My thoughts on the final Presidential debate
Preview of the third debate
According to some, the economy is on solid footing as evidenced by the labor markets and asset prices. This is true on the surface, but under the hood, a different picture can be seen.
The politics of crybullies
America faces a flash point in its history. How will it respond?
Thoughts on the sudden moralizing of the Presidential election
My quick thoughts on how the second debate went
More thoughts about the Trump Tapes and Podesta emails
Of Wikileaks and the horror of the Trump Tapes.
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.