The Weiner Component V.2 #41 – Patterns of History: Part 1: Welfare for the Rich

English: Woodrow Wilson.

English: Woodrow Wilson. (Photo credit: Wikipedia)

The Presidency of Donald J. Trump seems to be taking the country historically backwards.  We, as a nation, are moving toward the past, going from being a middle class nation to a lower class one.  And the current major agent bringing this about is the President of the country, Donald J. Trump with the aid of the Republican dominated Congress.

 

In the post-Civil-War Period the United States underwent a rapid phase of industrialization.  The Industrial Revolution arrived.  We changed from a rural civilization to an urban one.  This was the period of the robber barons and monopolies.  Taxation was limited.  The XVI Amendment to the Constitution legalizing the income tax would not be passed until 1913.  Prior to that date a large group of industrialists made multimillions of dollars in their prospective industries, establishing, in many cases, family dynasties, like the Rockefellers or the Fords.

 

At that time there were no rules of regulations.  Cities rose rapidly.  The country was crisscrossed with railroads.  Unions were considered organizations in restraint of trade.  Child and women labor was ramped.  Most industries worked their way up to become monopolies controlled by one man or a small group of men.  Monopolies bribed their way into Congress.  By the late 19th Century monopolies and oligopolies con`trolled most production.

 

All this corrupt growth was partly halted by the development of the Progressive Movement which rose around the turn of the 20th Century.  The struggle to end the monopolies and oligopolies would continue to and end with World War I.  It would not resume again until the Great Depression.

 

There was a great influx of labor during this early industrial period.  People came from Eastern Europe and Asia.  They built the railroads, filled the factories, and lived in overcrowded slums in the rapidly developing urban centers.

 

The overall population of the United States at this time was lower class, people: men, women, children, working for wages, usually low and were barely living upon what they earned.  With the Progressive Movement laws were passed improving conditions in the cities and the factories.  The labor movement developed and wages gradually improved.  Working conditions got better as new labor laws were passed.  It was a slow process.

 

With the coming of World War I there were shortages of everything in Europe.  Food and war materials were imported from the United States.  There was actually a labor shortage there.

 

During 1917 the United States was drawn into the war on the side of the Allied Nations.  The U.S. President, Woodrow Wilson’s slogan was: This was the war to end all wars.  Unfortunately after the war ended Allied Nations wanted revenge.  Wilson was forced to settle for a League of Nations which later the United States refused to officially join.

 

Germany as the only nation left of the Central Powers at the end of the War had to pay reparations for the cost of the war.  The Allies used the German reparations to pay the United States the money they had borrowed from her to fight the War.  With the coming of the Great Depression all payments ended.  Each nation worked unsuccessfully to get itself out of the Great Depression.  For the United States the Great Depression ended with the coming of World War II in 1939.

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In 1933, when he became President of the United States, Franklin Delano Roosevelt doubled the money supply in the nation by collecting all the gold coins, legally doubling their value from $18 an ounce to $36 an ounce, and reissuing the money in paper currency.  Presumably everyone had their currency exchanged from gold to paper.  Gold non-circulated certificates were deposited with the Federal Reserve which were supposed to stand behind the paper currency.  The gold was melted into blocks which were then put into depositories like Fort Knox.

 

By this move Roosevelt not only doubled the money supply he also gave the Federal Government possession or control of 50% of the money supply without raising one dollar in taxes.  This money would be used to pay for the “New Deal” that would be given to all the people in need in the United States.  Apparently Roosevelt also liked poker, that where the name of his program came from.

 

The entire concept of money would change at this point, not only in the United States but throughout all the nations since they all would follow this pattern.  Money would no longer be an exchange of a good or service for a valuable metal worth that good or service.  Paper money henceforth would have no intrinsic value.  It would only be a means of exchange.  A good or service would be exchanged for a different good or service.  Money would be the instrument of exchange.  It would state the value of the good or service for the other good or service for which it was exchanged.

 

Money now also became a means of scoring what a job or item was worth.  It had no real value outside of the country.  It could not be used in other countries.

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As we’ve seen in the United States prior to 1933 money was actual gold and silver; paper money was a promissory note that could be redeemed at any time for gold or silver.  It extended the amount of money in circulation.

 

Promissory notes began at one dollar and went up to thousands of dollars.  Ones and fives were silver certificates.  Anything above that was a gold promissory note that could be exchanged for gold $20 pieces of gold.

 

The year 1933 was the low point of the Great Depression.  In that year the Democrat, Franklin Delano Roosevelt, became the 32d President of the United States.  Among his actions that year he had all the gold coins, with the exception of a small number held back as souvenirs, collected and melted down into gold blocks.  They were stored in depositories.  Roosevelt had the value of the gold changed from $18 an ounce to $36 an ounce.  In essence he doubled the money supply.  This enabled him to pay for the New Deal.

 

What Roosevelt did, knowingly or not knowingly, was to change the function of money.  Before 1933 gold coins were accepted anywhere on the planet.  Money, an object of value was exchanged for equally valued goods and/or services.  After 1933 money became an object of exchange.  It had no intrinsic value.  It became within each country strictly an object of exchange; exchanging a good or service for a good or service.  Thereafter it became a sort of scorecard, denoting the value of an object, service, or occupation but other than that having no value itself.

 

In 1933 as the gold coins were collected gold certificates were issued and retained by the Federal Reserve for the gold collected and these served as the basis for the paper money issued.  Did the gold certificates equal the amount of paper money issued by the Federal Government?  I don’t believe anyone ever checked.

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Alexander Hamilton, the first Secretary of the Treasury, began this country based upon debt.  During the Revolutionary War the Continental Congress freely issued paper Continentals with which to pay its debts.  After the War Hamilton, as Secretary of the Treasury, Hamilton collected this money and put out a new issue paying off the Continentals at full face value.  He believed that a certain amount of Federal Debt ensured the allegiance of the property owning class.

 

With a few short exceptions, like the early part of Jefferson’s tenure as President, there has been a National Debt.  The question that now arises is: Should there be a limit to this Debt?  After all when the Federal Government borrows money it has to pay interest on the Debt.  Currently, toward the end of 2017 the Debt has reached 20 trillion dollars.  The interest upon that amount is in the hundreds of millions of dollars.

 

During periods of Democratic Presidents, when the Republicans had a majority in one House of Congress they have been deficit hawks, being upset over each additional dollar of debt.  With Republican Presidents they have been willing to massively expand the debt.  Under President Reagan the National Debt rose, for the first time, over one trillion dollars.  It more than doubled under the first Bush President and it quadrupled under the second Bush President.  Currently, under President Donald J. Trump, in order to bring about what the Republicans call “Tax Reform,” but what is actually a massive tax decrease for the wealthy, the Republicans are willing to increase the National Debt by over 1 ½ trillion dollars a year.

 

Originally they were going to gut Affordable Health Care (Obamacare) and use that money for the tax cut.  But when that plan failed their tax bill plans changed to take money from the middle class and from deficit spending.  Will that bill pass in both Houses of Congress?  I doubt it.  As long as the Republicans have a majority of two in the Senate they are having trouble passing anything.  To date, one year into their current administration they have passed no significant legislation.

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There is another important consideration to keep in mind.  With the current massive National Debt and the propensity of Republican Presidents to spend money unnecessarily or foolishly.  President George W. Bush’s Iraqi War and President Donald J. Trump’s ridiculous twelve hundred mile Wall there is a distinct possibility that the National Debt could continue to rise rapidly.  The effect of this is a redistribution of money in the hands of the wealthy.  After all who can afford to buy the continuous flow of government bonds?  Tax dollars will be paid by the rapidly declining middle and lower classes which will, in turn, be distributed as interest to the wealthy upper class.  This process will continually push many of the remaining members of the middle class downward economically into the lower class while enhancing the upper few percentile of the upper class.  It will help to take America back to where it was before the turn of the 20th Century.  In point of fact this plan can generate welfare for the very rich.

Franklin Delano Roosevelt, 1933. Lietuvių: Fra...

Franklin Delano Roosevelt, 1933. Lietuvių: Franklinas Delanas Ruzveltas (Photo credit: Wikipedia)

The Weiner Component Vol.2 #6 – Part 3: The Purpose of the Federal Reserve

The title page to Keynes' General Theory.

Unemployment rate in the US 1910–1960, with th...

Unemployment rate in the US 1910–1960, with the years of the Great Depression (1929–1939) highlighted. (Photo credit: Wikipedia)

The Federal Reserve was established on December 23, 1913. Its major mission was to avoid panics or major recessions in the future. It would at that time do this by being able to move money quickly anywhere throughout the National Economy. In essence since the nation functioned through its banking system the new Fed would protect its financial institutions from runs or panics where the depositors could all withdraw their funds, generally following a rumor that the bank was on the edge of failing.

 

In addition the United States economy had/has systematically gone through regular business cycles of recession, slump or depression, recovery, and boom. Invariably each of these stages of the economy leads to the next stage. During a boom period overproduction is invariably reached, workers are laid off, there is less income available, which accelerates the recession. This, in turn leads to a trough or low economic point which can be a depression with high unemployment. Eventually there is a shortage of goods and the amount of money being spent in the National Cash Flow increases; people are hired; there is more and more money available and recovery begins, continuing until a peak or production boom is reached again. The duration of the cycles can and do vary, going from less than a year to over ten years as the Great Depression did from 1929 to 1940. It was ended by World War II. These depressions can be regional or they can cover the entire nation, if not the world, as it did in 1929. They generally last between the two periods given above.

 

In simple terms this is the economic pattern of every industrial nation. Does it have to continue? That’s an interesting question. The probability is that it can be controlled by the Central Government’s actions.

 

In 1929 the science of economics was generally not understood well enough to determine exactly or why the depression was happening. In 2008 when the country had what is now called the Great Recession, enough was understood to avoid a greater depression than that of 1929. This depression was avoided by actions of the Federal Government.

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Even today economists disagree as to what caused the Great Depression and how it should have been dealt with. There are numerous theories. Probably The Keynesian theory is the most accepted. Keynesian economics deal with the various theories about how in the short run, mainly during recessions, economic output is strongly influence by aggregate demand or total spending. Aggregate demand does not necessarily equal the productive capacity of the economy. Instead it is influenced by a host of factors that can behave erratically, affecting production, employment, and inflation.

 

Keynes theories were first presented during the Great Depression in his 1936 book, The General Theory of Employment, Interest, and Money. Keynes’ approach contrasted with classical economics. Keynesian economists believe that the private sector’s decisions sometimes lead to inefficient economic outcomes which require active policy responses by the public sector (government). It is a combination of the two that stabilize output with the government exercising control over the private sector. Monetary policy actions are needed at times by the Central Bank and fiscal policy actions (Government spending.) in order to stabilize output over the business cycle. Consequently Keynesian economics requires a mixed economy, predominantly private sector with a strong role for government interventions during recessions and depressions.

 

Traditional or classical economics as developed by Adam Smith in his 1776 book, An Enquiry Into The Wealth of Nations, set the Market making all the societal decisions. The motivating force, according to Smith was the “invisible hand,” the profit system. Adam Smith was responding to an economic system called mercantilism, where gold was considered the basic wealth of the nation and the economic decisions were being made by the kings of the various countries.

 

John Maynard Keynes during the world economic disaster called the Great Depression was questioning the validity of this system, saying what was needed to solve this problem was a combination of private enterprise balanced by state control of the marketplace. To him unfettered classical economics had brought about the Great Depression.

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The actual causes of the 1929 Great Depression have been extensively discussed by economists and remains a matter of intense debate. In fact they are part of the larger debate about economic causes. The economic events that took place at that time have been studied thoroughly: a deflation in assets and commodity prices, dramatic drops in demand and credit, disruption of trade, widespread unemployment, over 13 million by 1932 the lowest point of the economic decline, and hectic poverty.

 

There is no consensus as to overall causes other than it started with the initial stock market crash that began on Black Tuesday, October 29, 1929 when panic selling of securities led to a continued dropping of value of the securities until the end of 1932 when it reached its lowest point. The Crash triggered the depression which had reached a high level of deteriorating economic conditions such as rising unemployment, over production, a totally unequal distribution of incomes, under consumption, and extremely high debt.

 

Both the stock market and the economy would slowly improve after 1933 with the new President, Franklin D. Roosevelt. It would rise to new heights after 1939 with the outbreak of World War II in Europe. The stock market and the economy would rise to new heights with a massive infusion of money for goods and services within the United States. War will have brought about its end within the U.S. It is interesting to note that it was the money spent during the war, first by European and Asian nations, then after December 7, 1941 also by the United States that specifically ended the Great Depression.

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Once the Great Depression had started there were massive mistakes made by the Federal Reserve. The Fed actually caused a shrinkage of the money supply and greatly exacerbated the economic situation. Deflation caused people and businesses to owe ever increasing amounts upon money they borrowed actually shrinking the money supply in the U.S. by about 1/3.

 

With the election of Franklin D. Roosevelt to the presidency in 1932 a form of Keynesian economics became the policy of the President from 1933 on when he assumed power. Roosevelt’s policy was the “3 R’s: Relief, Recovery and Reform.” This comprised Roosevelt’s “New Deal;” his attack upon the Great Depression, which essentially lasted from 1933 to about 1938. The Federal Government put itself in a position to help turn the country around. It brought about great improvement but not a complete end to the Great Depression.

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Toward the end of 2007 in the last year of the George W. Bush’s Presidency what is generally called the Great Recession began. The Housing Market in the United States collapsed. A great many people had been using their home as bank or checking accounts generally from the 1980s on, constantly refinancing their home and taking their equity out as property values continually increased. People bought the toys they always wanted: new cars, fancy trucks, boats, expensive vacations; just about anything they felt was desirable.

 

This had been going on for about thirty years, the entire career of many people in banking had taken place during this period. Housing loans or second mortgages were divided into miniscule fractions, put into a multitude of different Hedge Funds and sold to the general public as safe interest paying loans. The process brought the value of the home loans up millions, if not billions of dollars. The banks were earning large amounts in fees as the demand for loans actually forced up the value of the homes. By 2007 the end had been reached, property values had been raised beyond the point of sanity. The bankers were in denial that conditions could possibly change. Some banks were lending out 125% of the appraised value of the properties, working on the premise the housing values would rise endlessly.

 

The economic collapse began during the second week of March, 2008. It tended to be worldwide. In the United States, on Tuesday, with the encouragement of the President, George W. Bush and the Secretary of the Treasury, Hank Paulson, the Chairman of the Federal Reserve, Ben Bernanke injected $236 billion dollars into the American banking system. Citigroup, the world’s largest bank spent one billion dollars bailing out six of its hedge funds. Lehman Brothers, America’s fourth largest bank went under. AIG, the world’s largest insurance company, had moved into the business of insuring leveraged debt right at the time when the financial system was at the point of collapse. When the Housing Bubble burst Ben Bernanke, as chairman of the Fed, announced an $85 billion loan for them. Hank Paulson, the Secretary of the Treasury proposed buying up hundreds of billions of dollars’ worth of toxic assets.

 

With the accession of Barack Obama on January 20, 2009 as President of the United States that country and the rest of the Industrial Nations continued to hover on the point of economic collapse. This would have occurred if the governments had not interceded with masses of cash. They prevented, using taxpayer money, a depression that would have made the Great Depression of 1929 look like a weekend holiday. It would have been the total collapse of the banking systems which, in essence, run the economies of all those nations.

 

(Interestingly Donald Trump’s administration wants to do away with all the regulation in the U.S. which came about to avoid a repeat of this situation. Memories are short!)

 

President Barack Obama continued the bailout, saving the banks from their own stupidities, and he added the American automobile industry which was also on the point of total collapse. The governments of the various countries spent a lot of money saving their economies and returning the world to economic sanity.

 

Recently President Donald Trump commented in one of his speeches that President Barack Obama increased the National Debt more than any other prior President. He did so cleaning up the financial messes that they had helped to create.

 

We have passed beyond Keynesian economics to the point where the Free Market is today a farce. The governments of the United States and of the other industrial nations have assumed responsibility for the welfare of both the rich and the poor within their societies. How long will it take for the populations to understand this?

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In the United States and in most industrial nation there are groups that want to return to the good old days. Whatever they were. Everything is changing. The 21st Century will be completely different from the 20th Century.

 

It should also be noted that it was the Federal Reserve, under Chairman Ben Bernanke, who used creative Monetary Policy in a period of a little over 24 months, with strong encouragement from President Obama, to buy up the toxic mortgage pieces throughout the United States at the rate of 45 billion dollars’ worth a month and also he added another 40 billion dollars a month directly to the National Cash Flow.

 

The Republican dominated House of Representatives from 2011 on did nothing to help the situation. They should have applied Fiscal Policy, creating jobs by spending money on infrastructure modernization. Instead they tended to cut government spending and worsen the Great Recession. Mitch McConnell, the Republican majority leader in the Senate, announced that they would make Obama a one term president by not cooperating with him on anything. To them no price was too high in order to make Obama a one term president. Somehow the needs of the American people were lost.

 

It was the Federal Reserve and the President who saved the country from falling into the worst depression in its history. The Republicans, once they got control of the House of Representatives, refused to pass anything that would make President Obama look good. This was true even if it had a negative effect on the country and hurt the majority of its citizens. President Obama offered a Bill that would engender spending on our decaying infrastructure. It did not even come up for discussion in the House of Representatives.

The Weiner Component Vol.2 #5 Part 2 – President Donald J. Trump

Imagine a 17 year old adolescent in an over-fed 70 year old body with all sorts of insecurities who thinks of himself as being king of the world, and is surrounded by “yes men,” and you have an image of Donald J. Trump.

 

President Donald J. Trump is a Dorf.  In certain areas he is very secretive, while in other areas he makes constant dramatic public announcements, always talking about his great achievements.  Thinking back over former President Barack Obama’s eight year tenure as Chief Executive one remembers a formal signing of the Affordable Health Care Bill during his second year in office.  Looking back after Donald Trump being in office for three weeks there have been innumerable signings of his many Executive Orders.  He seems to take the position of a 16th Century European monarch, continually giving orders to the country.  But we are in the 21st Century and many of his Executive orders end up being suggestions for Congress to pass bills, which they may or may not do.  Most of his Executive Orders do not initiate anything.  Others are like his tweets: single sentences that tend to be fairly to very general in the area in which he is dealing.  The results of these can be obscure as his language use may not be clear.  All of them are in a black folder ready to be put on a shelf in his library after he retires from office.

 

Among other things President Trump ordered the Environment Protection Agency (EPA) to not make any public reports about pollution or anything that would upset his plans to limit the industrial expansion by increasing pollution.  He also ordered other units of government to not release or publish any similar type of information.  In turn when the general public became aware and protested loudly Trump backed down.  One wonders how much repression he is going to attempt.

 

In addition all ads urging sign-ups for Affordable Health Care (Obamacare) were cancelled.  And this includes those that had been already paid for.  His actions in this area threaten to undermine the nation’s medical insurance market by continually changing the parameters under which these policies are written, causing the insurance companies to lose their predictability factors as to what to charge for their services.

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On Friday, January 24th, just four days after he had assumed the presidency, Donald Trump issued an Executive Order suspending the issuing of visas to Muslims for 90 days from seven specific countries: Iraq, Iran, Syria, Yemen, Libya, Sudan, and Somalia.  He did not bother with our close ally, Saudi Arabia from which Osama bin Laden, the organizer and head of al-Qaeda, came.

 

The Secretary for Homeland Security is in charge of this move that is protecting the United States from foreign terrorist’s entry into the country.  No refugee will be admitted into the country for the next 120 days.  No one will be allowed in from Syria at all.  Muslim students, who are in the process of going to a U.S university and have gone to visit their parents over the holidays, generally will not be allowed back into the country.  Non-Muslims (Christians) from these countries will be allowed into the U.S.  Trump has stated that this is not a Muslim ban.

 

The result of this has been mass confusion at the nation’s airports.  The immediate effect has been to cause immediate confusion since a number of people from these seven countries were already in airplanes flying to the U.S.  Also the Home Security Agents at the airports stopped all Muslims coming into the country even those who ordinarily live in the United States and are returning home to their families. 

 

The Executive Order was passed with no warning.  Military officers are contending that it will hurt their relations with members of these countries who are fighting ISIS.  In fact an Iraqi legislator wanted to bring up a bill that would exclude all Americans from that country.  Inside the State Department some officials are contending in a document that closing the nation’s doors to 200 million people in order to weed out a handful of would-be terrorists will not make the nation safer but might instead increase the threat of violence.  The State Department affirmed the existence of this internal memo on Monday, January 29th. 

 

Meanwhile it’s been madness at the airports across the nation with millions of Americans peacefully and loudly protesting Trump’s edict.  The ACLU has been present at all these airports ready to represent the incoming Muslims.  It should be noted that even some top Republicans criticized the directive. 

 

The White House defended the Executive Order rollout as a success.  On Friday it led to the detention of more than 100 people landing at airports across the nation with valid entry documents.  Well over 200 individuals with valid visas were denied permission to board flights to the United States.   

 

An emergency stay was issued by a Federal Judge in Brooklyn, New York on Saturday.  In other areas of the country four other Federal Judges issued temporary stays.  Trump tweeted about Senators John McCain and Lindsey Graham objections that despite a rigorous existing security process, arrivals until now have not been properly vetted. 

 

The interesting note or irony to all this is that under President Barack Obama vetting of immigrants could take up to two years.  But under President Trump it is currently limited to 120 days.  Apparently Trump has a need to direct everything as President.  It as though in his mind nothing happened before he entered his new office.  In any event he does have the ability to increase his negative image among the American people.  He is probably the only president in the history of the country who can continually increase his unpopularity level among the people of the country.  And this during his first week in office.

                         

During the first week of February a Seattle Judge issued a national temporary restraining order on the ban after Washington State and Minnesota sued.  The Justice Department appealed to the 9th Circuit Court.  They argued that the president has the Constitutional power to restrict entry into the United States and that the courts cannot second-guess his determination that such a step was needed to prevent terrorism.  The states argued that Trump’s ban harmed individuals, businesses, and universities.  They cited Trump’s campaign promise to stop Muslims from entering the U.S., stating that the ban unconstitutionally blocked entry to people based upon religion.  All three Judges on the Appeals Court sided with the states.  The cancelation of the ban was continued. 

 

Trump stated that he will appeal the case.  If the second appeal goes before the Supreme Court with four conservative Judges and four liberal Judges and the result is a tie then the 9th Court Appeal’s decision stands.  The probability, however, is that at least one or two of the conservative Judges will probably uphold the Appeals Court decision, then it will be 5 to 3 or 6 to 2 in favor of upholding the lower court’s verdict.  Trump has a problem with rejection.  What does he do then?

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During his first twenty days in office President Trump has gone from crisis to crisis.  In all probability each new crisis was supposed to wipe out all objections on the preceding one.  In all it’s been a strong emotional ride for the American public.

 

First came his non-resolution for his conflict of interest.  He refused to get rid of his business interests and set up a blind trust.  Instead he turned all his business interests over to his older sons.  Presumably he will have nothing to do with them while he is president.  But as President-Elect he charged a multi-thousand dollar entry fee to anyone who wanted to spend New Year’s Eve at his party with him in his Florida club.  He brought back the Keystone XL pipeline which Obama had canceled and in which he invested quite a bit of money.  He also took on Nordstrom because they dropped his daughter’s business.

 

On his first full day in office there was the Women’s Protest March throughout the major and many minor cities of the United States and throughout Europe.  This was a historical first in the United States. 

 

Meanwhile he disrupted relations with our neighbor Mexico by insisting that Mexico will pay for the 12,000 mile Wall he is going to build between the two nations.  The Mexican President cancelled a diplomatic visit with the “world’s greatest negotiator,” as Trump has defined himself.

 

He has insisted that Obamacare is a disaster and that it will be replaced by a better plan.  The Republican Congress has begun the process of defunding Affordable Health Care but there doesn’t seem to be any replacements.  In fact the only plan there is in existence now is a voucher system, which has been discussed but not acted upon.  This will cost the recipients more every year since the probability is that medical costs will rise but the costs paid out in vouchers will not go up.  The Republicans talk about making access to what will be Trumpcare available to all but not about helping fund it for those who cannot afford to buy it.

 

Trump generated the Muslim Travel Crisis to the U.S. without any warning to anyone.  In essence he has shut the nation’s door to most refugees.  Even though, at least, five Federal Judges have put temporary bans upon the order from Brooklyn to Los Angeles, Trump has declared his ban a success.  He has threatened to make it permanent.  An Appeals Court has found it unconstitutional.  To Trump the point that it not constitutional would seem to be beside the point.  He says that it is necessary to keep terrorism out of the country.

 

The former Acting Attorney General has refused to defend Trump’s Executive Order in Court.  His response has been to fire her.  An interesting note of interest here is the fact that when the Acting Attorney General, Sally Yates, was being questioned by the Senate, Senator Jefferson Beauregard Sessions, the current, as of a few days ago,  Attorney General asked her who was primary in her carrying out her function in the Department, the President or the rule of law?  Her answer was the rule of law.  Trump fired her for doing just that.  He placed another person in her position who would use the Department to support the President rather than the rule of law.  And now that Jeff Sessions is Attorney General where will he place the emphasis?

 

Trump has appointed a reactionary individual, Judge Neil M. Gorsuch, to replace the former conservative Justice, Antonin Scalia, who died about a year ago.  A large percentage of Democrats believe the Trump has stolen a Supreme Court seat that should have come under the jurisdiction of President Barack Obama since Scalia died about a year ago and Trump has been President for a little over three weeks.

 

We are also dealing with the question of lifting sanctions placed upon Russia after she invaded and seized sections of some of her neighboring countries.  And the issue of Sanctuary Cities where the local enforcement authorities cannot be used by the Federal Government to enforce Federal Immigration laws or edicts against Muslims.  The California Legislature is currently dealing with a bill to make the entire state a Sanctuary one.

 

The interesting note of irony here is that the Republican Party is the minority political party in the United States.  They have essentially gotten control of Congress by gerrymandering political districts and the presidency with a minority vote.  Can Trump and the Republicans continue to enforce their will upon the American People?  There is a midterm election in November of 2018 and a Presidential Election in 2020. 

The Weiner Component #158 – Part 1: Donald J. Trump: The Presumptive Republican Candidate for the 2016 Presidential Election

speaking at CPAC in Washington D.C. on Februar...

The Race to choose presidential candidates for both major political parties in the United States seems to be just about over now.  The presumptive candidate for the Republican Party is Donald J. Trump.

 

The Republicans will meet at the Quicken Loans Area from July 19 – 21 (M – TH) 2016 in Cleveland, Ohio.  There they will start with the meeting of the rules committee a week earlier, vote the 2016 rules into existence, choose the Presidential candidate, write their platform of what the Party stands for the next four years, and choose the Vice Presidential candidate.

 

Donald J. Trump, their Presumptive Candidate, presumably is their choice for President of the United States.  If he doesn’t make any more stupid verbal mistakes or if new negative material on his background doesn’t become available to the general public he may become their actual candidate.  Right now one bookie in Las Vegas is giving 12 – 1 odds against Trump getting elected, another is giving odds of 25 to 1.  Still another Las Vegas bookie is taking bets that Donald Trump will be impeached at some point if he is elected.

 

Of all the people that the Republicans could have chosen as their nominee for president, Donald Trump is the worst possible choice.  On a 1 – 10 scale with 1 being the least satisfactory number, Donald Trump rates a 0 or less.  With the blatant fabricating, erratic behavior and the information coming out about him his rating keeps dropping.  He could conceivably end up at a minus ten or higher.

 

From examining his history he represents everything negative about human beings.  He treats most of his employees in the same fashion as a man who hates dogs would treat the animals, like slime.  In business abuses virtually all the people who work for him are potential victims.  He is a liar who apparently can’t tell the difference between a falsehood and truth.  He also sees everything in terms of himself and what he can get out of everyone.  Donald Trump is a sad example of a human being.

 

Interestingly Donald Trump has claimed to be a billionaire, stating publically that he has over 10 billion dollars.  Originally he said that he is really rich and that he is self-funding his campaign and is therefore beholden to nobody, but now that he is the presumptive Republican candidate he claims that he can no longer afford to finance himself.  It would seem that he exaggerated the extent of his wealth.  He has not released any income tax forms to show how much he did or didn’t pay in taxes.  I would suspect he paid 0 in income taxes and doesn’t want to admit that to his public,.

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Donald Trump, over the years, has used his name as a commodity, renting it out for a small percentage to innumerable products.  This has satisfied both his ego and his desire for additional money.

 

One of the items of which he was offered to add his mane was Trump University, an American, for profit, Education Company that would run a real estate training program.  A man named Michael Sexton created a business plan for a real estate training program and presented it to Donald Trump looking to pay Trump a flat fee for the use of his name.  Trump decided that he wanted to be the principle owner of this company.  He would own 93% of it after it was organized.

 

Trump University was incorporated in 2004 by Trump and two others as a New York limited liability company. It began operation on May 23, 2005.  It was a privately held, unaccredited school which did not give college credits, whose object was to make a profit for its owners.

 

Since it was unaccredited and did not offer college credit it was illegal under the laws of New York State which notified the business it was an illegal operation.  Trump was able to forestall changing its name for four years; after which the name was changed to the Trump Entrepreneur.  In 2011, the company became the subject of an inquiry by the New York Attorney General’s office for illegal business practices.  This resulted in a lawsuit filed in 2013, which remains ongoing.

 

rump University is also subject to two ongoing class action lawsuits in California Federal Court.  The lawsuits have centered on allegations that Trump University misled students into thinking that is was a real university whose instructors were hand picked by Donald Trump, when in fact they were not and it certainly wasn’t a real university.

 

In 2011 the office of the Texas Attorney General investigated Trump University.  After exchanging communications with investigators that included requests from the investigators for customer lists and internal documents, Trump University closed its operations in that state.  Once they went away the state dropped the investigation.

 

The focus of the seminar was real estate instruction.  Trump claimed in advertisements that he could turn anyone into a successful real estate investor.  The instruction began with an introductory seminar in rented space like a hotel ballroom.  The introductory seminar, which was free, urged students to sign up for additional classes, ranting from $1,495 to $35,000 for a “Gold Elite” program.  The records indicate that 7,000 tickets were sold to customers attending classes.  Approximately 6,000 of these tickets were for $15,000, for a three day course and 1,000 tickets were for silver, gold, or elite courses, ranging in price from $19,000 to $35,000.

 

The people who signed up were those desperate, for whatever reason, for money.  In order to get people to pay the so-called tuition the school had these people increase their debt limit on their credit cards to the maximum possible.  The excuse given was so that they could possibly jump into an immediate real estate deal of one became available.  The tuition was then charged to the credit card.  An interesting business plan to get those generally in debt to go into  greater debt to increase the profit for Trump’s company.

 

Trump said he “handpicked” the instructors but he testified in a 2012 deposition that he never selected the instructors for the program.  For a time in 2012, according to one of the other co-owners, Trump signed off on the school’s advertisements.  For a time in 2008 it used the name of “Trump Wealth Institute.”  The company ceased operating in 2010, after five years.

 

Three lawsuits have been file and are pending.  They assert the Trump University engaged in a variety of illegal business practices that range from false claims to racketeering.  Two are federal class-action lawsuits: one is against Trump University and its managers, including Donald Trump, and one it against Donald Trump personally.  These two lawsuits are in California.  There is a third case in New York, which has been in process since 2012 that is looking into criminal actions by Trump and his company.  Here Trump University is accused of being a “bait and switch” scheme and not a university.  Trump is accused of misleading over 5,000 people.

 

The first two cases will be heard in California by U.S. District Court by Judge Gonzalo P. Curiel..

 

Trump has traditionally used the courts and the law as a weapon against his opponents.  To him it is a means of extending legal cases until they are out of the financial range of the people suing him or he is suing.  He will delay as endlessly as possible the cases and then, if he loses, continue this process by appealing and , if necessary, re-appealing the case.  The Courts and the law have been his tool against people he cheats or wants to punish for whatever reason.  Most legal cases can take a very long time to be resolved.

 

In 2005 the New York State Department of Education sent Trump University a letter stating that they were violating state law by using the word “university” when they were not actually chartered as one and did not have the required license to offer instruction.  The organization promised to stop instructing students.  The New York Attorney General alleged that such instruction continued; Trump University was stalling.  It was not until March of 2010 that they dropped the word “university” and became “The Trump Entrepreneur Initiative/

On August 24, 2013, the State of New York filed a $40 million Civil Suit against Trump University.  They alleged illegal business practices and false claims made by the company.  Trump denied the allegations and claimed a 98% approval rating.  He called New York Attorney General Eric Schneiderman “a political hack looking to get publicity.”  Trump filed a complaint alleging that the state Attorney General’s investigation was accompanied by a campaign donation shakedown; the complaint was investigated by a New York ethics committee and dismissed in August 2015.

 

On October 2014 the Court found Trump personally liable for operating the company without the required business license.  The case is still pending.

 

Taria Makaeff had paid nearly $60,000 to Trump University in 2008.  She brought a class action lawsuit against the university on April 30,2010, in the District Court for Southern California, seeking refunds for Makaeff and other former students of Trump University, as well as punitive damages for breach of contract, fraud, negligent misrepresentation and bad faith.  The suit did not originally name Donald Trump as a defendant, but did so in a later amended complaint.

 

On May 26, 2010, Trump University filed a counterclaim that alleged Makaeff had made defamatory statements about Trump University, “including many completely spurious accusations of actual crimes,” that had caused the school losses of more than $1 million in los tuition.  On June 30, 2010, Makaeff countered that the defamation claim was an attempt to intimidate her.  Makaeff appealed to the Ninth Circuit Court of Appeals, where a three judge panel ruled on April 17, 2013 that Trump University had to show malice on Makaeff’s part to establish defamation.  This returned the case to District Judge Gonzalo P, Curiel, who, on June 16, 2014, ruled in favor of Makaeff and dismissed the defamation claim.  Makaeff then, at the court’s invitation, presented evidence of her legal costs in connection with the defamation litigation.  She asked for $1.3 million.  Judge Curiel, on April 20, 2015, ordered Trump University to reimburse he $798,000 in legal fees and costs.

 

On March 21, 2016, over objections from Trump University attorneys, Judge Curiel allowed Tarla Makaeff to withdraw from the case as head plaintiff, and named Sonny Low to take her place.  The case is coming up in November 2016.

 

On October 18 2011, Art Cohen filed civil lawsuit, “Cohen b Trump,” in the U.S. District Court for Southern California, as a class action on behalf of consumers throughout the United States who purchased services known as “Live Events” from Trump University after January 1, 2007.  It alleged violations of the RICO Statue, being essentially a scheme to defraud.  The suit named Donald Trump as the sole defendant and sought damages, including punitive, and treble damages.  In an order dated October 24, 2014 U.S. District Judge Gonzalo P,. Curiel certified that Cohen had presented enough evidence to allow the lawsuit to proceed.

 

The general council for Trump University stated that the university would appeal the Curiel ruling.  He said it showed a “manifest disregard for the law.”  In October 2015 he stated that Trump would ask Curiel to recuse himself because of his “animosity toward Mr. Trump and his views.”  Trump’s lawyers have not filed any motion to bring this about.  According to legal experts such a motion would lack legal merit and probably be considered frivolous.  This could cause Trump’s lawyer to lose their licenses.

 

On May 27, 2016, Judge Curiel granted a request by the Washington Post for public release of documents that had been filed in the case.  He noted that they were “routine” and many were publically available.  These documents included “playbooks” documenting instructions for employees to use a hard-sell approach, and depositions from former employees of Trump University that stated that the university had defrauded and lied to its students.  This case is scheduled for a hearing on July 22, 2016.  If the result is negative for Trump he will delay the results by appealing the verdict..

 

During campaign speeches, Trump has revealingly called Judge Curiel a “hater.”  He has described him as Mexican or Spanish, even though he was born in New York City just like Donald Trump.  His parents were of Mexican decent unlike Trump whose parents were of German and Scottish decent.  Apparently because of intense Republican criticism from people like Paul Ryan and Mitt Romney, Trump has been silent lately about Judge Curiel.

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According to an investigative article in USA Today hundreds of contractors and employees of Trump claim that he doesn’t pay his bills.  Generally with contractors he never makes the final payment claiming that the work is shoddy even though it has been approved by his general contractor.  With employees, like lawyers or ordinary workers, he just doesn’t pay them full for their services.  Interestingly he’s offered many of the contractors to whom he hadn’t given the final payment after the contract was completed, the opportunity to work for him again.  Employees, I suspect, that he’s finished with he sees no reason to pay fully.  In this fashion he has probably saved millions of dollars.  Lawsuits are expensive and take a lot of time; most people of companies can’t afford them; in many cases the lawsuit will cost more that these people or companies are owed by Trump.

 

In the early 1980s, when they were going through a surge of building casinos in Atlantic City, New Jersey the Trump Organization constructed the Taj Mahal Resort Casino.  A Philadelphia cabinet maker bid and won a contract to produce the bases for slot machines, registration desks, bars, and other cabinets in the Trump Plaza casino.

 

Bidding is a complicated process: a number companies compete for the contract which goes generally to the lowest bidder.  The contractors have to figure their labor and material costs and come up with a reasonable profit.  If the price is too high he will be outbid.  The only place he can be reasonable is in his profit margin.  The profit margin has to be as small as possible.  The contract won by Edward Friel, Jr. was for $400,000.  Apparently the bid was low, virtually every dollar was needed in payment to make the venture a success for the subcontractor.

There is usually an initial payment, a middle of the job payment, and a final one after the job is completed.  The final payment, in this case, was for $83,000.  It contained the profit and some of the costs of building the bases.  This payment was never made, presumably because of shoddy work, even after approval by the general contractor.  But later Friel was offered the opportunity to bid for additional contracts.  Friel’s lawyer informed him that it would cost over $83,000 to sue for the debt if Trump choose to string the case out.  The cabinet company eventually went under.

 

Atlantic City records indicate that at least 253 subcontractors weren’t paid in full or on time.  This also included workers who installed walls, chandeliers, and plumbing.

 

A USA Today Network analysis found that Trump had been involved in over 3,500 lawsuits over the last 30 years.  At least 60 lawsuit, in addition to liens, judgements and other government fillings documents where people have accused him and his business of failing to pay them for their work.  Among these a dishwasher in Florida, a glass company in New Jersey, a carpet company, a plumber, painters, forty-eight waiters, dozens of bartenders, and other hourly workers at his resorts and clubs coast to coast.  This includes real estate brokers and even law firms that had represented him in some of these suits and others.  Trump doesn’t discriminate, he stiffs everybody.

 

Trump’s companies have been cited for 24 violations of the Fair Labor Standards Act since 2005, for failing to pay overtime or the minimum wage.  This includes 21 citations against the now defunct Trump Plaza in Atlantic City and three against the former Trump Mortgage LLC in New York.  Both cases were resolved with back wages being paid.

 

In addition to these cases the review found over 200 mechanics liens that were filed by contractors and employees since 1980, the last 36 years.  The liens ranged from a $75,000 claim by a Plainview, New York air conditioning and heating company to a $1 million claim from the president of a New York City real estate banking firm.  The number of companies and others alleging he hasn’t paid suggest the wither his companies hire inept workers and contractors, or that Trump businesses renege on contracts, refuse to pay, or consistently attempt  to change payment terms after work is complete.  This is alleged in dozens of court cases.

 

Trump has asserted that the cases were a long time ago.  But even as he campaigns for the presidency new cases are continuing.  In May of 2016Trump Miami Resort Management LLC settled with 48 servers at his Miami golf resort over failing to pay overtime for a special event.  The settlements averaged about $800 for each worker and a $3,000 settlement for one, according to court records.

 

In California and New York, at Trump facilities, hourly workers, bartenders, and waiter staff have sued with a range of allegations from not letting workers take breaks to not passing along tips to servers.  The California cade was settled, the New York one is still pending.

 

The owner of the Paint Spot in South Florida, has been waiting more than two years to get paid for work at Trump’s Doral golf resort.  In May 2016 Trump’s company refused to pay over $30,000 owed for work done.  In courtroom testimony, the manager of the general contractor for the Doral renovation admitted that a decision was made not to pay the Paint Spot because Trump “already paid enough.”  The judge ordered foreclosure of the resort and the proceeds of a sale of the facility be used to pay the money owed.  Trump’s attorneys have since filed a motion to delay the sale.  The Paint Spot still hasn’t been paid.

To be continued next week.