Tag Archives: U.S. politics

intelligence?

According to TheWeek.com, the “Turkey coup attempt was a surprise in diplomatic and intelligence circles, says House Homeland Security Committee member“.

Is this a rare lapse by the CIA and the rest of the U.S. intelligence establishment? No, if you believe Tim Weiner’s book Legacy of Ashes: The History of the CIA. Using mostly primary sources and declassified government documents, he makes a surprising but very strong case that the CIA was never very good at spying. This is why major historical events like the collapse of the Soviet Union and 9/11 have caught our government completely by surprise, and why we have had trouble competently prosecuting wars from Korea to Vietnam to Iraq. The government and military just don’t have an accurate picture of what is going on or an understanding of the complex cultures and conflicts they are dealing with, and it leads to disaster. The CIA is pretty good at buying intelligence from allies that are good at spying on their neighbors, like Israel, Egypt, Turkey, Pakistan, South Korea, etc., which explains our strong ties to many of these countries. So it is not too surprising that if something is going on inside one these countries itself, we would not be the first to know.

the fall of the U.S. republic?

This article on History News Network compares the current state of the United States to the Roman Republic a few decades before it fell.

By the second century B.C., the Romans believed they had achieved the ideal state: a republic with strong checks and balances that provided a voice for the common people while limiting the dangers of direct democracy. By the mid 140s B.C., victories in foreign wars had led to a massive expansion of Roman power. It seemed the Republic — stable, powerful, and immensely wealthy — would last forever.

But things changed. The economy transformed as Roman power expanded across the Mediterranean. As Rome began to import cheap grain from North Africa in quantities previously unimagined in the ancient world, grain prices plunged. Domestic small farmers were squeezed out of the market and off their lands. Rich landowners snapped up land from these struggling farmers, incorporating these plots into giant plantations worked by slaves from newly conquered territories. Many of these land acquisitions were illegal — but the plebeians were powerless to stop them. Forced to compete against slave labor and facing a nascent form of corporatization that favored the wealthy, the plebeians felt that they were cast aside as Rome ascended to greatness.

In response to these changes, the plebeians voted a slew of populist politicians to power. These politicians were called Populares. While some Populares genuinely sought to uplift the plebeian class, others learned to harness the power of the people in a cynical ploy for power.

– See more at: http://historynewsnetwork.org/article/163207#sthash.FccCVUPn.dpuf

Could the U.S. form of government really fall? I am not predicting that but I can envision a scenario where it is plausible. Let’s say a completely incompetent leader gets elected by the people (I’m not naming any names) and orders the military to do something so egregious it refuses to carry out the order. At that point, the Constitution would no longer be functioning, so what then? Congress could act quickly to impeach the President to maintain the appearance of order, while the military could temporarily maintain order until the Vice President or another civilian leader could be installed according to the letter of the Constitution. But if that sort of thing kept happening, the Constitution would be weakened each time until one day the civilian government might cease to exist. Sound far-fetched? Maybe, but within the realm of plausibility. Throw in some serious natural or industrial disasters, terrorist attacks, or major geopolitical conflicts and it could put even more strain on our system.

NAFTA, Appalachia, and Trump

This article caught my eye just because (a) it is in the BBC and (b) it is about Martinsville, Virginia. It just so happens I was born in Martinsville in 1975 and lived there until 1985. Many of my relatives worked in the furniture and textile factories there between the end of World War II and when most of the factory jobs left in the 80s and 90s. Once upon a time Martinsville was an Appalachian manufacturing powerhouse and a place working class people could get decent paying jobs. Race relations were not perfect by any means but still, white and black and spanish-speaking working people shared in the relative prosperity. Workplace health and safety was also not perfect – my grandfather was minus a foot and an aunt was minus a few fingers at one point, although they were later reattached. Given all that, there was relative prosperity, health, and modern amenities for people whose parents and grandparents were subsistence farmers. The article talks about how NAFTA destroyed most of those jobs and most of that prosperity, and people are still bitter about it.

Now, I find the ideology of free trade attractive as a general principle. I think those industries were on the wane and those jobs were on the way out, and NAFTA just hastened them along. Still, it was a very abrupt and drastic change in Martinsville, and the people who were hurt are real people that I know. It illustrates that abstract measures of average economic prosperity that look good on paper have to be tempered with an understanding of what is going on with a broad cross-section of people across geographies, for example working class white and black and Hispanic people in Appalachia. People need viable options to be retrained and relocated in some cases to remain economically viable, and obviously their children need to be well educated. There has to be a safety net for the people who still fall through the cracks.

Sadly, the people interviewed in this article don’t seem supportive of the very policies that might help them, like universal health care. They were supportive of Obama but felt let down by him when he wasn’t able to deliver substantive change in their lives during his years in office. They don’t support anyone named Clinton because they associate that name with NAFTA. So, despite the fact that the people interviewed in this article are kind hearted, moral, and anything but bigots, which fits my personal experience in Appalachia, they are left with Trump as the only available choice that makes sense to them.

housing vouchers for all?

This article argues that if the U.S. took away the mortgage interest tax deduction, it could provide a housing voucher to everyone below the median household income. That’s hard to believe, but the key is probably that the median is well below the average, because of course the income distribution is skewed toward the top. I like my mortgage interest deduction. It is an important part of my retirement strategy and as I am a bit above the median (but hardly rich) it would be hard for me to support this policy.

Here’s another article on BillMoyers.com that says if you took away the mortgage interest tax deduction, the cap on social security deductions, the lower rate on capital gains, and tax-advantaged retirement accounts, you could double Social Security benefits for everyone. There’s a bit of a trick here – these ideas are presented as revenue neutral, because you can think of all these tax breaks as money the government is spending, rather than money it is not collecting compared to what it could be collecting or what it has collected under some past policy. It would be very easy to paint these as tax increases instead, of course. Still, I could be more easily persuaded to support this policy that the first one, because I would be guaranteed to get a portion of the higher taxes I am paying now back when I am older, and I wouldn’t have to worry so much about savings or home equity now. I would know that people who are both richer and poorer than me would all get the same share I would get, which I might be able to accept on grounds of fairness. I’m not out in the streets campaigning for this policy yet, I have to think about it.

divide and conquer

This article on History News Network goes through a long account of “divide and conquer” strategies of the white elite in the U.S., which led poor and working class white people to support the rich elite rather than unite with poor and working class black people. It goes all the way from slavery and civil war through to the Nixon and Reagan years and on to Trump. But he suggests that it won’t work for Trump because the white working class itself is shrinking and divided.

Nate Silver weighs in

Nate Silver has launched his general election forecast page. He gives Hillary about an 80-20 chance of winning. He has a long discussion post about it here. I found this last paragraph interesting, where he relates a 20% chance of winning to a baseball game:

A 20 percent or 25 percent chance of Trump winning is an awfully long way from 2 percent, or 0.02 percent. It’s a real chance: about the same chancethat the visiting team has when it trails by a run in the top of the eighth inning in a Major League Baseball game. If you’ve been following politics or sports over the past couple of years, I hope it’s been imprinted onto your brain that those purported long shots — sometimes much longer shots than Trump — sometimes come through.

It’s an interesting way of thinking about risk. Let’s say your favorite team is in game 7 of the World Series, down by a run in the top of the eighth. The game is insanely late on the east coast as they always are, and you have to do something important early the next morning, like interview for a job or operate heavy machinery. Do you turn the TV off? No, of course not, you stay tuned.

June 2016 in Review

3 most frightening stories

  • Coral reefs are in pretty sad shape, perhaps the first natural ecosystem type to be devastated beyond repair by climate change.
  • Echoes of the Cold War are rearing their ugly heads in Western Europe.
  • Trump may very well have organized crime links. And Moody’s says that if he gets elected and manages to do the things he says, it could crash the economy.

3 most hopeful stories

  • China has a new(ish) sustainability plan called “ecological civilization” that weaves together urban and regional planning, environmental quality, sustainable agriculture, habitat and biodiversity concepts. This is good because a rapidly developing country the size of China has the ability to sink the rest of civilization if they let their ecological footprint explode, regardless of what the rest of us do. Maybe they can set a good example for the rest of the developing world to follow.
  • Genetic technology is appearing to provide some hope of real breakthroughs in cancer treatment.
  • There is still some hope for a technology-driven pick-up in productivity growth.

3 most interesting stories

inequality and mobility

The Federal Reserve Bank of Cleveland has an interesting study of income mobility in the U.S. It appears to be true that the poorest families tend to stay poor (between 2003 and 2013, 64% of families in the poorest 20% stayed in the poorest 20%), while the richest tend to stay rich (72% of families in the richest 20% stayed in the richest 20%). Looking at the table if you are in one of the middle quintiles, (between the 20th and 80th percentiles, your chances of moving up or down to the adjacent quintile look to be about even. This measure of mobility increased somewhat in the 80s and 90s, but appears to be on the decline since then. Mobility is harder to measure across generations, but it does appear to be much higher than within a single generation, which you would expect. Mobility in the U.S. is lower than in other developed countries, both the northern European socialist ones where you might expect it, but also the Anglo-American peers like Canada, Australia, and New Zealand, although the UK, France, Italy are in the same ballpark as the U.S. If you’re interested in this, stop reading my wordy description and go look at the data!

prime age males

Here’s an interesting report from the President’s Council of Economic Advisers on the long-term decline in labor force participation by “prime age males”, defined as between the ages of 25 and 54 (this seems like a pretty broad definition, I’m glad to know I’m still in my prime!).

For more than sixty years, the share of American men between the ages of 25 and 54, or “primeage men,” in the labor force has been declining. This fall in the prime-age male labor force participation rate, from a peak of 98 percent in 1954 to 88 percent today, is particularly troubling since workers at this age are at their most productive; because of this, the long-run decline has outsized implications for individual well-being as well as for broader economic growth. A large body of evidence has linked joblessness to worse economic prospects in the future, lower overall well-being and happiness, and higher mortality, as well as negative consequences for families and communities…

• Participation has fallen particularly steeply for less-educated men at the same time as their wages have dropped relative to more-educated men, consistent with a decline in demand. o In recent decades, less-educated Americans have suffered a reduction in their wages relative to other groups. From 1975 until 2014, relative wages for those with a high school degree fell from over 80 percent of the amount earned by workers with at least a college degree to less than 60 percent. • CEA analysis using State-level wage data suggests that when the returns to work for those at the bottom of the wage distribution are particularly low, more prime-age men choose not to participate in the labor force: o The correlation is strongest at the bottom of the wage distribution: at the 10th percentile, a $1,000 increase in annual wages, or a roughly $0.50 increase in hourly wages for a full-time, full-year worker, is associated with a 0.13 percentage-point increase in the State participation rate for prime-age men. • This reduction in demand, as reflected in lower wages, could reflect the broader evolution of technology, automation, and globalization in the U.S. economy…

Conventional economic theory posits that more “flexible” labor markets—where it is easier to hire and fire workers—facilitate matches between employers and individuals who want to work. Yet despite having among the most flexible labor markets in the OECD—with low levels of labor market regulation and employment protections, a low minimum cost of labor, and low rates of collective bargaining coverage—the United States has one of the lowest primeage male labor force participation rates of OECD member countries. • U.S. labor markets are much less “supportive” than those in other OECD countries. The United States spends 0.1 percent of GDP on so-called “active labor market policies” such as jobsearch assistance and job training that help keep unemployed workers connected to the labor force, much less than the OECD average of 0.6 percent of GDP, and less than nearly every other OECD country. The contrast in participation rates reveals a flaw in the standard view about the tradeoffs between flexibility and supportive labor policies. • Another unique feature of the U.S. experience has been the rapid rise in incarceration, especially affecting low-skilled men. o By one estimate, between 6 and 7 percent of the prime-age male population in 2008 was incarcerated at some point in their lives. o These men are substantially more likely to experience joblessness after they are released from prison and in many States are legally barred from a significant number of jobs.

So if you are going to let companies hire and fire at will, which overall is a good thing in my view, you need to have programs to education and train workers, not just as children but to retrain and upgrade their skills throughout their adult lives. Globalization and accelerating technological change make this need even more urgent.

Trumponomics

Moody Analytics has tried to take what Trump says and predict what would happen to the economy if he could actually do what he says.

Broadly, Mr. Trump’s economic proposals will result in a more isolated U.S. economy.
Cross-border trade and immigration will be significantly diminished, and with less trade and immigration, foreign direct investment will also be reduced. While globalization has created winners and losers in the U.S. economy in recent decades, it contributes substantially to the ongoing growth of the U.S. economy. Pulling back from globalization, as Mr. Trump is proposing, will thus diminish the nation’s growth prospects.

Mr. Trump’s economic proposals will also result in larger federal government deficits and a heavier debt load. His personal and corporate tax cuts are massive and his proposals to expand spending on veterans and the military are significant. Given his stated opposition to changing entitlement programs such as Social Security and Medicare, this mix of much lower tax revenues and few cuts in spending can only be financed by substantially more government borrowing.

Driven largely by these factors, the economy will be significantly weaker if Mr. Trump’s economic proposals are adopted. Under the scenario in which all his stated policies become law in the manner proposed, the economy suffers a lengthy recession and is smaller at the end of his four-year term than when he took office (see Chart). By the end of his presidency, there are close to 3.5 million fewer jobs and the unemployment rate rises to as high as 7%, compared with below 5% today. During Mr. Trump’s presidency, the average American household’s after-inflation income will stagnate, and stock prices and real house values will decline.