Obama’s Regulatory Rush to the Finish Line

Key Takeaways

When I played football in high school, as the game neared its end–no matter if we were winning or losing–my coach always said, “Finish strong.” He didn’t want his players to leave anything on the field. He insisted we play with the same intensity in the fourth quarter as we did in the first.

As he ends his term, President Barack Obama is coaching the agencies under his watch with the same sense of urgency. And like my old football coach, he’s getting the same response, Politico reports:

Regulations on commodities speculation, air pollution from the oil industry, doctors’ Medicare drug payments and high-skilled immigrant workers are among the rules moving through the pipeline as Obama’s administration grasps at one last chance to cement his legacy.

[ … ]

As many as 98 final regulations under review at the White House as of Nov. 15 could be implemented before Trump takes office. Seventeen regulations awaiting final approval are considered “economically significant,” with an estimated economic impact of at least $100 million a year.

One agency who is taking this direction to heart is EPA. After the election, Administrator Gina McCarthy used an athletic analogy of her own in a pep talk email to her staff:

As I’ve mentioned to you before, we’re running — not walking — through the finish line of President Obama’s presidency. Thank you for taking that run with me. I’m looking forward to all the progress that still lies ahead.

By “progress” she means more regulatory red tape.

The regulatory rush is at full speed. The Interior Department finalized a rule to reduce methane emissions during oil and natural gas production on federal lands, even though methane emissions in the energy sector have fallen as natural gas production has risen. Energy groups immediately filed suit to stop it.

tweet-chamber

The Interior Department also released an offshore energy development plan that blocked portions of the Arctic from exploration.

Financial regulators are also doing their best to write as many rules before the next administration takes office, Reuters reports:

Some rules are meant to flesh out the Dodd Frank Act of 2010 designed to prevent the next global financial crisis. Trump campaigned on a pledge to scrap the law but now he says only some provisions must go to lighten the regulatory burden.

The Federal Reserve is working on rules to govern matters such as executive pay, market stability and what investments Wall Street may hold.

Last month, Securities and Exchange Commission Chair Mary Jo White said her agency would “in the near term” finish a rule on one thorny issue: how mutual funds manage derivatives.

The SEC and bank regulators have also for years struggled to finalize a rule that would tie more banker pay to the long-term health of their firms rather than short-term performance of Wall Street firms.

It’s all hands on deck throughout the regulatory apparatus, Reuters adds, “Some sixteen copy editors [at the Federal Register] are due to forego leave and be on hand in the coming weeks to process final rules expected from dozens of agencies, said an official familiar with the operation, but not authorized to speak to the media.”

To put the Obama administration’s regulatory barrage into some context, according to the American Action Forum, through the final November of his administration “President George W. Bush had issued 462 major rules. By contrast, President Obama has issued 636, or 37 percent more than his predecessor.”

 chamber-regs-chart

Congress does have some say in this rules rush. The Congressional Review Act gives Congress and the president an opportunity to block regulations up to 60 days after they were written. However, the law can only be used on one regulation at a time.

To give Congress more flexibility, a few weeks back, the House passed the Midnight Rules Relief Act, supported by the U.S. Chamber. This bill would package multiple regulations together under the CRA. According to the Chamber’s letter to House members, this would reduce “the risk that a poorly-written rule escapes CRA review because there is not enough time for separate debate and votes on each rule.”

One thing is for sure, the “strong finish” by President Obama’s regulators could keep the next Congress and administration very busy.

More Articles On Regulatory Reform

4 Reasons Trump Drives Lifetime High In Stock Market

After posting 9 straight lows in a row, and the market bottoming on election night, concerns have faded away in the rear view mirror as Trump drove the stock market to hit lifetime highs on November 21st. Three main things are happening that few people are talking about in what is affectionately being called “Trump Effect” by many experts. Either way, most people out there are on pace to beat their average 401k returns this year.

But what are these magical forces?

Let’s break them down one-by-one.

1. The Possibility Of A Stimulus To Help Lift Manufacturing

In the weeks leading up to the election, people were confused and concerned. Investors had no idea what to think. Now, however, with Trump at the helm and a the Republican lead house and Senate as his right and left hand men, the general consensus is that things are looking up for American manufacturing. The business community as a whole is feeling good about the possibility of a stimulus package focused on manufacturing to help struggling companies like Caterpillar and US Steel.

Such a stimulus would not only help those companies but benefit the many other industries closely tied to manufacturing. Investors are seeing this as an opportunity to buy before the stimulus is announced and enacted.

2. Infrastructure Funding Possible Boost For Economy

How many times did Trump say the airports in the US are like a third world country during the campaign? That’s rhetorical; obviously nobody can count that high. Regardless, that’s definitely something he focused on and is passionate about. He can’t land the Trump Force 1 in any old run-down airport.

Airports, bridges, buildings, highways, and a whole host of other items are on his fixer-upper list. This will require money, but more importantly it will require businesses in the private sector to get involved. That is good for the economy, which in turn is good for business again.

The point?

The economy is going to improve with someone at the top who is a successful business owner if not for any other reason than he sees the world through business-colored glasses. Business, and investors, like that. It’s not rocket science.

3. Deregulation, Including Obamacare, Has Businesses Optimistic

Perhaps Trump’s second favorite topic on the stump was repealing and replacing Obamacare. Whether or not that will be as easy as he initially thought it would be, it is certainly the direction he is headed. Whether it’s repealed, modified, added to, or modified in any other way, a safe bet is that it will be more business friendly. That compared with some of the talk of financial reform and going after the EPA and IRS has Corporate America excited about the options.

After all, American’s don’t necessarily like uncertainty. Election nights are always volatile events where nobody knows what is going on but, usually, calmer heads prevail. Usually.

After the 2012 election of President Obama, however, the stock market went into a tailspin. Here’s a fun fact from MarketWatch.com.

Dow Jones’s data team says the average change on the day after Election Day is negative 0.9%, with the top 5 declines arriving in the wake victories by Democratic presidents.

4. The Trade War With China And Mexico

A fourth, perhaps less important, reason for this increase in prosperity is the promise of an end to countries like China and Mexico taking advantage of the US. This would greatly increase the value of American-made products like an old fashioned Winchester safe or a set of craftsman tools.

I think we’ll find, going forward, that Trump will be very good for the people holding a lot of stock.

The Real Reason We Have Ethanol in Our Gas by William O’Keefe

To get enough votes to pass the 1990 Clean Air Act Amendments, Democrats led by Henry Waxman made a deal with the corn lobby.  In exchange for its support, Congressman Waxman committed to an oxygenate provision—essentially a mandate to blend corn derived ethanol into gasoline.

As a way of disguising this requirement, Congress wrote the oxygenate provision in a way that made it part of a formula for gasoline—government gas.  Section 211 (k) of the Clean Air Act spells out in detail specific component levels for gasoline.  Just think, lawmakers acting like chemists, telling refiners how to make gasoline.

Prior to the passage of the 1990 Amendments, it was clear that initiatives to improve air quality would mean that tailpipe emissions would become more stringent.  In anticipation, the oil and auto industries undertook the most extensive fuel-engine research program ever conducted.  The objective was to determine the most cost-effective ways to meet lower emission standards and to provide research based data that could be used by government.

Since the mandate went into effect, almost 26 years ago, its cost has been about $200 billion or more.

The two industries briefed Congress on the research and made one primary request:  set emission standards to achieve Clean Air Act objectives but give the two industries the freedom to determine how best to achieve them.  That request was rejected because of a deal with the corn lobby.

Ever since then, motorists have been stuck with higher fuel costs and lower mileage, and consumers have been stuck with higher food prices. Corn production has continued to increase and Congress expanded the mandate to include specific volumes.  The cost of the ethanol mandate has been documented extensively as has the lack of real environmental benefits. In 2015, the Manhattan Institute published a report—The Hidden Corn Ethanol Tax—that concluded that in 2013 the mandate cost consumers $10.6 billion. Since the mandate went into effect, almost 26 years ago, its cost has been about $200 billion or more.

President-elect Trump has pledged to “drain the swamp.”  The ethanol mandate is a good place to start because it may be the most visible and lasting example of how crony capitalists create Baptist and Bootlegger schemes to enrich themselves with taxpayer dollars.

Ethanol manufacturers have perfected championing the environment with corn farmer support for both to get richer.  Bringing the ethanol mandate to an end would send a clear signal that campaign promises to take on crony capitalists was more than just rhetoric.  Changing the Washington culture has to break the link between special interests, lobbyists, lawyers, the alliance between Bootleggers and Baptists.

Republished from Economics 21.

The Patent Bubble Is Getting Ready to Pop

Irrational Exuberance and Patents?

I’m certainly not going to win any popularity contests for writing this article.  The last thing anybody wants to talk about after a presidential election is a patent bubble.  After all, most of us took a nice stock market beat down during the recent housing bubble and mortgage crisis.

world patent marketing patent bubbleFor the past 40 years, intellectual property,  technology development, and invention ideas have been the driving force behind the United States and much of the world’s developed economy. Companies like Apple, Amazon and Amgen have been the leaders in wealth creation. Biotech, software, and communications systems have made fortunes for many and changed the world we live in.

It has resulted in a mad rush to capitalize on the “next big thing.” And that is creating a global patent bubble.  The chase of Intellectual Property (IP) has created the next “irrational exuberance.”  If the term rings a bell, it’s because it was the phrase that Federal Reserve Chairman Alan Greenspan used when warning about stocks being overvalued during the DotCom Bubble of the 1990s.

Since Microsoft burst onto the scene, IP has been seen as the next gold rush. Companies, venture capitalists, private equity shops, and universities worldwide are searching for new patents and copyrights that will create killer returns.

Patent Bubble Numbers Don’t Lie

patent bubble

The prices being paid for patents are all over the place. In 1975, more than 80% of an S&P 500 company’s net worth was based on tangible assets (real estate, machinery, receivables, etc.). By 2010, that number has completely flipped to 80% of the net worth being based on intangible assets (patents, goodwill ,etc.).

The numbers are clear. Intellectual property  now accounts for over 38% of the U.S. economy, but interestingly only 12% of exports. If that’s not the start of a patent bubble forming, I don’t know what is.

It seems that the race to patent a product has overshadowed the product itself. I am not discounting the importance of patents, however, when almost 40% of the economy is about protecting the right to make a product (rather than the product itself), there is something wrong.

95% of Patents Don’t Make a Dime

Accelerating patent valuation is the sign of a patent bubble.The common perception is that patents are a path to riches. If an inventor or entrepreneur files a patent, he can then build a successful technology company under the protection of that patent and eventually sell out to companies like Apple and Facebook.

Nothing can be further from the truth. A patent does not create a shield or grant you freedom to operate without competition. It gives you a tool to attack a competitor that you believe is infringing on your patent. Enforcing your patent is typically a nightmare, even for well funded corporations.  It can take up to 5 years and cost up to $5 million to actually win a patent litigation.  And that’s if there isn’t an appeal. And you better pray that the company infringing on your patent isn’t too comfortable in a courtroom.  They can make your life a living hell and make you wish you never filed for a patent in the first place.

Ever Heard Of The Tulip Bubble?

tulip bubble patent bubble

The Tulip Bubble is regarded as the first record of a widespread financial bubble in history. In the early 1600s, Tulips were newly introduced in the Dutch Republic and investors scrambled to get on board. At the peak of the bubble a single tulip bulb could sell for ten times the annual income of a skilled craftsman. Tulips were the fourth largest Dutch export! This was at a time when food and clothing absorbed almost the entire bulk of national income. In this environment where most people had barely enough to eat, it was simply bizarre that a useless luxury item absorbed such a huge chunk of Dutch wealth. Then in 1637 the bubble burst and the price of tulips fell to 1% of their former value. The Dutch economy crashed and the consequences were felt throughout Europe.

The bursting of the Tulip Bubble didn’t just affect those who owned and traded tulips. It caused a deep recession and a liquidity crisis in the Dutch Republics. The tulip bulbs were leveraged by finance, just as we leverage homes and commodities in the United States today. When a widespread bubble bursts, it up-ends the balance sheets of the entire nation.

The price of tulips never recovered, as you can see for yourself at any WalMart in Spring. You can buy them by the dozen for under five bucks.

The Crash of 1929 and the Mortgage Crisis Were Bubbles

The great Stock Market Crash of 1929 was brought on by similar forces. Investors were makingpatent bubble housing bubblehuge returns all through the 1920s. The stock market was the place to be if you wanted to get rich quick. People borrowed heavily to purchase shares. And then it all came crashing down.

The Mortgage Bubble, which burst in 2008 showed us the same pattern again. Following 1999, when the Tech Bubble burst, the safe place to put your money was into homes. Prices were bid to unsustainable levels. All of it was commodified for investment purposes. When it crashed, almost every major bank in the U.S. and Europe found themselves in negative territory. On paper they were bankrupt. They owned a bunch of mortgages tied to homes with inflated values. The government had to step in with cash to keep the banks afloat.

The bursting of the Mortgage Bubble led to the deepest economic downturn since 1929 and its aftermath is still felt throughout the U.S. economy.

The Patent Bubble Will Hurt the Entire Economy

patent bubble can hurt us allIt is my opinion that when the Patent Bubble bursts, it could be far worse than the housing bubble.

Today, a company’s most valuable asset is  its intellectual property. Their wealth is in their patents. These patents are held on their balance sheets as intangible and undisclosed assets. They attract investment, issue bonds, and obtain credit based upon those numbers.

These patent bubble assets are not liquid and they do not trade easily. It isn’t like selling a publicly traded security. Patent assets do not trade frequently and don’t have any valuation consistency.  If a company fails, it is forced to liquidate these patent assets at fractions of their assumed value.  When Kodak filed for bankruptcy, experts were predicting patent portfolio sales of $1.8 billion to $4.5 billion.  They sold between $94 million to $525 million.  Quite a difference. There was nothing unique about the way Kodak was valuing its patents. They were just following accepted accounting principles. Imagine Kodak happening over and over again. It would create an international liquidity and balance sheet crisis.

Don’t Confuse Inflated Prices with Economic Growth

Higher patent valuation is not necessarily good.Too much money chasing the same sector results in price inflation. Those inflated prices are always unsustainable. When this patent bubble bursts, it will hurt the entire economy.

This is the opposite of productive investment, which has given us tremendous growth and a high standard of living. Investment in goods and services for reasonable returns is vital to economic growth. Investment in paper monopolies, patents and copyright, can be good for the economy. But when it gets out of balance, as it is now, it can lead to very bad economic outcomes for the global economy.

Why isn’t anybody sounding the patent bubble alarm?

When bubbles are on the rise, a tremendous amount of wealth is created. Even a pure Ponzi scheme created plenty of profit for the early investors. During the Housing Bubble, many on Wall Street and in government knew that housing prices were unsustainable.  Even Federal Reserve made comments suggesting that the economy was now “different” and there would be a soft landing.

SUBMIT YOUR IDEA TODAY

Well the economy wasn’t different. Ponzi Schemes and bubbles always end the same way. Traders like Nassim Taleb, who wrote the influential book “The Black Swan”, and made a killing by investing against the home mortgage industry, were laughed out of the room. They were called alarmists or even branded as negative and destructive. But of course, Ponzi Schemes always fail. Everybody wants to believe it is different this time. But, it never is.

There is one thing for sure. We are in a Patent Bubble right now and history always repeats itself.

EDITORS NOTE: Learn more about World Patent Marketing.

Judge Blocks Oppressive Overtime Regulation by Jeffrey A. Tucker

Only days before the enforcement was to begin, Texas federal judge Amos L. Mazzant III has blocked the imposition of the Obama administration’s egregious overtime regulations that have already had a terrible effect on American businesses and workers.

The judge said, essentially, that the Department of Labor did not have the authority to issue these regulations. It had no mandate from Congress to do what it did. It was the worst form of regulatory overreach by administrative edict – an archetype of the arrogant, technocratic, top-down rule by the deep state that has been so harmful for jobs, wealth creation, and economic growth.

The Harm Is Done

This injunction is cause for great celebration, but let’s not forget the harm that the threat alone created over the last several months. Under the new regulations, which were to be enforced beginning on December 1, the salary limit below which workers and businesses fell under government mandates was raised from $23,660 to $47,476.

It’s just a change in one number, but it profoundly affected millions of lives. Most large businesses have already retooled, reshuffled, and renegotiated the employment terms of  millions of people, with nothing but bad results.

Ambitious workers who work more than 40 hours per week were told they can no longer do so without putting companies in legal jeopardy. This cuts off their career plans and harms productivity.

Workers on salary were downgraded to working on a per hour basis to avoid added costs of employment. This is a terribly demoralizing thing to happen to anyone mid-career. It causes personal bitterness and a profound sense of loss.

Many people already received the raise to $48K, which sounds like a wonderful thing, but it is a two-edged sword. The raise comes with new duties and demands, and added stress, essentially undoing what the Department of Labor claimed to be doing. Moreover, think about it: who wants their salary raise to be imposed by administrative edict as versus being earned by virtue of professional success?

And let us never forget the people who were not hired as a result of this rule. Forced raises drained resources needed to hire new people at starting wages. Many companies who might have done year-end hiring had to change their plans to fund forced raises for others.

And then there are also millions of people who once earned salary and had a side gig that paid wages. But the downgrading of people from salary to wages means forgoing the moonlighting in order to work longer hours to feed the beast of the main job.

Regulatory Chaos

And this small list cannot possibly capture all the chaos that this seemingly small regulatory change brought about. From the perspective of a bureaucrat in Washington, this might have seemed like a small thing: let’s give millions of people a raise or more free time just by imposing a new rule!

The naivete (or just arrogant overreach) is truly breathtaking. This kind of rule profoundly destabilizes a highly sensitive area of life itself: the relationship between workers and managers. That anyone could have believed that this rule could be passed without causing massive confusion and harm illustrates a core problem with public policy today.

What now? Large companies have already prepared for the change in the law that apparently is not going to happen now. The Chamber of Commerce has said that it considers the rule dead.

But read this intriguing paragraph from the New York Times coverage. Here is where you discover the complexities of the politics of regulation. Given that big companies have already responded with raises:

It is rare for employers to reverse such pay increases, making large employers potentially sympathetic to an overtime compromise that would effectively extend the salary increase to some of their smaller rivals.

Did you catch that? Large companies might actually push for an imposition of a new rule to use as a bludgeon against smaller companies. In other words, the initial victims of the rule might become the victimizer.

A Problem of Knowledge

This speaks to a more fundamental problem, which is the existence of a regime that imagines itself capable of managing the relationship between workers and companies at all. It’s not that this new rule went too far; it’s that the Department of Labor has such power to begin with. Not only the new rule needs to be stopped; the old rule was also terrible.

I recall all too well one of my first jobs when I wanted to work more than 40 hours at the prevailing minimum wage. I had the time and I wanted the money. The boss said no. I couldn’t believe it and I couldn’t understand it. He said that he would have to pay time and a half. I said, this is not necessary. He said he had no choice. Already, I experienced what it means to have your personal ambitions cut off by a regulatory knife.

Government does not possess the knowledge, much less the wisdom, to exercise this kind of power. The knowledge necessary to manage the salaries, wages, and employment terms of millions of American workers and businesses is not accessible to public employees ensconced in a marble palace in DC. Such knowledge is localized, dispersed, and best managed by people with skin in the game.

All these regulations need to go.

Here is more on Overtime Rules.

Jeffrey Tucker

Jeffrey Tucker

Jeffrey Tucker is Director of Content for the Foundation for Economic Education and CLO of the startup Liberty.me. Author of five books, and many thousands of articles, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook. Email.

You can download his books in epub format for free here:

Government Transportation is Literally a Train Wreck by Jairaj Devadiga

In March of 2015, Germanwings Flight 9525 crashed into a mountain, killing all 150 people on board. On November 20 of this year, the Indore-Patna Express derailed after a suspected rail fracture, killing at least 149 people. Both events were tragic and probably preventable, but the responses to these tragedies couldn’t be more different.

Germanwings Flight 9525

This was the first and only fatal accident in the 18 years of the airline’s operations. The co-pilot locked himself in the cockpit and deliberately flew the plane into the mountain because he was depressed and wanted to commit suicide. His doctor had deemed him “unfit to fly’, but he had hidden this information from the airline.

Lufthansa, which owns Germanwings, offered an initial sum of 50000 Euros (₹36.25 lakh) to the families of the victims to help cover immediate costs. For families of German victims, the amount was 95000 Euros (₹68.89 lakh). This was separate from the compensation, which amounted to $206 million in total, or ₹1.4 crore per family. Many families are not satisfied with this compensation offer, and have filed lawsuits, so Lufthansa may actually end up paying substantially more.

In the aftermath of this incident, Lufthansa and other airlines introduced more stringent background checks. They put in place several safety measures, such as requiring two crew members in the cockpit at all times. They did their best to make sure that such a tragedy is never repeated.

This phenomenon isn’t unique to Germanwings and Lufthansa. Indonesia AirAsia Flight 8501 crashed in 2014 due to a malfunction, which the pilot was unable to handle. As with Germanwings, this was the only fatal accident in the airline’s history. The airline similarly offered an initial compensation of ₹16.42 lakh for immediate expenses, on top of the ₹68 lakh it offered to each of the victims families. As with Lufthansa, they might end up paying more once all the lawsuits are settled.

Following the accident, the airline implemented improved training programmes for its pilots so they can respond more effectively in the future and avoid such a tragedy.

The Indore-Patna Express Derailing

Unfortunately, the derailing of one of India’s publicly owned railways was not the first time this had happened. Thousands die every year in rail accidents, and far more are seriously injured. In 2014 alone, more than 25000 people were killed in rail accidents.

In response to the accident, politicians offered cliched statements of condolences to the bereaved families. Railway minister Suresh Prabhu promised that the guilty would receive the “strictest possible punishment”. Narendra Modi announced a compensation of a measly ₹2.5 lakh to the families of the deceased.

This has been sequence of events following train accidents for many years, regardless of who was in charge of the government at the time. Few, if any, proper measures have been taken to improve the safety of rail travel.

Accountability in the Marketplace

Why is it, that airlines take steps to make flying safer and provide more generous compensation to those affected while railway officials seem so callously indifferent to the safety of their passengers?

The airline companies and aircraft manufacturers have to pay millions of dollars in compensation to the victims families. When company profits take a hit, the CEO does not get a bonus that year. Those who were responsible for the accident lose their jobs. The shareholders receive smaller dividends, if any dividends at all, that year.

The airlines voluntarily offer compensation over and above the legal requirements to encourage customers to continue to fly with them. They improve pilot training and aircraft design for the same reason.

Markets are savage and unforgiving masters to those who disregard the consumer’s interests. They hold people accountable and provide incentives to make products and services more reliable. That is why flying is so safe and is becoming safer every year.

Government-run railways, on the other hand, have had an abysmal safety record over the years. Why? Because the bureaucrats responsible did not lose their jobs. They continue to receive their pay even if they don’t perform. They will still receive promotions based on seniority regardless of how well they performed their duties.

What about the politicians? When Modi and Suresh Prabhu announce compensation to victims and their families, they are not paying out of their own pockets. Taxpayers, are on the hook for that money. Every time a bureaucrat or politician commits a monumental and expensive blunder, we pay for their mistakes.

The railways won’t go bankrupt, because like every government venture, they will be propped up with taxpayer money. The manufacturers of the trains and tracks will not go bankrupt. They get contracts from the government, based not on quality, but on political connections.

Government employees operate under the same lack of incentives to improve that their political bosses do, so those working in the Indian railway system have little reason to ensure passenger safety.

The solution is obvious. The railways must be privatized, not only to ensure better quality of service but more importantly, to save countless precious human lives.

Jairaj Devadiga

Jairaj Devadiga is an economist who looks at the less obvious, but devastating, effects of government policies. When he is not bashing governments and advocating free markets, he enjoys reading about medicine, computers, astronomy, and law among other things.

Trump has power to stop refugee flow, will he slow the flow of our tax dollars to UN?

All over the country, as we have been reporting, refugee advocates are having pow-wows and crying sessions about what Donald Trump might do about refugees on January 21st.

Many of those advocates have gotten comfortable, and felt safe in their jobs, through several Presidents including Bush, Clinton, Bush and Obama, but all that is expected to change.

This is a story from New Hampshire Public Radio (Clinton country) where experts try to predict what is coming.

ruxandra-paul

Asst. Professor Ruxandra Paul (Amherst)

The first quotes are from Chris George from the New Haven, CT resettlement agency. We told you about him here last week.  He is hoping we still take in Obama’s last wish—110,000 this fiscal year.

Asst. Professor Ruxandra Paul (Amherst): Trump on solid ground to cut flow of refugees, but she worries that other countries will follow suit. However, one thing never mentioned is that we are far and away the world leader in PERMANENTLY resettling refugees, most countries, including most European countries, do not admit permanent refugees.

Then we hear from a law professor who argues that we have given Presidents too much power.  As far as the Refugee Act of 1980 goes, the crafters of the law (all Dems) gave the President power. Congress was expected to “consult” and weigh in, but that body has until very recently ignored its role.

(Only Senator Sessions held a required hearing on Obama’s plan, the House has been silent under Rep. Trey Gowdy’s chairmanship of the immigration subcommittee.)

New Hampshire Public Radio:

“A president can exercise the highest level of authority, when it comes to border control or foreign policy,” says Sudha Setty from Western New England University Law. “So in terms of setting that refugee ceiling for future fiscal years, future President Trump does have the authority to set that ceiling very low.

Setty said Trump’s freedom to exercise sweeping decisions, like banning Muslims from entering the U.S. continues a disturbing trend of the last two administrations.

“The lesson of the last 15 years has been that we have given the president a tremendous amount of power.And we have not put into place a lot of accountability measures when it comes to anything that is deemed to be national security or terrorism or national security related, and that’s not changing any time soon.”

Next up is another assistant professor with a little nugget that is useful.  The UN High Commissioner for Refugees gets $1.5 BILLION a year from us (and not mentioned here is the fact that the UN is choosing most of our refugees).

Amherst College Political Scientist Ruxandra Paul is watching both sides of the Atlantic right now. She says if U.S. leadership changes direction on its decades long commitment to refugee resettlement, more global uncertainty is sure to come.

“Donald Trump has been suggesting that the US has contributed too much and that allies from western Europe are not covering their share of the burden.”

Last year the U.S. gave the UN Refugee Agency (UNHCR) more than $1.5 billion. The European Union next in line, followed by several European countries, gave in the hundreds of millions. [We gave a half a billion here just in July—ed]

From a legal perspective President Donald Trump will be on solid ground if he chooses to lower the refugee ceiling. If he does, Paul says, it’s possible other countries will do likewise.

Nikki Haley?

haley-graham1

Nikki Haley (right) with Senator Lindsey Graham

In light of that bit of information, that the UNHCR gets $1.5 billion a year from us, is Nikki Haley going to be tough enough and would she be able to deal with the refugee issue which The News & Observer, a North Carolina paper, says is one of four major UN issues she will have to confront?

Ambassador to the UN is not a little out-of-the-way job and will depend greatly on who Trump picks for the Secretary of State which she will be reporting to! Placing Haley there is not putting her in a place to simply keep enemies close. A deputy assistant job in the Labor Department would have been a better fit.

If Trump does go hardline on refugees and wants the UN funding cut would Haley resign and cause him a PR embarrassment down the road?  I think she would (and the likes of Senator Lindsey Graham will be cheering her on from the sidelines as they prepare for 2020)!

Here The News & Observer ponders the question about refugees:

Trump wants to end Muslim migration to the U.S. until terrorist threats are addressed, banning refugees fleeing violence in countries like Syria, Iraq and Afghanistan. This policy directly violates international law, which stipulates that other countries have an obligation to take in people seeking refuge from persecution in their home country and cannot bar refugees based on origin. [Trump (we hope) will follow US law which gives him the power to limit refugee flow, not international law!—ed]

Although Haley opposes Trump’s outright Muslim ban, she was among 30 governors who demanded Syrian refugees not be resettled in their states, citing security concerns. A spokeswoman for the governor said last year that until refugees can be properly vetted “it’s not appropriate for them to be sent to South Carolina or any other state.” [Just words and they all knew it!—ed]

guterres-un-symbol

Incoming U.N. Secretary General Antonio Guterres

Refugees are not allowed into the country until they pass a series of background and health checks, a process that can take up to two years. Governors can’t legally stop refugees from being resettled in their states. [For the umpteenth time, the Syrian screening has been reduced to 3 months and we do admit refugees with TB and other diseases.—ed]

Incoming U.N. Secretary General Antonio Guterres is likely to resist any American efforts to dismantle refugee programs. He formerly served as the U.N. High Commissioner for Refugees and is a strong advocate for wealthy countries doing their fair share to help the most vulnerable. He will take office Jan. 1.

This last makes me wonder (again) whether the Trump transition team has any idea of what they are up against at the UN and how those of us who voted for Trump feel about the ‘world body.’

Endnote:  If you were digesting your Thanksgiving meal and didn’t read my post last night, here it is. Islamists say their long game is to take America down through immigration and out-breeding us!

RELATED ARTICLE: Students at William and Mary pushing for refugee resettlement for Williamsburg, VA

Graphene Military Labs Unites Ambassador Dell Dailey and World Patent Marketing CEO Scott Cooper

Imagine computer screens that can be rolled into a tube for transportation, batteries that charge in seconds and hold their charge for days, gels that can soak up oil spills and radioactive waste, membranes that are impermeable to water and gasses, yet weigh almost nothing. It’s the world of graphene, the hottest new material to hit research labs in decades.

Ambassador Dell Dailey and World Patent Marketing's Scott Cooper

Up until now, Graphene Military Labs has been one of World Patent Marketing’s best kept secrets. It is the brainchild of Ambassador Dell Dailey and World Patent Marketing CEO Scott Cooper.  Graphene is commonly known as the “next wonder material” with the potential to revolutionize the world as we know it. Graphene Military Labs is moving forward on research for military applications, particularly in the area of infantry equipment and technology.

It has been known for some time that “invention powerhouse” World Patent Marketing isn’t the traditional product development company.  The composition of its military and politically influential Board of Advisers never really added up.  World Patent Marketing CEO Scott Cooper has always had close ties to Israel as a Director of The Cooper Idea Foundation and has always had unique access and close relationships with elements of the political, military and intelligence establishments in the United States. The need for such access was never known or discussed up until now. The company gave a “one-two punch” with last month’s release of its Military Defense and Security Inventions video supporting the US Fight Against the War on Terror and quickly followed up with the launch of Graphene Military Labs.

Ambassador Dell Dailey is a senior member of the World Patent Marketing Advisory Board and perhaps its most prominent member.  Ambassador Dailey was the head of the State Department’s counterterrorism office from July 2007 to April 2009 after a 36-year Army career.  The board consists of other notable figures including Vice Admiral and nuclear submarine Commander Al Konetzni, Former US Attorney Matthew Whitaker appointed by President Bush, General Nitzan Nuriel of the Israel Defense Forces, Dr. Aileen Marty, a member of President Barack Obama’s Advisory Council, Congressman Brian Mast, Pascal Bida Koyagebele, former Presidential Candidate for the Central African Republic and Eric Creizman, a legendary New York attorney.

“Graphene is one atom thick and 200 times stronger than steel.  It is one million times thinner than a strand of hair.  It is quite simply going to be the next gold rush.” said Cooper. “Sixty years ago the scientific community believed that graphene was theoretical and could not be isolated.  Today the Ambassador and I believe that graphene will lead to some of the greatest human accomplishments.  It’s going to push the boundaries of just about everything.”

300px-DellLDailey0908.jpg

“Graphene may be the solution the military has been waiting for,” said Ambassador Dailey. “First of all, it is light and durable. Adding graphene as a composite to standard equipment could reduce the weight and improve performance by a factor of four times or more. Besides, graphene may lead the way to the next generation of lightweight batteries, which charge faster and last longer.  And as we have started researching the material, primarily as a lightweight composite, I have become more and more intrigued by the sensor capabilities. Graphene patches can be designed that allow our soldiers to know instantly if an area is contaminated with radiation or chemical weapons, even when those levels are extremely low. And that can provide our troops the minutes they need to take precautionary action and protective maneuvers. We are talking about breakthrough military technology and invention ideas; that can save soldiers’ lives.”

Graphene May Produce the Strongest Lightest Military Technology Ever

Graphene is the strongest material ever discovered. It can be formed into a membrane that is so thin; it weighs almost nothing. A sheet that weighs less than a single cat whisker can support the entire cat. Graphene can support mass several thousand times its’ weight. It is far stronger than steel, it is quite simply when calculated by weight to strength, the most powerful substance on earth.

Graphene military technologies can create flexible screens.

Graphene is superconductive and can transfer information up 200 times faster than silicon. It has a low thermal rating due to its thin layer which provides amazing insulation properties.

It is being used in biomedical research in a variety of ways, including as a scaffold to help repair damaged nerves. Rats that were previously paralyzed with severed spinal cord injuries were able to heal and walk again fully.

And, it is being developed as a sensor for chemicals and pollution. It also has possibilities for research with DNA and cellular biology.

Graphene military technologies can be used in displays.

Graphene was first identified in the mid-twentieth century, but scientists had no way to isolate it in quantities that were large enough to use. It wasn’t until 2004 that Andre Geim and his research students, at the University of Manchester, found a way to isolate the substance in quantities that allowed them to do research. It was hailed as the first 2D material ever discovered. Graphene could form a solid sheet, just one atom thick.

Almost immediately, research labs around the world began working with Graphene. They discovered that this is one of the most bizarre substances yet created.

While it is the strongest material ever found, a little impurity or flaw leads to breakage. And even when perfect, it can be brittle and shatter like glass. A 2D membrane is stable and impermeable; even hydrogen cannot pass through the tight lattice that forms graphene. But, a 3D layer can be created that allows water and gas to go through it as if the graphene wasn’t even there.

Researcher with flexible graphene screen.

Because of its superconductivity, up to 200 times faster than silicon, there was early interest from computer chip makers. But their initial expectations foundered on another unusual property of graphene. It conducts quickly, but it can’t be turned off. Logic chips, the basis of modern computers, have to turn on and off. A switch that turns on and stays on isn’t worth a nickel with current technology.

Pushing the Boundaries of Military Technology

While graphene failed to be the sought-after replacement for silicon chips, it was quickly discovered to have a host of properties that are more than promising. The material may be revolutionary in many fields. Ultimately, it may completely change the equipment of infantry soldiers and dramatically increase their capabilities.

Graphene tubes used for nanotech.

“Our first introduction to graphene was on a project for the energy industry.” said Cooper, “Five years ago crude oil prices were over $120 per barrel.  Prices tanked within a few years to below $40.  The global energy industry is still in a state of confusion.  Notwithstanding the market’s optimism about an agreement being reached in Vienna at the end of November, the oil cartels are a perfect example of an industry that could greatly benefit from the commercialization of graphene.”

“Graphene carries an electrical charge and is already being used in cell phone screens. What I want to see is a touch pad for military purposes, that is flexible so that it can be rolled up like a scroll,” said Ambassador Dailey.

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Researchers are experimenting with what they call an aerogel. It isn’t soft like a gel, it is more like a sponge, it looks like a semi-translucent block. But it can absorb more than 600 times its weight of oil. Imagine what that could do to prevent environmental disasters. And they are working on graphene gels that absorb radiation. The possibilities are endless.

Cooper and Ambassador Dailey believe that graphene may eventually improve almost every item carried by an infantry soldier. They envision body armor and protection with graphene composites. Because it is impermeable to water and gasses, it is an ideal material for electronics housings and cases, and perhaps even for uniforms and protective gear.

Graphene offers possibilities for flexible and semi-transparent displays and military equipment coated in graphene has the potential to change color with an electric charge, and camouflage coatings may make tanks, planes, and ships, all but invisible to the human eye.

As Graphene Military Labs and World Patent Marketing push boldly into the future, the vision of Ambassador Dell Dailey and World Patent Marketing CEO Scott J. Cooper will help to give the military the fighting edge needed for safety and security, now and in the future.

Prognostication on Trump Administration Immigration/Refugee Policies

This morning I figured I would just go back to business reporting the news from across America and across the world on what was happening with refugees and specifically refugee resettlement here and abroad.  But, all the news everywhere (typical of most of the media) was about immigrants/refugees (and groups like CAIR) freaking out.  In the case of one particular story from Baltimore, The Sun article caused my computer to freeze up for about a half an hour. (Don’t you just hate those sites, even Breitbart does it, where they run videos that simply pop up and stall your computer!).

Does anyone think that a law created by Senators Ted Kennedy and Joe Biden (signed by Jimmy Carter) is worth saving? Is it in the best interests of your towns and cities? No! Tweaking the numbers is not sufficient. I say blow it up and start over!

ted-and-joe

So instead of sorting through all the scare stories, I read what Roy Beck (NumbersUSA) said about Trump on immigration, but will have to beg to differ if this is really what Trump plans on refugees.

Geez, is the honeymoon over already?

And, so begins a new phase for Refugee Resettlement Watch!  Will we have to be the conscience—the nag—for an administration that purports to be on our side?

And what is my side? It is my job to advocate for what I believe needs to be done, not to find the compromise!

First, let me tell you what Roy Beck says in an otherwise good piece on immigration control and the American worker.

See here on Refugees:

Trump would continue refugee resettlement at more traditional lower numbers*** than the Obama Administration has sought and would emphasize a higher priority on helping more refugees in their home regions.

During Trump’s Phoenix, AZ speech in August 2016 he advocated for creating safe zones for refugees instead of permanently resettling them in the U.S.: “For the price of resettling one refugee in the United States, 12 could be resettled in a safe zone in their home region. Which I agree with 100 percent. We have to build safe zones.”

Trump has also said he will end the practice of forcing refugee resettlement on local communities against their wishes. [Easier said then done! What? take a vote in town? See who comes out with more activists in dueling rallies in the town?—ed]

Just lower the numbers?  No way!

The entire structure of the Refugee Act of 1980 is flawed and my wish is for it to be scrapped altogether.  The system of sending millions (billions!) of taxpayer dollars to non-profit ‘religious’ groups to, in cahoots with the US State Department, secretly place them (chosen by the UN!) in hundreds of towns and cities in 49 states is wrong!

Now, if Congress with the President deem it in our national interest to admit some permanent refugees, then they must repeal the original act (build a new program) or completely overhaul it.  I have ideas on what could be done, if that is what the soon-to-be-powers in Washington decide to do.

But, simply reducing the numbers and restricting a few countries won’t cut it! This entire flawed system must be blown up first and I will continue to advocate for that outcome.

***If you want to talk “traditional” numbers, the refugee industry will be quick to say that the RAP (Refugee Admissions Program) admitted much higher numbers in the past, in some years twice what we bring now under Obama.  So you can’t stick to the strict ‘reduce numbers’ meme with this program. And, indeed, if Trump is turned out of the White House in 4 years, then the next administration will simply up the numbers again.

The Investment Implications of the 2016 Election

MORRISTOWN, N.J. /PRNewswire/ — Next week’s elections are among the most hotly contested in recent history. Undoubtedly, there will be winners and losers beyond the individual candidates running for office. In this report, we analyze some of the potential investment implications of the election, while maintaining a neutral tone with respect to any political party. Our analysis is based largely on the stated positions of each major party’s Presidential candidate, Hillary Clinton or Donald Trump, and the research of unrelated parties.

What Wall Street Really Wants – A Split Decision

First, the market tends to favor a “split decision” with respect to which political party controls the White House, Senate and House of Representatives. Under this “split decision” or “gridlock” scenario, it will be challenging for either party to enact major legislative changes, allowing free market forces, not central planning, to drive the economy’s future.

Most projections suggest the Republicans will retain the majority of positions in the House of Representatives, while the Democrats are likely to gain control of the Senate. If these projections hold true, regardless of which Presidential candidate wins the White House, one party will not sweep all three elections, resulting in Wall Street’s desired split decision.

But we caution that a split decision is not always a panacea, since it may delay progress on important issues, such as addressing the projected deficits in Social Security, Medicare, and Medicaid. An extension of the debt ceiling in 2017 will also be necessary, potentially creating a contentious battle viewed unfavorably by the financial markets.

And The Winner Is … Infrastructure

If there is one common sector or industry that is likely to do well under either candidate, it is infrastructure. Infrastructure includes the repair or building of bridges, roads, tunnels, airports, power grids, communication networks and may even be extended to items such as electronic medical records. Candidate Clinton proposed $275 billion in government spending on infrastructure over a five-year period and having another $225 billionspent on infrastructure through private investment. Candidate Trump has proposed an even larger plan, spending up to $1 trillion on infrastructure, through a mix of governmental and private sources, over a ten-year period.

The benefits of preventing a crumbling bridge are obvious, but the implications of a stronger and smarter infrastructure may not be quite as apparent. For example, smarter and properly maintained transportation networks may be able to reduce traffic congestion, commuting times and the number of accidents. An enhanced power grid may reduce the likelihood of blackouts and conserve energy. An improved electronic medical records system may improve the quality of healthcare, reduce medical errors and cut insurance payments. Each of these items may result in increased productivity for the economy over a long period of time.

Energy and Healthcare Policies: A Tale of Two Cities

The Presidential candidates have sharply different policies in the Energy and Healthcare sectors. Candidate Clinton favors further progress in the direction of a “green” future for America’s energy needs. Solar, renewable energy and natural gas firms may be prime beneficiaries under her energy plan. In contrast, candidate Trump has strongly supported “clean coal” technology as well as conventional oil and gas energy sources. He supports the Keystone Pipeline, which plans to run from Canada through the United States, so long as the deal is “favorable” for America. In contrast, candidate Clinton has announced her opposition to the Keystone Pipeline.

Candidate Trump is vehemently opposed to the Affordable Care Act, popularly known as “Obamacare.” If elected, he plans to repeal Obamacare, although a full dismantling of the program may be challenging without Congressional approval. Candidate Clinton favors slight modifications to Obamacare and price controls on some pharmaceutical products. She expressed outrage at firms, such as Mylan, maker of the EpiPen, after the firm raised the price on its product more than 450% in less than ten years. Similar large price increases have been observed in pharmaceutical products with little or no competition. Candidate Trump favors competition and market forces as a way of modulating prices as opposed to formal price controls.

In our view, hospitals and health maintenance organizations (HMOs) are likely winners under a Clinton victory, while traditional Pharmaceutical and Biotechnology firms, especially those that produce high priced drugs, are likely losers. The reverse is likely true under a Trump victory.

Some Relief May Be in Sight for the Financial Sector

The Financial Sector has been dramatically impacted by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which resulted in the largest set of new financial regulations since The Great Depression. Financial firms – primarily the large, national banks – have also been hit with billions of dollars in fines due to misdeeds committed during the period leading up to The Great Recession of 2007-2009. Candidate Trump has stated that he favors repealing the bulk of Dodd- Frank, claiming it makes it nearly impossible for bankers to function.

Candidate Clinton has supported Dodd Frank, especially in the context of large “too big to fail” banks, and seems to favor a tax on short-term trading activity. However, she seems to have a more dovish view on bank regulation than the Obama administration. For example, she has expressed support for reducing the regulatory burden on community banks. In her speeches to banks, in a private setting, she has expressed a somewhat more balanced approach to financial regulation.

A (Tax) Holiday May Be on the Horizon … For Corporate America

American corporations labor among the highest tax rates in the industrialized world, with domestic firms generally in a 35% tax bracket. In contrast, other regions, such as Bermuda, charge no corporate taxes, while others, such as Ireland and Canada, have a net tax rate of 15% or less. One implication of these widely varying tax brackets is that corporations tend to keep cash and securities held for investment, overseas. American companies hold roughly $2 trillion dollars in cash, with the vast bulk of it held overseas. For example, Microsoft recently held $96.3 billion of its $102.6 billion in cash (94%) overseas. If a firm brings money held overseas back to America (i.e., repatriates its cash), it is subject to paying tax at the 35% federal rate.

Both candidates have supported a “tax holiday” for cash held overseas, resulting in a temporary tax rate of 15% or less. Candidate Trump has proposed slashing the U.S. corporate tax rate from 35% to 15%. If enacted into law, a 15% corporate tax would be a large boon to companies, such as Costco, Home Depot and Chipotle that derive most of their profits domestically. Candidate Clinton has not endorsed cutting the corporate tax rate to 15%, but seems amenable to the tax holiday. In theory, if firms repatriate their cash, it may result in sizeable investment increases in the domestic economy. However, if the last tax repatriation period (2004/2005) is any indication, the bulk of the cash will be used for stock buybacks and dividend increases, which may also be a benefit to shareholders.

Your Income Taxes May Be Going Up… Or Down

Another sharp contrast between the two candidates is in their personal income tax policies. Candidate Trump has proposed a tax cut for virtually all domestic taxpayers. However, his plan may also increase the national debt between $5 and $10 trillion, according to several independent estimates.

In contrast, candidate Clinton has proposed a tax cut for most low- and middle-income families, but a tax increase for the highest income earners, those earning more than $250,000 a year. She favors a “Buffett Rule,” requiring a minimum effective tax rate of 30 percent on incomes over $1 million. She has also proposed an additional 4 percent “fair share surcharge” for those earning $5 million dollars or more a year. Analysts estimate that candidate Clinton’s tax plan, if enacted, would raise in excess of $1.5 trillion in new revenue, with the proceeds being spent on her domestic initiatives, such as on infrastructure and educational programs. Both candidates have proposed closing the “carried interest” tax loophole, which currently enables (mostly high income) individuals to convert earnings to long-term capital gains, generally taxed at a 15% rate. A more detailed summary table, produced by the website, Diffen.com, is reproduced below.

 

Donald Trump’s Tax Plan

Hillary Clinton’s Tax Plan

current rating is 3.79/5

current rating is 3.13/5

(133 ratings)

(136 ratings)

Tax Philosophy

Cut taxes for everyone

Increase taxes, especially on high-income earners.

Tax Brackets
– Ordinary Income

Three – 12%, 25%, 33%. Earlier proposal: 10%, 20%, 25%

Eight – 10%, 15%, 25%, 28%, 33%, 35%, 39.6%, 43.6%

Tax Brackets
– Investment Income

Three – 0%, 15%, 20%

Complex. Long-term gains will be redefined to assets held > 6 years. Tax rates of 0%, 15%, 20% and 24% on long-term. Additional surcharges on some. Higher rates for all if assets held for fewer than 6 years.

Net
Investment Income Tax

Repeal

Retain

Estate Tax

Repeal

Retain and expand. Increase tax rate from 40% to 45%; and add new tax brackets for 50%, 55% and 65% for estates worth more than $10 million, $50 million and $500 million respectively.

Gift tax

Repeal

Retain

Impact on
GDP

Positive 11% (as estimated by the Tax Foundation)

Negative 1% (as estimated by the Tax Foundation)

Impact on
Job Creation

Positive. 5.3 million new jobs (as estimated by the Tax Foundation)

Negative. 311,000 fewer jobs (as estimated by the Tax Foundation)

Impact on Government Debt

Negative. $10 trillion higher government debt (as estimated by the Tax Foundation)

Positive. $191 billion lower national debt (as estimated by the Tax Foundation)

Impact on Wages

Positive. +6.5% wage growth (as estimated by the Tax Foundation)

Negative. -0.8% wage growth (as estimated by the Tax Foundation)

Biggest Beneficiaries

High-income earners

Low-income earners

“Clinton vs Trump – Tax Plans Compared.” Diffen.com. Diffen LLC, n.d. Web. 3 Nov 2016.
< http://www.diffen.com/difference/Trump-vs-Clinton-Tax-Plan >

Source: Diffen.com

International Trade Policies: A Potential “Black Swan” On the Horizon

Another stark contrast in the economic policies of the two candidates is apparent in their views on international trade. In general, both candidates favor a less open policy on international trade, relative to recent Presidential administrations. This could result in “risk-off’ investment sentiment that would benefit US Treasury debt and the U.S. Dollar.

Candidate Trump strongly supports repealing the North American Free Trade Agreement (NAFTA), rejects the proposed Trans-Pacific Partnership (TPP) and has taken a hardline stance on China, deeming it a “currency manipulator,” a tactic that would likely sour relations with the country that is home to the world’s second largest economy. His positions on international trade may be a positive for U.S. firms that have been hurt by cheaper overseas imports, such as steel companies, and defense firms that are likely to benefit from increased spending on national security.

In contrast, candidate Clinton has expressed support for NAFTA and has declined to formally accuse China of currency manipulation. Although she was once supportive of TPP, her current stance seems to be against the prospective Partnership.

Between a third and half of the profits for S&P 500 firms come from overseas. The stock market, in aggregate, seems to dislike candidate Trump’s position on international trade. His policies, if enacted, bring an element of uncertainty to corporate profits, as well as increase the risk of trade wars with foreign countries, most notably with China.

Conclusion

Political elections are one of the greatest change agents of the American economic system. The contrast between the two Presidential candidates, Hillary Clinton and Donald Trump, is the starkest in recent memory. There appears to be less drama in the Congressional elections, with most forecasters predicting a split decision, with Republicans maintaining control of the House and the Democrats gaining control of the Senate. This type of result is generally cheered by Wall Street, which likes “gridlock” so the free market system can drive the economy.

But make no mistake, there will be clear winners and losers, beyond the candidates running for office. A summary table on our views is in the Appendix that follows. To some extent, the market has already priced in some of the anticipated movement. For example, Healthcare stocks have lagged the market on a year-to-date basis, and the Mexican Peso has risen versus the U.S. Dollar, anticipating a Clinton victory. However, the election is too close to call and we believe there is a high likelihood of a sharp move in the market, regardless of who wins, as some uncertainty is resolved and cash either pours into the market, or flees it. We welcome a further discussion of the investment implications of the election on your personal portfolio at any time and we encourage you to exercise your privilege to vote.

 

Appendix: Summary Table

If Hillary Clinton Wins…

If Donald Trump Wins…

Likely Winners

Likely Losers

Likely Winners

Likely Losers

Infrastructure

Big Banks

Infrastructure

Emerging Markets

Hospitals

Pharmaceutical

Domestic Firms

Multinational Firms

HMOs

Biotechnology

Defense

China

Low/Middle Income Families

High Income Families

High Income Families

Canada  

Education

Coal

Coal / Oil

Mexico

Alternative Energy

Oil

Financials

Alternative Energy

Important Information: Beacon Trust (“Beacon”) is the name used by two separate investment advisers and a trust company: Beacon Investment Advisory Services, Inc. (“BIAS”), Acertus Capital Management, LLC (“Acertus”) and Beacon Trust Company (“BTC”).  Both BIAS and Acertus are SEC registered investment advisers wholly owned by BTC, which is a subsidiary of Provident Bank. Provident Bank is a subsidiary of Provident Financial Services, Inc, a holding company whose common stock is traded on the New York Stock Exchange. Beacon does not provide investment advice for any affiliated securities or obligations. Additional information is contained in the respective Form ADV disclosure documents, the most recent versions of which are available on the SEC’s Investment Adviser Public Disclosure website at http://www.adviserinfo.sec.gov.

SECURITIES AND INVESTMENT PRODUCTS: NOT FDIC INSURED – MAY GO DOWN IN VALUE – NOT GUARANTEED BY A BANK OR BANK AFFILIATE – NOT A DEPOSIT – NOT INSURED BY ANY GOVERNMENT AGENCY

This publication is limited to the dissemination of general information pertaining to the wealth management products and services offered by Beacon to U.S. residents of those states where not prohibited by applicable law. No portion is to be construed as a solicitation to effect transactions in securities or the provision of personalized investment, tax, or legal advice. Investing involves risks which may lead to losses, including loss of principal. Different types of investments involve varying degrees of risk and there can be no assurance that any specific investment will be profitable.

Past performance is not a predictor of future results. It should not be assumed that any information discussed herein will prove to be profitable or that decisions in the future will be profitable or provide specific performance results.  Any discussion of tax matters contained within this communication should not be used for the purpose of avoiding U.S. tax related penalties or promoting, marketing, or recommending to another party any transaction or matter addressed herein. Beacon Trust does not provide legal advice.

Before investing, carefully consider fund investment objectives, risks, charges and expenses. For this and other information that should be read carefully, please request a prospectus or summary prospectus from your financial advisor or Beacon Trust at 973-206-7100 or visit www.beacontrust.com.

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Inaccuracy of Polls send Gold and Silver Soaring predicting a Trump Presidency

LOS ANGELES, Calif. /PRNewswire/ — On June 25th 2015 an opinion piece entitled “What’s the Matter with Polling?” by Cliff Zukin was published in the New York Times. In it, Mr. Zukin detailed how the rapid adoption of cell phones and rapidly diminishing numbers of survey respondents has hindered the ability of public opinion researchers to conduct accurate polling.

Millennials, who represent 56% of America’s eligible voters, are one of the largest demographics in the U.S. who are slipping through the cracks with most public opinion polls. Since 85% of Millennials own a cell phone instead of a landline, Millennials cost twice as much to reach since regulatory restrictions prohibit calling cell phones – not landlines – with an autodialer.

The generational shift from landlines to cell phones, combined with the Millennials’ waning desire to take surveys, is rendering opinion polls worldwide unreliable and making it ever more difficult to predict outcomes in politics and financial markets. Just last week, when every poll in Colombia had predicted the passing of a referendum vote for peace with the rebel guerrilla army, FARC, 50.22% of Colombians rejected the peace deal and sent the Colombian peso plunging.

413518logoHere at home, most recent polls predict that Secretary of State Clinton will win the election and that belief has been priced into the markets in much the same way that ‘Bremain’ was priced into markets prior to the ‘Brexit’ vote. Jack Hanney, a senior partner with the nation’s leading gold IRA dealer, Patriot Gold Group, states that the “Associated Press and Reuters polls got the Brexit referendum wrong and they’re going to get the U.S. presidential election wrong too.” His logic is supported by recent political polls that incorrectly forecasted elections in Turkey, Scotland, Canada and Greece.

Jim Rickard, author of the book “Currency Wars: The Making of the Next Global Crisis,” goes one step further than Hanney to say that “Trump will win, the Dow will drop over 1,000 points and gold will gain $100 overnight.” These sentiments are shared by many leading political and precious metal analysts who are hedging their bets as it’s widely believed that if Trump does pull a Brexit-style upset, gold and silver will move up as much as 20% within a week from today.

In a country whose government was founded 238 years ago to protect every citizen’s right to life, liberty and the pursuit of happiness, who’d have predicted living in the constant state of fear created by terrorism, systemic corruption, rising inequality and economic recession? If nothing else, the sad state of affairs in America today demonstrates that any outcome is possible. And the polls are no different.

Take heed of the recent warnings from the Huffington Post and Wall Street Journal: “the world will look so different six months from now” that Americans should “prepare themselves for the recession [and] hide in gold.”

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Syrian Refugee Numbers to Soar in FY2017 — Federally Subsidized Cheap Labor

We learned about the Syrian numbers soaring yesterday from Michael Patrick Leahy at Breitbart.

Besides the University of Nevada looking for employees (janitors?), another reason given in the Abstract was that Tesla would open its battery plant outside of Reno in 2017. Can you say a plentiful supply of federally subsidized cheap immigrant labor needed? Just like Chobani in Twin Falls, Idaho!

His story is here. If you live in Nevada you need to read this!

We’ve told you about the new resettlement office in Reno on several occasions.

We were fortunate to have an advance copy of the R & P Abstract for Reno long before the fiscal year began (back in May!). You can read about it here and see especially the information on the letters of support that were attached.

tesla

Telsa batter plant near Reno, Nevada.

It is that Reno Abstract that helped me understand how detailed the Abstracts are and to realize that many being reluctantly released by resettlement contractors to concerned citizens are abbreviated versions.

Unfortunately, unlike many communities developing ‘pockets of resistance’ (Rutland, VT for example), it seemed there was no interest by Reno citizens to question what was coming to their community.  Maybe some will speak up now.

However, the office is open in Reno and they are extremely difficult to close once opened (see ‘Ten things you need to know’).

See also our subsequent post on Reno’s new office here where we learned something important! The Dept. of State has identified 47 new sites***!

This is one of the letters of support in the Reno FY2017 Abstract prepared by the US Committee for Refugees and Immigrants (USCRI, the same federal contractor embroiled in controversy in Twin Falls, Idaho and Rutland, VT).

reno-nevada-muslim-letter

***Here are some of the new or expanding sites we have identified so far:

Asheville, NC
Rutland, VT
Reno, NV
Ithaca, NY
Missoula, MT
Aberdeen, SD
Charleston, WV
Fayetteville, AR
Blacksburg, VA
Pittsfield, MA
Northhampton, MA
Flint, MI
Bloomington, IN
Traverse City, MI
Watertown, NY (maybe)
Youngstown, OH (maybe)

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“Yes on 2” Caught Red-Handed Stuffing the Ballot Box

According to a report by Patricia Mazzei in today’s Miami Herald, a woman working for the “Yes on 2” campaign was caught red-handed “unlawfully filling out voter-registration forms on behalf of United for Care, the campaign to legalize medical marijuana in Florida.”

Florida State Senator Jack Latvala (R-St. Petersburg), former chair of the Ethics and Elections Committee and incoming Chair of the Appropriations Committee, is calling on all counties to be on high alert.

“… I’m absolutely disgusted by Yes on 2’s blatant attempt to betray the legitimacy of our democratic process,” says Senator Jack Latvala.

The “No on 2” campaign is extremely concerned about this and is urging all counties to be proactive in order to ensure a legitimate election.

Christina Johnson, spokeswoman for the Vote No on 2 campaign, stated:

“We are urging the state attorney’s offices across Florida to investigate every voter registration form that was handed in by anyone working on behalf of the ‘Yes on 2’ campaign. And we are appalled that ‘Yes on 2’ would be so disrespectful to the democratic process.

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Obamacare Failure in Florida

“Healthcare costs are rising on everyday Floridians. This year’s premium hike of nearly 20 percent is a wake-up call to Hillary Clinton’s plans to double down on the failed experiment known as Obamacare. We must elect a President who will finally repeal this failed federal takeover of healthcare and replace it with commonsense reforms that put patients in control of their healthcare and focuses on lowering costs. That candidate is Donald Trump.” — Senior Trump Adviser and Florida Chief Strategist Susie Wiles

Florida The Florida Office Of Insurance Regulation Approved Average Statewide Premium Hikes Of 19.1 Percent For 2017.”The Florida Office of Insurance Regulation announced today that premiums for Florida individual major medical plans in compliance with the federal Patient Protection & Affordable Care Act (PPACA) will increase an average of 19% beginning January 1, 2017. Per federal guidelines, a total of 15 health insurance companies submitted rate filings for the Office’s review in May. These rate filings consisted of individual major medical plans to be sold both on and off the Exchange. Following the Office’s rate filing review, the average approved rate changes on the Exchange range from a low of -6% to a high of 65%.” (Charles Gaba, “Florida: *Approved* 2017 Indy Market Rate Hikes: 19.1% (Vs 17.7% Requested),” ACASignups.net, 9/5/16)

These Premium Requests Are Higher Than Last Year’s Approved Average Of 10 Percent. “Fifteen health insurers want an average 17.7 percent increase in premiums for Affordable Care Act individual plans, Florida officials said Thursday — higher than last year’s approved average of less than 10 percent.” (“Florida Health Insurers Seek Average 17.7% Rate Hike,” Insurance News Net, 5/13/16) Blue Cross Blue Shield Of Florida, Inc. Was Approved For A 19 Percent Premium Hike For Individual Plans In 2017, After Requesting A 14.5 Percent Premium Hike.(Charles Gaba, “Florida: *Approved* 2017 Indy Market Rate Hikes: 19.1% (Vs 17.7% Requested),” ACASignups.net, 9/5/16)

Celtic Insurance Company Was Approved For A 20 Percent Premium Hike For Individual Plans In 2017, After Requesting A 4.3 Percent Premium Hike. (Charles Gaba, “Florida: *Approved* 2017 Indy Market Rate Hikes: 19.1% (Vs 17.7% Requested),”ACASignups.net, 9/5/16)

Florida Health Care Plan, Inc. Was Approved For A 15.4 Percent Premium Hike For Individual Plans In 2017, After Requesting A 12.3 Percent Premium Hike. (Charles Gaba, “Florida: *Approved* 2017 Indy Market Rate Hikes: 19.1% (Vs 17.7% Requested),”ACASignups.net, 9/5/16)

Health First Commercial Plans, Inc. Was Approved For A 11.7 Percent Premium Hike For Individual Plans In 2017, After Requesting A 8.4 Percent Premium Hike. (Charles Gaba, “Florida: *Approved* 2017 Indy Market Rate Hikes: 19.1% (Vs 17.7% Requested),”ACASignups.net, 9/5/16)

Health Options, Inc. Was Approved For A 18.9 Percent Premium Hike For Individual Plans In 2017, After Requesting A 13.8 Percent Premium Hike. (Charles Gaba, “Florida: *Approved* 2017 Indy Market Rate Hikes: 19.1% (Vs 17.7% Requested),”ACASignups.net, 9/5/16)

Humana Medical Plan, Inc. Was Approved For A 36.8 Percent Premium Hike For Individual Plans In 2017, After Requesting A 43.6 Percent Premium Hike. (Charles Gaba, “Florida: *Approved* 2017 Indy Market Rate Hikes: 19.1% (Vs 17.7% Requested),”ACASignups.net, 9/5/16)

Molina Healthcare Of Florida, Inc. Was Approved For A 17.4 Percent Premium Hike For Individual Plans In 2017, After Requesting A 10.6 Percent Premium Hike.(Charles Gaba, “Florida: *Approved* 2017 Indy Market Rate Hikes: 19.1% (Vs 17.7% Requested),” ACASignups.net, 9/5/16)

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Are You Not Selfish Enough? by Dan Sanchez

Have you ever read How I Found Freedom in an Unfree World by Harry Browne? I finished the 1973 book the other day; it was mind-blowing and life-changing. I’ve since restructured how I approach even the most elemental constituents of my life: my moment-to-moment actions and thoughts.

This mind-shift has had immediate, spectacular results. In the past few days, I’ve been dramatically more happy, more clear-thinking, and more deliberate. I’ve had more energy, yet also more serenity. Like Browne, I found freedom by learning to live free.

Harry Browne’s idea of freedom is more mental than physical, more spiritual than political. He doesn’t boil it down in quite this way, but this is my definition for the kind of freedom discussed in his book:

Living Free: Abstaining from preoccupation with the preferences of others and instead maintaining a clear focus on your own preferences.

Before you dismiss this as antisocial selfishness, note that this does not mean being oblivious to the preferences of others. The optimal route to one’s own goals often runs through the goals of others. That is to say, the best way to accomplish what you want is often by eliciting the help of others (whether in the form of goods or service), and the best way to elicit that help is often to appeal to their own preferences: i.e., by offering something they want in return. Such exchanges can involve both the formal trades of business and the loose reciprocities of friendship.

Enlightened selfishness is sensibly sociable. (A whole other essay could be dedicated to the interesting similarities and profound differences between Harry Browne’s notion of selfishness and Ayn Rand’s.)

Freedom doesn’t mean ignoring the preferences of others; it means not compulsively imposing someone else’s preferences on yourself.

Freedom from Social Anxiety

When first adopting this rule for myself, I was amazed to realize how much of my attention was previously used up by worrying about external opinions. Such worries had a constant effect on almost all my thoughts and actions: even down to such basic behaviors as the expression on my face.

Even now, I still sometimes catch myself giving a meek smile as I walk by others as if to express, “I’m harmless and nice. Please like me!” I used to constantly fret over whether the way I was moving, communicating, or otherwise acting came off to others as hostile, weird, dumb, or unbecoming.

Instead of sensibly selfish, I was compulsively unselfish, or “otherish.” My “otherism” was making me neurotic, holding me back, and dimming my shine.

As part of my new philosophy, I’ve made it a point to no longer give a damn about such things. Instead, when I walk, I focus on the next thing I want to accomplish. When I talk, I focus on what I would like to know or convey, or on enjoying myself through conversation.

Relapses into my old social anxieties have become ever less frequent. Now I walk, talk, and act with the air of a man intent on his own purposes – because I am one.

An interesting side effect is that people now seem to treat me with greater respect and friendliness. The funny thing about not caring what others think about you is that it seems to result in others thinking more highly of you. The reverse is also true. Social anxiety has the perverse consequence of generating the very awkwardness it fears.

MYOB to the Max

Again, living free is not being preoccupied with the preferences of others. This means not imposing the preferences of others on yourself. It also means not trying to impose your own preferences on others. It is “selfishness” in the sense of minding your own business (MYOB).

You free yourself when you free the other people in your life.

We often give lip service to the MYOB principle, but very few actually adhere to it. At most, we apply MYOB to strangers out in public, with the huge exception of politics; we’re more than willing to bomb or cage strangers for their own good or for not measuring up to our standards, as long as it’s through the intermediary of public policy.

But when it comes to people in our lives – family, colleagues, friends, etc – MYOB goes right out the window. Because of their closeness and their impact on our lives, we consider their business to be our business. The closer they are to us, the more we feel the need to change them, to fix them, to re-educate them: even if it takes a steady barrage of reprimanding, bullying, nagging, whining, guilt-tripping, and petty criticisms and insults.

Even if it doesn’t involve violence, all of this amounts to trying to supplant someone else’s preferences with your own. It is another form of otherism: of preoccupation with the preferences of others, at the expense of focusing on your own preferences, at the expense of attentively minding your own business.

Such “aggressive” otherism can tie you down just as much as the “defensive” otherism already discussed. When you let yourself become preoccupied with the preferences of others, you make your own happiness contingent on the decisions made by others. And since you can’t really control those people, you thereby give up control over your own happiness.

Ironically, by trying to spiritually subdue the people in your life, you actually subject yourself to an unhealthy dependence on them. You limit your own freedom when you try to limit theirs.

You free yourself when you free the other people in your life: when you abdicate the responsibility of improving or correcting them, whether for your sake or theirs.

Detox Your Mind

For me, this side of enlightened selfishness has been just as liberating as the other. It made me realize how cluttered my mind used to be: cluttered, not only with an irrational fear of external judgment, but with my own compulsive habit of constantly judging others.

It would be an interesting experience to count the number of times somebody aggravated you in a single day. If you were brutally honest with yourself when making the tally, I bet you’d be surprised. Your imperfect spouse, your noisy kids, your nosy parents, that annoying colleague, that unsmiling cashier, that inconsiderate driver, that swaggering passerby; even people who likely will never feel the heat of your judgment, like that obnoxious celebrity or that monstrous politician. It all adds up.

That is a lot of toxic negativity throughout your every day. Aggressive otherism distracts you from your own affairs and corrodes your sense of well-being. And for what? It almost never does any good; you almost never manage to sustainably change the object of your scorn.

Therefore, aggressive otherism is a recipe for a chronic sense of frustration and impotence. Indeed, that is precisely what makes it so stressful; it is distressing to be preoccupied with things you cannot change: things like your coworker’s personality or the outcome of a national election.

I’ve found that enlightened selfishness just washes all that psychic acid away. Whatever foibles and vices I perceive in other individuals are their own business, not mine. There is nothing I can do to rectify the failings of politicians and other distant strangers. And if I try to fix the supposed failings of those close to me, I will most likely just end up aggravating them and myself and damaging our relationship.

Once I accepted these truths, it became easy to kick the habit of reflexively judging people. I no longer felt the responsibility to judge and correct society or any part of it outside of my own skull. I have dropped that burden, and what a weight off my shoulders, what freedom, freedom to focus on the things I can profoundly and decisively improve: namely, my own affairs.

Now, when I catch myself mentally throwing shade at someone else, I shake it off and tell the other person in my mind, “You do you,” and return my attention to my own endeavors.

All of my relationships have benefited from this mindset shift, from my marriage to my career. Trying to re-educate the other person is the source of nearly all conflict in relationships. Without such a quixotic crusade, my relationships have become serenely simple; it’s all about enjoying the other person’s company and/or profiting from their freely-given cooperation.

If there is no such enjoyment or profit in the relationship, then there is always the option of exit; I am free to part ways and seek more suitable life/business partners, which is a much more effective recourse than trying to wring enjoyment or profit out of another person by forcing them to become more suitable to my preferences. Thankfully, all of my current relationships are good ones, so that hasn’t been necessary.

Unleashed Potential

Embracing enlightened selfishness and quitting compulsive otherism has swept away the entangling, encumbering cobwebs from my mind. Clearing the static of distracting preoccupations with the preferences of others has freed my precious time and attention to focus on improving my own life according to my own lights. And this has naturally involved redoubling my efforts toward the cooperative ventures that most powerfully create joy and profit: my family, my jobs, my friendships, etc.

Now the world is my oyster. I no longer see the world as a minefield of obligations to appease or re-educate others, but as an open vista of opportunities to accomplish the things I want, often with the free and willing cooperation of clients, customers, vendors, colleagues, friends, and loved ones. As a result, my initiative, productivity, mental clarity, goodwill, and joyfulness have all ascended to a new level.

The Source of Otherism

This approach to life isn’t some philosophical artifice manufactured by Harry Browne. Sensible, sociable selfishness is the natural mindset of human beings. The only reason it is so rare is that almost all of us have had otherism spiritually beaten into us by psychological child abuse.

Throughout our formative years, domination parenting and regimentation schooling subjected us to a constant barrage of authority-dispensed carrots and sticks, praise and admonishment, training us to ever judge our own conduct according to imposed, external standards.

This made us addicted to the dopamine rush of being patted on the head and paranoid about the judgment of authority figures and classmates. We carry this neurosis throughout our lives. Even as grown-ups, we are still disapproval-phobic approval junkies, constantly jonesing for our next fix of external validation.

The flipside of this lesson is the conviction that others should continually judge their conduct by our standards, and that it is our responsibility to enforce those standards through force or peer pressure.

The upshot of this universal curriculum is a world full of guilt-ridden, meddlesome, virtue-signalling neurotics ever at war with each other and within themselves. Most of our problems, both personal and political, can be traced to this backward, abusive upbringing.

But don’t waste your energy blaming older generations for our plight. Pavlovian conditioning and obedience training were the only kinds of “education” our parents and teachers knew, having been subjected to it themselves in their own childhoods.

Thankfully, Harry Browne was able to break this cycle of psychic violence by rehabilitating, deinstitutionalizing, and emancipating himself: by rediscovering the freedom and self-sovereignty that dwelt within him all along, and by broadcasting the message that it dwells in us too, that “You’re free – if only you’ll realize it,” as he put it.

Wisdom, Serenity, and Courage

To live free is to provide yourself with your own answer to the Serenity Prayer:

God, grant me the serenity to accept the things I cannot change,
Courage to change the things I can,
And wisdom to know the difference.

Living free is having that wisdom. It is granting yourself the serenity that comes with the acceptance of a basic fact: that you cannot ultimately control what others do or how they think of you. It is making room in your soul for the courage to unreservedly tackle the one thing you can fundamentally change for the better: your own life.

Your freedom is a saving gift you give yourself. Keep reminding yourself until it sticks:

You’re free if you want to be.

Dan Sanchez

Dan Sanchez

Dan Sanchez is Managing Editor of FEE.org. His writings are collected at DanSanchez.me.