Tag Archives: economics

Trump’s Got 99 Problems After 100 Days

Donald Trump said a lot of outrageous things over the past two years, but his most obviously fake lines were about how simple running the country would be. Among other things, he said he'd label China a currency manipulator on day one and promised that repealing and replacing the Affordable Care Act would be "so easy." Maybe he believed these things at the time when he said them; if he did, he has since changed his mind. "After listening for ten minutes, I realized it's not so easy," Trump said of a conversation he had with Chinese president Xi Jinping about North Korea. (He subsequently reversed himself on the whole currency manipulation thing.) "Nobody knew healthcare could be so complicated," Trump declared just before his healthcare bill failed to even get out of the House.

As Trump surely realizes by now, 99 days into the presidency, nothing is easy and everything is complicated once you're in the White House. Every crisis demands a response from you. Every problem in the country is your problem, and if an attempt at a solution fails, that's your failure. Every foreign leader wants something from you. So do members of Congress, lobbyists, and your own staff. Every move you make—every vacation, every church visit, the outfits your spouse wears—are scrutinized by a Media Establishment that exists to gin up controversy. The choices you make are literally a matter of life and death. Sometimes you will make a mistake. Sometimes there are no good options. No matter what you do, it's more than likely half the country will think you're doing a bad job. It takes a special kind of narcissist to want that power; it takes an even more special kind of talent to wield it successfully. 

It's too soon to judge Trump's presidency as a success or a failure. But it's as good a time as any to survey the challenges facing him. Some of the 99 problems listed below are issues that came with the job, others have developed during his brief tenure through no fault of Trump's, and still others are the result of the administration's elevation of a variety of fringe figures, oddballs, and Trump family members who have little to no experience in government. At least a few of these problems are also opportunities for the Trump administration to demonstrate its competence, and some of them are things he doesn't seem too concerned with at the moment—and others seem insurmountable. And by the time you read this, there will probably be at least one new one.

1. Trump doesn't have any relevant experience. Having never held an elected office or served in the military, the president has been learning on the job a lot—which explains a lot of the below issues.

2. A lot of government positions are unfilled. Out of 556 key jobs requiring Senate approval, only 25 have been confirmed, according to the Washington Post. Some of that delay can be blamed on the Senate, but in a whopping 468 cases, no one has even been nominated—likely a product of an inefficient and chaotic process on the part of White House officials. 

3. Some Trump appointees have massive conflicts of interestDespite promises to "drain the swamp," Trump has hired many former lobbyists and affiliated lawyer types to fill posts in agencies that they spent time influencing. "In at least two cases, the appointments may have already led to violations of the administration's own ethics rules," the New York Times reported this month. "But evaluating if and when such violations have occurred has become almost impossible because the Trump administration is secretly issuing waivers to the rules." 

4. Trump seems incapable of hiring anyone who is critical of him. The president's predilection for hiring people who didn't badmouth him during the campaign is so well known one right-wing wonk who wanted a State Department gig got Arab News to delete columns he had written that attacked Trump. Given how many Never Trump conservatives there were before Election Day, this unofficial policy makes hiring awfully hard.

5. Sebastian Gorka. The deputy assistant to the president may not have much official power, but he's been getting a lot of press thanks to his ties to far-right groups in his native Hungary and his questionable credentials in counterterrorism, his supposed specialty. (He reportedly doesn't even have a security clearance.) This is the sort of person you end up hiring when you only want loyalists.

6. Sean Spicer. The White House press secretary habitually gets things wrong and misstates the administration's own positions

7. Even ambassadors haven't been appointed. The granting of plum diplomatic assignments to top donors is one of the more routine—if odious—traditions in DC, but even here Trump has been dropping the ball. The administration has been dragging its feet when it comes to vetting potential ambassadors, and training sessions recently had to be delayed until May because there weren't enough new ambassadors to train.

8. The White House is at war with itself. The early days of the Trump administration have been defined by squabbling, in particular a long-running fight between White House adviser Steve Bannon and fellow adviser Jared Kushner, who happens to be Trump's son-in-law. More broadly, there's conflict between right-wing nationalists like Bannon and Kushner's crew of slightly less angry and ideological New Yorkers.

9. The constant leaking. Not surprisingly, this divided White House is prone to self-serving leaks as the factions attempt to make each other look bad. That doesn't make it an easy place to work, and evenly supposedly confidential meetings are quickly made public. 

10. The paranoia. Those leaks in turn have led to a well-documented atmosphere of suspicion and distrust. "People are scared," is how one senior White House aide put it while talking (a.k.a. leaking) to Politico.

11. Jared Kushner, despite a history of incompetence, has too many jobs. As Kushner's star has risen, he's been tasked with Mideast peace, solving the opioid crisis, making the federal government more efficient, and assisting with diplomacy involving China and Mexico, among other jobs. Maybe the 36-year-old real estate scion is super brilliant—he's probably not—but no one is that brilliant.

12. Trump himself doesn't really seem to have policies. "Trump's critics and supporters alike are equally flummoxed about what this president stands for," is how a recent Politico piece put it. His foreign policy flip-flops on everything from China to NATO are evidence of that, as is his failure to understand what was happening in the debate over the American Health Care Act. That makes him vulnerable to being pushed or pulled in various directions by the mess of advisers he's hired.

13. Trump watches too much cable news—and is influenced by it. The president's TV news addiction is at this point sort of a joke, but his constant consumption of cable (especially FOX News) may also be exerting a powerful pull on him. Reportedly, it was the images of children injured or killed in a chemical weapons attack on Syrians that led Trump to order a missile strike against the Assad regime. Whatever you think of Syria, military intervention on the basis of whatever crisis has captured the media's capricious eye is likely not the best policy.

An example of the "Mother of All Bombs," a huge explosive dropped by the US in Afghanistan

14. The Syrian Civil War. A sprawling, long-running conflict that has captured the world's eye and resulted in a refugee crisis, this was always going to be one of the nastier challenges facing Barack Obama's successor.

15. Trump hasn't made his policy on Syria clear. ... but Trump has so far failed to define what exactly he wants to do in Syria beyond defeat ISIS. Is removing Syrian President Bashar al Assad from power a priority? Is that missile strike going to be a one-off? Congress wants answers; so do a lot of other people.

16. Airstrikes against ISIS have reportedly led to more civilian casualties. It's not clear whether this is a result of changing policies or simply shifting conditions in the long-running campaign against ISIS, but a monitoring group says that the US has been bombing Iraq and Syria more aggressively than ever under Trump, resulting in more civilian deaths.

17. The first counterterrorism raid under Trump was a total failure. A January operation in Yemen ended with a lot of dead civilians and a dead Navy SEAL and didn't produce any intelligence worth having. What's more, it led to Yemen's government revoking permission for the US to conduct similar operations in the future.

18. By the way, Yemen is still in crisis. A civil war in the country has resulted in widespread starvation, and atrocities have been committed by Saudi Arabia—which is using US weapons to attack the rebels.

19. So is South Sudan. The African country is still suffering from war and famine, a situation that looks unlikely to change anytime soon. Trump's proposed budget cuts would likely limit aid to the country. 

20. Famine is widespread in many other countries. Yemen and South Sudan aren't the only countries where millions are starving to death. In those two nations and two more (Nigeria and Somalia), 20 million people are starving or in danger of doing so. 

21. The Philippines is still engaging in a brutal crackdown on drugs. Almost 9,000 drug dealers and users have been killed, many without a trial, under the brutal anti-drug government of President Rodrigo Duterte, a populist who was elected in 2016 after campaigning on a stark law-and-order platform. It's concerned many international observers, but Trump allegedly praised Duterte as recently as December

22. Tensions with Iran are still high. This week, an encounter between an American ship and an Iranian one resulted in the US vessel firing a warning flare.

23. Egypt is still abusing human rights. Trump was able to negotiate the release of an Egyptian American aid worker who had been in Egyptian prison for three years. (Which is good!) Still, the broader question of Egypt's abysmal record on human rights remains. The government of Abdel Fattah al Sisi engages in "torture, enforced disappearances and likely extrajudicial executions," according to Human Rights Watch.

24. ... And so is Saudi Arabia. Like Egypt, the US ally has a record of habitual brutality, not only in Yemen but also against dissidents on its own soil.

25. Israel and Palestine are no closer to peace. Former secretary of state John Kerry's effort to finally work out a deal between the two sides fell apart during Obama's second term. The only thing Trump has done on this front so far is to suddenly withdraw American support for a two-state solution in public—a position that was later reportedly reversed, sorta.

26. North Korea. The hermit kingdom is continuing its aggressive posturing and still has nukes.

27. South China Sea tensions. Meanwhile, China has continued to build man-made islands in a disputed body of water, leading to yet another source of potential conflict.

28. China is making trade deals with would-be TPP countries. When Trump killed the Trans-Pacific Partnership as he promised, many Americans skeptical of free trade deals cheered. Whether that was the right move or not, China is stepping into the void, attempting to make its own trade deals with countries in the region who would have been part of the TPP.

29. Russia is violating a nuclear arms control treaty. It's reportedly deploying missiles that a 1987 treaty banned.

30. ... And is continuing its aggressive posture toward Ukraine. Last month, Russian tanks were seen edging up on the Ukrainian border.

31. Renegotiating NAFTA. The president has threatened to cancel the free trade agreement, but it's unclear whether that's a negotiating tactic or what. Ironically, Trump tossed out some trade concessions from Canada and Mexico when he scrapped TPP, making any upcoming talks more difficult.

32. Mexico could swing left in the next election. If Andrés Manuel López Obrador, who is running for president on an explicitly anti-Trump platform, wins the 2018 election, it could complicate Trump's relationship with the US's southern neighbor even more.

33. Germany might get more anti-Trump, too. Martin Schulz, a left-wing opponent of current German chancellor Angela Merkel, said he has no desire to spend more on defense, which would come into conflict with Trump's demand that NATO nations bump military spending.

34. Puerto Rico needs money. Puerto Rico—whose residents are US citizens who pay taxes—is broke and likely won't be able to fund Medicaid this year, resulting in hundreds of thousands of Puerto Ricans losing health insurance coverage. Democrats want the federal government to pick up the slack, but Trump is opposed to it, which could lead to a government shutdown. That is very unlikely, but the Puerto Rican debt crisis isn't going away. 

35. Congressional Republicans aren't used to being in power. After eight years of being the pissed-off opposition party, the GOP is suddenly in charge. Governing is harder than simply trying to block the Democrats' agenda, as House Speaker Paul Ryan and other Republicans have admitted.

36. The House Republicans aren't unified. One problem the GOP faces is that the Freedom Caucus—a group of hard-right congressmen—are willing to split from Trump. They helped kill the American Health Care Act because they thought it didn't do enough to dismantle Obama's Affordable Care Act, and they want to make sure they're involved in negotiations over tax reform too. But after some members of the Freedom Caucus backed a new healthcare bill, more moderate Republicans were hesitant to embrace it, because it would lead to too many people losing insurance.

37. Maybe Paul Ryan is bad at his job? The AHCA was the speaker's first piece of big legislation, and it was terrible.

38. Conservatives are fine with opposing Trump. Under some circumstances, opposing a president from your own party could lead to political blowback. But the Freedom Caucus isn't worried about facing any primary challenges from the right and so don't mind standing up to Trump. 

39. Trump has a low approval rating. Only 44 percent of voters like what he's doing, according to a CNN/ORC poll, compared to 54 percent who dislike him.

40. People don't trust Trump. Just 45 percent say he'll keep his promises, according to Gallup

41. Republicans as a whole are becoming less popular. The GOP's popularity has dropped from 47 to 40 percent since Trump has been in office, according to Pew Research.

42. The Democratic base is energized. And flooding congressional offices with phone calls—a deluge that may have helped bring down the AHCA. 

43. A Kansas election was closer than it should have been. A Republican's narrow victory in a safely red district this month could show how vulnerable the GOP is.

44. Republicans are having to work hard to hold onto a Georgia House seat. Another special election is slated for June, and the GOP is spending a lot of time and money defending it from Democrat Jon Ossoff. Even if Ossoff loses, it's another warning sign for Republicans because...

45. ... The midterms are coming in November 2018. If Republicans lose control of the House, Trump will have an even harder time passing anything, and investigations against him and his allies would likely intensify since Democrats would run the relevant committees.

46. It's not clear a healthcare bill will ever become law. Trump and Ryan have expended a lot of energy trying to line up votes in the House for the AHCA—but even if it did pass the House, it would probably run into more opposition in the Senate.

47. Trump's new tax plan is extremely vague. As everyone expected, Trump wants to cut taxes for the rich—but the document sent out this week is a back-of-the-napkin sketch that offers few specifics.

48. Some Republicans don't like the tax plan. Anonymous GOP sources in Congress told CNN they weren't happy they were kept out of the loop. That's not the way to start a major legislative push.

49. The tax plan as proposed would cause the national deficit to rise. By a lot. Groups estimate it would cost more than $3 trillion over ten years.

50. Democrats are unified in opposing Trump. There's a lot of attention on divisions in the Republican Party at the moment because Democrats have it relatively easy—they can just vote against everything Trump proposes.

51. Senate rules make it almost impossible to get anything done. Controlling both houses of Congress isn't enough—to pass sweeping, nation-changing laws, Trump would need a filibuster-proof supermajority in the Senate. It's highly unlikely that that will ever happen; even though the Republicans recently eliminated the filibuster to seat Neil Gorsuch on the Supreme Court, they haven't yet contemplating ending filibusters forever. 

52. Cross-party compromise is a dead art form. You could get to the necessary 60 votes in the Senate if you wrote a bill that some Democrats could support. But Trump has pursued a historically polarizing agenda.

53. The famed infrastructure plan doesn't exist yet. Trump keeps talking about investing in infrastructure, but he hasn't even submitted the barest outline of a plan.

54. The looming threat of a shutdown. Even if Congress can keep the federal government open after Friday—which wasn't totally clear by mid-afternoon Friday—the partisan atmosphere in Congress means that a shutdown is a constant threat.

55. Trump can't book good talent at his events. Maybe not the biggest issue in the world, but it must eat up the fame-obsessed Trump that he couldn't book A-listers for his inauguration.

56. He's being sued for defamation. A former Apprentice contestant who says Trump sexually harassed her is suing him for calling her a "liar" and "phony," a case that's winding its way through the legal system. 

57. People are boycotting his brand.

58. Ivanka Trump's ethical conflicts. The president's daughter—who also works in the White House—has placed her company in a trust, but some ethics experts say that isn't enough to prevent conflicts of interest. She also recently announced the creation of a fund for female entrepreneurs, which could be complicated since White House officials aren't supposed to solicit funds.

59. Trump's own potential conflicts of interest. There are too many of these to go into, but in brief: Trump's sprawling business empire gives people plenty of ways to try to ingratiate themselves with him by say, buying a high-priced condo.

60. A Dallas hotel deal fell through because the Trump brand is so controversial. The developer is going with another company instead of the Trump Organization.

61. The EPA is in revolt. "Pretty much everybody is updating their resumes. It's grim," one EPA staffer told the Washington Post.

62. Morale at the State Department is in tatters. "I used to love my job," one employee told the Atlantic recently. "Now, it feels like coming to the hospital to take care of a terminally ill family member. You come in every day, you bring flowers, you brush their hair, paint their nails, even though you know there's no point. But you do it out of love."

63. All the squabbling in the administration has spread to federal agencies. Trump loyalists and Establishment Republican figures are engaged in toxic office politics across the government. "The backbiting is further paralyzing federal agencies, which have been hamstrung by slow hiring, disorganization and an overall lack of direction since Trump's inauguration," is how Politico described it this month.

64. The economy isn't growing especially fast. US GDP expanded just 0.7 percent in the first quarter of 2017. 

65. The economic recovery has been uneven. Though some big cities are doing well, large swathes of the country are gripped by poverty. This geographic inequality helped Trump get elected, but it's also now his problem. (Like everything else.)

66. Economic inequality. More broadly, the rich are getting richer, and the massive gap between the One Percent (which Trump and most of his advisers belong to) and everyone else could lead to a political crisis.

67. The opioid crisis. In 2015, there were more heroin overdose deaths than gun homicides

68. The deficit is on the rise. It's due to surpass $600 billion in 2019.

69. Student loan debt is a crisis. As a whole, Americans owe roughly $1.5 trillion in student debt.

70. Robots are replacing a lot of jobs. It will be hard to revitalize the manufacturing industry—as Trump wants to do—when automation has transformed it so completely. Even though the threat of robots is sometimes overstated, other areas of the economy are also at risk to lose jobs due to greater productivity.

71. More and more Americans are going on disability. A trend that's concentrated in struggling regions like Appalachia.

72. Health insurance companies are pulling out of exchanges set up by the Affordable Care Act. Aetna was the latest to announce plans to leave, blaming uncertainty over the law's future. Trump may want to repeal the ACA, but he also has to manage the exchanges or risk being blamed for their failures.

73. The ACA is more popular than ever. According to one poll, more than 60 percent of Americans want the law to be fixed rather than replaced. Trump, of course, would rather replace it.

74. Fewer tourists want to visit America, possibly because of Trump himself.

75. Fewer international students want to come to American universities. Again, possibly because of Trump and his policies.

76. Trump's "travel ban" remains held up by courts. The executive order intended to keep people from several Muslim-majority countries out of the US hasn't gone fully into effect thanks to court rulings

A section of border fencing

77. Trump's border wall is extremely expensive. It might cost as much as $20 billion, money that Congress will have to approve.

78. Politicians on the border don't want the wall. Not even Republicans.

79. But the Republican base really wants the wall. Or so says the Republican National Committee chair.

80. Authorities are in no position at all to deport all the undocumented immigrants Trump wants kicked out of the US. A report from a watchdog found that Immigration and Customs Enforcement agents are already desperately overworked.

81. The legal system may be overwhelmed by attempts to deport migrants en masse. Prosecutors only have so many resources.

82. Deportations can be unpopular. Many Americans like the idea of removing undocumented immigrants in the abstract, but there have already been cases where a deportation has caused pain for Trump supporters. One well-liked businessman in a Trump-supporting town was at risk of being deported in February, and in April, the husband of a Trump voter was deported. Those stories are likely to multiply as time goes on.

83. Voters are warming to the idea of immigration. Rather counterintuitively, some polling has found that Americans are actually getting more liberal when it comes to immigration policies—in other words, Trump's position may become less popular.

84. Trump's threat to take federal funding away from "sanctuary cities" that didn't comply with federal immigration law was blocked in courts.

85. It's hard to define what a "sanctuary city" is. That led to the administration suspending a plan to list jurisdictions that didn't comply with the law.

86. Wildfire season is going to be bad this yearFires are burning in Arizona, and the season is off to an early start in Jersey.

87. The National Parks system is falling apart. Congress wants Trump to help fix it.

88. A grain surplus is making life harder for many farmers. They're storing grain and waiting for prices to rise.

89. Rising sea levels are creating a crisis in Louisiana right now. The situation is so bad that the governor has declared a state of emergency.

90. China may soon overtake the US when it comes to renewable energy. Another result of Trump's executive orders dismantling efforts to fight climate change.

91. Former national security adviser Michael Flynn is under investigation for all sorts of things. Flynn was forced out of the White House for lying about his conversations with a Russian ambassador after the election, and now is being investigated for taking money from foreign governments.

92. The whole Russia thing. If nothing comes of all of the investigations into the ties Trump-linked individuals have with Russia, it at the very least is a constant distraction for a very easily distracted White House.

93. The press doesn't like TrumpIf you constantly call out major media companies for being "fake news" and denounce them at major rallies, you can't be surprised that so many outlets—even traditionally right-leaning ones—don't go out of the way to praise your presidency.

94. Sometimes Trump says things that are complete nonsense. It seems wrong to use the word lie indiscriminately because sometimes Trump seems badly informed rather than looking to maliciously deceive the public. But he has a long history of saying things that aren't so and hasn't changed this habit in the White House.

95. These misstatements are sometimes big deals. When the administration incorrectly said that an aircraft carrier was headed to North Korea, it showed exactly how serious Trump's combination of imprecise language and incompetence could be. How do you lose track of an aircraft carrier?

96. Trump's response to climate change could threaten disaster preparedness. When Trump signed an executive order rolling back some of Obama's climate change policies, local governments warned that it would make it harder for them to prepare for floods, hurricanes, and other natural catastrophes made more common by climate change.

97. Secretary of State Rex Tillerson in particular seems in over his head. "Why should US taxpayers be interested in Ukraine?" is something he actually said at a diplomatic conference in Italy. Some State Department staffers have reportedly been told not to make eye contact with him.

98. Trump actually seems bothered by Saturday Night Live. Really.

99. Trump thought this wouldn't be so hard. He told Reuters this week, "This is more work than in my previous life. I thought it would be easier."

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A Meat Tax Is Probably a Good Idea

On tax day of this year, the animals rights group PETA (People for the Ethical Treatment of Animals) revived a hilarious proposal from 2011: put a tax on meat. The idea is a little like something you would come up with if you were a candidate for office secretly trying not to get elected. "My fellow Americans, I promise to put a tax on, uh, meat! And then, ban the NFL and Beyoncé. Vote for me!" It's a nonstarter outside of maybe the vegan wonderland of Portland, and even those folks probably wouldn't go for it.

PETA president Ingrid Newkirk has acknowledged that the her organization's activities are sometimes just in pursuit of "ink and airtime," so it's safe to assume this was meant to rile up anti-tax crusaders like Grover Norquist, the current US president, or, say, your dad. The folks at PETA have also proposed banning women from attending a buffalo wing festival because chicken ostensibly shrinks baby dicks, and they tried to fat shame women into being vegans—to name just a couple of recent examples.

But upon closer inspection, there's more to the meat tax—10 cents per pound of "chicken, turkey, pig, cow, fish, and other animal flesh sold in grocery stores and restaurants"—than just pissing off dads. 

"I actually don't think it's a bad idea," said Dean Baker, co-founder of the left-leaning Center for Economic and Policy Research, and one of the few economists to correctly predict the 2007 housing crisis. To put it in economics jargon, Baker said, "it seems reasonable to say there's externalities associated with farm animals, so why don't we incorporate those into the cost of the product."

"Externalities" are essentially costs that get passed onto the taxpayer one way or another. In this case, that means the public cost of healthcare, and damage to the environment. But not only do those externalities justify a possible tax, but they make the idea more politically feasible than it sounds.

There are obvious parallels with tobacco. According to the World Health Organization (WHO), taxing tobacco is the "single most effective way to encourage tobacco users to quit and prevent children from starting to smoke." From a global health standpoint, meat is a disaster too. An Australian study from last year surveyed data from 170 countries and found a close correlation between the availability of meat and obesity. And according to the WHO itself, processed meat is a "Level 1" carcinogen, placing it in the same category as tobacco.

According to Katherine Baicker, professor of health economics at Harvard's T. H. Chan School of Public Health, the result of a tax is fairly predictable. Some consumers substitute something else for whatever you're taxing, "in this case, other food—whether that is vegetables or Cheetos," she told me in an email, adding, "Whether you think that that shift is a good thing depends on your views about the optimal 'basket' for people to consume." In other words, with a tax in place, some consumers who otherwise wouldn't have done so, will at least sometimes make vegetarian-leaning choices. But it remains to be seen if those choices would necessarily be healthier.

But of course there's more than a public health argument to be made in favor of the tax. "This is similar to the idea of a carbon tax," Baker said. "Farm animals are part of the story of producing methane gas, and global warming." Indeed, as of 2009 18 percent of greenhouse gas emissions came from livestock alone according to a 2009 report out of the Netherlands. That report also found that switching to a low-meat diet globally would bring the costs of carbon stabilization down by about 50 percent. Meat also speeds up the rate at which bacteria become resistant to antibiotics. 

But when it comes to taxing retail goods out of a concern for a global problem, there is one major drawback: "In general taxes on food can be regressive [since] lower income people spend a higher share of their income on food," Baicker told me. In other words: this tax would hit the poor the hardest.

"Someone's going to be hurt, but the point is to make sure that most people are not hurt, particularly not disadvantaged people," Baker said. He wasn't being paradoxical. Taxes are a sticky wicket, and if you make poor people pay them, the idea is that they'll get something out of them. "Suppose you increase the Earned Income Tax Credit somewhat," he suggested, referring to a program that gives out money to low-income people if they're employed. "If someone eats a lot of meat they might still be worse off from [a meat tax] but if you've made most low-income people at least as well off, or maybe somewhat better off, I get the feeling that's a good policy," Baker said.

Still, a tax, and corresponding tweak to the social safety net? That's a tall order. 

But Baker does at least think the idea has better-than-zero odds of gaining momentum, if the activists who support it can get their shit together, and act a little more like opponents of nicotine. Cigarette smoking was more than just normal, he reminded me. "It was considered rude if you didn't have ashtrays in your home," he said. And then a lot of stern, serious medical professionals talking about cancer eventually changed people's minds.

What should meat tax advocates say? "You just say, 'look, there are externalities,'" Baker suggested. "'We're not saying you're horrible people if you eat meat. Just that, you know, we want you to pay the cost.'"

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Economists Hate Them! Why We’re Stuck with These Tax Loopholes

In late March, just before the first attempt by Republicans to kill the Affordable Care Act crashed and burned, Donald Trump sounded positively joyous about the prospect of wrapping up the healthcare fight and moving on to a new challenge.

"Then we immediately start on the tax cuts, and they're going to be really fantastic," he told a group of House Republicans. "I am looking forward to that one. That one's going to be fun."

Maybe Trump hasn't learned this by now, but legislative battles are hardly ever fun, tax reform least of all. 

Already, a proposal to shift corporate taxes and target foreign imports has companies like Walmart and Nike battling other elements of the corporate world in Washington. And while much of the Republican Party seems hell-bent on cutting taxes for rich people, doing that means either blowing a big new hole in the federal budget or finding ways to make the money up elsewhere. One option would be making the tax cuts temporary, but that would hardly qualify as "reform" at all. Actual reform—a long-held bipartisan dream—would involve lowering tax rates and finding other ways to revenue. Like so many goals in Washington, it's theoretically doable, but almost impossible in practice. 

If politicians actually wanted to reform our tax system, there are some simple things they could do that would please economists and policy wonks from across the ideological spectrum. There are things that people who have studied this stuff for years agree on; there are also political reasons why their suggestions will never come to pass.

For the sake of understanding just how confused our tax system is, let's take a look at three big tax deductions that could be eliminated to free up room in the budget for tax cuts—and the reasons that would undoubtedly be met with screaming opposition. (The cost to the government cited here are estimates from the Treasury Department for 2017.)

Deductions for charitable contributions: $62.9 billion

As most people know, when you give money to the United Way or donate some taxidermied kittens to your local museum, the IRS lets you take a tax deduction. But most Americans don't take advantage of this, because it only makes sense to itemize deductions on your tax returns if your total eligible expenses add up to more than your standard deduction, which is $6,300 for an individual. 

And guess who has more than $6,300 in tax-deductible expenses? Rich people. In 2011, fewer 15 percent of tax filers making less than $50,000 a year claimed a deduction for charitable gifts. Among filers making more than $1 million, 94 percent did, reducing their taxable income by $134,000 on average. (This is despite people making less than $500,000 giving a similar amount to charity.)

Deductions work by reducing the total amount of income that people pay taxes on, so those who pay a higher rate get more value. The way the math works, if you're in the highest tax bracket the federal government is essentially funding 40 percent of your charitable giving. If you're in a lower bracket, just 15 percent of your giving might be covered.

"Really, it's an upside-down subsidy, subsidizing rich people more than poor people," said Roberton Williams, a senior fellow at the center-left Urban-Brookings Tax Policy Center.

This also influences what kinds of charities get donations. Really rich people mostly give to health, education, and arts groups. Think billionaires getting their name on a new hospital wing, parents giving to their kids' private schools, or cultured donors supporting the local symphony. People who make less than $100,000 devote two-thirds of their charitable giving to churches, compared with 17 percent among those who make more. 

A reasonable question to ask is whether the government should be incentivizing all of that giving. As Stephen Moore of the conservative Heritage Foundation puts it, "[Warren] Buffett and Bill Gates escape income tax on billions of dollars in earnings by diverting the money into the Gates Foundation to support dubious 'charities' like the Sierra Club and Harvard." 

The political trouble with doing away with the charity deduction, of course, is that philanthropic organizations worry people will stop giving as much if the deduction goes away. And any politician would have a hard time going up against the Society for Helping Cute Children on Capitol Hill. But if we really want to help people contribute to the causes of their choice, a better system might be simply giving out some kind of matching funds for contributions from people at all income levels.

Watch: The fight to tax soda

The mortgage interest tax deduction: $83.1 billion

Of all the twists and turns in the tax code, the rule allowing interest on mortgages to be deducted may be the one that makes wonks of all stripes fume the most. Like the charitable deduction, it mostly helps those who have money. But it also distorts housing markets in ways that drive economists nuts.

"The decision on what to buy, how much mortgage to take out, is a voluntary consumption decision," Williams said. "For high-income people, the federal government will pay up to 40 percent of your mortgage interest."

Theoretically, the point of the deduction is to encourage people to buy a home rather than rent. Setting aside whether that's a good idea at all, Williams said it doesn't even work. Homeownership rates in places like Australia and Canada, which don't have a deduction, are as high as in the US. "There's no clear evidence that people are more likely to buy houses," Williams said. "What is clear is that people are more likely to buy bigger houses."

So, the big effect of the deduction is inflating the market for McMansions. Which also explains why it would be nearly impossible to kill. "The housing industry loves it," Williams said.

In fact, when Barack Obama proposed capping the value of itemized deductions for the rich at 28 percent, both the real estate and philanthropic sectors came out swinging. Some current Republican plans include a similar cap, and also raise the value of the standard deduction, which would reduce the number of people who bother to itemize. Even these modest reforms have the real estate industry gearing up for a fight.

The state and local tax deduction: $55.3 billion

The deduction covering state income and sales taxes is the only one of the three big tax deductions that Republicans are looking at actually eliminating. Why? Well, blue states tend to tax their residents the most.

"It's a subsidy for state and local governments to charge local taxes with part of the charge being picked up by the federal government on people's tax returns," Williams said.

Not surprisingly, many state and local officials have panned this idea, which of course would add greatly to the burden of some Americans. New York Governor Andrew Cuomo has said it would be a "deathblow" to his state.

Even liberals have reason to hate this tax break, however: It's even more of a sop to the rich than the other deductions on this list. On average, tax filers making more than $1 million a year use it to reduce their taxable income by more than $200,000, while those making under $50,000 get a deduction of less than $1,500. If we want the federal government to subsidize states and local communities, there are a ton of ways that would be much fairer.

Politically, though, given the number of senators and representatives who hail from places that benefit from the deduction, it's likely to be controversial even among Republicans.

That's the trouble with any type of tax reform that isn't a simple, deficit-ballooning cut. Any big "loophole" is bound to be beloved by some constituencies, and the bigger the loophole the more powerful constituency. Closing those loopholes is bound to be difficult, politically costly—and not at all fun.

Follow Livia Gershon on Twitter.

Why Air Travel in America Is Such a Disaster

On Sunday, when a United passenger was violently dragged off an overbooked flight by Chicago police, the brutality of the video shocked the internet. The 69-year-old victim was reportedly a doctor who needed to stay on the flight in order to see patients the next morning; nevertheless he was picked out by the airline to be removed after no one on board volunteered to give up their seat in exchange for an $800 voucher. Since the video of the assault went viral, United issued a rather flaccid apology, with its CEO issuing a statement calling the event "upsetting" and saying, "I apologize for having to re-accommodate these customers."

If this was an especially brutal instance of an airline mistreating a paying customer, it was also a reminder of the everyday absurdity of how air travel works. Overbooking—selling more tickets than there actual seats—is common and only accepted because most of the time someone is happy to take money in exchange for a later flight. If you fly economy, like most of us, leg room is nonexistent, it's expensive to check your bag (but can also cost you money to bring your luggage on board), and airport security is intrusive and time-consuming. Buying a ticket is an insanely opaque process, and prices change base on the day of the week you book a flight. And none of this is getting better.

What happened to the doctor on United Express Flight 3411 ostensibly feels especially alarming because it could so easily happen to you—who among us has not been an overbooked flight that didn't allow everyone who had purchased a ticket their rightful seat? But if air travel can seem like it wasn't designed for humans, you can thank the United States government for that.

Though the country has centuries-old antitrust laws to prevent companies from becoming monopolies who can control pricing in unfair ways, airlines have basically done so anyways. In the last ten years, the nine biggest airlines in the United States have consolidated into four. The major players today—United, American, Delta and, Southwest—have many common shareholders. Five of the seven largest institutional United shareholders are also the largest shareholders of Delta and Southwest, a 2015 study found. Though some people have called for a boycott of United, an obviously worthy cause, it's difficult to make sure your money doesn't find its way into the pockets of United's owners.

The Barack Obama administration knew this consolidation was a problem approved two of the major mergers over the past decade that has undoubtedly harmed consumers. Perhaps an attempt to correct course after approving two major mergers, in 2013, the Department of Justice filed a suit to stop American Airlines and US Airways from merging—until government officials suddenly changed their minds. According to a blockbuster Pro Publica report from October:

The Justice Department's abrupt reversal came after the airlines tapped former Obama administration officials and other well-connected Democrats to launch an intense lobbying campaign, the full extent of which has never been reported. They used their pull in the administration, including at the White House, and with a high-level friend at the Justice Department, going over the heads of staff prosecutors. And just days after the suit was announced, the airlines turned to Chicago Mayor Rahm Emanuel, Obama's first White House chief of staff, to help push back against the Justice Department.

The airlines have been getting what they want for four decades. In 1978, Jimmy Carter signed the Airline Deregulation Act, which radically altered air travel in the United States. The bill effectively disbanded the Civil Aeronautics Board, a group that regulated airlines as if they were government entities, in charge of deciding routes and fares for all companies. (Before 1978, these carriers just competed on service, as ticket prices were set by the government.) Deregulating airlines did help consumers by making it way, way cheaper to fly, making traveling long distances more accessible to middle- and low-income Americans. The inevitable downside is that the bill also prohibits states from regulating the "price, route or service of an air carrier," which is why there are no laws protecting consumers from the current oligopoly of airlines.

What damage does this do? According to a Department of Justice complaint cited by ProPublica, a lack of competition allows major airlines to raise fees, limit services like meals, and eliminate some routes. United's treatment of the passenger, and its resulting mishandling of the PR nightmare, were appalling. But the larger issue is that airlines have too much power. In the short term, boycott United, yes. For the long term, however, have you considered socialism?

Follow Eve Peyser on Twitter.

Why Is Trump Losing So Much?

Aboard Air Force One on Thursday, hours before launching missiles against the Syrian government in a sudden foreign policy shift, Donald Trump told reporters how great he was doing. According to the president, it's been "one of the most successful 13 weeks in the history of the presidency," a curious statement on a couple grounds. First of all, it's been 11 weeks. Second of all, no it hasn't. Here's what's gone wrong for Trump during this "successful" stretch:

  • His "travel ban" barring refugee admissions and entry to the US from several Muslim-majority countries remains stalled in the courts, at least partially because of loose talk from Trump and his advisers about enacting a "Muslim ban."
  • The effort to repeal and replace the Affordable Care Act hasn't even gotten out of the House of Representatives thanks to a terrible bill that was incompetently rolled out.
  • We've yet to see a single brick of Trump's famous border wall.
  • Trump's other big legislative priorities—tax reform and an infrastructure plan—have yet to even materialize as concrete proposals.
  • His proposed budget was full of drastic cuts, but no one thinks that it will become reality due to opposition in Congress.
  • There are more than 500 important positions in the federal government that have yet to be filled, the vast majority because Trump has failed to even name a nominee. (There is no deputy secretary of state, for instance.)
  • Trump has promised to make a bunch of splashy foreign policy moves: pull out of the Paris Agreement on climate change, renegotiate NAFTA and the Iran nuclear deal, label China a currency manipulator, force US allies to contribute more to their own defense. But the only pledge he's really followed through on is killing the Trans-Pacific Partnership, one of the few issues he and Clinton agreed on during the campaign.
  • As for the Syria strike itself, it's not clear what the administration intends to achieve, let alone if it will be successful.

Despite everything that has gone awry Trump, he has accomplished some things. He nominated conservative judge Neil Gorsuch to the Supreme Court, a pick that was confirmed despite a filibuster from Senate Democrats. He is also assisting a Republican-dominated Congress in gutting regulations using a once-obscure tool called the Congressional Review Act. Trump's EPA doesn't seem too concerned about protecting the environment, raids targeting undocumented immigrants have ramped up, and the White House has thrown the State Department into chaos.

But those are all policies practically any Republican president would have pursued. What's striking so far is that the big-ticket agenda items Trump spent his campaign talking about—the things that got him this far—have fizzled. And everyone knows it. After stock markets surged in anticipation of Trump's pro-business policies coming into effect, corporate leaders are now warning that the economy could lag as it becomes apparent Trump won't deliver.  

These early struggles aren't surprising, said John Hudak, an expert in governance at the Brookings Institution. Though Trump talked big, many of his goals were always going to be incredibly difficult to realize. Repealing the Affordable Care Act, for instance, immediately ran up against a problem that has nothing to do with Trump: House Republicans are so divided that coming up with a compromise might be impossible.

"There's nothing the president could have done to make [conservative] Freedom Caucus members think this was good legislation their voters could support, nor could he have gotten moderates onboard with a bill that took health insurance away," explained Hudak, who blamed Speaker of the House Paul Ryan rather than Trump for failing to get House Republicans to fall in line.

"The president could have foreseen it and told Ryan he was doing a lousy job," Hudak said, but Trump doesn't have the power to change Republican hearts and minds about the bill.

(It's worth noting that passing the Affordable Care Act took over a year, Democrats had larger majorities than the Republicans have now, and many of them lost their seats afterward. Healthcare, as Trump now understands, is complicated.)

As for Trump's executive actions, some of them sound impressive, like one ordering the Pentagon to figure out how to defeat ISIS. But that directive, like many of Trump's moves, just directed a government agency to issue a report on something, which Hudak described as a "customary, and in many ways restrained," way of going about things. And as the fight over the travel ban demonstrates, any major action will result in a court challenge.

Presidents don't need to sign orders to change the way federal agencies operate, but they do need to appoint allies to top positions to get things done. As Hudak told me, understaffing departments as Trump has done doesn't just make it difficult to get work done, a president without his team in place "weakens himself."

Even if Trump wants to destroy the federal government's "administrative state"—a target of White House adviser Steve Bannon—he still needs to staff it. "If you want to dismantle an agency the best thing you could do is to set appointees who can set a new course," said Hudak. "Without aggressive management, agency employees will continue government operations as usual."

Weakening regulations and kneecapping departments like the EPA may be a top goal for some of the small-government zealots in the White House, but Trump promised voters much more than that. "We want to do a great infrastructure plan, and on that side I will say that we're going to have, I believe, tremendous Democrat support," he told the New York Times on Wednesday.

Hudak told me that any major infrastructure proposal could attract Democrats, but there are a lot of questions that would need to be hammered out. How much do you fund urban transportation? How much of the money is provided by government, and how much of it comes from public-private partnerships? More fundamentally: How is Trump going to work with a Senate minority leader he's called Chuck "Fake Tears" Schumer?

"It's difficult to be borderline hateful toward Dems one day… then expect to work closely with them the next," Hudak said.

Trump's election was a shock, but it didn't change the dynamics of Washington, DC. It still takes an enormous amount of effort, skill, and luck to make major changes, and it doesn't help that Trump's team is very inexperienced when it comes to the legislative process.

"Right now, the House of Representatives has embarrassingly failed leadership," said Hudak. To get past that, he said, Trump could start relying more on the Senate, or install more veteran hands at the White House. Whatever he does, "He has to be more serious about legislative politics," Hudak said.

The kicker? The administration needs to get its act in order before 2018 rolls around—the president's party tends to lose House seats in the midterms, especially when the president is as unpopular as Trump. "Every seat that Ryan loses makes the job of governing harder," Hudak said. "If he loses ten or 15 seats his job becomes impossible."

Follow Harry Cheadle on Twitter.

Trump Isn’t Living Up to His Big Promises on Trade

Before Donald Trump launched missiles into Syria, this week was actually primarily supposed to be about trade. That was Trump's number-one campaign issue, after all, back when he was talking about bringing jobs back and protecting the American worker rather than meddling in the Middle East; jobs and the economy will probably decide whether he's a successful president.

Last Friday, Trump signed his first proactive and wide-ranging executive actions on this central campaign issue. One ordered a report on the nation's trade status with countries that import more to the US more than the US exports to them, ostensibly to root out what the Trump crew would consider unfair practices. The other called for stricter enforcement of existing laws penalizing partners for known or suspected trade cheating. Trump followed up the flashy orders with a barrage of comments about his meeting with Chinese President Xi Jinping this Thursday and Friday, signaling that he'd put America's unbalanced trade relationship front and center. After that meeting, Trump is expected to sign an executive order clamping down on steel "dumping" (selling a good at an artificially low price in another country), a trade cheat in which China is often implicated.

From the outside, the moves seemed to project strength and a pending major policy overhaul; some administration officials even said as much. In practice, though, these measures and tirades just show how muzzled and muddled Trump's trade policy has become now that it's collided with reality.

"Trump made trade and tearing up existing trade deals a central theme of his campaign," said Dean Baker, co-founder of the progressive-leaning Center for Economic Policy and Research. As far back as his campaign kickoff in June 2015, he took a particularly harsh line on China, which he believes has manipulated its currency and the price of products to fleece Americans. His positions stem from a conviction that a country selling more defeats and demeans a country buying more. As a massive global exporter, in that worldview China is America's great satan.

This is a simplistic reading of trade. It ignores the complexity of global supply chains (when China sells us something, often a chunk of that money actually comes into the US economy) and the fact that while trade brings pain to some communities (usually manufacturers, who are hurt equally if not more so by issues like automation) it helps others, usually boosting overall wealth and production even as it hurts some groups. It's also a false reading of China, which does engage in numerous shady trade practices, but hasn't manipulated its currency against American interests in years and would almost certainly still sell us more than we sold them even in America's ideal market.

But Trump's ideas played to a longstanding national paranoia about China and the effects of free trade on American industry. His promises to label China a currency manipulator on day one, slap tariffs as high as 45 percent on Chinese exports to the US, and generally put up protectionist walls around American industries may have been a deciding factor in the election, as he was able to win Midwestern states that have seen their manufacturing base decline.

Watch: Can electrical zaps to your brain make you feel better?

Trump made good on one campaign promise right off the bat, pulling out of the Trans-Pacific Partnership, a massive free trade deal a decade in the works, soon after his inauguration. All through his transition and during the first couple months of his presidency, he and like-minded aides kept up a steady stream of hardline "blow-it-all-up" protectionist dialogue. Dan Ikenson, a trade policy scholar at the libertarian Cato Institute, thinks Trump and some of his team truly believe their nationalist economic mantras.

But if they do, they've taken a slow walk on that front. As Robert Scott of the left-wing Economic Policy Institute pointed out to me, Trump has yet to declare China a currency manipulator, impose any big tariffs, or enumerate any details about how he'd go about doing that. He hasn't even filled many vital positions that would deal with the nuts and bolts of trade policy. He hasn't started his promised overhaul of the North American Free Trade Agreement (NAFTA), added Baker. And his bid at insuring the Keystone pipeline would be built with American steel petered out as it was basically unenforceable.

"His actions on trade bear no resemblance to his campaign promises," said Baker, who added that Trump may still signal his trade maverick bona fides in speeches, but "at this point I don't think anyone cares… He signals everything and the opposite."

This gap between rhetoric and action put a lot of pressure on Trump's trade push this week. And he decisively disappointed his fans. Although his new orders hint at possible protectionist retaliation to come, they contain no immediate actionable content or truly fiery language. The report mandated in one order will likely retread ground covered in previous administration's one-off studies and many regular reports on trade. The better enforcement recommended in the second order, experts agreed, was low-hanging fruit any president would likely have gone for. Even the withdrawal from the TPP, Baker said, would have been pursued by most of the recent crop of presidential hopefuls, given its unpopularity with voters and Congress. "If you pull out the rhetoric," continued Baker, "there probably is not much difference" between Trump's initial trade bids and any recent administration's.

"I see the executive orders… as basically a delaying tactic," argued David Dollar, a Brookings Institutiontrade expert. Alongside wider inaction, this suggests Trump's trade agenda is in flux.

Some of Trump's failure to take action on his trade beliefs likely stems from the fact that, in practice, he is constrained in his ability to levy most forms of tariffs or reset trade extant deals without the consent of Congress, trading partners, or both. He can't even name China a currency manipulator on his own. Yet Dollar and Ikenson pointed out that Trump retains some unilateral powers that, while limited, could have real impacts. So some of this inaction likely comes down to internal debates between White House officials who believe in blowing the global trade system up and those who believe in incrementally changing it around the edges while maintaining the status quo. This squabbling, coupled with Trump's demonstrated lack of leadership and strategic vision on hard policy, may have ground real action to a halt.

Or, as Peterson Institute for International Economics trade expert Chad Bown suspects, Trump and company may have just realized that trade's more complex in practice than theory.

"Our relationship with China isn't only about trade," Bown said. "It's also wrapped up in these really important national security issues as well, like North Korea. So I think you can expect that's helped to put the brakes on things as well."

Trump could still turn things around and come out guns blazing on trade. But the experts I spoke to agree that moderating influences seem likely to carry the day. They may even lead Trump in the opposite direction of his hardline campaign rhetoric. To wit, a draft letter reported on late last month by the Wall Street Journal seemed to indicate that the administration would take a restrained approach on NAFTA, just trimming the edges; experts looking at the steps proposed noted it actually looked like that approach would revive several aspects of the TPP. At most, wonky observers suspect Trump will ramp up actions and cases against trade cheating under existing domestic and international law. But even that will largely just continue past administrations' effortsespecially Obama's.

"To date," summarized Baker, Trump "has indicated zero interest in his actions in breaking with the trade agenda of the prior administration."

Follow Mark Hay on Twitter.

Why British People Are Betting On Trump’s Impeachment

As controversy continues to swirl around the Trump administration, there's been speculation about whether Trump will even make it through his presidency before getting impeached. In fact, British gambling houses have been making a killing lately with people betting money on when and why Donald Trump will be forced to step down. VICE's Jake Warren met up with some gambling industry vets and newbies to hear more about the rise in political gambling.