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.

-----------------
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?

My Report Card on the 2018 Economic Forecast

In December of 2017, I wrote an economic forecast for 2018. I got the stock market prediction right and the job creation forecast wrong.

2017 was a great year for stocks, the SnP 500 up 19.3%. Simply put, I thought that stocks would not do as well for two reasons: Trump's first year, nearly trillion dollar stimulus would not be repeated and after 8 years of recovery it seemed to me that folks had forgotten that the Dow is always just one keystroke away from down. That said, it seemed unlikely that anything catastrophic would hit before year end so I estimated a downturn of only 5% to 10%. It would be tough to land more precisely in the middle of that range, so I'll give myself an A+ on that metric.

I forecast that the job market would slow this year. I'm delighted to be wrong on this score and the economy created a stunning (particularly for 99 months into a recovery) 2,638,000 jobs. Mostly I was bitten by the wrong assumption about labor force participation rate.

Labor force participation rate (LFPR) rose 0.4% during 2018. In the last decade it has fallen closer to an average of 0.4% and had only once in the last decade risen more during the prior twelve months. If LFPR had been flat, the economy would have created 2 million jobs; if it had fallen by 0.4% as it has during the last eight plus years of the recovery, the economy would have created only 1.3 million jobs rather than 2.6 million. That's pretty close to my forecast of 1 million. (No, I don't recall why I failed to provide a range for the job creation as I did for the other two forecasts.)

And of course my assuming that the unemployment rate would rise by a couple of tenths of a point rather than fall by a couple of tenths compounded by forecasting error as well. Had the unemployment rate finished the year at 4.1% instead of 3.9%, job creation would have been lower by about 300k, which - combined with a typical fall in labor force participation rate - would have meant that I'd had hit my one million jobs created as precisely as I'd hit the SnP 500 forecast. But I didn't. 

This job market is amazing and I'm not embarrassed to have assumed that it would become more normal in 2018. That seemed reasonable. Again, given what it means for household incomes and wealth creation, I'm delighted that job creation continues to be so strong. 99 months of uninterrupted job creation is more than double the old record of 46 months set in the late 1980s (and triple the late 90s dot-com boom of 33 months). This is a fabulous way to miss a jobs forecast. Creating 2.6 million jobs with the unemployment rate under 3% is a wonderful kind of madness.

My forecast was good for the economic metric that was bad (the stock market) and was bad for the metric that was good (the job market). I'm sure that means something but I'm not sure what.

In Which Your Blog Author Vents About Stupid Political Beliefs

Since Donald Trump's political ascension I've grown less tolerant of stupid ideas. Which stupid political ideas? Here are a few.

Belief that ...

•  you can raise median wages by raising minimum wages
•  illegal immigration raises crime or lowers our quality of life
• (bonus stupidity points if you believe this about legal immigration)
• Keynesian economics is unnecessary to a smoothly functioning financial system
• Keynesian-inspired policy is fair or cheap without personal - very expensive - penalties for bankers who force bailouts
• simple decency, also known as being polite, puts too much emphasis on being politically correct and should be blown up
• inheritance tax should be lower than income tax
• we should spend taxpayer money imprisoning guys who smoke pot
• people choose poverty 
• we can end poverty
• Ayn Rand's fiction is a better guide to government policy than J.K. Rowling's fiction
• cryptocurrency serves a purpose
• global warming is a problem that will only impact future generations or is too expensive to address now
• it's a bad idea to invest in alternative energy
• evolution (after working for billions of years) and economic progress (after working for centuries) will suddenly halt in our lifetimes and the future will only be worse
• government spending to close the gap between rich and poor kids when it comes to opportunities for health, learning, safety and engagement won't pay off for generations
• economic progress follows from a win-lose philosophy
• it's a good idea to protect jobs, companies and industries from gales of creative destruction
• it's a good idea to leave people vulnerable to gales of creative destruction
• we can make economic progress through trade protection
• healthcare is not a right
• government should not spend huge amounts investing in infrastructure, education and R&D
• teachers can be credible role models for kids while struggling financially because of low-wages or hourly pay that is subject to change every school term
• school bonds that give money to building contractors rather than teachers make education more effective

Scotland and How Identity and Economics Move in Opposite Directions

Scotland is weird. Scotland's First Minister Nicola Sturgeon has two goals that seem at odds with one another. She has already led one - failed - effort to break Scotland off from the UK. Now that the UK has voted to leave the EU, she has renewed that call for separation in order to ... [wait for it] ... be a part of the EU. Leave the UK but remain in the EU? If you are wondering how that makes sense and whether she's mad, stay tuned for an explanation of how it not only makes sense but helps to illuminate an important distinction (and no, Nicola is not mad but is instead delightfully wise).

The EU was formed as a means to create the largest economy in the world. People and goods can easily move across national borders within the EU, giving every employee in the EU access to more employers, every employer access to more employees and everyone access to more goods and services that can originate anywhere and be sold and consumed anywhere (else). 

Scotland was first made a part of the UK to unite kingdoms that shared a monarch. A nation-state is not just an economy. It lends an identity to the people within it. We can talk about the British or French or Americans and believe that we instantly know something about them. And more importantly, a child who grows up singing La Marseillaise or saying Pledge of Allegiance to the Stars and Stripes will believe something about who he or she is. "I'm an American," is a statement that is rich with meaning in spite of how very different Americans are from one another.

The EU is about economics and the UK is about identity. 

When our focus is on identity, we move towards something smaller. Identity distinguishes us from others. "You're tall but I'm short." "You're Canadian but I'm French." "You're straight but I'm gay." "You're a Lord of the Rings fan but I'm a Harry Potter fan." Identity does not stop until we reach the point of the individual. The fewer people with whom we share an identity, the better.

By contrast, when our focus is on economics, we move towards something bigger. What we can do as an individual is paltry compared to what we can do as community. If we have the specialization and knowledge and skills that come along with a set of 7 people, we live a life of poverty. If we have the specialization and knowledge and skills that come along with a set of 7 million - or even 7 billion - people, we have the potential to live a life of abundance. The more people with whom we can exchange goods and ideas, the better. 

Your Californian blog author meets
Scotland's First Minister in 2017.

It is dangerous to confuse identity and economics. Smaller worlds economically make us poorer and bigger worlds in terms of identity make us invisible. (To be one of a billion Muslims or Christians with no further distinction is to disappear.)

And now we return to Nicola Sturgeon who wants for her Scotland an identity more precise than UK and for her Scotland an economy bigger than the UK. Why? She's intent on giving her people a distinct identity in which they are more likely to make themselves visible and a broad set of economic opportunities in which they can find jobs, create businesses, and buy products from a broad menu of options. Why the abundance of choices that come from a bigger economy? In no small part because it gives the distinct individual a better chance of finding a distinct job or product that matches their unique history and aspiration, skills and passions. 

We're going to see more communities that look like Scotland in that they will - at first glance - seem to be moving in two, opposing directions. Look more deeply at this, though. What we will see is a process of identity creation that won't end until we are all individuals and a process of economic integration that won't end until this is a global economy.

The Good that Could Come from Trump

Every month Trump seems to find a new way to turn the volume up to 11. He's such a cluster of cruel and stupid, confident and confused, bad instincts and indigestion.

As I write this on Christmas day, the country has
- No Secretary of Defense - No Attorney General - No Secretary of the Interior - No Chief of Staff - The S&P 500 is down 24.4% since 1 October - The federal government is shut down

And yet there is one thing good thing that could come out of his presidency.

Trump is Loki. He's the trickster god whose role is to disrupt the status quo. Trump is intent on blowing things up.

Given his continual assault on everything from notions of what it means to be polite to the basics of markets and democracy, he is leaving us with one gift. Once he is gone, no proposal that defies tradition will be immediately dismissed. His legacy could include an openness to new proposals that probably wasn't there before he came.

If I'm right that we are transitioning into a new economy as different from the information economy as it was from the industrial economy before it, then we will need to challenge some things from the status quo. I think that Trump will have made it easier for us to do that.

Prosperity, Genetics, and Social Invention (And Over What Horizon Progress Lies)

I'd like you to predict which of these three people is fastest.

We have a middle-aged woman, a young man and a young woman.

You might speculate about whether the young man is an athlete. You know the young woman is. Some of you will recognize her as Allyson Felix, 3-time world champion short-distance runner (100, 200, and 400 meters) and Olympic medalist. You will likely predict that Allyson is the fastest, then the young man and then the middle-aged woman. Some people might suggest that saying that out loud makes you biased or prejudiced and some might say that it's just common sense. And if you had to choose between other groups you'd judge based on apparent fitness, sex and age. Data might be on your side and there would be all sorts of things we could say about whether you're unfairly excluding one person over another in spite of not really knowing them as individuals. And there might even be a debate about how silly it is to debate this when we have data to inform us who is faster and who is slower. 

But I'm not done with this question. I did not mention the distance they'd travel. I also did not tell you what inventions they have access to.

Now that you know the distance is 500 miles and you know what inventions they have access to - the young man has a bike, the young woman a car and the middle-aged woman a plane - you have absolutely no trouble predicting who is fastest. And in fact, there is no difference in their speeds running that even begins to compare with the difference in the speed they can reach in these different inventions. 

Usain Bolt was this phenomenon of speed last decade. It was mind blowing what he did. He broke the world  record for the 100 meter run in 2009 in the fastest recorded time. He ran roughly 23 mph, probably humanity's fastest time for that distant. 

He was not, though, the fastest person when he was running his race. That honor goes to Nicole Stott who was traveling at 17,150 mph while Bolt was setting his world record. Nicole and her crew mates on the Space Station were moving 745x faster than Bolt.

We're still fascinated by human potential and raw speed. But we don't depend on it as we go about our day. We use technology to get from place to place because it is so much faster. The incremental gains in speed from evolutionary advances are so tiny and slow in comparison to the incremental gains in speed from technology advances that they're not worth mentioning. The tiny and highly variable differences in genetics in determining speed are noise compared to the differences in technology in determining speed.

Now we move to part two of this pop quiz. Let's look at the same three folks and ask the question, Who is most affluent?

Again, you'd have your ideas. You may realize how subject your generalizations are to variation within groups. If you know Allyson is a star you'd likely think she was most affluent. If you didn't and thought she might just be a high school athlete it would be easy to assume that a young, black woman would be worth less than a middle-aged white woman. Probabilities support that guess. 

Let's now throw inventions back into the mix. This time, though, we're talking about which social inventions our three have access to rather than which technological inventions they have access to. 

If affluence is measured by how much one can spend, the young guy is now most affluent. Our young woman has only cash, the middle-aged woman has a credit card and the young guy has access to venture capital. The first can spend hundreds, the next ten thousand and the young guy millions. People with access to consumer credit have more money than people who have only cash, and so on. 

One of the best social inventions is a stable and prosperous country. If you have access to that you will live better than someone who does not. (I know. I know. There is variation in all things and there are people in poor countries who live better than people who live in affluent countries. Still, if you were talking probabilities you would want to bet on the Norwegian rather than the Syrian, At this point in history anyway; it would have been dramatically different a thousand years ago and could reverse again in a century or two.)

The differences in genes as a determinant of speed are noise in comparison to the differences in what technology we have access to. Similarly, differences in self-sufficiency as a determinant of affluence are noise in comparison to differences in what social inventions we have access to. Groups who have access to a peaceful, prosperous country and great education and dynamic companies to work for will be far more affluent than groups who have access to none of these things. That is as clear as the fact that a group in a plane is faster than a group with sneakers.

And once more, a nod to variation. When we get into a plane we all move at 600 mph. When we get into schools or markets or corporations we don't all move at $60,000 a year. There will always be variation in outcomes from systems like factories, schools, and markets. If you want to understand how to better manage such variation, you may want to search for "deming" on this blog or W. Edwards Deming more generally. The claim is not that all individuals benefit equally from these social inventions: the claim is that communities with different social inventions at different stages of development have very different outcomes. Take two populations of 100 or 100 million and put one in a society where social inventions like universities or financial markets are nonexistent or reserved for just the elite and put another in a society where such social inventions are accessible to a wide swath of people, and it is the latter that will be more affluent. Every time.

For at least the last 10,000 years - maybe the last 100,000 years - social evolution has done more to determine our quality of life than has genetic evolution. There is no conceivable genetic advance that will ever make us capable of running 17,150 mph. Nor is there any genetic advance that will ever enable us to live as well from self-sufficiency as we do in today's modern world. The point is to worry less about differences in individual ability within our current systems than to worry about how to make those social inventions and systems more useful for groups and the distinct individuals within them. Significant progress is never about pushing people harder within current systems; it is about the continual act of invention and reinvention - sometimes tiny and incremental and sometimes sweeping and grand - of those systems to result in longer lives and more autonomy, more choice about how to live a life. We don't live better than our ancestors from 1900 because we work harder or make bigger sacrifices. We live better because the systems we depend on and use - the social technology that makes us more or less affluent - are better. Focusing on the performance of our systems rather than the performance of individuals within them is the direction in which progress lies.

A More Civil War Between Two Economies

The American Civil War was fought between two economies: the South’s agricultural economy and the North’s industrial economy. Today's more civil war is also a clash of two economies: industrial and information. In the industrial economy are factory workers threatened by globalization and traditional capitalists who want lower taxes and smaller government; in the information economy are knowledge workers and new entrepreneurs who depend on globalization and public investment in education and research. They live in different economies. They want different policies.

In a country as big and complex as the US, people don't vote for or against candidates for just one reason. Still, these two economies explain a lot.

People in congressional districts that voted Democratic in 2018 are more likely to have college degrees, twice as likely to work in digital services and almost half as likely to work in manufacturing.[1] In the 50 counties with the most college grads, Hillary Clinton won by 26 percentage points; in the 50 counties with the least, she lost by 31 points.[2] College grads are the simplest proxy for knowledge workers and have become one of the simplest predictors of how communities vote.

The classic knowledge worker – whether biologists and chemists developing new drugs, engineers designing new products or programmers creating apps – is working towards disruption. Their new product displaces an old one.

By contrast, factory workers and traditional capitalists dislike disruption.

If we define traditional capitalists as people who invest in physical factories or private businesses, it becomes clear that they are more threatened by disruption. They can’t quickly buy and sell their assets like day traders and two things will enhance their investment: lower taxes and protection from sudden obsolescence.

If factory workers are laid-off they could be forced to leave manufacturing – or even town - for lower paying jobs. A new product or technology – the very goal of information workers - could make an entire factory obsolete and that could mean a wave of layoffs that might devastate a small community.

Disruption threatens factory workers and traditional capitalists in the industrial economy but is a goal of the new entrepreneurs and knowledge workers in the information economy.  This drives conflict.

People in the two economies also experience the outside world differently.

Knowledge workers inevitably have immigrant coworkers and foreign customers and suppliers. (As the name suggests, the world wide web isn’t a local service.) About half of Silicon Valley’s startups are co-founded by first or second-generation immigrants. Information shows about as much respect for borders as do clouds and this information economy is a global economy. NAFTA, WTO, and the EU were defined in the 1990s along with the internet. Also, knowledge workers generally live in cities among neighbors, coworkers and family from around the world.

By contrast, factory workers are more likely to see the outside world as a threat. Imagine competing with factory workers from foreign countries who might make as little in a day as you make in an hour. If you live in a rural area you know fewer foreigners. (Foreigners are 27% of California’s population but only 1.6% of West Virginia’s.) West Virginia has 5.6X as many veterans as immigrants; California has 5.3X as many immigrants as veterans. People in rural areas are more likely to meet foreigners through war and occupation than work and dating. To folks in the industrial economy, foreigners are people who take your job or even your life. To folks in the information economy, foreigners are coworkers, neighbors and family.

Everyone wants security. People in the industrial economy want it in the form of protection from the rest of the world and people in the information economy want it in the form of social programs. Factory workers want walls for immigrants and tariffs for trade. Knowledge workers want good social safety nets like generous unemployment insurance, universal healthcare and great education and retraining programs to help them through what they see as inevitable disruption. Knowledge workers want strong government. Factory workers want strong borders.

Traditional capitalists want low taxes and small government. They are trying to maximize their return on investment and aren’t interested in high-taxes to create a strong government. By contrast, the new entrepreneur relies on healthy government investment. The quality of his employees depends on the quality of education. And the knowledge workers the new entrepreneur employs often develop products that depend on government research. Mariana Mazzucato argues that companies like Apple could develop products like the iPhone because of earlier government research into technologies like touch screens and satellites. Government funds the uncertain R (research) and companies invest in the shorter-term D (development). In the information economy, R&D is a collaborative affair between the public and private sectors.

The conflict between knowledge workers and factory workers does not come out of irrational thinking or tribal impulses. They are protecting the economy that defines them.

There is precedent for such a divide.

The American Civil War was fought in the 1860s. Between 1840 and 1890, agriculture’s share of economic output and employment fell by half while manufacturing’s share doubled.[3]

The industrial economy – and Republicans - emerged from the north. Lincoln was the first Republican president, elected just six years after the party was founded. Between 1861 and 1933, a Republican sat in the White House 72% of the time. In 1861 daily life would have been mostly familiar to someone from 1776; by 1933, the nation had automobiles, electricity, telephones, airplanes and radio. Republicans were presidents and capital was king. The industrial economy emerged in gales of creative destruction and the South’s agricultural economy and way of life – both dependent on slavery - were two of the things that it destroyed.

The agricultural economy employed 90% of the workforce at our country’s founding; it now employs 1%. The industrial economy is following its trajectory. From 1910 to 2015, manufacturing as a percentage of employment fell from 33% to 9%.[4] Meanwhile, between 1940 and 2016, the percentage of Americans with four or more years of college rose from 5% to 33%. The industrial economy, like the agricultural economy before it, has proven to be just another phase of economic development rather than its culmination. The industrial economy eclipsed the agricultural economy as a source of wealth and jobs in the late 1800s; about a century later, the information economy has eclipsed the industrial economy. If you define yourself as a farmer or factory worker, such disruptions are a personal threat and not just an economic phenomenon.

People in the industrial economy feel under attack. For that reason alone they rally behind the warrior chief Trump and care little about whether others see him as crude or combative; he’s protecting them from an attack on their lifestyle and livelihood.

But if a transition from an industrial economy is as inevitable as the transition from an agricultural economy, the question becomes, What policies help with the transition? Policies designed to protect jobs, industries or even economies are expensive and defer the inevitable. Policies that protect people rather than jobs, helping them to make transitions rather than resist them, are less expensive and yield a better return. The transition won’t be – has not been – trivial but here are just a couple of suggestions.

Treat career investment more like a common right than a special privilege. States invest about $40,000[5] in knowledge workers who spend five years at a public university. Factory workers (or anyone who doesn’t go to university) deserve a similar investment. The money could be spent on education (vocational or trades schooling, for instance), venture capital for startups or housing allowance to move them into more dynamic communities with better jobs.

Another policy initiative could better integrate rural workers into the information economy. People in cities are 40 to 50% more productive for host of reasons, most stemming from the fact that they are part of richer and more varied communities. It is worth exploring options for better connecting folks in less populous communities with folks in nearby cities or rural hubs so they, too, enjoy more of the economic benefits of living in cities where ease of connection and specialization makes people more productive. 

One step to ending the more civil war between factory workers and knowledge workers is to treat them the same: invest in both and make them part of the same, continually evolving economy. Because as it turns out, the economy is not any one thing: it is an evolving market that will change even more rapidly as it becomes more clearly an entrepreneurial economy rather than the agriculture, industrial or information economies that preceded it.

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[1] https://www.cnbc.com/2018/11/15/charts-democrats-represent-modern-economy-republicans-left-behind.html

[2] http://fivethirtyeight.com/features/education-not-income-predicted-who-would-vote-for-trump/

[3] https://www.cambridge.org/core/journals/journal-of-economic-history/article/americas-first-great-moderation/E3217E2FA4B9D3CAD4AA23A67CDCDC62

[4] https://www.bls.gov/opub/ted/2016/employment-by-industry-1910-and-2015.htm

[5] https://www.usnews.com/news/best-states/slideshows/states-investing-most-in-higher-education-per-person

You Dreamer You

Imagine a game show.

You find yourself on stage with 3 strangers.

You are told to vote on a proposal to send foreign-born, undocumented people back to the country where they were born. If a majority of you vote for this proposal, it will be immediately enforced. Whether brought to the country as an infant or a 14 year old, one cannot stay here unless one's parent or guardian had the proper paperwork. Such people will be immediately deported once the law is passed.

Now it gets more interesting.

You are then told that one of you is actually foreign born and undocumented. As you talk among yourself you realize that none of you have a memory of living anywhere but the US. There is a 25% chance that the "born in a foreign country but raised in the US" person is you. Meaning, there is a 25% chance that you are the one who will be deported to what is - to you - a foreign country.

How do you vote?

#dreamers

Systems Optimization and a Life

I'm going to argue two seemingly contradictory points. First, a point about systems optimization.

You don't optimize a system by optimizing any one part of it. To optimize a system, you have to sub-optimize its parts. Let me illustrate what I mean by talking about a life.

Your life is a product of so many things: your physical health and fitness, your mental health and learning, your social life and psychological well being, your sense of meaning, your connection to the community around you and your sense of individuality in the community around you, your sense of legacy, individuality, belonging, your income and financial security, your cool shoes or cool car or cool taste in music, your hedonistic pleasures of food and sex, the hunger for stories that comes in the consumption of books and movies, or your tribal urges that find expression by cheering for your team and so many other things.

Here is the deal, though. If you optimize any one of those, you will sub-optimize your whole life. Do everything you can to be in peak physical condition and you'll likely have little energy left for something like plowing through great literature or keeping current on important new books. And if you do both of those things while working a full-time job, working out and reading all the great books, your social life will suffer. Life is zero-sum and if you optimize to any one piece of the myriad pieces that make up a life, you will sub-optimize the whole of your life. Oddly, the way to optimize any system - including and perhaps especially your life - is to sub-optimize every piece of it.

The punchline is perhaps cliche: a balanced life means moderation in all things.

Now the contradictory point.

This week there was some furor over Elon Musk's claim that to accomplish anything a person needs to work 80 hours a week. People pointed out that an 80 hour week is counterproductive. I totally agree. Long term. Short term? I think he's right.

A moderate, balanced life is not something that one achieves in any given instant. You don't split up each hour into 7 minutes for workout, 3 minutes for reading great literature, 8 minutes for building relationships, 4 minutes for eating, etc. Even within the course of a day or week we focus on just one thing at a time. So in any given instant, we're certainly not balanced.

There are times in life when you need to move forward. In those instances you look for the limit or obstacle to moving forward and you challenge that. You do optimize to the part that is the limit .... at least until it no longer is.

So then the question is, if you are going to optimize a life but not any one part of it, what does it actually mean to sub-optimize in a way that is best for your life?  It means that you have stretches of life that really do optimize for one part of it and subordinate everything else. Let's say that you have children. You don't want the entire rest of your life dedicated to doing what is best for your children, optimizing everything for them. But in those first few months? First few years? Maybe even first decade or so? You will optimize for them. Nobody with a newborn is running marathons or throwing big parties or reading great literature. They're sub-optimizing pretty much everything to that one thing: the newborn.

If you create a dissertation or book or symphony or business, pursue a gold medal or partnership in a prestigious law firm, you will probably go through something similar to what one goes through with a newborn. You're going to sub-optimize to that one thing. At least for a few years. New parents are not going to say that they'll only put in 40 hours each to care for their newborn; it would die in the other 88 hours of the week. A similar, but less dramatic thing, can happen with any of these ventures. Balance suggests that you never dive into anything: success suggests that you do.

And maybe you just keeping diving into things for the whole of your life. Or more realistically, at various times in your life that could be separated by six months to six years of "la de dah," days in which not a great deal happens. (That perfect storm of incredible opportunity for which you are incredibly well suited at the right time of life only happens one, two, maybe three or four times a life.) You throw yourself into things that result in sub-optimization elsewhere. You're immoderately out of balance at every stage and the end result is a full life that is balanced in that it lets you experience life as whole over the course of a whole life, but never in any one instant. Because in the end, a life takes a lifetime and if you're interested in a legacy of any kind, you don't even optimize for a window that small. (But that's the stuff of another post.)

Ocasio-Cortez as the Right's New Bogeywoman

Alexandria Ocasio-Cortez became the youngest woman ever elected to Congress. At the tender age of 29 she has become a favorite target of the right. She's got everything they love in a target: a beautiful, energizing young woman of color is the exact opposite of the old, white congressmen like Mitch McConnell who they prefer.

With the recent loss of Mia Love in Utah, "Republicans will lose 43% of their women in the House, [dropping] from 23 to just 13. 90% of House Republicans will be white men," according to Dave Wasserman.  The Republican Congressional Black Caucus could meet in a phone booth: Mia Love was its sole member. Now that caucus can actually meet in an imaginary space.

Ocasio-Cortez represents everything the Republican Party is not. Exit polls tell us that race is a huge predictor of how one votes: 54% of whites vote Republican and 76% of non-whites vote Democrat. Age, too, is a huge predictor: two-thirds of voters under 30 vote Democrat and only 48% of voters over 65 do. Finally, gender is predictive: 51% of men vote Republican but only 40% of women do. A young minority woman, she is the embodiment of who Republicans cannot win and who this country is becoming.

And conservatives who have convinced themselves that Obama and Clinton were socialists are alarmed to encounter a candidate who actually calls herself socialist. For many conservatives, simply believing that science is real is enough for them to conclude that you are a socialist. I've seen little evidence that my conservative friends can distinguish between pushing for, say, a 3% higher marginal tax rate for inheritances over $3 million and shifting 20% of GDP from the private to public sector.

And in this willing ignorance of the difference between the socialism of a Fidel Castro or northern Europe, today's conservatives are unable to process who Ocasio-Cortez is. From what little I know about her, she has this huge advantage over my libertarian friends: she can point to highly successful communities like Norway, Denmark and Sweden that do what she is advocating; libertarians still only have examples from Ayn Rand's fiction.

This, though, is what is most comical about how alarmed conservatives are by Alexandria Ocasio-Cortez. She is one of 435 House members. One of 535 congressional members. Her vote on policy represents less than 0.2% (not 2% but rather two-tenths of a percent) of Congress.

I was a big Hillary Clinton fan and while I'd have readily voted for Bernie Sanders rather than Trump, I don't get excited by politicians who distrust business as much as Republicans distrust government. (I think that both positions are not only naive but show one of the last, widespread kinds of acceptable bias in this country, groups who openly condemn bankers or government employees as if they were sub-human rather than people filling roles without which our modern world would collapse, and yes, I mean that literally.) Socialists* and libertarians strike me as generally smarter than the average person but generally more naive about how the world works. They're typically better at articulating concepts than pointing to any actual examples of what they're advocating.

All that to say that I would not naturally be a Ocasio-Cortez fan. But I'm becoming one for a host of reasons. One, she has shown such grace in the face of the right's paranoid and incessant attack on her. Two, she's too young to be president and if a person doesn't lean towards socialist or libertarian thought (or both) before the age of 35 they're probably either a really boring or really simple thinker. Three, the things she is fighting for are really important. As she put it in response to a Fox news alarmist piece about her and other new women of color in congress, "Oh no! They discovered our vast conspiracy to take care of children and save the planet."

I share this country with 325 million other people. I never expect to have a set of policies that perfectly capture what I believe. I will say, though, that for me it is such a no-brainer as to whether I'd rather live in Ocasio-Cortez's world where adults get free university than Trump's world where immigrant children get free cages. And that may be the final reason the right is so alarmed by her: she is as appealing as their champion is appalling.


* In this paragraph I refer to socialists are people who distrust bankers. Those I distrust and consider naive. At their worst, they give you a society like Cuba's. Socialist is also used to refer to folks who see bankers and business as vital but merely think that healthcare and education should be available to all. Those I trust. At best they give you a society like Norway or the Netherlands.

Women, Hitler and the Inevitability of Progres

Progress is inevitable.

As someone who loves history I've come to believe that certain things are inevitable. Once the telegraph had been developed, someone would eventually find a way to push voices down the wires and allow conversation. Alexander Graham Bell was the first to file a patent for a telephone and then, hours later, Elisha Gray tried to file a patent for a telephone.  Had neither Bell nor Gray been born, we would still have had a telephone. It was inevitable.

Hitler was not inevitable. No one had to step into power in Europe and derail progress, tipping the world into so much madness and evil. Yet even Hitler illustrates the inevitability of progress.

Hitler killed 6 million Jews. It was one of the greatest horrors of the last century, this systematic killing of a people. But he made it even worse. By far. Hitler - in league with Mussolini and Hirohito - started a war of conquest that killed 50 - perhaps s many as 80 - million people. It was the mass manufacture of death.

Hitler's beliefs have still not completely died. Neo-Nazis are not done killing people, even if it never approaches a fraction of the scale of Hitler's madness.

Hitler was awful, not inevitable, and left behind a trail of destruction.

The Allies response to him? Accelerated progress. Technological and Social.

New products that came out of World War 2 include penicillin, the programmable computer, a jet engine, and radar.

Less obviously, production and quality methods came out of this that helped to raise productivity during the 1940s and probably for the rest of the century. Three of the business thinkers who most influenced my understanding of business and were heard and read by millions - Peter Drucker, Russell Ackoff, and W. Edwards Deming - all were involved in the war effort and carried lessons from that time into work with clients into the 21st century.

Hitler did not just accelerate progress in technology and production processes. He actually accelerated social progress.

In the US, men went off to war and women were brought into workplaces. (Management expected productivity to drop when this happened. Instead it rose. They investigated to understand why and what they discovered was .... when assigned to work on a new machine, women asked questions about how it worked. That was it. That was the difference that accounted for the productivity gain.)

To win the war, the US was eager to have as many able-bodied men as they could. This included minorities and this effort at integration did not end with the war. WWII ended in the Fall of 1945 and by the Spring of 1947, Jackie Robinson began playing major league baseball.

Hitler probably accelerated the development of medical care, aviation, computing, racial integration and women gaining more rights. He arguably caused more pain than anyone in the last century and yet .... even all that seemed to give progress more of a boost. (Let me be clear that we could have done this anyways and far less painfully. Probably not as quickly, though. Once we learn to follow the lead of intrinsic, rather than extrinsic, motivation progress will move along at a good clip and not be in reaction to crisis.)

Hillary Clinton came so very close to becoming our first woman president, losing a marathon race by half a second. Now, in the first election after her loss, there have been a record number of women elected to congress. (And still counting. It looks like the 116th Congress will rather fittingly have 116 women. One can only hope that their progress towards representing half of the 435 won't take another 200 years.) Many of these women were motivated by Trump's election and Clinton's loss. It is distinctly possible that the election of a man who bragged about just grabbing pussy because he was a star will actually lead to more women in power than we might have otherwise had.

Progress has a direction. More people have more freedom to live a life of their own choosing. They get access to inventions technological and social. We invent cool things like church and state, cars and planes. That makes life better. Then we figure out how to let more people use these cool things. Religious freedom and democracy, Ford's factory line and commercial air eventually give the everyday person access to these great inventions that once were tools reserved for the elites. Progress continues to create more  possibilities and then offer those to more people.

I'm more appalled at Trump than most people I know. I think he already has created so much unnecessary grief and could be responsible for far more. That said, if even Hitler could not derail progress, there is no way that a man as simple-minded and emotionally needy as Don is going to. All these women winning elections is just the first good thing to come out of his presidency.

What if the Senate is Obsolete?

As economic power and population shifted from rural farms to industrializing cities in decades around 1900, Britain and Germany changed how their parliaments were defined. US legislature hasn't made that shift in representation and probably should. This is going to be contentious.

As Britain pioneered the industrial revolution, Manchester's population exploded. A center for industrialization, Manchester grew to become the UK's third largest city (after London and Glasgow) by 1901. Between 1700 and 1800 it grew from fewer than 10,000 to about 90,000.  Manchester's population doubled between 1801 and 1820 and then doubled again by 1850.

Yet when it began its growth, Parliamentary representation was granted to districts. Manchester did not even elect its own Members of Parliament (MPs) in the early 19th century. It was just part of the Lancashire district.

Meanwhile, in "rotten boroughs," a paltry few could elect two MPs. How few? In one borough, 7 voters got to elect 2 MPs. Dunwich had literally fallen into the sea, leaving just 32 voters clinging to land; they, too, got to elect 2 MPs. In a sense, this was representation by acreage.

The economy changed how population and power was distributed. Industrialization brought workers into cities like Manchester and left behind smaller populations in the little rural communities that - in part thanks to industrialization - needed fewer people to raise crops and tend livestock. While the population and economies of cities grew, their political representation had not.

This changed in the UK (the disparity between Dunwich and Manchester began to be addressed with legislation in 1832) and, later, in Germany, Austria and France through a series of parliamentary reforms starting in the early 1800s and continuing through the first world war. As the economy shifted from agriculture to industrial, as the important factor shifted from land to capital, these communities shifted political power to give voice to the members of this new economy.

The need for such a shift in the US is less dramatic. At least in the House. Divided into 435 districts by population (obviously a number that grows every decade), the US is not going to have anything as egregious as 7 people electing two representatives.

Nonetheless, the Senate is still structured around the notion that acreage deserves representation. Like the early forms of British parliament that found themselves antiquated by urbanization and industrialization, the US Senate gives disproportionate representation to owners of land rather than capital or knowledge. Two states, Wyoming and Vermont, have populations smaller than Washington DC. Those states have four senators and DC has none. 21 states with a population of 36 million get 42 senators; California with a population of 39 million gets 2 senators. In one part of the country, you are just one of 850,000 voices your senator must represent; in another, you are one of 19.7 million voices

California has helped to pioneer the information and entrepreneurial economies and that has made it successful in industries like aerospace, communications, silicon, software, biotech, and the internet. Of the 100 most valuable companies in the world earlier this year, the market cap of companies in California represented $4.2 trillion of the US's $14.1 trillion (and of the world's $21.2 trillion). California represents 12.4% of the American population and 30% of the value of the country's biggest companies. Like Manchester in the early 19th century, California's lead in creating jobs and wealth has not yet translated into commensurate representation.

In 1790, when the US was founded, 90% of workers were in agriculture. Acreage was a pretty good proxy for good representation at that time. Agriculture now employs fewer than 2% of American workers. Acreage is now a terrible approximation of how representation should be calculated. (And yes, I know that technically the Senate is a way to represent states not acreage but it does effectively do that. State representation does not follow people around as they move; states "govern" over a constant and stable area, not a constant and stable population. What this effectively means is that Senators represent acreage.)

As it now stands, the politics in the US is going to be disproportionately defined by the least populous and least affluent areas of the country because of how the Senate is structured. It's hard to imagine us ignoring that for too much longer or imagine that addressing this issue will ever be easy.

The Lesson of World War One (That is too costly to learn twice)

Today is the 100th anniversary of the end of "the Great War." This war killed 15 to 20 million people but within a generation we had a second world war that killed 60 million. In between, the Great Depression caused so much economic misery that it gave power to communists and fascists throughout the world.

The decades after the first world war were a time of misery. The decades after the second world war were a time of peace and prosperity.

Between 1350 and 1950, there was at least one major military confrontation between European powers in every decade. What changed after 1950 is that we created international institutions.

There is a quip that nations either exchange goods or gunfire. Economic development and trade have been a boon to peace. The West also has institutions that link it together: NATO, the UN the IMF and the EU. These didn't really exist until after WWII and they do a great deal to explain why the time after the second world war was so starkly different from the time after first world war.

Just as the institutions of families, city councils, federal governments, corporations, churches and banks all deserve continual criticism and drive to improve them so that they adapt to changing realities and new possibilities, so do these post WWII institutions. They need improving. Without institutions we are like the other primates, though. We can't afford to neglect or discard them. And the West without these post-WWII institutions would be more like the world of Stalin, Franco, Mussolini, and Hitler than JFK and Reagan, Thatcher and Blair, Trudeau and Mulroney, de Gaulle and Chirac, and Kohl and Merkel.

The lesson of WWI is that without creating institutions that transcend nations we again slip into the the madness that goes by a variety of names (patriotism, nationalism, self-interest) and devolves into the worst kind of competition rather than raise us to the best kind of cooperation. It is a lesson too costly to learn twice.

What is Certain in Today's Election

We live in a probabilistic, not deterministic world. The Democrats will probably win the House and the Republicans will probably hold the Senate but .... we don't know. Yet. Fivethirtyeight gives Republicans a 15% chance of keeping the House and the Democrats a 15% chance of winning the Senate.

Reality is choosing among possible paths as rapidly as it can but there are so many of them. We can simulate reality so much faster than reality can play out because reality does not simplify.

One of the things that we will learn is how unique is Trump. It is very normal for a Republican to win the presidency after two terms of a Democrat in the White House. In that sense, the 2016 election was boring and normal. But of course Trump is a bizarre character who seems to most of us to be hugely different than a typical Republican. If he really is, the backlash could be bigger than what is captured in current probabilities; if typical Republicans and swing voters think he is really no different than a normal Republican, there will likely be a swing towards Democrats but it won't be very dramatic; about enough to win the House but still be still be a minority in the Senate.

What is certain? 

Democrats could win by 6 points nationally (53 to 47) and still lose the House. Because of gerrymandering and the fact that individual voters in big cities have less influence even in House races, Republicans have about a 5 to 6 point starting advantage for Congress. That strikes me as the most remarkable thing about politics in this second decade in the 21st century.

Related, the counties that voted for Clinton represent two-thirds of GDP. It is the areas of the country that least understand how to create jobs and wealth that thought Trump's anti-trade, anti-immigrant, nationalist agenda sounded like a good idea.

As it now stands, our policy is being decided by minorities as counted by the number of voters and GDP. That's certain. And that is certainly weird.

What else is certain? The House will decide whether we learn what Mueller has learned about Trump. The House will decide whether Trump will - for the first time in his life - experience any negative consequences for any negative deeds. Voters today will decide whether we continue to have a Republican-led House that merely enables Trump or a Democratic-led House that checks his worst excesses. 

What is certain is that Trump will be more dangerous with a Republican-led House. I'm certain that I don't want two more years of a Congress that merely acquiesces to his every whim; I wish I could be certain we'll get that.

Finally, as I think about today's election, the words of Tiny Tim repeat in my head: God bless us everyone.