Just the Facts, Ma’am 2 11 February 2019.

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Second, three tax proposals have been offered to raise more revenue from the rich.[1]  Congresswoman Alexandria Ocasio-Cortez has suggested raising the tax on incomes above $10 million from the current 37 percent to 60 or 70 percent.  This would return upper-income tax rates to the level that prevailed during the 1970s.  In the regime of the 1970s, many deductions and exemptions existed which do not exist today.  The effective tax rate on high incomes under the Ocasio-Cortez proposal would be much higher than the one of the 1970s.  However, the top rate in the 1970s applied to the contemporary equivalent of $800,000.

Senator Elizabeth Warren has proposed a “wealth tax,” not merely an income tax.[2]  People with a net worth between $50 million and $1 billion would pay 2 percent per year[3]; people worth more than $1 billion would pay 3 percent per year.[4]  According to the calculations underlying Senator Warren’s proposal, this tax would generate $2.75 trillion over ten years.

The Warren proposal may not be constitutional.  The 16th Amendment to the Constitution created a tax on income, not a tax on all assets.  Apparently, the courts have held that taxes on estates and gifts are excise taxes on the transfer of assets, rather than a tax on the assets themselves.  The tax also might be a logistical nightmare to apply.

Senator Bernie Sanders has proposed revising the estate tax.  Until 2009, the tax applied to estates of more than $3.5 million.  A 2017 tax change raised the threshold for individuals to about $11 million and the threshold for couples to about $22 million, with a standard tax rate of 40 percent.  Senator Sanders would return to the 2009 level of $3.5 million.  In addition, he replaces a single tax rate with multiple rates.  From $3.5 million to $10 million, the rate would be 45 percent; on estates of $1 billion or more, the rate would be 77 percent.

[1] Paul Sullivan, “Taxing the Rich Sounds Easy.  But It’s Not,” NYT, 2 February 2019; Sydney Ember, “Sanders Unveils a Plan To Increase Estate Taxes,” NYT, 1 February 2019.

[2] Senator Bernie Sanders also supports the idea of a wealth tax, if not necessarily Senator Warren’s version of such a tax.

[3] Apparently, there are 39,735 people worth between $50 million and $1 billion in the United States today.

[4] Apparently, there are 680 billionaires in the United States today.

Just the facts, Ma’am 1 11 February 2019.

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The Congressional Budget Office (CBO) reports that spending on people aged 65 and older[1] has increased as a share of federal spending from 35 percent (2005) to 40 percent (2018) and is projected to rise to 50 percent (2029).  The federal budget deficit is projected to exceed $1 trillion a year from 2022 to 2029.  Proposals recently offered by Democrats intending to run for President in 2020 or to shape the party’s policy for that race may have an effect on this situation.  None of the proposals claim to aim at deficit reduction.  Instead, they target reducing income inequality and/or financing expanded programs.

First, it is proposed to reform Social Security.[2]  As originally designed, Social Security enhanced private preparation for retirement by adding the resources from a tax on currently working people to individual savings and/or pensions.  Today, however, there appears to be a savings crisis among working people.

There is also a financing crisis for Social Security.  The actuaries at the Social Security Administration report that outlays (payments) will soon exceed income (withholding tax revenues).  Thereafter the payments will be paid from an accumulated surplus held in the form of U.S. treasury bonds.  When that trust fund is exhausted by 2034, benefits will have to be reduced.  Currently, about 63 million people receive Social Security benefits.  The number is expected to rise to 89 million by 2030.  The total current cost is about $1 trillion.  The maximum amount of income subject to Social Security tax is $132,900; the current withholding tax on payrolls is 12.4 percent.

Democrats propose to increase the minimum benefit to help lower-income people who have saved less than have higher income people; increase benefits by an average of about two percent; raise the annual cost-of-living adjustment to payments to respond to the reality that retirees consume goods and services in a different pattern than do still-working people; cut the tax on benefits for middle-income recipients while increasing them on upper-income recipients; and increase the payroll tax rate from the current to 14.8 percent by 2040, and the payroll tax would be imposed on incomes above $400,000 a year, while incomes between $132,900 a year and $400,000 a year would not be subject to taxation.

This proposal would permanently fix the financing problem.  It would also increase benefits paid out to some Social Security recipients.  An estimated three-quarters of the extra income would go to covering the looming deficit; the rest would go to increased benefits for lower-income recipients.

[1] Social Security, Medicare, Medicaid.

[2] Robert Pear, “Democrats Push First Major Social Security Expansion Since 1972,” NYT, 4 February 2019.

My Weekly Reader 8 February 2019.

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Although Henry Lee III (1756-1818) was connected to a host of great landowners and political leaders of the Virginia Tidewater, read a great deal as a young man, and attended Princeton, he seems to have been about half horse: Lee loved to ride and was a superb horseman.[1]  Naturally, he joined the cavalry of the Continental Army in 1776.  In April 1778, Lee gained command of “Lee’s Legion,” a mixed force of infantry and cavalry employed in harassing British lines of communication and supply in New Jersey and New York.  He won several small-scale victories.  In September 1778, Lee ambushed and annihilated a smaller force of Hessians at the Battle of Edgar’s Lane; in August 1779 he commanded a successful raid on a British fort at Paulus Hook, New Jersey.

When the British shifted their main effort to the Carolinas in 1780, Lee’s Legion rode south.  Here Lee had much greater scope for the cut-and-thrust type of war to which he was so well suited.  The British offensive began well, with the capture of Charleston, South Carolina (and a large force of American forces ordered to hold an indefensible position) in May 1780, and then a crushing defeat of the American army at Camden in August 1780.  The British now hoped to raise a large force of American volunteers from among the Loyalists who had been terrorized into submission for the past two years.  A march by British troops through the Carolinas would show their command of the region.  Large numbers of Loyalists began to be recruited in Georgia, South Carolina, and North Carolina.  Along the way, small forts would guard lines of supply and provide rallying-points for Loyalists.  In February 1781, Lee’s Legion greatly discouraged the Loyalists with a surprise attack on Loyalist militia in North Carolina.[2]  In March 1781, the British won a costly victory over a larger American army at Guilford Court House.  The British commander, Lord Cornwallis, then divided his army.  He led most of them toward Wilmington, North Carolina in search of supplies.  The rest, mostly Loyalist troops, he left in South Carolina under the command of Lord Rawdon.

Rather than follow Cornwallis north, the Americans began to re-conquer South Carolina.  Lee’s Legion played an important part in this campaign.  Although Rawdon won a victory at Hobkirk’s Hill in April 1781, he soon found his lines of supply under heavy attack by Lee and by partisans under Francis Marion and Thomas Sumter.  In May 1781 a series of smaller British posts fell to Lee and the others.  Only Ninety-Six, stubbornly defended by Loyalist troops during May and June, defied the Patriot forces.  Rawdon had little choice to fall back to Camden, and then toward the coast.  In September 1781, Lee’s Legion fought with the rest of the American army at Eutaw Springs, where it suffered another defeat at the hands of a smaller British force.  But then news came of the British surrender at Yorktown in October 1781.

Lee had a fitful postwar political career as a devoted Federalist.  (He’s the one who described Washington as “first in war, first in peace, and first in the hearts of his countrymen.”)  In contrast, the management of his business affairs failed to command from him the same attention as had his military operations.  He went bankrupt, spent a year in debtors prison, and wandered the Caribbean for a time before returning to die in Virginia.

His son, Robert Edward Lee, commanded the Army of Northern Virginia.

[1] There is a new biography by Ryan Cole, Light-Horse Harry Lee (2019).

[2] Commonly known as the “Pyle Massacre.”

Venezuela 7 February 2019.

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In 1998, the Venezuelan people elected Hugo Chavez as president of a country with a strong economy, but also one divided over the distribution of the benefits of that economy.[1]  Chavez was a “populist”: he nationalized the oil industry, the banks, and much of the land, then used the profits to fund programs to aid the poor.  A big rise in government spending outstripped revenue, so they started printing money.  Prices soared.  Chavez slammed on price controls.  These didn’t (and don’t ever) work.  By 2013, the inflation rate had climbed to 50 percent; since then it has headed toward 10 million percent per year and the currency is worthless.  Furthermore, owners of nationalized assets were bent out of shape (see: selfish) and the price controls had distorted economic activity (see: Paul Samuelson).  In these circumstances, men with guns might make all the difference when it came to staying in power.  Chavez kept a tight leash on the army.  They—and politicians–went into drug trafficking.[2]

Then America’s “fracking” revolution hit.  An alternative to oil and coal flooded the energy market.  Oil prices collapsed everywhere, to the distress of Arabs, Russians Nigerians, and Venezuelans.  In the case of Venezuela, the country lost most of its foreign exchange earnings.  This cut the amount of money available to pay for key imports.  One of these was food, because the “populist” polices in the countryside had reduced food production.  Venezuela had to import more food, but lacked the foreign exchange to do so.  The same went for pharmaceuticals.  Entrepreneurs-with-pistols now extract goods and services.  As a result, 75 percent of the country is in poverty.  An increasing number of Venezuelans demanded a new course.  The army became even more important.

Then Chavez died in 2013 and his chief subordinate, Nicolas Maduro, took his place.  Maduro could have tried to clean up a bad situation.  He would have been a national hero.  Instead, he decided to ride it down.[3]  Ever-growing street protests began in 2014.  When opposition groups won the 2015 elections, Maduro fell back to rewriting the constitution so that he could do what he wanted and arresting anyone who seemed like a threat.[4]  Both the police and pro-government paramilitary groups called “colectivos” assailed the protestors.  Hundreds are dead.  Many of the original leaders are in jail.  Many ordinary people are pre-occupied with getting food and other necessities.[5]  Three million people have emigrated to neighboring countries.[6]  So protests died down in 2018.  Maduro rigged the 2018 election to win a new six-year term.  Cuba has sent intelligence officers to support the repression, China has loaned millions, and Russia has warned off American intervention.

From one perspective, this looks like the collapse of Communism in 1989.  Like the collapse of Communism, the aftermath will be painful, messy, and often un-just.

[1] “The growing crisis in Venezuela,” The Week, 25 January 2019, p. 11.

[2] This probably isn’t much different from Mexico.

[3] See; https://www.youtube.com/watch?v=9_SMJ-Uwmkg

[4] Many of these people were old Chavez loyalists in government ministries and in the army.  As a historian, I can’t help thinking of Stalin purging the “Old Bolsheviks.”  I’m sure this is an over-reaction.  So don’t write to me.

[5] So, a capitalist black market thrives amidst the ruins of a formally socialist society.

[6] Perhaps seven million more may follow their path, according to one estimate.

My Weekly Reader 6 February 2019.

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When the War of the American Revolution began, the rebellious colonies had no real army with which to fight it.  The colonists had long relied up militias made up of part-time soldiers.  For the most part, these militias had been dedicated to local defense against Indian attacks.  The militia units from the frontiers had more experience than did the militias from the eastern territories.  They all lacked training, discipline, equipment, and—often—competent officers.

Still, a bunch of them had “seen the elephant” up close.  George Washington had a couple of experiences in the back-country, then had a memorable experience with General Edward Braddock’s catastrophic attempt to capture Fort Duquesne.  Daniel Morgan (1736-1802) had been a teamster—no very exalted position–on that expedition.[1]  Morgan differed greatly from Washington.  He was a poor-boy immigrant from New Jersey to the Shenandoah Valley.  He arrived with nothing but muscle-power, but there was great need of that on the 18th Century frontier.  He began to accumulate property: first a team of horses, then a farm, and later slaves.  Braddock’s expedition offered him his first taste of war.  It left him unimpressed with British military leadership and also deeply bitter toward British rule after he was severely flogged for smacking one of his officers.  Soon, Morgan became an officer in the Virginia militia and experienced at war with the Indians.

Morgan led a company of Virginia riflemen on Benedict Arnold’s expedition through the wilds of Maine to capture Quebec.[2]  The effort failed and many American soldiers were captured, Morgan among them.  He spent a year in British captivity before being paroled.  Upon his release in early 1777, George Washington promoted Morgan to colonel in the Continental Army and told him to raise a regiment of frontier riflemen.  Morgan led the regiment in the campaign that ended with the surrender of General John Burgoyne’s army at Saratoga (1777).  He and his men passed from this triumph to disaster in the Philadelphia campaign and wintered in Valley Forge (1777-1778).  In 1779, fed up with Congress and ts mismanagement of the army, Morgan stormed off in a huff to retirement.

Then Horatio Gates, who had commanded at Saratoga, took charge in the South.  Morgan initially declined the offer of a command.  When Gates led the army to disaster at Camden (1780), however, Morgan returned to service.  The new commander, Nathaniel Greene, put Morgan in command of a small unit.  His mission was to avoid a battle while harassing the British lines of communication.  In January 1781, Morgan disobeyed the order to avoid battle by setting a trap for a British light force under Banastre Tarleton.  The two forces collided at a pasture called the Cowpens in South Carolina on 17 January 1781.  Morgan’s adept handling of his militia led to a brilliant, small-scale victory.  The American victory had a disproportionate effect because Tarleton’s force—virtually annihilated in the fight—included much of the British light infantry.  This hampered Lord Cornwallis going forward in the Southern campaign.  It also set a pattern for a campaign of attrition that would end at Yorktown.

Plagued with ills, Morgan left the army soon after Cowpens.

[1] Don Higginbotham, Daniel Morgan: Revolutionary Rifleman (1961) is still the best biography.

[2] See Kenneth Roberts, Arundel (1936).

I’m Running for President in 2020–3.

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The Global War on Terror is approaching a new stage.  The Islamic State (ISIS) has been driven out of Iraq and almost destroyed in Syria.  Recently, President Trump ordered a sudden withdrawal of American forces from Syria and announced a desire to do the same from Afghanistan.  Much expert and political opposition arise to slow him down.  Some people argued that the Islamic State had not yet been totally defeated or destroyed.  Parallels were drawn to President Obama’s withdrawal of forces from Iraq.  This had been followed by the rise of the Islamic State and its invasion of Iraq.

Peace talks between the Americans and the Taliban have been proceeding and may be approaching a settlement.   With regard to Afghanistan, two lines of criticism or concern arise.  First, a peace deal with the Taliban will be based up on some kind of compromise or power-sharing agreement between the Taliban and their indigenous Afghan opponents.  What assurance can be offered that the Taliban will honor their commitments?  The Taliban came to power in the first place through victory in a civil war.  Are they likely to pursue the same path again.  Second,  the United States invaded Afghanistan in 2001 to overthrow the Taliban which had sheltered Osama bin Laden and al Qaeda.  Who is to say that they will not again become patrons of anti-Western jihad?

In both cases, critics of President Trump argue for a continued American role in what Dexter Filkins called “The Forever War.”  While these critics are experts–and I am not–and they make important points, it seems to me that they fail to address a key question.  “How does this thing end?”  We are at war with an idea–Islamic radicalism–and with global social conditions–the failed states and the failed societies in much of the developing world.  It seems likely that the “defeat” of ISIS will soon be followed by a wild fire of Islamic radical rebellions running from Bangladesh through Indonesia to the southern Philippines.   Islamist movements are on their heels in much of Africa, but the conditions that gave rise to them have not been addressed.

I ask my fellow candidates the following questions.  Are we going to keep military forces in every place an Islamist wild fire has broken, been contained, and burned out in case the embers catch light once again?  Are we going to send military forces to every new place an Islamist wild fire breaks out?  Of course, it will be argued that American military technology and special forces are effective force multipliers.  America can “lead from behind” and on the cheap by assembling” coalitions of the willing” to do much of the fighting.

It might be answered that even these forces are not infinite.  America is not on a real war-footing and has not been since 2001.  A small share of Americans bear the cost of battle.  We develop plans for Operations in each Theater of Operations as it arises, but I see no Strategy for winning the global and forever War.

I am running for President in 2020–2.

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I’m content to wait on the Meuller Report and on the report of the DoJ’s Inspector General, before deciding whether Donald Trump should be impeached.

I have no doubt that Trump is not fit to be President of the United States.  However, he got elected president.  I haven’t seen any evidence yet that the Russian meddling tipped the balance.  Also, Hillary Rodham Clinton wasn’t fit to be president.  It’s just that she was less unfit than Trump.  Hence my vote in 2016.

George W. Bush wasn’t fit to be president.  Bill Clinton wasn’t fit to be president.  Nor were John F. Kennedy or Jimmy Carter.  Or Ronald Reagan.  Or Barack Obama.  For that matter, neither was FDR, or Harry Truman, or Jerry Ford.  But the last group grew into the job.  Leaves us with Eisenhower, Nixon, and George H. W. Bush.  Three Republican presidents.  Unless you regard Bill Clinton as “one of the lesser Republican presidents, ” as–I think–Mark Shields described him.   I am certainly not fit to be president.  Nevertheless, I want your vote.

That said on the “character” and ethics issues, here are some more of my positions.

First, according to the NYT, two thirds of the revenue lost to the Federal government by the Bush II-Obama tax cuts came from people making less than $250K a year.  We need to recoup these earnings if we are going to tackle the budget deficit and national debt.  For that matter, how can people–including me–be real citizens if we just tell politicians what benefits we want and then tell them to bill somebody else?

Second, the Affordable Care Act (ACA/Obamacare) extended medical insurance to about–I think–16 million Americans.  However, the larger problem–the high cost of American medicine relative to the low quality of outcomes–remained unaddressed.  Here’s the thing.  American doctors make about fifty percent more than do Western European or Japanese doctors with comparable skills.  The first step toward making health care affordable for most Americans must be to reduce the bloated incomes of physicians.  This will mean locking horns with the Americn=an Medical Association.  YIKES!

 

Zion Island 10.

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IPNdeM press release, December 1947.  (My translation.)

The Instituto Politechnico Nacional de Mexico announces with great pride that Professor Albert Einstein will hold a visiting fellowship at “el Poli” for Spring Semester 1948.  While Professor Einstein will not be teaching any classes, he will give several public addresses and be available for consultation during his stay.  He will reside at a private home at #45 Avenida Viena in Coyoacan.

Zion Island 9.

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Library of Congress/Admiral John A. Waters, Jr., Papers/Director of Security, Atomic Energy Commission/Miscellaneous/Notes to Self.

 

No Date.  Yellow legal pad.  Transcribed from hand-writing.

Who?

Krauts?  Already sharing Congo ore.  RH seems keen on no-pro.

Limeys?  Limited share from Congo.  RAB all about domestic reform.

Russkies?  Not much industry or science.  No air force.  Nuke Chechens?  HA!  What an idea.

Japs?  Big difference between them and US/Ger.  But Japanese China has bunch of Ur.

**Still, Geiger counter ships leaving Seattle/SF/Long Beach.

 

2 containers/30 lbs.  Why so little?  Need X for a “Trinity” bomb.  Need Y for a “Super.”  Need a lot more than that for a program.  + sci/ind infra.

Interrupted by fire engines?  Bolted?

Try again?

 

WEAPON DESIGN.  Or just dump it in Pepacton reservoir.  See what happens?

 

Then, Timms issue.[1]  Vetting.  FitzG—slimey.

 

[1] General(ret.) Thomas Timms, candidate for Commissioner, Atomic Energy Commission.

Zion Island 8.

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SECRET.

 

BEGINS.

 

TO: SIC Jeffrey Morton, Salt Lake City, Utah.

 

FROM: Clyde Tolson on behalf of J. Edgar Hoover, Director, Federal Bureau of Investigation.

 

DATE: 17 January 1953.

 

RE: Request for information.

 

Jack ZELIG may be identical with Zelig JACQUES.

INS reports that the latter entered the United States from British Mandate Palestine on a student visa on 1 August 1939 to study at the New School for Social Research in New York City.  He registered for classes, but then disappeared.

SSA reports that a “Jack Zelig” was employed as an Assistant Manager of “The Golden Arm” lounge in Newport, Kentucky from January 1943 to March 1946.  Newport PD reports that the lounge is a popular bar and restaurant with excellent floor shows.  Kentucky SP report that the lounge is a front for large-scale gambling and prostitution, and that the Newport PD is “as crooked as a dog’s hind leg.”

Kentucky SP further report their interest in a traffic incident that occurred near Newport in February 1946.  An automobile was discovered at the bottom of a steep bank, partially submerged in the Licking River.  Two men inside had died of injuries attending the accident.  Both men were “Italian gentlemen” from New Orleans.  A technician discovered black paint mixed in with the green paint on the left side of the wrecked car.

War Department reports that twenty-one men with some variant of that name served in the Army between 1940 and 1950.

Bureau examination of their service records found one Jack Zelig of particular interest.  Born: New York City, 1 August 1914.  Enlisted, March 1946, at St. Louis, Missouri.  After basic training, this Zelig was assigned to the Transportation Corps, where he trained as a truck-driver.  His commander discovered that he already spoke some Russian, so he was sent to the Army Language School, The Presidio, San Francisco.  Worked as a translator and radio observer in the listening post maintained at Fort Rousseau, Sitka, Alaska Territory.  He received a compassionate discharge upon the death of his father in March 1950.

Kentucky SP further report that the truck plate number belongs to a moving van based in Lexington, Kentucky.  Stolen sometime in late December 1952, but not reported until 2 January 1953 because it was replaced with a similar-appearing plate.  The replacement plate, in turn, was stolen off a garbage truck in Covington, Kentucky.  Replaced by a Handicapped Driver plate stolen off a Nash Metropolitan, but no one noticed.

No further information at this time.