Age is Just a Number. Then Again, So Are the Votes You Need to Win

Our last four presidents were all baby boomers.

Clinton, Bush, and Trump were all born within a year of when Japan's surrender ended WWII. Fittingly, the impulsive Trump was born a mere 9.5 months after.

Obama gets lumped in with that generation by demographers but was born 16 years after WWII ended. Less boom than echo.

Clinton, Bush and Trump time traveled together, hitting all the major events at the same age.

It is not just that the 2020 candidates include what could be the first Jew, black, woman, black woman, or gay to be president. It also includes members of the silent generation, baby boomers, gen x, and a millennial. These candidates have hit major events at very different stages of life and would bring a very different perspective to them. Bernie Sanders was 4 when Japan surrendered and the horrors of World War II would have been relayed to him as fresh stories by family members when he was a little boy rather than as distant history as it would have been for Pete Buttigieg who will be younger when he's sworn in than Sanders was when Buttigieg was born.

Here is a way to think about the age of the candidates in terms of where they were when historic events happened. (And obviously for the candidates, the age when "sworn into office" assumes that they would actually win the 2020 election.)

Oh, and yes. I know that Ocasio-Cortez is too young but I thought it was interesting to put her there for comparison. And she's too young for 2020 but she'll be old enough by 4 months to run in 2024.

Trump the Roman Leader - Sacrifice is For Suckers

With Trump's on-going attack on dead John McCain last weekend one thing is clear: the GOP has officially become the anti-sacrifice party.

Trump's criticism of McCain for his failure to thank him for the funeral Trump "authorized" is another instance of Trump's lack of civility. It's worse than that, though.

I used to marvel that the GOP who readily called on soldiers to make the ultimate sacrifice of a life for the country were so outraged that they might be called on to pay 40% tax rate on income over $250,000 rather than 35%. "You're upset about sacrificing another 5% of your income over a quarter of a million but think it both natural and good to sacrifice a life for one's country?" I wondered.

Well, apparently the GOP heard that and decided that I was right. But they resolved that in a direction I hadn't predicted. They continue to believe that only suckers pay taxes and now also believe that only suckers go to war to be shot or captured. Accused of not paying taxes, Trump claimed "That makes me smart." Questioned about his criticism of John McCain, Trump said that McCain was not a hero. "I like people who weren't captured," he said, casually dismissing POWs as people we should respect.

Frans de Waal has written extensively about our closest relatives, the chimpanzees and bonobos. Terry Gross interviewed him recently and here's a fascinating excerpt about alpha males within chimpanzee communities. I suspect that group support for leaders in human societies is not that different.

The alpha male has many duties. ... A good alpha male breaks up fights and defends the underdog — not the winners, usually, but the losers. And the alpha male also is the consoler in chief, [who] goes to individuals after a fight to console the ones who have lost and sit with them and groom with them and hold them and things like that. And so the consoler-in-chief role is extremely important, and an alpha male who is good at that, he is also usually kept in power for longer.
In a chimpanzee society, [there are] always ... challengers to the top male. And it's almost as if the group is waiting [to see] if the male is a bully [or if] they don't like him. ... If it's a good alpha male who keeps order and is protective and is not abusive, then they try to keep that male in power.

And curiously, the chimps are considered violent in contrast to the bonobos and yet this matter of empathy is so crucial to their acceptance of leadership. In this sense, a chimp troop is probably more developed than is the US right now.

What has happened to the Republican Party under Trump? They have made official the position of contempt for sacrifice for others. Trump is less anti-Christ than pre-Christ, a man whose morality is very Roman. For him the question of morality is a question of what one can get away with, his sense of civic duty defined by a quest for power rather than any sense of service. Greed is good and sacrifice is for suckers.

Oh Those Greedy Rich and Lazy Poor

I like Elizabeth Warren. Until she lapses into the reasons for raising taxes on the rich. "A government that caters to the rich is corrupt," she says.
I like certain friends who find Elizabeth Warren appalling. I like them until they get tight-lipped and talk about "You think it's right to take money from people who worked hard enough to get rich? That's wrong!"

Taxing the rich more than the poor is not a morality issue. The rich are no more likely to be rich because of corruption than the poor are to be poor because they are lazy. It's true that some people are rich just because of their grandpa or because they know how to game the system. It is also true that some people are poor because they have no common sense or because they chose not to work when they could have.

But here is the thing: morality has nothing to do with tax and welfare policy. We tax people making $10 million a year at a higher rate because they have more money and we give aid to people making only $10,000 a year because they don't have enough. It's no more complicated than this. You don't have to make claims about how the poor are lazy or the rich are greedy or how the poor are so incredibly unfortunate in spite of their noble efforts or how the rich who are worth 10X as much put in 10X as much effort. You don't have to morally impugn or praise the folks who are in tails of the distribution of wealth and income. Their morality is no more an explanation of where they are in the distribution than is the location of folks in the middle.

But maybe politics depends on a sense of outrage at someone's greed or laziness to work.

One Thing I'm Looking for in a 2020 Candidate

It hit me that the candidate who could win me over in 2020 could do that with a promise to fund our public broadcasting at the same rate that the UK funds their BBC. So I looked it up. 

Adjusted for GDP, the BBC gets 100x what the Corporation for Public Broadcasting gets. 100x.

Now I don't know the extent to which the CPB makes up total public budgets. ('m guessing it is closer to 50% than 5%, which suggests that the contrast between the UK and US is still stark but perhaps closer to 50x?).

The numbers:

UK GDP $2622 billion. (Less than California now.)

BBC spending $6.42 billion.

As % of GDP 0.245%

US GDP $19390 billion

CPB spending $445 million

As % of GDP 0.002% of GDP

Ratio: 107 to 1.

I would be relieved - but surprised - to learn that the CPB budget is only a fraction of what we spend around the US for public TV and radio, which would make this contrast less jarring. Perhaps even make it comparable. That seems optimistic, though.

It would be great not to be subject to fundraisers or "sponsor mentions" that are essentially bad ads while listening to public radio. It would be nice if we took public broadcasting even half as seriously as the UK.

A Doubling of the Rich This Century (And We're Only 17% of the Way In)

I find it helpful to tease through data just to calibrate perception. You may as well, so I'm sharing something I was teasing through this week.

Between 2000 and 2017, the number of Americans reporting income to social security (so this only includes wages), making more than 

• $100k more than tripled (up 236%), going from about 3% of the wage earners to nearly 10%
• $1 million doubled
• $10 million doubled

In 2017, 147,754 wage earners made more than a million. Studies suggest that there is a lot of turnover in this group, though, more people with one-off transactions (selling a business, for instance) than Manny Machado type contracts for that much money steadily paid over years.

What does this mean for a place like San Diego? Assuming San Diego's portion is the same as the average for the country (and I think that given San Diego's median household income is 24% higher than the national average, that's pretty conservative), San Diego city's population would have about

70,000 individuals who make more than $100k,

644 who make more than a million, and

16 who make more than ten million.

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The social security data from which this comes is in current dollars, so does not adjust for inflation. That said, I don't think that people who reach one million in income in 2015 say, "Yeah but that is actually just $997,000 in 2014 dollars." 

Change in Deficits From Reagan to Trump

Here is a chart showing the change in deficit from the first year of a president's term to the first year of his successor's term, the difference between what he inherited and what he left. It covers a span of 36 years. A negative number means that the president made the deficit smaller and a positive number means that he made it larger.

Reagan inherited a deficit of $419 billion and left George H. Bush a deficit of $252 billion. The deficit was $167.2 billion smaller by the time George took office, hence the -$167.2 in the graph above for the first bar.

Bush 1 turned the $252 billion he inherited into a $365.8 billion legacy for Clinton, increasing the deficit by $113.8 B.

Clinton turned this deficit into a surplus for his successor, reducing the deficit by half a trillion.

George W. Bush turned that surplus into the biggest deficit in history, a swing of nearly $1.6 trillion.

Obama whittled down the $1.4 trillion deficit he inherited into a still sizable $590 billion.

Trump is projected to increase that $590 billion into nearly $849 billion this year.

3 of the last 4 Republican presidents have increased the size of the deficit and both Democratic presidents have reduced it, suggesting that if you actually care about deficit reduction, you would not vote for Republicans. You can hate big deficits or love Republicans but you can't honestly do both.

Cohen's Testimony On the Penultimate Day of February

I watched parts of the Cohen hearing. The theme with Trump always seems the same: someone who once defended or worked with or was married to Trump suddenly realizes that he's a train wreck of a human being. Only years after normal people had that same realization. Like when someone is surprised that the guy with the "Poor Impulse Control" tattoo on his forehead turns out to make bad decisions. "I was so shocked."  

The other weird thing is that the Republicans didn't seem to realize that Cohen was them in the future. They were attacking the guy who said that his attacking people to defend Trump was the worst thing he ever did. It's like the ex trying to warn the new wife. For now the new wife simply has too much invested in the ex being wrong.

The most telling thing in that opening statement was the claim that Trump never expected to win. He makes clear with every utterance what idiots he thinks we Americans are and yet even he didn't think we'd be stupid enough to vote for him.

My Argument For an Inheritance Tax And Against a Wealth Tax

It’s hardly surprising that in the wake of the first billionaire’s presidency we would have a backlash against billionaires and talk of a wealth tax. 

Trump transforming the White House into a home theater dedicated to Fox News is less indictment of billionaires, though, than an affirmation of the need for a much higher estate tax. 

Trump’s pride in having turned a half a billion from his father into $3 billion in half a century is like a rabbit breeder taking pride in having transformed a herd of two rabbits into a herd of three in a year. He's not good with capital. He's no Warren Buffet. There are three ways be an old rich guy.  The first is luck. The second is to start with little or nothing and earn and invest well. The other is to start rich and then end rich. Trump chose the third door, which as it turns out doesn't so much open onto a path as a lovely room.

One (of many) advantage(s) the US had over the USSR is that it left the allocation of most capital to individuals and institutional investors (like mutual fund managers or private and public corporations). The way that wealth works is this: the better you are at getting a return on capital, the more of it the market gives you. If Warren Buffet gets 13% return on a billion, he has two billion to invest in 6 years. The guy who gets a -2% "return" on his billion will have only $890 million in 6 years.

It is true that variation in the ability to invest leads to wealth inequality. It is also true that the market ruthlessly gives more capital to the folks best able to create more capital and takes capital from those who destroy it through bad investments. It's true that luck plays a role in returns but it is also true that - just as with ability to play basketball or write poems - different people have different levels of ability in investing. A smart community likes the idea of good investors having more capital than bad investors.

I don't think the kind of wealth tax that Elizabeth Warren is proposing is a bad thing, I'm just not real excited about it. I'd much rather see an inheritance tax of 50% (or more) for amounts over $10 million than a wealth tax. Why? I don't believe in aristocracies.

Michael Jordan was an amazing player. His sons also played basketball but did not make it to the NBA. It's rare that a child inherits the gifts of the parent. This is likely true of Warren Buffet's children as well; it is highly unlikely that they have their father's genius for investment. Just as there is no reason to give Michael Jordan's sons the ball to play in the NBA, there is no reason to give Warren Buffet's kids billions to invest. They can't do anything special with it.

Just from a perspective of "How do we create the most wealth," question, we should let great wealth builders keep their wealth and then tax that wealth when it passes from one generation to the next. Obviously the next generation might preserve a fortune if they get it, but it's not obvious that the next generation will get returns any higher than average. There is no argument for accumulating great wealth over generations. That is the definition of an aristocracy, and one of many reasons that aristocracies are associated with stagnant economies is because they are about protecting wealth, not creating it. Entrepreneurs have an impulse to disrupt the status quo; aristocrats have the impulse to protect it. 

Billionaires help to create - and are created by - dynamic economies. As they build companies and invest capital, they add to a communities wealth. Billionaires are a natural companion to dynamic and healthy economies. Aristocrats are not. And that is the reason I think inheritance tax is a good idea and a wealth tax is only a mediocre one.

Randomly Fascinating Economic Numbers on 2 19 2019 (a number that looks like a repeating series, which is kind of randomly fascinating)

Looking for numbers to help inform a few arguments, I've run into or created the following recently. I know I obsess over these kinds of things more than most but you might find these useful as more data points for painting a picture of this continually evolving, messy, massive economy.

In December the US economy created 5.9 million jobs and destroyed 5.5 million. Protecting jobs isn't really an option but as long as the entrepreneurship and innovation that creates jobs runs at a faster pace than the automation that destroys them, we're good.

In 2018, the American economy passed two big milestones.
Annual GDP is now over $20 trillion.
Federal Spending is now over $4 trillion (although with current tax laws and projections, it won't be until 2022, when spending passes $5 trillion, that govt receipts will pass $4 trillion).

If you're interested in median incomes rising, you should do what you can to attract immigrants and create billionaires. Median household income and the percentage of immigrants and billionaires seem to move together. I think one reason people are threatened by immigrants and billionaires is because they represent a threat to the status quo. And that's true, of course, but the same thing can be said about progress.

And finally, this interesting and (I think) important quote.

“Capitalism has hundreds of parameters that you can change like the estate tax [and] the capital gains tax and it is still capitalism as long as you have market-based pricing, let people create new companies very easily and intervene where you don't see competition."
- Bill Gates

Two Questions That Drive Economic Progress

Creative answers to these two questions drives progress.
1. How do we automate jobs in order to obsolete lower-paying jobs and increase productivity and profits?
2. How do we create new, higher-paying jobs through entrepreneurship and innovation?

The answers to this question include money spent on research and development, education, healthcare, and incubators, policies that enhance financial markets and private property rights and encourage investment and savings, and a culture of win-win rather than win-lose. There are layers to the creative answers to these questions pursuing such answers would drive a great deal of progress.

We are All Uprooted Now

Anomie, noun Sociology. a state or condition of individuals or society characterized by a breakdown or absence of social norms and values, as in the case of uprooted people.
from dictionary.com

The new, entrepreneurial economy is disruptive. It is not just entrepreneurship that will be popularized, the emergence and disappearance and transformation of companies and entire industries destroying, creating and relocating jobs, careers and people. Social invention - the emergence of new kinds of marriages, schools, businesses and government - compounds the feeling of dislocation.

"The past is a foreign country: they do things differently there," wrote L.P. Hartley.

Anomie is the sense that what you knew of social order has been reset. It's like what happened to American natives after the European arrived with his devastating diseases, weaponry and culture.

Anomie is what an uprooted people feel. We are all uprooted now.

Income Inequality and Income Growth - Fairness and Progress

There are two dimensions to improving lives. The first has to do with income transfer from rich to poor, the second with raising real median wages. Those initiatives are not at odds with each other but they are separate.

There is so much talk about income inequality and stagnating median income in ways that suggest the speaker thinks they are the same thing. They are not.

Alleviating Poverty
Most people agree that the rich should help the poor. There can be arguments about who is rich, who is poor and how much help they should provide. Those are important arguments.

For instance, I believe it's absurd for someone in the top 49th percentile to help someone who is in the bottom 49th percentile. Someone making $60k shouldn't have to give $500 to someone making $55k. There has to be a middle ground of 30%, 50% or even 80% of people who are neither expected to help others or expect to be helped. (At least formally through income transfer in the form of taxation and welfare. Obviously everyone helps and needs help just to get through the day.)

Should only people making $200k help only those making less than $10k? Or should even households making $100k help households making less than $35k? The first choice would leave about 87% in the middle class who neither got nor gave help. Do you make more than $10k a year? Don't expect any help. Do you make less than $200k? Don't worry about being taxed to help the poor. The second (tax above $100k and subsidize below $35k) would leave about 43% in the middle class who neither got nor gave help.

In the last 100 years, the top marginal tax rate has ranged from a low of 28% to a high of 94%. Even within the same country, the consensus about what constitutes a fair rate of taxation varies over time. To illustrate how unsettling this change is, Starbucks founder Howard Schultz came out this week to say that he was running for president. One reason? He hate this absurd talk of a 90% marginal tax rate. Asked who is favorite Democratic president was, he said FDR. Under FDR, marginal tax rate was 94%.)

[You can find data on median income and what percentage of Americans make more or less than certain amounts here.]

You can argue about the cutoff point for who pays additional tax for the poor and who is poor enough to benefit from that tax. Ultimately, though, voters will decide what is fair. There is no magic formula for that.

By definition, though, you can never raise the average wage through income transfer. In theory you can raise the median wage through income redistribution but that strikes me as funky; it essentially means that you would tax enough people in the top 49th percentile at high enough rates to lift the income of everyone in the 50th percentile on down.

To define someone making the median income as poor is odd. It's like defining a 5'10" man as short. Income transfer is compassionate, practical and yet does nothing to raise median income. For that you need a completely different set of policies.


Raising Median Income
The usual suspects to raise median income? Investments in infrastructure and education, research and development, childcare and healthcare. These all help to raise incomes. These are essential. We're not doing enough of them or even doing them enough. That said, the biggest boost to an economy is moving into a new one.

In the century after the US was founded, median wages rose as we created an industrial economy that gradually supplanted the agricultural economy. Last century, median wages rose as we created an information economy and workers moved from factories into cubicles. This century, median wages will rise as we create an entrepreneurial economy. The median wage in Santa Clara County - home to companies like Google, Intel, HP, and Apple - is $107k, nearly double the $58k for the US. This will become a norm as more regions adopt and adapt the entrepreneurial culture that defines Silicon Valley. And there is so much more we can do to popularize entrepreneurship. Redefining work to become more entrepreneurial will do as much to raise productivity and wages as any previous change.

The question of how to alleviate poverty through income transfer is an important one and needs to be defined in a way that voters think is fair. The question of how we move into a new economy to create more for everyone is even more important. How a community answers the first one defines how they pursue fairness. How a community answers the second one defines how they will pursue progress.

The Fundamental Reason Politics Will Become Kinder to the Poor

One reason that rich may be more willing to support the poor is because they are more able. I think this will change politics.

Between 2009 and 2017 the ratio of households making more than $200k a year to those making less than $10k a year rose from .54 to .94. Put differently, in 2009 each rich family would have to adopt nearly 2 poor families (1.85) whereas by 2017 they would only have to adopt 1 (1.06). (And by 2018 that was probably less than 1.0.)

In San Diego - and likely most big cities - the ratio is even better. In 2009, each poor family could get 1.18 rich families to help. By 2017, the ratio was 1.94 to one, meaning that each poor family could get 2 sponsors. It's obviously easier for two rich families to help one poor family than it is for one rich family to help two poor families. 

What does this mean? Not only are programs to help the poor more financially viable than ever, they're probably more politically viable. 

Wage Growth After the Great Recession

In numerous posts I've argued that the first half of the teens (the years from 2010 to 2019) would repair the unemployment rate and the second half would repair wage growth. Stats on wage growth 2009 to 2017 help to illustrate that. First we have to get unemployment down and then wages start to grow.

From the end of 2009 and 2015, unemployment fell by half, from 9.9% to 5.0%. Since then it has continued to drop but 5.0% gets unemployment within fairly normal boundaries. (This century, unemployment has been over 5.5% about as often as it is below 5.5%, so 5.0% is pretty good.) At that point the labor market has tightened enough that employers have to offer higher wages and can't simply hire folks from among the unemployed.

You can see the sharp rise in the rate at which incomes began to rise since 2015 here.

Last week with a client in Orange County, I was with an executive team. The head of HR told me that two big changes in the last year are passive recruitment and a new California law that bars employers from asking what you made in your last job.

Demand is high enough for employees that companies increasingly recruit people who are not looking, a process they call "passive recruitment." A lot of this recruitment happens within LinkedIn.

Also, last year California made it illegal for employers about to offer you a job to ask what you made in your last job.

The consequence of these two phenomenon are that there are a chunk of people who are getting very cool raises by changing jobs. Across the country, household incomes are rising at their fastest rate since the Great Recession.

More broadly, though, low unemployment rate simply means more upward pressure on wages. And wages are now rising at a healthy rate and will continue to rise as long as the economy continues to create new jobs at this rate.

That's very cool.

Take note, though, that politicians trying to make the case for change will point to older data and argue that wage growth is not keeping pace with inflation. Senator Kamala Harris argued this week that wages are not keeping up with the cost of living. That was true early in the decade when the unemployment rate was higher than average but is no longer true.

We're going to hear a lot of nonsense about what policy changes we need but we need to be clear about why wage growth was so sluggish. We had a Great Recession. What are the implications? Regulate financial institutions so that they do not blow up the economy. The problem is not the economy the problem is its vulnerability to financial mischief. Just like sports competition is enhanced by good officiating, so is business and finance competition. The American economy is still a great game; it's just that we can't expect good results when we've put blindfolds on all the refs. 

How Trump Won (yes won) the Shutdown and What We Can Conclude About Immigration, Income and Crime

The general consensus is that Trump lost the government shutdown. I think he won it. Before I explain why, let's look at some data.

There is nothing like data to undermine certainty.

Donald Trump and Ann Coulter believe that more immigrants means more crime and higher unemployment and / or lower wages. Let's take a look.

First, let's look at a smattering of cities with a population between 200,000 and 300,000. 

Median household income varies greatly, from about $34k a year in Buffalo, NY to $96k in Irvine, CA. Irvine's population is about 40% foreign-born, 10X Buffalo's 4%. Irvine's income is nearly 3X as high.

The correlation between these two variables - income and immigration -  is not perfect but is positive through most of the cities. Immigration and incomes rise and fall together.

What about violent crime? Surely it will rise as the percentage of immigrants goes up, no?

Well, in the above table we can again look at the two cities with the highest and lowest percentage of immigrants to see how crime and immigration are correlated. In Buffalo, violent crime is 179% higher than the national average. That is nearly 3X higher. By contrast, in Irvine violent crime is 86% lower than the national average. (It could only be 100% lower for the simple reason that once violent crime drops to zero it cannot go any lower. 86% lower than the national average is kind of amazing.) We can, again, look at a graph to see a line that is the best fit through all those points.

It is obvious that factors other than immigration change crime rates but as the percentage of immigrants in a community rises, crime falls. 

What about the ten biggest cities in America, you ask. Immigration might be good for mid-size cities but what about cities of millions? (And as it turns out, only the country's ten biggest cities have populations of more than a million.) Well, I have a table for that as well.

Of America's ten biggest cities, Philadelphia has the lowest income and San Jose has the highest. And as it turns out, Philadelphia also has the lowest percentage of immigrants and San Jose has the highest. Immigrants make up only 13% of Philadelphia's population and 39% of San Jose's. Median household income in San Jose is nearly $100k and in Philadelphia is just over $40k. San Jose has 3X the immigrants and double the income.

Above is the graph plotting the relationship between these two variables for the cities over a million. 

Finally, we take a look at the relationship between the percentage of foreign born and violent crime rate in America's biggest cities. Chicago is the most violent of America's biggest cities and 21% of its population was born outside the US. San Jose is the least violent (its violent crime runs 6% lower than the national average) and has 39% immigrants.  The graph looks like this.

Now there are a few arguments you could make when faced with this data. One, you could say that immigrants move into more affluent or peaceful cities but don't help to create affluence or safety. Perhaps the best cities would be even better if not for the percentage of immigrants who move there. The data moves together but immigration doesn't cause higher incomes or lower crime, you say. Perhaps. The fact that the median home price in San Jose is over one million dollars and in Philadelphia is only $158k suggests that it is harder - not easier - to move into these safer, more prosperous areas. 

Or you could argue that immigration has a fairly weak correlation to income and crime, even if it is in the right direction for pro-immigration arguments. The R-squared measure is a simple measure of how well a line fits through the data; at best (median income and foreign-born % in cities of ~250,000) these move together about 40% and at worst (the relationship between violent crime and immigration in America's ten biggest cities) about 24%. So you might say, "Well sure, it seems positive but obviously other factors are a bigger determinant than immigration." And you are right. Education, infrastructure, research and development investments, culture, and social connections are all factors that matter. Immigration is just one dimension of what makes a city great. But the data nonetheless suggest that it IS one dimension of what makes a city great.

Those are valid - but fairly weak - arguments that you could make to discount the relationship between immigration and incomes or crime.

What is not valid to conclude from this data? Higher rates of immigration lower household income or raises crime. That simply does not fit the data. Given the data you could (sort of) challenge the claim that immigration makes a city better but you could not argue that it makes cities worse.

What does this mean? It means that Congress should ignore Trump's demands that they take immigration more seriously. Why? Because immigration is - at the least - a non-issue and - at most - is actually a huge positive that we should encourage rather than discourage. And in spite of that, Trump has forced House and Senate members to treat immigration as if it is an important issue to address. (They have three weeks to "resolve" the issue before another shutdown could hit.) It simply is not. And this is an argument that I've made recently here. Trump has won the shutdown because he has forced Congress to take a non-issue seriously. He has won because he has managed to change the focus of DC onto what he imagines is real, like getting your parents to lose sleep in order to fight the monster under your bed. It is such a waste of leadership potential to solve imaginary problems rather than real ones. (And more generally, a waste of leadership potential to fix old problems rather than create something new. Every successful company puts more money into new product development than it does product repair.)

In the minds of Ann Coulter and Donald Trump, you could predict unemployment rates based on immigration rates. Immigrants steal jobs, they tell us. So, if one city of two million had no immigrants its unemployment rate would be zero and if another city of two million had a million immigrants, its unemployment rate would be 50%. And of course this is an inane way to think about an urban economy, almost as if you thought that brown bodies and white bodies were affected differently by gravity. When a person buys gas or groceries, the market hasn't a clue whether they were born within a block of that place or half a world away. 

There are any number of issues that congress should consider if they are intent on raising income, lowering crime and making life better. Immigration is not one of them. If anything, the data suggests that Congress should do what it can to increase immigration, not decrease it.

We're suffering from the worst recorded case ever of an old man talking back to his TV. Terrifyingly, making his narcissism seem justified rather than delusional, his TV then talks back to him. Trump is on a closed-circuit loop with Fox news. Facts have little influence on his thinking. He gets his talking points from Fox and then they report on what he has talked about. Like Hendrix's guitar, the feedback just increases the volume and the distortion as Trump talks to FOX (Frightened Old Xenophobes) and FOX talks back to him and Trump's story escalates from a campaign to a presidency to a Monty-Pythonesque tragedy.

My two cents? Congress should ignore his insistence that they treat immigration as a real problem and instead either insist on studies as prelude to policy or even celebrate immigration as a positive. It's time to de-escalate the feedback with facts before we are all made as crazy as Trump or waste anymore time chasing his hallucinations.

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Quick note: this data is for foreign born. It makes no distinction between legal and illegal immigration; the two move together.
https://cis.org/Report/Connection-Between-Legal-and-Illegal-Immigration

The Ideal 2020 Candidate

Ideal candidates are genius at politics (they know how to get elected) and policy (they can make the world better once they are elected) and are focused more on what they can do than what flaws they now have or have had in the past.

 So who am I looking for in 2020? My ideal candidate would 

• Promote disruption in the form of entrepreneurship and social invention and help to mitigate the trauma of disruption in the form of social safety nets. Entrepreneurship should be taught and set up as expectation for a segment of the population in the same way that college education now is and governments and communities should do what they can to make it easier for entrepreneurs to be successful and less painful for individuals impacted by their success.
• Move to change laws so that employees are better able to use corporations as tools for creating wealth, to work towards the popularization of entrepreneurship as a way to transform work.
• Invest record amounts in research in every field.
• Create research funding for major agencies like the Environmental Protection Agency Housing and Urban Development, Department of Energy, Department of Education, Department of Transportation and Justice Department that rivals the research funding for the Department of Defense.
• Create a new cabinet position: the Secretary of Happiness (and the pursuit thereof).
• Will support an independent Fed and Keynesian policy
• Keep us highly engaged in international organizations like NATO, the UN, WTO and even lead initiatives to create new institutions to deal with the myriad realities that spill across borders
• Move towards subsidizing university education the same way we do high school education, leaving students without debt.
• Be a strong advocate for immigration
• Move towards more comprehensive job training and retraining programs that make groups other than knowledge workers more productive. 
• Help promote connection. Not only at the individual level as a route to richer communities (and lower suicide rates) but at an institutional level as a route to making corporations, schools, NGOs, and government agencies more robust.
• Work towards universal healthcare by whatever means is politically practical (see social safety nets). 
• Take climate change seriously,
• Police poor neighborhoods and financial institutions with equal vigor and respect.
• Not be a fan of universal basic income.
• Think it is normal rather than evil for a country to have billionaires and poor people.
• Think it makes sense to tax inheritance more than returns on capital more than income (rather than the reverse as it is now).
• Think that it makes sense to increase the marginal tax rate but never to higher than 50%.
• Ask a little more of everyone in the top 50% and ask everyone in the top 70% to pay taxes to contribute to the quality of our common good.
• Believe that life will be better in 100 years and is choose to act in a way that enhances life in a century rather than ignores it.
• Experiments their way into the future
• And perhaps most importantly, knows that mistakes are inevitable and given that chooses to err on the side of kindness when uncertain about a policy or judgement. People critical of this candidate would alternate between criticizing them for being so wonkish (loving policy and numbers) and being soft-hearted.

I don't expect any one candidate who checks all these boxes to emerge, so I will vote for the candidate who comes closest to this. Perhaps.

There is even one scenario in which I might be persuaded to vote for a candidate who checks only a few of the items on this list. That would be to vote for a candidate who promises me that Donald Trump will die in jail. We have an entire generation who could watch Donald Trump and believe that it is a good idea to lie, cheat, and to approach every encounter as a win-lose engagement. Parents need to be able to tell their sons, "Sure you can choose to be selfish and combative your whole life, ignoring every law and social norm. You can be just like Trump. And you might die in jail."  If we have millions of people believing that Trump's parasitic behavior is a good strategy, our country will become like every other dysfunctional country where bribery and corruption are the norms and people with good hearts and a sense of fair play are considered dupes. Failure to implement my policy ideas would pale in comparison to the damage wrought by Trump becoming a norm for behavior. 

Growing Income Inequality and the Real Policy Solution of Popularizing Entrepreneurship

The effects of automation are accelerating as algorithms grow more sophisticated and a global market means more people who might come up with that one killer app or manufacturing process or delivery trick that quickly obsoletes 2 or 3 people or even 2 or 3 industries steadily grows by millions every month.

How does one counter that? Income vulnerability seems inevitable in a world of growing disruption. The good news is that the team who creates the new solution to obsolete the old one(s) will get rich; the bad news is that there is a whole swath of people will lose income and wealth as they become obsolete. If we want to ride this wild horse of automation to higher productivity, we need to acknowledge that our safety nets need to be good. How this happens will ultimately involve a mix of unemployment insurance, universal healthcare, affordable or free education and retraining for any age, and perhaps a variant of guaranteed income. But those are mere bandages on the body politic, merely a way to mitigate the pain of disruption. The solution that is essential to couple with more rapid automation is more rapid entrepreneurship and innovation.

When we no longer need 90% of our people to grow our food on the farm, we can use them for other things. Some can get into food preparation and serving, letting us enjoy a wider variety of foods that people in 1790 America (when 90% of the population was in agriculture) would have never imagined: foods like sushi, adoboda tacos, spaghetti, and liquid nitrogen ice cream. Others can design and make cars, legos, barbie dolls, and new drugs. If there is nothing else to do but grow food, reducing the percentage of our workforce needed to grow food from 90% to 1% (which is roughly where it is today) is a catastrophe. 1% of the population would be incredibly rich and the other 99% would literally need credit just to buy food. But we innovate and those 99% come back with cool stuff that entices the farmer to give up his food. (Or, more precisely, he sells his crop for money he can use for the cool stuff.)

The problem with wealth and income inequality today is not that people are getting rich automating jobs. The problem is that we have not learned how to balance that rate of automation with an equal or even better rate of innovation and entrepreneurship.  What this means will involve everything from even more money poured into R and D to more funding even within Fortune 500 companies for entrepreneurial efforts that simultaneously allow employees and the company to create new wealth.

As mentioned, programs to mitigate income and wealth inequality seem both necessary and inevitable. But to stop there is not enough. The real question of economic progress should be: how do we create the new so rapidly that it feels like the old industries are not automating jobs fast enough to free up workers to enter the new industries and companies? 

Economics makes a big deal of supply and demand and equilibrium between them. It's a beautiful and powerful concept. But just as important to prosperity is understanding the balance between automation and innovation, destroying the old while creating the new. What is the solution for automation obsoleting jobs? Popularizing entrepreneurship: making it easier for more people to be more entrepreneurial and even changing the definition of work as much as the information economy has or the industrial economy before that.

Ayn Rand

I am done with the monster of "we," the word of serfdom, of plunder, of misery, falsehood and shame.
And now I see the face of god, and I raise this god over the earth, this god whom men have sought since men came into being, this god who will grant them joy and peace and pride.
This god, this one word:
"I."
- Ayn Rand  [quote from intro to Will Storr's Selfie]

Ayn Rand.

Rand Paul is named after her.

Paul Ryan named her as his most influential philosopher.

My two cents? She didn't write philosophy. She wrote fiction. And you'd do much better basing policy on JK Rowling's fiction - even with its heavy reliance on magic - than hers. Soulless and selfish and apparently a big inspiration for more than a few of the libertarian persuasion. 

Two Lies to Support the Border Wall

In the late 1990s, illegal border crossings peaked. It was a crisis of near-apocalyptic proportions as immigrants streamed into the US in record numbers.

Wait. Wait. No. That did not happen.

In the late 1990s, illegal border crossing peaked. That's true. It's also true that from 1997 to 1999, the American economy created 3.2 million jobs per year (that's 824k more jobs a year than the economy has created in the last three years). Violent crime had fallen by a third from early in the decade. It was no crisis. No apocalypse. 

And illegal border crossings were 5X what they are now. 5X.

So, two lies in the claim that our current situation is a crisis for which we should close the government. The first lie is that illegal immigration is now high. It's not. The second lie is that illegal immigration drives a spike in unemployment and crime. It does not. 

#factsnotfear

Job Creation and Market Returns for the Last 49 Years

This uses the compound annual growth rate (CAGR) calculation from the first to last day of the decade for the S&P 500 and simply averages annual job creation during each decade (using the first 9 years for this decade).

During the last half of the 20th century - 1950 to 2000 - CAGR was 9.4% a year. That's almost exactly what it's been this decade. But with the train wreck of the oughts, so far this century CAGR works out to 5.6%. So I guess one question is whether we'll ever make up for the last decade or whether the job and stock market just continue at the rate they were before it. Is that potential lost or still waiting to be realized?