Thoughts on the Republican debate transcript

I promised myself not to look at anything that any Republican candidate said or did due to the fact that I don’t think any could win (previous posting). But friends keep asking me what I think about these folks so here are my comments on the transcript from last night.

Trump: I hate to say it, but we have to leave [minimum wage] the way it is. People have to go out, they have to work really hard…”

Telling Americans that they have to work harder to earn a higher wage = political suicide.

Carson: Every time we raise the minimum wage, the number of jobless people increases….

Mostly consistent with The Redistribution Recession but “there is no free lunch” is not a message most voters want to hear. I would write off Trump and Carson based simply on the above.

Rubio: If you raise the minimum wage, you’re going to make people more expensive than a machine. And that means all this automation that’s replacing jobs and people right now is only going to be accelerated.

Not a message that Americans want to hear. We are special. We are creative. People in Asia are not creative. Machines are like Asians (reliable, consistent, good at math, not creative) and therefore can never replace Americans.

Kasich: An economic theory is fine, but you know what? People need help.

… and the Great Father in Washington is going to help them. This guy may have some promise. Now that the government is close to 50 percent of the economy (previous posting) it does make sense that Americans seek help from the government. What other entity is big and rich enough?

Cruz: It’s great to be here in Milwaukee.

It is hard to think of a situation in which a person could say this and not be lying.

Cruz: I have rolled out a bold and simple flat tax: 10 percent for every American that would produce booming growth and 4.9 million new jobs within a decade.

How can it possibly work to have a 10-percent federal tax rate in a country where the federal government is more than 20 percent of the GDP (with state and local governments bringing us up closer to 40 or 50 percent, depending on how you look at Obamacare)?

Bush: A corporate rate of 20 percent, which puts us 5 percent above — below that of China, and allows us full expensing of investing. It would create an explosion of investment back into this country, creating higher-wage jobs, and so that’s part of it.

This would be a disaster for accountants and tax lawyers. The “full expensing of investing” is not something that the average voter can understand (presumably he means toss out our perverse depreciation system, as I suggested in my November 2008 Economic Recovery Plan). This seems like a losing message with voters who are passionate about soaking rich companies and would be much more receptive to a proposal for Third World-style capital controls to stop the corporate exodus.

Fiorina: Well, first of all, I must say as I think about that question, I think about a woman I met the other day. I would guess she was 40 years old. She had several children. And she said to me, you know, Carly, I go to bed every night afraid for my children’s future. And that really struck me. This is America. A mother is going to bed afraid for her children’s future.

It seems safe to assume that Fiorina did not tell the woman “If you wanted financial security, you should have read Real World Divorce and had sex with a married dermatologist for the first kid, then had sex with a drunken Medicaid pediatric dentist for the second, etc. Having established a tax-free, location-independent source of income, you could have moved yourself and your children to a low-debt, high-income, high-growth country anywhere in the world.”

Fiorina: We need to pass the REINS Act so Congress is in charge of regulation, not nameless, faceless bureaucrats accountable to no one.

This led me to Google and I found a relevant article. This seems naive because oftentimes the bureaucrats who make a living enforcing regulations present the most influential testimony on Capitol Hill. See this Washington Post article, for example. Some politicians are considering cutting off taxpayer funds used to try to get child support cash from imprisoned fathers. Who is enthusiastic about chasing after incarcerated African-American guys? Frances Pardus-Abbadessa, head of child support enforcement for New York City. (See this YouTube video at 6 minutes in for how Ms. Pardus-Abbadessa is getting her share of $6 billion.)

Kasich on immigration: in 1986 Ronald Reagan basically said the people who were here, if they were law-abiding, could stay. But, what didn’t happen is we didn’t build the walls effectively and we didn’t control the border. We need to.

Translation: despite spectacular budget increases, the U.S. government has demonstrated continuous incompetence in this area for the past 30 years but somehow it will become competent. I wonder if this guy just checked the wrong box a long time ago and nobody has noticed that he is in fact a Democrat with unlimited faith in Big Government.

Cruz regarding entitlements: for seniors we should make no changes whatsoever, for younger workers we should gradually raise the retirement age, we should have benefits grow more slowly, and we should allow them to keep a portion of their taxes in a personal account that they control, and can pass on to their kids…

Translation: I have no clue what to do and the actuarial disaster won’t be fully apparent until I’m out of the White House.

Cruz on immigration: the politics of it will be very, very different if a bunch of lawyers or bankers were crossing the Rio Grande. Or if a bunch of people with journalism degrees were coming over and driving down the wages in the press. Then, we would see stories about the economic calamity that is befalling our nation.

Beautifully phrased! (albeit irrelevant)

Fiorina: Obamacare has to be repealed because it’s failing… …it’s failing the very people it was intended to help, but, also, it is croney-capitalism at its worst. Who helped write this bill? Drug companies, insurance companies, pharmaceutical companies, every single one of those kinds of companies are bulking up to deal with big government.

Self-contradictory? If Obamacare is crony capitalism then the “people it was intended to help” were executives and shareholders in the health care industry. In that case, Obamacare is not failing but rather it is working beautifully.

Carson: …there are a lot of people who say, if you get rid of the deductions, you ruin the American dream because, you know, home mortgage deduction. But the fact of the matter is, people had homes before 1913 when we introduced the federal income tax, and later after that started deductions.

How is this persuasive? Nobody can remember what things were like before the Great Father in Washington guided everything. Most Americans seem to think that before Social Security and Medicare older Americans would wander off into the snow to die at age 60-65 and that, before publicly funded schools, Americans couldn’t read.

Paul: I’m also in favor of a plan called the penny plan where we’d just cut 1 percent across the board and the budget actually balances in less than five years.

This seems false. Growth in government spending on health care and pensions (including Social Security) will be more than 1 percent annually, won’t it?

Cruz: There are more words in the IRS code than there are in the Bible…

The real question is whether the IRS code or the Bible has a larger effect on American lives!

Cruz: if you’re a single mom, if you’re making $40,000 a year, what [his tax cut] means is an extra about $5,000 in your pocket

Assuming that the “single mom” has median fertility (rounds to two kids), why didn’t she have sex with two different men, each with a reasonably high income? In that case, assuming an appropriately chosen state in which to have sex (e.g., Massachusetts or New York), she would be getting a lot more than $40,000 per year, entirely tax free, without having to work. Her child support revenue would be, in most states, a function of the gross income of her defendants. Thus her profits from child-ownership would not be affected by Cruz’s proposed change in tax rates.

Bush: simplify the tax code, to spur economic activity in this country

The companies bailing out of the U.S. are not put off by the complexity of the tax code. They just don’t like the rates!

Rubio: the most important job anyone in this room will ever have, is the job of being a parent. … And so when we set out to do tax reform, we endeavor to have a pro-family tax code, and we endeavor to do it because we know how difficult it is for families in the 21st century to afford the cost of living. … It is expensive to raise children in the 21st century, and families that are raising children are raising the future taxpayers of the United States, and everything costs more.

Let’s make low-income childless Americans work harder to give money to higher-income Americans with children (previous posting).

Rubio: And so, yes, I have a child tax credit increase, and I’m proud of it. I am proud that I have a pro-family tax code, because the pro- family tax plan I have will strengthen the most important institution in the — in the country, the family.

A person will be able to get hold of these credits by getting Clomid online, going to a bar, meeting a drunken married radiologist, etc. Thus the “family” can be a child support profiteer and one or more cashflow-positive children. That will be “the most important institution” that other taxpayers are tapped to subsidize.

Rubio: I do want to rebuild the American military.

Why does the world’s most expensive military need “rebuilding”? Does that not call into question our competence to manage military spending?

Fiorina: how is it possible that the federal government gets more money each and every year, which the federal government has been doing, receiving more money every year for 50 years under republicans and democrats alike, and yet, never has enough money to do the important things?

Occam’s Razor gives us an uncomfortable answer: Americans are not competent to run a big government. No voter wants to hear that he or she is part of an incompetent nation.

Trump: [the latest trade agreement is] 5,600 pages long, so complex that nobody’s read it.

This is kind of impressive! What is in there?

Paul: You can be strong without being involved in every civil war around the [world]…

A well-turned phrase.

Rubio: I’ve never met Vladimir Putin, but I know enough about him to know he is a gangster. He is basically an organized crime figure that runs a country, controls a $2 trillion economy.

Translation: I am envious of this Russian guy.

Rubio: Do you know why these banks are so big? The government made them big. The government made them big by adding thousands and thousands of pages of regulations. So the big banks, they have an army of lawyers, they have an army of compliance officers. They can deal with all these things. The small banks, like Governor Bush was saying, they can’t deal with all these regulations. They can’t deal with all — they cannot hire the fanciest law firm in Washington or the best lobbying firm to deal with all these regulations. And so the result is, the big banks get bigger, the small banks struggle to lend or even exist, and the result is what you have today.

Since these Republicans don’t have any chance of winning, should we buy stock in the biggest banks on the theory that they will outperform?

Kasich: I’ll tell you about Wall Street: There’s too much greed. … and they need a good ethics lesson on Wall Street on a regular basis to keep them in check

Let’s buy stock in corporate training firms. But what evidence does Kasich have that Wall Streeters are greedier than anyone else? They work with bigger numbers, of course, and are presented with larger temptations, but plenty of politicians have sold themselves for bribes that wouldn’t get the attention of anyone who works on Wall Street.

Fiorina: Government created the problem of a real estate boom. How did we create it? Under Republican and Democrats alike, Fannie Mae and Freddie Mac, everybody gathered together, Republicans and Democrats, and said, “home ownership is part of the American dream.

None of the professional politicians wanted to touch this and none of the journalists were curious to hear more! Good evidence that even Republicans love a bigger government. The idea that the Great Father in Washington has done something wrong is intolerable to contemplate.

Cavuto (journalist) to Donald Trump: Perhaps the most successful capitalist on this stage tonight, you’ve acknowledged that some give capitalism a bad name.

So painful to read that a person who has underperformed a passive investment either in the New York City real estate market or the S&P 500 is celebrated as “a successful capitalist.” Will give thanks on November 26 that I didn’t watch this on TV.

Paul: The planet’s 4.5 billion years old, we’ve been through geologic age after geologic age.

Where is the Creationist to ask him “Were you there?” More seriously, none of these folks talking about climate change addressed the question of how American fretting could be relevant in the long term, given that the U.S. is a shrinking share of the world economy. Why isn’t the focus on technological advances that would enable people all around the world to cut carbon emissions purely to save money? Instead of watching the debate I was down at MIT talking with a friend about Keystone Tower Systems (nearly all MITers but they bailed out of Massachusetts into Colorado). It turns out that the tower is about 30 percent of the cost of a windmill. If you build tower pieces in a factory they have to be small enough to ship, which means that they need to be built from crazy thick steel in order to be strong enough to support a 500′-high windmill (the higher the better for efficiency). This company has designed a machine that can be parked at the wind farm and will built the tower components in place, thus enabling large diameter tower bases made from thinner steel. Wouldn’t it be better to concentrate our energies on stuff like that instead of telling everyone on the planet to act against their personal economic interest?

Readers who watched the debate: What did you think? Are any of these candidates so charismatic that they can fight the headwinds facing any Republican in a country where voters want the government to take care of them?