Sobering Thoughts

Comments on politics, the culture, economics, and sports by Paul Tuns. I am editor-in-chief of "The Interim," Canada's life and family newspaper, and author of "Jean Chretien: A Legacy of Scandal" (2004) and "The Dauphin: The Truth about Justin Trudeau" (2015). I am some combination of conservative/libertarian, standing athwart history yelling "bullshit!" You can follow me on Twitter (@ptuns).

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Saturday, May 27, 2017
 
Chief of Staff to Canadian Prime Minister calls pro-lifers anti-choice
Issue isn't choice, it's abortion. Liberals are anti-choice on many -- most? -- other issues.


 
Conservative leadership prediction - for what it's worth
Earlier this week I wrote about the inherently unpredictable nature of the format of the Conservative Party leadership. I've number-crunched but there are still huge holes in useful information. The fact is we don't know how people will fill out their ballots after their first and second choices, or even if they will rank their ballots rather than support their favourite choice or two. The latter may be more important than the first. Even the first-ballot support is meaningless without knowing how it is distributed with the riding point system.
A more general prediction: I will be surprised if many in the party and the press are not surprised by the first round results. I think polls under-estimate the social conservative vote in this leadership race.
This is my guess: Maxime Bernier wins no later than the 10th ballot. He wins Quebec and gets massive bumps from smaller ridings once favourite sons or daughters are eliminated and Bernier's low-level of support turns into a high number of points. Here's my bold prediction: I don't know who, but one of Brad Trost or Pierre Lemieux should finish in fourth, ahead of Kellie Leitch. These are educated guesses -- taking the information from numerous sources including internal and public polls, weighed by my sense of how things are going and the GOTV efforts of the campaigns, and mixed with a good dash of guesswork.


Friday, May 26, 2017
 
Public universities, economic diversity, and the American dream
The New York Times has its third annual College Access Index. There is a very good David Leonhardt column explaining why this matters. In brief, publicly subsidized and easily accessible post-secondary education is the "most reliable ticket to a good job and a better life" (including better health outcomes). Because state governments are cutting funding to post-secondary education, public universities have responded by abandoning poor and middle-class students to chase students from more affluent families who can pay more for tuition. Leonhardt says governments should restore funding for public universities and that these universities should scour "their budgets, looking for spending that is less important to their mission than economic diversity and meritocracy are," for cuts to ensure that capable students can get the sort of education that allows them to get ahead. It is a waste of human potential to attract out-of-state and more affluent students with lower test scores while bright teens from low-income and lower middle-class families are denied access to program proven to improve standards of living.


 
OECD studies UBI
Bloomberg View's Leonid Bershidsky examines an Organization for Economic Cooperation and Development policy brief on universal basic income (UBI). There are problems with the design of the OECD's UBI, but when the organization ran their model, they found that in some countries paying every resident a basic income could result in budget savings. Bershidsky writes:
In a number of developed countries, especially those in southern Europe, social safety nets are atrociously designed. In Greece, Italy, Portugal and Spain, more social transfers accrue to the richest 20 percent of the population than to the poorest 20 percent.
That's only partially due to the fact that not all transfers are meant to alleviate poverty. The complexity of the benefit systems is a big contributor: Poor people often find it hard to figure out their entitlements. There's also the legacy of decades of political decisions benefiting various interest groups. In a badly afflicted country, a UBI scheme can erase the unfairness of a social security system and even save the government some money. That's the case of Italy, where close to 80 percent of the people in lower-income groups would gain from the replacement of the current system with a UBI -- but the UBI would actually cost less than the current system, creating savings that could be plowed back into the scheme or used in any other way.
But in the United Kingdom, which has better designed social programs, a UBI would increase the poverty rate while increasing taxes.
Bershidsky concludes saying that in countries with inefficient and ineffective social safety nets, like many southern European nations, bold politicians should consider a UBI.


 
Defund the UN, close the HRC
Anne Bayefsky, director of the Touro Institute on Human Rights and the Holocaust, writes in the Wall Street Journal:
The United Nations Human Rights Council is preparing a blacklist of American and other companies doing business with Israel—and U.S. taxpayers are paying a quarter of the bill.
The council’s move embraces the “boycott, divestment and sanctions” campaign, which seeks to accomplish through economic strangulation what Israel’s enemies have been unable to achieve through war and terror. How did the U.S. get on the wrong side of this battle?
When the Human Rights Council was created in 2006 as a “reform” of the original U.N. Human Rights Commission, the Bush administration voted against, because no membership conditions required actually respecting human rights.
But Barack Obama jumped on board and, playing Gulliver at the U.N., allowed the American giant to be tied up by foes contributing a fraction of our moral and financial weight. In 2016 Americans sent the U.N. almost $10 billion ...
The council has condemned Israel more than any of the other 192 U.N. states, notwithstanding 500,000 dead in Syria, starvation and mass torture in North Korea, and systematic, deadly oppression in Iran. Saudi Arabia and China have used their seats on the council to avoid condemnation altogether.


 
Strategic Petroleum Reserve sell-off
The Associated Press reports:
President Donald Trump's proposal to sell nearly half the U.S. emergency oil stockpile is renewing debate about whether the Strategic Petroleum Reserve is still needed amid an ongoing oil production boom that has seen U.S. imports drop sharply in the past decade.
Trump's budget, unveiled on Tuesday, calls for selling an additional 270 million barrels of oil over the next decade, raising an estimated $16.6 billion. The proposal, on top of planned auctions expected over the next few years, could push the reserve below 300 million barrels by 2025. It now is at 688 million barrels.
The petroleum reserve, created in the wake of the 1970s Arab oil embargo, stores oil at four underground sites in Texas and Louisiana. The reserve guards against disruptions in the flow of oil from the Middle East and other countries, and lawmakers from both parties have long warned against using it to raise money.
But some Republicans say North Dakota's oil-rich Bakken region offers a de facto reserve that can be tapped if needed.
"You know the world's changed a lot," said Rep. John Shimkus, R-Ill., a senior member of the House energy committee. "We're one of the largest oil producers in the world."
I agree with Glenn Reynolds on this:
On the one hand, the Strategic Petroleum Reserve is a creature of a time when our production was falling and OPEC was strong, conditions that have been reversed. On the other hand, we still consume more oil than we produce, and simply by existing the reserve imposes a downward force on prices, since too much of a price rise, or efforts to interrupt supply, might lead to a release.
On balance, I think I’d keep it because I’m a big believer in being prepared for bad situations. But I don’t think it’s crazy to feel otherwise.
Austin Bay writes at StrategyPage in favour of the Trump administration's plans, saying the global oil market means the SPR is a relic of OPEC's petroleum near-monopoly:
Today, the U.S. is less dependent on foreign oil imports. Daily U.S. imports have declined, from around ten million barrels to seven million. The U.S. is now exporting energy to select markets. This is why the Trump Administration's proposed sale of half of the U.S. strategic petroleum reserve is timely. The reserve has around 700 million barrels ...
At one time Tehran could shake global oil markets by threatening to close the Strait of Hormuz, the sea lane connecting the Persian Gulf and the Indian Ocean. That gambit is no longer quite as menacing. Moreover, lower oil prices weaken Iran's religious dictatorship. They have less money for nuclear weapons and training terrorists.
Fracking and other advanced techniques have changed the ways many analysts calculate oil and gas reserves. The subject stirs intense debate. North America may have enormous reserves. 36 billion barrels is an accepted figure for current U.S. oil reserves. However, in July 2016, an independent study by Norway's Rystad Energy estimated the U.S. has 264 billion barrels in recoverable oil. Saudi Arabia has around 212 billion and Russia 256 billion.


Thursday, May 25, 2017
 
Scheer on CPC leadership
Conservative MP and leadership contender Andrew Scheer talked with the Huffington Post's Althia Raj. He said it has been difficult to differentiate the candidates in the allegedly over-sized leadership field:
The crowded field has meant less scrutiny given to the perceived front-runners, he says, “less opportunity to provide that contrast,” and not enough attention on candidates who don’t court controversy.
“You know, if I said something extreme or if I said something poorly worded or not well thought-out, I could guarantee myself a headline,” Scheer tells HuffPost Canada over coffee at the Farmteam Cookhouse & Cellar, two blocks from Parliament Hill.
Let me translate Andrew Scheer for you: politicians playing it safe haven't been able to excite people. Maxime Bernier has offered a mostly libertarian vision and seems to be the favourite to win. Kevin O'Leary offered a bold distinction between his cartoonish self and the Trudeau government (and Wynne's and Notley's), and was leading in the polls until he dropped out. Brad Trost has excited some social conservatives as has Pierre Lemieux, and I'd bet on them exceeding early expectations (of the low threshold of 5% or less). But Lisa Raitt and Andrew Scheer have offered very little to get rank-and-file Tories to back them and while Scheer is considered to have an outside chance to win the whole thing, Raitt, who should have been a star, probably won't be one of the last five or six last contenders standing.
Andrew Coyne has made the point (at Scott Gilmore's Toronto dinner for sorta Conservatives) that voters aren't afraid of so-called policy extremism. He posits voters would reward a bold vision and unconventional policies. What voters don't like, says Coyne, is an extreme temperament. I tend to agree with this analysis. Scheer looks at so-called ideological visions as risky, but he may have taken a risk himself by playing it overly safe. By offering lower common denominator conservatism -- focusing, he says, on what unites Conservatives not divides them -- Scheer may failed to give anyone a reason to mark their ballot for him; Scheer may not have excited the sort of voters who are tired of vanilla.


 
Books on innovation
Mike Moffat has a list of recent(ish) books on innovation. I highly recommend Mark Zachary Taylor's The Politics of Innovation: Why Some Countries Are Better Than Others at Science and Technology, which was on my list of 20 best books of 2016. Ryan Avent's The Wealth of Humans: Work, Power, and Status in the Twenty-first Century is also on my list of great 2016 books, but is more about politics than innovation. Competing Against Luck: The Story of Innovation and Customer Choice by Clayton Christensen et al is also good (and important). Learning by Doing: The Real Connection between Innovation, Wages, and Wealth by James Bessen is a 2015 title that escaped my attention and I'll try to make room for it sometime soon. Government and private enterprise needs to think better about innovation and this is a great reading list for policymakers and entrepreneurs.


 
The decline of middlebrow
In his May Interim column, Rick McGinnis riffs on a recent Joseph Epstein Weekly Standard essay on cultural literacy or lack thereof, to lament the decline of middlebrow culture:
But what Epstein is talking about is something particular – the acquisition of opinions and the assumption of standards within what was once called, without irony, high art or high culture, which stood very much apart from popular or “low” culture and (especially) the middlebrow, a much-maligned plateau of indeterminate size that sat between the vast vulgarity of the popular and the venerable edifice of high art.
The middlebrow was a strange place, where a few products of pop culture could migrate once they’d developed grudging critical respect (jazz passed through here on its way to high culture) or where high art sometimes devolved when it became unexpectedly popular with the middle classes. The symphonies of Tchaikovsky and Beethoven and operatic arias have flown low into the flatlands of the middlebrow for brief periods, before once again lofting upwards again.
It’s worth recalling that this three-tiered taxonomy would have made no sense to anyone alive 200 years ago, when novels and opera were regarded as populist and even trashy, and theatre was often vulgar, or at least regarded as a vulgar profession, and probably an immoral one. In any case, all of these art forms were enjoyed up and down the class ladder by anyone with money for admission or sufficient literacy.
There’s no reason to assume that our stratified understanding of culture will persist – or if it even endures today. The middlebrow has effectively disappeared and high art has become so gnomic and irrelevant that Epstein devotes several paragraphs near the climax of his essay to what’s really an obituary: Visual art “scarcely exists,” poetry is “degraded to an intramural sport,” “audiences for traditional classical music performance dwindle” and American theatre “seems moribund, if not flat-out deceased.”


 
What I'm reading
1. Two Paths: America Divided or United by John Kasich. I am pleasantly surprised by the bits I've picked to read at random. Will probably read from beginning to end. Was not anticipating liking this book.
2. October: The Story of the Russian Revolution by China Mieville. It's the centenary of the Russian Revolution. I'll have to be a bit more discriminating about what to read as there appears to be a glut of books marking the occasion. Mievelle's offering appears to be narrative-based, bordering on reading like fiction. It is also unapologetically left-wing.
3. Exporting Freedom: Religious Liberty and American Power by Anna Su
4. A Pope and a President: John Paul II, Ronald Reagan, and the Extraordinary Untold Story of the 20th Century by Paul Kengor. Not a lot of new ground if you read John O'Sullivan's 2006 book The President, the Pope, And the Prime Minister: Three Who Changed the World.
5. The Cubs Way: The Zen of Building the Best Team in Baseball and Breaking the Curse by Tom Verducci. It's not as good as David Kaplan's The Plan: Epstein, Maddon, and the Audacious Blueprint for a Cubs Dynasty, which was also released this spring.


 
Our response to barbaric acts of terrorism must be more than mourning
Spiked editor Brendan O'Neill writes:
After the terror, the platitudes. And the hashtags. And the candlelit vigils. And they always have the same message: ‘Be unified. Feel love. Don’t give in to hate.’ The banalities roll off the national tongue. Vapidity abounds. A shallow fetishisation of ‘togetherness’ takes the place of any articulation of what we should be together for – and against. And so it has been after the barbarism in Manchester. In response to the deaths of more than 20 people at an Ariana Grande gig, in response to the massacre of children enjoying pop music, people effectively say: ‘All you need is love.’ The disparity between these horrors and our response to them, between what happened and what we say, is vast. This has to change.
It is becoming clear that the top-down promotion of a hollow ‘togetherness’ in response to terrorism is about cultivating passivity. It is about suppressing strong public feeling. It’s about reducing us to a line of mourners whose only job is to weep for our fellow citizens, not ask why they died, or rage against their dying. The great fear of both officialdom and the media class in the wake of terror attacks is that the volatile masses will turn wild and hateful. This is why every attack is followed by warnings of an ‘Islamophobic backlash’ and heightened policing of speech on Twitter and gatherings in public: because what they fundamentally fear is public passion, our passion. They want us passive, empathetic, upset, not angry, active, questioning. They prefer us as a lonely crowd of dutiful, disconnected mourners rather than a real collective of citizens demanding to know why our fellow citizens died and how we might prevent others from dying. We should stop playing the role they’ve allotted us.
As part of the post-terror narrative, our emotions are closely policed. Some emotions are celebrated, others demonised. Empathy – good. Grief – good. Sharing your sadness online – great. But hatred? Anger? Fury? These are bad. They are inferior forms of feeling, apparently, and must be discouraged. Because if we green-light anger about terrorism, then people will launch pogroms against Muslims, they say, or even attack Sikhs or the local Hindu-owned cornershop, because that’s how stupid and hateful we apparently are. But there is a strong justification for hate right now. Certainly for anger. For rage, in fact. Twenty-two of our fellow citizens were killed at a pop concert. I hate that, I hate the person who did it, I hate those who will apologise for it, and I hate the ideology that underpins such barbarism. I want to destroy that ideology. I don’t feel sad, I feel apoplectic. Others will feel likewise, but if they express this verboten post-terror emotion they risk being branded as architects of hate, contributors to future terrorist acts, racist, and so on. Their fury is shushed. ‘Just weep. That’s your role.’
Momentary feelings of sadness are a form of passivity that does nothing to prevent future terrorist attacks.


 
Money and politics
George Will writes about the Georgia 6th CD special election, which the Democrats believe, and polls show, they can win for the first time since 1979:
By the time Georgia’s sixth district votes in the June 20 special congressional election, $40 million — perhaps more than $130 per ballot — will have been spent to pick one-435th of one-half of one of the three branches of one of America’s governments. This is an expensive funeral for Tip O’Neill’s incessantly quoted and increasingly inapplicable axiom that “All politics is local.”
And Democrats, who are situational ethicists regarding money in politics, provided Ossoff enough to enable him to provide free Lyft rides for some primary voters.
The Hill reports Democrats will spend $5 million on television ads and minority outreach, with four weeks left in the campaign. The runoff election is June 20. Last month, 30-year-old Jon Ossoff came just short of winning the required 50%+1 in an 18-candidate race to fill the House seat vacated by new Health and Human Services Secretary Tom Price.


 
2020 watch
Hot Air reports that in an interview with People magazine, Senator Al Franken (D, Minn) has ruled out running for president in 2020. In fact, the idea gets a triple family veto:
“Yeah, I’m not going to do that,” says Franken.
“It’s not going to happen,” adds his daughter, Thomasin, 36.
The senator’s wife, Franni, puts it most simply: “No.”
At the age of 66 (today), Franken would be one of the younger candidates being mentioned to lead the Democrats in three years.


 
Either reform entitlements or gut all other programs
Yesterday the Wall Street Journal had an excellent editorial that said:
Trump is imitating Democrats in ducking Social Security and Medicare, which means that everything else the government does has to fight for what’s left. Those two programs plus interest on the debt remove about $1.9 trillion from political debate in the $4.1 trillion spending outline for fiscal 2018. Mr. Trump wants to increase defense spending to more than $600 billion, so that’s $1.6 trillion left for everything from education to veterans to Medicaid to Amtrak.
Democrats and the press claim to be shocked and appalled, but what did they expect? They had their free-spending way in 2009-2010, and voters quickly pulled their credit card by electing a GOP House. Now they are furious that a GOP President is asking them to make choices rather than assume automatic annual increases in everything. Maybe they should mull over what they really think government should and shouldn’t do.
The Journal reminds readers that in the 1990s, Nebraska senator Bob Kerrey (D) warned that if government did not reform entitlement spending, all other programs would get squeezed. The fiscal reckoning will arrive soon.


Wednesday, May 24, 2017
 
Cowen and Chetty
Tyler Cowen has a wide-ranging interview with Stanford economist Raj Chetty. It is, as Cowen would say, self-recommending. Chetty is one of the most accomplished, cited, and original economists working today. Here is an excerpt from the conversation on geography and gender:
COWEN: Yes. Have you thought much about within this country, geographic differences in gender inequality? This is a big issue in India. People in South India will tell you, “It’s better for women here than in North India.” I haven’t seen data, but I find that believable. Where in the United States does gender equality come most naturally and where not? Do you have a sense? Is it an interesting question?
CHETTY: Yeah, that’s a very interesting question. We find sharp differences in outcomes by gender across areas for various reasons. Let me give you a couple of examples. One, we find that areas with more concentrated poverty — take the city of Baltimore, for example — we find very poor outcomes for boys in particular, relative to girls, and we think that that has to do with crime, and getting involved in gangs, and so forth — things that girls are less likely to do. As a result, growing up in a place like Baltimore turns out to be extremely detrimental for boys. We estimate that you lose something like 30 percent of your earnings relative to if you’ve grown up in an average place in America. Whereas for girls, it’s slightly negative but not nearly as bad. There are a set of urban ghettos, places with concentrated poverty, that tend to have particularly negative outcomes for boys. There are also other phenomena that are more subtle, related to things like marriage patterns. Relating this back to personal experience, I remember when working on these issues and thinking about our decision to move from Harvard to Stanford. At the time, we actually were expecting our first child, a daughter. And I noticed in our data that, for kids in affluent families in the Bay Area, daughters tend to have very low household earnings. And I found that kind of curious and we spent some time trying to dig into why what was, partly given my personal interest in the issue.
COWEN: So, your own moving decision was influenced by this research.
CHETTY: [laughs] In some ways.
COWEN: Yeah.
CHETTY: What you find is an interesting explanation, which is, if you look at individual earnings rather than household income, girls growing up here in the Bay Area do extremely well. However, when you look at household income, they don’t do so well, and that’s because they’re much, much less likely to be married than if they grew up somewhere else.
COWEN: Yes.
CHETTY: So if you’re in your mid-30s, only something like a quarter or less of girls growing up in the Bay Area are married, and we show in our paper that every extra year you spend growing up in the Bay Area, you’re less likely to get married. I remember telling my wife, “I don’t think we need to worry. Our daughter will be fine in terms of earnings. It’s just that she might not be married if we move to California.”
COWEN: So, you’ve lowered your expectations for grandchildren?
CHETTY: Yes. [laughs]


 
Eric Grenier guesses a Conservative Party leadership result in 'structurally unpredictable' contest
A few days ago, the CBC's Eric Grenier speculated on the down-ballot results, essentially predicting -- modelling? -- a race among Maxime Bernier, Andrew Scheer, and Erin O'Toole. I intended to write a thorough debunking of the methodology. For example, Grenier says:
Where the vote will go after the first ballot is more difficult to figure, but it is possible to get an indication of voters' preferences from fundraising data.
A significant proportion of donors contributed funds to more than one candidate, suggesting that they are likely to rank these candidates highly on their ballot — and presumably like-minded voters will do the same.
First, working from a suggestion to a presumption is a little risky. Indeed, there are good reasons to believe that the handful of donors to candidate X do not much resemble "like-minded voters." Furthermore, extrapolating this without looking precisely at where the donors come from -- and maybe Grenier did -- is not very meaningful. But we'd also be talking about ridiculously small sample sizes at some point.
There are a lot of numbers after Grenier digs through the data, but it is unclear that this provides meaningful information. The people I talk to on campaigns are, at best, agnostic about what happens after the second rankings. And the wild card is just how many candidates the voters will rank. In the 2009 Ontario Progressive Conservative leadership race, I'm told that other than the ballots that had Randy Hillier ranked first, the majority of ballots only ranked a first preference. My guess is that a plurality of ballots will have only one candidate ranked, followed by two candidates, four, three, five, and then all ten. That means down-ballot support might not matter as much as having one's points becoming worth more as others are eliminated from the ballot. In some smaller eligible member Quebec and Atlantic Canada ridings, once local winners are eliminated (Lisa Raitt in parts of Nova Scotia, perhaps Steven Blaney in a handful of Quebec ridings, and eventually Kellie Leitch in Newfoundland), the remaining handful of votes are going to be worth a lot of points. For example, say Raitt wins 80% of the vote in a Nova Scotia riding where only 50 people vote. If Pierre Lemieux received five votes and Lemieux finished ahead of Raitt nationally, those votes could be worth 50 points if Raitt is eliminated before Lemieux. It sounds complicated but it really isn't. But trying to guess what's going to happen is nearly impossible. I'm not sure I'd use the word irresponsible, but J.J. McCullough was correct to chastise gussying up a guess as analysis because the rules makes this contest a "structurally unpredictable Tory leadership race."
I could have debunked Grenier's column, but why bother. It is mostly nonsense that extreme political nerds will like because Canada lacks a FiveThirtyEight website of our own. We just don't have as much political data as they do in the United States, and even if we did, it wouldn't really help to predict who's going to win the Conservative Party leadership "structurally unpredictable" contest. Maxime Bernier seems well ahead of his opponents. Quite often a "controversial" candidate like Bernier, who holds a number of hard-libertarian positions that could be off-putting to traditional Tory voters or be considered an electoral albatross in 2019, faces a stop-the-controversial-candidate opponent. Public polling has not captured who that might be, if this phenomenon is taking place. Any analysis such as Grenier's that doesn't examine that phenomenon is ignoring a likely important factor in the leadership contest. Quite often, voters coalesce around one person naturally without bidding. But sometimes (think the 2016 Republican primaries) they don't. As McCullough says, "structurally unpredictable."


Tuesday, May 23, 2017
 
The decline of the mall and how it affects counties and municipalities
Alana Semuels writes in The Atlantic about the effect of malls emptying and closing on local government:
As my colleague Derek Thompson has pointed out, the reasons for the decline of malls are multifold: People are buying more things online, developers built too many malls in the 1980s and 1990s, and consumers are now spending more on services and less on material goods.
But these changes in spending habits have big implications for the counties and towns that depend on retail for sales- and income-tax revenue. Many of the areas affected by retail closures have already weathered other departures: factories closing, young people departing for bigger cities, home values dropping. The constant departure of more retail stores is another blow. Some counties in Ohio, for instance, get half of their budget from the sales tax that they levy on top of the state’s 5.75 percent rate, according to Suzanne Dulaney, the executive director of the County Commissioners Association of Ohio.
Nationwide, sales taxes comprise nearly one-third of the taxes that state governments collect and about 12 percent of what local governments collect, according to Lucy Dadayan, a senior researcher at the Nelson A. Rockefeller Institute of Government, a New York-based research group. “The epic closures of the brick-and-mortar stores is troubling news for state and local government sales-tax collections,” she said. They’re already feeling the hit: States’ tax revenues grew just 1.9 percent between 2014 and 2015, after growing 5.8 percent in the previous four quarters, according to the Rockefeller Institute ... When revenues don’t continue to grow, governments have to slow down spending and can’t readily invest in long-term projects.
Semuels also reports that malls are opening in some larger, growing cities (like Columbus, Ohio), and that people are abandoning their local malls to drive to new malls in the big city. This, she argues, can harm the smaller, local community (breaking the bonds between consumers and shopkeepers, for example). But it does more harm than that. It may also lead to poorer government services (schools and parks) which could drive away residents. It is, as the title of the article says, a vicious circle: hollowed out communities lead to unsustainable malls which lead to a further hollowing out of the community.


 
Trump budget makes unrealistic assumptions
The White House has released its budget and Secretary of the Treasury Steven T. Mnuchin has issued an incredibly brief statement. Much of the media is focusing on cuts to program spending and the federal government (see Washington Post) or how it cuts taxes for the rich and hurts the poor (see the New York Times). Little of the media coverage is focusing on the unrealistic economic assumptions underpinning the budget's numbers. ZeroHedge's Tyler Durden says that the Trump budget assumes 3% annual economic growth and, more unrealistically, no contraction in economic growth in the next decade. Durden says: "While we will clearly take the under, what we find most amazing about Trump's budget proposal, is that it does not anticipated a recession until 2027. That would imply 18 years of economic growth since the 2009 recession, without a single contraction! Good luck with that." Or as David Stockman, Reagan-era director of the Office of Management and Budget, tells the New York Times: "I see no way that’s going to remotely happen," with the paper reporting Stockman "noted that the White House is depending on the continuation of an economic expansion that is already among the longest in American history. 'It assumes you’re going to go 206 months without a recession, which has never happened'." It is worth noting that the Times story with the Stockman quote takes some searching whereas its featured coverage does not make this point.


Monday, May 22, 2017
 
Kling is (understandably) more pessimistic about politics
Arnold Kling:
I think that in general I have become more pessimistic about American political culture.
I think that I would have preferred that the elite stay “on top” as long as they acquired a higher regard for markets and lower regard for technocratic policies. What has been transpired is closer to the opposite. There was a seemingly successful revolt against the elite (although the elite is fighting back pretty hard), and meanwhile the elite has doubled down on its contempt for markets and its faith in technocracy.
I am disturbed about the news from college campuses. A view that capitalism is better than socialism, which I think belongs in the mainstream, seems to be on the fringe. Meanwhile, the intense, deranged focus on race and gender, which I think belongs on the fringe, seems to be mainstream.
The media environment is awful. Outrage is what sells. Moderation has fallen by the wayside.
It seems increasingly clear that no matter who wins elections, my preferences for economic policy get thrown under the bus. The Overton Window on health policy has moved to where health insurance is a government responsibility. The Overton Window on deficit spending and unfunded liabilities has moved to where there is no political price to be paid for running up either current debts or future obligations. The Overton Window on financial policy has moved to where nobody minds that the Fed and other agencies are allocating credit, primarily toward government bonds and housing finance. The Overton Window on the Administrative State has moved to where it is easier to mount a Constitutional challenge against an order to remove regulations than against regulatory agency over-reach.
Outside of the realm of politics, things are not nearly so bleak.
Kling is more anti-populist than I am, but I generally agree with his observations and sentiment.


 
The decline of Baltimore: blame government
Consultant and former government employee Jerry Cothran writes in the Baltimore Sun about the root cause of Baltimore's neglect: government. Despite high taxes, Baltimore taxpayers get very little worthwhile in return:
It's clear that Baltimore has a number of systemic government issues, including mismanagement, that have resulted in a decades-long exodus out of the city. From 1970 to 2000, Baltimore's total population declined nearly 30 percent. That hemorrhaging of population continues, as evidenced by more than 6,700 people leaving in the 12 months that ended in July 2016.
Christopher B. Summers, CEO of the Maryland Public Policy Institute, has offered a plausible causal effect: Baltimore's exceedingly high tax rates, which are about twice as high as other counties across the state. Deferred or favorable tax rates given to developers and the non-tax status of non-profits and churches have resulted in the current environment where the tax burden on property owners is egregious. The city has a high personal income tax rate as well.
While all of this revenue should provide benefits, the opposite seems to be true. Due to a neglected maintenance of our infrastructure, we are facing horrendous costs to rebuild the city sewer and water systems, resulting in yet another burden on homeowners with city water rates increasing by more than 30 percent through 2019.
Our schools are consistently underfunded and poor performing as well. Families make their home-buying decisions based largely on the quality of schools for their children. Our lack of attractive schools leaves families with little option but high-priced private schools, resulting in a high percentage of homebuyers without children. Those demographics have left us with a population that is highly mobile, and they are exercising that option in choosing to move elsewhere.
To be fair, eight of America's 12 largest metropolitan centers have seen net migration out of the city since 2010. Baltimore's exodus goes back further, but as Cothran argues, from location to climate to amenities, Charm City should be an attractive destination for people. But the high costs (property and city (and state) income taxes, and the perceived need to invest in private schooling) is a huge turnoff for mobile individuals and couples. High taxes is one problem, but high taxes without a concomitant level of services is untenable for residents and would-be residents, not to mention unconscionable.


 
The problem with the health care system: first, it's not really a system
The Insider interviewed Robert Graboyes, a fellow at the Mercatus Center and expert on health care innovation. This is important:
TI: Is the problem badly written regulations, badly implemented regulations, or something more fundamental with the design of health care?
RG: All of the above, but mostly fundamental design problems. You can’t really “design” the health care system, but we try mightily, and that is part of the problem. There’s a long list of policies that ultimately have to be altered, and they are mostly not part of the health care reform debate we see on television everyday now.
The Medicare reimbursement system divorces the prices of health care from the actual underlying costs of producing care. It’s a price control system. If something doesn’t go into the Medicare reimbursement protocols, it’s not going to be compensated, and that’s the death knell for that technology. The problem leaks into both Medicaid and private insurance plans; they lean very heavily on the design and structure of Medicare’s pricing formula. So, Medicare’s reimbursement system is the biggest problem.
If you care about health care policy, the full interview is worth reading.


 
In some ways, Donald Trump is a normal president
New York Times columnist Ross Douthat lists the myriad ways in which little has changed policy-wise in Washington despite Donald Trump's Disrupter-in-Chief persona:
In fact, the various outsider groups that cast their lot with him — from working-class ex-Democrats to antiwar conservatives to free-trade skeptics to build-the-wall immigration hawks to religious conservatives fearful for their liberties — have seen him pick very few difficult fights on their behalf.
To working-class voters he promised a big infrastructure bill and better health insurance than Obamacare. But his legislative agenda has been standard establishment-Republican fare — spending cuts to pay for upper-bracket tax cuts, rinse, repeat ...
[H]e’s mostly handed foreign policy over to his military advisers (a pretty deep-state group, as such things go), which means that so far it resembles Obama’s except with more cruise missiles and saber-rattling.
Religious conservatives got Neil Gorsuch because he was a pedigreed insider. But they aren’t getting anything but symbolism on religious liberty, because Trump doesn’t want to pick a fight with the elite consensus on gay and transgender rights. And then go down the longer list and the establishment keeps winning: Planned Parenthood was funded in the budget deal and the border wall was not, the promised NAFTA rollback looks more likely to be a toothless renegotiation, Trump’s occasional talk about breaking up the big banks is clearly just talk, we haven’t torn up the Iran deal or ditched the Paris climate accords, and more.
Trump might still like to do some of the things he talked about on the campaign trail (his pining for a détente with Russia remains, um, palpable) and a few of them might actually still happen (some sort of wall-like structure will eventually go up, I assume).
But on most issues Trump’s promised war with the establishment has been fizzling almost from day one.


 
Nothing wrong with market pricing
Axios reports on Uber's planned new pricing scheme:
What Uber's doing is pure economics—price discrimination to charge riders it describes as time-sensitive (those paying more for a private UberX ride) to subsidize price-sensitive riders (usually those taking the cheaper UberPool option). The former group, according to Uber, is willing to pay more for a particular route at a particular time than it has been paying, so Uber will now charge these riders what it believes is that maximum price. An Uber spokesperson assured Axios that pricing has nothing to do with a rider's perceived level of income, past rides, or any individual characteristics.
Uber's love of classic economic principles is nothing new—"surge pricing," its practice of hiking prices in times of higher demand, is textbook supply-and-demand.
If a producer is willing to sell its product for price X and a consumer is willing to pay it, there is nothing wrong with the transaction, or how the producer got the consumer to surrender every cent he or she was willing to spend. Uber seems a little defensive about its plan saying it will effectively subsidize more price-sensitive consumers. I see nothing wrong with Uber profiling customers based on "perceived level of income, past rides or any individual characteristics." In fact, I hope Uber figures out how to charge more based on pick-up location, destination, and ride history.
But I'm disappointed that temperature- and supply sensitive vending machines haven't taken off.


Sunday, May 21, 2017
 
Snowflakes shut down class because knowledge is threatening
Time reports:
Student protesters shut down a sociology class at Northwestern University on Tuesday, after a professor invited an Immigration and Customs Enforcement (ICE) public relations officer to be a guest speaker.
The protesters, chanting and waving banners, argued that the officer's presence on campus represented a threat to undocumented students. But the professor — who canceled the class during the protest because she was concerned for the speaker's safety — said she had been hoping to start a dialogue.
"The goal was to bring in somebody who was familiar with how that agency is structured," Beth Redbird, an assistant professor in the Department of Sociology, told TIME.
She said the plan was for the officer to visit the class, which covered social inequality, and explain how ICE's Chicago field office works within the larger law enforcement structure of the Department of Justice and Department of Homeland Security. Redbird had also planned for an undocumented immigrant, who advocates for immigrant rights, to visit the class on Thursday, but after Tuesday's protests, she decided to cancel that visit as well.
"I told my students today: knowledge is power. And I want to make that possible," Redbird said. "I think they were genuinely interested in a chance to learn about these things that we had discussed kind of broadly. And I think they were genuinely disappointed when it was canceled." ...
“We’re not interested in having those types of conversations that would be like, ‘Oh, let’s listen to their side of it’ because that’s making them passive rule-followers rather than active proponents of violence,” April Navarro, a Northwestern sophomore who helped organize the protest, told the Daily Northwestern. “We’re not engaging in those kinds of things; it legitimizes ICE’s violence, it makes Northwestern complicit in this. There’s an unequal power balance that happens when you deal with state apparatuses.”
Understanding the other side, or how things work, is a fundamental aspect of genuine education. What students seem to want is not a university education but adult daycare.
I wish radical students truly believed "unequal power balance that happens when you deal with state apparatuses." The fact is many are highly selective about their worries over power imbalances.


 
May will trade votes for a meaningful mandate
ConservativeHome's Paul Goodman notes two public opinion polls showing Labour closing the gap with the Conservatives:
YouGov for the Sunday Times puts the Conservatives down to 44 per cent, with Labour up to 35 per cent. That’s the smallest Tory poll lead that it has found this year.
Survation for the Mail on Sunday shows the Conservatives on 46 per cent and Labour on 34 per cent.
Goodman has several observations, but this is the most important:
May seems to have calculated that it is worth weakening her majority to strengthen her mandate – in other words, risk losing some votes on June 8 in order to deliver the policies she wants later.


 
Charitable resale shop asks donors to stop giving The Da Vinci Code, Fifty Shades of Gray
The Guardian reports:
A branch of Oxfam in Swansea has received a copy a week of The Da Vinci Code since its staff can remember. Lately, manager Phil Broadhurst has make a tower with the books, at the foot of which he has posted a note, now widely shared online. “You could give us another Da Vinci Code ... but we would rather have your vinyl! We urgently need more records to ... make more money for Oxfam.”
Three years ago, at the height of Fifty Shades mania, Broadhurst and staff made an impressive fort out of copies of EL James’s wooden prose. As now, they asked donors for “60s and 70s vinyl” instead.
As the tide washes back out on a fad, it can leave a sticky residue. That year, Travelodge released a list of its most left-behind books. The top five started with Fifty Shades and included JS Scott’s Shades-esque Billionaire series and Jennifer Probst’s similarly themed The Marriage Bargain.
Travelodge’s list is a fascinating dip into the ephemera of changing times. In 2007, it was Alastair Campbell’s The Blair Years that topped the chart. By 2010 it was an “unauthorised” biography of Simon Cowell, alongside The Storm: The World Economic Crisis and What it Means by Vince Cable.
Many non-children's/non-teen popular offerings lack literary merit or staying power. Children's books and teen fiction lack literary merit but have staying power because of nostalgia; there are studies that show girls reread fiction and many revisit their youthful reading in their 20s. Because of that, Harry Potter and Twilight books can be resold in a way that the umpteenth copy of The Da Vinci Code can't.