Ukraine
Speaking extemporaneously, President Biden said “Putin must go.” That off the cuff comment caused angst among his senior advisers and they later walked back his comments fearing that Putin and others would twist Biden’s words into regime change away from the invasion of Ukraine and containment of Russian aggression.
Biden’s original words should stand. President Biden spoke truth, Putin must go. In politics and elsewhere it is time for plain talk and truth, cut the BS, no more spin.
Russia is bogged down in Ukraine and Russia’s enemies are taking advantage of that.
As the grinding war in Ukraine enters its second month, tensions flared in another former Soviet region, where Azerbaijan and Armenia fought a war in 2020, as Azerbaijani troops moved into territory patrolled by Russian peacekeepers.
The Russian defense ministry said that the Azerbaijani forces had launched four drone strikes against the army of Nagorno-Karabakh, a disputed mountain enclave that is internationally recognized as part of Azerbaijan but claims independence and is closely allied with Armenia.
The Azerbaijani forces installed a surveillance post, the Russian ministry said, adding that it had called for troops to be withdrawn from the area. The ministry said the events had occurred on Thursday and Friday.
Azerbaijan went to war and emerged victorious over Armenia and Nagorno-Karabakh in the fall of 2020, recapturing some of the territory it had lost during a war that followed the Soviet collapse in the early 1990s.
Russia did not take sides in that fight, but President Vladimir V. Putin of Russia brokered an agreement to end the conflict. He also sent about 2,000 peacekeeping troops to the area, demonstrating Russia’s role as a potent arbiter in the Caucasus region, which has been plagued by conflicts and volatility.
But with Mr. Putin preoccupied with the war in Ukraine, the most audacious foreign policy move of his 21-year tenure at the helm of Russia, foreign policy experts said other powers in the region might treat the situation as a window of opportunity.
The Russian military is stretched to the breaking point.
Markets and Stocks
The equities market is acting better. Credit spreads have narrowed. The volatility index has dropped. But Mike Santoli of CNBC as well as others say that until the S&P 500 breaks decisively through 4,600, there is no clear signal that the correction is over. That makes sense to me. Ukraine is a risk. Inflation is a risk. Fed policy is a risk.
For now I will remain a little cautious. I will focus on energy, the U.S. is a low cost producer. I will focus on agriculture, the U.S. enjoys significant comparative advantages in the agricultural sector. I will focus on the steel sector, the U.S. is on the cusp of having a comparative advantage in steel production. And I will focus on the defense stocks. I anticipate a huge increase in spending on the military.
Otherwise, I will stay with big technology, proprietary semiconductor companies, Goldman Sachs and Morgan Stanley, both stocks are extremely cheap, and Disney which has raised prices by 40 percent; yet, is seeing fantastic attendance at its parks.
In the week ahead, Friday’s employment report will be the key data release. It should be a strong report. But it will be the inflation data, interest rates and oil prices that could set the direction for markets in the weeks ahead. Above all though, it will be Fed policy where market eyes are focused. The yield on the 10 year Treasury is flirting with 2.5 percent. Investors are afraid the Fed will overplay its hand and end up slowing the economy, and perhaps causing a recession. I am not pushing my investment boat out.
Economics
The White House will ask Congress on Monday to pass a new minimum tax on billionaires as part of a budget proposal intended to revitalize President Biden’s domestic agenda and reduce the deficit.
The tax would require that American households worth more than $100 million to pay a rate of at least 20 percent on their income as well as unrealized gains in the value of their liquid assets, such as stocks and bonds, which can accumulate value for years but are taxed only when they are sold.
Mr. Biden’s proposal to impose a tax on billionaires is the first time he has explicitly called for a wealth tax. While many in his party have advocated taxes that target an individual’s wealth — not just income — Mr. Biden has largely steered clear of such proposals in favor of increasing the top marginal income tax rate, imposing a higher tax on capital gains and estates, and raising taxes on corporations.
The “Billionaire Minimum Income Tax” would apply only to the top one-hundredth of 1 percent of American households, and over half of the revenue would come from those worth more than $1 billion. Those already paying more than 20 percent would not owe any additional taxes, although those paying below that level would have to pay the difference between their current tax rate and the new 20 percent rate.
Biden’s billionaire tax is DOA, and that is the way it should be. Capital and investment are joined at the hip. They rise together and bring greater prosperity for 100 percent of Americans. Isn’t greater prosperity for all a “common good ?”
Biden’s proposal is intended to please his progressive base. Why he wants to please progressives escapes me. Progressives are out of touch with the majority. Progressive policies are a major reason why Biden’s polling numbers are awful. See Edsall.
If Biden wants to tax accumulated capital which is used to finance conspicuous consumption, then he should propose a billionaire’s consumption tax.
The top one percent of taxpayers, pay about 43 percent of all federal taxes in whatever form. The United States has the world’s most progressive tax system. Finally, don’t we want more innovation and prosperity? If so, then we should tax less, the men and women who innovate? See Mirrlees.
Politics
In spite of public approval of his policies on Ukraine, Biden’s overall approval numbers remain very negative, with approval numbers in the low 40s and disapproval ratings near 55 percent. The public wants progress on inflation, and that won’t happen for a few more months. Public opinion against Biden and the Democratic Party is becoming fixed, fixed hard in the concrete of the public mind.
Sociology
At Calhoun I met a DOC officer who was also a preacher for a fundamentalist church. I came to know the officer, a sergeant, because for about two months, he worked as the librarian for the library where I taught reading and basic arithmetic. The sergeant liked what I was doing. He believed in personal redemption and rehabilitation. We talked. He preached a little to me about Creationism, that the earth is only about 5,000 years old. I was always polite as the sergeant spoke. He was a DOC officer and he was a good guy trying to do a very difficult job.
Today, former Secretary of State Pompeo is quietly running for President. Though he is a long shot, I support Pompeo. I have heard him speak. He is smart. He is tough. He has experience in foreign policy and in domestic policy, he was a four term member of the House of Representatives.
But Pompeo is an evangelical Christian with strong views on the positive forces of religion and equally strong opinions against abortion. Pompeo talks often about family and community, the foundations of a positive society.
Still, as noted, Pompeo is a long shot to go all the way to the White House. His Christian views and strong opposition to abortion are anathema to large parts of the population. I ask myself why? At its heart Christianity, like Judaism, is about the Golden Rule, the primacy of the family and the critical importance of strong communities. Why are so many Americans opposed to the positive values of Christianity and Judaism?
In too many working class communities the fabric of society is fraying in large part because of the absence of positive social institutions including church. Why do so many Americans reject what works, family, community and faith? What do progressives propose as alternatives to church, to family and to community?