great recession in 2008, which was actually caused by the then current version of irresponsible deregulation and "Trickle Down" economics. Yet here we are at it again with the new Trump version of this failed economic theory. 

"Insanity" is doing something that doesn't work over and over again expecting a different outcome.

We are in Kansas, Dorothy!

We can easily see the inherent failings of "Trickle Down" on steriods at the state level. Back in 2010, Kansas elected a Tea Party true believer to be their governor. He promised during his campaign that by slashing taxes for businesses and the State's elites, everyone in Kansas would benefit. After being elected into office and then witnessing the Republican Party takeover of the State assembly and senate, the Governor signed off on the biggest tax cut in the state’s history.

The result: Ninety percent of those tax cuts in Kansas benefited the top 10 percent of earners, i.e. the rich. The Kansas economic experiment failed miserably and since the cuts, Kansas has faced yearly budget deficits and was sued for its lack of funding for public education.

By June of 2014, the results of Sam Brownback’s disasterous economic reforms  weren’t pretty. During the first fiscal year that his plan was in operation, which ended in June, the tax cuts had produced a staggering loss in revenue—$687.9 million, or 10.84 percent.

According to the nonpartisan Kansas Legislative Research Department, the state will run budget deficits through fiscal year 2019. Moody’s downgraded the state’s credit rating from AA1 to AA2; Standard & Poor’s followed suit. Such credit downgrades increase the state’s borrowing costs and further enlarge its deficit.

Yet in spite of the massive negative evidence of “Trickle Up“ fiscal policies, Donald Trump brags about doubling down on "Trickle Down" nationally, an economic policy that mainly inceases the wealth and consolidates the power of his elite kleptocrat cronies.

Markets

When viewing the Trump economic plan objectively, it does look like we are experiencing a Trump stock market rally - going on for over a year now - mainly because of "business friendly" deregulation proposals tax cuts for the US plutocrats. 

Make no mistake, once the Trump Administration economic policies get fully implemented, only then will we see the real negative effects of the "Trumpnomics" version of the "Trickle Down" philosophy on the US and global economies.

A prediction: At the end of the Trump presidency in 2020, the rich will be even richer and the rest of America will still be angry.

Rocky Boschert

The Electric Car Revolution is Accelerating

Electric cars will outsell fossil-fuel powered vehicles within two decades as battery prices plunge, turning the global auto industry upside down and signaling economic turmoil for oil-exporting countries, according to an important Bloomberg New Energy Finance (BNEF) study.

The BNEF forecast says adoption of emission-free vehicles will happen more quickly than previously estimated because the cost of building electric cars is falling so fast. The seismic shift from dirty energy to clean energy will see cars with advanced plug-in capability account for a third of the global auto fleet by 2040, displacing about 8 million barrels a day of oil production—more than the 7 million barrels Saudi Arabia exports today. 

“This is free market economics, pure and simple economics,” BNEF’s lead advanced-transportation analyst Colin McKerracher said before forecasts were published on Thursday, July 6, 2017. “Lithium-ion battery prices are going to come down sooner and faster than most other people expect.”

The forecast is BNEF’s most bullish to date and is more aggressive than projections made by the International Energy Agency. Surging investment in lithium-ion batteries, more sophisticated manufacturing capacity at companies including Tesla Inc. and Nissan Motor Co., as well as emerging consumer demand from China to Europe support the BNEF’s projections, which also include:

1) In just eight years, electric cars will be as cheap as gasoline vehicles, pushing the global fleet to 530 million vehicles by 2040

2) Electricity consumption from EVs will grow to 1,800 terawatt-hours in 2040, or 5 percent of global power demand, from 6 terawatt-hours in 2016

3) There's around 90 gigawatt hours of EV lithium-ion battery manufacturing capacity online now, and this is set to rise to 270 gigawatt hours by 2021.

However, charging infrastructure on the road will continue to be an issue with distribution bottlenecks capping growth in key Chinese, U.S. and European markets - emerging in the mid-2030s.

Lithium-ion cell costs have already fallen by 73 percent since 2010 and BNEF predicts innovation of battery manufacturers will accelerate and lead to further steep declines in average prices over the next two decades. While they won’t fall as fast as solar panels, it could still lead to suppliers getting squeezed as they compete for contracts, McKerracher said. “There’s an element of competitive dynamics and a real possibility of oversupply in the lithium ion battery market that will serve to hammer down prices,” he said.

The world will need the equivalent of 35 of the so-called Gigafactories like the one built by Tesla founder Elon Musk in Nevada over the next 13 years to meet the power demands of electric cars, according to BNEF. The global shift toward electric vehicles will create upheaval for the auto industry.

Moreover, the oil industry majors will be harmed by reduced gasoline demand, as well as spark plug and fuel injection manufacturers whose products aren’t needed by plug-in cars. BNEF, which last year forecast as much as 13 million barrels of oil a day was being displaced by electric cars, said its revised 8 million barrel a day figure is “likely understated. ”While traditional car suppliers may be hurt by EV growth, some commodities will get a lift, according to BNEF:

    1. Graphite demand will soar to 852,000 tons a year in 2030 from just 13,000 tons in 2015

    2. Nickel and aluminum demand will see demand rise to 327,000 tons a year from 5,000 tons now

    3. Production of lithium, cobalt and manganese will each increase more than 100-fold

It’s the world’s biggest economies—China, the U.S. and Europe—that will drive demand for battery powered cars over the next 25 years, according to BNEF. These governments which have already been the most advanced in providing subsidies and installing charging points, will reap the benefits sooner than other emerging economies like India. "Electric cars are intrinsically cheaper than gas or oil fuelled cars because they're simpler and their maintenance is a lot easier,” said Enel SpA Chief Executive Officer Francesco Starace said in an interview in Rome. In Europe, almost 67 percent of new cars sold will be electrified in 2040, and 58 percent of sales in the U.S. and 51 percent in China, BNEF said.

Unfortunately, there's some uncertainty in the U.S., where the backwards thinking Donald Trump could disrupt electric vehicle growth by withdrawing support for this essential smart technology in the world’s second biggest car market.

“The next 6 to 8 years become very important,” McKerracher said. “If those volume amounts falter, then some of those cost reductions may not come to pass and that will affect the crossover point and therefore the overall adoption level.”

Jess Shackleman, Bloomberg News, July 7, 2017 

California's Economy Trumps Trump's Economy

California's economy is the antithesis of Donald Trump's vision of the US economy.

And the economy of California is the chief reason America is the only developed economy to achieve record GDP growth since the financial crisis of 2008 and ensuing global recession, according to data compiled by Bloomberg.

In fact, much of U.S. economic growth can be traced to California laws promoting clean energy, government accountability and protections for undocumented people. Governor Jerry Brown, now in his fourth term, considers immigrants a major reason for the state's success: "39 percent of us are Latino and the majority are from Mexico," he said in March in his Sacramento office.

In the stock and bond markets, where investors show no allegiance to political parties, California has outperformed the rest of the U.S. the past five years, especially since the Nov. 9 election, when Trump became the fifth person to win the Electoral College and lose the popular vote.

California's creditworthiness keeps getting better, measured by the declining cost global investors must pay to ensure against depreciation of the state's debt obligations. That premium has diminished more than any other state since 2012, according to data compiled by Bloomberg.

California, whose voters favored Hillary Clinton two to one, outperformed Treasury bonds since the November election. Texas, which is the second-largest state in population and which supported Trump, lost ground compared to Treasuries and California in the market for state and local debt since the November election. Investors see better security in the state with more regulations that protect investors and more support for immigrants.

California's borrowing cost is 0.15 percentage points lower than the average for states and municipalities and has declined to just 0.24 percentage points more than the U.S. pays on its debt, down from 1.97 percentage points in 2013.

At the same time, bonds sold by California's municipalities produced a total return of 2.3 percent since November, outperforming the benchmark for the general U.S., according to data compiled by Bloomberg. The growing popularity of bonds sold by California issuers is a consequence of the state's more rigorous regulation of the bond market, specifically legislation signed by Brown last year, creating greater transparency and accountability for issuers of California debt.

The Clean Energy Economy

Moreover, no state in the US or no country in the world has created as many laws discouraging fossil fuels and carbon pollution while promoting clean energy. That convergence of policy and voter preference is clearly paying off in the stock prices of companies domiciled in California.

California is also home to 20 of the 130 companies in North America and South America that meet the standard classification of clean energy. These 20 companies produced a total return of 40 percent during the past 12 months, beating the clean energy benchmark's 13 percent, the S&P 500's 19 percent and the S&P 500 Energy Index's 6 percent.

California clean energy companies reported annual revenue growth of 26 percent, almost three times the benchmark, and they turned more revenue into profit with an average gross margin of 46 percent, compared to 41 percent for the benchmark. California companies also spent 13 percent of their revenue on research and development compared to 8 percent for the benchmark.

Jobs at clean energy companies in California increased 14 percent last year, double the average rate for the industry. Analysts surveyed by Bloomberg say these 20 stocks will gain only 1 percent during the next 12 months, because they achieved their target valuations much sooner than predicted. Tesla Inc., the Palo Alto-based manufacturer of electric vehicles, appreciated 60 percent since Trump's election and is now worth more than $50 billion, greater than Ford Motor Co.'s $45 billion market capitalization and almost as much as General Motors Co.

"We have a goal of a million and a half electric vehicles by 2025 and that's quite a steep curve to get there," Brown said in the interview in March. "No matter what Trump says, China, the world, the academies of science and all the major countries have all recognized climate change. Certainly, businesses acknowledge they have to make these investments. California is well on its way."

Technology driving the clean energy boom is the reason California companies lead most of their peers in U.S. The 467 California-based firms in the Russell 3000 Index produced a total return of 185 percent since 2012, easily surpassing the 94 percent for the index, according to data compiled by Bloomberg. Analysts also are more bullish on companies in California than the rest of the U.S., predicting a 12-month average total return 12 percent (income plus appreciation) versus 9 percent, according to data compiled by Bloomberg.

Behind such a favorable outlook is the diversity of the California economy, which grew $42.3 billion during the first three quarters last year. That's almost as much as the next two fastest-growing states, New York and Florida, combined.

California's revenue from agriculture, forestry, fishing and hunting totaled $39 billion in 2015, plus $279 billion from manufacturing. The trailing 12-month revenue from California technology companies is $720 billion, or 54 percent of the U.S. industry, according to data compiled by Bloomberg.

The capitalist juggernaut that is California helps explain why the state's per capita income increased 9.5 percent since 2015, the most of any state and the most since 2012, according to data compiled by Bloomberg. Far from losing jobs overseas, California keeps creating them with an unemployment rate declining to 4.9 percent from 5.7 percent in 2016, faster than the national average.

None of this is lost on the residents of California.

They are proudly enacting policies in opposition to Trump's economic mindset. The California legislature became the first to vote to become a sanctuary state, and supported raising gas taxes and vehicle registration fees to improve infrastructure. While Trump gets the lowest approval of any new president after 100 days and the Republican Congress does worse, the politics of California are the opposite. A recent University of California Institute of Government Studies poll found 57 percent of California's registered voters approve of the legislature's job performance. Governor Jerry Brown gets 61 percent approval.

If that's an economic "mess," as Donald Trump declared about "liberal" economies during his first week in the White House, we all could only hope for more of California's multicultural green energy economy in many more states nationwide.

Mathew Winkler, Bloomberg View, May 10, 2017