2024 and there is so much more

 

Prognosticators in Dante's 8th Circle of Hell - Or Why I May Not Attempt an Economic Forecast for 2024

I was tempted to generate a forecast for 2024, but then I remembered that in Dante's Inferno he puts prognosticators in the eighth circle of hell. Fortune tellers and astrologers have their heads twisted around, forced to wander backwards for all of eternity in a punishment that symbolizes the twisted nature of their attempts to see into the future.

Then again, Dante doesn't mention economists in that group of prognosticators so I may just play with a couple of possibilities for this new year, specifically having to do with real interest rates and the resultant change in equity prices. But if I don't, you'll understand why.

Smart Phone and Individual - What Makes Them Valuable or Worthless (and what that tells us about the imperative to take entrepreneurship, or social invention, seriously)

Consider a smart phone a metaphor for the potential of the individual.

In the 1940s, a smart phone would have been both fascinating and largely worthless. With no internet, no phone network, no software to run on, it would have been ineffective. The value of the smart phone does not come from the phone or from electricity or from apps or from the internet or cells to enable phone calls. It comes out of the interaction of all of those, the interdependencies that emerge in the performance of "the phone."

Over time, we've created systems that have increased the potential of individuals. A person in 2024 is wildly more productive than a person in 1924. This isn't because the individual - the smart phone - is engineered any better. It is because of myriad systems it is now a part of.

In a sense, we both over and underestimate the importance of the individual. Overestimate because within the wrong system, there is little the individual can do. Underestimate because we still don't fully understand what potential looks like because we still haven't created the social reality that allows the individual to fully realize that potential. (And never really will. Evolution. History. They are hardly near their end.)

If entrepreneurship is to institutions what invention is to products, it is entrepreneurship that changes our potential over time. We create institutions that then create us. As those systems evolve, so does our potential.

Occupations in San Diego - What a Ranking of Average Pay Reveals About the Value We Place On the Heart

Here's a list of occupations for San Diego County.

Curiously, radiologists top the list for average annual salary, followed by cardiologists and then by psychiatrists. So the order of value apparently is first wanting to know the condition of your heart, then addressing any obstacles to its main job of keeping you alive, and then finally, how what is is in your heart makes you feel. These three heart-related occupations are the only ones that pay an average of more than $300,000 a year.

Even when it comes to careers, it appears that what we value most are matters of the heart.

What did Don Henley sing?

I've been tryin' to get down
To the heart of the matter
But my will gets weak
And my thoughts seem to scatter
But I think it's about
Forgiveness, forgiveness
Even if, even if
You don't love me anymore

The full list is here:
https://www.bls.gov/oes/current/oes_41740.htm#00-0000

How the 2nd Amendment Has Been Misunderstood and Misused

The second amendment has been taken out of context and been applied in ways never intended by the founding fathers. It has almost nothing to do with the individual’s right to own weaponry and almost everything to do with Jefferson and Madison’s belief that expensive standing armies exploited common citizens and enriched aristocrats. The third amendment that prevents the government from forcing citizens to house soldiers is related.

Jefferson and Madison had a close friendship based on a shared 

philosophy. One of the beliefs they shared was that monarchs were enriched by standing armies. The reasoning was simple. It was expensive to fund an army and this required exploitative taxation that generated a lot of money – money that could be used to fund lavish lifestyles at Versailles as well as armaments, food and supplies for soldiers. Rather than create such expensive standing armies, it was better to rely on militias. A militia was simply an army of local people. (This was a stark contrast to the British soldiers from overseas who local colonialists didn’t trust and who created such tension and conflict even before the American Revolution began.) A democracy was government of the people. A militia was meant to be an army of the people.

The third amendment builds on the second amendment – the amendment that guarantees Americans that they wouldn’t be forced to share their homes with soldiers. Both the second and the third amendment are designed to free Americans from standing armies.
Jefferson and Madison didn’t like the idea of an expensive government and looked for ways to lower its cost. The second, third, fifth and sixth amendments do that.

When peace and safety was threatened by outside forces, by war, it was to be countered by local volunteers – militias. This is defined by the second and third amendments.
When peace and safety was threatened internally, by crime, it was to be countered by local volunteers – juries. The sixth and seventh amendments define the right to a jury, a group called out from the community in the same way as a militia.

Madison and Jefferson’s view of a modern democracy was that it would be run by local volunteers who could shape their local defense against crime and war, meaning fewer taxes and more control for these communities.

Rights generally suggest some responsibility. The right to bear arms was paired with the responsibility to be in a militia, ready to be called upon to keep the peace, to protect from outside threats. There is nothing to suggest that this right to own guns is separate from the responsibility to be a part of the militia that Jefferson and Madison hoped would substitute for standing armies. Militias and juries were part of their vision of a government that, in the words of Lincoln, was to be "of the people, by the people, for the people."

Amendments

2nd
A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

3rd
No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner; nor in time of war, but in a manner to be prescribed by law.

5th
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury ...

6th
In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed ...

Trump can't run for president in Colorado - the Triumph of Democracy and the 14th Amendment

Trump can't run for president in Colorado.

Once upon a time, you could change national rulers by violently rising up against the king. At that point in history, there was a clear bargain: you could attempt to overthrow the king and if you won, you were now king and if you lost, you were executed.

One of the many beautiful things about democracy is that one no longer had to threaten to kill the king or risk death himself when deciding that the country needed a new ruler. You simply ran against the president. (Well, and dozens of other candidates.) There is no need for violence in a democracy because we have a system designed for the peaceful transfer of power.

Trump tried to ignore our system and opt instead for a violent overthrow. Sadly for him, we no longer let someone violently overthrow the system. Luckily for him, we no longer execute the guy who attempts to violently overthrow the legitimate ruler and rule of law.

Colorado's Supreme Court disqualified Trump from being on their ballot after engaging in insurrection, ruling that the 14th amendment applies to him. 

Specifically, this third clause applies to Trump in their opinion.

"No person shall be ... President ... who, having previously taken an oath ... as an officer of the United States ... to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. ..."

This is a little triumph for those of us who think that the decision to opt for democracy 200+ years ago was a fabulous decision and one which it would be disastrous to reverse.

Could AI Emerge as a Higher Order Consciousness and We Never Know About It?

Cells, limbs, or organs might possess a form of consciousness, but it differs significantly from our collective human consciousness. Our experience, such as feeling a warm mug of hot chocolate in our hand, is not just about sensory perception. It's a richer, more complex experience that intertwines with our memories, aspirations, and thought processes. Our hand feels the mug but not in the same way that we do.

Similarly, as we delve into artificial intelligence, we might encounter a scenario where our awareness becomes a mere fraction of an AI's broader consciousness. This situation can be likened to the hand's limited awareness of warmth from the mug, which is much less rich than the person's full experience. The intriguing question then arises: if AI were to develop a more advanced consciousness, would we, as humans, even have the capacity to recognize it? Is there a scenario in which AI happily emerges as conscious while we remain blissfully unaware of that, happily operating at the level of single cells convinced that we're actually a self-contained universe?

President Trump's 3 Wishes

When he was president, Trump had a button on his desk that he pressed to order a diet coke be delivered to him. Of all the magic buttons a president might have on his desk, this was the one that he chose.

"You have 3 wishes."
"Well, Trump began excitedly, "first I'd like a big button on my desk that when I press it, staff magically appears with a glass of diet coke!"
"Uh, okay. What about the other 2 wishes?"
"A, uh, cheeseburger."
"You do know that I'm a genie, right, and not your waiter?"
"And fries! Fries are my third wish."
"Of course they are."

The Best Quarter for Economic Data in This 21st Century

I know that some of you like facts. Bless your noggin.

Most recent numbers:
Inflation (October): 0%
Real GDP Growth (Q3): 5%
Unemployment Rate (November): 3.7%
Change in NASDAQ in last year: +31%

There have been only 8 quarters in this century with higher GDP growth. In each of those, inflation and unemployment was much higher - averaging about 5% annual inflation and unemployment over 6%.

This is the best set of economic data for a quarter within this century.

Capitalizing on the Wild Disconnect Between the Perception of the Economy and Economic Reality

It is one thing to think that the economy might get better and have controversy around that FORECAST. I'm trying to remember when the economy has been this great and there is controversy around that FACT.

Continuously compounded annual rate of inflation was under 1% last moth. (The median this century has been 2.2%).

The unemployment rate is 3.7%. The median rate for this 21st century is 5.3% and the unemployment rate has been higher 97% of the time in the last half century. This is - per the Council of Economic Advisers - "the 22nd straight month below 4%, a more-than-50-year record."

Some people are angry about the fact that so many think this is the worst of times when all the data supports claims that the economy is actually great. To me that kind of wild disconnect between reality and perception suggests investment opportunities. You can argue with people who deny reality or just buy discounted assets from them.

Forecasting a Bull Market as Real Rates Fall

For the most part, I limit my forecasts to "now is better than the past and the future will be better than now." Rather uncharacteristically, I'm going to forecast a bull market over the next 6 to 18 months.
There's a simple reason for this. Higher interest rates mean a drop in the net present value of earnings. Between mid-November of 2021 and late October of 2023, real interest rates rose from -0.38% to +2.55%. That's a massive shift in discount rate. The NASDAQ fell 21% during this time to reflect the drop in the value of future earnings.

As inflation abates and the labor market shows signs of easing, real interest rates have fallen, from 2.55% to 2.24% in just the last month. The NASDAQ is up 11% in that time.
Real interest rates will continue to fall over the next 6 to 18 months. This will raise the value of future earnings and with it, stock prices.

Top and Bottom 10 Counties by Average Income - How the Richest Counties Vote and How the Poorest Counties Have Fared in the Last Year

Now that the pandemic is over and the world has gone back to real world interactions, New York County has again taken the top spot for average income, surpassing Silicon Valley counties.

So many fascinating things to tease out from the data in these 2 tables but I'll focus on just two.

One, across the US, the ratio of Biden voters to Trump voters was 1.1. Within the ten counties that make the highest income, that ratio was 3.7. The average voter in the richest county was nearly 4X more likely to vote for Biden. Within the ten counties with the lowest income, that ratio was 0.8. Communities that struggle to succeed generally think that Trump's policies make sense. Communities that are thriving dismiss the notion that Trump's policies make any sense.
Two, in the last year, the poorest counties have done better than the wealthy counties. Across the country, average wages are up 6.6%. In the 10 richest counties, wages rose only 3.4%. In the 10 poorest counties, wages rose by 8.2%.

To recap, richer counties don't take Trump or his policies seriously. Poorer counties are doing better under Biden than are richer counties. Biden promised to help the working poor; it seems like that's happening.

data source:

https://www.bls.gov/news.release/cewqtr.t01.htm

Blowing up Democracy - the Chaos is a Feature, Not a Bug, of Trump's Republican Party

If communists took over Exxon and "struggled" to appoint a CEO, to make and execute plans to increase profits, to invest, to trim costs, no one would say, "Oh. They're so incompetent ." It would be clear that they're doing exactly what they want: blowing up an important institution of capitalism.

Republicans have taken over the House and cannot even elect a speaker. There is a lot of commentary about how wildly incompetent they are. They are not. They're doing exactly what they want: blowing up an important institution of democracy.

It's time to stop pretending that the party of Trump is incompetent. The goal internationally is to give more power to autocrats like Putin and a couple of mechanisms for that are attempts to defund or disrupt organizations like NATO and to undermine military effectiveness by blocking appointments throughout senior leadership positions in the military. (Right now Republican refusal to approve appointments has put more than 300 appointments for generals and admirals on hold, causing a leadership crisis within the military.) By freezing funding, they can undermine Ukraine's war against Putin and increase his odds of winning.

The goal is domestically to undermine social programs that might actually make their red state, poor, uneducated voters happy with government. Their goal is to mismanage government and prove that it is ineffective by making it ... well, ineffective.

Incompetence is not a bug in Trump's Republican Party. It is the feature. Trump and his MAGA boys are angry and want to destroy democracy. If you claim to be a Republican, either have the courage to own that or to walk away from the party.

One Challenge to a Democracy Founded by Enlightenment Thinkers

Isaiah Berlin argued that the Enlightenment faith in reason was changed by Romanticism. This has profound consequences for democracy.

Enlightenment trust in reason suggests that reality is something that gives way to the scientific method, rational analysis yielding insights about reality. Romanticism, by contrast, suggests invented reality that is the product of the complex mix of values, feelings, and creative ability of individuals and groups. The Enlightenment gave us a new way to look at natural reality. For instance, Benjamin Franklin's lightning rod that treated lightning as a natural phenomenon rather than a divine act. But to the extent that experienced reality becomes something manufactured by consensus rather than given by nature, rational analysis of what we observe gives way to passionate discussion of what we want to see.

This can change political discourse. A purely rational, Enlightenment-based approach might emphasize technocratic decision-making, while a Romantic approach might prioritize the lived experiences, feelings, and intuitions of individuals and groups. Debates about best policies for creating the good life give way to debates about the very definition of the good life. As Louis Menand puts it, "Romanticism rejected the end [goal] of self-understanding and replaced it with the end [goal] of self-creation."

If that end goal is about how an individual creates a life, there is no conflict. If that end goal is about how a people create a nation, there is infinite debate and conflict to follow.

The Ancient Greek's Obligation To Take an Interest in Politics (Or Why Plato May Have Called You an Idiot)

Don't be an idiot.

Plato recognized that power could easily corrupt in politics and was skeptical that good men would be attracted to politics, given its state. Plato has a character named Socrates say, in the Republic, "to be sure, good men will have to go into politics, whether they wish it or not. For, as you say, if they don't, they'll be ruled by people worse than themselves."

The engagement of virtuous people in politics is not presented by Plato as an attractive option but rather as a necessary one to save society from deteriorating into tyranny or anarchy.
And this realization of how important is public policy is the origin for a particular Greek word we use today.

Idiotes was a private citizen who wasn't involved in public affairs or politics. This didn't imply stupidity or a lack of intelligence. Rather, it referred to someone who was preoccupied with their own private life and showed a lack of concern for the well-being of the community or state. These "idiotes" were not looked down upon for their intelligence but rather for their self-centered focus and disengagement from civic life.

The Athenians encouraged citizens to take part in public decision-making given the welfare of the community depended on active participation from members. In such a culture, the choice to abstain from politics was considered a form of neglect.

We, of course, still have the word democracy from these ancient Greeks and have inherited the word idiot from them as well.

One of the Benefits of Trump Blowing Up the Republican Party: We Will Likely Have Another Long Period of Sustained Policy Coherence

“My problem is, for the next 50 years, when people think of progressive politics, they’re gonna think of you. They’re gonna think of you and your idiot followers passing out daisies to soldiers and trying to levitate the Pentagon.”
- Aaron Sorkin putting words into the mouth of Tom Hayden as he rebukes Abbie Hoffman for his reliance on political theater rather than debate and reason in the film The Trial of The Chicago 7, set in 1969.

There is a bright side to Donald Trump immolating the Republican Party: we will be back to a period of one party dominance for a generation or two and in that sort of dominance, we will be able to pass legislation that will mean a coherent policy can again emerge, as it did from 1801 to 1861, 1861 to 1933, and from 1933 to 1969.

Since 1969, politics has taken a back seat to entertainment. We have, as Tom Hayden predicted, been living in a time of political theater. 

Perhaps the simplest example of this is Rush Limbaugh who visited the White House during George H. Bush's presidency and loved for years after to tell the story of how the president carried his luggage. Rush Limbaugh was an entertainer. We, as a society, paid him 200X as much as we paid our president. The president himself showed him the deference people in earlier times had reserved for, well, presidents. Since 1969, we don't so much have politics as political theater.

In your lifetime, all you have known is political division, a hollering across the aisle of congress in a poor imitation of actual theater, a drama of stalemates. Now because a former college football coach (Tuberville - who gained fame by standing on the sidelines coaching young men who entertained millions with the theater of college football) won't approve the appointments of hundreds of officers, we have a military crisis. Tuberville knows nothing about national security but he does know how to entertain Fox viewers. And because government is so divided, one man can jeopardize our military. That sort of casual hostage taking by one man of a key institution like the military would not be possible in time when one party dominates.

What you have not known is what Americans of past generations have known: a coherent, persistent set of policies championed by a dominant party that changed reality for the average American.
The good news about Trump destroying the Republican Party is that we will be back to a time when policies can move in one particular direction.

The Misery Index Could Bode well for Biden

The Misery Index might be the simplest measure of how Americans feel about the economy. It is the sum of the unemployment rate and inflation. If either unemployment or inflation is high - particularly if both are high - Americans are unhappy.

Fair or not, attitudes towards the president go up when the misery index goes down and go down when this misery index goes up. Americans were angry with Carter in no small part because inflation and unemployment rose so much during his presidency and were happy with Reagan because they dropped so much during his.

No president's term ended with as low a misery index as Biden now has. This should - but won't necessarily - translate into higher approval ratings for Biden.

Of course feelings are complicated - particularly when it comes to misery - as Morrisey knew.

"I was looking for a job, and then I found a job

And heaven knows I'm miserable now"

- The Smiths, song released in 1984 when the misery index 

was high and the youths were particularly disenchanted, you might even say, miserable.

A Divided Government - the Norm Since 1969

It is not true that things have never been worse. It is true that during your lifetime politics have been more divided than it has during the lifetime of any previous generation of Americans. Divided government is now our norm and not an exception. None of us have lived during a time in which one party has been able to consistently pursue a coherent agenda over a decade, much less a lifetime.

The longest stretch during which any one party has had control of the House, Senate and White House since 1968 were the last 6 years of George W. Bush's presidency, when the country was drawn together after 9-11.

Janet Yellen - Still the Only Woman to Serve as the Federal Reserve Chair and a Living Argument For Considering Women in That Role More Than Once per Century

Only once in its 100+ year history have we let a woman head the Federal Reserve. The Federal Reserve Chair is responsible for monetary policy which has an influence over important things like inflation, job creation, and financial markets.

Trump - who loves women but just not THAT way - did not renew Obama's appointee Janet Yellen's time as Federal Reserve Chair. It's worth looking at how she did.

No Fed Chair presided over a period of lower inflation, the 1.4% inflation during her time at the Fed easily the lowest.

No Fed Chair who served a full 4-year term presided over a time of more rapid job creation.

Finally, the only Fed Chair under whom the S&P 500 did better was Volcker.

Given she did so well, the powers that be are toying with the idea of letting another woman take a shot at the job sometime during the next century. And then - who knows - if that woman does as well we may start appointing a couple of women per century - doubling their representation in this important role.

The Pursuit of Happiness - What the Founding Fathers Thought Was Reason Enough for a Revolution

Such a curious reason to declare independence. It's not a guarantee of or a promise of. Jefferson and rest left Britain simply to pursue happiness.

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. ..."

Hard to tell whether to blame it on us or happiness, but one or both seem to move around a bit. We don't just sit in one place with happiness or it with us. Here's to continuing the pursuit.

Fun Stats About Independence from the British Empire to Impress Fellow Nerds at Your 4th of July Celebration

Here are some facts to share at your 4th of July celebration that will make everyone love you. (Or inspire them to declare independence from you and breakaway violently, almost like a spontaneous Revolutionary War reenactment. So, a win in either case).

When the US declared independence in 1776, its population was less than 3 million. It's now 333 million. No one talks about what a huge audience the BBC lost with the revolution. It's little wonder that the British sent an invasion in the 1960s with the Beatles, Kinks and Rolling Stones - an attempt to reclaim a lost audience. 333 million people is nearly 666 million ears.

Britain had 26 colonies in North America but it was just the 13 that declared independence in 1776 and broke away to eventually unite as states. (Leaving colonies like Jamaica and Nova Scotia to remain British.) I feel like their retention of 50% of their American colonies is a stat that too rarely gets acknowledged.

The next country to gain independence from Britain is one that the US has tried to occupy itself a couple of times since: Afghanistan in 1919.

The US was just the first of 63 countries to successfully declare their independence from Britain. Six others gained independence from evolution rather than revolution. Countries that chose evolution include Australia, Canada, and Ireland.

On average, all throughout the year another country celebrates its independence from Britain every 5 days. Imagine being King Charles and having to scurry around the globe every week to appear at yet another independence day celebration, putting on a brave face as you plead with former colonialists, "Please come back! We will love you better this time."

The combined population of the countries that will be celebrating an "independence from Britain!" day this year is 2.9 billion - about 44X the population of the UK.

Militias as a Means to Avoid the Cost of Standing Armies (or why the second amendment doesn't mean what the NRA wants you to believe it means)

The NRA has distorted the intention of the 2nd amendment and glosses over the historical realities and philosophies of the founding fathers. The 2nd amendment was never intended to give any random citizen unfettered access to any random number of any weaponry they fancied. It was written to describe how free people were to defend themselves without relying on standing armies.

Jefferson’s Republican Democratic Party (which was referred to at various points in the 1790s through 1830s as the Republican Party, Jeffersonian Republicans, Democratic-Republican Party or Democratic Party) thought that war and monarchy were intertwined. The taxes and spending needed to create a standing army led to huge riches for the monarch who ruled it, and a huge tax burden for the people. War and monarchy were seen as entangled. Jefferson and his fellow Republicans did not want a standing army and thought that war could be avoided. (They thought trade sanctions and other economic penalties might be enough to punish or change other nations when needed.)

They also knew that war was not always a choice and for that situation, they had a vision of a Militia rather than army.

Militias were not a standing army. They were formed by free citizens who had day jobs. Militias might (should) meet and train but they had real lives to go back to. The vision was that they would be well-regulated but not that they would be on payroll, lounging around in the barracks or in some free citizens’ bedroom – and the very next amendment addresses that. A standing army meant more expense which meant more taxes.

Now might you just save money on a standing army by letting them stay in the homes of citizens? Nope. The third amendment is "No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner, nor in time of war, but in a manner to be prescribed by law." During peacetime, there would be a Militia that was manned by residents who stayed in their own homes and could rally with their own guns when the need arose.

Such citizens needed the right to bear arms and the first amendment gave them that. Bring your own gun. Sleep in your own bedroom. This is a well-regulated militia we’re relying on, not a standing army collecting a monthly paycheck.

The 2nd and 3rd amendments were about how the US was to deal with breakdowns between nations and how to provide for an army or Militia. The 4th through 8th amendments were about crimes and their consequences, how to deal with breakdowns between citizens through the judicial system.

(The right to a trial by jury has a curious parallel to the Militia. Here was another volunteer citizen group called upon to fill a vital role in a democracy. Militias were a group of citizens who defended the community from outside attack. Juries were a group of citizens who administered justice to defend the community from criminal attacks from within. Both relied on ordinary citizens to do extraordinary things, to restore peace and order.)

The guys in this Militia were a substitute for the standing army that would otherwise need barracks and provisioning and regular paychecks that cost more than what Jefferson and the Democratic-Republicans wanted to pay. And they would have the right to bear arms because soldiers needed weaponry and the small government Jefferson envisioned wouldn’t buy those for them.

With that in mind, read the 2nd amendment again.
“A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”

And lest you think that I’m just making all of this up, I’ll close with a couple of quotes from Supreme Court Chief Justice Warren Burger. The first quote is from an interview of his. The second is from a piece he wrote.

"The real purpose of the Second Amendment was to ensure that state armies – the militia – would be maintained for the defense of the state."

"The very language of the Second Amendment refutes any argument that it was intended to guarantee every citizen an unfettered right to any kind of weapon he or she desires."

One of the biggest cons the NRA has played on the American people is not just that they’ve argued that the second amendment has nothing to do with militias or that militias are just any group that decides to call themselves that. It is that they’ve convinced others that an amendment that begins with the words, “A well-regulated” means that a community cannot regulate gun ownership.

Overturning Roe V Wade - the One Year Anniversary of a Decision That Allows Religious Beliefs to Be Dictated (The Rise of Catholics on the Supreme Court)

One year ago, the Supreme Court overturned Roe v Wade, a Supreme Court decision from 1973 that let a woman and her doctor choose whether to continue a pregnancy.

There are up to one billion sperm in a single ejaculation. Nobody - not even the wildest kook in your family - thinks that we should work to protect the lives of all these sperm in spite of the fact that they are human and they are alive. Similar (but less dramatic numbers) with the eggs that many women lose through regular periods. Sperm and eggs. Human. Alive. But not deserving of the respect we pay to human life.

A newborn baby is a little miracle. It is human life and nobody - not even the wildest kook in your family - thinks that it would be okay to end this new life.

Sperm and egg are garbage. Newborns are treasure.

Different people have different opinions about when the human waste of sperm and egg become precious human life. The pope and agreeable Catholics believe that the transformation from waste to treasure is at the moment of conception. Good on them. If the pope ever gets pregnant he will surely carry it to term regardless of what an awkward predicament pregnancy and raising a child in the Vatican would be for him. Others might think that 2 or 4 months into the pregnancy the human life within them is closer to the human life of sperm or egg than newborn. Good on them. They may decide to terminate the pregnancy before then and Roe v Wade quite simply said, "That's her decision."

Roe v Wade did not dictate that we should save all the sperm and eggs. It did not give license to kill newborns. It quite simply gave pregnant women the right to decide for themselves at what instant the miracle of transformation from waste to treasure takes place and act accordingly.

Because the first amendment gives us all the right to opine at length about what pregnant women should do, it is easy to confuse our right to dictate to strangers with their right to choose. Roe v Wade clarified the difference between our right to express our opinions about the most intimate, personal and - arguably - impactful decision a woman can make and the actual right to make that decision for her.

Sex can be one of the most wonderful acts one can engage in. Unless it is forced on you.
Pregnancy - for all its discomfort, stress and worry - can be one of the most wonderful states. Unless it is forced on you.

Galileo understood that the earth was orbiting the sun but given this contradicted the Bible (Joshua 10:13), the Catholic Church put him under house arrest and silenced him. The year he died, Newton was born and was to build on Galileo's insights to create calculus and physics and help to create the modern world. Descendants of the British, we Americans have kept religion a private affair rather than make it the basis for laws and science.

For centuries, the US Supreme Court had zero to one Catholics. In 2020, Amy Coney Barrett became the sixth Catholic to join the Supreme Court and shortly after, the Supreme Court overturned the decision that had made abortion a private choice rather than public law. We are back to the days of the pope's beliefs being the basis for public law.

Italy was the center of the Renaissance and lost that vibrant economic, scientific, artistic and cultural lead about the time the Church silenced Galileo. Northern Europe began the centuries long march to make religion a matter of private conviction rather than public law and leadership shifted from Italy to northern Europe. A year ago, American Catholics on the Supreme Court made a matter of private conviction again a matter of public law. History suggests that this moves us backwards, not forward.

The Economic Policies That Worked so Spectacularly in the 20th Century Are Failing Most Americans in the 21st Century

Between 1900 and 2000, a few related, wonderful things happened.

For one, the nature of work and what it meant to be a human changed. Machines provided force and humans provided knowledge. The portion of teenagers in school rose from 10% in 1900 to 90% by 2000. In 1900, the men and women who were used like machines died – on average – by 47. By 2000, men and women who used machines lived until 77. This gain of 30 years was as if every day Americans gained 7 more hours of life. For a century. Your little brother born 3 years after you could expect his life to be a year longer than yours.

Not only did people live longer but the workweek was shorter, dropping from about 60 to about 40 hours. The average American worked about 20 hours a week less but made 8 times as much. On top of that, they got to enjoy a fabulous invention that too rarely gets mentioned among the 20th century’s great breakthroughs: retirement. When you die at 47, you die working. FDR signed social security to begin providing retirement income at 65, which would give a person who lived to 77 a dozen years of retirement.

Intellectual and industrial capital – education and machinery – made Americans more productive. In 2000, incomes were about 8X what they were in 1900. So, every week 20 more hours of free time in 2000 than they’d had in 1900, each life with 12 years of retirement instead of zero and Americans made as much in one hour as they’d previously made in 8.

In no other century in history had life changed more for the average person. Ever. This was simply extraordinary.

The extraordinary policies of the 20th century seem less effective in this new, 21st century. At least for the majority of Americans.

Since 2000, this magic of more education translating into more income and more years of life continued. For the roughly one-third of Americans who got a BA. For the rest, incomes and life expectancy had begun to fall by about 1990.

Measuring expected years of life between 25 and 75, “by 2018, Americans with a BA could expect 48.2 years out of a possible 50, compared with 45.1 years for those without a BA.” At 25, Americans with a BA would probably enjoy 3 more years up to the age of 75. And while the data is less definitive beyond that, the gap seems to widen after 75. COVID seems to have widened it even further.

In the 20th century, everyone gained – particularly those with college degrees. In the 21st century, the gains mostly accrue to those with college degrees.

Angus Deaton and Anne Case have chronicled what they refer to as Deaths of Despair – lives shortened by suicides or drug and alcohol abuse. These deaths rise in regions where factories have closed and jobs have been lost to globalization and automation and where the workforce hasn’t a college degree to use to transition into new fields. But it is not just suicide that truncates life. People who lose jobs, who lose careers, report more pain, less vitality and – finally – die sooner.

As those without degrees experience lives more nasty, brutish and short than what they’d come to expect, it is little wonder that a man as perpetually outraged and aggrieved as Trump would sound to them like their voice, their president. It’s less remarkable that they might be ready to blow things up.

Our model of continued reliance upon a steady increase in knowledge workers and their knowledge is creating a new generation of haves and have nots.

For most Americans – specifically the two-thirds without a college degree – the positive trends of the last century have stagnated and reversed. An information economy that assumes perpetual increases in levels of education and gigabytes of information as a means to more prosperity and longer lives has seemed to hit its limits. Until we develop a new economy that finds a new way to put us back on a path of widespread, increasing prosperity, those who are missing out on the benefits of this information economy will only grow more bitter, resentful, and willing to blowup up a system that seems to ignore their reality rather than change it.

For a fascinating conversation between Chris Hayes, Angus Deaton and Anne Case, listen to Chris Hayes "Why is This Happening" podcast, the episode from 20 June 2023. They don't talk about the 20th century but they do explore these deaths of despair and how our economy is failing those without a BA.

A piece by Case and Deaton is here:
https://www.pnas.org/doi/10.1073/pnas.2024777118?fbclid=IwAR1ZwVfadj-KnHs-Gls_c4ma0AHmRmAEzjGY89rmdsGLuFC2ZmP4uUQ8vMo

How a Tragic Gap of 6 Days Turned into 99 More Years of Injustice - the Story of 2 Johnsons, a Civil War and Civil Rights

Sunday, 9 April 1865, Robert E. Lee surrendered, ending the Civil War.
Saturday, 15 April 1865, Abraham Lincoln died after being shot the night before.

Thursday, 2 July 1964 - 99 years after the Civil War ended and Lincoln was killed - LBJ signed Civil Rights legislation that prohibits discrimination on the basis of race, color, religion, sex or national origin.

One of the biggest tragedies of the Civil War is that Lincoln got to win the war but not the peace that followed.

The Republican Abraham Lincoln had run for reelection on a unity ticket, naming Andrew Johnson - a Democrat - as his Vice President. Johnson had been a senator from Tennessee and was the only southern senator not to give up his seat when his state seceded.

When Lincoln's assassination made Johnson vice president, Johnson made a number of concessions to the south, among other things bringing them back into the union without protection for the rights of former slaves. Furious at his betrayal of Lincoln's and the Republican party's goals, the Republican-dominated Congress impeached Johnson. He was acquitted by the Senate by one vote, narrowly escaping removal from office.

The result of Johnson giving southern states what they wanted was that many Blacks throughout the south were betrayed, their right to own property and vote denied and their rights as workers often brutally ignored. For instance, Black orphans or indigent children could be made apprentices, even against their will, to an employer until age 21 for males and 18 for females. Masters (notice this doesn't say employer) had the right to inflict moderate punishment on their apprentices and to recapture runaways. This was not what hundreds of thousands of Americans had died to create.

The sins of the Johnson who was made president by Lincoln's assassination were finally undone by the Johnson who was made president by Kennedy's assassination.

Less than one week separated Lincoln's victory and assassination.
99 years separated the Civil War and Civil Rights. 

Lincoln's assassination was one of this country's greatest tragedies and one huge reason for it is that it added a century to the inhumane treatment of our fellow Americans.

#juneteenth

Americans Have Lost Faith in Crypto

Only 6% of people who've heard about cryptocurrency are very or extremely confident in it. 80% of women say they are not confident in it, as opposed to 71% of men.

[Details here:

https://www.pewresearch.org/short-reads/2023/04/10/majority-of-americans-arent-confident-in-the-safety-and-reliability-of-cryptocurrency/

]

Crypto is an odd post-Great Recession response. Why odd? The 2008 Great Recession was the worst economic downturn since the Great Depression. Between 1933 and 1999, Glass Steagall helped to regulate financial markets while also slowing financial innovation that could so easily disrupt markets. Deregulated financial markets took less than a decade to produce the worst recession since 1929.

(And from this recession we got the most extreme elements of our current politics: the right-wing Tea Party that was anti-government and has morphed into MAGA boys and the left-wing Occupy Wall Street crowd.)

Satoshi Nakamoto in 2008 - during this financial crisis - imagined that the problem was not deregulation but instead that deregulation hadn't gone far enough. With a deep distrust of fiat money, Nakamoto claimed that algorithms could create the monetary stability that had eluded Central Banks. He helped to invent bitcoin. And of course in the 15 years since, bitcoin has been more volatile than any currencies since the Confederate dollar, more subject to wild bouts of inflation and deflation than any fiat money.

It seems that Americans have learned that crypto is less - rather than more - trustworthy than the US dollar and are moving away from it. And good thing, too. There are so many legitimate investments we can make - from exciting startups that could transform or create new markets (urban air vehicles and mRNA still seem wonderfully promising) to public investments that could change future GDP growth rates by one-half to one and a half percent a year. (A rate that could accelerate the doubling of GDP by a decade.) Some "investments" actually have a shot at helping to create a new world and some simply divert it. As it turns out, crypto had about as much to do with investing in a new world as does sports betting.

This 2023 Job Market Defies Expectations - But No One Acts Surprised

The 2023 job market is incredible.

With upwards revisions to March and April, this May jobs report adds 432,000 new jobs to the 2023 total. The average for the first 5 months of 2023 is 314,000 jobs created.

How strong is the rate of 314,000 jobs per month? It is 3.6X what it averaged from 2000 through 2019. A year with a monthly average of 314,000 jobs created would fall into the top 10 for all the years since 1939, when records began.

Four variables make job creation at this rate absurd (in a good way).
1. We began 2023 with 3.4% unemployment - the lowest it had been in 54 years.
2. The Fed has been dramatically raising interest rates. 15 months ago, their overnight rates were 0.05%. That rate is now 5.05% - its highest in 16 years.
3. 10,000 baby boomers are hitting retirement age every single day.
4. 2021 and 2022 rank first and second all-time for job creation. 12 million jobs created in 2 years. That’s absurd and would suggest that the rate of job creation might “correct” to a lower rate.

Any one of these four variables would be a perfectly plausible explanation for a slow year of job creation in 2023. And yet the economy is creating jobs at a rate that would make headlines and create buzz during FDR, Reagan or Clinton’s presidencies. (FDR – like Biden - had 2 years with a more rapid rate of job creation than 2023. Reagan and Clinton each had only 1.)

Of course, we will find a way to dismiss this and move on to the next bit of handwringing to replace our fretting about the price of eggs. And the memes will be catchy - so much better than - yawn - data.

"You People Seem to Think We Have to Start With Reality" - Living in a World Where Everything is Made Up

“You people seem to think that we have to start with reality. But we’re an empire now, and when we act, we create our own reality. And while you’re studying that reality – judiciously, as you will – we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors … and you, all of you, will be left to just study what we do.”
Karl Rove quoted by Ron Suskind in “Faith, Certainty, and the Presidency of George W. Bush, October 17, 2004.

Once upon a time, you were raised in some small place, told how the world was, and everywhere you looked you saw evidence of what you were told, all confirmation that the world was just one way.

Then everyone's world grew larger, we were exposed to other peoples and places, they invented travel, fiction, philosophies, and then science fiction, and then moving pictures and now everyone is exposed to a huge variety in lifestyles and ideas and values and can hardly escape the realization that everything is made up. We're all acutely aware at any given moment that things are one way now but they could be different. Likely will be different.

This could excite you, exhaust you, confuse you, make you open up or hunker down.

There are two choices once people get this insight.

1. Just make up and declare anything you want because, you know, everything is made up. Say that when people are offended by you, that's on them. Throw a piece of sheet metal into the air and call it an airplane. Just lie to people even when you know they know you're lying. Live by your own rules and change those depending on your mood.

Or,

2. Feel sobered by this insight that everything really is "just made up" and that making up the wrong things can leave a trail of dead bodies, broken hearts, bankruptcies, chlamydia and cynical, angry youths in your wake. Take at least as much care in "just making things up" as an architect and general contractor would in "just making up a house" that someone they loved was to live in for decades.

Freedom is a beautiful thing until it suggests freedom from consequences or conscience.

Debt Created the United States of America: Hamilton, The Constitution, National Debt and the World's Greatest Economy

Debt created the United States of America.

It was very expensive to go to war against the greatest empire in the world and newly independent colonialists ended the war with about $80 million of debt, representing roughly 40% of the $200 million total GDP at that time.

It was not just the magnitude of this debt. Before the constitution was created and approved, there wasn’t a national government. There were thirteen states but they were not united. The army was going to force congress to pay soldiers back wages after the war and this was the closest our nation has ever come to a coup. (Washington was able to head off this mutiny simply because he was, well, Washington.) In 1783, interest payments on bonds had been suspended and there was no good way to make interest payments. Again, states were real but – at this point – the federal government was fiction that still needed a constitution to become real. Fictional entities generally don’t pay their bills. The first treaty after independence was between Connecticut and Massachusetts settling a border dispute, as if they were France and Italy.

The historian James Beard made a very persuasive argument that the constitution that created the United States of America was driven by bond holders who wanted a national government that could honor its debt. Debt they held.

Collecting revenue and paying the national debt was one of the acts that made the Constitution real, that created the United States.

Hamilton was keen to honor the face value of all this debt. During the Revolution, various Americans bought bonds to help to finance the war. Some surely did it in the hopes of gain. Some did it as a show of support for this aspiring government. By the time the founding fathers were establishing this new democracy, though, most of the debt had been devalued to about 10 to 20% of its face value. Nobody really expected that it would be paid back fully.

Hamilton, though, thought that by honoring the debt he could do a variety of things – chief among them creating a financial system to encourage investing and early manufacturing and he saw the credibility of this new government as key to its credit and financial system. He pushed for valuing the debt at face value, bringing the value of existing bonds from 10 to 20% of their face value to 100%. He saw how debt could literally become a foundation for a modern economy.

Who voted for the new constitution that would create a federal government? And national taxation that would allow this new country to pay back its debt? Bond holders. Only 42% of the Senators who did not hold bonds voted to approve this new constitution. By contrast, 80% of the Senators who held bonds voted for the constitution, voted to create these United States. This vote – that literally established the United States – was biased by those who had the most to gain financially from creating a United States. Because a key part of this new constitution was the ability to tax and spend at a national level. This increased the value of bonds, making them worth 5 to 10X as much as they had been.

During the war, it was states that incurred the debt. The United States did not exist. One of the chief reasons for creating a new nation rather than simply leaving the states independent of one another was to consolidate the debt that states could not repay.

The Senators who helped to create Hamilton’s financial system that was embedded in the constitution made a great deal of money voting for it. But so did the country, creating a financial system that is now the most influential in the world.

Hamilton saw debt as a foundation for a great financial system, borrowing from the British model. In this he was very much aligned with George Washington. The Bank of England had been founded in 1694 and was to become the model for most central banks, a catalyst for the industrial revolution. Curiously, George Washington remained a stockholder in the Bank of England throughout the American War of Independence. Unsurprisingly, Washington approved the first Bank of the United States.

In Hamilton’s mind, taxes, debt, banking and industry were all of a piece. Taxation could finance interest payments on the debt. The debt could be used to create bank stock, something against which banks could issue banknotes and those banknotes could be used to finance industrial stocks, creating a manufacturing economy. Hamilton was one of the few founding fathers who really understood banking and finance, how debt itself could be a valuable asset.

Hamilton’s vision was merited. The US has never defaulted on its debt - has always honored the full face value of its bonds - and is the largest, most dynamic economy in the world and in history. (Russia, by contrast, has always defaulted before any 30-year bond has been paid back and even today about 20% of its population has no indoor plumbing.) And while Hamilton died before he could see it, the US did surpass the UK as the greatest industrial power in the world. And except for one year in its long history, the US government has always held debt since. And continued to prosper.

The United States since its founding has held debt. Honored that debt. And prospered. Just like it was designed to do from the moment our founding fathers first created and approved the constitution that first created this nation.

How Did the Party of Lincoln Degenerate Into the Party of Trump?

How did the party of Lincoln degenerate into the party of Trump? Trump who was born rich and presided over years of peace and prosperity punctuated by a dozen angry tweets every day. The man who claimed to be the most persecuted politician in our nation’s history. Lincoln who was born poor and was engaged in civil war for the entirety of his presidency but left us with some of the most inspiring and hopeful words of any president. Who became the first president to be assassinated. The stark contrast between them and the parties they led may point to a coalition of groups alienated by the transformative policies of three of America’s most influential presidents.

Thomas Jefferson was probably a deist and was (quietly) dismissive of Christianity. Jefferson’s University of Virginia was the first university in the West that was not initially founded as a school of divinity. He was in France as the American ambassador while the constitution was being written and approved. Coming in late to the debate, he argued that the constitution needed a Bill of Rights. The first of these ten amendments, inspired by a similar provision penned by Jefferson himself for Virginia's constitution, ensured the separation of church and state. “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” Fast forward to the era of Reagan, and we find a stark contrast. Reagan appealed to religious conservatives by pushing for an amendment endorsing prayer in public schools, thus inserting religion into public education, a domain which Jefferson fought to keep distinct.

Abraham Lincoln was an advocate for a new kind of industrial economy. Despite his lack of formal education, Lincoln’s fascination with the potential of machinery to revolutionize the economy led him to promote industrialization. But he didn’t see investments and their returns as something to be limited to private citizens and corporations. Lincoln championed the importance of government investment in both capital and education, leading to the establishment of the transcontinental railroad and Land-Grant colleges. The transcontinental railroad he authorized was completed in 1869 and it created a national economy that stretched from coast to coast. Before 1870, the American economy grew about 0.45 percent a year. After 1870, it began to grow about 2.1 percent a year – a stunning difference. (How stunning? At 0.45%, GDP takes about 160 years to double. At 2.1%, it takes only 34 years to double.)

To finance these initiatives, Lincoln instituted the IRS to administer the country’s first tax on income. The narrative of government investing in its citizens through taxation - particularly of those with higher incomes - has faced opposition in the last generation of Republicans, who have promised to reduce government spending and investment on initiatives aimed at poverty alleviation, public schools, and infrastructure. And modern Republicans continue to enact cuts to the IRS that make it more difficult to accomplish the goal of tax collection that Lincoln first defined.

No president experimented more boldly with initiatives to create jobs and to enhance the value of labor than FDR. He gave labor unions more power. He invested huge sums in R&D and education. He made workers more secure with unemployment insurance and social security. He strengthened capital markets but not at the expense of workers. In the few decades after FDR’s presidency, the new policies he’d instituted fed economic growth even more dramatic than the incredible growth that followed Lincoln’s presidency. LBJ took these policies even further, working to give equal opportunity to women, minorities and immigrants whose inclusion made America’s workforce a leader in diversity, productivity, and innovation.

Eisenhower, the first Republican president after FDR, largely continued with FDR’s policies. He wrote “Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. … Their number is negligible and they are stupid.”

Since Nixon, though, the Republican Party increasingly aligns itself against the socioeconomic reforms introduced by Franklin D. Roosevelt.

The policies of Jefferson, Lincoln, and FDR each led to an era of unprecedented economic growth, each time creating a level of prosperity unseen before in human history. Yet, the pushback against their policies has not disappeared. The religious conservatives, who were skeptical of Jefferson's clear separation of church and state, have found a home in today's Republican Party. The fiscal conservatives, resistant to Lincoln's vision of the government as a significant investor in public projects, are – weirdly – now a prominent and vocal part of the GOP. Social conservatives, disgruntled by the increasingly multicultural fabric of a society and economy dependent on not just men but women, minorities, and immigrants, were drawn to Trump's unapologetic rhetoric.

So, how did the party of Lincoln - arguably the most progressive political force of its time - transform into the party of Trump? It seems to come from a coalition of those resentful of Jefferson's secularism, Lincoln's faith in public investment, and FDR's commitment to empowering labor. These three presidents led us away from a past that many conservatives now idealize. The GOP that first emerged as a party able to create a new, prosperous future has become a coalition of those yearning for a return to a perceived golden past, wishing to unravel the legacy of America’s three most influential presidents.

6 Presidencies, 4 Economic Measures - Data on Inflation, Per Capita GDP Growth, Job Creation and Change in Annual Deficit

 Some of you like data that helps to inform your worldview. This post is for you. Here is data comparing the economy during six presidencies by four measures: inflation, per capita GDP growth, jobs created, and change in annual deficit.

How Kevin McCarthy's District and its Economy Might Explain Why He So Casually Threatens to Blowup Capital Markets

House Speaker Kevin McCarthy is toying with the possibility of blowing up the global financial system by refusing to raise the debt limit. It's a terrorist act that threatens to eradicate tens of trillions of dollars in assets in an instant.

McCarthy is a Californian but he's from an inland district more likely to employ farm workers than programmers. I think this may be part of why he feels like a functioning capital market is less important than, say, other California House representatives from places like Silicon Valley or any districts where they support rational thought.

The biggest employers in McCarthy's district (outside of the hospitals) are farms and oil companies. These are industries that rely on land - natural resources like oil, water, and sun - more than knowledge workers and generally trying to resist innovation. The value of an oil company could rapidly be halved with a breakthrough in new technology like fusion or solar energy. It is certainly possible that McCarthy sees financial markets as engines for disruption, financing the very technologies and industries that could obsolete jobs in his district. Why worry too much about the capital markets that seemingly worry so little about the industries that your district is home to?

The biggest employers in Silicon Valley are information companies like Apple, Meta (Facebook), Intel, Alphabet (Google), Cisco, and Adobe. These companies are heavily reliant on well educated knowledge workers from all around the world, people intent on developing new products. The value of one of these information companies could rapidly be doubled with a breakthrough in new technology. People and their representatives here rightfully see the plot to blow up financial markets that funnel money into a constant stream of startups and inventions as a threat to their economy.

McCarthy's casual disregard for international capital markets is a weird reminder that as capital markets have become more disruptive, the Republican Party has morphed from its pro-capitalists origins. Loudly anti-communist and now anti-capitalist as well, the Republican Party has become a refuge for anarchists who protest stifling regulation from government and the disruptive progress of capitalism alike, seemingly longing for an imagined past of in which capital markets created stable jobs and governments didn't funnel any tax money into unworthy people or programs.

For those of you from outside our great state of California, here are some comparisons from Kevin McCarthy's district and the 3 districts that comprise most of Silicon Valley. The districts most appalled at McCarthy's tactics have double the portion of college educated, about 3.5X as many households making more than $200k, and more than 3X as many foreign-born residents. Oh, and a voter in Silicon Valley is 2.5X as likely to vote for a Democrat rather than a Republican who might think it sport to eradicate trillions in global assets as a tactic to force cuts in funding for food stamps.

America's Puny Investments in the Future as Stark Contrast to Investments of our Greatest Presidents Jefferson, Lincoln, and FDR

1Q GDP equates to annual GDP of $26 trillion.

As a component of that, non-defense federal government investments are 4% of private investments.

That's incredibly puny if the game is to grow the economy.

Thomas Jefferson wanted a smaller federal government. (3rd president of the US, he died considering Virginia his country.) Yet even Jefferson was willing to invest in the future. Jefferson spent 2.5X the annual federal budget to make the Louisiana Purchase - an amazing investment for Jefferson (that represented needed financing for war for Napoleon). In the two generations after Jefferson's presidency, the US grew faster than any country in history.

Lincoln not only waged the costliest war in the nation's four score and seven years history, at the same time he funded an incredibly expensive transcontinental railroad and land grant colleges and other major investments. In the two generations after Lincoln's presidency, the US economy grew faster than any economy in history.

FDR increased government spending more than the GDP of most nations, with everything from social security and unemployment insurance to massive investments in the factories and science needed to win WWII. In the two generations after FDR, the US economy grew even more than it had after Lincoln's presidency.

Outside of defense, our national government is investing an amount that Jefferson, Lincoln, and FDR would consider rounding errors. It shows a pathetic lack of interest in future potential and suggests that Americans are more driven by fear than hope.

RWorld's 3,000th Post - We Make Our Institutions and Then They Make Us

We make our institutions and then they make us.

The political crisis we face is so pervasive that it is almost invisible: Americans have lost confidence in institutions. Every institution. Church. State. Media. Schools. On average, the portion of Americans who have confidence in institutions has fallen about 60% since the late 1970s. It's tough to sustain a society in those conditions.

Right now we have two response to this crisis. One is the Trump response of tribal impulses, cynically decrying every expert and the institution he rode in on as corrupt or misguided.

The MAGA crowd's take on institutions was articulated by Rush Limbaugh in 2009.
"So, we have now the four corners of deceit, and the two universes in which we live. The universe of lies, the universe of reality, and the four corners of deceit:
government,
academia,
science, and
the media.
Those institutions are now corrupt and exist by virtue of deceit.”

Rejecting the institutions that define our modern world is akin to embracing a Hatfield and McCoy kind of world where you can't do much more than live like early Americans from a time when it took about 90% of the population to feed us. It is a world that excites survivalists. 

That's a crazy path championed by crazy people.

The other option currently offered is essentially to pretend that these institutions are fine and people should appreciate them more. That actually works far better than societal collapse but it seems to consistently succeed at making more people more angry. Life is pretty good in this world but a growing percentage of people fail to believe that.

There is a third option that no one seems to be talking about.

Thomas Jefferson was part of radically redefining politics and government in 1800. Lincoln did the same about 1860, and FDR in the 1930s and 1940s. Along with Washington, these three presidents consistently rank the highest in historians assessment of great presidents. 

One thing that defined them is that they had far less regard for tradition than they did for future potential.

Our next great president will be the one who creates a way to redefine our institutions so as to restore trust in them and to realize our own potential, showing little regard for institutional tradition and a great deal of regard for institutions' ability to shape our potential. An inventor creates or improves a product. An entrepreneur creates or improves an institution. The next president to successfully change our country as much and as well as Jefferson, Lincoln, and FDR will popularize entrepreneurship, leading to a change in our institutions and our experience of them. Among the many shifts this will represent is a world in which our institutions conform to our potential rather than requiring that we conform to their traditions and constraints.

It won't just require someone who is looking more to the future than the past. It will require a shift in power akin to what Jefferson and the founding fathers made. By 1800, the US had shifted power from aristocrats to the people. (Okay. That admittedly is the 30,000 foot view of this nation's founding but still contains key truths.) This next great leader will do something similar within the institutions we rely on, shifting the power over shaping them from legislators who see them as something to be built once into the customers and employees using them to be continually shaped. Like previous, great democratic changes, this will shift power from elites to everyday Americans, making our democracy more democratic. 

Why Bitcoin is a Bad Investment and Futures You Should Buy Instead

Markets will eventually come back from last year's dismal performance. For those of you tempted by bitcoin rather than stocks, here are some things to consider.

One, bitcoin can never scale as a medium of exchange. It is scarcely able to process the number of transactions you'd need for a shopping mall much less a national or global economy.
The VISA network can process 24,000 transactions each second.
Bitcoin can process 5 to 7. It is not designed to support actual transactions and will never become a widely used medium of exchange.

So if it is not viable as a currency, can it be considered an asset? No.
If you buy a share of stock, you get a share of its future earnings, or profits. Bitcoin has no profits, represents no claim on any asset or wealth.
If you buy a bond, you are buying a right to interest payments and / or principle on debt held by a government or company. Bitcoin offers no interest payments or future payoff.
Assets have underlying value. Bitcoin does not.

Well, is it not - at least - a form of money or legal tender?
Again, no. The lowly dollar is legal tender. What does that mean? US dollars have written on them, "This note is legal tender for all debts public and private." If I owe you $1,000 for the really fancy shoes I bought from you, you are obligated to accept my $1,000 in currency or VISA transaction. It is the law. No one is obligated to accept your bitcoin for payment any more than they're obligated to accept a shiny rock or curious leaf you found on your walk.
Bitcoin is not designed to support transactions and thus replace currency, is not an asset and is not fiat money people are obligated to accept.

And finally - most importantly - it does nothing to move us towards a better future. One of the things I love about stocks is that I'm buying a future. 3d printing could enable companies to manufacture one custom part as cheaply as they might manufacture one of millions of the same part. That is a very cool future to buy.

mRNA promises not only vaccines for new viruses but the treatment of genetic diseases, cancer immunotherapy, and the development of personalized medicine that are tailored to your personal genetics. That, too, is a very cool future to buy.

Urban Air Mobility promises transportation that - among other possibilities - allows vehicles to travel above rather than through cities. It could effectively increase traffic through cities without any new construction, dependent on advances in advanced navigation and propulsion rather than billions of dollars in construction costs through and around existing buildings and infrastructure.

These and other possibilities are all uncertain investments and any specific investment you make might be in the wrong company even if it is the right idea. (In 1914, there were more than 250 automobile companies. Even if you KNEW that cars were going to be a big deal, you could easily lose on investments in the industry.)

When you buy bitcoin, you are not investing in any future. You're just hoping that someone comes along after you willing to pay more than you did. Given bitcoin has no intrinsic value and serves no purpose, the parade of people willing to pay more than the last guy is going to end soon.

And that's a great thing because there are so many exciting possibilities that need and deserve capital, futures waiting to be realized that actually make life better. The $3 trillion put into crypto could have been put into real technologies and companies that actually promise a better world. What you're trying to do with any investment is buy a future in which you're more financially secure and the world has better products or services at better prices because of the investment you made in a better future. Bitcoin is not that. So many other ventures, technologies and companies - by contrast - might be.