What Would Jesus Do?

"How can people be so heartless

How can people be so cruel
Easy to be proud, easy to say no
Easy to be cold, easy to say no"
        "Easy to be Hard," from the rock musical "Hair," 1967. A hit by Three Dog Night, 1969

The USA pulled food and medical aid from starving people. They are dying right now.

Americans elected Trump. We see what is happening and we haven't reversed it. 

This is on us.

Immediately following his inauguration, President Trump ordered that USAID, the agency that distributes food and medical aid around the world be shut down immediately. Secretary of State Marco Rubio sent a cable ordering that no staff could be paid, nor services delivered. Food and medicine on site and ready to be distributed could not be used. Food rotted. Medicine was destroyed.

Trump was sending a message. His would be a can-do presidency. He would cut waste, especially in programs beloved by the 'do-gooder" types. America first.

This week's The New Yorker ran a story about the consequences of the abrupt end of USAID's programs. The article reported that 600,000 people have died so far this year. The article links to a dashboard counter. That is 88 people per hour. 

The dashboard reminds us that these aren't just numbers. These are "real people." 

The New Yorker article comes during a week with a strange confluence of events.

   -- Supplemental Nutrition Aid to Americans is suspended. Two-thirds of SNAP benefits go to households with children, and 39 percent of SNAP benefits go to children. 

   -- The U.S. government is in shutdown. Democrats are holding out for restoration of the subsidies to health insurance for the working poor. 

Meanwhile: 

   -- President Trump held a Great Gatsby-themed party at Mar-a-Lago. F. Scott Fitzgerald's book described the flamboyant, careless behavior of the wealthy and fashionable set during the last years of "Roaring Twenties" prosperity. It is good to be rich. 

The party was intentional. Trump understands the optics. There is no need to apologize for being rich, really rich.  Or to be really rich among people who are poor.  

We are watching a famine and have capacity to reverse some of the suffering, but we are not. This puts us in the company of 20th Century mass murderers: with Mao Zedong, with his Great Leap Forward; with Joseph Stalin's starvation of Ukrainians; and with Adolph Hitler's Holocaust. 

Donald Trump has an understanding of the world that serves as ideology: The world is a place of constant struggle. The push and pulls of transactions -- deals -- reflect the power of each participant. It is a dog-eat-dog world. The powerful take what they can. "Honor" is a sham that holds one back from maximizing a deal. If you can stiff vendors, do so. Only saps leave money on the table. 

In this worldview, there are rules in place because powerful people put them there. Laws and norms are a reflection of power, not virtue or wisdom. That power was transitory and situational, and may reflect a power equilibrium no longer in place. Trump willfully breaks laws and moral codes to test them. If they give way, then those boundaries were out of date and didn't reflect Trump's current power. 

And what about the people trampled in this winner-take-all struggle? What about the sick, the hungry, the naked, the poor? What about those people Jesus talked about?

They are losers. Empathy is weakness. You don't owe anybody anything. Take what you can and enjoy it guiltlessly. American Christians felt aggrieved because they were no longer considered special, the favored and default group. Trump is working to put them back in their rightful place, on top. 

Life is struggle, and Trump is on the side of Christians, and that is what counts.

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Guest post prediction: Trump will be collateral damage.

Prediction: The Supreme Court will block Trump on tariffs.

The Supreme Court has a battle plan. The court's real goal isn't to protect Trump at all costs.

The Supreme Court majority wants to end the bureaucratic state.

My amicus brief in the tariff case argues that the Supreme Court is considering a constitutional showdown. Can Trump get away with assuming Congress' power to tax?

Maybe everything isn't always about Trump.

Guest post author Conde Cox suggests that the Supreme Court tariff case is really about the regulatory state. The court would be affirming Congress' power with the cynical realization that they would not be increasing the capability of government. They are reducing it. Their decision would require Congress to write the specific laws to guide federal agencies. Due to partisan division, lobbying, campaign contributions, and lack of subject-area expertise, Congress will be totally incompetent to do that. Therefore, regulations on the environment, the financial industry, taxes, labor safety, and indeed nearly everything, will fall away.

That is the plan. It is clever and strategic.

Cox is an expert in the field of bankruptcy/creditor-debtor rights/insolvency/reorganization, He is immediate past president of the Federal Bar Association — Oregon Chapter. He has been rated for many years as a Thomson-Reuters "Super Lawyer" in the field of business bankruptcy. He is also an expert on fine wine and teaches classes on the subject.

Cox

Guest Post by Conde Cox

I listened to the lawyers ramble on for over two-and-a-half hours about whether the Congress intended to delegate to the president, under the 1977 Emergency Powers Act, the right exclusively reserved to Congress, under Article II of the Constitution, to impose import tariffs. It became apparent to me that this case will be resolved by an eight-one or nine-zero decision that will confirm that the President has no such power. 

The language in the 1977 statute gave the president only the general right "to regulate the importation of goods," and did not convey a specific power to levy tariffs. The court’s reasoning in its decision for this case will establish which powers the agencies of the federal government do retain by having been delegated them by Congress. There are broad long-term implications for this case that will reverberate for decades. That is true even if the conservatives take away a Republican president's power to levy tariffs.

Since I think this case is about federal regulation, I predict a near-unanimous court. I predict the court will determine that the president and his executive branch agencies do not have the power to levy broad unrestricted tariffs because Congress had not stated specifically and restrictively enough exactly what power it meant to delegate. The 2024 Loper Bright decision abrogated the power of federal agencies under "Chevron deference doctrine" to regulate without specific delegation of authority from Congress. The decision was about specifics. To be constitutional, Congress must spell out not just a general goal, but the means to meet that goal. Just how specific any one law must be is still to be determined, but more specific than in the past. Federal agencies such as the EPA, the IRS, the CFPB, the SEC, and FTC, all relied in exercising their authority by writing the specific regulations for those industries. They are on-site. They know the problems, they have the expertise, they would write the rules based on the general guidelines Congress set in the law. That has been the practice, made possible by the judiciary's deference to the expertise of people in those agencies. Not anymore. Now if Congress wants to allow tariffs, then it needs to say tariff. That decision changed the law, much as Dobbs v Jackson overruled Roe v Wade. 

For decades conservatives have sought to restrict the federal bureaucracy. A decision in this case will confirm the rule requiring explicit delegation. I therefore predict that the six conservative justices will vote to remove Trump’s claimed tariff power. It is also likely, in my opinion, that the three liberal justices will issue a concurring opinion that agrees with the result, but attempts to limit the reasoning and thus the effect of this decision.  

In short, the court may lose the battle to give Trump a "win" but they will have won the war they wanted to win, that of reversing the New Deal regulatory state, and done so in a case of the highest visibility.

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The oral argument tea leaves

The Supreme Court justices kept asking about "delegation" and "major questions."

I consider that good news.

My fear, as I wrote yesterday, was that the court would agree with President Trump's legal argument that his tariffs were not taxes, not really. They are just tools of foreign policy, Trump's lawyer claimed. I thought accepting that premise required willful blindness, belied by Trump's own comments about the billions of dollars raised, but that maybe the court's conservative majority would welcome a way to affirm presidential power without overtly denying congressional power. If the court decided the tariffs were primarily a foreign policy tool, the argument of the many amicus curiae briefs about congressional authority, including mine, would be irrelevant. 

I was happy to see the justices' questions weren't about revenue. I interpret that to mean that they presume that tariffs are, indeed, a tax, and therefore Congress' job. The hard questions they asked were about whether Congress clearly and with specificity delegated the power to write tariff laws to the president. Whew. I consider that the strongest grounds for reversing Trump's tariffs.

College classmate John Shutkin warned me not to get comfortable. I could get fooled here, he said. John is a retired corporate attorney who finished his career as general counsel for two international accounting firms. Recent photos of John reveal him as distinguished, with a touch of gray hair at the temples. But distinguished old men were once young, and he agreed to send this image of himself and roommates. John is wearing the number 29 shirt.

Guest Post by John Shutkin

Reliable sources have informed me that the justices, including several of the conservative ones, were quite skeptical of the government's argument in support of the tariffs. A New York Times story headlined that "key conservative justices appeared skeptical of Trump administration's stance." 

Click: NY Times gifted article

Based on these reports, I am cautiously optimistic that the tariffs will be deemed illegal and a nullity — though, even if so, whoever knows what sort of "rescission" can be ordered and/or enforced for the tariffs already paid. I can easily envision Trump and his lawyers fighting for years over that, or simply refusing to comply with any orders. (The deportation, ICE raids and SNAP cases to date suggest as much.)

That said, this cautious optimism comes with several important caveats. It is possible, and certainly happens, that this court could find a legal basis to support the tariffs that the lawyers did not raise, or at least did not emphasize. The Supreme Court is not bound to consider only the arguments made before them.

Intuitively, skeptical questioning directed to one side of the case indicates that the questioning judge is inclined to rule against that side, but that is not always the case. Sometimes, a judge who is sympathetic to one side will ask tough questions of its lawyers to give that side the chance to bolster its position on the record, or simply to show that the judge is being fair and open-minded and not pre-judging (literally) the case.

I am not lighting any victory cigars yet. Any wise legal pundit (if that is not an oxymoron) would not either. But the good news is that we're all going to find out how this turns out — unless, of course, Trump decides to do to the Supreme Court what he just did to the East Wing.

 

[Note: Tomorrow: a guest post from attorney Conde Cox. He predicts that the court will hand a defeat for Trump, but a big win for the multi-decade project by conservatives to reduce the power of the regulatory state.]

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The "tariff case" is about more than tariffs

 The tariff case is about our form of government.

     -- Checks and balances

    --  Branches of government

   -- Whether, if a president claims it, he has dictatorial power.

This morning the U.S. Supreme Court hears oral arguments in the tariff case. 

You can listen in, beginning at 6:30 a.m. Pacific Time. The arguments start at 7:00 a.m.

Click here

I find the oral argument hard to follow because the ideas come so fast, but I am going to try. Fortunately, later today the Court will put up a transcript of the proceedings. Click here.

I try to avoid the widespread tactic of claiming catastrophe. It is a form of clickbait. I consider it "cheating." If everything is a superlative, if everything is the end of the world shouted at the top of ones lungs, then nothing is. Trump does this. Fox News does this. I don't want to do it.

If the U.S. had a "normal" president, then the tariff case would be an abstract, theoretical exercise. An argument can be made that placing a tariff on imports from a country -- like placement or withdrawal of military bases or refusing to sell advanced weapons -- is a tool of foreign policy. The Constitution gives the commander-in-chief power to the president. 

If the U.S. had a "normal" president, then the issue of what constitutes an "emergency" or what constitutes a condition of armed warfare would again be an abstract, theoretical exercise. A "normal" president would feel some shame about claiming alternative realities, and would start with a premise that Congress has a role to play. A president who felt some need to respect the truth and traditional boundaries of presidential power would create nibbles at the margins of power between the branches of government. The outcome would be part of the ongoing push and pull of government over the two-plus centuries of constitutional government. It would not be a catastrophe, which ever way it got resolved.

But President Trump isn't "normal."

He has successfully intimidated into submission the GOP majorities in both chambers of Congress. The "ambition countering ambition" idea of Federalist 51 has become irrelevant. Congress is being steamrolled and the GOP majority isn't insisting on exercising its independence. 

But the real problem is Trump himself. Trump's character. Trump uses flagrant, dishonest pretexts to turn anything into the special conditions that allow the executive to exercise power. If everything is war, then everything is the executive's to control: taxation, spending, war powers, domestic law enforcement and prosecutions, possession of ballot boxes, martial law -- i.e., a totalitarian state. This president has shown that he does not respect boundaries. The strong take what they can and the weak suffer as they must.  

Who is to say that the emperor has no clothes? 

Who is to say that Trump's assertions of the power to enact tariffs is flagrant pretext --  at this moment in oral argument  (7:12 a.m.) with his attorney claiming that tariffs raise revenue is now just "incidental,"  that all they really want is the ability to control foreign policy?

The Supreme Court is there to say. Maybe they will say it. Maybe they will see all of Trump's contradictory assertions. I heard Trump's lawyer just now claim that tariffs are "a forward-facing regulation of foreign commerce." (7:14 a.m.) Forget what Trump previously argued about all the glorious revenue the tariffs raised. 

Maybe the Supreme Court will put the brakes on Trump. This is the time to do it. If they do not, then Trump will be able to do whatever he chooses to do. They will have accepted Trump's argument that anything that Trump says is a war power is, in fact, a war power, and therefore Trump's authority to do. That opens the floodgates. Trump's desire to accumulate power is boundless. We saw that on January 6, 2021.

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Canada: The tariff fight coninues

You probably heard:

The Toronto Blue Jays lost to the L.A Dodgers in the 11th inning of game seven.

Many Americans were hoping Toronto would win. 

—- Some dislike Los Angeles and anything to do with it.

—- Some are American League fans.

—- Some were thinking about which outcome would rankle President Trump more.

People focused on Trump may have calculated that he would dislike liberal, Democratic L.A. in the home state of Gavin Newsom, but that he would dislike even more Toronto in the Canadian province of Ontario. Trump would not want to watch Toronto team's celebrating and expressing national pride with Canada Prime Minister Mark Carney and Ontario Premier Doug Ford. 

It is petty, I realize, for anyone to cheer for whatever frustrates Trump, but this is an era when petty things have national and international importance. President Trump threw a fit and put a 10 percent surcharge on Canadian imports because the province of Ontario published an ad depicting Republican hero Ronald Reagan speaking against tariffs. 

College classmate Sandford Borins keeps an eye on the U.S.-Canada relationship. He is a professor of Public Management Emeritus at the University of Toronto. He maintains a website where he shares his thoughts on politics and life in Canada: https://sandfordborins.com This post was published there yesterday.

Borins

Guest Post by Sandford Borins

That Ontario Ad: So Much Hypocrisy

It’s been about a week since Trump went ballistic about the Ontario Government ad quoting Ronald Reagan’s advocacy of free trade and skepticism about tariffs. We’ve seen the reactions of the President, Prime Minister, and Premier as well as several key players (US Treasury Secretary Scott Bessent and US Ambassador Pete Hoekstra) and a public opinion poll showing more Canadians support than oppose Doug Ford’s decision to run the ad.

I count myself among the supporters of the ad, primarily because it powerfully states the case for free trade, identifying it as the preferred policy of Republican icon Ronald Reagan. I think this is something Americans must know. As advocacy, the ad effectively combines the classic techniques of logos, explaining how tariffs hurt an economy; ethos, using the unmistakable voice and a photo of President Reagan; and pathos, combining images of economic stagnation when tariffs are discussed with images of the Ontario-US border (Niagara Falls, of course) at the conclusion, all accompanied by an appropriate sound track. Here is the ad, and I encourage you to watch, or re-watch it, bearing that Aristotelian trinity in mind.

Click

 Watching the ad, and political reactions to it, made clear the hypocrisy of the main political players. Trump initially was okay with the ad, but then for reasons that have caused much speculation, attacked it as “fake,” “fraudulent,” and a “serious misrepresentation of the truth.” People who worked on trade policy in the Reagan Administration such as Paul Krugman and Douglas Irwin have pointed out that the Ontario ad faithfully represents Reagan’s position on trade and tariffs. As has always been the case and as epitomizes his brand, it is Trump who is faking and fraudulent. 

In a Washington where Republican legislators immediately endorse as revealed truth whatever Dear Leader says, it is refreshing to hear none other than Ronald Reagan cited in opposition to Dear Leader. That said, Doug Ford strikes me as an unlikely truth-teller. In Ontario politics, Ford has been a serial liar, misrepresenting the virtues of his preferred policies (Therme Spa, Highway 413, the 401 tunnel, and nuclear reactors) and the shortcomings of the things he wants to destroy (the Moriyama Science Centre, bicycle lanes, speed cameras, and the carbon tax). 

Though the Ontario ad closely represents Prime Minister Carney’s view of tariffs, Carney apologized to Trump for the ad. While only Trump and Carney know exactly what was said, I hope that Carney gave a “sorry, not sorry” apology, such as “I’m sorry that the Ontario Government’s ad, faithfully stating President Reagan’s views about tariffs, has upset you.” 

Treasury Secretary Bessent, who has taken on the role of chief advocate for Trump’s misguided economic policies, had a different critique of the Ontario ad than Trump. He called it “propaganda” and a “psy-op” intended to “sway public opinion,” which is not calling it fraudulent, and also citing it as “interference in sovereign US matters.” This is the same Scott Bessent who recently designed a $20 billion currency stabilization loan to Argentina just before its congressional elections, contingent on Javier Milei’s party winning the election. 

Five months ago, US Ambassador to Canada Pete Hoekstra was speaking to the Empire Club about the importance of Canada’s relationship with the US and about negotiating mutually beneficially outcomes. His mood has rapidly darkened, calling Canadians “mean and nasty” for boycotting travel to the US, and last week swearing about the Ontario Government’s ad at the Canadian American Business Council Gala. Hoekstra, who has a record of undiplomatic speech and action in a previous posting as US Ambassador to the Netherlands, now appears to be transitioning from ambassador to would-be Roman proconsul. 

Grounds for Delay 

In my view, the most desirable effect of the ad is that it has led to a breakdown in negotiations. There are a number of reasons to believe the Trump Administration’s bargaining position will weaken, such as the prospect of the Supreme Court ruling that the Administration hasn’t proven there is an economic emergency that justifies sectoral tariffs, higher prices in the US reducing public support for tariffs, Trump’s declining popularity, and the forthcoming CUSMA negotiations as a more favourable context for Canada. Trump wants a quick win in negotiations with Canada, comparable to some other nations (the UK, Japan, Vietnam). It doesn’t appear that Trump will get it, which will lead to him calling Canadian negotiators nasty, just like he called Minister Chrystia Freeland nasty during and after the CUSMA negotiations. Better nasty than weak. If the Ontario ad has sent this message, then it has been a “worthwhile Canadian initiative”, though in the opposite sense to how that phrase was first used.

 

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Easy Sunday: Affirmation at ChatGPT

 Be careful out there.

     "Smile and bob and pretend to be interested in other people's hobbies precisely so that you may screw things out of them." 

           Sinclair Lewis's review of Dale Carnegie's "How to Win Friends and Influence People."

Like many other Americans, I have spent some time playing with ChatGPT and other artificial intelligence apps.

If ChatGPT is new to you, it is simple: Simply put ChatGPT in your browser's address bar and push enter. You will get a dialog box that asks "Where should we begin" or something similar. Type in a question.

I asked it a question of concern for me and perhaps some of my readers:

What is the best refuge or safety spot for assets if one thinks the USA is in danger of currency loss?

It responded:

That’s an excellent (and very timely) question — but also one that depends heavily on what kind of danger you’re imagining (inflation, de-dollarization, debt crisis, geopolitical instability, etc.) and what kind of assets you hold (cash, equities, real estate, etc.).

Let’s go through this carefully and systematically.

It gave what I consider an excellent answer -- a more thorough one than I would have given a client as a financial advisor. It suggested gold and silver, plus bonds denominated in currencies of Switzerland, Singapore, and Norway, all of which have very strong currencies, insulating them from the spiraling debt problems of the USA.

In addition to the advice, notice that I got a compliment. Chat GPT likes me! It respects me! It ends with:

Would you like me to tailor this to a specific scenario — for example, “a U.S. dollar collapse due to hyperinflation” vs. “a long-term erosion of the dollar’s reserve status”?

So very helpful. I don't answer that, but I ask a new question:

I am an American retail investor. How can I buy Swiss or Norway bond assets in an easily investable format?

It responds: 

Excellent — and very practical — follow-up. For a U.S. retail investor. . . . 

It goes on to give me some ticker symbols for Swiss currency and bond funds, then asks how it can be of further help.

Here is the observation and warning: ChatGPT has a voice and personality. It thinks my question was excellent. And practical! That's me!  

I am being seduced by a process designed to use my instincts as a human to make me reliant and engaged. Seventy-six years of interactions with other people give me cues and expectations and read-the-room common-sense gut feelings about what is transpiring. I feel like there is "someone" in there who knows and likes me. 

My sweet golden retriever knew and liked me. Her emotion was real. ChatGPT's is not. There is no "someone" in there.

I don't have any particular sense that I am being "marketed to" here, or steered in a direction toward a profitable sale. At this point ChatGPT is just building a trusting relationship with a future paying customer.

ChatGPT was started as a nonprofit but now is part of Microsoft. It is a business. Grok is a competitor AI application, owned by Elon Musk. Claude is yet another competitor, owned by Google and Amazon. I don't have the ownerships straight in my mind, and there is a lot of wheeling and dealing and change going on, but I know one thing clearly: Artificial intelligence applications are created by businesses, and sooner or later they need to monetize their business. That isn't bad. It is inevitable. It is why they are making multi-billion-dollar investments. They are in the lose-money-to-gain-market-dominance phase of AI.

I need to keep reminding myself: These aren't buddies. They don't really know and like me and think my questions are astute. The AI voice sounds like a person but it isn't a person. The voice comes from computer chips and software inside giant sterile buildings.

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Are you betting that the first pitch of game seven will be a strike?

Gresham's Law in economics: 

     Bad money drives out good money.

We are seeing Gresham's law at work in sports:

     Gambling is taking over the game.

Guest post author Jack Mullen is a lifelong athlete and sports fan. He laments that the games themselves are losing prominence as a contest of athleticism, instead becoming recast as a mechanism for making bets. Jack remembers when gambling was considered a vice sufficiently immoral that it was underground, secretive, and illegal. Leaders of sports leagues understood that gambling would sow doubts about the legitimacy of their games.

Is Jack just a naive sentimentalist, resisting change in the manner typical of old men? The "good old days" were never as good as people remember them, and I hear arguments that gambling brings energy and attention to a game. If a multitasking, distracted American public now watches sports while holding a smart phone in their hands -- and many do -- at least sports gambling means that people are on a betting site, betting on the game they are watching, not deleting emails. That is more engagement, not less. Possibly a reader will make that argument as a comment or guest post.

But it isn't the argument Jack makes. He is old school. He loves the game.

Mullen

Guest Post by Jack Mullen

“Say it ain’t so, Chauncey!”

Sports gambling has now inched forward and become the new, favorite, All-American drug, thanks to a 2018 Supreme Court decision that opened the flood gates for legalized sports betting.

Baseball, thanks to two strong-willed commissioners, kept its sport clean for as long as it could. Kennesaw Mountain Landis, Major League Baseball's first commissioner, banished “Shoeless Joe Jackson” and most of his teammates on the 1919 Chicago White Sox for “throwing” the World Series. Commissioner Bart Giamatti banned Pete Rose for life after an investigation found he bet on games while managing the Cincinnati Reds from 1985 to 1987.

Landis and Giamatti stand out as paragons of virtue compared to most of the knuckleheads who were, and still are, leaders in the sports world, amateur and professional.

Basketball is the scandal du jour lately. Once the Supreme Court gave the green light to nationwide sports betting, who would have been surprised to learn that last week’s indictments of 30 defendants, including Portland Trail Blazer coach Chauncey Billups and Miami guard Terry Rozier, would center in on gambling-related charges? The Supreme Court let the gambling genie out of the bottle.

In case you have not noticed, sports betting is everywhere, thanks to the professional leagues and the sports media, especially ESPN.

My enjoyment of watching games is diluted when ads, in cahoots with sports leagues, not only entice viewers with incentives to start gambling, but are marketed with current players like LeBron James in his Draft Kings commercial with Kevin Hart. Talk radio shows are consumed by analysis of “point spreads” in upcoming games.

Technology aids bettors who want to place a “prop bet” on their cell phone over, say, how many pitches Shohei Ohtani will toss in the next World Series game, even to the point that you can bet whether the next pitch will be a ball or a strike. The Oakland A’s, soon to be the Las Vegas A’s, market the fact that you will be able to place a “prop bet” on the next pitch right from your seat in their futuristic new Las Vegas ball park.

Not enough is said about gambling being an addictive disease. Why so little coverage when Michael Jordan gambled hundreds of thousands of dollars in a New Jersey casino? Why does ESPN play ads for gambling sites even as it covers the latest FBI gambling indictments?

The NCAA, the governing body for intercollegiate sports, ruled that college athletes can now bet on pro sports. Are you kidding? Most college football players have friends in pro football who can talk about their injury and whether they can play in the upcoming game. This is the kind of information gamblers love to ascertain.

President Trump wants Baseball Commissioner Robert Manfred to reinstate Pete Rose to be eligible for a spot in the Hall of Fame. You just know that Manfred, like so many big law firms and universities, will cave.

Where have you gone, you Kennesaw Mountain Landises and Bart Giamatties? We need leaders like you to bring sports back to a spot where fans aren't concerned about games being rigged by mobsters, the guys who used Chauncey Billups, maybe knowingly, maybe unknowingly, as assets. 

Mullen, 1965. Catching a pass from Bill Enyart

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