29 Mar A Simple Take-away from the Mueller Investigation; Paradigm Shifts*

A Simple Take-away from the Mueller Investigation

The Mueller Investigation was not about whether President Trump conspired with Vladimir Putin to overthrow the U.S. government. Those who took a Manchurian Candidate view of the Investigation, as well as those who saw the Investigation as an attempted coup by the Deep State an entrenched Democrat bureaucracy, have read too many Tom Clancy novels.

Mueller’s job was “to investigate allegations of Russian interference in the 2016 U.S. presidential election.” That’s precisely what he did, and he did so exceedingly well, professionally, objectively, and despite the hype rhetoric hysteria without being politically influenced. That’s a triumph for American democracy and the American legal system. It’s also a tribute to an outstanding lawyer and an equally outstanding legal team.

As a result of the two-year Mueller Investigation, we know beyond any doubt that Russia interfered in the 2016 U.S. presidential election. That was the primary goal. We also know that a number of U.S. and Russian nationals, 34 at the last count, either conspired to interfere in the 2016 U.S. presidential election or lied about doing so. That too was a goal.

There’s a simple take-away: America should make certain that no other country can again interfere in an American election/subvert America’s democratic institutions. The U.S. should treat Russian interference in the 2016 presidential election as a 9/11-like moment where the U.S. and the sanctity of its democracy were challenged … and America came away stronger for it.

In contrast to the Mueller Investigation, the Ken Starr Investigation into President Clinton’s alleged criminal activities lasted twice as long – four years – and resulted in criminal convictions of fifteen people for crimes unrelated to the Investigation. Neither the original target of the investigation, the 1994 Whitewater land deal, nor questionable acts subsequently investigated by Ken Starr, resulted in criminal indictments, pleas or convictions (including investigations into the firing of White House travel agents, the alleged misuse of FBI files, and Clinton’s conduct with respect to the Paul Jones lawsuit).

Paradigm Shifts

It used to mean something when adults were urged to “Fly First Class … or your kids will.” Today, however, airlines no longer offer First Class on domestic flights. They offer them only on certain international ones – and their numbers are declining.

Why have airlines abandoned First Class? Why haven’t sales of airlines’ most profitable seats increased during a period that’s seen consistently high travel growth? Luxury is one of the few sectors that’s boomed over the past decade. And yet luxury airline seats have missed out. Why aren’t billionaires and millionaires flying First Class? How else are they getting to Aspen? Especially since there are now more billionaires and millionaires than ever before.

Although the TSA has been laboring to make airport security more efficient and secure, its efforts haven’t been successful in reducing the sometimes excessive waiting times to pass through airport security, especially at major airports. The possibilities for delay make even a 2-hour flight a 4-hour ordeal. The security experience at airports, especially at aged American airports, is often a nightmare.

There are no security lines when flying private, no fixed schedules and no delays. Those who fly private never have to worry about missing a flight and can depart at any time that suits them. Increased demand has led to an increase in the number of manufacturers and technological advances have led to increasingly sophisticated sizes and models having varied ranges and costs. Those who can afford to avoid the nightmare commercial airline experience therefore are purchasing their own jets, buying fractional ownership interests, chartering jets, or for the mini-millionaire set subscribing to regularly-scheduled private jet services. Given the security delays and the condition of America’s aging airports and aging air fleets, flying commercial is a burden that the 1{29ea29b64b10057f61377b2c087cd5b7537a0cd24da4295a308b0bf589469f35} no longer need endure.

That’s why commercial airlines have abandoned First Class fliers and, with them, their First Class airfares. Instead, they’re fitting their planes with as many seats as possible. The crowding-in of passengers has led some commentators to relabel Economy Class as Cow Class, and those who fly Economy understand how descriptive that label is. Commercial passengers are herded onto planes through hierarchical entry lanes – if you’re not Business Class or a Frequent Flier, forget about fitting your carry-on onto the aircraft! If flying is supposed to be a democratic experience, it’s now one very much determined by class.

The origin of stringent airport security was terrorism, a goal of which was to damage the financial infrastructure of the West. Making it more difficult and more costly to travel has had the desired effect. That’s a bad thing. It’s resulted in a reallocation, as well as a misallocation, of resources. Investment dollars that might have gone into infrastructure, technology and medical research have been reallocated to airport security and security personnel. Those dollars could be adding value to business and innovation. Stringent airport security has been a clear drag on economic growth.

A further, insidious effect of increased airport security has been the separation of the 1{29ea29b64b10057f61377b2c087cd5b7537a0cd24da4295a308b0bf589469f35} from the 99{29ea29b64b10057f61377b2c087cd5b7537a0cd24da4295a308b0bf589469f35}. The wealthy are now less likely to interface with their fellow travelers. The chasms in society are becoming more exaggerated.

That, too, is a bad thing. Is the new catchphrase “If you don’t fly private … your kids will”?

Inverted Yield Curves Revisited

In Monday’s A Lonely Realist, the discussion of “Will Central Planning Work?” addressed the question of how Central Bankers and governments might counter a slowing global economy. One reader viewed this as primarily a European problem:

“[The] inverted yield curve may be a response to negative yields for European debt issues as their recovery from 2008-2009 is almost finished and they may be lapsing into a significant period of no growth, once again. The Europeans are still mired in Keynesian economics and will not make the necessary changes to their local economies which will produce growth, but are wedded to highly statist structures and socialist policies that may not work any more.”

The reader may be correct that the U.S. markets are merely reacting, and reacting unnecessarily, to a European problem. However, it seems more likely that economies that are closely linked will continue to have integrated expansions and contractions. That certainly has been true this Century. Moreover, Europe is not alone in adhering to policies that stunt long-term growth and mortgage the future. The U.S., after all, carries a $22 billion debt. It may be that not only the European economy, but the global economy, has recovered from the Financial Crisis and is now lapsing into a period of no growth … or worse. If so, it will be up to the Central Bankers, and not only the European Central Bank, to “do whatever it takes.”

The reason for Central Bankers’ success after the 2008 Financial Crisis was Keynsian coordination. They all printed money to stimulate inflation – the Federal Reserve, the European Central Bank, the Bank of Japan, the Swiss National Bank, the Bank of England, the People’s Bank of China, etc. Their governments abandoned fiscal constraint and became willing allies of monetary stimulus, precisely as America’s two political parties have. If the global economy is teetering on recession, the likelihood is that they’ll continue to do so.

A Continuation of Wednesday’s “Speak Softly and Carry A Big Stick”

As a follow-up to Secretary of State Pompeo’s message to his Russian counterpart, President Trump on Wednesday warned Russia to pull its troops from Venezuela. “Russia has to get out,” Trump told reporters. Asked how he would make Russian forces leave, Trump said, “We’ll see. All options are open.”

Finally (from a good friend)

*┬® Copyright 2019 by William Natbony. All rights reserved.