First Clinton-Trump Debate: Dumb Economic Policy and Even Dumber North Korea Policy

The first presidential debate between Trump and Clinton ended a few hours ago and it was one for the history books for all the wrong reasons. For an hour and a half, hundreds of millions of people around the world got to witness sheer cynicism being masked around as political debate such as moments when Hillary Clinton talked about the importance of cyber security without a hint of irony or self-consciousness and when Trump went on an incoherent spiel about Rosie O’Donnell, Sean Hannity, and Howard Stern.

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The Lincoln-Douglas Debate this was not! Not that anyone ever suspected it would be. Political debates are little more than pomp and pageantry where candidates get to flout their well-rehearsed lines and zingers hoping to spring their gotcha-traps for each other. But even when political candidates for the highest office of the land, and possibly the world, are held to such low expectations, it is amazing how they can still trip over those low bars.

I could honestly think of no other television show in history that was done a greater disservice from an absence of a built-in studio laugh track than that so-called debate.

There are many people who already have and will continue to break down the debates and go through them in excruciating detail until the next debate occurs. I wish them the best of luck. It would be akin to being told to look for gold in the Cheonggyecheon stream.

So instead, I will focus on two small portions of the debate that matter the most to me - economics and North Korea.


Economics

Economics is a complicated field. It has its own set of experts who have studied the topic their entire lives and those experts bitterly argue with one another with as much intensity as you’d find among those who argue about the Israeli-Palestinian conflict. It truly is a specialized field of its own that can also be divided into its own subgroups that are so disparate that an expert in one field could be completely clueless about the issues that deal with another.

But no layperson could ever be convinced of that when they hear politicians spout their bullshit views about economics when they try their best to dumb down the topic into easily consumable soundbites for the TV-watching audience.

Although many can convincingly argue that Clinton may be more knowledgeable about certain subjects than Trump and that Trump may be better versed in other things than Clinton, the first segment of the debate which dealt with economics clearly showed that neither person knew what the hell they were talking about.

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What Clinton said about the economy:

1. I want us (the government) to invest in the people and their future by promoting infrastructure, advanced manufacturing, innovation and technology, clean, renewable energy, and small business, because most of the new jobs will come from small business.
2. I also want to see more companies do profit-sharing. If you help create the profits, you should be able to share in them, not just the executives at the top.
3. We have to make the economy fairer by raising the national minimum wage and also guarantee, finally, equal pay for women's work.
4. We need paid family leave and earned sick days, affordable child care, and debt-free college.
5. We're going to do it by having the wealthy pay their fair share and close the corporate loopholes.
6. We also, though, need to have a tax system that rewards work and not just financial transactions. And the kind of plan that Donald has put forth would be trickle-down economics all over again. I call it trumped-up trickle-down. Trickle-down did not work. It got us into the mess we were in, in 2008 and 2009. Slashing taxes on the wealthy hasn't worked.
7. We had the worst financial crisis, the Great Recession, the worst since the 1930s. That was in large part because of tax policies that slashed taxes on the wealthy, failed to invest in the middle class, took their eyes off of Wall Street, and created a perfect storm.
8. We can deploy a half a billion more solar panels. We can have enough clean energy to power every home. We can build a new modern electric grid. That's a lot of jobs; that's a lot of new economic activity.
9. When I was secretary of state, we actually increased American exports globally 30 percent.

My rebuttals to Clinton:

1. Classic example of Broken Window Fallacy.
2. The President of the United States does not have the authority to force companies to share their profits “more equitably.”
3. Raising the minimum wage hurts the most vulnerable members of society - the marginal worker. It will exacerbate wealth inequality, not alleviate it. Also, when is this gender pay gap myth ever going to die?
4. Ever heard of unintended consequences?
5. Pray tell, what is fair?
6. Here’s an old challenge. Please name any economist outside a mental institute who has ever defended or called for trickle down economics.
7. Please cite evidence that the 2008 financial crisis was a result of low tax rates. Otherwise, please be prepared to be called a bullshit artist.
8. See rebuttal number 1.
9. Does the Secretary of State oversee trade?

Well, that was easy. So much for a smart and experienced Hillary Clinton.
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What Trump said about the economy:

1. American jobs are fleeing the country.
2. China is devaluing its currency, and there’s nobody in our government to fight them.
3. I'll be reducing taxes tremendously, from 35 percent to 15 percent for companies, small and big businesses.
4. We have to renegotiate our trade deals. Other countries are giving incentives, they're doing things that, frankly, we don't do.
5. Impose a tax on American companies that manufacture their goods overseas and then sell them in the US.
6. Bill Clinton approved NAFTA, which is the single worst trade deal ever approved in this country.
7. I built an unbelievable company. But we’re opening the Old Post Office. Under budget, ahead of schedule, saved tremendous money. I’m a year ahead of schedule. And that's what this country should be doing.

My rebuttals to Trump:

1. Trump spoke a few times about the employment situation in Ohio and Michigan. So in other words, he is talking about manufacturing jobs. But the reality is that the American manufacturing sector is still robust.
2. If China is devaluing its currency, then what do people call what the Federal Reserve is doing?
3. That’s actually a pretty nifty idea. Inversions are one of the most visible signs that the U.S. corporate-tax code is broken. One of the reasons Ireland is a popular destination for corporations looking to move their headquarters out of the United States is the fact its corporate tax rate of 12.5 percent - about one-third of America’s rate. Cutting corporate tax rates could potentially help to create hundreds of thousands of new jobs and it could also lead to a significant increase in real wage. The question is how Trump intends to do that. As per usual, he doesn’t offer any concrete plans.
4. (i) This will come as a surprise to the TPP’s 12 signatory countries that agreed they would not renegotiate the trade deals that have already been made. Seeing how the US is the major partner in the TPP, reneging on that promise would destroy the TPP and would destroy the Asia Pivot.
   
   (ii) Trade means increased jobs, but trade also means increased security. Reneging on its trade deals would be comparable to the Ming Dynasty suddenly choosing to become an isolationist hermit kingdom in the mid-15th century, after pursuing oceangoing exploration in the early part of the century. China could have been a superpower hundreds of years before the rise of the West. Is the US willing to become the new Ming China of the 21st century?
   
   (iii) In regards to complaints about “unfair” subsidies foreign governments grant their corporations, once again, Milton Friedman already provided the best rebuttal to that decades ago.
5. Is Trump talking about companies with captive offshore operations (the practice of completing work at a non-domestic location, whether by workers at a company’s own offshore subsidiary - often called a “captive” center - or by a third-party or companies that outsource to third-parties based overseas) or is he talking about companies that outsource (the practice of contracting out of goods or services to a third party)? Does he even know the difference?
   
   This is an important distinction because targeting companies that operate subsidiaries overseas would include, for example, IBM and a good number of non-vendor Fortune 500 companies who maintain a presence abroad, such as GE and Proctor & Gamble, some of which provide their parent companies with IT services.
   
   On the other hand, if it does not affect US companies that “ship jobs overseas” by hiring an offshore company, then the only offshore outsourcing customers this plan could have any bearing on are those who work with US-based IT services companies like IBM, which then deliver those services offshore. If that is the case, it's unlikely the the average American would have much to benefit.
   
   Also, how would increasing taxes on those companies persuade businesses to relocate to the US? Taxes are not the only reason companies outsource. There are also lower wages in overseas markets. The likely outcome of increasing taxes on such businesses could be more offshoring, not less, as those corporations use labor arbitrage to offset the bigger tax bill.
6. NAFTA is NOT the worst trade deal the US has ever had.
7. The idea that it would be better for the government to be run like a finely operated corporation has always been fancied by those on the political right. For good or for ill, however, a government cannot be run like the way a business is run. See here, here, here, here, here, and here.

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North Korea

Very little was said about North Korea. So my response will be short, too. Trump said, “China should go into North Korea. You look at North Korea; we are doing nothing there. China should solve that problem for us. China should go into North Korea. China is totally powerful as it relates to North Korea.”

My rebuttal:

Assuming that the US even has the leverage to “let” China do anything, allowing China to install a pro-Chinese regime in Pyongyang would infuriate not only Seoul, but also Tokyo, Moscow, and Hanoi. It would most likely be the best way for the US to actually become what Chinese nationalists have called it for decades - a paper tiger.

It is obvious except to the most deluded that the only place where Trump is a brilliant strategist or a deep thinker of any type whatsoever is in the deep recesses of his own twisted fantasies where he ought to crawl back into.

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Conclusion

I know that I've said this about politicians many times but I will say it again. A plague o' both their houses!

Welfare vs. Taxes in Korea: Nobody wants to Pay the Piper

It might appear that Korean politicians are not complete fools after all.

When President Park Geun-hye was campaigning to become president, she promised that she would deliver a lot of goodies, and much more, without ever raising taxes.

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A few days ago, however, Representative Kim Moo-sung, the chairman of her own party, said, “It is impossible to finance welfare without tax hikes, and it is inappropriate for politicians to deceive the people.”

Representative Kim was not alone in voicing this sentiment.

So do Koreans want a greater welfare state? The answer seems to be “yes and no.”

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As Steven Denney said in his recent article in the Diplomat, in a poll that was commissioned by JTBC, 46.8 percent of the public favor welfare cuts over a tax increase. 34.5 percent of the public think that a tax increase is needed to pay for welfare; and 18.7 percent didn’t know what to think.

So it might seem that many people do not support expanding the welfare state. However, one always has to remember the old adage about lies and statistics. That is because 52.8 percent of the respondents, a clear majority, supported increasing the corporate tax rate.

What Mr. Denney got absolutely right was when he said “The simple fact of the matter is that South Koreans might not support more welfare, if it means that they have to pay for it.”

(What Mr. Denney got absolutely wrong was that he thinks Korea needs a welfare state.)

Isn't that typical? Everybody wants to go to the party, but nobody wants to pay the piper. Case in point, when salaried workers angrily protested that many of them were likely to pay additional taxes this year instead of receiving a tax rebate, a move that was made by the government in order to help pay for its welfare programs, Finance Minister Choi Kyung-hwan said the government would consider revising tax return regulations.

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It yet again goes to prove that Frédéric Bastiat was absolutely right when he said, “Government is the great fiction through which everybody endeavors to live at the expense of everybody else.”

So who will be made to pay more taxes? The easy answer seems to be to raise the corporate tax.

After all, Finance Minister Choi said that the government may consider raising corporate taxes and that “the government does not regard corporate tax as too sacred of a realm to enter.”

But will raising corporate taxes come at no cost? I will let the maestro speak for himself.

However, as succinct as Milton Friedman was, this video did not even cover other questions. Could it cause domestic corporations to invest less in order to pay less corporate taxes? Or might it cause them to invest elsewhere? Could it lead to more corporations hiding their money in overseas bank accounts? How much more will it cost taxpayers for the government to investigate and try business owners for tax evasion? Could it dampen foreign investments? If so, by how much?

Assuming that we can even find answers and practical solutions to those questions, then we have to ask the second batch of questions. Will welfare benefits remain constant? Will increasing welfare benefits help to lift the poorest Koreans out of poverty so that they will no longer need to rely on welfare? How will aging and low birth rates affect welfare programs, future taxation, and the national debt?

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In regards to the Saenuri Party's leadership's dithering about welfare benefits and taxes, Mr. Denney rhetorically asks “Is this strategic dissonance, or does Saneuri simply not know what it wants?”

It is certainly not the latter. All political parties in the world want the same thing. They either want to attain or retain political power. Ipso facto, the correct answer is the former.

However, this dissonance is not limited to the Saenuri Party. It is an ailment that the entire country is suffering from. To use an analogy, all democratic republics in the world act like a mirror; and are, therefore, a reflection of the body politic. And as I said earlier, everybody wants to go to the party, but nobody wants to pay the piper.

Mr. Denney, (and other like-minded people) was wrong then, and assuming that his position has not changed, he is wrong now. Korea does not need a welfare state. If anything, it is the very last thing it needs.

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The government has a plan to prevent child abuse. Be afraid.

In case there are those of you who have not been paying attention to Korean news, people have been sent into fits of outrage over a spate of child abuse that has been reported around many of the country's daycare centers and nurseries.

In order to appear as though the government were doing something constructive (something that never ceases to instill fear in me), as it was reported in the Korea Herald, the Korean government plans to introduce a state-run qualification examination for daycare workers. Like as though Korea didn't have an excessive number of standardized exams already, the same article reported that the Korean government plans to require a set curriculum and a personality test for those who seek to take the national daycare exam.

And in the long term, the Ministry of Health and Welfare, which is overseeing this whole mess, plans to restrict the exam applications to those who major in child-related studies.

But will this help to end the spate of child abuse in the country's daycare centers? I remain unconvinced. Also, there are many other problems that the government's proposals can lead to.

1) Standardized Exams for Daycare Workers → One-Size-Fits-All Education

A standardized exam that will limit who can and who cannot work at a daycare center will also likely standardize daycare service itself. That is because those who are allowed to work in the daycare industry will eventually all have the same educational background and views. When a one-size-fits-all education model is then imposed on Korean students from the moment they learn to walk and talk, this could potentially further stunt Korean students' critical thinking abilities.

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2) Growing Role of Bureaucrats and Politicians

As the role of the government increases in how daycare centers operate, it will enlarge the role of bureaucrats and politicians. And any time the government gets involved in anything, there is almost always a glut of taxpayers' money. When there is that much “free money” available, it will further cement the destructive symbiotic relationship that already exists between bureaucrats and those people who run daycare centers. Skip to Number 8 on this list for more about this.

3) Standardized Personality Tests are likely to be ineffective

Setting up yet another standardized personality test, which this national day care exam will require, will not be helpful in any way. Does anyone think that this is somehow a novel idea? The Ministry of Defense has required Korean soldiers to take such tests for decades. In fact, while I served in the ROK Army, my battalion forced us to take these kinds of personality tests at least once every two months, which is standard practice throughout the ROK Armed Forces.

Yet those tests have done little to nothing to prevent suicides, desertion, murders, harassment, or hazing in the military. So why does anyone think that personality tests will somehow lead to a different result for the daycare industry?

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4) Surveillance cameras obviously haven't worked

The government also plans to force all child care facilities to install surveillance cameras, and threatened that those without cameras will be barred from operations in the future. However, I do not understand what this law will accomplish. After all, those people who have recently been arrested for abusing children were CAUGHT ON CAMERA!

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5) And who is going to pay for this?

The government plans to raise the number of assistant teachers at facilities to reduce the workload of daycare workers while improving the quality of daycare services. To be specific, the government plans to provide 6,500 assistant teachers nationwide and “all costs will be borne by the state.” Of course, when they say “the state,” what they really mean is “taxpayers.”

The government plans to earmark around ₩200 billion to ₩300 billion for the move. Of course, experience says that whenever governments say something will cost so much, it's a safe bet to assume that it will cost much more than that amount. Which is just perfect! Yet another reason for the government to whine about its tax deficit (here's an idea – how about just reducing spending?) and to impose yet more taxes on people! Like as though that hasn't been yet another mess!

6) Show me the data!

The government also plans to open an additional 450 public daycare centers nationwide by 2017. Aside from the need to impose further taxes on people and the other related problems that that could lead to, have people forgotten that Korea has one of the lowest birth rates in the world? Will opening so many daycare centers be profitable in the long run? Will the demand for daycare centers be consistent? If so, how long will it remain consistent? If it will remain profitable, how long will it be before the losses start? Will the losses be politically viable? Will it be economically sustainable?

Where is the cost-benefit analysis? All I see is a whole lot of nothing.

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7) Treating the Symptoms vs. Treating the Disease

This proposed law does not even seem to pretend to look to solve the cause of the problem. And what is the cause? The main cause for so many of the problems that exist within the daycare industry is that there isn't a single daycare center throughout Korea that is allowed to run as a for-profit business. In fact, every single daycare center, whether they are public daycare centers or privately-run daycare centers, is forced to operate as a non-profit because, as far as the Ministry of Health and Welfare is concerned, “the very idea of trying to make money while taking care of children is an anachronism in modern society.”

Yes, they actually said that. So if there is anyone who is reading this who happens to teach young children or happens to be a nanny, the Korean government's message to you seems to be to go screw yourselves. How dare you think that investing your time, energy, and soul into taking care of the children of others could mean that you deserve to make money, you greedy boor?

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In effect, the government has prohibited economic competition among the 45,000 or so daycare centers around the whole country. Some people might think that this is a good thing because parents are financially struggling and that, therefore, parents need all the help that they can get. However, what those people also seem to be forgetting is the maxim “you get what you pay for.”

As daycare centers are not allowed to run as for-profit institutions, they have no choice but to obey government diktats when it comes to pricing, services provided, etc. Therefore, as many of these daycare centers do not have the funds that they need to provide competitive services, many of them cannot afford to provide high quality amenities or teachers or service workers.

In an attempt to make everything equal, the government has made the entire industry, which happens to be the one of the industries that parents trust to take care of their young children, to become equally mediocre cesspools.

8) How to get Rich in the Daycare Industry

But does that mean that people who run daycare centers do not make money? Many do struggle to survive. However, there are those who do make money. Typically, I see nothing wrong with making money. However, in the case of some of these daycare centers, everyone ought to have a problem with the way they make money.

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As mentioned earlier, every single daycare center in Korea is forced to run as a non-profit. Therefore, they are one of the most regulated industries in the country. However, where there is regulation, there is always room for corruption.

Case in point, according to this article in the Sunday Newspaper, one of the easiest ways for a daycare center director to make a lot of money is by pilfering the children's lunch money. Firstly, as the government promised to provide “free” lunch meals to students, the government has to spend a total of ₩1,745 per child per meal per day.

The following are translations from that article about what some of the more unscrupulous daycare center directors do to make money:

• Some daycare center directors make deals with the businesses that provide the meals that the children eat. To explain, the directors and the the food companies agree to create a separate bank account into which the government will allocate the promised lunch money. For example, if a daycare center has 100 students, the government will allocate ₩174,500 per day into that account. Assuming that the children attend the daycare center for twenty days out of a month, the government will allocate a total of ₩3,490,000 into the account.

The deal that the director and the food company will make is that the latter will provide only up to (for argument's sake) only ₩3,000,000 worth of food. The the two parties will split the remaining ₩490,000 among themselves.

• Some daycare center directors also charge what they call “special expenses,” which are expenses that do not include English, art, or music lessons. These expenses can cost anywhere between ₩100,000 to ₩200,000 per child per month. It was reported that much of this money ends up becoming part of the directors' personal slush funds.

• Some daycare centers also employ what are known as “ghost teachers.” After submitting fabricated documentation, instead of hiring actual teachers and daycare workers, some directors employ part-time workers. Some of them even employ their own family members. That is because the government provides subsidies for each teacher that a daycare center employs.

• Some daycare centers also enroll what are known as “ghost children.” Currently, the government subsidizes daycare centers that have enrolled children. The government provides up to ₩394,000 per child who is less than a year old, ₩347,000 per child who is a year old, ₩286,000 per child who is two years old, and ₩220,000 per child who is between three to five years old.

Therefore, even though some daycare centers may be filled up and can no longer accept any more children, some daycare center directors still register even more children as having enrolled in their school. That way, the daycare center director will pocket that subsidy money, which he/she might split with the “ghost child's” parents.

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Conclusion

As I said earlier, where there is regulation, there is always room for corruption. Also, where there is regulation, there is always the possibility of mediocrity. In the case of the government's regulation of the country's daycare centers, there seems to be more than a lot of each to go around.

If the government truly wishes to improve the state of the country's daycare centers, the best thing that it can do is to lift all of its ridiculous regulations and allow them to compete like businesses ought to compete.

This state-run qualification examination for daycare workers will do nothing to solve the pre-existing problems of the industry, and will likely only make things even worse than they already are.

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“Voting Against Their Own Interest” - You should probably stop saying this.

The majority of people in the world, except perhaps the mentally ill, seldom ever claim to be Marxists anymore. Whenever progressives are accused of being Marxists or socialists, they mock their simple-minded opponents and go on their merry way.

However, we have to keep in mind the famous quote about the greatest trick the Devil ever having played was how he convinced the world that he didn't exist.

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The great irony of present-day Marxists is that the majority of people who are either consciously or subconsciously influenced by Marxism have never read any of Marx's works. Then there are those who have read his works and who have failed to understand Marx.

(Joseph A. Schumpeter listed in his book, “History of Economic Analysis” (Page 362, “Concerning the Marxist System”) quite a formidable and hefty set of prerequisites that people have to read in order to properly understand Marx. This probably explains why so many people are reluctant and/or unable to fully understand Marxism.)

Regardless of whether people have read or not read or understood or not understood Marx, many people have uncritically accepted many of his views as gospel truth. And I am willing to bet that most of those people don't even know that they are channeling Marx.

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For example, one thing that I have heard many progressives complain about often is that, especially after having been “influenced” by the “corporate media,” far too many middle to low income earners “vote against their own interest.” For proof simply do a Google search for “vote against their own interest.”

However, we have to ask what people mean by “interest” when they pose their question. In every single instance, when that question is asked, what they almost always mean by “interest” is the interests of the group that the individuals supposedly belong to.

For example, people often ask why ethnic minorities or women vote for conservative parties, or why the low-to-middle income earners vote for tax breaks for the “super rich.” Notice how no one ever asks why a particular woman or member of an ethnic minority group might vote for a conservative politician or why individuals would vote for tax breaks that they themselves might not benefit from immediately. It's always about the group.

This goes back to Marx's belief, which he stated in the Communist Manifesto, that “the history of all hitherto existing human society is the history of class struggles.” As far as Marx was concerned, “interests” are something definite and apart from a person's ideas.

It was a belief that Marx himself contradicted in the same damned book. As Marx was not a member of the proletariat, he conveniently added that “in times when the class struggle nears the decisive hour... a small section of the ruling class cuts itself adrift, and joins the revolutionary class.”

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If it is possible for some people to extricate themselves from the trappings of their own class and its supposedly inherent interests, then the law is really not a law! Too many Progressives, however, don't seem to be able to see the contradiction to question their own beliefs when they talk about people “voting against their own interests.” They believe that the “interest” of a class is obvious and that there could be no doubt about what it is.

I suppose it is much easier to assume that people who do not agree with them are brainwashed class traitors than individuals who genuinely have their own independent minds that happen to be opposed to theirs.

Furthermore, this idea about class interest is an idea that is all too similar to that of racists. Racists tend to believe that members of a race all look and think alike. That they should all behave in a particular way. That there are certain things that all members of a certain racial group should inherently like and dislike. Replace the word “race” with “class” and you get the same argument!

It all comes down to collectivism. Modern-day Marxists (whether they know that they are channeling Marx or not) do not believe in individualism. They may say that they do, but their inner most philosophy seems to say otherwise.

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Edit:

The quote about the Devil may be attributed to Charles Baudelaire but in all fairness, Kevin Spacey did make it sound much better.

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