Why the Richest States Are Voting for Biden and the Poorest States Are Voting for Trump: A Study in Economic Policy Cause and Effect

Ranked by personal per capita income, 8 of the 10 highest income states will probably go for Biden and 7 or 8 of the 10 lowest income states will probably go for Trump. 

Why are the richest states so very Democratic? It is partly cause and partly effect.

First the cause. Intellectual capital has surpassed industrial capital as the source of wealth and income in this information economy. The communities around the various University of California campuses, for instance, have become host to a lot of exciting companies that have spun off from the staff, students and studies on those campuses. Democratic states invest more in the science and education that create jobs and wealth.

The only two states in the top ten by personal per capita income that Trump will win are Wyoming and Alaska. These are land-based economies, rich with oil, mines, livestock, grains, and forests. And of course, these economies are not the kind that create jobs; Wyoming's total population is 580,000 and Alaska's only slightly more at 730,000.

The economies in states like Connecticut and Massachusetts depend on a heavy public investment in schools and research, classic Democratic policy prescriptions. 42% of Massachusetts has a BA; only 26% of Wyoming does. By contrast, Wyoming and Alaska's economies depend on continued subsidies to oil and gas and lax regulation on greenhouse gases, classic Republican policy prescriptions.

Every year, more people can profit from technology advances in computing and genetics or new materials, the sorts of research and industries that spin off from universities. An oil well is zero-sum, though. If I own it, you don't. Meanwhile, knowledge builds on knowledge. You're going to hear more about AI and genetics in the next decade, the confluence of two research areas that promise products that might analyze patterns in your genetic code that make you more susceptible to Alzheimer's, for instance. This does not come at the expense of genetics or computing research but instead makes both more valuable. Oil wells and mines are zero sum but research and development literally stimulate more research and development; knowledge creates more knowledge.

Folks in places like Wyoming see the world as zero-sum because their economy actually is. The state can't even sustain a population the size of the cities in LA county that you've never heard of. Folks in places like Cambridge, Massachusetts tend to be more win-win because their economies actually lend themselves to that. If you give me an acre and I give you an acre, we leave the transaction unchanged. If you give me an idea and I give you an idea, we may both leave better off. You better understanding my AI technology and me better understanding your genetic analysis might enable us to collaborate to create a new industry with trillions in wealth and millions of jobs.

Zero-sum communities are also more susceptible to conspiracy theories that point them towards threats, that turn complex phenomenon into simple us vs. them narratives, a stark contrast to the pragmatic relationship knowledge workers in the information economy have to reality and theories about it.

So that's the cause. Wealth, income and jobs in the modern economy are increasingly the product of intellectual capital and the communities like New York and California that do the most to invest in it are the ones that will create the most jobs and highest incomes.

What is the effect? Well, richer people are less tolerant of low-quality of life. A poor person in West Virginia who lives near a mine doesn't have the resources to take on a business that endangers their child's health. Meanwhile, some mother in Santa Clara, CA - where per capita income is $106,000 a year - is not about to put up with risks to her child's health ... and she and her neighbors have the resources to fight a business that would put their children's health at risk. It is true that blue states have more regulations. Why? They are democracies and the residents of those states demand more regulations. There is little sense in making twice the national average income and then having to listen to the loud noises of a jack hammer at 4 AM or breathe noxious fumes from a factory.

Weirdly, though, the US rewards states unable to create jobs with more political power. The 21 least populous states have 42 senators and less population than California with its 2 senators. What does that mean in practical terms? If your policies can't create jobs to grow your population, your political policies have more influence. This may be the biggest design flaw in our current political system.

This design flaw is slowing the creation of jobs and wealth and improvements to quality of life. It is a weird thing to give more influence to less advanced communities, as if we were bringing in economic advisers from Afghanistan to decide what to do with Manhattan.

It is a weird election. The 30 states in between the top and bottom 10 are debating whether to follow the lead of the country's richest states - states that include Silicon Valley, Wall Street and the nation's top universities - or rural Mississippi, West Virginia, Kentucky, and Alabama. You might think that such a debate would have an obvious outcome. It does not. And that may be the weirdest thing about this very weird year.

Culture as Play - from Shakespeare to "I Shot the Sheriff"

Baby boomers made Clapton's cover of Bob Marley's "I Shot the Sheriff" #1 in 1974. Now they’re offended that millennials are protesting police brutality.

Culture makes for weird politics.

William James was one of the first Americans to argue for multiculturalism. Like his brother Henry in England, William was a bestselling author (William wrote the nation’s first psychology textbook and helped to invent pragmatism). At Harvard, he helped to define the university that granted various degrees, each offering a different way to look at the world, a different specialty. He also thought the term multiverse made more sense than universe.

Clark Kerr, who helped to define and lead the University of California system, argued that it was better to think of California’s college and university system as a multiversity rather than a university. Not only would it grant such a wide variety of degrees and guide people through a variety of ways to think, but Californians would use their college system for a wide variety of reasons. Many, not one; multi, not uni.

The one sustainable solution to the question of culture is, of course, multiculturalism. Everyone goes to China Town or Little Italy for the food and some come back with their gods or philosophy. There is no one way to be an American any more than there is one American food.

It is as absurd to argue for one culture as it is to argue for one personality. Culture is a fabulous invention and to evoke it is to manipulate an audience. One of the reasons Shakespeare’s plays so captured Elizabethan England is because people were coming into the city in unprecedented numbers and the stage gave them a place to study and learn the roles society might expect them to fill. 

Shakespeare had a huge influence on culture – something we take seriously – and yet he defined culture through a marvelous invention we call the play.

About 20 years after Clapton's #1 hit, Ice T wrote "Cop Killer." It was wildly controversial but it got people’s attention. The album went gold and made Ice T a star. Ice T’s biggest role, the source of most of his entertainment income, did not come from music, though. It came from television. For 20 years he has played a detective on ... Law & Order. Ice T isn't really a cop killer and he's not really a cop. 

Culture is defined by people at play and what politicians have learned is that the easiest audience to play are voters.

When Trump tweets LAW & ORDER he - like Ice T - could be mocking it as the outlaw he loves to play, the president who has had 7 advisers (including his personal lawyer) arrested for felony charges, the man who defends a 17 year old killer or could – again like Ice T –actually be calling for a calming of the turmoil that so worries his older supporters. (You remember them, the ones who sing along with Clapton.) Like Ice T who plays outlaw or cop depending on which one pays the most, Trump plays outlaw or peacekeeper depending on which one gets him the most attention or votes. While Ice T and Trump are playing roles, their audience takes them seriously.

Joe Biden Speaks About Violence and Fear in Trump's America

Some excerpts from Joe's speech today.

I’m going to be very clear about all of this, rioting is not protesting. Looting is not protesting. Setting fires is not protesting. None of this is protesting. It’s lawlessness, plain and simple. And those who do it should be prosecuted. Violence ... divides instead of unites, destroys businesses, only hurts the working families that serve the community. It makes things worse across the board, not better.

One of Trump's closest political advisers in the White House doesn’t even bother to speak in code, just comes out and she says it. “The more chaos, violence, the better it is for Trump’s reelection.” Just think about that. This is a sitting president of the United States of America. He’s supposed to be protecting this country, but instead he’s rooting for chaos and violence. The simple truth is Donald Trump failed to protect America. So now he’s trying to scare America.

And I find [what Trump and Pence say] fascinating. “You won’t be safe in Joe Biden’s America.” And what’s their proof? The violence we’re seeing in Donald Trump’s America. These are not images of some imagined Joe Biden America in the future. These are images of Donald Trump’s America today. He keeps telling you if only he was president, it wouldn’t happen. ... He keeps telling us that he was president you’d feel safe. Well he is president. Whether he knows it or not, and it is happening, it’s getting worse. And you know why? Because Donald Trump adds fuel to every fire.

Look, if Donald Trump wants to ask the question, “Who will keep you safer as president?” Let’s answer that question. First, some simple facts. When I was vice president, violent crime fell 15% in this country. We did it without chaos and disorder. And yes, we did it with democratic mayors in most of the major cities in this country. The murder rate now is up 26% across the nation this year under Donald Trump. Do you really feel safer under Donald Trump?

Donald Trump’s role as a bystander in his own presidency extends to the economic plan and pain. The plan he doesn’t have and the pain being felt by millions of Americans. He said this week, and I quote, “You better vote for me, or you’re going to have the greatest depression you’ve ever seen.” Does he not understand and see the tens of millions of people who’ve had to file for unemployment this year so far?

Our current president wants you to live in fear.

Trump has sought to remake this nation in his image. Selfish, angry, dark, and divisive. This is not who we are. At her best, America’s always been, and if I have anything to do it, it will be again, generous, confident, an optimistic nation full of hope and resolve. Donald Trump is determined to instill fear in America. That’s what his entire campaign for the president has come down to: fear. But I believe Americans are stronger than that. ... Fear never builds the future, but hope does. And building the future is what America does, what we’ve always done. In fact, it’s what we have done best and continue to do best.

Biden's August 31, 2020 speech from Pittsburgh here.

Kamala Harris: Created by Clark Kerr's Vision of a Knowledge Economy

In the early 1900s, the Democrats began to shift from the party of farmer to the party of labor. In 1800, only 20 percent of the workforce was employed by someone else; by 2000, over 90 percent were. [1] The modern corporation was defined in the mid-1800s. As its employees grew in number, so did their political influence.

When the Democratic Party was first defined by Jefferson, it was the farmer’s party. As farmers fell as a percentage of the workforce, the Republican Party emerged – and dominated – as the capitalists’ party. But those successful capitalists who were creating new factories were hiring labor that often found itself at odds with the owners. As the Democratic Party shifted its identity from the farmers’ party to the labor party, it dominated American politics from 1933 to 1969.

In 1972, labor and politics changed. At the 1972 Democratic National Convention, the party had quotas for women, young people, and minorities but none for union labor. At that point, labor began its split into two camps: the blue-collar labor on factory lines that was both at odds with and dependent on the capitalists who built the factories and made the investments in industrial capital that made them productive; and the white-collar labor in cubicles wearing pocket protectors and increasingly reliant on the novel technology of computers. By appealing to the blue-collar workers reliant on industrial capital, Republicans like Nixon and Reagan won over a group the Democrats had long had. By appealing to the white-collar workers, Democrats were helping to create a new economy but were floundering as a national party.

Without understanding how Kamala Harris represents knowledge workers and this new economy, it is hard to understand how she is different from Joe Biden, how she is a different kind of Democrat.

California has led before. Blue jeans, Hollywood, and Silicon Valley began here. So did the Republican resurgence that ended Democrats’ long dominance in DC. Between 1933 and 1969, Democrats had control of the White House and Congress 72% of the time. In 1968, 1972, 1980 and 1984, two Californians – Nixon and Reagan - won the presidency in landslide victories, marking an end to Democratic dominance. What Nixon and Reagan represented was the Republican Party gaining the blue-collar workers who had for so long identified as Democrats.

As blue-collar workers rose in prominence a century ago, they changed politics. White-collar workers are now rising prominence and they, too, are changing politics. Today one of the simplest predictors of whether someone will vote Democratic is the question of whether they have a college degree. A recent – and typical – poll showed that only 39% of whites without a college degree would vote for Biden but 64% of those with a degree would, a stunning shift of 25 points.[2]

Harris represents a very different kind of labor than did her fellow Californians Nixon and Reagan from an earlier generation.

Trump won Joe Biden’s home state of Pennsylvania with 48% of the vote. In the California counties where Harris spent her childhood, he won only 17%. In California, Trump’s campaign promises sounded like threats. Trade wars with China? A wall to keep immigrants out? It is connection to and not protection from the rest of the world that has helped California to thrive. A regional Hollywood is a playhouse. A regional Google search engine is the yellow pages. Silicon Valley is capital of the worldwide – not the nationwide - web.

Harris’s parents met as grad students at UC Berkeley in the 1960s. While the Midwest was enjoying its time of manufacturing dominance, the Bay Area was placing its bets on a new economy, one Harris’s parents were part of. It is not a stretch to say that Harris is a product of Clark Kerr's vision of a knowledge economy that helped to define the UC Berkeley that brought her parents together from such distant places.

In 1960, California governor Pat Brown signed legislation that made California the only state in the nation to offer free education from kindergarten through grad school. Clark Kerr – who headed the committee that drafted the plan Brown turned into law – was head of the University of California and had a theory about economic progress. In the same way that the railroad in the late 1800s and the automobile in the early 1900s had reshaped the economy, he thought that the late 1900s would be transformed by a knowledge economy.

In the decades after it began investing in Kerr’s vision, California became home to Silicon Valley. Intel was founded in 1968, Apple in 1976, and Google in 1998. California’s early investment in education paid off with millions of high-paying jobs and trillions of dollars in new wealth.

Harris’s father was an economics professor at Stanford, her mother a researcher at UC Berkeley. Median household income in the two Bay Area counties where Harris spent her childhood is now about $119,000 a year. Joe Biden was born in Scranton, Pennsylvania where median household income is now about $39,000. Biden comes from a generation of labor that needed protection from capitalists. Harris comes from a generation of labor who are the capitalists. The Bay Area is defined by returns to intellectual – not industrial - capital. On two campuses six miles apart – Google and Facebook – median employee pay is $200, 000 and $240,000. Billionaires get a lot of attention but stock options have made multi-millionaires out of thousands of west coast employees. To not understand how labor changed from the early to late 1900s is to not understand the Democratic Party that now champions the information economy dependent on global markets, immigrants, and big investments in education and research.

In 1969, per capita personal income in Santa Clara County was 24% higher than the national average. By 2018, it was double. Clark Kerr was right about the importance of the knowledge economy and while the Bay Area and Scranton are in the same country, they are in different worlds. In Harris’s two childhood counties[3], 77% of people over 25 have a Bachelors degree. In the county that is home to Scranton, only 22% do. In Harris’s counties, minorities and immigrants make up 45% and 28% of the population; in Biden’s home county they are only 27% and 10%.[4] The Bay Area’s highly-educated, diverse and cosmopolitan population thrives in the global economy while Scranton struggles.

When the US was founded, it was a nation of farmers. 80 to 90% of the workforce was in agriculture. In the late 1800s and early 1900s, the workforce moved from farms to factories and investments in industrial capital made regions prosper. By the late 1900s, it was investments in creating intellectual capital that made regions prosper.

In 2010, Harris won her first state-wide election in California. In 2020, she could share a victory with Biden in the nation’s most defining election. If knowledge workers represent the future of the American economy, Kamala Harris could represent the future of Democratic Party: educated and cosmopolitan.

California was one of the early investors in Kerr’s vision of an economy dependent on knowledge workers but it is not the only one. States that enjoy a return to investments in education lead the nation in income. Biden and Harris will win the eight states with the highest per capita income. Trump will probably win all but one of the eight states with the lowest per capita income. This has nothing to do with the people in these states and everything to do with past decisions about whether to heavily invest in industrial or intellectual capital. It is the states that made relatively heavier investments in the intellectual capital that now lead in incomes.

Biden will likely bring compassion to communities like Scranton that are struggling to transition out of an old economy dependent on industrial capital. Harris will likely bring a vision of what is possible if communities place their bets on the information economy.

Biden’s compassion promises to alleviate poverty; Harris’s Bay Area experience promises to enhance prosperity. It is the latter that could define the Democratic Party for the next generation.

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[1] Charles Perrow, Organizing America: Wealth, Power, and the Origins of Corporate Capitalism (Princeton, NJ: Princeton University Press, 2002), 1.

[2] https://poll.qu.edu/national/release-detail?ReleaseID=3666

[3] Alameda and Santa Clara

[4] https://www.census.gov/quickfacts/fact/table/paloaltocitycalifornia,berkeleycitycalifornia,alamedacountycalifornia,santaclaracountycalifornia,scrantoncitypennsylvania/PST120219

Underground Tunnels and News Feeds - how the right exploits the parallel worlds we live in

My mom was having trouble with her computer about 4 years ago. I eventually got things restored and launched her Facebook. (She rather charmingly assumed that when a friend posted they had sent her a personal note, so found it exciting.)

Conceptually I knew part of the genius of Facebook is that each one of us has our own Facebook. First of all, everyone has different friends and subjects to follow. Then our comments and likes determine who gets to the top and who we rarely see. In place of the daily newspaper we once shared, we now have a minute by minute privately customized publication - and they're wildly different.

My mind was boggled by how different hers was. First, it had page after page of seemingly random posts. Random as in the URLs they pointed to were literally strings of words. None were Newsweek.com or sandiegouniontribune.com. And the posts were a mix of weird allegations ("Hillary is sick!") to weird "news" ("Melania wears beautiful summer dress" or "The First Lady's dress makes her arms look so masculine!"). None of it was news as I think of it. It was all praise or criticism of outfits or manners and the occasional distortion or outright lie. Through this window on the world, mom saw the Obamas as an embarrassment, Trump as powerful, Melania as beautiful and Hillary as a threat.

Facebook is market driven. One of the many things that I love about markets is that they are driven to create exactly what you want. You want a sandwich made with a croissant? We got you. Rye? Check. English muffin? Fine. You don't like reggae or hard rock but you do like the fusion of those two? Listen to Dread Zeppelin. (Seriously. Listen to Dread Zeppelin.) Markets treat every one of us as unique and the mix of things I consume is different from the things that you do. The same is true of us as producers, as employees. Specialization means that we all bring something different to the market in terms of what we make and take. It's a beautiful thing.

But politics is not about the thousands of ways each one of us is unique. It is about the dozen or so things we share in common. We have to agree on where the road will be built, what we teach in schools and who gets public assistance and who does not. What is brilliant and beautiful in markets is divisive in politics.

Facebook also enables conspiracy theories. Yesterday a friend who is a fan of Trump sent me a link to an article about 35,000 children released from tunnels under New York. As if this were a real story. The link was to a website with the name operationdisclosure1. It is a complete nonsense story, totally fabricated, and easily debunked, offered as proof that Trump is a hero and the world is full of evil from which he will save us. These are posts that only show up in the feed of people who've already shown their willingness to believe such things - so many of us don't even know about them.

QAnon has emerged as a weird amalgam of conspiracy theories. Folks who like or react to stories about 35,000 children coming out of underground tunnels in big cities are likely to get a stream of QAnon conspiracies. One of the common theories is about the deep state, the notion that the government is actually run by nefarious civil servants intent on stealing your money, guns, and freedoms. Just as he has done with the 35,000 children living underground, Trump is intent on freeing us from the imprisonment of this deep state.

If you are not fed a stream of nonsense, deep state means nothing to you. If you are steeped in QAnon, use of the term "deep state" is a sign that "you're one of us." You get it. It is like a random line from a song or video game or movie; meaningless to folks who are not a fan and a sign that "you're one of us!" to the folks who are. And Trump says "deep state" a lot.

Yesterday Trump was asked about QAnon. He said only positive, if vague things. A couple of people on my post about this are now arguing that he didn't really endorse QAnon. Technically they are right. (Trump didn't technically say Obama and Harris were constitutionally unqualified for office ... he just quoted "some people" as claiming they were born elsewhere. Repeatedly. Same with calling COVID a hoax or masks as useless or snake oil a sure cure for the pandemic.)

You have to know that everyone has a different media diet to understand what they hear. One person is being fed continual QAnon nonsense about the "deep state" that is working against Trump. Another hears nothing about this. When Trump says, "Deep State," it just sounds like nonsense to the person whose feed isn't full of QAnon garbage but is confirmation of the veracity of QAnon to the folks who feed on it. Millions of people are fed a steady diet of conspiracies and told that credible sources are fake news. Trump regularly affirms to his fans that this world is the real one, the only one they can trust. And their feed is a daily confirmation of that.

Understanding the Republican and Democratic Party Divide Today as a Divide Between an Industrial and Information Economy

The last time I was on Google's campus, I was training 7 project managers. At one point it came out that 6 of the 7 had gone to Saturday school for years to study language and get religious / cultural education. Mandarin, Hindi, Hebrew, Nubian-Muslim (the Nubian tribe is divided by the Egyptian / Sudanese border) and Korean are five of the six that I remember. Another time, I was in a room with about a dozen engineers at Intel and every single one had a story about green cards.

That sort of diversity is pretty normal for the tech and pharmaceutical companies I work with. If you are hiring and want the best and brightest, you hire from around the world. Even if China and India's universities turn out great engineers at half the rate of US universities, they will still turn out two times as many given their populations are four times ours.

One thing that I've concluded from decades of working with engineers and scientists is that creating a team able to win in a global market without first or second-generation immigrants on your team is about as tough as trying to win MLB, NBA or NFL championships without players of color. Given how talent shows so little regard for race or nationality, you’d be a fool to exclude any group if you’re serious about conquering a global market or world championship. You’re not going to find the talent you need within your local zip code.

Anti-immigrant and free-trade nationalists inevitably argue for the importance of an industrial economy. Why? Industrial capital is in a place. By contrast, intellectual capital is in people’s heads and hands. You can put up walls around industrial capital. Look at a place like North Korea to see that walls are an obstacle to the creation of intellectual capital – something created through the exchange of ideas rather than their suppression.

The two economies - industrial and information - have been created by two kinds of politics. And that brings us to the divide we have today.

The Republican Party under Trump is championing a set of policies that are fitting for an industrial economy. People who consider themselves part of this economy feel threatened by immigrants, free trade and universities.

The Democratic Party - as it has been since about the time of Kennedy or Clinton - has a set of policies that are fitting for the information economy. People who consider themselves part of this economy see immigrants, free trade, and universities as essential.

To not understand the sharp divide in American politics is to not understand how much of the cultural war actually comes out of a perception of which economy livelihoods depend on. Whether something is essential or a threat is a question of which economy people consider themselves members of. And these two groups bring about as much passion to the topic as one might expect of people who see their livelihoods caught up in a particular set of policies.

Progress does have a direction, though.

William F. Buckley was one of the Republican Party's most respected intellectuals. He wrote, "A conservative is someone who stands athwart history, yelling 'Stop!'" To attempt to undermine the universities, immigration and trade that causes our information economy to thrive in order to protect the industrial economy is to do exactly that: yell stop to progress.

Republicans are fighting to protect the past, not create it. Since 1950, factory workers as a percentage of the workforce has dropped each decade and college grads a percentage of the workforce has gone up. Whatever economy we create in the future, it will be beyond the information economy, not back in time into the industrial economy.

How to Explain Why Stock Markets Do So Much Better Under Democrats

"If Biden is elected, markets will fall," Trump has warned. "Socialism!" Trump friends have posted.

The curious thing is, while the folks who still identify as members of the industrial economy obviously consider themselves part of capitalism, it is actually knowledge workers who are a new kind of capitalist. It is not the companies who manipulate things that account for the rise in stock prices; it is the companies who manipulate symbols. Not General Motors but Microsoft, not US Steel but Google are now the world's most valuable companies.

In 1989, working class whites and white college graduates had about the same share of the country's net worth: 45 and 46 percent. 

By 2016, that had dramatically changed; the share held by the white working class had dropped to 22 percent and the share held by white college graduates was at 67 percent. (See figures 4 and 5.) The two groups had gone from equals to a 3 to 1 difference. 

The post-FDR Democratic Party had shifted from the party of farmers to the party of labor. Post-JFK, they had increasingly been aligned with a particular kind of labor, with knowledge workers who have college degrees. In a recent Quinnipiac poll, there was a stark contrast between whites with and without college degrees. Trump led by 3 points among the white working class and trailed Biden by 33 points among white college graduates. White college graduates aren't exactly socialists; they actually are the ones with an increasing share of capital.

Trump warns of market collapse and for the white working class, that actually resonates. The truth is, though, that the stock market first made significant by Republican policy in the 1800s now seems to do best when a Democrat is president. (I'd be remiss if I didn't point out that people like Daryl - who are smarter than me - point out that seeing a correlation between who is president and how the market does is akin to seeing a face in piece of toast; there are simply too many variables at play to claim such a simplistic link, they say.) One big reason markets do better under Democrats is because the are more likely to push for Keynesian policies that accelerate recoveries and mitigate busts. A more subtle reason is that Democrats are the ones whose pro-education and research policies are more obviously assisting the information economy dependent on knowledge workers. One can argue that stock market performance is too complex to trace to something as simple as who is president and that market movement has little to do with that. That is certainly the rational thing to argue. I argue instead that at different points in economic development, different policies are better aligned with current and emerging realities. The important reality of the 20th century is that labor led progress in the same way that capital led progress in the 19th century. The party advocating for labor was the Democratic Party and so the market did better under their leadership.

The stock market has done well under Trump. The average of S&P 500, NASDAQ and the Dow in his 3.5 years in office have gone up 57%, so better than it had at this point under Carter, about the same as under Clinton and not as well as under Obama. Since Carter, though, the differences through the first 3.5 years of the presidency have been 2 to 1 in favor of Democrats. On average for Democratic presidencies 3.5 years in, the market was up 53% and the average for Republican presidencies was up 26%.

The differences in market returns since 1900 have been stark. Imagine two families, each with $100,000 at the start of Teddy Roosevelt's presidency in 1901. One puts all their money under a mattress each time a Democrat is in the Oval Office and puts it all in a Dow index fund each time a Republican is in office. The other family does the opposite, going all in on the Dow each time a Democrat is in office and under the mattress when a Republican is president. How would the two families have done since 1901? The Republican family would now have $700k. The Democratic family would have $5.9 million.

I argue that the stock market has done better under Democratic presidents because financial capital now follows the development of intellectual capital and Democratic policies are more obviously pro-labor with its consequent intellectual capital. Smarter people than me look at this same data and say that this link between presidencies and stock market performance is random. Folks on talk radio look at this data and argue that it is clear evidence that Democrats are socialists and the market does better under Republicans. That last claim - that in spite of the data markets actually do better under Republicans - seems the hardest to believe.

Kent State and a Half-Century Conflict Between Two Economies and Two Kinds of Labor: Factory Workers and Knowledge Workers

On May 4, 1970, the National Guard opened fire on student protesters at Kent State, killing 4 and wounding 9.

On one side of campus were guardsmen - most of whom had not considered going to college until ordered to go that day - and on the other side were students who were preparing for careers that neither they nor their professors could imagine. A divide that would define the next half century.

Economic change creates new identities which changes politics. Before 1970, white collar and blue collar workers shared the identity of labor and tended to vote similarly. After 1970, a divide began to emerge between the college educated who saw themselves as part of a global, information economy and non-college educated who felt more a part of an American, industrial economy. Labor split into factory workers and knowledge workers and they voted differently.

Between 1933 and 1969, as the party of labor the Democratic Party had the White House and a majority in the House and Senate 72% of the time. They dominated. After 1969, labor identities split between factory workers and knowledge workers and the vote - too - was split. Since 1969, power has been shared between Republicans and Democrats 70% of the time, and each has had control of government only 15% of the time. That could change.

In 1972, the Democratic National Committee set quotas for women, minorities and youth but not union members or factory workers. After that point, feeling ignored by the Democratic Party, factory workers tended to vote Republican and knowledge workers to vote Democratic.
When there were more factory workers than knowledge workers, the Republicans won the popular vote for president. When the number of knowledge workers began to eclipse the number of factory workers, the Democratic Party began winning the popular vote for president.

In the 1970s and 1980s, factory workers outnumbered knowledge workers. In five presidential elections from 1972 to 1988:
- Republicans won 4 by average of 11.2 million votes
- Democrats won once by 1.7 million (and that was after Watergate)

Since 1990, knowledge workers have outnumbered factory workers. In the seven presidential elections since 1992:
- Democrats have won 4 by an average of 7.1 million votes
- Republicans have “won” 3 by an average of -133,444 votes (the one time a Republican presidential candidate actually won the popular vote was after 9-11)

Factory workers as a percentage of the population continues to fall and the percentage of folks with a Bachelors degree continues to rise. While Trump has a shot at winning the electoral college, his odds of winning the popular vote are close to zero. Trump has finalized the Republican Party's identity as the anti-knowledge worker party. Since he has become head of the Party, Republican's trust in universities has dropped and a willingness to defy experts has become key to the identity of Trump's Republicans.

That day at Kent State dramatized a dividing line between two groups with very different identities that considered themselves part of two very different economies. It is a conflict that has continued to define our politics for half a century and is finally waning in importance as the percentage of factory workers falls to the level that knowledge workers were at the beginning of this divide.

Trump's Last 24 Hours - Catastrophe, Cowardice, Conspiracy, Cain and Economic Collapse

Within the last 24 hours,

• Trump promoted the health claims of a woman who not only advises against wearing a mask but warns of alien DNA and demon semen,
• Admitted that he didn't confront Putin about his paying the Taliban to assassinate American soldiers,
• Proposed indefinitely delaying the election (something neither Lincoln (during the Civil War) nor FDR (during WWII) did).
• Additionally,
• The country lost 1,400 people to COVID for the first time since May. That number included Herman Cain, a former GOP presidential candidate who was diagnosed with COVID 2 weeks after attending Trump's Tulsa, OK rally and
• The Commerce Department announced that GDP fell at an annualized rate of 33% - the worst quarterly contraction in at least 145 years.

One day in the life of Donald.

It's a remarkable thing to have a president so cognitively, emotionally, and morally deficient.

A Belief in an Afterlife as the Beginning of Morality

I post all the time about politics, policy and stats that seem to describe our world because I have to live with the consequence of your vote and you with mine. There is nothing private about the consequences of politics so I love the notion that we can at least better understand what thinking (or instincts) lie behind particular models of the world. Shared stats and perspectives can make those worldviews - and thus our votes - better.

Religion, though, is a private matter and so I stay away from that. Unlike your choice to vote for someone, your choice to be Catholic or atheist or Scientologist doesn't impact me and is none of my business. But I do want to talk about the afterlife.

I have developed this theory that morality is enhanced by a belief in an afterlife.

"A man finds himself, to his great astonishment, suddenly existing, after thousands of years of non-existence; he lives for a little while; and then, again, comes an equally long period when he must exist no more. The heart rebels against this, and feels that it cannot be true."
- Arthur Schopenhauer

By afterlife, I don't even mean that if you live a good life you'll be playing harp on a cloud or be reincarnated as someone's spoiled dog. By afterlife I mean something more simple: after your life, the world will go on and the lives in it will be just as important as those of you and the ones around you that you love. Perhaps even more important because there will be so many more lives.

Years ago I read a fascinating thought experiment. Imagine that you knew with great certainty that at the moment you died, life for all humanity would end. Giant meteor, terrible pandemic ... whatever. Everyone gone. How does that change your own life?

I think for a lot us, honestly believing such a thing would tend to gut you. It would make so much of what animates you suddenly seem laughable. "What does anything matter?" you might ask. And that thought experiment seems to me proof that our lives are generally animated by a belief in an afterlife and a sense that it's important.

Morality is certainly about now, about caring how we harm or help others. I think it's also about later, making provision for the future we'll eventually be excluded from. Believing that an afterlife matters allows us to take actions on what has the highest impact: things that take years, decades, or even lifetimes to play out.

I don't even think that a belief in an afterlife is a religious matter; it seems to me a demonstrably moral one based on a simple premise: what matters most in the world is so much bigger than me or my lifetime.

The Meta-Conspiracy Theory of Trump Supporters

To be a Trump supporter now means having to believe or defend any number of conspiracy theories.

Which is the most popular of the many conspiracy theories Trump supporters believe? That supporting Trump doesn't require believing in conspiracy theories.

Fear of Mexicans and Millionaires, or Immigrants and Billionaires Will Stop Defining American Politics

The 2018 and 2020 elections represent a return to normal politics.

After the Great Recession, we had Occupy Wall Street and the Tea Party. Occupy became the Sanders supporters. The Tea Party became the Trump supporters. They got all the press attention and assumed that they had all the voters. They didn't. They don't.

The average American is not afraid of Mexicans or millionaires, or immigrants and billionaires, and know that there isn't a single example of a prosperous economy that wasn't created by and didn't create both. (Show me an economy without any rich people or without any immigrants and I'll show you a really lousy economy.)

So in 2018 we did - and in 2020 we will - hear from the majority of Americans who are happy to have rich people (on top of everything else they do, they can help with all the taxes we have pay) and immigrants (they can help us to increase supply and demand, helping natives to start and work in businesses and buying the many products and services these businesses generate).

A Pandemic of Conspiracy Theories: Why Trump's Followers Feel Like They're Stars in the Truman Show

Ideology lowers IQ about as much as a blow to the head. ISIS, the Nazi Party, the Medieval Church, Stalinist apparatchik, Trump supporters .... every group has people of varying intelligence. But their intelligence is subordinate to the larger group and that means intelligence is channeled into loyalty, not understanding.
There is a stunning number of conspiracy theories running a muck among Trump supporters. All are variants on "MIT, WHO, Gates Foundation, CDC, New York Times, CNN, BBC, the EU, China, (etc., etc.,) are in collusion to control you or profit from you and here is what is really going on ..." First, just from a logistic perspective, getting all of the folks in all of these organizations (these are really, really smart people who really, really pride themselves on original thinking) to agree to fake a global pandemic is inane. In this country alone we can't muster agreement to rebuild crumbling bridges. Second, the conspiracy theories all have the same purpose: undermine the authority of anyone who makes Trump look like the fool he is.
Occam's razor can be explained this way: if you hear hoofbeats, assume it is horses and not unicorns. Go for the simplest explanation. Could it be that experts throughout the world - even the doctors in your local hospital - are conspiring to fake a global pandemic in order to put a microchip in your body so they can track your location? (A conspiracy theory propagated by folks on smart phones with microchips that never leave their person.) Is that possible? I actually think that it's practically impossible given a million things that all have to be aligned to make this true, but let's say, sure, It could be a unicorn.
What's a simpler explanation? Trump has bumbled handling this pandemic from the start and unless he can find a way to discount every expert who might be able to shed light on that fact, he has to take responsibility. He's already done a great job of inoculating his followers from facts by insisting that they stop trusting the mainstream media or twitter or libtard friends and trust only his interpretations. Trump loyalty - as with any true love - demands a level of abstinence from all others, particularly those investigative journalists and so-called experts.
Is the whole world conspiring to make up a pandemic? Are you caught in the Truman show? Or is Trump just a con man? Occam's razor suggests that it's one con man fumbling with a global pandemic rather than a global conspiracy intent on killing millions just to make this one con man look bad.
Are the people who believe these conspiracy theories stupid? Not necessarily. Some of them just want desperately for there to be unicorns. For them this is all a loyalty test. Their revelation won't come from increasing their intelligence. It will come from them simply deciding that its better to be led by simple truths than simpletons.

Why Pete Buttigieg Could Be Our Next President

One simple distinction for leaders is eloquence. Bill Clinton was the best speaker I've heard in politics. Obama created a similar confidence in listeners, exuding intelligence as he calmly explained things. And now we have Pete Buttigieg who is easily the most eloquent of the great candidates in the 2020 field. (He may have been making a dig at his opponents in the debate last night when he said, "As everyone up here has so elegantly [rather than eloquently] said.")

Republicans love to talk about Democrats as socialists but of course that is nonsense (stock markets actually do better under Democrats and have for a century). In truth Democrats nominate moderates who prefer markets to government agencies but are not afraid of government. It is true that Democrats prefer candidates who actually believe in science rather than conspiracy theories and Keynesian policies to unregulated markets but only in the mind of the most excitable Republicans (that is to say, talk radio and Fox TV hosts and their fans) does that make anyone a socialist.

One thing that sets Democrats apart is their insistence on inclusion. It is older white men who vote Republican. Democrats lead in just about every other group - young, minorities, women and - speaking of minorities - the college educated.

51% of men vote Republican and 59% of women vote Democratic. The last Democratic nominee was a woman.

54% of whites vote Republican but 90% of blacks, 69% of Hispanics, and 77% of Asians vote Democratic. The last Democratic president was black.

50% of those over 65 vote Republican. 67 to 58% percent of voters under 44 vote Democratic. Bill Clinton, George W. Bush and Donald Trump were born within 66 days of each other; Bill was sworn in when he was 46 years old, the third youngest president ever. Donald Trump was 70 - the oldest president ever when sworn in for his first term.

Like Obama and the Clintons before him, Pete Buttigieg has moderate politics and a distinct identity. He's young. If he won this election he would become the youngest ever president. And he would be the first gay president.

Like Bill Clinton, Barack Obama and Hillary Clinton before, it is not Buttigieg's policies that make him a liberal but instead his identity. (And like Bill Clinton, he was a Rhodes scholar.)

So why might he become President Buttigieg? Because what he shares in common with the two previous Democratic presidents is eloquence, moderate policies with an emphasis on use of reason rather than emotion to solve problems, and an identity as an "other." It may not be a fluke that he won the Iowa caucus.


Graphs from Pew here.

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).

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. 

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.

The Christian Equivalent of Sharia Law?

Someone literally responded to my making fun of Trump with, "Well Ilhan Omar wants Sharia Law here." And I thought, "Yeah, and every elected Christian wants to make the Beatitudes our law." And then I thought, wouldn't that be something? Elected officials who provided for the meek, comforted those who were mourning, and considered peacemakers to be the people most worth emulating.

Matthew 5:3-12 New International Version (NIV)

3 “Blessed are the poor in spirit,
    for theirs is the kingdom of heaven.
4 Blessed are those who mourn,
    for they will be comforted.
5 Blessed are the meek,
    for they will inherit the earth.
6 Blessed are those who hunger and thirst for righteousness,
    for they will be filled.
7 Blessed are the merciful,
    for they will be shown mercy.
8 Blessed are the pure in heart,
    for they will see God.
9 Blessed are the peacemakers,
    for they will be called children of God.
10 Blessed are those who are persecuted because of righteousness,
    for theirs is the kingdom of heaven.

Why Trump Will Lose in 2020

Trump lost the popular vote in 2016. Less talked about is how narrow was his electoral college victory. To put that in perspective, he's the 45th president and 45 presidential elections were decided by a wider electoral college margin. Since his first day in office, his net approval across the 50 states has dropped by an average of 20 points. It is hard to imagine any scenario in which such a drop doesn't reverse his narrow margin of victory into a decisive loss.


Trump's approval rating has crashed since his first day in office. His net approval [footnote 1] across all 50 states has dropped by an average of 20 points since he took office, ranging from a drop of only 10 points [2]  to a drop of 33 points [3]. There is not a single state where his approval has gone up since he took office.

[graph with latest information at Morning Consult, here.]

He won 306 electoral votes in 2016, 38 more electoral votes than he needed to become president. That was a tight margin. (To put it in perspective, Trump is the 45th president and there have been 45 presidential elections decided by wider margins.)

I'm no scientist but I can't see how a margin of victory that slim can overcome a drop in approval rating of 20 points.

The states he won that have shifted from a net positive approval to a net negative represent 125 electoral votes. [4]

If all of those states shift from Trump to his opponent, he loses by 354 to 181, a victory roughly equivalent to Obama's 2008 win. If only one-third of the states that no longer approve of Trump vote for his opponent, his opponent wins by the very thin margin that George W. Bush won by in 2000. And obviously if his drop in approval rating doesn't change a single electoral vote, he wins again by a narrow margin. That last scenario is possible but seems wildly improbable.

And of course one thing that makes this even worse for Trump is that every year more of his supporters die. In 2016, 52% of those over 65 voted for him while only 36% of those 18 to 29 did. Every year, about 2.8 million people die and about that many become old enough to vote. Every year, Trump loses about 500,000 voters, net, as younger voters less likely to vote for him replace older voters. He lost the popular vote by 3 million in 2016. Since then, the conveyor belt of aging has meant a net loss of roughly 2 million more voters.

A cautious man would predict a narrow victory for whichever Democrat runs against Trump. These numbers don't make me feel that cautious.

----------------------------------
[1] % of the people in the state who approve of him minus the % who disapprove
[2] Hawaii, where it dropped from a negative 13 t a negative 22
[3] New Mexico, where his net positive of 17 points dropped to a negative of 16
[4] The states that have dropped from a net positive to a net zero approval rating represent another 26 electoral votes. In June, Georgia and Missouri would have to flip a coin to decide whether they approved or disapproved of him.

Micheal Flynn, Q-Anon, Conspiracy Theories and Trump's Descent into Madness

Excerpt from P.W. Singer and Emerson T. Brooking's LikeWar: the weaponization of social media.

Michael Flynn's personal Twitter account was @GenFlynn . Once he entered politics, Flynn's persona changed dramatically. His feed pushed out messages of hate ("Fear of Muslims is RATIONAL," he fumed in one widely shared tweet), Antisemitism ("Not anymore, Jews. Not anymore," referring to the news media), and one wild conspiracy theory after another. His postings alleged that Obama wasn't just a secret Muslim, but a "jihadi" who "laundered" money for terrorists, that Hillary Clinton was involved with "Sex Crimes w Children," and that if she won the election, she would help erect a one-world government to outlaw Christianity. To wild acclaim from his new Twitter fans, Flynn even posted on #spiritcooking, an online conspiracy theory that claimed Washington, DC, elites regularly gathered at secret dinners to drink human blood and semen. That message got @GenFlynn over 2,800 "likes."
....
Despite the online madness that violated his advice (or perhaps because of it), things seemed to work out well for the general. When Trump won the election, Flynn was named to the position of national security adviser, one of the most powerful jobs in the world. His first tweet in the new role proclaimed, "We are going to win and win and win at everything we do."
The winning didn't last long.

Claims that would have gotten someone checked into a clinic decades ago instead got Flynn appointed to one of the government's most important and sensitive positions. This is how Trump's mind works.

Not enough is made of how susceptible Trump's base is to positively bonkers conspiracy theories. After his election, Donald Trump thanked Alex Jones for his reporting. Among other things, Jones had reported that the government has created tornadoes to kill people, deployed a gay bomb designed to slow population growth, and that Hillary Clinton ran a child sex ring out of a pizza parlor.

More recently, QAnon has captured the imagination of Trump supporters. It, too, feeds a steady stream of conspiracy theories to Trump's base. QAnon's latest test of gullibility? The belief that John F. Kennedy Jr. is not dead and will emerge at the 4th of July celebration in DC to support Trump as his running mate.

Trump lies about 8 times a day. And that rate is accelerating. Not only is this properly understood as mental illness, it is a loud confession that his worldview and policies have little connection with reality. He can't support his policy and actions with facts. He has to make them up. And what happens to people who have a schizophrenic break with reality is that they descend into poverty and squalor. The same thing can happen to a nation. Trump's madness is Shakespearian and future generations will read about his descent into madness the way that past generations have read about King Lear. (But of course Trump would never be heard saying, as Lear did, "I fear I am not in my perfect mind." Further tragedy that.)

Maybe we will look back at this descent into unsubstantiated and irrational conspiracies as a generation's reaction to a world where data doubles every 3 years. Faced with too many facts to process into a coherent theory, the choice between the shrug of the shoulders and the honest answer of, "I don't really know," or the more alluring, "Did you know which evil characters have kept you down ..." a swath of the population has opted for evil conspiracies over benign uncertainty.