What do Donald Trump and I have in common?  Both of us have been relatively silent for the past few days. Trump is trying to keep inconvenient legal matters from getting worse.  In my case, it is the constant challenge of finding topics which are not already adequately covered on television, newspapers or on-line outlets.  Today’s post is dedicated to a few stories and observations which have been overlooked this past week.

Don’t Look Over Your Shoulder

Remember the Tax Cut and Jobs Act of 2017 and how it was touted as a major boon for the employment prospects of middle class Americans?  Despite all the historic economic evidence to contrary, proponents claimed the “trickle down” effects would result in more jobs and higher income for “those left behind” during the recovery from the 2008-09 recession.  In contrast, opponents predicted corporate beneficiaries would use the savings for stock buy-backs to solidify control and their share of future profits.  Turns out both are probably wrong.

Several recent reports suggest the major trend in business activity for 2018 will be mergers and acquisitions.  Business Insider reports:

Goldman (Sachs) forecasts that cash M&A spending will climb by 6% to $355 billion in 2018. That will, in turn, boost the stock prices of companies with a high chance of being bought. As a result, a basket of likely M&A targets is poised to outperform in 2018 after trailing the broader S&P 500 in 2017, according to Goldman.

Let’s parse this statement.  First, it refers to “cash M&A spending.”  Where did all that new cash come from?  That’s easy, savings from reducing the maximum corporate tax rate by 15 percentage points.  Second, this activity will “boost stock prices.”  In other words, the owners will be the primary beneficiaries of these paper transactions.  Third, and most important, when was the last time a merger resulted in job growth?  A 2016 study in the Journal of Competitive Policy International reported a job loss by 6.5 percent of the 3.7 million employees affected by mergers and acquisitions between 2013 and 20116.

Linda Brown’s New Legacy

In 1953, a nine year old African-American student wondered why she could not attend a neighborhood school with the friends she grew up with.  With the help and support of her father, Linda Brown, who died this week at the age of 76, changed history.  This week she is being honored posthumously for her central role in Brown v. Board of Education of Topeka, Kansas, the Supreme Court case which stated segregation in education was a violation of the U.S. Constitution.  The world is significantly different because of this brave, young girl’s willingness to challenge “existing case law.”

For the Supreme Court to rule in Linda Brown’s favor, it had to do something it rarely does.  It invalidated a previous decision Plessy v. Ferguson (1896).  In the Plessy v Ferguson 7-1 decision, the Court rejected the plaintiff’s contention that segregated schools were de facto unequal in quality.  The lone dissenter Justice John Marshall Harlan, in closing, predicted how history would judge the Court’s action.  “In my opinion, the judgment this day rendered will, in time, prove to be quite as pernicious as the decision made by this tribunal in the Dred Scott Case.”

In 1954, by a unanimous decision, the Court voted to overturn Plessy v. Ferguson.  Speaking for the Court, Chief Justice Earl Warren did not mince words.

Segregation of white and colored children in public schools has a detrimental effect upon the colored children. The effect is greater when it has the sanction of the law, for the policy of separating the races is usually interpreted as denoting the inferiority of the negro group. A sense of inferiority affects the motivation of a child to learn. Segregation with the sanction of law, therefore, has a tendency to [retard] the educational and mental development of negro children and to deprive them of some of the benefits they would receive in a racial[ly] integrated school system

Which brings me to Citizens United v. Federal Elections Commission (2010).  In the 5-4 decision, Justice Anthony Kennedy wrote:

The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.

Yet in a 2015 interview with Harvard Law Dean Martha Minow, Kennedy admitted the dependence on disclosure to protect the public interest has not worked the way he envisioned.

Just as a flaw in the basic premise of Plessy v. Ferguson forced the court to reconsider its decision in Brown v. Board of Education, maybe it is time for the Court to take a second look at Citizens United.  Couldn’t hurt!

Is Michael Cohen Lazy?

I have been asking every trained attorney I know, “Is it not strange the non-disclosure agreement (NDA) between Donald Trump and Stormy Daniels contained the phrase ‘and matters related to paternity’?”  But if you believe Daniels is credible, you also must believe she is telling the truth when she says her one-night stand with Trump did not result in a pregnancy.  There was no love child or abortion to further complicate the relationship.

But last night, another possibility arose.  On CNN, Daniels’ attorney Michael Avenatti told Wolff Blitzer he had now been approached by eight additional women you claimed to have had relationships with Trump.  And in two cases, the women said they too had signed an NDA.  (NOTE: Avenatti stated his legal team has not yet verified any of these claims to date.) What if the NDA Daniels signed was “legal boilerplate?”  What if Trump’s attorney Michael Cohen was just too lazy to draft NDA’s which applied only to disclosure concerns associated with each respective paramour?  It might explain why Cohen is so anxious to enforce the Daniels NDA.

Just Glad I Didn’t Spend It Already

One of the nice features of TurboTax is the ability to estimate tax liability for the next year.  This function is particularly useful if you want to understand how the 2017 Tax Cut and Jobs Act will affect you personally when you file next year.  So I ran the numbers.  My 2018 tax savings is a whopping $310.  Thanks Donald.

Just one problem.  This week when I went to fill up the gas tank in my car, the price of a gallon of fuel had jumped from $2.17 before the tax cut to $2.59.  Working from home, I am lucky that I only use about 20 gallons per month.  Over a year that adds $100.80 to my car expenses.  An incremental increase of one percent in the cost of living over the current rate, due in part to overheating the economy with an unnecessary tax cut, will cost me approximate $400 dollars.  And if I borrow money for some long needed home improvements, the higher interest rates needed to attract lenders to cover the tax-cut related deficit puts me further in the red.

Donald, if you don’t believe me, I’m more than willing to show you my tax returns.  You claim you also will lose money because of the tax legislation.  How about proving it!!

For what it’s worth.
Dr. ESP