Wednesday, August 26, 2015

Donald Trump is not a "serious"...

...candidate for president, right?

I mean, his immigration plan is as unrealistic as it is heartless. Jeb Bush is correct: We're not going to build a wall on the border with Mexico or round up and deport 11 million people -- it's just not going to happen.

As for unemployment, there's no evidence to support Trump's claim that the rate is closer to 18-20 percent.

Obamacare? It's not a "disaster" or the "big lie"; it's actually working as designed.

And the United States is not about to "become Greece." (Ask yourself: If the debt were really a problem, wouldn't the yield on the 10-year note be a lot higher than two percent?)

So the Donald has said some crazy things; why should we listen to him at all?

Because for an "unserious" candidate, Trump is saying some very serious things.

I'm serious.

For starters, take entitlements. In his announcement speech, Trump said:

Save Medicare, Medicaid and Social Security without cuts. Have to do it.

All these other people want to cut the hell out of it. I’m not going to cut it at all. 

On healthcare, Trump's thinking is a little muddled, but he's said:

We must have universal healthcare. 

As far as single payer, it works in Canada. 

We have to take care of the people that can't take care of themselves.

(Those quotes weren't from Bernie Sanders; they were from Trump.)

What about infrastructure? Trump wants to:

Rebuild the country’s infrastructure.

So we have to rebuild our infrastructure, our bridges, our roadways, our airports.

China, you got there now - roads, bridges, schools. You never saw anything like it. They have bridges that make the George Washington Bridge look like small potatoes.

But we’re becoming a third-world country because of our infrastructure, our airports, our roads, everything.

You come into LaGuardia Airport, it’s like we’re in a third world country. You look at the patches and the 40-year-old floor. They throw down asphalt, and they throw. 

You look at these airports, we are like a third world country. And I come in from China and I come in from Qatar and I come in from different places, and they have the most incredible airports in the world. You come to back to this country and you have LAX, disaster. You have all of these disastrous airports. We have to rebuild our infrastructure.

Trump also said we need to "take care of our vets." Any argument there? Fewer than one percent of American families have been directly effected by the wars in Afghanistan and Iraq and we've treated them shamefully

As for money in politics, Trump says his competitors are:

...controlled fully, they are controlled fully by the lobbyists, by the donors and by the special interests. Fully. They control them.

And, again, he's right about that. Consider this (my emphasis):

Fewer than four hundred families are responsible for almost half the [$388 million] raised in the 2016 presidential campaign, a concentration of political donors that is unprecedented in the modern era.

The super PAC set up by allies of Jeb Bush collected by far the most money, $103 million, given by thousands of donors. But a relatively small number provided the bulk. At least 26 individuals or companies contributed more than $1 million to the group, including Mike Fernandez, a Cuban-American billionaire who with his family gave more than $3 million; Francis Rooney, a former ambassador to the Vatican, who gave more than $2 million; and Helen Schwab, wife of the investor Charles R. Schwab, who gave $1.5 million.

Or this:
Only three percent of Jeb Bush's campaign cash came from small donors.

From that piece in the Times:

“Most start-up operations need an angel investor: someone who believes in the project and the candidate and puts money in to make it viable,” said David Keating, president of the Center for Competitive Politics, which pushes for fewer limits on campaign giving. He said the potential for corruption was minimal.

“Are they going to return people’s phone calls? Yeah, I’m sure they’re going to return people’s phone calls,” Mr. Keating said. “But I don’t think it’s going to drive policy.”

Oh really? Are you telling me that the .01 percent, or .001 percent (I don't really know how many zeros to use), who invested in Jeb Bush's candidacy aren't planning on "driving policy"? They're not looking for a return on their investment? Please. Don't kid yourself; Jeb is the candidate of the super rich. If he's elected you can expect to see reductions in the capital gains tax rate, estate taxes, corporate taxes, etc.

Which brings me to Trump's latest (and the motivation for writing this post in the first place), the carried interest tax provision. Huh? The what? (Again, my emphasis.)

Most hedge funds and private equity funds are structured as partnerships where the fund managers serve as general partners and the investors as limited partners. Carried interest represents the fund managers’ share of the income generated by the fund, which is typically 20 percent of the fund’s profits at the end of the year. For most funds, this share of the profits, called an “incentive fee,” makes up most of the fund managers’ income, and, depending on the size and performance of the fund, it can stretch into the hundreds of millions of dollars. It’s largely what pays for 40,000 square foot mansions in Greenwich, Conn., and major league baseball teams and $100 million works of art. Under current tax rules, much of that incentive fee income is taxed at the long-term capital gains rate of 20 percent. If it was taxed as ordinary income, the top rate would be 39.6 percent. For hedge fund managers, the carried interest tax provision is something of a third rail, the one thing that unites them in furious opposition.

I happen to know a partner in a small private investment partnership that pays this rate on all his income. (He's also the author of a blog on high school football.) And he would tell you that it's Just Plain Wrong that he pays taxes at a lower rate than his cleaning lady.

So, while it's easy to dismiss Trump as a clown, he's actually making some very serious contributions to the 2016 conversation.

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