Trump Should Propose the “China Rebuilds America” Fund Now!

Following a midterm election in which Republicans gained seats in the Senate but lost their House Majority to Nancy Pelosi and the Democrats, President Trump needs to manage a divided Washington to continue delivering on campaign promises and advance America’s interests, which in turn will boost his own re-election chances. As the consummate negotiator, Trump must strike fast to put Democrats on their back foot and immediately offer a deal that will aid America’s workers and economy: a Chinese funded infrastructure bill.

Right now, the American economy is rocking, maintaining 3% growth, which has pushed unemployment below 4% and wage growth to around 3%. The manufacturing sector, which has been enjoying its strongest stretch of job creation in over 20 years, is resurgent. It’s no wonder then that the GOP was able to take Senate or Governor races in manufacturing-heavy states like Indiana, Tennessee, Missouri, and Ohio. Trump needs to ensure economic growth continues to broaden out to further tighten labor markets and push wage growth higher so that all workers see their paychecks rising.

Investing in infrastructure, which enjoys broad political support, will create jobs now, and importantly by modernizing and expanding our infrastructure capacity in everything from rail to broadband, we enhance the long-term potential of our economy. Strategic infrastructure investments will boost near-term growth and employment, forcing wages higher, while also increasing wages over the long-run for all Americans. In so doing, he lays the groundwork for his own re-election. However, we can’t borrow more money to have a multi-billion-dollar boondoggle while deficits are running around $1 trillion.

And this is where China enters the picture. Trump has rightly singled out China as our top long-term geopolitical foe, and they have used unfair trading practices and intellectual property theft to amass a cumulative $4.5 trillion trade surplus with America since George W. Bush foolishly let them in the World Trade Organization (WTO). With this wealth transferred from Americans, China has rebuilt its economy and military. We have literally funded China’s rise as our top rival.

In an effort to right these historic wrongs and restore our industrial base, Trump has correctly levied tariffs on about $250 billion of Chinese imports to level the playing field and eventually force China to negotiate in good faith. From January 1 onward, these tariffs will generate about $62 billion in revenue, which currently goes into the Federal Government’s general budget and reduces the deficit. If, as threatened, 10% tariffs are placed on China’s remaining imports, the annual tariff run-rate will approach $90 billion.

Trump should immediately and publicly offer House Democrats a deal: all Chinese tariff revenue is put in a segregated trust fund (named the China Rebuilds America Fund) to invest in new infrastructure projects in partnerships with state and local governments. By making states and localities together put up 50% of the funding, you can increase accountability and double the effective size of the infrastructure program. We can cap annual federal spending from the China Rebuilds America Fund at $50 billion ($100 billion with state matches) as over time China tariff revenue will fall as companies move production back into the US, which in turn will create new jobs. By capping the fund, infrastructure spending can then continue for some time even as the tariffs are removed. Importantly, by recycling tariff revenue into productivity-enhancing projects, Trump will be offsetting any near-term dislocations caused by the China trade situation and actually accelerate economic growth.

By getting Democrats on board with this plan, Trump would show a unified front to China, which only further enhances our bargaining power to strike a new trade agreement. This is compounded by the fact that Trump’s tariffs will be funding growth-accretive infrastructure. By strengthening the economy further, there is less need for us to strike a quick deal, ensuring we get a better one. There will now be a clear benchmark for China: until they are willing to offer enough concessions to outweigh tariff revenue funding major infrastructure improvements, we have no reason to say “yes” and remove the tariffs.

By proposing the China Rebuilds America Fund, Trump can retake control of Washington, show voters he is a deal-maker, get implicit backing for his tough on China trade stance, provide tangible change to voters via better infrastructure, and boost economic growth. Additionally, he achieves two critical strategic priorities: rebalancing trade with China and modernizing American infrastructure. If Democrats don’t accept this win-win deal, it’d be a proof point to voters they are uninterested in governing and are simply the party of obstruction. Trump wins if they accept this offer because it will help America, and he wins if they say no because it will show Democrats to be hypocrites on their promises for bipartisanship.

It’s time we rebuild America’s roads, bridges, airports, and rail, and with Trump’s tough trade stance, we can have China pay for them.

 

 

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How to Protect Social Security and Medicare

Recently, the social security trustees offered yet another stark reminder that America is nearing an entitlement crisis. Within a decade, the Medicare hospital trust fund will be insolvent; within two decades, social security will be. When that happens, each program will be forced to automatically cut benefits—in the case of social security by over 20%. To fully fund the shortfall for the next 75 years, we would need to immediately inject about $17.5 trillion into the two programs, $3.5 trillion into Medicare and $14 trillion into Social Securitya financial impossibility. 

Over time, it is a financial necessity to make some changes to the programs, like a gradual increase in the retirement age, to improve their financial situation and ensure they will be there for future generations. Donald Trump promised to govern on behalf of the forgotten men and women of the working class who in particular rely on these programs in their sunset years, which is why it is critical he takes steps to sure up their finances. 

 

Now, not only is it financially impossible to fully fund these programs for perpetuity today, it is unnecessary. The $17.5 trillion shortfall is a best-efforts estimate that can shift materially if for instance economic growth is faster than forecast, which would result in higher tax revenue. Nonetheless, Social Security and Medicare clearly face shortfalls, and we should find ways to extend the trust funds’ lives. Fortunately, there actually is a way to materially extend these programs’ lives, reduce today’s budget deficit, make mortgage rates lower, and not reduce benefits by a dollar. 

 

The United States Treasury should sell $2 trillion in zero  couponputable, perpetual bonds (more on their structure below) to the Federal Reserve, America’s central bankIn turn, about $600 billion would be granted to the Medicare hospital trust fund and $1.4 trillion to Social Security’s trust fund. With these additional sums, Medicare would be able to meet current benefits into the mid-2030s, about a 10 year improvement, and Social Security into the mid-2040s, about a 5 year improvement. This step would provide more security and certainty to older Americans and give us more time to make gradual changes to the programs for future beneficiaries to further extend their solvency. 

 

Now as is the case with existing trust fund sums, this $2 trillion would be invested over time in US treasury debt. With the budget deficit likely to surpass $800 billion annually in coming years, the trust funds’ buying power would essentially cancel out 2-2.5 years of new budget deficits. By buying US debt, we would be selling fewer treasuries to private investors, this reduced supply would mean we can sell our debt at a higher price, all else equal. In other words, we would sell debt at a lower interest rate. Paying less in interest would bring down the US budget deficit somewhat. Additionally, US treasury interest rates are the benchmark off of which most banks determine their mortgage rates, business loan interest rates, and so forth. So, a lower treasury rate will translate to lower mortgage rates, making home buying more affordable. 

 

To some, this may sound too good to be true. If we are putting more money into entitlement programs, and bringing down the cost of debt in the process, there must be a catch, and they would point to the $2 trillion in bonds the government would sell to the Federal Reserve. Note though that the bonds sold to the Fed are “zero coupon,” which means they pay no interest, meanwhile the trust funds would be using the proceeds to buy US treasury debt that does pay interest. Additionally, these zero-coupon bonds are “perpetual,” meaning they never have to be paid back. In reality, these Fed-owned bonds hold no economic value. However, the Fed would “print” $2 trillion to send to Medicare and Social Security in exchange for them. At this point, some may say I am merely proposing printing money to pay for entitlements, which will cause inflation and weaken the dollar. As I will explain, that is actually not what I am proposing, but first, let me rebut the case that printing money in the first place would definitely be inflationary.

 

Over the past ten years, the Federal Reserve has printed about $3.4 trillion buying treasury and mortgage bonds, nearly quintupling its balance sheet to $4.3 trillion. During this time, the US dollar has actually strengthened by over 26% on a trade-weighted basis and core inflation has averaged less than 1.6%, below the Fed’s target of 2%. The many predictions that Fed policy would create runaway inflation simply have not come true. 

 

Moreover, it is worth noting that the fashion in which the Federal Reserve operates its monetary policy has exacerbated income inequality and the stagnation of median incomes for the past two decades. Targeting 2% inflation, the Fed tends to raise interest rates as we near full employment. Now, it is during periods of at or near full employment where workers are more in demand than in supply, meaning they enjoy the greatest wage increase. Immediately after a recession, even as business improves, there are many people eager for work, so businesses don’t have to increase wages even as the business grows, leading to higher profit margins. Periods of full employment reverse this with workers getting a bigger share of the pie. However in its fear of inflation, the Fed raises rates as the labor market improves, truncating the time spent in a tight labor market relative to the time in a loose labor market

 

As this continues over each economic cycle, business owners get a gradually increasing piece of the economic pie at the expense of workers, widening inequality and leaving our middle class behind. In fact, over the past twenty years, core inflation has averaged 1.7%, missing the Fed’s 2% target and showing its preference for low-inflation periods when businesses have the bargaining power to tight labor market periods when workers do. Using the Fed balance sheet to support entitlement programs that particularly benefit middle and working class Americans would help counteract this bias. 

 

Now to those still unsatisfied by my argument that using the Fed to create money is not problematic, I wish to explain why I am not proposing printing money. Rather than have the Fed print $2 trillion, I recommend selling $2 trillion in zero coupon, putable, perpetual bonds. True, zero coupon perpetual bonds have no economic value, but note the word “putable.” Putable means the Fed can “put back” (sell) the bonds at face value to the treasury if certain conditions are met. Namely, in any month when the core PCE index (the Fed’s preferred inflation measure) rises by 3-3.5% year over year, $50 billion of bonds are put back, 3.5-4% $75 billion, 4-4.5% $100 billion, 4.5-5% $125 billion, and over 5% $150 billion.

 

Essentially if I am wrong, and this program causes inflation to rise materially above the Fed’s 2% target, the Fed would be able to sell the bonds back, taking the US dollars back out of circulation, thereby tightening policy to bring inflation back down. Given that inflation hasn’t passed 3% on an annual basis in 26 years, it is likely that little if any of this $2 trillion bond is ever put back to the treasury. And if such a period comes sufficiently in the future, the amount saved on interest payments thanks to Social Security and Medicare buying treasury debt may well exceed the cost of buying back these putable bonds. I would venture a prediction that this $2 trillion bond issuance does not lead inflation to breach the putable levels over the forecastable horizon.

 

Given the structural undershoot of inflation, a middle class that has been left behind, and the pressing need to provide support to Medicare and Social Security, selling these bonds to the Federal Reserve is a gamble well worth taking. I would recommend beginning with this $2 trillion program, because the sum is large enough to postpone our entitlement crisis several years, but I wouldn’t attempt to fund all of the $17 trillion shortfall today as that would raise the risk of causing excess inflation, undermining the purpose of the program. Rather, it is best to take one step likely to succeed today, and then, 5-10 years down the road, the exercise can always be repeated if it proves as successful as I anticipate.

 

While virtually all Americans agree it is critical to preserve these programs as best as possible, some may question the wisdom of perpetuating them in their current form, and to them I would highlight some key points. First, we should ask honestly ourselves whether Congressional Democrats and Republicans, who both clearly like to spend money when in power, would actually permit Social Security and Medicare to cut benefits when their trust funds run dry? Or rather, would they either raise taxes or sell more debt to the public to fund the shortfall? It seems clear to me that it is better to try my strategy of issuing perpetual debt than issuing debt that has to be repaid to investors or raising taxes on hard-working Americans.

 

Some others may argue that it is unwise to take this course of action when there would remain a $15 trillion problem. To them, I would make two points. First, I think it better to solve part of the problem than none of it. Second, I don’t pretend this plan is a be-all, end-all solution. Rather, it is intended to add several years of viability to these programs to ensure they can meet the promises made to those at or near retirement who need certainty. It would be fantastic if this $2 billion Federal Reserve bond were paired with measures like gradually lifting the retirement age by 2 years starting in 2024 and moving future Social Security benefit cost of living adjustments to chained-CPI from headline CPI. These measures combined with the $2 trillion cash infusion would greatly extend the lives of Medicare and Social Security. Like President Reagan in 1986, I believe Republicans should take the lead in solving entitlement problems before the crisis is upon us. However, I would rather issue this zero-coupon bond then permanently raise taxes.

 

Last, it is critical to emphasize again that while America faces a public debt problem and a deficit problem, it does not face an inflation problem. That is largely because the Federal Reserve has run a structurally hawkish monetary policy that has led to below target inflation and lackluster median wage growth. While the Fed, through its quantitative easing program, has been happy to buy bonds to push up asset prices and make the rich richer, it has consistently acted to raise rates and slow the economy as it senses that upward wage pressures are increasing.As such, the one risk my policy increases, inflation (albeit as highlighted above, I emphasize my skepticism inflation would materially rise), is one the economy can afford, if only to counteract the years of overly hawkish Fed policy that have left the middle class behind. Moreover, given the putable nature of my bonds, any period of higher inflation would be short-lived as the Fed puts the bonds back to the Treasury and takes dollars out of circulation. All told, these risks stack up attractively versus the potential of putting $2 trillion into entitlements without issuing debt that has to be repaid or raising taxes.

 

Donald Trump was elected President because he promised to bring new thinking to our politics, and given the size of their problems, new and innovative thinking is needed to secure Social Security and Medicare. Issuing $2 trillion in zero coupon, putable, perpetual bonds to the Federal Reserve would greatly enhance these programs’ viability at no cost to taxpayers. In fact, by pushing down treasury bonds’ interest rates, taxpayers would save money in coming years.

 

Let’s act now to protect the retirements of America’s forgotten men and women.

Facing the Truth on Immigration and DACA

In recent days, the debate over immigration policies have raced ahead amid charges of racism, amnesty, an impending government funding deadline, and the March 5 expiration of DACA (Deferred Action for Childhood Arrivals), even grinding government to a halt. Remarkably, a group of republican Senators, led by Lindsey Graham, wish to capitulate to democrat demands, granting a path to citizenship for 3 million illegal immigrants, give their parents work permits, and in exchange, republicans would merely get $2.7 billion for border security, a pittance, and only modest changes to our legal immigration system.

Such a policy will give millions amnesty without taking actions to ensure we don’t face a flood of illegal immigrants again in 25 years, repeating Ronald Reagan’s 1986 immigration mistake, granting amnesty now for border security that never materializes. If Americans wanted blanket amnesty, we had ample opportunity with the candidacies of Jeb Bush, Marco Rubio, and Hillary Clinton. Donald Trump staked out the only law-enforcement, citizen-minded immigration policies, and he won. To capitulate now is to ignore the message voters sent in 2016. DACA is the only bargaining chip Trump and republicans have; they must use it to reform a legal immigration system that has hurt working American citizens.

Since 1999, real median household income is up less than 1% to about $59,000. Working people have suffered two lost decades even as the rich get richer. A major reason why is the surge in immigration. America is now home to over 45 million immigrants, compared to less than 20 million in 1990. Over 13% of our population is foreign born, the highest level since before World War I. It has been steadily increasing since hitting 5% in 1970.

            Historically, our immigration intake has been cyclical, which is to say we take in a large number of immigrants, and then slow down the intake as we assimilate them into our culture. As that process ends, we let immigration levels rise again, a process that has worked well. That pattern played out in the 1900s with high immigration levels through World War I, which we then slowed through 1970 (a period where coincidentally the modern American middle class was built), and which subsequently have been rising. With immigrant levels at a century high, we have to decide whether to let this uptrend continue or slow immigration as the RAISE Act would do.

Just from an economic perspective, the data argues for slower immigration. During the immigrant boom of the past twenty years, the middle class hasn’t enjoyed any real wage gains. We recognize the laws of supply and demand in almost everything but immigration. When supply goes up, prices go down. Immigration increases the supply of labor, driving the price lower. This is great for business owners who employ laborers (hence why the corporatist GOP establishment favors ever more immigration), but bad for wage-earners. If America had a sustained labor shortage, that would call for more immigration, but if anything, we’ve suffered from an excess of labor.

Over the past 20 years, the unemployment rate has averaged 5.9%. The Federal Reserve estimates the unemployment rate consistent with a full labor market is 4.6%. In other words, for the past two decades, America has had a structurally loose jobs market with 1.8 million Americans unnecessarily unemployed on average. During this time, the flow of immigrants has continued unabated. It’s no wonder wages have barely budged. We are doing a bad job getting the people already here employed; there’s no need to keep bringing in a record number of new people too.

            Even today with the unemployment rate at 4.1% and talk of a tight labor market, fewer Americans under the age of 55 are working than in 2000, even though the population of 25 to 54 year olds has grown over 5 million. While the labor force participation rate among prime working age adults is at or near highs in nations like Germany and Japan, ours is well below last decade’s level. Not to mention after years of loose jobs markets that benefited employers, America’s workers will benefit from a prolonged period of tight employment where businesses are competing for workers, forced to raise wages. In a tight labor market, businesses would have to train American citizens, improving their potential earnings, rather than import skilled labor and let American citizens form an underclass. Considering their lower median earnings and higher unemployment rates, African-American and Hispanic-Americans would disproportionately benefit from a tight labor market policy, making the charges of racism from immigration expansionists all the more laughable.

            After two lost decades for America’s working people, now is the time to slow immigration and let citizen wages rise. If Republicans and Trump truly want to listen to their base and help the forgotten men and women, they can’t capitulate to amnesty for millions of “dreamers,” and must negotiate lower legal immigration levels to make the dreams of America’s citizens more attainable. If they can’t hold this line, what was the point of the 2016 election?

It’s Time to Back Trump

Within the political and chattering class, some conservatives, describing themselves as part of the “Never Trump” movement, have attacked Donald Trump as a threat to the republic and the conservative movement while attacking GOP leaders who support him, like Marco Rubio and Paul Ryan, as sell-outs or charlatans. These attacks couldn’t be further from the truth. Most recently, Ohio Governor John Kasich has been generating headlines by distancing himself further from Trump, in an attempt to lay the groundwork for another run for the Presidency in 2020. Conservatives need to recognize that much, though not all, of what Trump has run on represents the future, not the demise, of the conservative movement. While he is an imperfect messenger, Hillary Clinton would likely do irreversible harm to this country, which is why conservatives must back Trump.

In April 1998, there were 17.64 million Americans working in the manufacturing sector; today that number is 12.28 million. Put another way, we’ve lost 800 jobs every day for 18 years. During this time, real median incomes have fallen, and the African-American poverty rate languishes over 25%.

The typical working American is worse off today than at the turn of the century; for this, both parties share blame. While economists focus on the lost decades nations like Japan have suffered, the simple fact is outside of Silicon Valley and the DC and NYC suburbs, much of America has suffered two lost decades as well, a symptom of a nation in decline.

Trump has refocused the debate around the plight of ordinary Americans, something conservatives have failed to do in recent years. Conservatism is an inherently populist ideology; we prefer giving power to everyday individuals than concentrate it in the hands of supposed experts. Conservatives have faith in the genius of every man and woman. Since 1988, that has been forgotten as the GOP became the Chamber of Commerce Party. Trump is rightly realigning the GOP around the working men and women of this country.

While Trump is imperfect, the general election is about who is the better candidate, making it a simple choice. Given his lack of a political record, there is some uncertainty about what he would do, but we can be certain of what Clinton will do. She will nominate liberals to the Supreme Court while he may nominate conservatives. Take even an area where Trump supposedly disagrees with orthodoxy: trade. Does anyone really believe the same government that has run VA hospitals so terribly negotiated perfect trade deals, particularly when we know China has amassed $3 trillion in reserves?

True, Trump lacks a foreign policy record and is something of a wildcard, but no record is better than a record littered with failure, from ISIS taking territory across the Middle East to China building militarized islands throughout the South China Sea. As Secretary of State, Hillary Clinton left a world on fire; no wonder global warming appears to be such a problem…

It is said every election, but in 2016, the stakes really could not be higher. Implicit in the Never Trump argument is the belief the damage of a Clinton Presidency is containable, which underappreciates the power of a party’s 3rd term in power. Controlling the White House for 12 years cements policies and structurally shifts the political center. The Roosevelt-Truman terms shifted the country left for two generations, making support for more entitlements and welfare the new political center as evidenced by Republicans eventual acceptance of Social Security. Similar, the three Reagan-Bush terms shifted the political center rightward for a generation on most economic issues with even Bill Clinton declaring the era of big government over.

Clinton will cement the leftward shift begun by Obama for a generation with Obamacare, political correctness, and new regulatory regimes across the economy becoming entrenched political facts, unlikely to be rolled back for years, if ever. For eight years, Obama has pushed our economy, society, and foreign policy footing into one that looks more like Europe. A Clinton Presidency makes a reversal from that path all but impossible. We see the results of Europe’s experiment, and they’re devastating: slow growth, high debt, chronic youth unemployment, and atrophying military power.

The race is tightening, and in the polling averages, Trump has taken the lead in Ohio and Iowa while other states like Florida, North Carolina, and Nevada are too close to call. With momentum at his back, now is the time for reluctant Republicans to get behind Trump. Whether Trump wins 85% or 90% of republican voters on November 8 could very well determine who wins the Presidency. Leaders like John Kasich must really ask themselves if they are willing to sow division and make it easier for Hillary Clinton to continue Obama’s disastrous policies as President.

Donald Trump is our last chance to turn back from the current path of decline and decay. Conservatives need to get behind the republican nominee or risk losing the country we all have fought so hard to build.

Trump Will Reinvigorate NATO

In many precincts, there is this misleading suggestion that Donald Trump is backing off of America’s traditional support for NATO, a claim undermined by a reading of his actual position. Joint security pacts are only sustainable when all participants have security capabilities; Trump gets this. That is why NATO calls for each nation to spend 2% of GDP on defense to avoid free-riders. Otherwise, nations can rely on the defense capabilities of other nations. That isn’t collective security; it is one country providing a free, outsourced military for others.

Sadly, many nations are not spending the 2%, instead benefiting from the U.S. security umbrella without pulling their weight. That is unsustainable; even President Obama has called for more defense spending from NATO allies. Alliances, like personal friendships, are two-way streets. States like Estonia and Poland are meeting the minimum while those like Italy and Spain are in default. Italy, a wealthy country, spends less than 1% of GDP on defense. Germany, home to Europe’s top economy, is little better at a meager 1.2%. Relatively poor countries like Poland, Estonia, and Greece are meeting their NATO requirement while wealthy European states are gladly allowing their military to atrophy, enjoying a defense apparatus subsidized by the American taxpayer who is already carrying over $19 trillion in national debt.

Trump recognizes the 2% minimum is useless without enforcement mechanisms. Unless there are consequences for failing to spend 2% (either a fine or loss of membership), European nations will continue to ignore the requirement. Trump’s plan would simply put in penalties for falling short of 2% and would reinvigorate NATO. By forcing Europe to invest its military and thereby reconfirm its commitment to joint security, the alliance will be stronger and could more easily deter Russia. Putin sees a Europe with decaying powers and weak militaries; it is no wonder he is pursuing expansion. A weak Europe has given Putin room to expand, and by being lax on NATO enforcement, we have allowed Europe to weaken. Given NATO’s reliance on American power, we alone have the leverage to get the 23 members who inadequately invest in defense to meet their commitment. The result will be an energized NATO that makes Eastern Europe more not less safe.

Trump’s push for more NATO spending is the only way to stand up to Putin and protect our allies. Islamic terror, an Expansionist Russia, and a strengthening Iran are global problems. They require global responses. Europe should recognize this, especially after a string of terrorist attacks have hit Belgium, France, and now even Germany. Our current policy of blindly subsidizing many European powers has turned NATO from a collective defense pact into a bunch of nations free-riding on the US (and to a lesser extent the UK, Poland, Estonia, and Greece who are spending the 2%). Our European partners need to determine whether they want to help provide and enjoy collective security and meet their commitments.

Trump’s policy will return NATO to its original promise-a transatlantic alliance of democracies all providing for the security of each other. That will make NATO stronger and its collective defense mechanism more credible. Putin will no longer be able to devour the decaying carcass of Europe; instead, the Continent will be able to deter Putin and other aspiring powers like Russia and China. We can then deal with these nations from a position of strength, striking deals when possible and pushing back when necessary. America and the world will be better for it.

Time to Unite Behind Trump

While the media focuses exclusively on deepening divides within the Republican Party, we need to take a step back and remember the stakes of this election. A certain Senator this evening exhorted voters to “vote their conscience.” Yes, his non-endorsement of Donald Trump was clear, but let’s consider what our conscience actually demands of us.

Does your conscience consider the fact 3,400 Americans, many of them children, have been killed in the past 8 years in the city of Chicago acceptable? How about the fact the unemployment rate for African-American teenagers has risen in 2016 to 31%? Or that economic growth, the ultimate engine for lifting people out of poverty and into the middle class, is running at the slowest pace in a peace-time recovery since World War II? Are you comfortable with the fact that after years of decline, the violent crime rate has been rising since early 2015? Can your conscience tolerate the fact that Radical Islam is on the march, poisoning the minds of millions, seeping into Europe and even this country, while stripping millions of Muslim women and gays in the Middle East of basic human rights and dignity?

Are we willing to accept that this is the best that America can be? If your conscience says, “yes, the status quo is acceptable,” then perhaps you should vote for Hillary Clinton. After all, she is not an agent of change. Rather, she is beholden to an entrenched donor and political class that will continue the policies of President Barack Obama. Moreover, this status quo will persist beyond her 4 year term as she appoints judges, regulators, commissioners, and civil servants who could serve decades beyond her final day in office. A Hillary Clinton Presidency will cement our current trajectory for a generation. However, even if you are comfortable with the status quo, does your conscience permit you to vote for a woman of Hillary Clinton’s character? Obama’s own FBI Director noted Clinton’s “extreme carelessness” as she attempted to keep her emails secret from voters while exposing our nation’s secrets to our enemies. She even told the mother of an American killed in Benghazi that a video was the cause of the attack while telling her own daughter and a foreign diplomat otherwise. If Hillary Clinton can’t be trusted to tell a grieving mother the truth, can she be trusted in the event of a national crisis?

True to the American spirit of perpetually seeking national betterment, perhaps your conscience says the status quo isn’t good enough, that we can do better. That we can turn a safety net that merely makes poverty more palatable into a safety trampoline which makes poverty less prevalent. That we should give all parents choice where their children go to school to end the vicious circle of entrenched poverty. That we can accelerate growth by returning power and freedom to the most innovate citizenry the world has ever known. That we have a leader who is unafraid to call out evil in the world by its true name and work to eradicate it, instead of merely downplaying it.

Doing better requires doing something else. It requires voting not for an all-talk-no-action entrenched DC elite but for an outsider who is a doer not a talker. Doesn’t our conscience demand a vote for Donald Trump? We need a President who will cease to accept the decline into mediocrity that is our present course. Would we not rather have Paul Ryan as a governing partner with a Republican White House than as a leader of the opposition against yet another Democrat President who is simply presenting the same old ideas in new packaging?

If we believe conservative principles will make American lives better, we have a moral imperative to vote for the candidate most likely to institute them. Without a doubt, that candidate is Donald Trump, helped by his fantastic running mate, Mike Pence, and a partner in Congress in Speaker Ryan. I will vote my conscience, and it demands a vote for Donald Trump.

He offers change. She offer more of the same. He will return power to ordinary people and to the markets to free up the economy, boost working Americans, and improve social mobility. She will continue the same top-heavy policies that have seen weakened growth and ever-rising inequality. He will restore strength around the world after a President who has let American power recede by backing off red lines, downplaying Radical Islamic terror, and letting China expand in the South China Sea. Her foreign policy? Well, let’s put it this way: if global warming is such a major problem, perhaps the fact Secretary of State Hillary Clinton left a world on fire shares some of the blame.

Let’s unite and win in 2016.

Trump: Not Inevitable But Getting Closer

Well, Super Tuesday has come and gone, and the defining aspect of this race remains the same: Donald Trump is the overwhelming frontrunner to be the Republican nominee. That said, Senator Ted Cruz had a surprisingly strong night, carrying 3 states (TX as expected but OK and AK were a bit surprising). Senator Marco Rubio did manage a win in MN, but it otherwise was a dour night for him. Governor John Kasich nearly stole Vermont, had a 2nd in Massachusetts, and took critical votes in Virginia but was barely relevant in the South. As expected, Dr. Ben Carson barely took any delegates and is exiting the race. Here is how the delegates seemed to break (note things are not finalized and Trump could be anywhere between 240 and 260 with Cruz anywhere between 205 and 225) and updated probabilities.

st delegates

odds

As you can see, from a delegate perspective, Trump performed in-line even though I thought he would get 9 or 10 states rather than 7. His strong delegate performance was fueled by Rubio’s inability to meet thresholds in TX, VT, and AL as well as larger than expected wins in TN and GA. These factors buoyed his results despite losses in OK and AK. By missing those thresholds, Rubio fell significantly short in the delegate count, and much of his underperformance mirrors Cruz’s outperformance.

However, moving forward, Trump is clearly in the driver’s seat. I struggle mightily to see a scenario where a candidate other than Trump claims the 1,237 delegates needed to clinch the nomination, though I can still see the other candidates getting enough delegates together to block Trump from getting to 1,237 (though a finish below 900 would seem very unlikely). Yes, compared to what we were expecting 72 hours ago, Cruz had a good night. However, if we were told he won 3 states 1 month ago, that would have been disappointing because it is unclear what upcoming major states Cruz can beat Trump in 1 on 1. Super Tuesday is as good as it gets for Cruz. States like NY, NJ, PA, IN, and much of CA fit Trump better, even if the race narrowed. Cruz will continue to win a fair share of delegates, but to have a credible chance, he really needed to be the delegate leader. His path to the nomination is still hard to see, apart from some deal at the convention.

Similarly, Kasich is well positioned to compete in his state of Ohio and take the 66 delegates, but getting to a majority is hard to envision and is certainly dependent on Rubio losing Florida and dropping out on the 15th (note: I have donated to the Kasich campaign). Kasich must win Ohio, and if he does, he can accumulate more delegates in the North and Midwest to help block Trump. If Rubio loses FL, he could be the last, best hope against Trump and with enough wins, get enough delegates to take the nomination in a floor fight in Cleveland. The odds are long.

That leaves us with Rubio. He is so far back in the delegate count, he will basically need to win 2/3 of the remaining delegates, which is extremely unlikely. However, upcoming states are a far better fit for him than Cruz, and he is better funded than Kasich. In the event of a contested convention, there is a very good chance he is the nominee. However, his home state of Florida is a must-win for him, and polling shows him at least 10% behind. Early voting is also showing a substantial number of new voters, which is a positive for Trump. Losing those 99 delegates to Trump (it is winner take all) would give Trump an excellent shot at claiming 1,237 and be a devastating defeat to the Senator.

Expect Florida to be a war of attrition like 2012 with millions spent on TV ads (and the cavalry is coming with a heavily funded anti-Trump Super PAC hitting the airwaves), days of campaigning, and brutal attacks. Rumors continue to swirl Governor Rick Scott will endorse Trump, which would further lengthen Rubio’s odds. Florida is do or die for Rubio. If he wins (maybe a 25-33% shot at this point), he would suddenly be relatively well-positioned to take on Trump, but a loss is game-over. If Kasich were to lose alongside Rubio that night, the battle for the nomination would be effectively over with Trump able to run out the clock until he formally clinched it. Rubio is in a precarious position: the poor Super Tuesday showing makes getting an outright majority of delegates very difficult and forces him to come from behind in FL.

While Tuesday was in-line for Trump, he benefitted from the fact Cruz outperformed at Rubio’s expense, giving Cruz the rationale to stay in the race and continue splitting the vote. In future states, Rubio is more dangerous than Cruz, so Trump is happy to have Rubio further back in the delegate race. One cannot wonder if Rubio’s childish attacks on Trump backfired a bit. They may have succeeded in bringing down Trump but did some of those voters go to Cruz (who stayed above the fray to a degree) instead of Rubio? When you mud-wrestle, everyone gets dirty and the third person can benefit. Expect fireworks at the Thursday debate because the other candidates need to find a way to stop Trump by the 15th. If not, it will almost certainly be too late.

So that is how I see the race. Agree? Disagree? Let me know here or on Twitter!