SYDNEY WILLIAMS: THE MONTH THAT WAS-FEBRUARY 2016
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February is always short in days, but this month was long in news – more than I could cover.
Antonin Scalia’s death, which came as a surprise and disappointment, showed the partisan divide in Washington. As well, it highlighted the functions and responsibilities of our three branches of government. The President has the right, and indeed the obligation, to nominate Justice Scalia’s replacement. The Senate has the right, and indeed the obligation, to advise the President and to consent to the nomination, table it or deny it. Our system was not designed to be efficient – to “get stuff done” – but to be true to the principles of representative government. Justice Scalia felt personal preferences should play no role in a justice’s interpretation of the Constitution. His greatest contribution was his sense that contentious social issues, like abortion and gay marriage, are better resolved at the ballot box than determined by nine unelected individuals who are in no way representative of the people. As Justice Scalia often reminded us, four of the justices grew up in New York City and all nine received their law degrees from either Harvard or Yale.
Justice Scalia’s death was not the only one in February. The reclusive Harper Lee, author of To Kill a Mockingbird died at age 89, less than a year after her second novel Go Set a Watchman was published, a book unlikely to enhance her reputation. Umberto Eco, author, philosopher, essayist and semiotician – best known for his mystery The Name of the Rose – died at age eighty-four. The world lost two wonderful women, both friends: Betsy LeGard, who with her husband Ed have been friends for forty-five years, and Barbara Perkins, who with her husband Ned have been friends in Old Lyme for the past twenty years. Jerry Gold, a friend for over forty years and the OM (oldest member) of the Drones of New York – a swarm of P.G. Wodehouse fans – died last week. Thank God for memories.
As it has been for most of the past eight months (and will for the next eight!), the endless election process dominated domestic news. On the Democrat side, while the popular vote has been fairly close between Clinton and Sanders, the delegate count (502-70) has not, because of the undemocratic way Democrats assign Super Delegates. On the Republican side, Trump (who at the end of the month gained the endorsement of Chris Christie) has taken about a third of the popular vote and about two thirds of delegates. In terms of delegates, Republicans are more democratic than Democrats. The outlook may change with today’s “super Tuesday” primaries, but at this point the leading candidates are a demagogic man who has nothing nice to say about anyone (apart from himself and his family) and who has, unsurprisingly, the most negative poll numbers of any candidate, and an ethically-challenged, demagogic woman who was Secretary of State when $6 billion went missing and who lied about Benghazi. As former Defense Secretary Donald Rumsfeld would put it, in the first instance we have a known unknown and in the second, a known known. Neither’s appealing.
During the month, Republican’s saw Huckabee, Christie, Fiorina, Paul, Santorum and Bush bow out. The State Department released more of Mrs. Clinton’s e-mails, but also announced that two dozen were too sensitive to be released even in redacted form. “Nothing to see here, folks,” is the way the Clinton forces explain it. Keep in mind, the e-mails the State Department are looking at are the ones the Clinton’s released. Last week’s testimony from John Kerry confirmed that a secure e-mail account had been set up for Mrs. Clinton when she was Secretary of State, but she neglected to use it. A federal judge, toward month’s end, granted a motion that could pave the way for the State Department to subpoena “personal” e-mails withheld from the State Department by Clinton and her aide Huma Abedin, wife of the notorious pervert, Anthony Weiner. Keep in mind, Mrs. Clinton led the State Department when the image of America overseas became more tarnished than it had ever been. The result is both Parties find themselves in a catch-22: Democrats because they made a pact with the devil, in placing their 2016 bets on a woman who is a liar and who could be indicted (and would have been had she not been a Clinton). Republicans, who had expected Trump’s candidacy to be ephemeral – to end like a Supernova – have watched him become a magnetar.
Elsewhere domestically, Tim Cook’s adamancy in not helping the FBI seems almost surreal. One would think they could “unlock” the iPhone belonging to Syed Farook without this becoming a Pandora’s box. The security of the nation must be weighed against the privacy of a dead terrorist. Apple is supposedly working on a phone that not even they will be able to unlock. Is that right in a world where terrorists hide behind privacy laws? President Obama visited a mosque in Maryland, the Islamic Society of Baltimore, a temple associated with the Muslim Brotherhood. Eliot Spitzer, who as the the New York Daily News put it “rents hookers more often than other men rent cars,” was caught in another love nest imbroglio at the Plaza with Svetlana Travis. She skedaddled back to Russia, leaving the former Governor to explain himself – that he only wanted to prevent her from harming herself. The truth and Mr. Spitzer have been strangers for years. In Kalamazoo, Michigan, a crazed man, Jason Dalton with no history of mental health problems, went on a shooting spree, killing six. A gunman killed seven at Excel Industries in Hesston, Kansas.
During the month David Cameron attempted to wrest some concessions from the EU regarding continued membership. All he got was “bupkis,” according to Seth Lipsky of the New York Sun. The decision to stay or go will be determined by a referendum in June. The fight is Herculean. There are obvious benefits to a union that eases border crossings, encourages trade, and engages in continuous dialogue. (Keep in mind, this is the continent that saw two world wars in the past century that killed almost 100 million people; talking to one another is important.) On the other hand, the flow of immigrants from North Africa and the Middle East has warranted tighter border controls. More important, there is an arrogant and unelected bureaucracy in Brussels that writes regulation and taxes the citizens of EU nations without representation. At least a quarter of Britain’s laws originate in Brussels. Those bureaucrats have done much for themselves, but little for economic growth and the people of Europe. The consequence is disillusionment within the EU about the EU. As well, socialism, whether of the democratic or autocratic variety, does not work. It has been democratic, free-market capitalism that has lifted so many from poverty. The problem is compounded by the fact that Brussel’s bureaucrats work for the public sector, so their future depends on that sector surviving and thriving. I have wavered on this issue. While I believe in open discussions, free trade and relatively open borders, the problem of immigrants, Europe’s slow economic growth and sanctimonious folks in Brussels are causing me to question the value of Britain’s staying in the EU.
Observing what is happening in Europe – the lives of those bureaucrats in Brussel unaffected by policies they promote – it becomes easier to understand the phenomena that is Trump. In both places – Washington and Brussels – those who make policy are insulated from what they have wrought. Remember, Congress exempted itself from the Affordable Care Act, and their retirement system is not dependent on Social Security remaining solvent. They want to write laws making it easier to discharge one’s debt from tuition if one works in the public sector. When I came out of college more than fifty years ago, a job in government was considered secure, but that security came at the cost of lower-than-average pay. Today, jobs in the public sector remain secure, but the pay and benefits are above the norm. Our politicians have created a society of haves and have-nots. The wealthy have done well, but the middle class has shrunk, not only because of Wall Street, but mainly because the middle class can no longer compete with those who work in the public sector. According to the American Community Survey, Loudon, Fairfax and Howard Counties – all suburbs of Washington, DC – are the three wealthiest counties in the U.S. Aspirant young people want the opportunity individual success brings, but they don’t want to support hypocrites in Washington or Brussels.
The South China Sea, with its shipping lines once protected by the U.S. Navy, is being consumed by China. They have deployed anti aircraft missiles on disputed Woody Island, and they have erected a high-frequency radar array on Cuarteron Reef in the contested Spratley Islands. With Assad practicing genocide, the civilized world hopes that a US-Russian brokered truce for Syria will work. It has become popular to ridicule the United States as the world’s policeman, but when we walk away, as we did in Vietnam, Iraq and Syria, are doing in Afghanistan, or “lead from behind,” as in Libya, chaos follows and people die. When we stay, as we did in Europe, Japan and South Korea, success follows. Ironically, the number of political prisoners in Cuba has increased and the number of Cubans immigrating to the United States has spiked since President Obama announced renewed ties with the Communist island nation. Forty-five thousand arrived in 2015, a 78% increase from 2014. Our government may turn a blind eye to the evils of Communism, but the Cuban people know better.
Negative interest rates have become the rage among central bankers. It was reported during the month that $5.7 trillion in sovereign debt has negative interest rates. Sweden, Denmark, Switzerland and Japan have issued paper with negative rates. When rates are at zero or lower, deposits decline. Money stops circulating, which means business loans and investments decline – accentuating already poorly performing economies. Low rates are tempting to government borrowers, putting pressure on already strained budgets. The situation should be self-correcting, but central bank interference won’t allow it. At some point rates will rise. The question is: Will the increase be gradual or sudden? In the U.S., net annual interest expense on the federal deficit is about $250 billion. Were rates at the level of ten years ago, interest expense would be more than double. Reflecting uncertainty, the number of publically traded companies reporting dividend cuts in 2015 was 28% more than in 2008 when the world stood on the precipice of a financial collapse. The importance of dividends can be seen in that dividend paying stocks have out-performed market averages this year by 600 basis points. For the month, the DJIA inched higher and volatility (still high) declined modestly from its rapacious January pace.
Elsewhere, Larry Summers, trying to sound relevant, wrote an op-ed suggesting doing away with the $100 bill. He cited the use of cash by criminals, terrorists and tax evaders. He neglected to mention those who simply want to keep credit card charges at a minimum. I suspect that the real reason Mr. Summers and others want to do away with the $100 bill is that people using cash are harder to track and that in a zero or negative interest rate environment bank deposits would decline. The 25th Anniversary of the end of the First Gulf War slipped by unnoticed, despite 425,000 Americans having participated – though it did not in Canada. It was reported that a group out of Nevada (#hookers4hillary) is partly responsible for Mrs. Clinton’s victory in that state’s caucus. Perhaps they are doing it for Bill; presumably he ranks as their favorite president. After Defense Secretary Ashton Carter opened all combat positions to women, two Republican law makers presented a bill that would require all women to register for the draft. The pretentious, left-wing Oscars were called out for the nincompoops they are. Nominations, according to the “pc” police, did not include the right proportion of African-Americans or gays. Will we ever live in a world where rewards will go to the most talented, irrespective of race, religion, gender or sexual orientation? The Left would have us stuck in a politically correct world where appearance is more important than content. A 575,000 acre Texas ranch sold for $725 million. Joshua James was arrested in West Palm Beach for tossing a three-and-a-half-foot alligator through a Wendy’s drive-thru window. Way to go, Josh!
While there is some truth to Joseph Wood Crutch’s quote at the top of this essay, February will always have a special place in my heart; for it was the month that in 1968 my wife gave birth to our delightful daughter.
We move on to March and to the beginning of spring.
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