The same people who thought it was hunky-dory for a man with a background of community organizer and two years in the Senate to fill the shoes of President of the U.S., are now outraged that a neurosurgeon might head HUD (Department of Housing and Urban Development).
That’s right. Progressives are outraged that Dr. Ben Carson might head what Francis Menton calls “government subsidized housing.”
HUD operates mostly outside of the consciousness of most of the public. But you only have to look into it for a few minutes to realize that the business of HUD is creating poverty traps to make the supposed “beneficiaries” into government dependents for life. HUD is not merely a failure as an anti-poverty program; it is a disaster. It operates substantially on the model of socialism (“to each according to his needs”; assets in public ownership), and it achieves results that would make Cuba or Venezuela or East Germany proud. Readers here know that HUD’s flagship, the New York City Housing Authority, is an unspeakable disaster at every level. Its properties, housing about 7% of New York City’s population, sit on vast acreage of prime real estate — some of it (e.g., miles of Manhattan waterfront) among the most valuable in the world — and its residents receive subsidies in many cases worth $50,000 and $100,000 per family per year, and yet the poverty rate in its projects exceeds 50%, turnover is almost non-existent as residents remain in poverty for life, the rents cover barely a third of operating costs and nothing for capital projects or property taxes, and HUD throws some $2 billion down the rat hole every year only to maintain the poverty and dependency.
Dr. Ben Carson did not have much to say specifically about HUD during the presidential campaign. But in a speech at a Conservative Political Action Conference in 2015, he urged that the next president “get rid of dependency” some Americans have on the U.S. government.
“We need to understand what true compassion is to reach out to individuals who think that being dependent is reasonable as long as they feel safe,” said Carson, the first speaker to address this year’s annual keynote conservative conference. “It’s not compassion to pat them on the head and say, ‘There, there, I’m going to take care of all your needs, your health care, your food.’ That’s the opposite of compassion.
You can see why progressives loath this guy. Read more from the Manhattan Contrarian here.
Henry Cisneros on Ben Carson as potential HUD Secretary
Writing at The American Conservative, Cato Institute’s vice president for defense and foreign policy studies, Chris Preble, takes a look at Trump’s foreign and defense policy team with special attention given to retired Marine Gen. James Mattis.
I sense in Mattis a healthy appreciation for the limits of military power. He’s obviously no pacifist (check out some famous #Mattisisms), but he asks tough questions about what military action is intended to achieve, and whether the mission has the support of the American people. This is not a man who is inclined to treat every problem as a nail, just because Uncle Sam wields a massive hammer.
Mattis has also raised some serious concerns about the deficit and the debt, and challenged some sacred cows, including the need for maintaining a nuclear triad.
For now, I’m reserving judgment on the “Warrior Monk.” He is sure to be a very important player in the Trump administration, and has the potential to steer the new president away from his hawkish impulses, if he, Mattis, is actually so inclined—and if the president is willing to listen.
Christopher A. Preble discusses Donald Trump and foreign policy on BBC Radio 5
Most of the 1.6 billion Muslims in the world are living peaceful lives, writes Peggy Noonan in the WSJ. “But Jihadists don’t want to be integrated. They want trouble.” By using a simple child’s math of 10%, Ms. Noonan offers some sobering reality:
Let’s say only 10% of the 1.6 billion harbor feelings of grievance toward “the West,” or desire to expunge the infidel, or hope to re-establish the caliphate. That 10% is 160 million people. Let’s say of that group only 10% would be inclined toward jihad. That’s 16 million. Assume that of that group only 10% really means it—would really become jihadis or give them aid and sustenance. That’s 1.6 million. That is a lot of ferociousness in an age of increasingly available weapons, including the chemical, biological and nuclear sort.
When have we ever seen a single individual who has so defied expectations, broken the rules, violated norms, beaten not one but two political parties on the way to winning an election that he entered with 100-1 odds against him? I don’t think we have ever seen one person operating in such an unconventional way have an impact on the events of the year quite like this.
MORNING JOE 12/7/16: Time reveals the 2016 Person of the Year
Things are looking up for residents of the 25 super states where Republicans control both chambers of the state legislature and also the governor’s mansion. Read about a selection from the super group here, as Kyle Peterson from The Wall Street Journal interviews Tracie Sharp, president of the State Policy Network.
So what can Republicans realistically accomplish in the next few years? A quick survey of think tankers in states where the GOP gained on Nov. 8 suggests that the mood averages somewhere between bullish and giddy. Visions of tax cuts and tort reforms are dancing in their heads.
• Kentucky: “Republicans now control the Kentucky House of Representatives for the first time since 1921,” says Jim Waters, the president of the Bluegrass Institute. The GOP flipped 17 of the chamber’s 100 seats and defeated the sitting Democratic speaker. With all the levers of power in Republican hands, right-to-work legislation looks like a shoo-in.
Also likely, he thinks, is a law establishing charter schools. Kentucky is one of only a handful of states without charters. “The Republicans need to grab this opportunity,” Mr. Waters says. “Our biggest concern is that the Republican leadership will be too timid.” Somehow that seems unlikely: Gov. Matt Bevin has already suggested calling a special session in 2017 to revamp the tax code—and maybe even eliminate the income tax.
• Missouri: A new Republican governor, Eric Greitens, will replace term-limited Democrat Jay Nixon. “I think that we’re going to see bills that have been vetoed in the past, like right to work, go through quickly,” says Brenda Talent, the CEO of the Show-Me Institute. Last year the Republican House tried to override Gov. Nixon’s right-to-work veto but fell short by 13 votes.
Expanding charter schools, Ms. Talent predicts, will be an “easy lift,” and tackling corporate welfare is a possibility. “To give you an idea of the magnitude of the problem,” she says, “you could eliminate the corporate income tax in the state simply by eliminating economic development tax credits.”
• New Hampshire: With the election of the first GOP governor in 12 years, add this to the pile of potential right-to-work states. “The odds certainly are better than they’ve ever been,” says J. Scott Moody, the CEO of the Granite Institute. In 2011 the Democratic governor vetoed a right-to-work bill, and the House could not muster the votes to override.
• Iowa: Republicans retook the Senate, defeated the incumbent Democratic majority leader, and regained full control for the first time since 1998. Don Racheter of the Public Interest Institute says flatter tax rates are likely, as is a goal long-sought by social conservatives: defunding Planned Parenthood. In April the Republican House passed a bill to block Medicaid dollars from flowing to groups that provide abortions, but the language was stripped out by the Democratic Senate two days later. “Now,” says Mr. Racheter, “I think that’ll happen.”
• Pennsylvania: In October the GOP House fell three votes short on a bill to move newly hired public workers away from traditional pensions. As it happens, on Nov. 8 Republicans picked up three additional seats. “Every indication we have,” says Charles Mitchell,president of the Commonwealth Foundation, “is pension reform is coming back and it’s coming back soon.” The legislature may also put on the Democratic governor’s desk a “paycheck protection” bill, which would bar the government from collecting union political funds. “The dynamic has shifted considerably,” Mr. Mitchell says. “A lot of these issues were laughed out of the room, even under the last Republican governor.”
• Minnesota: A gain of six seats in the Senate put the legislature under total GOP control. “We’ve got about a $1.4 billion budget surplus,” says John Hinderaker, president of the Center of the American Experiment. “I think our Republican legislators understand that if they don’t provide some tax relief people are going to say ‘Well, why the hell do we bother voting for Republicans?’ ”
The best targets for repeal, he suggests, are the state’s taxes on commercial property and on Social Security benefits. There’s also MNsure, the ObamaCare exchange. When open enrollment began Nov. 1, Minnesotans saw rate increases up to 67%. “Something is going to be done. Something’s got to be done,” Mr. Hinderaker says. “This is why the Republicans won the election, in large part.”
• Illinois: Democrats kept the House but lost their supermajority, which will give Republican Gov. Bruce Rauner’s vetoes a bit more bite. It may also strengthen his hand in negotiations to end the 18-month budget stalemate. “You’re starting to get the liberal chattering class in Illinois saying ‘Come on Democrats, why don’t you just agree to one thing that he wants to do,’ ” says Diana Rickert, vice president of communications at the Illinois Policy Institute.
She adds that there is more grumbling than ever—even from fellow Democrats—about Michael Madigan, the powerful House speaker who has held that office, excluding a two-year hiatus, since 1983. “We’re trying to dismantle a political machine that’s been in place for 40 years,” Ms. Rickert says. “It takes time. But we are making a lot of progress.”
Post-Election Panel: How Conservatives Move Forward
NRO’s Andrew McCarthy, not always a huge fan of Donald Trump, writes on why he is encouraged by Trump’s cabinet picks. “I don’t like everything Trump has done so far, but I like an awful lot of it. And saying so is only fair.”
As far as Trump schmoozing with Al Gore? McCarthy maintains that Trump’s meeting with Al Gore before nominating Scott Pruitt is something he can live with. Many critics, McCarthy notes, who were worried “there might not be much daylight between Trump and Clinton are thankfully being proved wrong.”
Well, if there had been a second Clinton administration, do you think we’d have gotten Pruitt? How about Jeff Sessions at Justice, or General James Mattis at Defense? Or Trump’s promised upgrade in immigration enforcement to be carried out by General John Kelly, the clear-eyed So-Com commander who has warned about radical Islam’s inroads in Central and South America (and a Gold Star dad whose son laid down his life in Afghanistan, fighting our jihadist enemies)? Do you figure Hillary would have tapped teachers-union scourge Betsy DeVos for the Education Department? Or a staunch Obamacare critic such as congressman (and doctor) Tom Price to run HHS?
Here, my Cato friend Tucker Carlson picks apart the arguments of Erin Schrode, an opponent of Donald Trump’s pick for EPA, Scott Pruitt. In a tweet, Schrode had compared the selection of Donald Trump as TIME’s man of the year to the magazine’s pick of Hitler in 1938. She asked her followers to discuss. Carlson rebutted Schrode, saying that comparing anyone to Hitler is the end of a discussion, not the beginning of one.
With the Rex Tillerson nomination for Secretary of State now official, it’s worth reflecting on how much the punditry surrounding the nomination has focused on the US-Russia relationship. This is understandable, given the extent to which Russia has been in the news lately, but there are implications beyond Russia that bear thinking about.
So it’s worth broadening the lens a bit. In a critical take at the New Yorker, Steve Coll–who literally wrote the book on ExxonMobil–notes that
Because oil projects require huge amounts of capital and only pay off fully over decades, Tillerson has favored doing business in countries that offer political stability, even if this stability was achieved through authoritarian rule.
Moreover, writes Coll, “in general, Tillerson and ExxonMobil have argued against economic sanctions as an instrument of American foreign policy.”
This take on international politics sounds eerily reminiscent of an earlier era in which Republican oil men ran U.S. foreign policy in the Middle East. Take this remark, from one of these men, in 1998 regarding U.S policy toward Iran:
The nation that’s isolated in terms of our sanctions policy in that part of the globe is not Iran. It is the United States. And the fact that we have tried to pressure governments in the region to adopt a sanctions policy that they clearly are not interested in pursuing has raised doubts in the minds of many of our friends about the overall wisdom and judgment of U.S. policy in the area.
That analysis comes from the 1998-vintage Dick Cheney, when he was CEO of Halliburton. Now, say what one will about Halliburton, or the earlier vintage of Republican foreign policy hands, but can anyone argue that this unabashedly pro-business, pro-oil take on foreign policy was less destructive to U.S. interests than was the messianic foreign policy of the neoconservatives in the early 2000s?
As that Cheney example indicates, past performance is not necessarily an indicator of future results. People change. But if Tillerson has been shaped by his time–some 46 years–at ExxonMobil as much as his detractors suggest, one wonders if a preference for stability and predictability in the Middle East might be better than the possible alternatives.
The downside of this approach historically has been to grow too close to authoritarian regimes in the region rather than to deal with them constructively but at arm’s length. The Middle East, as a region, matters far less to the United States than people think. But if we’re going to be intricately involved there for the foreseeable future, an approach that hearkens back to the George H.W. Bush days might be as good as we could reasonably hope for.
No, it is not the end of the world, but if you are a loyal Vanguard investor, as am I, having one of the few dividend-based funds in the world I advise for purchase close is a “Vanguard Crisis” for me as well as for many individual investors.
How is this “Crisis at Vanguard” going to play out for the individual investor?
I have been anticipating this “Crisis at Vanguard” for a long time. And it is going to become a broadening industry crisis, not just a “Crisis at Vanguard.” The handful of big mutual funds suitable for my subscribers and management clients are facing the imminent risk of closing to new investors.
Why is there high risk of closings among the worthy funds available to conservative, retirement-oriented, seasoned investors?
The acceptable funds have simply grown too big. Increasingly, fund managers are finding that the field of securities suitable, given a particular fund’s strategy mandate, is shrinking below a satisfactory level that allows investing options. The well is running dry. When a well runs dry, there is no more water. In the case of Vanguard Dividend Growth, the day of the dry well has arrived. The flow of suitable securities options for fund managers no longer exists.
Now What?
I long ago developed a strategy ladder to deal with the “dry well.” My strategy ladder has a two-rung approach. First: My family management accounts are not super-fund sized. Meaning, I have a multitude of securities options available for all my accounts. Neither Intelligence Report readers nor my management clients suffer from size constraints. Second: I have the luxury in Intelligence Report and at Richard C. Young & Co., Ltd. (sign up here for the Richard C. Young & Co., Ltd. client letter, delivered free even to non-clients) of being able to select from a field of securities where market capitalization levels are small enough that any big fund would be excluded from the start. I can stay under the big fund radar and feel no repercussion from big fund closings. Investing in mutual funds at all could actually become a narrowing process.
On many fronts, the tide for the mutual fund industry is moving out.
I recently was involved in an exclusive interview series in which I explain how investors can transition away from this dying breed of financial beast. The interview series should be available this fall. For the individual investor, the future is with old-line, conservative investment firms that concentrate on individual securities selection and ongoing family-oriented associations.
Now here is the sad and official release from Vanguard:
Vanguard Dividend Growth Fund is closed to new investors as of July 28, 2016. The fund will remain open to existing investors for additional purchases. Vanguard has a long history of preemptively restricting cash inflows to maintain funds’ assets at reasonable levels. In addition to the Dividend Growth Fund, other funds that have closed or have restrictions, include Vanguard Capital Opportunity, Vanguard PRIMECAP, and Vanguard PRIMECAP Core funds. Vanguard Convertible Securities Fund and Vanguard Wellington Fund remain closed to most new institutional accounts.
