Politics

Still A Trump Fan? – Here’s One For You

So, you’re still a Trump fan? You’ve now heard of the $2 Trillion COVID-19 U.S. stimulus package – right. You recall that there was a bit of a delay in getting it through in spite of general bipartisan support. Well, it’s 880 pages apparently and room was needed to help along the one percent club during this health crisis. Yes. While health professionals scrambled without sufficient PPE ( you will know the acronym now) to care for the overwhelming caseload, while  masses digested news of job loss, and while families hunkered down in self-isolation,  legislators were hard at work fine tuning an earmark to grant a new tax benefit for the richest one per cent of Americans.

You see, the way you grant benefits to the one per cent club is you change a tax provision.  Those earning this kind of money have “multiple streams of income”. Tax rules typically have restrictions when it comes to amortization (depreciation). The U.S. tax code up until the corona virus stimulus package had a limit on the ability to deduct excess losses generated from amortization (depreciation) from real estate (buildings) against other forms of income. The limit was $500,000. This limit has been removed. Let’s think this through. For those real estate developers who are now going to encounter serious drops in market valuation, the probability of experiencing “recapture” on written down buildings in the future during an ultimate disposal is reduced (lesser capital gain or loss), but today they’ll get the benefit of reducing aggregate taxable income by utilizing unlimited excess losses. Actually, not only today but they’ve been granted retroactive treatment back to 2018 by amending their 2018 returns. 

Now, do you want to cut Trump a little slack with his incoherent COVID-19  bafflegab when behind the scenes he was distracted on how to potentially profit from misery with an earmarked addendum to a stimulus package?  

What would an honourable leader do if he wanted to grant such a benefit? He would float the topic to the public, debate it openly in parliament and grant it a vote within its own piece of legislation. 

Credits to CNN and NY Times.

Lifes Lessons

Untimely Elimination of Epidemiologist Position

There was an untimely elimination of an epidemiologist position in China back in July of 2019. You know how much Mr. Trump liked to exclaim “you’re fired” back when he hosted “The Apprentice”. It’s Reuters and four of their sources who expose this stunning revelation. The key post administered through the American Centre for Disease Control was bestowed the duty of identifying disease outbreaks in China. Dr. Linda Quick served in the role prior to it being extinguished. This woman actually trained Chinese field epidemiologists in concert with monitoring the public health landscape. Chinese American Bao-Ping Zhu who served in the role from 2007 to 2011 expressed his dismay to Reuters. The four sources also confided to Reuters that no other foreign disease experts were embedded in China after the departure of Dr. Quick.

Who would have thought during the taping of “The Apprentice” that the term “you’re fired” by one, Donald Trump would one day come back and haunt hundreds of thousands of people around the world whose health depends on the early detection of deadly viruses? Were there other variables associated with the outbreak? Yes. One very important variable would have been the strength of the relationship between countries and the goodwill of China in communicating issues around public health to the U.S. and the World Health Organization. I’ll leave it to you to speculate whether Trump fostered trustworthy relations with the Chinese. If these sources are correct, the World Health Organization may have also failed in its duty to deploy resources inside China. 

The matter of corporate interests in the aviation sector, the “travel bug”, and duties of repatriating citizens, and limitations of airports in dealing with crowds have also been key elements associated with this pandemic of COVID-19. The aviation industry as we see it today and the negative consequences we’ve come to realize were likely unimaginable to the Wright Brothers as they pioneered motorized flight.        

Politics

Cavalier Trump And COVID-19

Has cavalier Trump posturing as Chief Medical Man having made irresponsible initial remarks during outbreak tempted New Yorkers to ignore social distancing guidelines? Governor Cuomo was appropriately eloquent and stern yesterday when bringing attention to the non-compliant social distancing behaviour of New Yorkers

One might ask…what role must the U.S. federal government play in back stopping a “for profit” medical system with idle inventory of medical supplies in the case of a pandemic? Well….when you look at some the spending decisions made by Congress…one might suggest that this has been one hugely over looked budget line item.

Given the character of Donald Trump and his propensity for vindictiveness, it was easy to predict his “blame” on China for not communicating effectively with his administration. Oh yes, he couldn’t help himself from labelling the virus the “Chinese virus” as a reference to where he thinks the blames lies never mind the racist overtone. You’ll recall the remark pertaining to the white supremacists marching against the removal of confederate statues. “There are good people on both sides.”

Instead of deferring to medical professionals and heeding their counsel, he’s compelled to stand at the microphone and spew defensive rhetoric when faced with legitimate questions at his gong show of a daily briefing. After pointing Pence as the front man, his unwavering ego of course demands the spotlight.

As one procurer of medical supplies has pointed out “it’s the wild west”. Perhaps, a phrase which aptly characterizes the White House operations tainted with nepotism, oppression evident by personnel turnover, and skulduggery exemplified by Ukraine / Biden scandal. America, you had your chance to oust him but were denied due to gutless senators holding the party line. 

Economics

Canadian Practical Measures COVID-19 & Economic Crisis

Recommendations for the federal government of Canada in lieu of corona virus pandemic and economic crisis. Will they listen? I don’t know.

  1. Permit the purchase and sale of unused RRSP contribution room.
  2. Permit the direct tax deductibility of net capital losses up to a maximum of $25,000 per year.
  3. Rewrite usery laws prohibiting lenders from charging more that a seven per cent differential from the Bank of Canada overnight rate.
  4. Reassess affordability of Canada Child Benefit program.
  5. Expropriate treaty land deemed necessary for commercial development from which fair negotiations have failed.
  6. Proclaim jurisdiction over tide water ports with constitutional amendment if required.
  7. Assign able bodied unemployed men to environmental remediation projects.
  8. Improve service channels to Canadians via CRA and Service Canada.
  9. Impose and enforce director liability for environmental negligence.
  10. Responsibly incentivize investors interested in the development of our natural resources.

If any reader finds this list appropriate, do feel free to copy the items into a letter addressed to any Canadian politician you deem open minded.  

Economics

Banking Credit Specifics Amidst COVID-19

You’ll notice that your governments are speaking in code much of the time when it comes to addressing the financial impact, consequences to your household, and detail pertaining to your access to credit facilities in the context of COVID-19. Your Prime Minister is once again scheduled to address the nation at 11:30am EST. We’ll see if he get his “head of his a@s” and starts speaking in terms of your household cheque book.

While the Bank of Canada rate has been reduced over the past decade, margins between the “overnight rate”, “prim rate” and “retail lending” has widened. That’s right…the banking system has done very well because you my fellow Canadian has been too happy to pay interest in the wide margins. 

This crisis has hit while you are highly leveraged meaning that many more of you will now be faced with bankruptcy unless your government starts REGULATING THE BANKING SECTOR in terms that assist you in managing your debt. The board of directors of your chartered banks won’t be too warm to that idea especially in lieu of their confounding argument that masses of Canadians hold chartered bank stock in their registered investments.      

From what I can see so far, your government is going to be floating more “paper” in order to free up credit. The term “paper” refers to securities which may take the form of derivative contracts. Oh ya…you remember those – the ones that produced the financial crisis of ’08 / ’09 (mortgage backed securities). Of course your government will also be referring to the “purchase of bonds” which is code for creating new money out of thin air with a charge to your grandchildren’s future.