Rod Martin's "The Week" – April 16, 2016

A Note From Rod

Dear Friends,

As always, we have a lot more for you at RodMartin.org, so don’t miss that. But for now, let’s get to it.

We can get to politics in a minute. But the most important thing that happened this week — or this year, or possibly this decade — was SpaceX landing a reusable Falcon 9 on a tiny drone ship in the Atlantic. If you haven’t seen the video, it’s just unbelievable.

Maybe this doesn’t mean a lot to you. Let me explain.

Space travel is expensive almost entirely because of the cost of getting from Earth’s surface into orbit. The main reason that cost is high is because we have to use a completely new rocket every time we fly.

Rockets aren’t cheap. The cost to launch a decent sized payload on an Atlas V is about $140 million. It cost $450 million each time we flew the Space Shuttle.

What Elon Musk just did has potential to bring that cost down to around $700,000.

He’s not alone. Richard Branson, Jeff Bezos and others are racing to bring about cheap access to space. And the Falcon 9 that landed this week launched an inflatable space station, the first of many that Bigelow Aerospace intends to sell to everyone from the Pentagon to Hilton Hotels.

Is the world different than it was 100 years ago because of cheap, widespread air travel? How much different is it?

That’s what’s about to happen. Again.

Yesterday was April 15, and just in case you’re wondering what the outcome of the current Presidential contest would mean for next year’s taxes (and actually for this year’s also: Hillary’s husband made his then-largest-ever tax hike retroactive!), consider this:

• This week, Hillary Clinton confirmed that she’ll increase taxes by at least $1 Trillion. Yes, that’s “trillion” with a “t”.

• Bernie Sanders has already proposed an astounding $19.6 Trillion in new taxes. That’s a couple trillion dollars more than the entire U.S. economy last year! And that’s before he starts nationalizing your business ala Atlas Shrugged.

• By contrast, Donald Trump has promised a tax reform plan that Americans for Tax Reform estimates would stimulate economic growth of 4% per year, which may not sound like much, but is almost a whole percentage point above the post-World War II average (and two points above the anemic Obama era).

• And Ted Cruz has outlined a 10% flat tax (16% for businesses), cutting taxes by $3.6 Trillion, eliminating the IRS and sparking 5% to 6% economic growth (closing in on China levels) and, according to former Reagan tax expert Peter Ferrara, balancing our out-of-control budget. And that’s before his spending cuts.

Yes, there’s a lot more than “a dime’s worth of difference between the parties.”

But it’s more than just money. Hillary now wants a new gun tax, by which she intends not only to make gun ownership cost-prohibitive, but to institute a form of backdoor gun registration. And this is just the beginning of the many ways in which Democrats intend to use the tax code to remake society.

The income tax has always been used this way. But it’s about to get far worse if either the Socialist who admits it or the Socialist who won’t get elected. And by contrast, if Ted Cruz is elected, a simple flat tax means the code can’t be manipulated to pick winners or losers at all.

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These things make an enormous real-world difference. Let’s take a look at just one measure:

The blue line is the reduction in extreme poverty around the world since late in the Cold War, roughly 1980. What happened in that period? Communism collapsed, and most of the world embraced at least some degree of democracy and economic freedom. Socialism fell out of favor, markets came in vogue, and as a result, poverty dropped dramatically.

Oh, and what’s the orange line you may ask? That’s the virtual elimination of extreme poverty — globally — by 2030.

Bernie Sanders decries “inequality”, and it is true that the rich have gotten richer. But so has everyone else. And poverty has been reduced more in the last 50 years than in the previous 500.

Thank you capitalism. But not if Hillary or Bernie takes us — and the whole world with us — the exact opposite direction.

*******

Speaking of the Senator, a New Jersey court this week upheld Ted Cruz’s eligibility to run, using exactly the argument I did in this short video. Indeed, Cruz has now won every single court challenge against him, including before the Pennsylvania Supreme Court a week earlier. As always, I told you before it happened.

*******

The political marvel of the past month has been Donald Trump’s astonishing incompetence. And though I am emphatically for Ted Cruz, I say that as a longtime fan of The Donald’s many achievements.

As I’ve noted previously, Trump could have put the nomination away back in February just by announcing he’d nominate Cruz to replace Scalia: 1/3 to 1/2 of Ted’s support would have taken the bird-in-the-hand path, Trump looking inevitable and shock from Scalia’s death being fresh.

But that was a judgment call. In March, amateur hour started in earnest. Trump deliberately chose to shut down state field operations where he had them, and not to deploy them in states like Wisconsin, Colorado and California where they were needed. Then, coming off his Florida victory, he delivered a masterful speech at AIPAC — I was genuinely impressed — the morning after which ISIS terrorists attacked Brussels, while Barack Obama partied in Havana. It was tailor-made for a Trump surge, just as Paris was last November.

So what did Trump do? He attacked Heidi Cruz’s appearance, completely changing the subject and squandering a golden opportunity.

I won’t recount all the stupidity that followed, including having his goons at the National Enquirer accuse Ted Cruz of multiple affairs (all these weeks later, not a shred of corroborating evidence, not a recording, not a video, not a phone record, nothing), Trump went suicidal. Wrecking multiple opportunities to unite the party behind himself, he instead flamed the distrust and distaste that has become the virulent #NeverTrump movement.

You know the results. Cruz has run the table in state after state, including a 69% win in Utah and a nearly 50% win in Wisconsin, which just three weeks earlier the pundits had declared “a perfect state for Trump.” Everywhere there’s a delegate selection process, Cruz’s masterful ground game has elected its people. And this week, we learned that Trump’s own children won’t be able to vote for him in the New York primary because they forgot to register Republican.

Indeed, only this week did Trump name a political director for delegate-rich California, the state he absolutely must win massively to clinch 1,237. That new staffer now must recruit a complete and loyal delegate slate in each of 53 Congressional districts by May 7th.

Not gonna happen.

A second ballot will be ugly for Trump. Nate Silver says — and I agree — that Ted will win a second ballot if there is one.

Trump says his favorite Bible verse is “an eye for an eye.” Perhaps it ought to be “the apostles marveled and asked, ‘why this waste?'”

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Trump’s response to his own failings has been a barrage of accusations of cheating. He now says the system is rigged. But oddly enough, he has had no issue with winner-take-all systems elsewhere. Here in Florida for instance, he won 45.7% of the vote but all 99 delegates. In South Carolina under very different rules, he won 32.5% of the vote but all 50 delegates.

Indeed, Trump is averaging about 37% of the vote but about 47% of the delegates. Trump and his supporters love the rules…just so long as they’re winning. This also seems to be how they feel about Trump’s bragging that he’s routinely bought politicians.

*******

For weeks, this pathetic display has been diminishing Trump in the eyes of all but his fanboys. But now, as Mike Huckabee pointed out yesterday, Trump is finally starting to recover, particularly with a smart op-ed in the Wall Street Journal that shifted the focus of his claims that “the system is rigged” from mere sore-loserdom to a populist assault on the system. That will resonate well, not least because like Trump himself, few people have bothered to read or understand any of the rules.

But aside from the hypocrisy, Trump’s day-in-day-out assault on the integrity of the system is very troubling. First, it mirrors Bernie Sanders’ rhetoric to a tee. Second, it is an assault on federalism — the rules differ from state to state because each state (and state party) is free to make their own rather than have a top-down system imposed upon them — which plays into the Democrats’ hands as they seek to centralize and control everything.

But third, if people cannot believe in the integrity of the system, civil society eventually breaks down. You see this with the #BlackLivesMatter movement: as more people are encouraged to believe they cannot get justice from police or courts, they take the law into their own hands, turn to violence, and begin to advocate the overthrow of the system.

Trump is inciting exactly that on the Republican side. I am not suggesting that is his intent; nor am I saying the Republican Establishment hasn’t created an environment in which that thought could prosper. I am, however suggesting that he knows and appreciates very little about the American system of government, the Founding Fathers, or why we do anything the way we do. And in deliberately conflating his own incompetence with corruption in the system, he is damaging that thin thread by which belief in the American Experiment currently hangs.

*******

I mentioned earlier that on a second ballot, Ted probably wins. But the issue remains as to whether Trump can clinch before Cleveland.

It’s getting harder. Since Utah, Ted has won 128 delegates to Trump’s 7 and Kasich’s 0. And it gets worse for Trump from here. Yes, he’ll win New York Tuesday, but let’s say both Cruz and Kasich can stay above 20% and keep The Donald under 50%: in that scenario, instead of getting 95 delegates, Trump would get about 54.

Even losing 20 would make a huge difference to his chances. Trump needs 65% of all remaining delegates. Ignoring all other factors, he will have to significantly improve on his average just to get over 1,100.

Some quick numbers. Most polls have Trump beating that 50% number in his home state (!), but Optimus has a poll out yesterday (with a sample size of 14,000) showing Trump under 50% statewide and collapsing outside of New York City. No way to know whether this is right, but this much is certain: all year long, Trump has performed roughly in-line with his polling, while Cruz has outperformed by close to 9 points.

In Pennsylvania, Quinnipiac has Trump 39%, Cruz 30%, Kasich 24%. And 54 Keystone State’s 71 delegates are unbound. Guess who’ll be better at organizing them.

Expect recriminations.

*******

Bernie’s had a heck of a month. He’s 7 for 7 since Idaho (and 8 out of the last 9), racking up 155 delegates to her 76. And a great deal of what’s left is out west where he’s doing best.

Obviously, the only ways Bernie wins are if he earns a majority of the elected delegates or if Hillary gets indicted, and in either case gets the superdelegates to flip to him as a result.

But the more interesting point is that fully 25% of Sanders supporters now say they’ll bolt the party if Clinton is the nominee.

This tells us Hillary is weaker than most people think. And while nearly identical numbers of Cruz and Trump supporters say the same thing if their guy loses, adding Sanders’ supporters to the mix greatly muddies the November waters. Most national elections come down to turnout. These numbers blow all the models.

Oh, and just one more point: Cruz is now tied with Hillary in Pennsylvania. A Republican win there would be the ballgame.

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One last thing before we call it a day. I am terribly saddened by the hypocrisy of our old company PayPal. PayPal, which does business in countries which actually execute homosexuals, has announced it’s refusing to do business in North Carolina, which passed a law requiring biological men to stay out of women’s bathrooms.

Time does not permit the fullness of my thoughts on this; perhaps another week. However, it illustrates yet again just how radical the left truly is. Is it really discriminatory to protect little girls from whatever biologically male person happens into their bathroom? Isn’t that just good sense? And does it actually discriminate to ask transgendered people — whom most Americans hadn’t even heard of a year ago — to give the sort of consideration to others which they loudly demand for themselves?

As in, why can offense only go one (leftist) way?

These are exactly the sorts of things Democrats assured us would never happen if they got their way, the sort of “bigoted nonsense” that only “wingnuts” could believe they’d do.

Keep that in mind when Bernie says he’ll “only” raise taxes by more than the size of the entire U.S. economy.

*******

Finally, all of the articles below are important, but none so much as John Mauldin’s piece on negative interest rates. You really need to take the time to understand this looming nightmare, which (among other things) is poised to wipe out everyone’s retirement. It must be opposed, vociferously.

You can read about the world anywhere. You come to RodMartin.org to understand it. Do your friends a favor and pass it along; and remember, there’s a lot more we publish each week that doesn’t make the newsletter.

Best wishes,

P.S. Don’t forget: we’d appreciate your input on whether a contested convention should consider candidates other than Cruz, Kasich and Trump. Vote now!

And also see my important piece on why women should or should not be punished for abortion, immediately below.

Why Not Punish Women For Abortion?

by Rod D. Martin

Donald Trump unleashed a firestorm last week with his suggestion that women should be punished for having abortions. But he raised a question that needs answering: why don’t pro-lifers support this? Rod explains, and you need to read this.

Negative Interest Rates: The Death of Retirement as We Know It

by John Mauldin

Virtually no one — including central bankers — understand the ramifications of negative interest rates. The biggest of those is the upending of the retirement plans of millions of seniors. The ever-brilliant John Mauldin addressed this topic broadly in our last issue, and today looks specifically at the looming retirement nightmare.

Use It or Lose It: China’s Grand Strategy

by Parag Kanna

China’s grand strategy is increasingly one of controlling access to its sources of raw materials. But its sources of raw materials are literally all over the world. This has…implications.

Most of Europe Is a Lot Poorer Than Most of the United States

by Daniel J. Mitchell

Bernie Sanders, Hillary Clinton and Barack Obama all share one goal: make America a lot more like “democratic socialist” Europe. But Europe is a lot poorer than you think, and socialism is the reason, not the cure.

Putin’s Plan to Checkmate Turkey and ISIS in Syria

by Dr. Jack Wheeler

The brilliant Jack Wheeler, architect of the Reagan Doctrine, reveals the power play shaping up in Syria, and how it will stifle ISIS and its frenemy/enabler, NATO “ally” Turkey. It may cost the Turks a province and a key port.

Oh, and you’ll also learn about the connection between the Syrian Civil War and Indiana Jones!

A Cooperative Program For Today and the Future

by Dr. Ronnie Floyd

Dr. Ronnie Floyd, President of the Southern Baptist Convention — America’s largest Protestant denomination — addresses the issue of the Cooperative Program, one of the major distinctives and key funding mechanisms for all SBC missions and ministries, and why and how we can advance it far into the 21st Century.