The Trump Tax ‘Bombshell’

Last night, the New York Times continued its attack on Donald Trump by dropping this ‘bombshell,’ publishing a leaked copy of part of Trump’s 1995 tax returns.

Here’s the bottom line: Trump declared a loss of over $900 million in 1995. By law, one is allowed to carry forward losses in one year to future years, which reflects the simple fact that the life cycle of a business doesn’t necessarily line up perfectly with the date.

In other words, if a business has a $5 million loss in one year, and a $6 million profit in the next, during the year with the losses, no taxes were paid. In the year in which the profit was made, the profits from the prior year is ‘carried forward,’ to reflect the fact that the business made a $1 million profit across two years. The IRS allows one to apply losses for up to 18 years, as long as it exceeds income made over that time.

Nothing about this is illegal, or even uncontroversial. The guy who owns a dry cleaner at your local strip mall faces these issues.

Yet the NYT used intentionally misleading language for the sole purpose of duping a misinformed electorate into thinking Trump has somehow gamed the system at the expense of the little guy.

The title of the piece itself is ‘Trump Tax Records Obtained by The Times Reveal He Could Have Avoided Paying Taxes for Nearly Two Decades.’ The use of the word ‘avoided’ is intentional, suggesting Trump did something sneaky. The bottom line is you don’t pay taxes on a loss, so Trump didn’t ‘avoid’ anything.

The piece spends a great deal of time talking about how the loss represented a devastation and heartbreak for those affected, while Trump was able to skate through unscathed because of extraordinary tax privileges apparently only he was privy to.

The truth is that the real estate industry was decimated in the late 1980s and early 1990s. Plenty of developers were devastated in a similar fashion to Trump. The difference was that Trump was the most high profile of the developers at the time, and as such his business trials and tribulations were in the public domain. To the extent he was fortunate lies in the fact that most developers would have been totally wiped out by a near $1 billion loss. Trump wasn’t, because he convinced the banks to work with him, so he didn’t have to liquidate all of the holdings he had already built up. Call it luck, or great negotiating, but that’s what happened. Nothing nefarious.

Yet, it will play that way to the average voter, for whom these sort of dealings are completely foreign. The concept of carrying forward a loss won’t resonate with them, and therefore they’ll be amenable to the Clinton spin that Trump is bilked the public for years.

It also represents an opportunity for Trump if indeed Clinton/the media keeps playing this line. It will almost surely come up in the next debate, at which time Trump needs to point blank state that there was nothing controversial, let alone illegal about what happened. The fact that the Clinton campaign and the media are portraying it that way can only mean one of two things.

One possibility is they do not understand even the most basic of tax law, accounting, and general business, and therefore cannot be expected to understand anything about creating jobs. Why would Clinton or the media understand anything about business or the economy, given Clinton has only worked in the public sector and the NYT’s support of failed neoliberal Keynesian economics?

The other possibility is brazen dishonesty, in knowing the average voter takes much better to a simple ‘Trump avoided taxes!’ one liner than the far lengthier, legal and accounting arguments such as what I’ve put forth here.

Furthering the dishonesty angle, there is a potential legal issue here involving the NYT releasing the leaked tax information. The Washington Post discusses it here.

So in a twist of irony, the NYT may have broken the law…to show that Donald Trump followed the law in his tax dealings. And people wonder why the mainstream media is failing.

They’re even bragging about the whole thing. The author of the piece has just written this article, breaking down the events leading to the piece. The way she describes it one could think she had solved the Jimmy Hoffa mystery rather than a data point corroborating an old saga that we already knew. Trump literally wrote a book about this period in his life, The Art of the Comeback.

The fact the leak came from Trump Tower itself is also rather intriguing. Did Trump himself leak the documents, so as to control the narrative, which he is known to do? The next few days should answer that.

Trump could use this saga to his advantage rather easily. It has been public information for decades that Trump had losses in the billions in the early 90s. Yet he is here, richer than ever. Losses happen, especially in business. But to be down on the mat, and then get up and triumph, is America in a nutshell. And this is precisely what Trump is trying to do with the country as a whole. The country is down, and trying to get back on its feet, and then some. Trump has been there, done that.

The indignation over Trump’s honest failures, compared with the silent acceptance of the dishonest enrichment of the Clintons stands as one of the clearest examples of what this election is all about. Because Clinton is on the ‘right side of history’ in terms of social justice nonsense that plagues the nation, her sins are forgiven, while Trump credits are manufactured into sins because of his resistance to the march of social justice.

Reality Doesn’t Care About Feelings, Volume 3 – The Colin Kaepernick Protest

Colin Kaepernick’s protest of the national anthem has been a hot topic of conversation of late, with everyone from news outlets, to political shows to sports shows having guests on to weigh in with their opinion. His rationale for the protest has been the following, in his words:

I am not going to stand up to show pride in a flag for a country that oppresses black people and people of color. To me, this is bigger than football and it would be selfish on my part to look the other way. There are bodies in the street and people getting paid leave and getting away with murder.

This, combined with his decision to wear the following socks, depicting police officers as pigs, suggests that his main concern has been the treatment of black Americans by police officers.

0901-colin-kaepernick-socks-getty-zoom-3

I respect Kaepernick’s right to engage in protest of the flag, and the national anthem. Indeed, the very flag and national anthem is what confers upon him that right. Much of the discussion I’ve seen on the subject has centered around whether Kaepernick’s protest was done in the right way, whether it was wise of him to use NFL games as his platform, and things of that nature.

All of this assumes that his protest is legitimate in the first place. I contend it isn’t. Consider the following passage, taken from this recent article in the Washington Post addressing the subject of the racial distribution of police shootings:

In 2015, The Washington Post launched a real-time database to track fatal police shootings, and the project continues this year. As of Sunday, 1,502 people have been shot and killed by on-duty police officers since Jan. 1, 2015. Of them, 732 were white, and 381 were black (and 382 were of another or unknown race).

 

But as data scientists and policing experts often note, comparing how many or how often white people are killed by police to how many or how often black people are killed by the police is statistically dubious unless you first adjust for population.

 

According to the most recent census data, there are nearly 160 million more white people in America than there are black people. White people make up roughly 62 percent of the U.S. population but only about 49 percent of those who are killed by police officers. African Americans, however, account for 24 percent of those fatally shot and killed by the police despite being just 13 percent of the U.S. population. As The Post noted in a new analysis published last week, that means black Americans are 2.5 times as likely as white Americans to be shot and killed by police officers.

 

U.S. police officers have shot and killed the exact same number of unarmed white people as they have unarmed black people: 50 each. But because the white population is approximately five times larger than the black population, that means unarmed black Americans were five times as likely as unarmed white Americans to be shot and killed by a police officer.

Passages such as this are used to buttress the point that people like Kaepernick are making with respect to police brutality. The problem with this analysis, which compares the numbers of fatalities to population, is that it assumes that each segment of the population commits crimes at the same rate. This isn’t true. From the Post article:

Because detailed FBI data on crime can lag by several years, the most-cited statistics on this point refer to 2009 data. According to that data, out of all violent crimes in which someone was charged, black Americans were charged with 62 percent of robberies, 57 percent of murders and 45 percent of assaults in the country’s 75 biggest counties — despite the fact that black Americans made up just 15 percent of the population in those places.

The following table shows the distributions of violent crimes by race, both of the offender and perpetrator, from 2012-2013, with homicides excluded:

ncfs-table

From that chart, and the Washington Post story, we can glean that black people commit more violent crimes than their 13% population share suggests they should. As a result, we should rationally expect that there will be more run ins with police, and thus more police shootings involving blacks.

Indeed, when comparing the police shootings by race to the violent crimes committed by race, which is the relevant comparison, the distributions match up relatively well.

From the Washington Post quote earlier, from Jan 2015 to July of 2016, 49% of police shootings involved whites, who according to the Bureau of Justice stats from 2012, commit 42% of violent crimes.

24% of police shootings involved blacks, who commit 22% of violent crimes.

27% of police shootings involve the rest of the races, or unknown, a group which according to the Bureau of Justice commits 35% of violent crime.

If anyone should feel aggrieved, its whites, who are shot by police at a higher rate than they commit violent crimes, excluding homicide. Yet that isn’t the narrative.

The Washington Post tries to temper analysis such as that by claiming the crime level in a particular community doesn’t affect the rate at which police kill, and by stressing the fact that unarmed blacks are killed at a greater rate to whites:

Despite these arguments, police reform advocates and researchers as well at The Post’s own analysis has consistently concluded that there is no correlation between violent crime and who is killed by police officers.

 

A 2015 study by a University of California at Davis researcher concluded there was “no relationship” between crime rates by race and racial bias in police killings.

 

….

In a report covering 2015 data, Campaign Zero compared violent crime rates of 50 major cities to the rate at which police officers killed people, concluding that there was no correlation.

 

As part of its data effort, The Post tracks the “threat level” of each person who is shot and killed by a police officer: Were they shooting at the officer? Were they threatening the officer? Were they fleeing?

 

Overall, the majority of the people who have been shot and killed by police officers in 2015 and 2016 were, based on publicly available evidence, armed with a weapon and attempting to attack the officer or someone else.

 

But an independent analysis of The Post’s data conducted by a team of criminal-justice researchers concluded that, when factoring in threat level, black Americans who are fatally shot by police are no more likely to be posing an imminent lethal threat to the officers at the moment they are killed than white Americans fatally shot by police.

 

[Study finds police fatally shoot unarmed black men at disproportionate rates] 

The study also sought to answer whether officers were more likely to shoot and kill someone who is unarmed if the shooting happened to occur in a high-crime area. They concluded that is not the case.

 

“The only thing that was significant in predicting whether someone shot and killed by police was unarmed was whether or not they were black,” said Justin Nix, a criminal-justice researcher at the University of Louisville and one of the report’s authors, said in April. “Crime variables did not matter in terms of predicting whether the person killed was unarmed.”

 

“This just bolsters our confidence that there is some sort of implicit bias going on,” Nix said. “Officers are perceiving a greater threat when encountered by unarmed black citizens.”

Regarding the point about there being no correlation between high crime areas and police shootings, that might be true, but it doesn’t show that there is any bias involved in either direction.

As for the unarmed argument, it is riddled with holes. Blacks may be more likely to be ‘unarmed’ when shot by police, but that is hardly the full story. Heather Mac Donald details this in a piece she wrote back in February:

In August of 2015 the Post zeroed in on unarmed black men, who the paper said were seven times more likely than unarmed white men to die by police gunfire. The article noted that 24 of the 60 “unarmed” deaths up to that date — some 40 percent — were of black men, helping to explain “why outrage continues to simmer a year after Ferguson.

 

 

But the numbers don’t tell the whole story. It is worth looking at the specific cases included in the Post’s unarmed victim classification in some detail, since that category is the most politically explosive. The “unarmed” label is literally accurate, but it frequently fails to convey highly-charged policing situations. In a number of cases, if the victim ended up being unarmed, it was certainly not for lack of trying. At least five black victims had reportedly tried to grab the officer’s gun, or had been beating the cop with his own equipment. Some were shot from an accidental discharge triggered by their own assault on the officer. And two individuals included in the Post’s “unarmed black victims” category were struck by stray bullets aimed at someone else in justified cop shootings. If the victims were not the intended targets, then racism could have played no role in their deaths.

Mac Donald further lists several examples of various incidents in which the perpetrator was literally unarmed, but still posing a threat to the officer in various ways. Perpetrators attacking with their fists, using the officer’s own equipment, or a car were considered unarmed. Innocent victims who may have been caught in crossfire of a police shootout are also included among the unarmed figure. The fact that blacks are more likely to resist arrest or engage in a confrontational manner is why the figures of unarmed black shootings are disproportionately higher.

And what of ‘Driving While Black?’

This was a common refrain uttered after Sandra Bland’s death last year. This goes to the notion that while perhaps police treat all suspects in a similar manner after the interaction has been initiated, there is bias in the choice of police to interact with the population.

In other words, police racial profiling is a big issue. Vox said as much in an article on the subject, stating that black people were more likely to be stopped than whites.

We also know that black drivers are more likely to be stopped by US police. In 2013, the Bureau of Justice Statistics found that about 12.8 percent of black drivers reported being pulled over in 2011, while about 9.8 percent of white drivers and 10.4 percent of Hispanic drivers did.

That statement means nothing by itself. It could be, for example, that there are more repeat offenders in the 9.8% of whites who got pulled over, which wouldn’t necessarily mean there was a bias in police stops.

The very study that Vox links to has the following chart, which is more relevant to the point at hand:

contact-with-police

The relevant column is the second column, which shows that whites made up roughly 65% of street stops, and 69% of traffic stops. Blacks made up 12% of street stops and 14% of traffic stops. Hispanics made up 15% of street stops and 12% of traffic stops.

The population distribution of each group is, according to 2010 census data the following: 63.7% white, 12.2% black, 16.3% Hispanic. In short, there is little to no bias shown by police in stopping people. Vox must have missed this chart in the report they cited.

All in all,  there is nothing that shows that there is some sort of bias shown by police officers against blacks which necessitates outrage, let alone public protests from the likes of Colin Kaepernick.

The bottom line is that if you want to avoid being killed by police, you would do well to first avoid committing a crime. Failing that, or perhaps if you find yourself involved in a police stop despite not having committed a crime, avoid confrontational attitudes with the officer, do not resist arrest if it comes to that, and do not try to fight the officer or grab any foreign object in an attempt to injure the officer.

Follow that, and your chances of not becoming another statistic are quite high.

The “Trump Just Doesn’t Know What He’s Talking About” Argument is Based on a Flawed Analogy

In my view, one of Donald Trump’s biggest hurdles to the presidency is the idea that he has no idea what he’s talking about with respect to many issues, but mostly in terms of foreign policy. Since Hillary Clinton has spent nearly three decades in and around Washington DC as First Lady, Senator, and Secretary of State, during which time she’s flown around the world to meet with leaders and diplomats, and actually been in the ‘war room’ when key decisions were made, she is the candidate we should trust with the nuclear codes. Donald Trump, on the other hand, is a buffoon business tycoon who shoots off at the mouth with little regard for any fall out.

Or so the story goes.

Last night at NBC’s Commander-in-Chief Fourm, Matt Lauer touched on this point with Trump, asking him the following:

So many of the issues that we’ve talked about with you, Mr. Trump, tonight, and Secretary Clinton, are so complex that even career military people and career diplomats and politicians have trouble getting their arms around them….You’ve had a very different background, in business. So nobody would expect you to have taken over the last 20 years really deep dives into some of these issues. But I’m curious about what you’re doing now. What kind of research are you doing now? What kind of homework are you doing? What kind of things are you reading as you prepare for the day in two months where you might be elected the next president of the United States?

On the surface, it’s a good question. Trump really does have no experience in the narrow arena of Geopolitics and military conflict, at least compared to Hillary Clinton. The issue is that in this case, Clinton’s experience may actually be a big negative. Thus the premise of the question is flawed.

The root of the flaw is the false equivalence being made between foreign policy and a discipline like physics. Physics is a scientific discipline which is founded on universal principles and phenomena in the natural world which are known to be true. Foreign policy is the extension of a political ideology onto a world stage.

In other words, people are wrong to be making the following analogy:

Trump is to Hillary Clinton in Foreign Policy, as a Physics 101 student is to Stephen Hawking in Physics

Again, this would hold if foreign policy was based on falsifiable arguments and hypotheses the way physics is. The reality is that it simply isn’t.

Donald Trump is extremely ignorant, when looking through the tinted lens of the post WWII US foreign policy of interventionism, nation building, and soft imperialism. He sings an unabashed America First song, in direct contrast to what he correctly terms the ‘false song of globalism.’ His views on the place of the US military in the world seems to be ‘Peace Through Strength,’ rather than the more passive aggressive, relative half measures the US has currently been undertaking in war.

This doesn’t represent ignorance, but a complete difference in views. Which is fine when we’re dealing in an ideology based arena such as foreign policy. Trump is not arguing that Bernoulli’s Principle doesn’t exist. He is arguing that the current ideology has failed us and we must try something different.

And on that point, there is little to argue about.

Regardless of what you think about the intentions, the bottom line is that the ‘Russian Reset,’ the Syrian Red Line, toppling Ghadafi in Libya, the Arab Spring, Benghazi, and setting the foundation for the Iran deal had disastrous outcomes. The destabilization created room for ISIS, which now has a gigantic swath of land in the Middle East from which it is fanning out terror operations worldwide.

This is not a partisan argument either – the Bush administration had numerous blunders in the foreign policy arena as well, chief of which being the handling of the Iraq War.

Trump stands against both Republicans and Democrats, which is why he’s been pilloried by both sides. Just last month, 50 former GOP national security officials wrote an open letter imploring Americans to steer clear of Trump because of the ‘danger’ he represents.

 

This merely confirms the fact that Trump is a true agent of change. Both the Republican and Democrat establishments have been happy to feed the Military Industrial Complex for decades, despite the warnings of President Eisenhower. To people like those who wrote that open letter, the ‘danger’ is that the status quo is disturbed.

Regardless of the outcomes of the wars and skirmishes America has been involved with over the last few decades, regardless of the bloodshed and the lives lost, the elites in the government and those in the defense industry have reaped rewards.

Trump doesn’t care about the status quo. He cares about America engaging in foreign policy that benefits the people, as opposed to the special interests in government and the defense industry. As such, his advisers are outsiders, just like he is.

Consider Michael Flynn, a retired lieutenant general who served in the Obama administration as the director of the Defense Intelligence Agency. He was ultimately forced out of the role in 2014:

Stars and Stripes said Flynn “did not leave the Obama administration on warm terms,” adding that, “in 2014, he was effectively forced out of the Defense Intelligence Agency as part of a leadership shake-up after clashing with officials over his management style and vision for the agency.”

 

Flynn explained his firing, according to the New York Post, by saying he “knew then it had more to do with the stand I took on radical Islamism and the expansion of al Qaeda and its associated movements. I felt the intel system was way too politicized, especially in the Defense Department.”

Despite being a Democrat, he has been one of Donald Trump’s key advisers, even making the short list to be his Vice Presidential pick. The reason for this is that Flynn, like Trump, disagrees with the the way the establishment is taking to foreign policy, if not the basic ideology itself.

That Trump may not be well versed in some of the political lingo, some of the more detailed strategic points, or arcane historical facts which may affect policy is not automatically disqualifying. After all, Barack Obama was similarly cast as inexperienced, and ill-informed on matters of foreign policy – by none other than Hillary Clinton back in 2008.

Given Obama’s election, the country obviously didn’t think those claims were valid. It is rich, however, that the same Obama-turned-Clinton supporters are now claiming that Trump has no clue what he’s doing, and doesn’t have the experience.

This is because Obama, of ‘adequate’ experience, exercised that wisdom to put Hillary Clinton in the Secretary of State position, which led to the aforementioned failures of her tenure. These failures are currently being touted as the evidence of the requisite experience needed to be president, that Trump lacks. It’s not a very convincing argument coming from Obama and Clinton.

The bottom line is that the type of experience matters. Trump’s experience has been in business, overseeing large complex problems by giving it direction, and making sure the right people are in charge to take care of things at a more local level. This translates almost directly to what he would have to be doing as a President. It is up to those underneath a President Trump to carry out the day to day grunt work involved in getting the job done. Trump’s job is to hire the best people, who will give him the best information, to then devise strategy based on this information within the framework of an overarching goal, and then to implement it. In short, true leadership is the ultimate job of the President.

Trump has been doing this for his entire adult life, to great success. In that respect, he is far more qualified than the perpetual failure Clinton has ever been.