Before January 6, 2021, there was another “big lie.”  Republicans repeatedly told us that they are the guardians of the U.S. economy.  Yet, according to the U.S. National Bureau of Economic Research, there have been 11 recession since 1953 of which 10 took place during Republican administrations.  Consider the following.

• During the Eisenhower administration (1953-61), there were THREE recessions with a combined duration of 28 months.  The peak unemployment rate rose to 7.4 percent.  Chronologically, gross domestic product (GDP) declined by 2.7, 3.7, and 1.6 percent during each of the three downturns.
• During the Kennedy/Johnson administration (1961-65), there were NO recessions.
• During the Johnson administration (1965-69), there were NO recessions.
• During the Nixon/Ford administration (1969-1977), there were TWO recessions with a combined duration of 27 months.  The peak unemployment rate was 8.6 percent.  GDP declined by 0.6 percent and 3.0 percent, respectively.
• During the Carter administration (1977-1981), there was ONE recession with a duration of 6 months.  Peak unemployment was 7.8 percent and GDP declined by 2.2 percent.
• During the Reagan administration (1981-1989), there was ONE recession with a duration of 16 months.  Peak unemployment was 10.8 percent and GDP declined by 2.9 percent.
• During the George H. W. Bush administration (1989-1993), there was ONE recession of eight months duration.  The peak unemployment was 6.8 percent and GDP declined by 1.5 percent.
• During the Clinton administration (1993-2001) there were NO recessions.
• During the George H. Bush administration (2001-2009), there were TWO recessions of combined 26 months duration.  The peak unemployment rate was 9.5 percent and GDP declined by 0.3 and 4.3 percent, respectively.
• During the Obama administration (2009-2017), there were NO recessions.
• During the Trump administration (2017-2021), there was ONE recession with a duration of two months.  The peak unemployment rate was 14.7 percent.
• During the Biden administration (2021- present), there have been NO recessions.

To recap, since 1953, there have been five Republican administrations with a total of 10 recessions.  Over the same period, there has been six Democratic administrations with only one recession.   The combined duration of GOP recessions is 117 months compared to six months for Democratic presidents.

There has not been a single recession during the past three Democratic administrations spanning 19.5 years in the White House.  In contract, there has not been a single Republican administration in the past 71 years without at least one recession.  In terms of impact, Republican recessions are longer in duration and have higher average peak unemployment.

One of the great mysteries of life is why the CEOs of so many major U.S. corporations continue to back the party that seems to have recession built into their DNA.  Perhaps, Forrest Gump provides the best explanation.  “Stupid is as stupid does.”  Or as George Constanza advised Jerry Seinfeld how to beat a polygraph test, “If YOU believe it, it’s not a lie.”

For what it’s worth.
Dr. ESP

In his victory speech following the 2016 Nevada primary, then candidate Donald Trump thanked those who made a difference during his campaign including a shout out for one demographic of which he seemed most proud.  “We won with poorly educated.  I love the poorly educated.”  I too would love this segment of the voting population if they continuously supported me despite the fact my policies and programs were not in their self-interest.  The best analogy is Trump as Omega Theta Pi pledge master Gregory Marmaland (James Daughton) in “Animal House,” wielding the ritual paddle on initiation night.  One can imagine Trump’s glee as he recalls, “Each inductee, with tears in their eyes, begged ‘hit me again, SIR.'”

However, if you want to understand the difference between “the uneducated” and “the just plain stupid” despite academic credentials, look no farther than page 696 of the Heritage Foundation autocracy handbook, “Mandate for Leadership:  The Conservative Promise,” otherwise known as Project 2025.

Intermediate Tax Reform. The Treasury should work with Congress to simplify the tax code by enacting a simple two-rate individual tax system of 15 percent and 30 percent that eliminates most deductions, credits and exclusions. The 30 percent bracket should begin at or near the Social Security wage base to ensure the combined income and payroll tax structure acts as a nearly flat tax on wage income beyond the standard deduction.

This chapter in MAGA’s 900+ page encyclopedia of malarkey was written by William L. Walton, Stephen Moore and David R. Burton.  Walton is a venture capitalist with a B.S. and M.B.A. from Indiana University and life memberships in MENSA and the NRA, which suggests he is probably more qualified to address the need for “smart firearms” than economic policy.  Moore is an economist with degrees from the University of Illinois and George Mason University and senior economic writer for the Wall Street Journal.  According to his Heritage Foundation bio, he is the recipient of the Ronald Reagan “Great Communicator” award “for his advancement of economic understanding.”  That honor will crop up again in this discussion.  Burton is a specialist in “securities law, capital markets, financial privacy, tax matters, and regulatory and administration law issues” at Heritage. He holds a B.A. from the University of Chicago and a law degree from the University of Maryland.  Based on his range of policy responsibility, he is the Jared Kushner of Heritage’s “where’s the loophole” division.

With the best education and real-world experience of these three old, white men, let us see what they actually proposed as tax policy to benefit all Americans.  First, it is not original.  Remember Moore’s Ronald Reagan award for communications.  A two-bracket regressive tax system, with rates of 15 and 28 percent, were established in 1988 by none other than (drum roll) Ronald Reagan.  This supply-side fantasy lasted exactly two-years before subsequent presidents including George H. W. Bush proposed a return to a more progressive rate schedule with additional tiers.  [Note: Moore, et. al., do not mention this former iteration of a two-rate system or credit Reagan for its origin.  At Miami University, where I was a professor, we would not have recognized Moore for his communications skills.  We would have charged him with plagiarism.]

Assuming this is Moore’s first offense, we will put him on probation.  It is more important that we understand how this scheme supports MAGA policy objectives.  In 2018, Trump’s Secretary of Commerce Wilbur Ross lauded the president’s 2017 tax legislation.  “As Americans filed their taxes this spring, they wrestled for the last time with a system that for decades plundered their paychecks and made American businesses uncompetitive.”  Sounds good.  But remember,  in 2016 Ross reimbursed investors $11.8 million and was fined $2.3 million by the SEC for fee overcharges.   In 2017, he was accused of insider trading after selling his shares in the Bank of Ireland.  In 2018, his partners accused him of siphoning $120 million from WL Ross & Co.  To paraphrase John Houseman, “He made money the old fashioned Trump way, grifting.”

Damn, it is so hard to keep on message.  So let’s give Ross a pass (as would the current Supreme Court) and take a deep dive into that paragraph that lays out the 2025 tax proposal and see whose paychecks get plundered and whose do not.  First, it is important that to understand what remains the same and what changes.

• In the current system and Project 2025, all taxpayers are entitled to a standard deduction, $29,200 for married couples filing jointing and $14,600 for single filers.  Each year the size of the standard deduction is adjusted based on the Consumer Price Index.  Your gross income minus the standard deduction becomes your taxable income.
• This tax year, there are seven incremental tax brackets ranging from 10 percent on the first $19,900 of taxable income to 37 percent on all taxable income over $628,300.
• Under the proposed system there would be two brackets, 15 and 30 percent.  The  higher rate would kick in at the “Social Security wage base,” the point at which workers no longer contribute 6.2 percent of their gross salary to the Social Security trust fund.  For 2024, the wage base is $168,000.

With this information, you can now calculate the tax liability of individuals and married couples with different income for tax year 2024 and what it would be if the Project 2025 system was in effect.  Let me give you a few examples starting with Americans at the lower end of the wealth spectrum.

For a Married Couple Making $50,000/year
Taxable Income for 2024 would be $20,800
This year they would pay $2,236
Under Project 2025 rates they would pay $3,120
An additional tax burden of $884

For an Individual Making $50,000/year
Taxable Income for 2024 would be $35,400
This year he/she would pay $4,118
Under Project 2025 rates he/she would pay $5,310
An additional tax burden of $1,192

Maybe I misunderstood the objective.  Maybe Project 2025 tax policy is designed to reduce the federal deficit and national debt.  In which case, this seems like a reasonable contribution by lower income families and individuals.  Let’s see how much the wealthy contribute to this goal.

For a Married Couple Making $1,000,000/year
Taxable Income for 2024 would be $970,800
This year they would pay $289,665
Under Project 2025 rates they would pay $266,040
A savings of $23,625

Surely the 0.1 percent wealthiest Americans will make up for this.

For a Married Couple Making $5,000,000/year
Taxable Income for 2024 would be $4,970,800
This year they would pay $1,769,665
Under Project 2025 rates they would pay $1,466,040
A savings of $303,625

Now I get it.  Project 2025 tax policy is nothing more than an opportunity for Trump to hold a party at Mar-a-Lago for his major donors and tell them once again, “I made you a lot of money today.”  And the uneducated voters he loves so much get screwed again.

But these “men of UNreal genius” are far from finished.  The algorithms I created for the EXCEL spreadsheet to test the impact of the Project 2025 tax proposal provided the means to test the financial costs or benefits for families and individuals at any level of annual income.  And that’s how I found the following anomaly, perhaps the most damning evidence you should not believe anything these idiots tell you.

In the Foreword titled, “A Promise for America,”  Heritage Foundation president Kevin Roberts writes.

The Heritage Foundation is once again facilitating this work. But as our dozens of partners and hundreds of authors will attest, this book is the work of the entire conservative movement. As such, the authors express consensus recommendations already forged, especially along four broad fronts that will decide America’s future:

1. 1. Restore the family as the centerpiece of American life and protect our children.

Okay!  If that is the goal, certainly the tax policy, even it if is biased toward the wealthy, will incent the formation of families.  Wrong!  Consider the following comparison of current tax policy to Project 2025.

For a Married Couple Making $100,000/year
Taxable Income for 2024 would be $70,800
This year they would pay $8,236
Under Project 2025 rates the would pay $10,620
An additional tax burden of $2,384

For an Individual Making $100,000/year
Taxable Income for 2024 would be $85,400
This year he/she would pay $14,261
Under Project 2025 rates he/she would pay $12,810
A savings of $1,451

In simple English, here is the message emitting from the brilliant minds of Walton, Moore and Burton.  Want to save $3,800 a year in taxes?  Don’t get married.  Just shack up.  Of course, you might get arrested by the Christian nationalist morality police for living in sin.  But that’s a small price to pay for a $300/month tax break.

Maybe that’s why we all should embrace the uneducated.  They would never come up with anything half as stupid as these guys, all of whom will likely be members of a second Trump administration under Project 2025’s personnel mandate, “Replace expertise and experience with loyalty.”

For what it’s worth.
Dr. ESP

England and America are two countries separated by the same language!

~Mallory Brown, Christian Science Monitor
September 1942

Brown’s observation was never more true than last night as BBC correspondents reported the Labour Party’s landslide victory after 14 continuous years of Conservative Party rule.  For example, as the vote counting ended in each parliamentary district, a “returning officer,” the equivalent of our supervisor of elections, issued a “declaration” rather than a “certification” of the results.  However, these amusing differences in language paled in comparison to the decisiveness of the massacre Scotland Yard would be hard-pressed to explain.

How did Labour pull off this landslide while the American electorate seems mired in a 50/50 standoff, despite the fact both nations face many of the same issues coming into the election?   Inflation.  Immigration.  Support of the wars in Ukraine and Israel.  Health care.  Availability and cost of housing. Above all, this was a Tory defeat, not an enthusiastic endorsement of Labour or its agenda.  As reported by the BBC,  Labour’s share of the total national vote increased by a mere two percent from 32 to 34.  In contrast, support for Conservative candidates fell from 44 to 24 percent.  In many districts, the Conservative candidate ran third behind Labour and Nigel Farage’s Reform Party.  As the head of BBC’s exit polling analysis explained, voters split their votes between Labour and the Reformists based on a strategic decision which candidate had the best chance of ousting the incumbent Conservative MP.

From a U.S. perspective, the obvious question is, “What does this tell us about out November election?”  First the good news.  Labour’s success is due in part to Keir Starmer (the incoming prime minister) rejecting the extremist and bigoted views of and calls for nationalization of commerce by former party leader Jeremy Corbyn. The majority of voters have been and probably will remain in the center of the political spectrum.

In his victory speech, Starmer acknowledged that it was no easy task to convince voters Labour was once again a center-left party. “Four-and-a-half years of work changing this party… this is what it is for. ”  Democrats can make the same argument in November.  Contrary to MAGA claims that Democrats are socialists at best and communists at worst, the numbers say just the opposite.  The dollar is strong.  Equity markets are at all time highs.  Likewise for job creation, wages and productivity.  And not one industry has been taken over by the government.  Inflation, though higher than one would hope, is lower than in any other G7 nation.

The bad news?  Incumbency is a disadvantage.  Not because incumbents have done a terrible job.  Expectations have changed.   In America, the question is no longer, “Are you better off than you were four years ago?” It is now, “Are you as well off as you think you should be?”  It makes a difference.  On July 5, 2020, these were the New York Times page one headlines.

• As Coronavirus Slams Houston Hospitals, It’s like New York ‘All Over Again’
• As Neo-Nazis Seed Military Ranks, Germany Confronts ‘an Enemy Within’
• At Mt. Rushmore and the White House, Trump Updates ‘American Carnage’ Message 2020

In July 2020, unemployment was 10.2 percent and new unemployment claims rose to 18 million.   Exactly four years later, despite a slowing economy finally responding to high interest rates, June unemployment remains at 4.0  percent, and initial unemployment claims for the week of June 29, 2024, totaled 238,000.

So what does this have to do with government bailouts?  The answer is simple.  One of the two political parties in the United States consistently bails out the the other’s bad policies and performance.   George W. Bush, after eight years of GOP economic orthodoxy consisting of tax cuts and deregulation, handed Barack Obama the worst recession since the Great Depression.  Eight years later the economy was on an unprecedented growth streak.  And what did Donald Trump do?  He returned to the same failed formula but still claimed in his 2020 state of the union address, “Our economy is the best it’s ever been.”

[NOTE:  Last Wednesday, former navy intelligence officer Malcolm Nance told Democrats to stop whining and get ANGRY.  In that spirit, this angry blogger wants to put Trump’s bullshit about his economy to rest.  At the time of his January 2020 declaration, pre-COVID, the average annual growth in gross domestic product (GDP) during his administration was 2.58 percent, seventh when compared to Lyndon Johnson (5.05), Kennedy/Johnson (4.65), Clinton (4.45), Reagan (3.87) and Nixon/Ford (2.85).  Oh, I forgot one more.  Even Jimmy ‘F***ing’ Carter, when he left office in January 2001, delivered an average annual GDP growth rate of 3.27 percent.]

Here’s the difference between what happened in Great Britain yesterday and what may happen here in November.  The Tories stayed in power for 14 straight years.  And they continued the same failed policies year after year and things got worse and worse.  The British economy stagnated.  The National Health System deteriorated.  There was no cavalry to save them from themselves.  Even after Boris Johnson was ousted by his own party for mishandling the pandemic, the Conservatives answer were more tax cuts, deregulation and reduced services.  None of which resulted in benefits for average British working families.

Now, just imagine Donald Trump had been reelected in 2020 accompanied by MAGA majorities in Congress.  Want to take a wild stab what his economic recover plan might have been?  You do not have to guess.  It is all laid out in the Heritage Foundation’s blueprint for a second Trump administration “Project 2025.”  More tax cuts.  More deregulation. Reduced services including “elimination of the Head Start program.”  The same policies, that after 14 straight years in Britain, led to a historic defeat for the ruling party.  After eight straight years of MAGA rule, I am betting Americans would have overwhelming followed their British counterparts and shown Trump and his lemmings the exit door.

But Joe Biden stepped up with a different approach.  Investment rather than tax cuts. Investment that  defied the experts who predicted an inevitable post-COVID recession.  Investment that is reinvigorating American manufacturing in strategic industries. e.g. computer chips and alternative energy.   Investment that translated into historic job growth. 

The United States is better off for that change in direction.  However, a Democratic administration again bailed out MAGA world and saved it from itself.  Unfortunately, by doing so, Biden may have sealed his own fate.

For what it’s worth.
Dr. ESP