The John Batchelor Show

Tuesday 14 March 2017

Air Date: 
March 14, 2017

Photo, left: HUAC 1948.
Co-host: Larry Kudlow, CNBC senior advisor; & Cumulus Media radio
Hour One
Tuesday  14 March 2017  / Hour 1, Block A:  James Taranto, WSJ Editorial Board & Op-Ed editor, in re: Tax reform, trade, Pres Trump & media frenzy over these.  Also NEA!  Avik Roy’s article.  CBO says that ACA will lose 24 million people over ten years; however: 5 million won’t sign up because of no penalty for failing to sign up.  Medicaid is worth $6,000 a year.  Obamacare ballooned Medicaid’s population.  LK suggests: no tax credit for $125K; instead, apply to the very poor and slowly move it up to the middle class; i.e., more generous at the low end and less so at the high end.  E that CBO estimates for exchanges were 20 million, whereas 10 million entered; CBO was off by 100%.  AVA: GOP offers no incentive, and incentives are more powerful than laws. Must help people out of Medicaid, which is the worst care-deliverer of all. Ryan’s bill tries to cap Medicaid and put a limit on aid to states for it.  ;
Tuesday  14 March 2017  / Hour 1, Block B:  James Taranto, WSJ Editorial Board & Op-Ed editor, in re: Tax reform: border adjustment tax.  Called revenue-neutral, allowing for 51 votes instead of 60 in the Senate (reconciliation; sometimes called Vote-o-rama).  Means fewer imports, ends widening of the tax base.  Paul Ryan, smart and a supply-sider, hasn't figured this out.   Proponents say it'll raise the value of the dollar and so mitigate- but not overnight, creating a bust in imports and a boom and exports; then, later, vice-versa – creating a convulsion in the economy. Or, the dollar’s value probably depends more on what Treasury does.  Higher-cost imports will be passed on to consumer and industry, and damage the economy. 
Tuesday  14 March 2017  / Hour 1, Block C: David Drucker, Washington Examiner, in re: Freedom Caucus (“say no to everything; ‘We won’t tell you what we’ll settle for’ ”), sprang from the brow of the Republican Study Committee.  Freedom Caucus often moves the goalpost.  David Brat, Freedom Caucus leader, never said No on Larry’s radio program, just enunciated his goals.  The issues are tough: refundable tax credit is viewed as a . . . This is where the GOP absolutely must get itself together. The question is: can it govern? This is what presidents are for – it’s on him to use carrots or sticks or both to get the requisite number of votes.  President has blandishments, but they're not much good with the Freedom Caucus.  What might win is that their voters like Trump more than they like their Congressman. Ryan, McCarthy, McConnell.    Concerns about Medicaid expansion.   Then Lee, Paul, Cruz , et al., who hold that the bill doesn't go far enough.
Tuesday  14 March 2017  / Hour 1, Block D: Larry Kudlow, in re:  the markets, the Fed.  . . .  Full employment is not inflationary!   . . .  Fed owns trillions in bonds. Need to deaccession. 
Hour Two
Tuesday  14 March 2017  / Hour 2, Block A:  Stephen F. Cohen, Prof. Emeritus of Russian Studies/History/Politics at NYU and Princeton; also Board of American Committee for East-West Accord (; in re:  Russia deploys special forces to a base in western Egypt, to support Haftar in Libya.   In Moscow, PM Netanyahu had given Putin a XVI Century volume of Josephus; Putin looked at it, was so excited and overwhelmed by the magnitude of the gift that he hugged Bibi. [Peanut gallery: Not Bush 2, nor Obama, nor perhaps Trump, would even recognize what the gift is.]  A year on, no facts to sustain allegations, but full morphing of Rachel Maddow on MSNBC into a new McCarthyism – hands waving, eyes rolling, no fact. A 45-min documentary begins with the trauma Putin endured at the break-up of the USSR in 1991 when he was a young JKGB officer; then eventually his hatred of Hillary Clinton and its result, according to Fareed Zakaria, led him to hack Clinton’s email and put Trump in the White House It draws a straight line from the end of the Union to the current US president. This is now offered s history!
A new HUAC, along with the Global Engagement Center (q.v.) where __ asks if this can be turned against American citizens to counter “propaganda” by Americans.  A genuinely dangerous turn of events
Tuesday  14 March 2017  / Hour 2, Block B: Stephen F. Cohen, Prof. Emeritus of Russian Studies/History/Politics at NYU and Princeton; also Board of American Committee for East-West Accord (; in re: Adam Schiff (D-CA; Ranking Member of the House Permanent Select Committee on Intelligence) takes as a fact the notion that the Russians hacked Clinton’s email.  Normally have a fact-finding committee, present the result to a Congressional committee.
All these people are anti-Russian; will demonize Putin and use that to damage Trump. Classic McCarthyism.  The intell report from Jan 2017 offers nowhere even one fact – all opinion an speculation.  It's pellucid.  Robert Parry a good investigative reporter, on 8 March published a piece looking for evidence of a DNC hack and found none. All we have is allegations, called assessments. 
First, possible that a Russian, could be anyone, hacked and released the documents. Second, that Putin did. Third, that DNC was hacked by someone, not Russians.  See Wikileaks release last week showing that CIA can go into almost any device, IOT, and leave behind false flags.  Remember that in the original hack, someone let behind a clue, Dzerzhinsky (Cheka/NKVD/KGB/FSB founder), using his given name and his patronymic, Felix Edmundovich – which, btw, almost guarantees that it wasn’t a Russian who did the hack.
Tuesday  14 March 2017  / Hour 2, Block C:  Stephen F. Cohen, Prof. Emeritus of Russian Studies/History/Politics at NYU and Princeton; also Board of American Committee for East-West Accord (; in re: Democrats will take this anti-Russian hatred to next elections. Russians are excellent at hacking and do not leave fingerprints.  Fourth: someone inside the DNC took the info and leaked it.  A group named, Intelligence Veterans for Sanity, have studied all the information and concluded that the origin of the leaks was, in fact, someone who had access to the DNC.  American media say that Putin is “joyous” that Trump has been “crippled” and the American system is “paralyzed.” Hunh?  Why would the Kremlin be joyous after purportedly aiding Trump?
1.  Seems to me that Mrs Clinton is using this to exonerate herself, and 2. The anti-détente movement in Washington is fully on board.
What if Trump is more cunning than they think:  He appointed Jon Huntsman US ambassador to Moscow; Moscow takes this as a very positive signal:  whereas Obama appointed McFaul, an ideologue [and hack], Huntsman is a sophisticated, experienced diplomat and an experienced US politician held in respect, the past ambassador to China.  If Trump proceeds with any kind of détente with Moscow, he’ll try to put space between Russia and China, and not succeed because Chinese relations are too important. However, if anyone knows how, it's Huntsman. (Gossip that appointing Huntsman, a Mormon, as a final act of revenge against Romney, also LDS.)  I’ve heard that Huntsman doesn’t believe anything fervently enough to [do anything but follow instructions].   Chinese trust Huntsman. 
Tuesday  14 March 2017  / Hour 2, Block D: Stephen F. Cohen, Prof. Emeritus of Russian Studies/History/Politics at NYU and Princeton; also Board of American Committee for East-West Accord (; in re: As much as I know about Rex Tillerson, he’s a very substantial person and took the position f Secretary of State because he was confident he could succeed.  He was given the Russian Order of Friendship, along with scores of other Americans. Because in the Nineties, under Yeltsin, Russia was badly ripped off of oil and gas and minerals, there’s a law that says any subsurface mining/drilling must be personally approved by Putin.  Ergo, Tillerson of Exxon was obliged to meet Putin.  Syria: growing cooperation between Russia and US in Syria to avoid accidental military conflict.  . . . Coming: a meeting between Xi and Trump in Florida;  a meeting of Trump and Putin? Probably at the G-20.
Hour Three
Tuesday  14 March 2017  / Hour 3, Block A:   Charles Blahous, Hoover Institution and Mercatus Center, in re: Why Obamacare’s Medicaid Expansion Needs to Be Fixed  Congressional Republicans, having moved their ACA repeal-and-replace bill through committee, are hearing the inevitable criticisms from both sides of the aisle as to what should be done differently.  These disparate opinions are useful only insofar as they enable Senate and House leadership to finalize a bill that attracts the votes necessary to pass both houses and get to the president’s desk.
One of the issues in contention is what to do with the ACA’s Medicaid expansion.  Medicaid provides health insurance for the poor and is jointly funded by the federal and state governments. The ACA departed from the historical distribution of government financing obligations, providing inflated federal matching payment rates specifically to cover those brought newly under Medicaid.  The federal government covered 100% of these costs from 2014-16, scheduled to phase to 90% from 2020 onward.
The House bill would leave the ACA’s match rates in place until 2020, thereafter reverting to Medicaid’s historical matching formula through which the federal government provided 57% of funding on average. The expansion population enrolled before 2020 would be grandfathered in; the federal government would permanently fund them at the ACA’s elevated (90%) matching rates.  After 2020, federal payment growth per Medicaid enrollee would be limited to national health cost inflation.
The issue of how rapidly to reform the ACA’s inflated Medicaid payment rates has divided Congressional Republicans. Fiscal conservatives are concerned the bill does not do enough to scale back the ACA’s expansion costs.  Other Republicans, as well as governors in expansion states, resist even the gradual cost-containment provisions in the House bill.
The following explanation is not intended to provide guidance as to what schedule will produce the critical mass of votes necessary to pass legislation.  Rather, it is an attempt to explain the substantive problems created by the ACA’s inflated match rate.  It’s important these problems be corrected.  While the precise timetable must be determined by the vote-counting, the bill’s sponsors are right to be taking this on.
Problem #1: The ACA Medicaid Expansion Payment Rate Is Inequitable  The only convincing way the ACA’s inflated Medicaid payment rate can be justified is in terms of a political negotiation between the federal government and the states.  Otherwise, . . .’s-medicaid-expansion-needs-be-fixed-2243.html
Tuesday  14 March 2017  / Hour 3, Block B:  Charles Blahous, Hoover Institution and Mercatus Center, in re:  
Tuesday  14 March 2017  / Hour 3, Block C:   A Wretched and Precarious Situation: In Search of the Last Arctic Frontier by David Welky (3 of 4)
Tuesday  14 March 2017  / Hour 3, Block D:  A Wretched and Precarious Situation: In Search of the Last Arctic Frontier by David Welky (4 of 4)
Hour Four
Tuesday  14 March 2017  / Hour 4, Block A:  Robert Zimmerman, in re:
Tuesday  14 March 2017  / Hour 4, Block B:  Robert Zimmerman, in re:
Tuesday  14 March 2017  / Hour 4, Block C:  Paul Gregory, Hoover Institution & Forbes, in re:
Putin Changes Course As He Gives Up on Trump  Vladimir Putin has gained his reputation as a strategic thinker and mover by being one step ahead of his opponents. His blitz annexation of Crimea caught a world off-guard, thinking: “He’ll never do that.” Putin moved into the Syria conflict with the West unprepared, just in time to save client Bashar Assad’s regime. When the West made a concerted effort to isolate him politically, he introduced regular forces into east Ukraine and gained a seat for himself as a “mediator” at the Minsk peace talks. Putin is seen as constantly wrong-footing hapless Western leaders, who must react to him, rather than vice-versa.
Donald Trump may be the first President of the United States who has the 17-year reigning Russian president dazed and confused. Trump’s campaign gave Putin pause to hope: unlike his opponents in the primaries and then general elections, Trump refused to bad mouth Putin. Trump characterized Putin as a “strong leader” and refused to condemn him for his military aggression and abuse of dissidents. Instead, he claimed to look forward to negotiations with Putin and stressed his desire to get on a new and better footing with Russia. Even more promising, Trump criticized Putin’s bogeyman, NATO, as obsolete and demanded NATO countries stop freeloading. Trump refused to rule out the removal of sanctions but mumbled instead: "We’re looking into that." In his campaign rhetoric, Trump painted a picture of Russia and America fighting in harmony to defeat a common Islamic-extremist foe.
What must have been going on in Putin’s head? Would he have thought that the American electorate was about to present him with an amateurish buffoon who would give him exactly what he wanted: A Ukraine forever in Russia’s sphere of influence, an impotent NATO,  recognition of Crimea, and a prominent role in the middle east as America turned inwards? If so, Putin would have concluded that he should hold off and give Trump a chance. The payoff from a Trump election under this set of assumptions would be too large to pass up.
The steps that Putin took over the past year are consistent with a Putin waiting for the Trump windfall, which all along he considered unlikely. Surely Hillary would win as the polls predicted.
Putin took the supreme risk of toning down the “surrounded by enemies” narrative on which his whole regime rests. The Kremlin media began publishing favorable articles about Trump and about his valiant David and Goliath campaign against the evil establishment. Indeed, the Russian people and its parliament celebrated when Trump won. Public opinion polls showed that Russians had begun to look favorably on Trump’s America.
A month into the Trump presidency Putin must realize that the Trump he was waiting for will, like Godot, never appear. If Donald Trump is an agent or, slightly less damning, a pawn of Russia, Putin’s intelligence agents could not be doing a worse job. They have helped elect a president who is announcing massive increases in defense spending, unleashing America’s hydrocarbon reserves, and appointing a hawkish foreign policy team. In the words of Walter Russell Mead, “Trump is, in other words, a nightmare for Putin and a much, much bigger threat to Putin’s goals than President Obama ever was or wanted to be.” If Putin’s agents had regular contacts with Trump’s team (as some media claim), Putin should fire them for incompetence. Their pawn has turned into a monster.
Now that Putin understands that Trump is not going to give away the store, he has begun to scramble. He cannot afford a public that thinks highly of America; so he has ordered his media to cut out the favorable coverage of Trump. The Trump “upset of the century” raises concerns about Putin’s own 2018 election. He has had to disqualify the Russian version of Trump from the ballot. To lend some legitimacy to his reelection, Putin had planned to let anti-corruption blogger, Aleksei Navalny, on the ballot. With Trump-like early ratings, Putin presumed Navalny had no chance, but, after Trump, he cannot be sure. To rev up his irritant role in Ukraine, Putin decreed that Russia will accept the passports of the two self-proclaimed people’s republics of the Donbass. With this action, Putin more or less announced the end of the Minsk 2 peace deal, which he had claimed to support. Now Ukraine can complain to Europe that Putin, not they, are the obstacle to peace.
On the international front, the Putin regime has flouted compliance with the 1987 Intermediate Range Nuclear Forces Treaty, according to Congressional testimony. The treaty bans all land-based cruise missiles with ranges between 500 and 5,500 kilometers. The newly deployed missiles threaten U.S. facilities in Europe and the NATO alliance. Moscow would be unlikely to make this move if it intended to have serious negotiations with the Trump administration – yet another sign that Putin has given up on Trump.
Trump’s major increase in defense spending, announced in his address to a joint session of Congress, represents Putin’s worst headache from his purported “agent.” Putin has been promising an economic turnaround for more than two years. His statisticians have even used a statistical sleight of hand to manufacture a recovery of industrial production dating back to mid-2015. With this trick, Putin wants to tell the West and his own people that the Russian economy is back on track.
I doubt that the Russian people will be impressed by this bit of “fake news.” The government tells them that things are looking up, but their own lives paint a different picture. Real wages and personal consumption continue to stagnate. Construction shows no signs of turning around, and pensions are falling behind inflation. Government spending on health and education continues to shrink as mortality rises and human capital is lost. Their refrigerators give the Russian people a different message than government statisticians.
Nor will things get better. The consensus prognosis through 2023 calls for growth well below two percent. At this rate, the Russian economy will likely not recover to its pre-Crimea level of output before the then-71 year-old Putin completes his fourth term. And that assumes Putin does not bog down Russia in more foreign adventures that harm the economy.
Pundits say that Donald Trump’s 2020 reelection will depend on the economy. Will his taxation, health-care, and anti-regulation policies restore the US economy to three percent plus growth? Vladimir Putin’s 2018 reelection will not depend on the Russian economy, which has been in recession since mid-2014. Putin will face no real opposition (Navalny is out and Boris Nemtsov is conveniently dead); anti-Putin demonstrations will be punished harshly, and the Kremlin media will pound home a pro-Putin message.
Putin has used repression to break free from having to offer growth and prosperity in return for votes. In 2018, his opponents will be the forlorn and aged leader of the shopworn communist party, Gennady Zyuganov, and the corrupt and clownish nationalist, Vladimir Zhirinovsky. With opponents like these, even Putin looks good.
What the Russian economic statistics show is that Putin is nearing the limits to which he can push the Russian people. He has carried the choice of “guns versus butter” to the extreme with three years of declining living standards. There are limits to the tolerance of the Russian people, as is demonstrated by the outbreaks of demonstrations and protests in the provinces and regions, including calls for increased autonomy from Moscow.  Putin is testing the limits of Russian military buildup as the new US president Donald Trump is proposing a rebuilding of American military power. In such a competition, Putin and Russia cannot keep up.
With Trump and Putin, we are returning to the Reagan-Gorbachev era, but under less favorable conditions for the Russian side. The USSR had a larger population than the US and its GDP was around one half. Can Putin really hope to compete with a country two and a half times Russia’s population and a GDP a 14 times Russia's? Can he sacrifice his peoples’ living standards, health, and education even more? I doubt it.
The first meeting of Trump and Putin may tell us more about how Putin plans to handle this looming conundrum.
Tuesday  14 March 2017  / Hour 4, Block D:   Lou Ann Hammond,, in re: