Republicans Are Split on Tax Reform

If President Donald Trump thinks he has browbeaten conservatives into submission with a few tweets, he has another think coming. Multiple conservative groups are already running ads against his tax plan. Trump wants a border adjustment tax because it makes exporting more attractive to U.S. companies than importing. Speaker Paul Ryan (R-WI) also likes this because it could raise a trillion dollars over 10 years, allowing him to slash income taxes for the wealthy without blowing a hole in the budget. But conservatives don't like it. One group is running an ad aimed at millennials telling them the tequila in their margaritas will get more expensive. A second group is focused on telling seniors how it would hurt them financially. A third is directing their message at Latinos, telling them they would be among the hardest hit by the new tax.

Fundamentally, what Trump wants and what conservatives want on economic policy differ, and the two views are incompatible. Conservatives want free trade, where the market determines what is offered and at what price. Trump wants the government to play a big role in determining what is available for sale and at what price. The border adjustment tax would make foreign goods more expensive and conservatives don't like the idea of telling Americans they can't buy cheap goods from abroad and that they have to buy more expensive American-made goods.

On the other hand, some companies are for the border adjustment tax, namely companies that export a lot of their products, such as Boeing and Caterpillar. There is no way for Trump to change the economics here. Importers and exporters simply have different economic interests. To make it worse, the White House itself is split. Treasury Secretary Steven Mnuchin and economic adviser Gary Cohn are against the tax, while senior adviser Steve Bannon and trade adviser Peter Navarro like it. During the campaign, Trump often said that when an issue came up about which he didn't know everything there is to know, he would ask great people and get terrific advice. He is about to discover that even his closest advisers are often badly split. Harry Truman had a famous sign on his desk reading: "The buck stops here." It is now at the Truman Library, maybe Trump could negotiate to get it back. He is going to need it. (V)

Uniqlo Threatens Trump

Uniqlo is a Japanese-owned chain of clothing stores. They have 51 stores in the United States, and were planning to open 20 more. Now, those plans are on hold, as they watch to see what Donald Trump does. Further, CEO Tadshi Yanai has announced that if the President imposes a tax on foreign imports to the U.S., then Uniqlo will shutter its existing locations. "We would not be able to make really good products [in the U.S.] at costs that are beneficial to customers," Yanai explained.

Yanai is probably not bluffing here. Undoubtedly, his company's supply chains are complex and could not be replicated in a cost-effective fashion in the United States. Further, while they certainly like doing business in America, they don't need to do so. Their footprint in the U.S. is small compared to the business they do in Japan (855 stores), or China (211), or South Korea (133). And so, we now have a concrete example that speaks to the sort of collateral damage that will come from a protectionist trade policy. America learned this lesson the hard way with the Hawley-Smoot Tariff, but that was fourscore and seven years ago. Perhaps we now require a reminder. (Z)

Chinese Acquisition of U.S. Financial Company Raises Questions

A Chinese company that is partly owned by the Chinese government plans to acquire MoneyGram, a major U.S. financial services company. This takeover would give the Chinese government access to a large amount of financial information about Americans, raising some alarms. In particular, many MoneyGram outlets are close to major military bases and are widely used by soldiers to send money. Now the Trump administration has to decide if it wants to anger China and kill the deal.

Not only privacy concerns are at stake, but also national security ones. From the financial data the Chinese government would acquire from having access to MoneyGram's data, it might be able to determine which individuals, especially service members, might have financial problems and would be good targets for blackmail and/or bribery. Again here, conservatives and nationalists have different views. Conservatives support free trade and believe Chinese companies should be allowed to buy American companies as long as American companies can buy Chinese ones. Nationalists, under the banner of "America first," don't buy this. Sooner or later, the administration is going to have to approve or reject the deal and manage the consequences. (V)

Poll: Americans Want an Independent Commission to Investigate Russia Ties

A new AP/NORC poll shows that 52% of Americans want an independent investigation of Donald Trump's ties to Russia. Only 23% are opposed. The rest have no opinion. Democrats strongly support such a commission, while most Republicans are less than enthusiastic. One Texan said: "Russia has always been an enemy of the United States and of democracy across the world. Our politicians have no business making secret deals with them." But another Texan said: "They are just kicking up dust. It's obstruction. It's just another way to try to block this president." Trump is opposed to an independent commission or special counsel to investigate the ties between him and his administration to Russia. Attorney General Jeff Sessions won't be appointing one, because he has promised to recuse himself from the investigation. Currently there is no #2 at the Justice Dept., but when Rod Rosenstein is confirmed as Sessions' deputy, the ball will be in Rosenstein's court. (V)

Trump Blasts Chuck Todd

A clear pattern has emerged: Donald Trump, it would seem, can't enjoy his weekend without a little rabble-rousing first. Every Saturday (when Jared Kushner doesn't use his electronic devices in observance of the sabbath), Trump fires up the Twitter, and issues forth with one bit of outrageousness or another. This week's entry was a slam on NBC's Chuck Todd:

When will Sleepy Eyes Chuck Todd and @NBCNews start talking about the Obama SURVEILLANCE SCANDAL and stop with the Fake Trump/Russia story?

— Donald J. Trump (@realDonaldTrump) April 1, 2017

Now, imagine if while he was president, Barack Obama tweeted, "When will bad dye job Sean Hannity and @FoxNews start talking about GOP PAYMENTS TO THE KKK and stop with the fake Obamacare website crash story?" Or, "When will greasy-haired Steve Bannon and @Breitbart start talking about PAUL RYAN TAKING BRIBES and stop with the fake Benghazi story?" Or any other tweet with a personal attack, a lie presented as the truth, and something truthful presented as a lie. If Obama had tried to pull such a stunt, his opponents in the media would have screamed bloody murder. There would have been weeks and weeks of stories and editorials, and probable congressional investigations and threats of impeachment, and who knows what else. The fact that Trump's tweet will be nothing but a brief blip on the media's radar speaks to an obvious double standard, but also to the extent that Trump has quickly been able to normalize outrageous behavior by the chief executive. Neither development is a good thing for the health of the democracy. (Z)

Mark Cuban: Trump Isn't Smart Enough to Have Colluded with the Russians

While many people in D.C. are sniffing about, looking for a smoking gun in the Russia-Trump affair, Dallas Mavericks owner Mark Cuban has an interesting alternative theory of what really happened. He tweeted: "No chance this is a DJT led conspiracy. He isn't detail oriented, organized or big picture enough to pull off any [type] of conspiracy."

Cuban's point is that Trump just isn't smart and careful enough to pull off a great plot. Much more likely is that Vladimir Putin recognized Trump's greed and took advantage of it. Putin also hates Hillary Clinton and although he probably expected her to win, he thought he could at least weaken her as president. Cuban also theorized that Trump didn't hire Paul Manafort as his second campaign manager on account of Manafort's connections with Russia. He knew Manafort because they both lived in Trump Tower and the fact that Manafort did business with Russian oligarchs was just incidental. Because many wealthy Russians bought units in Trump's buildings makes Trump see Russians as good people, but Manafort's Russian connections were not the main reason he hired Manafort. If and when the FBI issues a final report, maybe we will learn if Cuban has it right, but the key idea that the election meddling was Putin's idea, not Trump's does make some sense. (V)

Fox Stands With O'Reilly

Bill O'Reilly has had a pretty bad week (although, by his standards, it was also kind of an average week). He started the week by issuing forth with snide remarks about Maxine Waters' hair (and its resemblance to James Brown's hair), remarks that many found to be racist and/or sexist. This weekend, even more troubling news broke, when it was revealed that Fox News has paid out $13 million to settle five different sexual harassment lawsuits filed against their star employee. That adds $4 million and three lawsuits to the $9 million and two that were already widely known. To nobody's surprise, Fox says it is "standing behind" O'Reilly.

As with the above item, a comparison across the aisle is instructive. When NBC's Brian Williams got caught lying about his experience covering the Iraq War, he was vilified, suspended for six months, and ultimately demoted. Now, one might argue that Williams' crime was different from O'Reilly's crimes, but for one thing: In addition to the sexism, racism, and harassment, O'Reilly has also lied about his experiences as a war correspondent (in his case, the Falklands War). One might also argue that Williams is a reporter, while O'Reilly is in the opinion business, and that somehow makes a difference. The problem is that O'Reilly regularly switches between his "reporter" and "opinion" hats, both on his own program, and when appearing as a guest on other Fox programs.

The argument, here, then, is that we are seeing a double standard. When the left-leaning (or centrist) media errs, it becomes a national scandal, and one that is beaten to death by those of a conservative bent. Breitbart got over a hundred stories out of the Brian Williams fiasco, for example, while Donald Trump is still complaining about a minor error the New York Times made nine weeks ago (about whether or not he kept a bust of MLK, Jr. in the Oval Office). At Fox News, by contrast—which clearly has some institutional issues regarding the treatment of female employees—anything goes, without much recrimination. Bill O'Reilly is clearly going to be allowed to keep going until he retires or drops dead or his audience (average age: 72) becomes too old to operate a remote control. (Z)

The Kushner Chronicles, Volume III

On Friday, we had an item about how Jared Kushner's friends are cutting him loose. Yesterday, it was a biting critique from a former employee. Today, then, we turn our attention to his White House colleagues, many of whom are not fans.

There appear to be at least five different major sources of anti-Kushner resentment in the White House. In no particular order:

1. Jealousy over his close relationship with The Donald
2. The (accurate) perception that he's not a conservative
3. That he is Trump's de facto hatchet man
4. That he has little interest in the details or hard work of actually governing—he just wants glory
5. That he has been tasked with more projects than he can reasonably handle: managing relations with Canada and Mexico; bringing peace to the Middle East; and reorganizing the federal government

What this all points to is a White House power structure that cannot possibly last. Barring a literal miracle—and by that, we mean a parting the Red Sea type of thing—Kushner is going to fail at his various projects, just as so many others have failed before him. At that point, those colleagues who already have their knives out are going to pounce. At the same time, Kushner has the president's ear, and an already-established ability to and predilection for eliminating his enemies (see Lewandowski, Corey; Christie, Chris). The upshot is that there is going to be bloodshed, the only questions are (1) who starts it, and (2) when will the first blow be struck? (Z)

Russians Celebrate April Fools' Day

Say what you will about the Russians, they do have a sense of humor. In honor of April Fools' Day, the Russian foreign ministry announced a change to the outgoing voice message of its embassy phones:

You have reached the Russian embassy, your call is very important to us. To arrange a call from a Russian diplomat to your political opponent, press 1. To use the services of Russian hackers, press 2. To request election interference, press 3 and wait until the next election campaign.

It's not true, of course (again, April Fools' Day), but it is pretty amusing. Though we will see who is laughing once the FBI finishes its investigation. (Z)

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---The Votemaster and Zenger