Donald Trump Keeps the Bad News Coming

The fuss over Melania Trump's plagiarism is finally dying down. So what does Donald do? He keeps it going by finally deciding to offer up a comment:

Why would he do this? There's no way to spin this into good news. Does he think he can eventually morph it into some kind of devastating attack on the hated liberal media? Will he spend half his speech on Thursday complaining about the treatment of his wife? The mind boggles.

A Peek Inside a Donald Trump Presidency

According to the New York Times, Donald Trump Jr. approached John Kasich a couple of months ago:

Did he have any interest in being the most powerful vice president in history? When Kasich’s adviser asked how this would be the case, Donald Jr. explained that his father’s vice president would be in charge of domestic and foreign policy.

Then what, the adviser asked, would Trump be in charge of?

“Making America great again” was the casual reply.

Is this actually true? Normally I'd say it sounds ridiculous, but keep in mind that this is Donald Trump we're talking about. Maybe he really does think he can just snap out a few orders—build a wall! destroy ISIS! cut taxes!—and let a guy like Kasich figure out how to get it done. In the meantime, he'll barnstorm the country holding rallies and conducting fireside chats on Twitter.

In any case, this belongs in the category of too good to check. If it's not true, it ought to be.

Obama Is the Guy Who Made America Work Again

The theme of the convention tonight was supposed to be "Make America Work Again." But Donald Trump has a famously short attention span, and apparently that's spilled over into the scheduling of the entire convention. As near as I can tell, not a single person talked about jobs and the economy except maybe soap opera star Kimberlin Brown, who grows avocadoes and spent several minutes railing against Obamacare.

However, I didn't watch every minute of the convention, so maybe I missed one of the early C-list speakers talking about jobs. On the off chance that this happened, I have two charts for you. First, here's a re-up of one of my favorites, showing that Republicans did everything they possibly could to keep America from recovering while Obama was president:

As you can see from the various red and orange lines, Republicans were eager to increase spending for Reagan, Bush Jr., and Bush Sr.—at least until he lost the election and Clinton took over. Then they cut back. For Obama, they depressed public spending from the start. That's the blue line. Today, more than six years after the official end of the recession, public spending is more than 20 points lower than the trendline for Reagan and Bush.

Nonetheless, check out Obama's record on job growth:

Even with two big tax cuts and a housing bubble, Bush Jr. managed to create only 10.9 million jobs. Obama, even with the headwind of Republican obstruction, has created 13.1 million jobs so far.

You can decide for yourself how much credit presidents deserve for the strength of the economy on their watch. But one thing is sure: Obama started with the worst recession since World War II, and six years later he's created over 13 million jobs; the unemployment rate is under 5 percent; inflation is low; and the economy is growing faster than nearly any other rich country. Imagine what he could have done if Republicans hadn't stood in his way the entire time.

Ben Carson warned GOP convention-goers about Hillary Clinton's close relationship with Lucifer.

Today was just plain boring compared with yesterday. Still, I guess I can dig up five favorite moments:

  • Trump campaign defends Melania Trump's plagiarism by saying, "This concept that Michelle Obama invented the English language is absurd."
  • The official theme of the evening, "Make America Work Again," is completely missing in action. Does that count as a moment? A non-moment? Whatever it is, it makes the list.
  • In its place, the vaguely creepy chant "Lock her up" turns into the official slogan of the evening.
  • Donald Trump Jr., the son of a famously flamboyant billionaire, rails against the "self-satisfied people at the top, our new aristocrats."
  • Ben Carson tells us that Saul Alinsky dedicated his book to Lucifer; Hillary Clinton wrote a college thesis about Alinsky; therefore Clinton is…a Satan worshipper?

Obamacare rates are going up in California:

Premiums for Californians’ Obamacare health coverage will rise by an average of 13.2% next year — more than three times the increase of the last two years and a jump that is bound to raise debate in an election year.

....Two of the state’s biggest insurers — Blue Shield of California and Anthem Inc. — asked for the biggest hikes. Blue Shield’s premiums jumped by an average of more than 19%, according to officials, and Anthem’s rates rose by more than 16%.

That's gonna hurt. And it's going to be a big political football too. Just keep in mind what I told you a few weeks ago: Obamacare rates have been way under projections ever since the program started in 2014. Even if premiums go up 13 percent nationwide, the average will still be around $4,746, far less than the $5,616 the Congressional Budget Office originally projected for 2017.

Trump Auctions Himself Off to Wall Street

Check this out:

Donald Trump has told prospective donors that, if elected president, he plans to nominate former Goldman Sachs banker Steve Mnuchin for U.S. Treasury Secretary.

That’s according to Anthony Scaramucci, a high-profile hedge fund manager and Trump fundraiser....Earlier this year, the 53-year-old Mnuchin joined Donald Trump’s campaign as national finance chairman.

Trump's message to Wall Street is: The guy calling you for donations is going to be Secretary of the Treasury in a few months. So no worries: treat him right and he'll treat you right.

This comes via Jordan Weissmann, who has about the right take on things: "Promising to pick a Wall Street banker whom you have charged with the task of raising money for your campaign from other Wall Street bankers to head the Treasury Department may be the single most straightforward way a presidential candidate could auction himself off to the financial services sector." Trump is quite the man of the people, no?

Megyn Kelly says Roger Ailes Propositioned Her

Oh my. Megyn Kelly has joined the brigade of Fox News anchors saying that Roger Ailes sexually harassed them:

According to two sources...Kelly has told investigators that Ailes made unwanted sexual advances toward her about ten years ago when she was a young correspondent at Fox. Kelly, according to the sources, has described her harassment by Ailes in detail.

Kelly’s comments to investigators might explain why the Murdochs are moving so quickly to oust Ailes....According to two sources, Monday afternoon lawyers for 21st Century Fox gave Ailes a deadline of August 1 to resign or face being fired for cause. Ailes’s legal team — which now includes Susan Estrich, former campaign manager for Michael Dukakis — has yet to respond to the offer. Ailes has also received advice on strategy from Donald Trump and Rudy Giuliani, sources say.

Advice from Donald Trump! That's sure who I'd go to if I were on the cusp of a humiliating, career-ending sexual harassment scandal.

Kelly is the network's biggest female star. If she's turned against Ailes, it's all over for him. This just goes to show the power of a single person coming forward. Nobody said anything until Gretchen Carlson had the courage to speak up. Then we started hearing from seemingly half the women who had ever worked for Ailes. One person really can make a difference.

Tyler Cowen writes in Bloomberg today about Donald Trump's main base of support:

Older white Americans are Donald Trump’s core support group, and that’s relevant to the success of Trump’s rhetoric. Commentators frequently cite globalization and wage stagnation as the economic forces behind recent political shifts, but there is a less heralded force influencing American politics: insufficient savings, most of all for older Americans. For those individuals, the prospect of falling standards of consumption — for the remainder of their lives — means the economy is worse than the GDP growth and unemployment numbers are indicating.

....As for today’s 45-to-69-year-olds, only 36 percent claim to be engaging in net savings. And only 45 percent of all people earning $75,000 to $100,000 a year claim to have net positive savings, as measured in 2012. That helps explain why the typical Trump voter in the Republican primaries earned a relatively high income of about $72,000 a year and still worried about his or her economic future.

It's not really possible to read minds in order to figure out definitively why older white voters support Trump. But the evidence doesn't support inadequate savings as a possible reason. For starters, older black and Hispanic voters don't support Trump, and their savings are even more inadequate than those of older white voters.

But put that aside and look just at retirement for a moment. Cowen, like most people who write about retirement, offers up a blizzard of scary statistics. But there's one thing he doesn't do: put them all together to come up with probable retirement income. However, the Social Security Administration has done this, and their conclusions are clear: retiree income has been rising steadily since the 70s and will continue rising steadily far into the future. This compares to virtually no increase at all for working-age families. When it comes to rising incomes, the 65+ crowd is by far the best-off age cohort in America.

But there's more. If there's any group that's benefited from financial deregulation and the growth of 401(k) plans, it's higher-income workers. The Employee Benefit Retirement Institute has attempted to take a look at retirement security by income level, and their conclusion is that folks in the top two quartiles—which includes Cowen's households earning $70-100 thousand per year—are in pretty good shape. Only a tiny fraction are likely to run short of money, even if you go out 35 years:

There are two real retirement risks in America: being poor and ending up in a nursing home. Those are both worth addressing. But overall, Americans are in pretty good retirement shape, and that's especially true for prosperous families.

So are retirement worries behind the support Trump gets even from affluent older white voters? It's possible, of course. There's no telling what people are worried about. But reality doesn't back it up. Their support for Trump is a lot easier to figure out if you just pay attention to the obvious. That's not as much fun, but it's a lot more likely to be correct.

Republicans Circle the Wagon for Trump

Last night, after I finished writing about the Republican convention, I plopped into my easy chair and watched an episode of The Night Manager, which I DVRed a while back. After it was over, I turned on CNN at about 1:30 am Eastern time, and they were chatting about the Melania Trump plagiarism. It was sort of astonishing: virtually everyone was doing their best to minimize the whole thing. And I'm not talking about the Trump cheerleaders, I'm talking about the regular reporters.

Anyway, at one point someone—Jake Tapper, maybe—said he was most interested not in the plagiarism per se, but in how the campaign would respond to it. Option 1 was to just bull through it, as Trump usually does. Option 2 was to be "transparent," which he defined as admitting that it happened, and explaining that it was probably an accidental cut-and-paste done by a harried staffer. I was agog at both these points. Bull through it? How can you do that? And in what universe does making up a story about an "accidental" cut-and-paste count as transparent?

But I guess I was wrong, wrong, wrong. The Trump campaign certainly seems to agree that the cut-and-paste story would, in fact, count as transparent and thus would be bad for Trump's image as an asshole. So they did what I thought was impossible: bull their way through. Katrina Pierson, a spokesperson who makes Ron Ziegler look candid and honest, had this to say:

"These are values, Republican values by the way, of hard work, determination, family values, dedication and respect, and that's Melania Trump," Pierson told The Hill. "This concept that Michelle Obama invented the English language is absurd."

Paul Manafort, of course, also says there was no plagiarism. Chris Christie says the speech was 93 percent non-plagiarized, and that should be good enough for anyone. Actor Stephen Baldwin says the identical phrases were "sheer coincidence." The RNC's Sean Spicer says Twilight Sparkle of "My Little Pony" used the same words as Melania. WTF does that even mean? I guess they've all been reduced to desperate googling in an effort to find someone, anyone, other than Michelle Obama who might have said something kinda sorta similar to the plagiarized phrases.

Then there's Ben Carson, who actually admits something happened, but suggests it was just an innocent mistake and paints it as an overall positive: "I think we should celebrate the fact that both parties take something like what Michelle Obama said and Melania Trump said and they honor it and cherish it and think that it’s something — that tells you that we’re not as far apart as Democrats and Republicans want to make it out to be."

As for the Trumps themselves, they've been silent so far. Melania's Twitter account merely passes along the campaign's official statement, while Donald's Twitter account has been unusually inactive. I guess he's letting his minions soften up the ground for him before he strikes. What's your guess? Will he blame Hillary Clinton? The liberal media that's obviously out to get his wife? ISIS?

California's Retirement Fund Is In Big Trouble

California's biggest public retirement fund, CalPERS, generally counts on a rate of return of about 7.5 percent. They're missing that by a wee amount:

The California Public Employees’ Retirement System said Monday that its rate of return for the year ended June 30 was just 0.61%. What’s more, Ted Eliopoulos, the pension fund’s chief investment officer, said the poor year has pushed CalPERS’ long-term returns below expected levels.

....CalPERS officials had recommended the rate be cut further, to 7.25%. But government agencies that pay into the pension system on behalf of their employees said that large of a reduction in expected returns would cut too deeply into their budgets. As expected returns go down, the amount local governments have to pay for pension benefits rises. And small changes in expected returns can add up to big changes in what government agencies have to pay.

This year's return is unusually low, but as CalPERS acknowledges, investment returns are likely to be modest for quite a while. This is one reason I'm more sympathetic to 401(k) funds than a lot of liberals. There's no magic here. If returns are low, then returns are low. Even if you run a big fund with professional investors, you can't defy gravity forever.

It's true, of course, that a big fund can spread its pain over a lot of retirees, while a 401(k) that goes south concentrates all its pain on one person. And 401(k) owners can make unusually bad investment decisions, too. Along with high fees, those are real problems with only partial solutions.

In other words, 401(k)s aren't perfect. Some of their problems can be addressed by better rules, while others are inherent in the structure of a private fund. On the other hand, big pension funds aren't perfect either. They can lose money. They aren't portable. They're often heavily backloaded. They don't provide anything to pass on to your children if you die before you retire. They often require years of vesting.

There are no magic bullets here. It's not plausible to make Social Security into our sole source of retirement income, and that means we need other sources too. Pension funds are one source, and they aren't perfect. 401(k)s are another source, and they aren't perfect. But it hardly matters which is better: you can't force employers to join big pension funds, so 401(k)s are what we have. We improved them considerably via legislation in 2006, and we can improve them further if we want to. We should focus on that, not on casting them as the devil's handiwork.