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WHY IT MATTERS: Income Inequality

Peasant-Wedding-Bruegel-the-ElderMy Comments: I’ve argued frequently that if income inequality is not addressed, our children and grandchildren will be rioting in the streets of America. I’ve also argued that the recent rioting in Louisiana, and elsewhere, ostensibly because of racial issues, is as much caused by economic disparity as it is racial disparity.

At the extreme, in the Middle East, the rise of ISIS is as much an economic issue as it is a religious issue. If there are no jobs for young men and women to aspire to and become the economic foundation of a family, one is left with strapping on a suicide vest and causing chaos.

We better hope the next round of elected leaders in Washington and elsewhere pay attention to this problem.

By Josh Boak – August 18, 2016 –

WASHINGTON (AP) — THE ISSUE: The rich keep getting richer while more Americans are getting left behind financially.

Income inequality has surged near levels last seen before the Great Depression. The average income for the top 1 percent of households climbed 7.7 percent last year to $1.36 million, according to tax data tracked by Emmanuel Saez, an economics professor at the University of California, Berkeley. That privileged sliver of the population saw pay climb at almost twice the rate of income growth for the other 99 percent, whose pay averaged a humble $48,768.

But why care how much the wealthy are making? What counts the most to any family is how much that family is bringing in. And that goes to the heart of the income-inequality debate: Most Americans still have yet to recover from the Great Recession, even though that downturn ended seven years ago. The average income for the 99 percent is still lower than it was back in 1998 after adjusting for inflation.

Meanwhile, incomes for the executives, bankers, hedge fund managers, entertainers and doctors who make up the top 1 percent have steadily improved. These one-percenters account for roughly 22 percent of all personal income, more than double the post-World War II era level of roughly 10 percent. One reason the income disparity is troubling for the nation is that it’s thinning out the ranks of the middle class.
Hillary Clinton has highlighted inequality in multiple speeches, with her positions evolving somewhat over the past year. Bernie Sanders held her feet to the fire on that subject in the primaries. Clinton hopes to redirect more money to the middle class and impoverished. Clinton would raise taxes on the wealthy, increase the federal minimum wage, boost infrastructure spending, provide universal pre-K and offer the prospect of tuition-free college.

Donald Trump offers a blunter message about a hollowed-out middle class and a system “rigged” against average Americans. Still, he has yet to emphasize income inequality in the campaign. To bring back the factory jobs long associated with the rise of the middle class, Trump has promised new trade deals and infrastructure spending. But Trump has also proposed a tax plan that would allow the wealthiest Americans to keep more of their earnings.

President Barack Obama has called rising inequality “the defining challenge of our time.” And experts warn that it may be slowing overall economic growth. Greater inequality has created a festering distrust of government and of corporate leaders whose promises of better times ahead never fully materialized.

The result has been a backlash against globalization that many Americans feel tilted the economy against them. For the top 1 percent, the ability to move money overseas and reach markets worldwide concentrated pay for “superstars,” according to economists. At the same time, factory workers now compete with 3 billion people in China, India, Eastern Europe and elsewhere who weren’t working for multinational corporations 20 years ago. Many now make products for Apple, Intel, General Motors and others at low wages. This has depressed middle-class pay. These trends have contributed to a “hollowed out” labor market in the United States, with more jobs at the higher and lower ends of the pay scale and fewer in the middle.

Social factors have amplified the trend as well. Single-parent families are more likely to be poor than other families and less likely to ascend the income ladder. Finally, men and women with college degrees and high pay are more likely to marry each other and amplify income gaps.

Options for Funding Long-Term Care Expenses

retired personMy Comments: When you reach retirement age, the elephant in the room becomes Long Term Care. This is when someone in the household becomes unable to perform two of what are called Actitivies of Daily Living, or ADLs.

A healthy spouse will simply take on more and more to help the affected person manage and get by from day to day. But it takes a huge toll, and if there are enough resources or insurance in place, there may be money to find someone to help.

Only two of the four ways to finance a solution are referenced in this blog post. If you want more information on the other two, call or email me.

This begins to explore ways to pay for those LTC expenses.

January 12, 2016 by Wade Pfau

Four general ways to finance long-term care expenses include:
1. Self funding with personal assets
2. Medicaid
3. Traditional long-term care insurance
4. Long-term care insurance combined with life insurance or annuity

I will discuss the first two of these today and go into the others in subsequent posts.

The overall cost of long-term care can be defined as:

LTC Cost = LTC Expenses + LTC Insurance Premiums – LTC Insurance Benefits

This equation highlights that the overall cost of funding long-term care is comprised of the actual expenses for care plus any premiums paid for long-term care insurance, less any benefits received (including death benefits or other auxiliary benefits, when applicable) from the insurance policies. For this formula, one may consider Medicaid benefits as a type of insurance benefit.

Before we go any further, notice that Medicare and health insurance are not on the above list. The misperception that Medicare provides long-term care support is common. Medicare provides support only in limited situations when an individual is confined to home, requires intermittent or part-time support from a Medicare-certified home health agency as prescribed by a doctor, and is expecting a full recovery. Full benefits last 20 days and partial support ends after 100 days.

Selecting between the four options listed above includes a number of considerations: age, health, ability to receive help from family or friends without overburdening them, wealth levels and how they may relate to Medicaid qualifications, legacy objectives, risk tolerance with regard to the financial impact of unknown long-term care events, and costs and benefits of different types of insurance.

As far as funding is concerned, developing a written plan and sharing it with family members can help avoid misunderstanding when the time comes. You should also ensure family members know about any funds set aside or any insurance policies designed to support care when the time comes. A qualified elder care law attorney can help with issues surrounding the transition to using Medicaid for long-term care expenses.

Self Funding
Self funding means any long-term care expenses will be funded through distributions from financial assets. This strategy keeps the full risk for the amount of long-term care spending on the household and results in the widest range of potential spending outcomes. Of course, if no long-term care event occurs, the cost of self funding is zero dollars. But without any risk-sharing, the threat of potential costs that could exceed one million dollars hangs overhead.

If you are more risk-averse, you may prefer to pay a premium to better protect your wealth in the event of an expensive long-term care event, even if it carries a relatively small loss should no long-term care event arise. Risks of self funding include potential high costs, investment risks for the underlying portfolio, and difficulties with managing investment assets after a long-term care need begins.

For self funding, ask yourself if you have sufficient financial resources to cover an expensive long-term care shock and still meet the remaining financial goals for retirement. Which specific resources could be used for long-term care expenses? How will they be invested? What impact would these expenditures have on the standard of living for remaining household members and potential beneficiaries? Is this a risk that can be accepted, or could insurance provide a positive impact by helping pool this risk?

Clearly, the self funding option is only possible for those with sufficient discretionary assets to meet potential expenses. With sufficient assets, those with high risk tolerance may prefer the increasing variability in net care expenses by self funding to insurance. Others with a lower risk tolerance might choose to pool some of the risks through an insurance company.

Another risk tolerance consideration: What kind of investment returns could the assets earn if no protection is purchased? The more conservatively these assets earmarked for long-term care are invested, the less potential upside growth they would lose. Those with greater risk tolerance who invest more aggressively may find self funding fits their circumstances, while those who would otherwise invest the assets more conservatively – in cash or CDs, perhaps – may benefit more from an insurance solution.

The self-funding route may also be more attractive to individuals with a family history free of health problems that result in the need for long-term care such as dementia. Also, those with the potential to receive care from family or friends may feel self funding is a safe bet as it could greatly reduce the cost of care.

Self funding could force an individual to rely more greatly on family care, which introduces a number of potential opportunity costs not included in formal cost calculations. Caregivers often experience increased stress and health problems, and they could be forced to make sacrifices in their careers that could result in substantially reduced lifetime earnings. The health problems created by providing long-term care could potentially result in the caregiver needing long-term care for themselves as well.

Medicaid is the most commonly used funding option for long-term care in the United States. It generally serves as a last-resort option once assets and income have fallen to sufficiently low levels. The qualifications for Medicaid – assets, income, and medical need – vary widely by state, which makes it hard to generalize about the process. Some states require relative impoverishment to qualify for Medicaid, while others allow money set aside for a surviving spouse to be exempted from consideration to pay for long-term care.

Medicaid is the main option for those entering retirement with little savings. It is also the go-to for continuing care after available resources have been depleted.

Still others reposition their assets with the aid of an attorney to work around Medicaid limitations and gain access – a somewhat controversial strategic process known as “Medicaid planning.” Some view it as unethical, while others say they are entitled to the welfare benefits through their lifetime tax payments.

Either way, Medicaid is making such planning increasingly difficult by limiting the transfer of assets to avoid using them to pay for long-term care. Also, efforts to recover Medicaid benefits from the estates of beneficiaries have grown more and more complex as states work harder to reduce overall Medicaid expenditures.

Nevertheless, Medicaid planning may be helpful for those with limited resources and health problems preventing them from qualifying for long-term care insurance. Available resources may still need to be spent on long-term care needs in the end, and qualification for Medicaid could occur if long-term care needs persist.

Because Medicaid reimbursement to long-term care facilities is generally lower than the true cost, self-funding patients may receive priority admission – and potentially better quality care – over Medicaid patients. Yet, as an increasing number of people require long-term care, making it difficult for everyone to receive high quality long-term care, those who would otherwise have the ability to self-fund may come to regret using Medicaid planning techniques if they could have funded better quality care themselves.

Wade Pfau: Professor at The American College and Principal at McLean Asset Management. His website: http://www.RetirementResearcher.com

‘Biggest Bond Bubble in History’ is About to Burst

bear-market--My Comments: Broken record time again. The punditry has almost one voice and yet the markets are not listening. I can’t wait until November 9 arrives.

Aug 20, 2016 – The Irish Times

“The market can remain irrational longer than you can remain solvent,” is a famous quote, often attributed to JM Keynes. And indeed we have experience in Ireland of how a market – in our case the housing market – can remain irrational for a long period of time. The “ fundamentals” were supporting it, was the argument. And how wrong it was.

Now we have the same argument being used to support the super-low and even negative yields in bond markets, especially those for Government debt. Some $13,000 billion of bonds worldwide are now trading at negative interest rates, including short-term Irish Government debt. But with central banks pumping billions into the world economy (often by buying bonds), growth remaining at record lows and official interest rates on the floor, we are told, yet again, that the fundamentals are supporting all this.

Looks like a duck

Perhaps they are. But the lesson of our housing market reflects the theory about something that looks like a duck and quacks like a duck. And so enter Paul Singer of Elliot Management, who should know something given that his hedge fund manages $28 billion in assets.

He told investors in a letter this week that, in his view, the turnaround in the bond market was likely to be “surprising, sudden, intense, and large”. He said he believed we were in “the biggest bond bubble in world history”, and advised investors to avoid sub-zero yielding debt.

“Hold such instruments at your own risk; danger of serious injury or death to your capital!” he wrote, according to CNBC.

Of course such warnings have been made for the last couple of years and, despite them, bond prices have continued higher and yields – or interest rates – have continued to decline. It is hard to know what might burst the bubble, with little sign of a big take-off in growth or inflation. But common sense would suggest that investors paying governments to lend them money to cover their budget deficits really doesn’t make a lot of sense.

As Singer said, it could all end with a bang. But when, and why, is the really hard question to answer.

Understanding Social Security Spousal Benefits

SSA-image-3My Comments: these details were found at a site called WiserWomen.com . They are consistent with my thoughts about how to get the most from the Social Security system as you ask questions to find the optimal timing to apply and possibly suspend your benefits. If you want a personal analysis and comprehensive report, talk with me. Their comments follow this first paragraph.

Social Security is a vital source of retirement income for most women. For this reason, it is important to understand how the spousal benefit works and how it can impact the amount of Social Security income you receive. While this fact sheet is written for women, the information here is the same for men who may want to claim the spousal benefit based on their wife (or ex-wife’s) earning record.

As a spouse, you can claim a Social Security benefit based on your own earnings record, or collect a spousal benefit in the amount of 50% of your husband’s Social Security benefit, but not both. You are automatically entitled to receive whichever benefit provides you the higher monthly amount. In order to qualify for Social Security spousal benefits, you must be at least 62 years old and your husband must also be collecting his own benefits. If your husband is of full retirement age and is not yet collecting benefits, he can apply for retirement benefits and then request to have the benefits suspended and receive delayed retirement credits until age 70. Once he has applied for and suspended his benefits, you would then be able to apply for spousal benefits. Additionally, if you are the higher earner, your husband can apply to collect spousal benefits based on your work record. It is important to note that claiming a spousal benefit does not impact the benefit amount received by the worker whose earning record is being used.

Taking Benefits Early

A full spousal benefit is worth 50% of the non-claiming spouse’s retirement benefit at their full retirement age (known as the “primary insurance amount”, or PIA). It does not matter when the non-claiming spouse actually filed for their own retirement benefit. Therefore, even if your current or former spouse is receiving a reduced benefit as a result of early claiming, your spousal benefit will not be affected. What CAN impact your spousal benefit, however, is if YOU claim the benefit before your own full retirement age. For example, if your full retirement age were 66, then the following reductions to benefits would apply:
• At age 65, you would receive 45.8% of your spouse’s benefit.
• At age 64, you would receive 41.7% of your spouse’s benefit.
• At age 63, you would receive 37.5% of your spouse’s benefit.
• At age 62, you would receive 35% of your spouse’s benefit.
It is also worth noting that unlike delaying your own worker benefit, there is no credit for delaying a spousal benefit beyond full retirement age.

Divorced Spouses
You can receive benefits as a divorced spouse on your ex-husband’s Social Security record, even if he has remarried and his current wife is collecting benefits based on his record. However, there are a few eligibility requirements:
• You must have been married to your ex-husband for at least 10 years.
• You must be at least 62 years old. However, if your ex-husband is deceased and you are currently unmarried, you may collect benefits as early as age 60 as a surviving divorced spouse. If he is deceased and you are disabled, you can collect benefits as early as age 50.
• Your ex-husband must be eligible for benefits. If he is eligible but is not currently receiving benefits, you can still qualify for spousal benefits if you have been divorced for two or more years.
• You must not be currently married. If you remarried and your second husband is deceased, you can claim benefits from either your first or your second husband as long as each marriage lasted at least 10 years.

Surviving Spouses
• If your husband passes away, you can collect survivor’s benefits as early as age 60.
• You are eligible to receive his full Social Security benefit amount if you claim the benefit at your own full retirement age. If you claim before your full retirement age, your benefit will be reduced. (You can learn more about this on the Social Security website by clicking here.)
• If your ex-husband is deceased and you remarry before age 60 (or 50 if you are disabled), you cannot receive survivor’s benefits unless the latter marriage ends (whether it be through death, divorce, or annulment). If you remarry after age 60, you can continue to receive benefits on your former husband’s Social Security record. However, if your current husband is also a Social Security beneficiary and you would receive a larger benefit from his work record than you would from your former husband’s record, you should apply for spousal benefits on your current husband’s record. You cannot receive both benefits.
• Regardless of your age or marital status, if you are caring for your deceased husband’s child or children, you would be eligible to receive benefits for raising them until they are 16 years old. These children can then continue to receive benefits based on your husband’s work record until they are 18 or 19, as long as they are unmarried. If a child is still a full-time student (no higher grade than grade 12) when they turn 18, they can continue to receive benefits until 2 months after they turn 19 or until they graduate, whichever comes first. Children who are disabled can also continue to receive benefits after they turn 18 years old.

Applying for Benefits
You can apply for benefits online by going to http://www.socialsecurity.gov. You can also apply over the telephone by calling 1-800-772-1213, or apply in person by visiting your local Social Security office. For more information on how to apply, visit www.socialsecurity.gov/retire2/applying8.htm.

To make the application process easier, you should know your husband’s (or ex-husband’s) date of birth and Social Security number. You may also be asked to provide certain documents as proof of eligibility, such as your birth certificate or other proof of birth, naturalization papers, W-2 forms, a marriage certificate, or divorce papers if you’re applying as a divorced spouse.

Here’s How You Know The Stock Market Is Hugely Overvalued

roller coaster2My Comments: Worrying about your money is a normal activity. At least it is for me.

That being said, to the extent you have money somewhere where your principal is not guaranteed, I think there is a high probability you will soon suffer some losses.

Actually, unless you sell at a loss, you really haven’t ‘lost’ anything. But if your account value drops, and you are old like I am, you may not have the necessary time to wait for it to recover. That’s because you may be using it to pay your bills, and chances are those bills will continue. Unless of course you die, which means it becomes someone else’s problem.

Mark Hulbert – August 16, 2016

The U.S. stock market currently is more overvalued than it was at almost every bull market peak over the past 100 years.

That’s crucial, since it undercuts one of the arguments some exuberant investors currently are using to try to wriggle out from underneath the otherwise bearish message of various valuation indicators. Their argument in effect is “of course current valuation is high; what would you expect when the market is at an all-time high?”

Unfortunately, an equally sobering picture is painted when we compare the current market not to historical averages but to just those past occasions when equities were at the top of a bull market.

In fact, as you can see from the chart (not shown), the current stock market is more overvalued, in terms of the following metrics, than it was at most of the past bull market peaks dating back to 1900.

Giving credence to this message is that it comes from six different ways of measuring valuation. That should make it harder for the bulls to dismiss the data:
1. The price/book ratio, which stands at 2.8 to 1: The book value dataset I was able to obtain extends only back to the 1920s rather than to the beginning of the century, but at 23 of the 29 major market tops since then, the price/book ratio was lower than it is today.

2. The price/sales ratio, which stands at an estimated 1.9 to 1: I was able to access per-share sales data back to the mid 1950s; at 18 of the 19 market tops since, the price/sales ratio was lower than where it stands now.

3. The dividend yield, which currently is 2.1% for the S&P 500: SPX, -0.33% . At 31 of the 36 bull-market peaks since 1900, the dividend yield was higher. (high is good; low is bad)

4. The cyclically adjusted price/earnings ratio, which currently stands at 27.2: This is the ratio championed by Yale University’s Robert Shiller. It was lower than where it is today at 31 of the 36 bull-market highs since 1900.

5. The so-called “q” ratio: Based on research conducted by the late James Tobin, the 1981 Nobel laureate in economics, the ratio is calculated by dividing market value by the replacement cost of assets. According to data compiled by Stephen Wright, an economics professor at the University of London, and Andrew Smithers, founder of the U.K.-based economics-consulting firm Smithers & Co., the market currently is more overvalued than it was at 30 of the 36 bull-market tops since 1900.

6. P/E ratio: This is the valuation indicator that is perhaps most-often quoted in the financial media. Nevertheless, according to data on as-reported earnings compiled by Yale’s Shiller, and based on S&P estimates for the second quarter, this ratio currently stands at 25.2 to 1. That’s higher than at 89% of past bull-market peaks.

To be sure, valuation indicators are not helpful guides to the market’s shorter-term direction. Overvalued markets can stay overvalued for some time, and even become more overvalued. But value eventually wins out.

For example, it was in December 1996 that Yale’s Professor Shiller gave his now-famous lecture to the Federal Reserve about irrational exuberance. His analysis struck many as silly during the subsequent three years in which stocks continued to soar; when the dot-com bubble hit he looked like a genius — and he eventually was awarded the Nobel prize.

A timely analogy comes from Ben Inker, co-head of the asset-allocation team at Boston-based money management firm GMO. He likens the market to a leaf in a hurricane: “You have no idea where the leaf will be a minute or an hour from now. But eventually gravity will win out and it will land on the ground.”

So enjoy the market’s strength — while it lasts.

ThrowBack Thursday: My College Days

33 60-62 CavingClub copyAbout this time some 57 years ago I arrived in Gainesville, Florida. I was a freshman with no clue yet what to study and no meaningful focus other than survive on my own with a vague sense of taking the next steps. I found myself enveloped in a group of non-conformists whose extra-curricular avocation was caving. If you were a sophisticate, you would have said spelunking, as performed by speleologists. At the time, we cavers were mostly sober and were prepared to spend much of the night in underground, sometimes muddy, bat infested caves, climbing walls and crawling through narrow passages. Never mind that you missed classes the next day. And on weekends, there were parties with purloined grain alcohol and folksongs. Some of us managed to graduate, despite having no real clue what we were going to do with the rest of our lives.

The link below will take you to a site where I have uploaded images of those days, along with comments that my now 75 year old brain thinks are relevant. Unfortunately, too many of the people shown have passed and exist only in our memories. Perhaps some of you will recognize these folks, or others with similar tastes whose lives touched yours. Good times were had and enjoyed.

Go HERE to see it all: https://goo.gl/09cPIv

Alternatively, I’ve created a PowerPoint slide show and uploaded it to dropbox.com  If you have problems with either of these let me know and I’ll try a new way to get you the stories and pictures.

The Return of American Exceptionalism

My Comments: We live in a biased world and are likely to remain in a biased world. I find it helpful to read ideas expressed by people who live outside the US and have a different bias filter. This is one of them.

By Edward Luce, August 14, 2016

Until recently most of the world yearned for the US to become a more normal country. It had seen enough of George W Bush’s freedom agenda to put it off American exceptionalism for good. People should be careful what they wish for. Donald Trump may be the most gaffe-prone — and offensive — US presidential nominee in history. But he is also the first to scorn the belief that America’s mission should be to uphold universal values. It is not clear he even thinks such values exist. Hillary Clinton, on the other hand, is their unabashed cheerleader. “I believe with all my heart that America is an exceptional country,” she said in June. “We are still, in Lincoln’s words, the last best hope of earth.”

Long-suffering US realists — those who argue that America should merely pursue its national interests — must wonder what they did to deserve such a champion. Mr Trump vows to avoid foreign entanglements, such as pre-emptive wars in Iraq. That is what realists want to hear. Ditto for Mr Trump’s view that America’s allies should pay for more of their defence, or that China is entitled to occupy atolls in a sea named after it. Why should America always play the referee? But Mr Trump inevitably spoils things by adding his own gloss — promising a nuclear attack on Isis, for example, or claiming that President Barack Obama founded the terrorist group. The key to successful realism is tactical guile and deep knowledge of the world. Mr Trump epitomises the opposite. With friends like Mr Trump, realists need no enemies.

There is also the likelihood that he will lose to Mrs Clinton in November. Mr Trump’s defeat would probably come in spite of his foreign policy instincts, rather than because of them. For years, the US public has said it is tired of military adventures, thinks Nato allies should shoulder more of the burden and that America’s global role should be more modest. Nation-building is no longer an election winner, if it ever was one. Mr Trump’s “America first” slogan might have unfortunate antecedents (it was picked up by Fascist sympathisers in the early 1940s), but many Americans are happy with its current meaning. If he loses it will be because of his manifestly unpresidential temperament and a tendency to insult almost every group in America.

Unfortunately for realists, their ship may go down with him, which means the USS Exceptionalist would set sail again under Mrs Clinton next January. Where was it during the Obama years? Mr Obama’s foreign policy has been neither exceptionalist nor realist but a hybrid of the two. A few weeks after he took office, I asked whether he subscribed to the school of US exceptionalism. Mr Obama replied that he was a US exceptionalist in much the same way that “Brits subscribe to British exceptionalism, and Greeks subscribe to Greek exceptionalism”. His creed, in other words, was avowedly subjective. Given how harshly Mr Obama’s critics have questioned his patriotism, his answer today may be less ambivalent. It is hard to imagine Mrs Clinton saying that. A true exceptionalist leaves no room for doubt. They believe the US stands taller and sees further than other nations, as Madeleine Albright, the former secretary of state, once said.

What would this mean for a Clinton administration? Unexpected events would dictate much of her presidency, as is always the case. Ronald Reagan’s struggle with the Soviet Union’s “evil empire” was rendered moot by the rise of Mikhail Gorbachev. Bush junior took office promising a humbler foreign policy. He pivoted quickly to hubris after the 9/11 attacks. Mr Obama promised to wind down the wars in Afghanistan and Iraq. He will leave office with thousands of US soldiers in each country. Bill Clinton, meanwhile, vowed to uphold human rights and confront the “butchers of Beijing”. To his lasting regret, he turned a blind eye to the 1994 genocide in Rwanda. This was largely because of what he learnt from another event — the “Black Hawk down” debacle in Somalia. He also brought China into the World Trade Organisation. In each case, however, the president’s philosophy shaped how they responded to events.

Many assume that Mrs Clinton would simply pick up the baton from Mr Obama, since she was his first secretary of state. But serving a president is very different from being one. On each military question that arose in Mr Obama’s first term, Mrs Clinton took the hawkish view. Sometimes she was on the winning side, such as on intervention in Libya. At others, such as on whether to arm Syrian rebels, her advice was overruled. In spite of her early involvement in the Iran nuclear talks, it is doubtful if she would have signed Mr Obama’s deal.

Her campaign rhetoric is also strikingly different from Mr Obama’s. In 2008 he pledged to revive America’s moral authority in a world reeling from Mr Bush’s wars of choice. She vows to engage with a dangerous world with all the tools at her disposal. It is a different sensibility.

Mr Obama once summed up his approach to foreign policy as “don’t do stupid shit”. In a rare critical moment, Mrs Clinton said Mr Obama’s maxim did not amount to an organising principle. She was right, of course. But in these hazardous times, the instinct to first do no harm may be worth more than we can appreciate.