All posts by Marcy

About Marcy

Advocate of Constitutional guarantees to individual liberty.

Now a Credit Card Crisis?

U.S. Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez plan to introduce legislation that would cap credit card interest rates at 15%. Proposals such as this sound great on paper – cap interest rates, and consumers will benefit. But is that all that would happen?

Consider the Following Track Record

* College Tuition

Rise in College Tuition 2If anything, increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase. In 1978, subsidies became available to a greatly expanded number of students. In 1980, college tuitions began rising year after year at a rate that exceeded inflation.” William Bennett, Secretary of Education, Our Greedy Colleges, The New York Times, February 18, 1987.

* Health Care

Rise in health care costThe U.S. “health care cost crisis” didn’t start until 1965. The government increased demand with the passage of Medicare and Medicaid while restricting the supply of doctors and hospitals. Health care prices responded at twice the rate of inflation. Mike Holly, How Government Regulations Made Healthcare So Expensive, Mises Wire, May 01, 2017

 

* Housing

Rise in California RentsRent controls protect tenants when rents rise faster than incomes. Because it makes owning rental properties less profitable, rent control discourages landlords from maintaining apartments and encourages them to convert apartments to condominiums, thus reducing housing supply. California’s current housing crisis has resulted in calls to expand rent controls, despite evidence that this practice may drive up rents in uncontrolled buildings.   Jenny Schuetz, Under US Housing Policies Homeowners Mostly Win, While Renters Mostly Lose, Brookings, July 10, 2018

* And Now Credit Cards

Like any other economic good or service, interest rates are subject to the laws of supply and demand. The supply of genuine savings and the demand for those savings embody the interest rate, and this is reflected by its price. When the price of a good or service is capped, this produces a disincentive for entrepreneurs and suppliers to engage in economic activity in the affected industry. This is simultaneously coupled with an artificially low price, which in turn increases demand. The result of a decreased supply and an increased demand is a shortage.  Logan Davies, Ocasio-Cortez’s Plan to Cap Interest Rates is a Horrible Idea, Eccentric Economics, Being Libertarian, June 9, 2019.

Caveats and Externalities

Seldom there is just one reason that explains a situation; although often there is a fundamental reason. Also, it is sometimes difficult to establish whether concurrent events are causal or incidental; but if the incidence of a type of concurrent event produces similar results, one would suspect a causal relationship. Thirdly, economics is a fungible discipline that can regard John Maynard Keynes as well as Milton Friedman with equal seriousness, although the economic theories of these two folks are diametrically opposed.

And fungibility of economic theory is good at both including widely – collective-leaning hypothesis are as acceptable in the economic arena as are market-leaning ones – and excluding imprudently. A couple of lines on a diagram cannot possibly take into account the countless characteristics in human behavior; therefore, those lines simply illustrate a scenario whereby “all other things being equal,” which hardly ever happens in real life.

Subsidy diagramFor example, the diagram at left is often used to illustrate the benefits of subsidies.  The higher “S” is pre-subsidy price, and the lower “S1” is post-subsidy.

A college administration’s greed response to government subsidies as described by Secretary William Bennett would be difficult to include in this diagram. Greed, that is, the capture of any marginal benefit, negates the assumption that all things remain equal. Thus, as subsidies grew, so did the number of college administrators, the variety of student services outside of basic instruction, and employee benefits such as pensions. It was not just demand that grew.

Are We Dealing With Microwave Mentality?

People use microwaves because they want their edibles now, not later. Microwave users want theirs now!

When politicians insists on, say, free college for all, universal health care, rent control, or a cap on credit card interest rates, they are catering to voters’ microwave mentality. In order to get elected or re-elected, politicians need to showcase immediate events that benefit constituents and ignore negative externalities that harm them.

The Curious Case of Housing Legislation

California is littered with billionaires, mansions, 2 million-dollar shacks, and the highest number of souls who call the state’s grimy streets their home. Meanwhile, state legislators are on a mission to pass legislation that result in the tearing down of older more affordable buildings, destruction of traditional neighborhoods, out-migration of the middle class, and in-migration of both the well off and the destitute.

A Background Worth Reiterating

Sacramento has been generating buckets full of high-profile real estate bills (which legislators call housing bills) for the last half a dozen years or so. At first, the reason behind the earlier bills was the “climate crisis,” a “matter of state-wide concern” that required the state to implement drastic mandates whether such mandates overruled local land-use laws or not.

The seminal piece of legislation behind these bills was California Assembly Bill 32, The Global Warming Solutions Act, signed into law by Governor Arnold Schwarzenegger on September 27, 2006. AB 32 mandated a reduction of the state’s greenhouse gas emissions to 1990 levels by 2020 and to 80 percent below 1990 levels by 2050.

California Senate Bill 375, The Sustainable Communities and Climate Protection Act, signed into law by Governor Schwarzenegger in 2008, zeroed in on cars as the primary culprits in the imminent demise of Mother Earth. SB 375 mandated 1) the California Air Resources Board set regional emissions-reduction targets from passenger vehicles, and 2) the Metropolitan Planning Organization for each region develop a Sustainable Communities Strategy that integrated transportation, land-use and housing policies.

Bingo! SB 375 earned its spurs by 1) pulling in land use and housing policies into the climate change crisis, and 2) shifting responsibility for land-use policies from cities and counties to state-enabled regional agencies. The Metropolitan Transportation Commission (the San Francisco Bay Area region Metropolitan Planning Organization) enshrined SB 375 in recognition of the bill’s stature:

375 Beale St

Headquarters of the Bay Area Metropolitan Transportation Commission. From the MTC’s website:   “The building’s address — 375 Beale Street — is a nod to Senate Bill 375, the landmark state law passed to foster a more sustainable future for California’s metro areas.”

After SB 375, transit-oriented development bills, created in the name of reducing green-house gas emissions produced by commuters, encouraged housing clusters within permissible areas and discouraged sprawl.  Housing prices within narrow transit corridors skyrocketed.  Speculators poured in, developers came seeking customers for luxury housing, and construction unions clamored for their piece of the already high-cost pie.

The Enabling Legislation

Recently, three pieces of real estate legislation garnered nation-wide attention:
Senate Bill 827, introduced by Senator Scott Wiener, focused on inserting dense housing in any and all transit corridors, regardless of local zoning. The bill was so ferociously opposed by counties, cities and neighborhoods that it was mercifully killed in the legislation’s Transportation Committee in April of 2018. SB 827 was brazen, but it was also bizarre. The transit mentioned in the bill included bus routes, which could conceivably disappear overnight before SB 827 glommed on to the route.

The demise of SB 827 spawned Senate Bill 50, also introduced by Senator Wiener. SB 50 was even more brazen than SB 827, since it not only mandated density in any and all transit corridors regardless of local zoning, but mandated the same in “job-rich” areas. Job rich meant any neighborhood in any corridor leading to any business cluster that provided jobs. So, a neighborhood of single-family homes adjacent to transit that takes residents to jobs is job-rich and open by mandate to developers that want to build multi-unit housing. Opposition again mounted. SB 50 was tabled by the legislation’s Appropriations Committee on May 16, 2019.

Now Californians have been presented with Senate Bill 330, the Housing Crisis Act of 2019, introduced by Senator Nancy Skinner on February 2019. The bill is currently active and pending referral.

SB 330 consists of 24 pages of minutia that purportedly aims to “temporarily,” until 2025, enhance the ability of developers to obtain building permits regardless of local rules. In the process, SB 330 obliterates county and city land-use and zoning rules enacted since January 1, 2018 that the bill’s authors view as impediments to nearly unfettered housing development.

Like SB 827 and SB 50, SB 330 transfers by edict land-use decisions from cities, counties and neighborhoods to the state, even curbing the ability of cities’ and counties’ electorates from placing initiatives or referendums on ballots.

And, of course, SB 330 contains the obligatory clause featured in legislation that nullifies local rules, including rules enacted by charter cities. Charter cities are protected from outside meddling by the California State Constitution, unless the meddling is a matter of “statewide concern rather than a municipal affair.”

Here are some clauses of SB 330

* Prohibits retroactively from January 1, 2018 any city or county from imposing or increasing any requirement that a proposed housing development include parking in excess of specified amounts, and prohibits any city or county from charging approval fees in excess of specified amounts.

* Prohibits retroactively from January 1, 2018, any city or county from disallowing a proposed housing development project that has been given a conditional use permit if that project would have been eligible under a city’s or county’s general land-use plan and zoning ordinances in effect on January 1, 2018.

* Prohibits retroactively from January 1, 2018, any city or county, or any voter initiative or referendum, from a) changing the land use designation or zoning of a parcel of property to a less dense use or reducing the parcel’s density; b) imposing or enforcing a moratorium on housing development; c) imposing or enforcing new design standards that are not objective design standards; d) establishing or implementing certain limits on the number of permits issued.

* Requires enforcing agencies to grant to owners of substandard housing delays up to 7 years for correction of violations or nuisances if owners submit an application for such delay and if the enforcing agency determines that correction or abatement of the violation or nuisance is not necessary to protect health and safety.

Check out the California Political Review for a more passionate post on the perils of SB 330.

Rules for Radicals

One could almost think that Saul Alinsky’s Rule #10 could be found somewhere in California’s State Constitution, judging by the relentless tsunami of housing-related legislation generated by state legislators purportedly in their effort to fix a crisis they themselves help create. Rule #10 says,

The major premise for tactics is the development of operations that will maintain a constant pressure upon the opposition.

Antonio Gramsci: The New Hegemony

One of the most fascinating political writers of the early 20th century was Antonio Francesco Gramsci. Gramsci was born in 1891 in the beautiful Mediterranean island of Sardinia, and died at only 46 in Rome in 1937. During such a short life, he was able to formulate possibly the most influential philosophy of our times – rule brought about not by violent force but by consent of the subjugated class. Some call Gramsci’s philosophy Neo-Marxism, since it aims to achieve similar results without the extreme authoritarianism of Traditional Marxism. Gramsci himself does not appear to have called his philosophy anything; he simply described and emphasized the plan’s components: hegemony, praxis, and civil society.

Gramsci’s writings, mostly essays, are divided into pre-prison time and prison time. Prison time, courtesy of Benito Mussolini’s anti-Marxist Fascist Italy, lasted six years, 1929-1935. According to those who study Gramsci’s work, the pre-prison essays (1910-1926) lean towards the politically specific, while the latter woks are more historical and theoretical. Interestingly, Gramsci’s socio-political theories provide insight into common strategies used by both capitalists and Marxists. Concepts of hegemony, praxis, and civil society are entirely adaptable.

Hegemony

The bourgeoisie, in Gramsci’s view, develops a hegemonic culture using ideology rather than violence, economic force, or coercion. Hegemonic culture propagates its own values and norms so that they become the “common sense” values of all and thus maintain the status quo. Hegemonic power is therefore used to maintain consent to the capitalist order, rather than coercive power using force to maintain order. This cultural hegemony is produced and reproduced by the dominant class through the institutions that form the superstructure.  Wikipedia, Antonio Gramsci

The bourgeoisie indeed ruled, until it was officially challenged in the 1960s by Lyndon Johnson’s Great Society.  During the last 50 years, the U.S. has experienced a gradual and relatively peaceful normalization of the socialist order. The newly- socialist-bent institutions of the superstructure (courts, universities, news media) provide support to the superstructure itself (today popularly alternately called the military-industrial complex, the deep state, or the central banks). Meanwhile “the capitalist order” has assumed the full mantle of crony capitalism and is busy normalizing its own crony newspeak (bailouts, affordable housing, industry tax breaks). Hegemony brought about by the consent of the subjugated (taxpayers, the working-poor dependent on public assistance, the priced out renter) is totally fungible.

Praxis

Praxis is the process by which a theory, lesson, or skill is enacted, embodied, or realized. Praxis may also refer to the act of engaging, applying, exercising, realizing, or practicing ideas … It has meaning in the political, educational, spiritual and medical realms.  Wikipedia, Praxis

In other words, praxis is the end result of observation, study, and thinking. It is doing.  It can be action oriented towards changing societal norms and values. Or it can be action to defend the status quo against factions desiring change.  Endless discussions on the virtues of capitalism vs. socialism are fine, but movement towards or against one or the other can only come about via mobilization of armies of volunteers, financial supporters, and strategists.  Praxis is exemplified by mobilizers such as the Tea Party or MoveOn and the Koch brothers or George Soros.

Civil Society

What we can do, for the moment, is to fix two major superstructural “levels”: the one that can be called “civil society”, that is the ensemble of organisms commonly called “private”, and that of “political society” or “the State”. These two levels correspond on the one hand to the function of “hegemony” which the dominant group exercises throughout society and on the other hand to that of “direct domination” or command exercised through the State and “juridical” government. The functions in question are precisely organisational and connective. The intellectuals are the dominant group’s “deputies” exercising the sub-altern functions of social hegemony and political government.  Archive.org, Antonio Gramsci, Selections from the Prison Notebooks

In summary, civil society lives by consent, while the State ensures by force the continuation of consent. Intellectuals function as the principal manufacturers of consent.  Academics are the foot soldiers that help either preserve the status quo or generate fresh value systems from which new hegemony arises.  Civil society is the battleground that gives rise to hegemony.

The International Gramsci Society, until recently presided by the late literary scholar Joseph Buttigieg (father of Rhodes-scholar and Mayor of South Bend, Peter Buttigieg, a presidential candidate in the 2020 U.S. elections), is one of many societies developing the socialist/Marxist consensual hegemony within today’s civil society.

Gransci meetingPictured lecturer:  Marcus E. Green, Phd, Pasadena City College, author of several Gramsci-related essays and secretary of the International Gramsci Society.

Gramsci’s Other Concepts

Antonio Gramsci discussed several other important concepts, many of which we can clearly see playing out today. Here are three:

Organic intellectuals: Scholars, artists, and functionaries (administrators, bureaucrats, industrial managers, and politicians) that identify with the economic structure of their society more than traditional intellectuals. Thus, organic intellectuals are more able to spread organic ideology, since their communication is with structures they identify as their own. Our representatives in the U.S. Congress are good examples of organic intellectuals; they identify with today’s penchant for kicking the can of the obviously unsustainable national debt down the road, and their ideological hegemony persists.

War of Position: Struggle against the existing hegemonic system is necessary for the establishment of a new system. The war to establish a dominant position must be waged on all three levels of society – economic, political and cultural. The current thrashing about between the administrative and legislative arms of our federal government should go down in history as a quintessential war of position.

Organic Crisis: Differs from ordinary financial, economic, or political crises. It encompasses an entire system that is no longer able to generate social consensus because the system’s ruling classes are unable to resolve conflicts. Organic crisis appears when, as Antonio Gramsci describes in his Prison Notebooks, “the old is dying and the new cannot be born.” Has the U.S. reached that point yet?

Update on who California legislators work for

Dogpatch Neighborhood - CopyCalifornia Senate Bill 50, authored by Senator Scott Wiener, was tabled today by the Appropriations Committee until “at least 2020.”  In a previous post Just Vote No asked Who Are California Legislators Working For?  After all, if Senator Wiener states that “everyone hates SB50”, then why, pray tell, would he continue to hawk that bill?  Are legislators not supposed to represent their constituents?

SB 50 has been put to sleep, it has not been done away with.  So, the pressure against it needs to continue.  This is a bill universally despised by just about every city, including San Francisco and Los Angeles, simply because SB 50 shamelessly attempts to remove control of land-use planning from every singly city and county in California.

Here are a couple of articles announcing the news:

California transit density proposal SB 50 on pause until 2020, L.A. Curbed 05/16/19

High-profile California housing bill dies without a vote.  Sacramento Bee 05/16/19

Gentrification: One Way it Happens

A neighborhood butcher shop, Avedano’s, in an old and beautiful neighborhood in San Francisco, Bernal Heights, has made news, mostly because its owner, Angela Wilson, gave such a clear and empathetic description of how neighborhoods change.  Her story is happening in countless neighborhoods throughout the nation.  Her story is one variable in the dreaded word “gentrification” that is often left out when politicians, activists, homeowners, and renters talk about fear of being priced out.

According to Wilson, the fact that she has a new landlord with plans for massive construction and renovation isn’t the real problem, though that project would effectively end their access to a kitchen for the foreseeable future. “It has more to do with the demographics of the city and the fact that people buy things online and want to use stores to supplement what they buy online,” says Wilson. “We’ve created two market places for the same amount of people.”

“The neighborhood wants to blame somebody else rather than themselves and they want to blame the bad landlord,” said Wilson. “My old landlord had the building since 1955, so my rent did increase but it’s not the new landlord’s fault. The community doesn’t shop here, they love to have it and it makes their houses worth a lot of money but they’re going down to Safeway.” 

Without a New Plan, Bernal Butcher Shop Avedano’s Will Close in June, Eater, MSNBC, May 10, 2019.

Avedanos Shop 2

In a previous article Just Vote No talked about California Senate Bill 50, which would greatly facilitate the replacement of older buildings with new much more expensive ones.  A reader raised the question, how would a new building take the place of an old one to begin with?

Changes in demographics, lifestyles, and consumer preferences is one way.  When in older times families would shop at the neighborhood butcher shop, now they shop at Costco for several days’ or weeks’ worth of supplies, order whole dinners on line, or stop by their favorite take-out shop on their way from work. So, the butcher shop has difficulty staying open.

Add to that scenario, aging landlords who decide to sell their buildings and retire.  Most likely their buildings will be purchased by deep pocketed developers, who, incentivized by legislation such as Senate Bill 50, might want to tear down old buildings and replace them with denser, more expensive ones that yield higher profits. Rents double and renters already struggling leave unable to afford the new rent.

Just Vote No hopes Angela Wilson’s shop will survive in some manner.

Who Are California Legislators Working For?

California claims multiple bragging rights – environmental leader, 4th largest economy in the world, highest GDP in the U.S., and lots of sunshine. Astronomical living cost, highest homelessness in the nation, and jewel cities like San Francisco noted for not-so-clean streets all are challenges legislators are working on…and on. However, California has an especially worrisome condition: legislators that do what they determine is good for their constituents, regardless of what those constituents want.

Prime Example: Senate Bill 50

The desire of California legislators to remake the state in their own image is exemplified by Senator Scott Wiener’s proposed Senate Bill 50 which is relentlessly winding its way through legislative committees. The bill claims it aims to fix the state’s notoriously high housing costs by requiring that all cities in California allow developers to build multi-family housing by receiving “communities incentives” in any neighborhood adjacent to transit or adjacent to “job-rich” hubs, regardless of local zoning laws.

This bill would require a city, county, or city and county to grant upon request an equitable communities incentive when a development proponent seeks and agrees to construct a residential development, as defined, that satisfies specified criteria, including, among other things, that the residential development is either a job-rich housing project or a transit-rich housing project, as those terms are defined… Senate Bill 50

Thus if a bus line runs along main street in your single-family neighborhood, multi-family housing – luxury or non-profit, containing any number of subsidized units, and casting whatever shadow it wants onto your yard — shall be built whether you like it or not. The same will occur if your neighborhood is considered by the state to be in an area that offers jobs, such as Silicon Valley or Walnut Creek.

As an aside, SB 50 is a remake of SB 827, which went down in flames at its first committee hearing in 2018. However, this time around the bill offers some tenant protections in an effort to pacify residents that fear being priced out of their neighborhoods; and it requires “labor protections,” such as prevailing (union) wages.

Everybody Hates SB 50

CDogpatch Neighborhood - Copyalifornia is home not only to a lot of homeless and housing insecure people, but also home to rich people. Recent statistics say California is #1 in the nation in the number of resident billionaires. Also, the state boasts some lovely single-family and/or low-density neighborhoods – seaside, suburban, and urban – that few would want to give up.

Thus, there is a nearly universal aversion for SB 50.

Local governments across the state have lined up against SB50, including the San Francisco Board of Supervisors and Los Angeles City Council. There is widespread opposition along the Peninsula and in the South Bay, in Palo Alto, San Mateo, Cupertino and Sunnyvale, which like the East Bay suburbs could see their zoning rules upended because of their designation as “jobs-rich areas.  Wealthy Bay Area Suburbs Could Have a Whole New Look Under California’s Housing Bill, San Francisco Chronicle, May 10, 2019

“Everyone hates SB 50—everyone hates it,” said California state Sen. Scott Wiener at a recent forum on the state’s housing crisis. “You hear people getting upset about it, yelling about it, coming down to City Hall and yelling.” Flanked by real estate developers and housing rights advocates, Wiener, a Democrat who represents San Francisco, had come to discuss his ideas for solving the problem—which meant talking about the heated reaction to his signature piece of legislation, Senate Bill 50—the housing bill Californians seem to love to hate.  Everyone Agrees California Has a Housing Crisis. Trying to Fix It Has Become a Battle, Mother Jones, May 3, 2019.

Who Does Your Legislator Work For?

In a representative type of government, legislators supposedly represent the majority of their constituents without neglecting the minority. In California, legislators increasingly ignore their constituents’ wishes in favor of determining on their own what is best for those constituents.

Senator Scott Wiener says “everyone hates SB 50,” yet he is on a mission to get that piece of legislation passed. Who is Senator Wiener working for?

Tax Cuts: Rising Tide That Lifts Some Boats

On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act after approval of the bill by the Senate and the House of Representatives on December 20, 2017. Thus the most significant tax changes since the Reagan years were enacted. Ever since, the “tax cuts” have joined the growing list of subjects that elicit a great deal of hand wringing from just about everybody.

Rather than post yet another laundry list of what the Tax Cuts and Jobs Act says, here is a brief review of what has happened since the bill became law that might interest workers.

* Job Creation:

At the beginning of May 2019, the unemployment rate stood at 3.6%, lowest level since the 1960s, indicating that companies are creating jobs and hiring workers. The long-term trend since well-paying manufacturing jobs vanished continued, and most growth occurred in low-paying sectors. A lot of hand wringing from our legislators culminated in Senator Chuck Schumer’s sudden concern about “income inequality” as associated with the tax cuts, when the rich have been getting a lot richer for years.

* Wage Growth:

January 2019 posted a real wage gain of 1.7%, and a nominal gain of 3.2%. Real wage figures are adjusted for inflation, while nominal wage figures are not. Lower-paid workers saw the highest gain, around a quarter to a third of that gain probably due to new minimum wage laws and the rest due to job growth that requires employers to pay more to attract workers. The 1.7% figure is a nice gain from 2018, but not much different than year-over-year figures since the 1960s. In other words, in-spite of astronomical rises in the prices of goods in major U.S. cities, real wages have been downright stagnant. The hand wringing comes in again when legislators so concerned about the rich getting richer want interest rates to remain low, which means stock prices remain high, creating wealth mostly for those who can afford stocks (of course, low interest rates “benefit” the poor and middle class, since low rates facilitate more consumption based on a sea of debt).

Pew Research Center:  For Most U.S. Workers, Real Wages Have Barely Budged in Decades.  August 7, 2018.Real and nominal wages

* Company Profits:

The tax cuts lowered the corporate tax rate from 35% to 21%, in hopes employers would make capital investments, hire more workers, and increase workers’ pay. That is not what usually happens. Blessed with a windfall such as the 2017 tax cuts, major corporations usually benefit their shareholders first with investments such as stock buybacks and generous bonuses. Capital improvements that can increase productivity and worker benefits trickle down eventually, though. Such facts did not prevent major hand wringing from the mainstream media when the usual corporate behavior occurred after the 2017 tax cuts.

* Growth of Gross Domestic Product:

The Gross Domestic Product (GDP) is the total value of all end-product goods and services in the country, including personal consumption, business investment, and government spending on goods and services (welfare payments and interest on the national debt are excluded). The U.S. real (adjusted for inflation) GDP growth rate for 2017 was 2.27% and estimated for 2018 2.80%. For comparison, the real GDP of our two neighboring countries are: Canada 3.05 for 2017 and 2.00 estimated for 2018. Mexico 2.04 for 2017 and 2.10 estimated for 2018.

A healthy GDP is thought of as the tide that lifts all boats. However, sometimes the rise is perilous enough to endanger the people in the boats or uneven enough that some boats get lifted more than others.

At present the U.S. national debt to GDP is hovering on the perilous. That is because legislators, in their effort to get re-elected, want to make the U.S. economy look good, regardless of underlying financial land mines. Deficit spending that keeps adding to the national debt is the financial land mine of our time.

Debt to GDP

Theoretically, as GDP grows so does the wealth of a country’s citizens. However, wages of lower and middle-income workers are stagnant, while the asset-based wealth of the rich is growing. Nobody dares talk about the growth of monopolies – they are too big to annoy.  Nobody dares do much about the “plantation” into which lower-income folks have been assigned – keep the plantation denizens dependent and they will deliver the vote.

In Summary:

The 2017 tax cuts gave a good boost to the U.S. economy.  Workers are finding jobs.  Lower-income folks take home a little more on pay day than they did before the tax cuts.  U.S. companies have more after-tax money that could trickle down to workers once stockholders are appeased.  To the ire of profligate states like California, federal deductions for astronomical state and property taxes are now limited (as an aside, most workers in expensive states like California rent their home, and thus do not have property tax deductions).

The eye-popping downside of the tax cuts is that they will add to the already significant national deficit (the U.S. spends more than it takes in revenues).  By October 2018, the deficit grew to $779 billion, a 17% increase over 2017.  Deficits end up being paid by borrowing, just like in any household.

The unfortunate downside is that tax cuts — any tax cuts — act like a band-aid.  The economy gets a boost and the political faction that brought about the cuts can hope for votes if all goes well.  Meanwhile the underlying variables that support monopolies, stagnant wages, income inequality, and perilous government borrowing remain untouched.