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2018-12-26 07:00 by Karl Denninger
in Politics , 304 references Ignore this thread
What Trump Must Demand to End Shutdown
[Comments enabled]

So the Democrats don't want a wall now, after saying they did back when there was no way they were going to get one.

Just like the Republicans wanted to repeal Obamacare knowing Obama would veto every bill (and did); as soon as they had someone who would sign such a bill in the White House they couldn't pass it.

In other words they're all liars.

There's a common chestnut in negotiation that many people hold dear but it's a lie; that is, you can never return above wherever you are at this moment.

Let's say you start negotiating with a $10 million price; that's your offer to sell.

To make a "deal" you must have a meeting of the minds; that if, an offer and acceptance of the same offer.  You also need, for it to be a binding contract, consideration (something of value on both sides) and mutual obligations (a contract cannot require someone to do something in exchange for nothing.) Finally, the parties have to be competent and capable of performance (you cannot, for example, enter into a contract to jump over the Empire State Building since that is a physical impossibility.  Note that political, personal or financial difficulty is immaterial; that an agreement will bankrupt you doesn't release you from it -- only physical impossibility does!)

You go back and forth and over time you now are at $8 million.  However, there has been no meeting of the minds; that is, while you seem to be in the same place on money you're not on the other elements of the deal. An "acceptance" that contains changes of any material sort is in fact a rejection and a counter-offer of the original proposal.

The salient point is this: Until all material elements are agreed in point of fact none are!

The common chestnut is that if you start at $10 million and get to $8 million you can't go back above $8 million, say much less $10.

Nonsense.

A counter-offer or silence in response to an offer is legally identical to the original offer never having been made.  There is thus exactly nothing -- not in law or ethics that prevent you from saying "Not $10 million which you refused, but now the price is $15 million!"

The other side may freak out but that's tough crap.  If they wanted to take the $10 million offer they could have; their refusal now does not obligate you to take it later.  In fact that's one of the risks of saying "No" -- the other side may turn around and actually boost their deal terms, not reduce them.

If you negotiate frequently it is in fact a good practice to do this once in a while, just like you occasionally bluff at the poker table, literally throwing away money on a hand you know is a loser and intentionally let the other players see your losing cards.  Why?  Because if you only bet the cards you know you will win on at poker when you bet everyone knows you have the cards.  There is a great deal of value in placing in your opponent's mind uncertainty; it is in fact necessary for you to do so in order to obtain results that are better than chance because over enough time everyone at the poker table gets the same number of aces, kings, queens and deuces.  The only way to beat an equally-skilled player is for the other player to think you have crap when in fact you don't and thus he calls with a losing hand!

Trump made several promises to the electorate that got him into office.

One of them was The Wall; an end to Illegal Invasion and both the job theft and crime that comes with it.  It does not matter if illegals commit more or fewer crimes per-capita than Americans; what matters is that if all the illegals are gone none of the crimes they would otherwise commit will happen at all.  In addition there is a very significant financial drain, both directly and indirectly, placed on the Treasury and especially on state and local governments from these invaders.  All citizens pay for this through their taxes.  That illegals pay some taxes (e.g. sales tax, etc) is again immaterial; essentially none of them pay anywhere near their fully-laden cost of being here.

The other was to stop the Medical Monpolists.  Trump in fact had three platform planks on that issue, not just one (as with The Wall.)  All three disappeared on election night, never to be seen again.  This is the issue that is driving federal deficits, The Fed's malfeasance in pumping and maintaining bubbles and your cost of living, both directly and indirectly.  Not only has this murdered middle-class America in terms of health insurance costs and made starting new businesses outright stupid since the second $20,000 a single person makes has an effective tax rate (due to subsidy phase-out) of more than 70% it is also what has driven property taxes upward since those taxes pay pension and retirement medical costs along with those for incarcerated people, among others.

These machinations, which are now being forced to end 10 years after the crash in 2008, are why the market is in the tank.  If the games do not stop by 2024 Medicare will run out of money and be forced to curtail care for Seniors or attempt to throw the entire deficit in its spending into the Federal Budget.  At that point The Fed will lose control entirely as will Congress, since effectively shutting off Medicare for Seniors will prove politically impossible.  We are talking about $2 trillion a year deficits forever once this occurs and the market will not allow that to happen.

What Trump must do to win re-election is thus not only fulfill his promise on the Wall in its entirety but also blow up the game when it comes to the medical monopolists.  He has no choice and he must do it now; any "deal" that does not accomplish both is in fact capitulation on his part and a guaranteed loss in 2020.

Further, the longer the shutdown goes on without the world ending the more obvious it is that 25% of the Federal Government is actually unnecessary.  That adds yet another demand which I'll get to shortly.

In short to end the shutdown Trump must now demand a clean bill containing all of the above on his desk:

  • $30 billion for a complete wall.  No exceptions, no compromises.  Not $5 billion or $2.5 billion, $30.  Period.  This is less than (by a lot) we were spending in Syria and Afghanistan, both of which we're leaving.

  • 100% E-Verify with control numbers submitted on all 941s and a $50,000 per-person, per pay period fine to any employer without, plus a year in prison consecutively for each person employed without.  A one-year grace period for all existing employees (to be run through E-Verify) is reasonable, but "new hires" must be screened starting immediately.  No exceptions, including "domestic help" and similar.  Get caught, go to jail and pay the fine for each employee you illegally hire.

  • Nobody who comes into the country illegally is eligible for asylum or release into the United States -- no exceptions.  If you wish to attempt to claim asylum you must do so while honoring our laws.  If your first act in the United States is to dishonor our laws and claim immunity from same your claim is void.

  • Revocation of "birthright" citizenship for any person born here where both parents are not either permanent residents or citizens.  The 14th Amendment contains "and subject to the jurisdiction thereof"; an illegal invader or "tourist" who comes here and lies as to their intention has by their actions refused jurisdiction of US law while at the same time is subject to another nation's jurisdiction.  This should not need to be clarified but a simple bill will do so, and Trump must insist that it is.

  • All medical monopolies are prosecuted and all existing laws, particularly those on drug reimportation and free trade in prescription medications, are hereby repealed.  To actually solve the problem Trump could demand that this bill, or something substantially similar, be included.

  • Nobody gets paid for time not worked during a shutdown, ever, and Congress never gets paid for the time during a shutdown at all whether they work or not.  Period.

Again, since the Democrats refused Trump's offer of $25 billion he is under no obligation to let them take a lesser deal now.  In fact he not only should but must not -- instead he must make an immediate and very strong demand, from which he won't move, for a complete fiscal fix plus ending illegal immigration permanently.

Let's not kid ourselves though -- the medical monopoly collapse will temporarily cost jobs and the economy will suffer a deep, but spike-style recession.  This is good, not bad, as those employees laid off will be redirected into other pursuits while the cost of employing persons will drop like a stone.  At the same time property taxes and medical expenses for ordinary Americans will drop precipitously while the Federal Deficit will end and in fact go into surplus.

In other words the American people will benefit from:

  • Far lower state and local taxes (thus "SALT" is no longer an issue)
  • Far lower direct medical costs (especially if currently on a high-deductible plan)
  • The federal budget going into surplus means savings and earnings will go further every year instead of depreciating.

The latter is huge; instead of having your purchasing power damaged by 50% every six or seven years you will instead have it double every 20.  The difference over a working person's life will be extraordinary; it will literally multiply the wealth the average American accumulates over their working life by a factor of five to eight or more.

In addition it will make Medicaid unnecessary entirely (zeroing it from the budget; that's $300+ billion alone) and permanently resolve Medicare funding.

If it is done now the economy will be roaring back in the summer and fall of 2020; Trump will of course get credit for that and win reelection easily.

If it is not done now and the medical scam collapses instead into the maw of a large bear-market drawdown he not only loses in 2020 the resulting inability to fund what 3/4 of the people in the nation are dependent on may spark a civil war.

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User Info What Trump Must Demand to End Shutdown in forum [Market-Ticker]
Captainkidd
Posts: 1226
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Houston, Texas
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To solve a problem....
One must admit there is a problem.

And....
One must WANT to solve the problem.

So far...
He's 0 for 2.

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A lawyer with a briefcase can steal more than a thousand men with guns. --Mario Puzo

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. -- Henry Ford
Goforbroke
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The tadpole and I are hunkering down.
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KD ... there's absolutely nothing more to say. The chances of some sort of movement to implement what is needed are probably close to zero. What it boils down to is each man/woman for him/herself. As TFers have repeated over and over, "Stay frosty."

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Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our Light, and not our Darkness, that most frightens us. -- Marianne Williamson
Aztrader
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Scottsdale, AZ
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Good blog today. Passing it around wherever I can. Completely agree that Trump needs to stick to them. Right now, he has nothing to lose. If the left continues to get what they want, this sell-off in the markets is just a taste of things to come.
Tickerguy
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I was going to get into a point-by-point with someone citing a lefty web page that hasn't bothered to read the MTS (the canonical "what did we spend and where" cash flow statement from the Treasury) but decided that seeing it wasn't the first time said person tried to run that bull**** here instead I'd do my upper-body work early today.

 

 

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Robodog
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Recently I opined that the time frame for acting may be as little as two years but didn't give the why. I said so because beginning a few months ago, U.S. Treasury tax receipts began dropping both in nominal and inflation-adjusted terms; both Bloomberg & the WSJ, establishment mouthpieces, reported this situation and since 1970 that's the first time it's happened before an official recession started when those government revenues (aka skim) will inexorably decline further. The MT may have reported it too, but the good Lord blessed me with neither a photographic memory nor a genius level IQ. That's why I said it and I do think it's a BFD.

The scuttlebutt on the street is that some of the newly elected incoming blue Congress critters have global minded, grandiose dreams of a green New Deal. Just where in the hell do these Marxists think the money will come from to pay for it and how the F much more can the hourly class in the country give up? I pray daily that the adults in both the Congress & country take control and start using logic & reason instead of emotions & feelings. These puerile & petulant children are blithely playing with ingredients that may morph into nitroglycerin.

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We cannot solve our problems with the same thinking we used when we created them. - Einstein
Tickerguy
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@Robodog - I'm beyond giving a **** at this point WHEN it DOES turn into nitroglycerin.

Indeed, I'm to the point where I'm perfectly happy to see people like Pelosi and Occasional Cortex get it right up the chute; were I to see any of these people, or anyone who supports them, on fire I wouldn't even stop to******on them to put it out. If it was to start tomorrow I'd both tip a glass of Glengoyne and snicker.

There's a point where you just say "**** it, **** you and may you get ****ed up the ass dry, no lube" and walk off. I'm there. One man can't change a ****ing thing; oh sure, you can go postal but that does NOTHING except make you dead. A couple million people going on a general strike would get some attention. TEN million doing so would fix it all in a week, but the simple fact of the matter is that nobody gives a **** even though such a general strike is LAWFUL and thus there's not DICK that the authorities could do about it.

Fine. If the people don't care I don't either, nor will I WHEN, not if, they taste it ticking their tonsils from the bottom up.

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Krzelune
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Was it the guy that let his dog******all over the house?

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Tickerguy
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No.

It's probably the lefty who just reported me to Twatter and got my account suspended for asking Chucky whether he was going to like having another conservative nominee rammed down his throat (and telling Pelosi to go **** herself with a rusty chainsaw -- they called that advocating "suicide or self-harm".)

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Winding it down.
Bagbalm
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Just North of Detroit
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(Voice cracking with emotion)

It's, it's almost like they are on the same side...
Wa9jml
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DeKalb, Illinois
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It has been my sad experience that most politicians clearly lack courage. This is especially true when their mistakes cause massive problems. There are a few who have spines, but they are an endangered species. So, they blissfully ignore the canary tweeting in the coal mine, and drag their local, state, or federal government into the Abyss.

It is suicidal to try to get them to notice the obvious. I paid the price for doing so, after burning myself out trying to fix the problems that my predecessor created with the City Council's help.
Goldmanssack
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38320 / 07849
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Doxxing is apparently socially acceptable now(fighting the good fight)...I wouldn't be opposed to a naming of the banned. Fire with Fire.

I know better on this site, tho. One of the last honorable corners of the web.

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"But like every one of the super-states that preceded it, it has one iron rule: Logic is an enemy and truth is a menace." - Rod Serling, 1961.
Dtlgc
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Texas
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Love it - perfect Ticker, I would love to see Trump shove these demands up their asses - all of them.

Merry Christmas.....
Whitehat
Posts: 877
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The People's Republic of New York
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trying to understand why we cannot get something like this done decided to bring your points to the attention of local business owners.

regarding the E-verify their take is that it is less about illegals than the general way that many small and mid-sized businesses operate. it is their opinion that the problem starts when a lot of otherwise non-viable operations become possible through the fraud, namely not reporting employees of any immigration status. in my community this is a fact for over forty years. what we are speaking about is the employer not having withholding obligations, workman's compensation insurance premiums, mandatory employee benefits when required by statute, etc. these operations are not profitable or even break even with these costs in place. in a few cases the businesses without the current hack would be owner operated as in the boss and perhaps spouse and children are doing all of the work. this also limits the volume of the business. when an illegal immigrant shows up, he is simply no different than anyone else that the boss hired in the past perhaps with the exceptions of working for lower pay, long hours without complaint and willingness to do anything.

one of the things that occurs in the above scenario for the legal, native born Americans in that many of these hard working people are making no social security contributions being on a cash basis. the initial hook of the "off the books" becomes necessary as the inflated cost of living means that low pay is unsurvivable without the "off the books" hack. many of these people work very hard and through little fault of their own cannot achieve something legitimate that pays reasonably. go into most service businesses in many metros, deli's, contracting companies, small Main Street businesses and the like and one sees that this is a very common dynamic. verifying employees for all businesses pulls back the curtain on a lot of funny stuff which is a poor fix for a larger set of problems. the underground economy is very large and supports many other things and necessities.

here is one for the "How does this grab you file." we in NYS have an enforcement system for the workman's compensation insurance board. employers' payrolls are audited and facilities are subject to inspection to count employees. there is an exception for immediate family as they do not count towards the workman's comp premium.

i was visiting some business owner friends when the state insurance inspector came around for some other businesses neighboring my friends'. he never went into their facilities and spoke to the owners outside who told him that their wife was at the desk, son in the shop and no one else worked there while at the same time they had six of more illegals working on their shop floors. the inspector has a pretty nice job, out of the office, govt job, benefits, probably pension, makes his own schedule and look what we get. and there was no bribery or personal connection. the inspector just ignored to not make trouble. simple enforcement of the law could have stopped a lot.

i did ok with my business, so no complaining here, although not breaking the law more than doubled the costs and consequently the personal work. expansion was out of the question. others in similar work who decided to break many laws in some cases have purchased all of the real estate up the block from their locations, worked a whole lot less and expand easily. the illegals are just a symptom of a larger problem and Trump and company and the politcos know this and will not shake up the system that covers so many sins.

we really need to eliminate all income tax from work and employer obligations if they are not going to be followed. at least the playing field will be level.

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There are two ways to be rich: One is by acquiring much, and the other is by desiring little.
snow, seasons, distance and dirt roads: SSDD
"Be not deceived; God is not mocked; for whatsoever a man soweth, that shall he also reap" (Gal. 6:7)
Whitehat
Posts: 877
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The People's Republic of New York
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a good way of looking at the problem:
Inline

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There are two ways to be rich: One is by acquiring much, and the other is by desiring little.
snow, seasons, distance and dirt roads: SSDD
"Be not deceived; God is not mocked; for whatsoever a man soweth, that shall he also reap" (Gal. 6:7)
Wearedoomed
Posts: 4367
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slightly red state
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Whitehat - and given your bit about "since 1972," I'm willing to bet that that number might not even be adjusted for inflation, which would make that number even bigger...

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A collectivist defines peace as the silence of their enemies, through fear, imprisonment or death. That's how they define peace. - Mike Vanderboegh
Gonewest
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PacificNW
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Whitehat wrote:
Quote:
regarding the E-verify their take is that it is less about illegals than the general way that many small and mid-sized businesses operate. it is their opinion that the problem starts when a lot of otherwise non-viable operations become possible through the fraud, namely not reporting employees of any immigration status. in my community this is a fact for over forty years. what we are speaking about is the employer not having withholding obligations, workman's compensation insurance premiums, mandatory employee benefits when required by statute, etc. these operations are not profitable or even break even with these costs in place.


As a small business owner, this whole thing pisses me off to no end. The main problem being, everyone has to cheat to be viable or competitive with others who are cheating. So everyone is now breaking the law and can be prosecuted at someone else's (political enemies, competitors, socialists) whim. Total load of bull****. This is why so much corruption is taking place. Rule of law is dead.
Whitehat
Posts: 877
Incept: 2017-06-27

The People's Republic of New York
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Gonewest wrote..
The main problem being, everyone has to cheat to be viable or competitive with others who are cheating.

no you don't. you can go out of business, work your ass off, never take a vacation, live well below means, become a bitter son-of-a-bitch, etc. most of the people doing this are greedy and/or lazy. those that have to go out of business should have joined the rest with pitchforks. the people either demand the rule of law or not. this is why i hate most people and will never again fight to protect them.

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There are two ways to be rich: One is by acquiring much, and the other is by desiring little.
snow, seasons, distance and dirt roads: SSDD
"Be not deceived; God is not mocked; for whatsoever a man soweth, that shall he also reap" (Gal. 6:7)
Tickerguy
Posts: 155674
Incept: 2007-06-26
A True American Patriot!
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Whitehat wrote..
This is why i hate most people and will never again fight to protect them.

Got it folks? No pitchfork, torch or even a general strike NOW then in the future you want my help?

GO **** YOURSELF WITH A RUSTY CHAINSAW.

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Winding it down.
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