Some Policies my Ideal 2020 Candidate Would Pursue

My ideal candidate would take the following positions on these issues.

Economics

• Make it easy for entrepreneurs to succeed.
• incubators in communities the way earlier generations planted libraries and universities as just one of the many support structures to put in place to make more citizens more entrepreneurial. Do all we can to make citizens wildly successful and then tax the ones who achieve success at high rates (say, marginal tax rates double that of middle class) to pay for investing in the next round of new entrepreneurs.
• Make a huge investment in research

• We will spend about $3.5 billion on DARPA - Defense Advanced Research Projects Agency - this year. DARPA has helped to fund amazing technologies that helped birth modern computers, smart phones and satellites. We are still counting the trillions in returns on early investments of millions and billions in DARPA. I would match the DoD's R-and-D spending with similar levels of spending on Department of Education, Department of Energy, etc. to something like the table above. This would not only employ a growing number of doctoral graduates (we could conservatively assume about 140,000 new jobs for staff and leading researchers with the numbers above) but would lead to returns of trillions in the future as we solve problems of energy, commute times, poverty, environment, etc. Entrepreneurs can translate this research into development, creating new wealth and jobs in the process of deploying new processes, services and products that build on this research.
• Make it easy for employees to use corporations as tools for creating wealth
• Laws requiring mechanisms inside of corporations that allow employees to create wealth through innovation and entrepreneurship and dictating that between 0.5% to 2% of that corporation's employees are paid more than the CEO as a result.
• Tax inheritance more than capital gains more than income
• Massive spending on research on alternative energy, upgrading infrastructure to reduce carbon emissions and the introduction of carbon tax. Innovate our way out of a fossil fuel economy.

Social policy

• Make it easy for single moms to succeed
• Make high-quality childcare free
• Sex is one of the most wonderful acts and rape is one of the worst. The main difference is consent. Pregnancy and childbirth is one of the most wonderful acts ... unless it is forced on you by others, in which case it is one of the worst. It should be the choice of individual women about whether and when to have sex or babies, not the choice of the men in their community. 
• Annually - and aggressively - reduce childhood poverty
• Provide universal healthcare
• This would include death panels and other criteria about what level of care we have a right to and what level of care the community should not be billed for.
• Transform K-16 into an education system that creates a common sense of community but a wildly diverse workforce that includes the knowledge workers that are the primary focus of schools today AND trades, entrepreneurs, makers, government and service workers and other emerging career paths

Communications

• Treat investigative reporting like research. That is, it should be funded by the government with oversight of the agenda by citizen boards. (We should more aggressively follow the example of the BBC.)
• People whose data is key to the success of a social platform (e.g., Facebook, Twitter, etc.) should receive a portion of that platform's revenue (idea taken from Andrew Yang).

A Curious Explanation as to Why Europe's Population Fell During the Dark Ages

Learned something curious from Berkowitz's Sex and Punishment, a book I picked up from the Harvard Bookstore a week ago.

Medieval priests used penitentials to define rules and punishment. A lot of prohibitions involved sex and some were odd. (To be fair, in an age before cars, guns, and corporations there wasn't much other behavior to regulate.) In a few regions, the penalty for performing fellatio on one's husband was greater than the penalty for killing him.

The penitentials offered a labyrinth of penalties and prohibitions. Among other things, it left only about 4 days a month during which it was "legal" to have sex. Even those limits weren't enough: married couples could be prosecuted if they were known to enjoy sex too much. Pope Gregory (~540 to 604) declared that marital sex was blameless only when there was no pleasure involved.

Perhaps unsurprisingly, during the period of the Dark Ages when these penitentials had the most influence - from about 500 to 1050 - Europe's population actually shrank.

So that's kind of interesting.

Beyond Win-Win or Win-Lose into the Strange Mind of Donald Trump

Stephen Covey's 4th habit is the building block to relationships. It also gives us a way to better understand the danger of Trump.

Think Win-Win is how we approach others. It's a belief that relationships make things better for us and them, for you and me, whether the you is a romantic or business partner or simply a friend.

Covey's 5th habit is Seek first to understand and then to be understood. You have to understand their perspective and their win and then communicate your own. His 6th habit is Synergize which could be stated more clumsily as, Create a solution that will not just give you your win and them theirs but might actually result in something extra that neither of you could have anticipated, a solution that encompasses both of your wins in a manner that might actually create wins you hadn't anticipated - whether for you or people outside the relationship.

Back to the 4th habit of Think win-win, the approach to take into a relationship or even a quick encounter.

To get to win-win, one needs both courage and consideration. You need courage enough to articulate and fight for your own win. You need consideration enough to listen and fight for the other's win. 

If you have only courage but no consideration, you'll likely become either a win-lose person who must beat the other while getting your own win or simply a win person who doesn't care at all whether the other person gets a win or a loss as long as you get your win.

If you have only consideration but no courage, you'll likely become a lose-win person who takes on the role of martyr, simply swallowing your own needs and dreams and deferring to the needs and dreams of others.

I think one obstacle to win-win is that it isn't natural to both be willing for combat for our own win and willing for empathy to understand the other's win. We tend to toggle into either courage or consideration rather than try to encompass both.

Trump introduces a new variable in this model that I hadn't really considered before: the role of comparison or status. It takes him to a new and odd place.

Trump's trade wars seem to have played a factor in the fact that Germany and China's economies are now stuttering. Automobile production has fallen dramatically in Germany. China's growth has slowed. In response to these sorts of issues, bond markets suggest there is a higher probability of a global recession. None of this seems to deter Trump from his trade war.

Part of Trump's bulldoggery of course is related to the fact that Trump has never once admitted to a mistake of any kind. I suspect, though, that it actually points to something else that is so defining of Trump: his quest for status above all else. In the wake of the 9-11 tragedy he called in to announce that with the collapse of the World Trade Center, his building was now New York's tallest. There was a tragedy but it gave him more status and that was what he wanted to talk about. Trump cares less about living in time of antibiotics and internet than being the top dog and if he had to choose between being Attila to the Huns or middle-class guy in a wildly affluent future, he'd choose to be Attila. What matters most is to be at the top.

China's economy has grown more rapidly than ours for the last 20+ years. This makes perfect sense given their relative stage of economic development. (It takes the average Chinese all week to make as much as the average American makes by the end of the day Monday.) This contrast outrages Trump who wants to be better.

I get the very real sense that given the choice between winning less than China wins (for instance, our economy grows 3% and theirs grows 6%) or losing less than China loses (our economy contracts only 1% while China's economy contracts 3%), he would choose losing less. It doesn't matter nearly as much that we're winning as it does that our position is better than our rivals.

Trump's little graph is not about win-win or win-lose quadrants. It is simply this: we're doing better or worse than the other guy. Better can include a loss in real terms as long as our loss is not as bad as the other guy's loss.

The probability that the US economy tips into recession goes up every time Trump's Twitter Tourettes drives him to spew out trade war nonsense. Remarkably, the probability of recession still seems considerably less than 50%; recession within the year is unlikely. In any case, our economy will likely be doing worse in 2020 than it was in 2016 but China and Germany's economies will likely be doing even worse even than ours. The global economy doesn't matter to him. Our relative position does. I'm not even sure what to call Trump's mindset. (Who cares about winning as long as we're doing better than than the other guy?)

Trump's 2020 campaign slogan could simply be, "You should see the other guy."  

The Economics Behind the 3 Waves of Feminism

Robert Wright's Nonzero forms one of the foundations to my worldview. The other day he interviewed Kat Rosenfield and Phoebe Maltz Bovy on the Wright Show. One of the topics that came up was the three waves of feminism. As Rosenfield and Maltz Bovy defined it, it seemed to me that these three waves of feminism could be defined through economics.

1. Wave one feminism most easily characterized by a woman's right to vote came in the wake of industrialization. (It was 100 years ago that women got the right to vote.)  As labor was less about muscle and more about the mind, women could less easily be ignored as equals.

2. If wave two feminism came after the Pill - approved in 1960 - maybe it was about pointing out that with family planning a woman had even more control over how she timed her entry and engagement in the job market. She had the option to take a role more traditionally associated with men. Her biology no longer kept her home raising children.

3. If wave 3 feminism is happening now, it may be coincident with what I see happening: the beginning of the shift from an information to entrepreneurial economy. If the early 1900s was about a rise in product invention, I think that the early 2000s will be seen as a time of a rise in social invention: changing and inventing institutions to accommodate who we are or aspire to be. The old quip about the Model T, "You can have any color you want as long as it is black," in the early 1900s has given way to UX research that tailors the product to the customers. We judge products by how they perform when we use them; curiously, we still judge students and employees by how well they use schools and workplaces rather than judging schools and workplaces by how well they perform for students and employees. What does this have to do with anything? There are institutional changes that need to be made to accommodate (most? some?) women and it's not enough to say to women, "You just adapt to these institutions and social norms that have been made for men." The most obvious of these is that a woman who does want to raise a couple of children will find herself carrying a heavier load in child raising than a man simply because of the biological reality of pregnancy and nursing, etc. One option is to pretend this away, another is to say that women should just revise their ambitions to accept the fact that they can't engage in the same way as men and a third way is to insist on change to institutions to accommodate both their biological realities and their ambitions.  I think one element of social invention will be intentionally adapting our institutions to the people we are rather than the people our grandfathers imagined themselves to be. What I'd call social invention or entrepreneurship. 

Put more succinctly,

3. Wave 3 feminism is not just about women's right to participate fully but changing defining institutions to adapt to who women are and aspire to be. It's about shifting the burden of adaptation from women to institutions and social norms.

The Future of Politics Might Be Culture, Not Policy

One of the things that neo-nationalism might signal is a hunger for common culture. We all listen to different music, read and watch different stories and worship at different holy sites.

We share an economy but not a culture. What is economics? A study of how we depend on strangers for our lifestyle. Some people find that unsettling. 

Peter Drucker supposedly said "Culture eats strategy for breakfast." A variant on that is "Culture eats policy for breakfast." Culture excites people and policy makes their eyes glaze over. One of the more enduring elements of culture is music.

It takes less time to listen to a song than read a book or watch a movie. This might be why 4 of the top 5 people (counted by followers) on Twitter are musicians. (Obama tops the list, followed by Katy Perry, Justin Bieber, Rihanna, and Taylor Swift.) Music might be the most effective cultural glue we have.

Prediction? Eventually politics will devolve into a people - bored with policy and disappointed by politicians - voting on what song will be the national anthem for the next couple of years. 

Then politics will really get ugly. 

It's Time to Stop Pretending That Both Sides are Equal: Trump's Parade is Leading Backwards on Progress

From about 1830 to about 1900, the Democratic party was all madness and defense of the agricultural economy and the Republicans were the progressives. While Democrats were defending slavery, Republicans were figuring out capitalism. Now the Republican Party under Trump has gone full bore mad, fighting for the waning industrial economy the way Democrats once fought for the waning agricultural party. While Trump is fighting trade wars, Democrats are trying to figure out how to finance education and R-n-D for projects like global warming.

This divide between defending an old economy and trying to navigate a new one is why Democratic support is so high everywhere that the economy is strong and Republican support is so strong everywhere the economy is weak. (In the regions with the highest wages, Hillary Clinton won twice as many votes as Trump. (See below for details.)) Communities whose policies support the information economy are more prosperous than those still defending the industrial economy.

One of the many things absurd about this current battle between information and industrial economies is that rather than engage in a really great conversation about policies that better support an information or entrepreneurial economy and how to transition into the latter, we're debating something settled decades ago ... whether we should give preference to policies to support an information or an industrial economy. It is a complete waste of time to defend Trump's 1950s vision of the world and yet that is exactly what you have to do if you're a Republican. It's the political equivalent of selling rotary dial phones. There was no legitimate "both sides are equal" argument in 1870 and there is no both sides are equal argument today. 

Progress is heading in a particular direction and that's not the direction Trump is leading his parade.

-----------

The claim that the most prosperous areas voted most strongly against Trump's call to defend the industrial economy is based on facts. Among them is this fact: the 15 counties with the highest average weekly wages voted 2-to-1 for Clinton and against Trump.

The average vote for Clinton in these regions was 66% . (Details here.) 

Contrasting the Districts that Supported and Opposed Trump: It Comes Down to a Divide Between Industrial vs. Information Economies

Nerd that I am, I collected some data on the 15 congressional districts where Trump won the largest percentage of votes and the 15 districts where he won the lowest percentage of votes. 30 districts out of the 535 lets us look at the contrast by looking at extremes.

The biggest difference is the ratio of folks with Bachelor's degrees or higher to the folks employed in manufacturing. (I still don't know of a simpler proxy for knowledge worker than a Bachelor's degree.)

In the least Trumpian districts, the ratio of folks with college degrees to folks working in manufacturing is 6 to 1. These are districts in the information economy. Not only are they more likely to be knowledge workers than factory workers but they create more jobs. There are 43 jobs for every 100 people living in such districts, 1.5X as many as found in the most Trumpian districts. The information economy is still growing even as the industrial economy shrinks. This not only explains the fact that districts in the information economy have more jobs but likely explains why they're 4 years younger, on average. The regions creating the most jobs are going to attract more people starting their careers.

In the most Trumpian districts, people are 3X more likely to work in manufacturing and household income is $22k lower. These are related. Generally, folks with a degree make about $22k more than folks without one.

Trump is the warrior chief for the folks in the waning industrial economy. It is just one of the ways that he is the opposite of Lincoln, the GOP's first president. In 1860, the industrial economy was cutting edge. Today it is on the wane, being eclipsed by the information economy just as the industrial economy eclipsed the agricultural economy during the time of the first Republican presidents. 

Republicans - the Party That Does What It's Told

When it comes to how we're wired, liberals prioritize equality and care while conservatives focus more on loyalty, authority and purity. Once Republicans know who the authorities are, they'll reliably do what they're told.

No Republican has been more popular - not Eisenhower or Reagan, not Bush or Bush, not Nixon or Ford - than Trump. Trump defines and owns his Party in a way that no president since FDR has. This is only possible because Republicans so readily cede to authority.

Concerned Republican, "Trump had sex with a porn star while his wife was home with a new baby and then used campaign funds to hush her up. Oh, and then lied about it. We were really upset about sex and lies with Clinton, right?"
"Right. But that doesn't matter now."
"Oh, okay."

Concerned Republican, "Trump has doubled the deficit to a trillion dollars. We were really upset that the deficit grew so fast during the Great Recession under Obama, right?"
"Right. But that doesn't matter now."
"Oh, okay."

Concerned Republican, "Trump has insulted prisoners of war, discounting their sacrifice and heroism. We really love our veterans and in particular those who suffered as prisoners of war, no?"
"No. Not any more. A prisoner of war is a loser who got caught."
"Oh. Okay."

Concerned Republican, "Trump is against free trade. Aren't we against government interference in markets and for free trade?"
"Not anymore. Now we like trade wars."
"Oh. Okay."

Concerned Republican, "Trump is telling businesses that they can't do business in China or with China. Isn't government telling businesses what to do socialism?"
"Not anymore. We like this."
"Oh. Okay."

Concerned Republican, "Russia helped Trump to win. Don't we hate the Russians and isn't that foreign interference in our elections?"
"Not anymore. Democrats just hate Putin because he didn't help them to get elected."
"Oh. Okay."

Concerned Republican, "Every time Trump tweets the stock market falls. Don't we care about the stock market?"
"Not anymore. We think trade wars are more important than prosperity."
"Oh. Okay."

Concerned Republican, "Trump claimed that he was the chosen one and that he is the second coming of God. Should we be worried that he's going crazy?"
"No. He actually is the chosen one. God loves him best."
"Oh. Okay."

Concerned Republican, "Should we be drinking this kool-aid? It looks like it made those other people really sick."
"Everyone feels worse right before they feel better. Just close your eyes and swallow it quickly."
"Oh. Okay."

There was a reason Putin wanted Trump to win. Democrats will reject a Democrat because he posed for a picture pretending to touch a sleeping woman or because she was paid for a speech by bankers. You can't get Democrats to reliably vote AGAINST a madman. Republicans? You just have to tell them to vote for and what to support this year and they'll happily do it. It's a pretty easy group to herd. If you tell them they're supposed to, they'll even reliably vote FOR a madman.

How Hosting or Squelching Science Determines Where Progress Goes Next

In 1642, Galileo died and Newton was born. That's still a poignant symbol of the hand off from Italy to Britain for progress.

In 1500, Italy's per capita GDP was about 50% higher than Britain's. By 1820, Britain's per capita GDP was about 50% higher than Italy's.

Galileo was arguing that the earth rotated around the sun. The church had the authority of Joshua 10:13, a verse that made it clear that it was in fact the sun that orbited the earth. They put Galileo under house arrest and made it clear that developing theories based on observation was not to be tolerated as long as Italy had the church's authority.

Science traveled north. The Protestants of Northern Europe accommodated Galileo's theories and became host to the scientific method that the Italians had helped revive from Greek and Roman time. Newton went further than Galileo, developing a set of laws to explain what Galileo observed. Newton's science and math became a foundation for the Enlightenment and that, in turn, became a foundation for the Industrial Revolution and Democracy. Italy protected its past and the UK created a new future.

Today, we have a similar inflection point in the transition from fossil fuels to alternative energy. China now leads in the production of wind turbines and solar panels. Meanwhile, we Americans have elected a president intent on protecting coal - an industry that dates back to the time of Newton. Trump - like so many of his supporters - denies climate change in the same way that the Catholic Church denied we orbit around the sun. And science, less interested in the vested interests of coal industry profits or old testament prophets than reality, is shifting away from the greatest home to science since, well, Italy during the Renaissance or the UK during the Enlightenment.

Economic growth and prosperity follows science. It has for centuries. If we continue to deny the reality of climate change and what that means for a shift in strategies and the source of prosperity, we will play the role of Italy in the 1600s. It's not a good role. Shakespeare - born the same year as Galileo - set half his tragedies there.

We're All Becoming more Individual - or the curious challenge progress poses to politics

It's not just that we're getting more specialized in our work. We're also getting more specialized in our consumption. My lunch is different from yours. The last book I read has nearly a 0% chance of being the same book you last read. The article linked below is a tad wonky but the punchline is that there is a rise in "niche consumption."

This is so fascinating to me because it means that economically we have never been more diverse. I can't do your job and I never see you at my favorite lunch spot. To some degree. our lives are lived in separate economic universes whether we're on the production or consumption side of the economy.

Meanwhile, we have to come together as a community when it comes to the government we choose and the policies we implement. You don't have to live with the consequences of what I choose in the market - which is becoming increasingly fragmented and diverse - but you do have to live with the consequences of what I choose at the ballot box - which still has to hit 51% and by definition cannot be that fragmented. At no time in history have we had to bring so much diversity into one common cause, creating community even with less and less is in common.

In this way, progress poses a curious challenge to politics. Progress makes us all more distinct individuals. Politics is often built on what we have in common. As we make more progress, what is common between us becomes less obvious.

From the summary:

This paper empirically documents a rise in what we call "niche" consumption. Households are increasingly concentrating their spending. This pattern, however, does not appear to be driven by the emergence of superstar products. Rather, households are increasingly buying different goods from one another. The increase in segmentation seen in many other walks of modern life also applies to consumption: our grocery baskets look less and less similar. As a result, aggregate spending has become less concentrated.

From the intro:

We show that over the last 15 years, the typical household has increasingly concentrated its spending on a few preferred products. However, this is not driven by “superstar” products capturing larger market shares. Instead, households increasingly focus spending on different products from each other. As a result, aggregate spending concentration has in fact decreased over this same period. We use a novel heterogeneous agent model to conclude that increasing product variety is a key driver of these divergent trends. When more products are available, households can select a subset better matched to their particular tastes, and this generates welfare gains not reflected in government statistics. Our model features heterogeneous markups because producers of popular products care more about maximizing profits from existing customers, while producers of less popular niche products care more about expanding their customer base. Surprisingly, however, our model can match the observed trends in household and aggregate concentration without any resulting change in aggregate market power. 

https://faculty.chicagobooth.edu/brent.neiman/research/NV.pdf?fbclid=IwAR31n5iLO6ab94BzFp9sqvD1s43eJPcejJxIR6WqGMiQuQgqLqDouBoFMrM