What Border Agents Might Consider

Today Muhammad Ali Jr. was detained by border agents as he returned to the US from Jamaica. He was held for nearly 2 hours as they repeatedly questioned him about his religion, where he was born, and his name. He's considering legal action.

This sort of thing did not happen before Trump's election. Trump wants to ban Muslims and border agents are acting on his wishes even though courts have thrown out his first executive order aimed at enacting that ban.

This is blatantly unconstitutional and there are only a couple of ways this can go.

The most unlikely direction is that this sort of discrimination becomes the new normal and we become a less open and diverse country, realizing the ideal of white nationalists like Steven Bannon. The implications of this direction are so dire - our universities, corporations, conferences, tech hubs, intellects and inventors all become second rate as the best in the world begin to choose new places to learn, work, live, and collaborate. Too many rich and powerful people will oppose this to allow people as small as Trump and Bannon to vandalize our country like this. This is certainly a possible outcome but it is unlikely to be sustainable.

A more probable outcome is that this gross infraction of constitutional law will prove to be temporary. At that point the border agents engaged in this behavior will have to be prepared for investigations that could result in legal action against them. Unconstitutional behavior has consequences for everyone from president to entry-level agent. The only reason there is currently no consequence for this is because Republicans have the House and Senate and they don't care about constitutional niceties nearly as much as they care about offending Trump and his base and exploiting a monopoly on power to get their agenda passed. But when they lose even one branch of Congress, the investigations will begin. Once a special investigator was appointed for Watergate or Lewinsky, impeachment followed and nobody in Congress could stop that train. This will happen eventually. Either the Republicans do it now or the Democrats will do it later. And when it does, border agents and people throughout the organization below Trump will either be on the side of the constitution or find themselves in legal trouble.

It might be exciting to go against the constitution in pursuit of some grand vision but American history isn't kind to parties who do. Rather than being excited about the opportunity to crack down on people they don't care for, border agents might think about trouble with other people they don't care for: lawyers. It's wildly improbable that any of the Muslim immigrants or visitors that worry them will take action against them; it is distinctly possible that lawyers will. This might be worth considering.

The Price of a Simplistic View of Intelligence - A Trumpian Tragedy

We like the simple notion of a person being either smart or stupid. It's tempting to say, "She's intelligent," or "He's so dumb," as if it's settled.

As it turns out, that's not a particularly intelligent way to think about it.

Almost everyone is either really smart or really stupid in the right context, situation, or task. I can think of half a dozen things I'm stupid at (art composition, foreign languages, dance steps, etc.) and half a dozen things I'm smart at (project management, history, economics, listing half a dozen things). Part of life is getting smart at some things that matter and the bigger part of life is then finding or creating situations in which those smarts create value and make you feel accomplished.

When you blithely assume that someone is just smart or dumb, you can get into all sorts of trouble. You gloss over the fact that the guy you dismissed as dumb is actually really insightful about the kindness of strangers or really clever at tying fishing lures or any of a number of other things. And if you get caught up in the fact that a guy is really smart, you miss the fact that you should distrust all his recommendations for good music or never let him help you to assemble anything from IKEA. Nobody is smart at everything. Almost nobody is stupid at everything.

This distinction always seems to matter but in this Trumpian Twitocracy, it seems to matter even more. Is Trump brilliant and calculating or a bumbling idiot? It seems to me that the only accurate answer is "Yes." When it comes to knowing how to arouse great affection among his base, how to exploit cynicism of swing voters, and completely confuse and baffle his opposition, he's genius. I doubt that anyone in the history of American politics has better understood how to push and pull all the levers of politics as well as him. But when it comes to policy, the man is an idiot. He doesn't understand the difference between the deficit and debt. His protectionist policies to save jobs will actually make them more difficult to keep and create, and all of his understanding of any issue is rooted in his perception of personality rather than appreciation for system dynamics.

It doesn't matter whether you think Trump is brilliant or an idiot, you're right. The more important question - and the important question for everyone - is brilliant or an idiot in what situation? Trump himself knows this. Baffled at his new job, unable even to nominate hundreds of people for key positions, he retreated last weekend to a campaign rally, to feel what it is like to again have command of the situation, to feel his natural talent for soliciting cheers and fierce devotion come to the fore and his natural bumbling at articulating useful policy fade into the shadows.

Your happiness and success will depend on how deftly you create, find or insinuate yourself into situations in which your natural talents and genius bloom and, conversely, how well you avoid those situations that illustrate to the world the ways in which you're an idiot. One of the many things so fascinating about Trump is that his very genius - the ability, against all odds - to get elected has put him into the very situation that reveals his idiocy. Trump's biggest strength actually put him into a situation that reveals his biggest weakness. This isn't a Greek tragedy. It's something unique. Perhaps we could call it a Trumpian tragedy, a genius for getting into situations in which one looks like an idiot.

Different Worldviews or Different Worlds?

An overlooked possibility of the seemingly different worldviews of Americans is this: people actually do live in different worlds.

In The Fourth Economy, I explore how very different are agricultural, industrial, information, and entrepreneurial economies. An economy focused on the limit of land has a very different set of values, philosophy, and institutions than one based on the limit of knowledge workers.

If land is your limit, zero-sum thinking dominates. Cooperation is not going to create a new oil well or acre of farmland.* Either I get that oil well or you do and if we have to fight over it - in literal battle or legal battle - we will.

In a land-based economy, reality is fairly black and white. No amount of discussion will change the fact that we're arguing over rich farmland or desolate outback. The reality we deal with is fairly non-negotiable.

In an information economy based on the work of knowledge workers, reality is very different. One problem with the efforts of knowledge workers is that nothing they do has value in isolation. Knowledge workers depend on others to create value. If you design a great new heart valve, it has no value without a skilled tech to make it. That skilled tech is worthless without advanced machinery to aid in that task. And the dozens or hundreds of people working towards completion of the design and manufacture of that heart valve would have all their efforts for naught if it weren't for the surgeon and her team able to put that valve into place. Knowledge workers depend on others to create value. They're dependent on others for negotiation and cooperation. The better they do this, the more value they create.

The more someone in an information economy cooperates, the more value they can create. The more someone in a land-based economy competes, the more value they can seize. People in an information economy want a leader who negotiates and understands the others point of view; people in a land based economy want a leader who is a fighter.

The reality of the person embedded in a land based economy is so very different from that of the person embedded in an information economy. It's not a surprise that the old guy in rural Kentucky has a different worldview than the young woman in San Francisco because they do, in so many ways, actually live in very different worlds.

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* Cooperation is not going to create a new acre of land? Well, actually it can. Talk to the Dutch about their cooperative efforts to reclaim low lands from the sea to create acreage. The "fact" of a land based economy doesn't have to dictate your worldview, it just makes it more probable.

Trumpian Twitocracy (For proper pronunciation, imagine an angry Elmer Fudd saying this)

There is a lot of criticism of Trump for his tweets designed to punish companies he's mad at or reward the companies he's happy with.

To be fair to Trump, it is the first time that anyone has tried to manage an entire economy with tweets. Not the first time a leader has tried to make friends rich and opponents poor, just the first time to do it  140 characters at a time.

Feudalism, communism, capitalism ... twitterism? Twitocracy? Not sure what to call it but it is a fascinating new development in economics.

I'm trying to influence the small economy of Estonia with tweets but so far to no avail. I'll continue to experiment and report back once I've collected data.

Trump's Wildly Impractical Immigration Ban and Why 120 Companies Are Suing Him Over It

Trump's ban on immigrants shows a disrespect for our constitution and an ignorance of modern economic realities. 

Let's start with Syria, a country on the banned list. Put aside for a moment the motivation of simple human compassion to help people who've been bombed out of their homes. Among the other reasons to challenge this ban is one ancient and one modern.

First the ancient. Jesus healed people in Syria and Paul preached there, which suggests a connection to a predominantly Christian nation.

Then the modern. Steve Jobs' father came to the US from Homs, Syria. This is what it looks like now.

This is what the Apple campus looks like, headquarters to the world's most valuable publicly traded company, a company currently worth nearly $700 billion (about 9X Syria's GDP), a company co-founded and reinvented by Steve Jobs, son of Syrian immigrant.

And that brings us to the heart of this argument: modern business is international business. This is bigger than Syria. Immigrants are an integral part of the American economy. Friday I was with a client in Orange County and met with 3 project managers and their core technical teams of four. As so often is the case in those situations, the teams were dominated by immigrants. One team of four had two people from the Middle East (Orange County has a very large Iranian community and they may have been part of that) but each of the three four-person teams had at least two foreign born team members. One team member, Peter, I just thought was American until he spoke in an impeccable British accent. The project managers were all from California but their team members were from China, Philippines, Iran, the UK, and India. Oh, and a couple were from California.

I once sat in a conference room with a technical team making a next generation computer chip for a Fortune 100 company. There were about 12 of us in the room. The conversation at lunch time went to green cards and visas and every single person had a story. (Mine was about my Canadian wife.Theirs was about their own experience of migrating to the US for school or work.) 

About a week ago, one of the team leads I had worked with last year at a startup on Google's campus posted something about giving a demonstration of the surgical robot he'd helped to create to Sergei Brin, the co-founder of Google who is now worth nearly $40 billion. He was delighted by that but almost more delighted that Brin had gone to the protest against Trump's ban at the San Francisco airport. Why was he so delighted? He's from Iran. Brin's show of solidarity not only was affirming but raises the probability that as he pursues his career in the US his own parents will be able to come to visit him. 

The teams within our leading companies are so intertwined with other countries. Monday of last week, the second person I spoke to at my new client's campus was a man from Iran whose mother is on her deathbed. He had to cancel his trip to see her, losing thousands of dollars in nonrefundable fares and - more poignantly - the chance to see his mother one last time. 

What Trump supporters don't realize is that banning travel between countries is - to the modern corporation - as impractical as banning travel between states for American families. Imagine not being able to visit your mother in Oregon because you'd taken a job in and married a fellow from California. It's inane and it's no wonder that leading tech companies like Alphabet (nee Google), Apple, Airbnb, Facebook, Microsoft, Tesla, Intel, Lyft, Netflix, Snap and Uber are among the technology companies that participated" in the legal brief to oppose Trump's ban. 

The modern corporation is a multinational institution. It's customers and suppliers come from around the world and even its development teams are scattered across continents.  For American based companies, 10 PM meetings with teams in India are normal, as are 6 AM meetings with teams in Europe. So many of the essential specialists who know how to design a computer circuit or heart valve or nanotechnology scope or the machinery on which such intricate and advanced equipment can be made are rare. It is normal - not unusual - for the technical teams I work with who are creating the next generation product to come from half a dozen different countries. I don't remember a single instance of working with a product development team made up only of Americans but I can remember multiple instances of working with teams who were completely from foreign countries.

What Americans don't realize is that if those team members aren't here, they will still get hired to create next generation products. They will just work in Mumbai or Shanghai or Eindhoven, Netherlands. And when that happens, the restaurants, dry cleaners, carpenters, car repair crew, hundreds of other service people who work with and for them will be in Mumbai, Shanghai and Eindhoven. They won't be here in San Jose or Austin or Boston. The result will be fewer, not more jobs. We're not protecting jobs by barring immigrants; we're shifting them to other places where multi-national teams are free to assemble. The teams of experts will assemble, the only question is where. Given how open we've been here in the US, the natural answer to the question of where best to assemble those teams has been the US. That could change.

It would be enough if Trump's ban was simply unconstitutional. It would be enough if it simply banned immigrants from countries who have never once killed an American on our soil, a policy based on irrational fear. But even if all that doesn't matter - and it should, it should matter greatly - this ban is based on such a wildly naive and ignorant model of how modern corporations actually work, how dependent we are on a vast web of specialists, technologies, and knowledge that respects borders about as much as the flow of air currents. The ban is ignorant. The global economy is a vast, evolving, and interdependent thing that has lifted billions out of poverty and given us a quality of life the description of which generations 100 to 150 ago would find fantastical, nonsensical and about as believable as teams made up of men and women from every continent working together on next generation products. I'm sure that there were elements of Stalin's Five Year plans that were more firmly planted in economic reality than Trump's immigrant ban. 

The companies who oppose his ban aren't trying to be cute or politically correct or compassionate. They're simply trying to run a business and when borders become walls that becomes incredibly difficult. Difficult enough that some of our best jobs might just go outside of the US. 

Obama by the Numbers - Comparing America Under the Last Five Presidents

Obama was my kind of president. He was a wonk who guided his decisions by probabilities. He was compassionate and careful. He had a clear sense of how progress is made and promoted education, science and entrepreneurship for everyone and made a special effort to extend opportunities to women and minorities. 

He stepped into the Oval Office when the economy was in free fall. In the twelve months leading into his presidency, the American economy had destroyed 4.4 million jobs. Never had so many been put out of work so quickly. Those were not ideal circumstances. And yet things turned out well.

Here are some numbers comparing him to the four previous presidents.

PRESS CONFERENCES

Of the most recent five presidents, only Reagan gave fewer press conferences per year.

After his first two years, the House and Senate opposed his initiatives, no matter how reasonable. The fact that he gave so few press conferences could not have helped him to make his case to the American people. This seems to me like the biggest mistake of his presidency. 24-7 news channels were hungry for news of any kind and he could have done more to circumvent Congress by talking directly to the media, giving him an opportunity to shape public opinion. 

FDR gave an average of 73 press conferences per year - more than double what any of the most recent five did. I don't think it's a coincidence that he passed more defining legislation than any of them could have imagined.

OUR SERVICE MEN AND WOMEN KILLED

Our American military are a precious resource and should be sparingly used.

Obama was determined to extract our service people from harm's way. Not only did his policies result in death rates for our military that were about one-third of what they were under the Bush presidents and one-fourth of what they were under Reagan, by his eighth and final year the fatalities had dropped to an unprecedented 19. By contrast, between 2004 - 2007, fatalities averaged roughly 1,900 and - as you can see - averaged 2,150 during Reagan's presidency. Under each of the last five presidents, we lost an average of at least one person a day but at least in the final year of his presidency, that number had dropped to closer to one per month.

CHANGE IN UNEMPLOYMENT RATE

The unemployment rate was high and rapidly rising when Obama took office. Nonetheless, it dropped even from that initial rate.

Under George W. Bush and George H. Bush, the unemployment rate rose 3.6 and 1.9 percentage points. Under Reagan, Clinton and Obama it fell. 

In Reagan's last month, the unemployment rate hit 5.4%. In Clinton's last month, it hit 4.2% and in Obama's last month it hit 4.8%.

JOB CREATION

This stat is tough on Obama. In his very first year in office, the Great Recession destroyed 5 million jobs. No year on record was that bad and in a normal, healthy year the economy creates about 2 million jobs so from the start he was battling against a 7 million job deficit, something that took a long time from which to recover. 

The average annual job creation rate over his 8 years puts him between the Bush presidents and Reagan and Clinton. However, in his second term the economy created 10 million jobs - just as it did in Reagan's second term. (In each of Clinton's two terms, the economy created 11 million jobs.)

CHANGE IN HOUSEHOLD WEALTH

This is the one bit of data which still isn't complete. It does not include the fourth and final quarter of his second term, so it will go up. Even so, this stat is good for Obama. Not only was the economy destroying jobs when he took office, but home and stock prices had been brought low. When the economy recovered, so did markets. Net worth soared under his presidency.

It's easy to dismiss this as being of concern for only the wealthy but here's a fact: if you plan to retire, you need for stock values to rise. It doesn't matter if your retirement is going to be funded by a pension fund or your 401(k) or your financially stable son-in-law, you are dependent on the creation of wealth to fund your retirement. 

CONCLUSION

On so many measures that matter - from the number of uninsured, the percentage unemployed, soldiers killed, and the net worth of American households - the country did wonderfully well under Obama. Not only did we have no scandals - personal or administrative - but the country prospered. If you voted for him, you showed good judgement. 

No More Wondering. Trump Will Do The Crazy Things He Promised

In his first week, Trump moved towards building a wall and banning Muslims from entry into the country. He's keeping his promises.

More than one Republican friend of mine has nonchalantly shrugged off Trump's crazier promises with, "He won't really do that." Now it's clear that he really will. And it's not at all clear that Republicans in Congress have the desire or ability to stop him.

What crazy things are next? Massive tax cuts that will trigger deficits back to nearly a trillion a year. (Last year's deficit was less than half that.) Tariffs that will trigger trade wars. And job protection bills that will not only inhibit companies from doing business freely but will erode our country's ability to compete.

I've been nearly frozen in my attempt to do the normal, annual forecast for the coming year's economic measures (e.g., S&P 500, job creation, etc.) because of the uncertainty surrounding everything Trump has promised. It no longer makes sense  to give Trump - or the Republicans around him - the benefit of the doubt, assuming that they understand the difference between crazy campaign promises and reasonable policies.

Inventions Matter More Than People

Inventions matter more than people. 

There are two kinds of inventions that fuel progress. Technological inventions like your smart phone or a bullet train give us what past generations would have thought of as super powers. Social inventions like nation-states or the modern corporation also transform lives.

If people mattered more than inventions, a "good enough" person could run faster than a bullet train or a "good enough" person could create a great and prosperous life even in the midst of anarchy and chaos. In the words of W. Edwards Deming, though, "A bad system will beat a good person every time." 

Racist: my race is better

Patriarch: men are better

The argument of racists and patriarchs is that we white men have ended up at the top of the heap because we're better. The simplest evidence of this is that we're wealthier and more powerful than people of color or white women. It is not that we've had better access to better inventions. It's simply that we're better people.

But differences in people do not explain differences in lifestyle or wealth. An American in 2000 made 6 to 8X what an American in 1900 made and could expect to live 30 years longer. Not because the American in 2000 worked harder or was morally better or was innately more intelligent. The average work week in 1900 was sixty hours (10 hours a day, six days a week). The average work week now is less than 40 hours.

It is true that Americans in 2000 were "smarter" than Americans in 1900 but that was not because of any innate intelligence. It was because of the popularization of social inventions like a K-12 education and the modern corporation that our efforts were leveraged into such (relatively) great lives. The American in 2000 simply had far better inventions than a person in 1900.

The notion behind white supremacy or anti-immigration, or patriarchy is that people matter most. In the minds of these people the systems are invisible and the people who sit atop them is all they can see. It's like thinking that the driver of the car is responsible for going 70 mph rather than realizing that anyone in that position could match or better the speed.

There are a host of reasons why racists and patriarchs are such passionate defenders of the border. A chief one is that they're convinced that the people living in more impoverished parts of the world are that way because they are lesser people. In fact, what has made our country great is that the inventions we've popularized - from Montessori schools to smart phones - make us better. It doesn't just work for our children; it can work for anyone's children.

When you welcome immigrants you're expressing confidence in the power of your systems to change life for anyone. When you reject immigrants you're saying that our inventions - our systems - are incidental to who we are and if other people come here to use them those people will still be lesser people, will be a burden on us.

There are obviously limits to the number of immigrants a country can absorb and migration laws do matter. But focusing on the border as a basis for prosperity is misleading for so many reasons. The most important reason that it shifts a country's focus and policies onto protecting borders rather than creating inclusive inventions that make more people more able to make themselves and others happy. It shifts the focus from inventing and change to protection and resistance. 

We've gotten off the path to progress. Hopefully someone will still find that path or else the global economy will stagnate and when modern economies stagnate, modern democracies flounder.

Trump - Soul Mate to Medieval Popes

Trump knows there were millions of illegal votes cast and that climate change is fiction in spite of a lack of evidence for the first and an abundance of evidence for the second.

His criteria for truth is the same as the one medieval popes used: personal revelation. If you think that's a good idea, you might want to read up on what life was like in medieval times and contrast that with what life became after we (mostly) accepted the scientific method. There is plenty of evidence that testable hypotheses supported by plenty of evidence is at the root of all progress. We all knew he wanted to take the country back; even his most rabid supporters didn't realize he meant to take us back to the Dark Ages.

And now today there is news that he's deleted government twitter accounts that have dared to tweet facts about the climate. Censorship because of facts. It's climate change now, evolution and the neo-Copernican model next. Finally, there will be a ban on reports that Trump is infallible.

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Who does find revealed truth stronger than science? Not just the evangelicals who voted for Trump but a district in LA that houses a disproportionate number of Scientologists.

Nozick's Defense of the Minimal State & Increasing Diversity Up Maslow's Ladder

The philosopher Robert Nozick offered a challenge in defense of the minimal state. Try to imagine a single utopia suited to the desires and needs of the following people: Beyonce, Lionel Messi, Stephen Curry, Bob Dylan, Neil deGrasse Tyson, Jane Goddall, JK Rowling, Richard Branson, Marissa Mayer, Bill Murray, Larry Page, your parents, Noam Chomsky, Angela Merkel, I.M. Pei, and you.

After we get past the first two rungs of Maslow's ladder - past physiological and safety needs - we become more diverse. A good society will not ignore the common expression of those first two rungs nor pretend that the expression of the next three will bring anything but diversity.

A good society doesn't begin with a notion of the ideal, perfect life but instead begins after the reality of physical and safety needs are met. The perfect life emerges out of those and is different for each person.

Christians Who Understand Christianity Better Than Christ Did and America Better Than Our Founding Fathers

Without the support of the "abortion is murder" people, Trump would have lost. These people pretend to understand Christianity better than Christ and America better than our founding fathers. They don't.

In the first four gospels, the poor are mentioned 24 times and the rich 29. In Luke 18:24-25, for instance, Christ said,

Jesus looked at him and said, “How hard it is for the rich to enter the kingdom of God! Indeed, it is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God.”

In Luke  14:13-14 he told a host,

when you give a banquet, invite the poor, the crippled, the lame, the blind, 14 and you will be blessed. 

He left little doubt about his disdain for wealth and love for the poor and he expected his followers to have a similar ambivalence about wealth and compassion for the poor. There is no doubt about this.

In the first four gospels, abortion is not mentioned once. (Actually, it's mentioned nowhere in the Bible.) You might argue that abortions had not become as easy or common in his time as ours but keep in mind that Jesus's authority comes in no small part because he saw to the end of time and preached about all that would matter until then.

Evangelicals gave Trump the presidency. Without their vote, he would have lost. The central reason they voted for Trump is that these people believe that life starts at the exact instant that a sperm and egg collide and are appalled that Roe vs. Wade lets women follow their individual conscience about when that transformation occurs. To be clear, their belief is not based on anything Christ said. This is their own idea, one they've slapped the label of Christianity onto.

Many Christians don't share this belief. The Christians who see abortion as murder are less remarkable for their affection for Christ's teaching (again, this isn't even something he taught) than their personalities: these are the people who cannot tolerate ambiguity or gray areas. They need clear black and white boundaries and saying that life starts at a particular instant is very appealing to them. Such a belief is less product of soul searching than the compulsion of a particular personality type.

Nobody is arguing that we should kill babies. Nobody is arguing that we should protect the "lives" of sperm or egg cells. The argument is about when sperm and egg - the jetsam and flotsam of life - become a baby - the essence of life.

When does a child become an adult? 12 seems compelling. Until just a few centuries ago, every community around the world treated 12 as the legal age of consent, an age when young girls were commonly married off. Theaters and amusement parks still seem to believe a 12 year old is no longer a child. Or you might argue for 16, the age when we trust teens to have the cognitive capacity to drive, to stay focused on the road in ways that don't endanger the rest of us. 18 is old enough to let them vote or go off to war. 21 is when we trust them to drink to console themselves for the trauma of war or to celebrate the victory of the candidate they backed.

Most people can accept that the definition of when a child becomes an adult is fuzzy and might even depend on the context. Reasonable people disagree about when a child becomes an adult. Reasonable people also disagree about when a sperm and egg become a baby.

Our founding fathers gave us a government that provided freedom of religion and freedom from religion. What could not be proven through science or a vote - things that could be seen and verified objectively by other people - could be held as personal conviction but not imposed on anyone else. People were free to live according to their own conscience.

There are people who have a religious belief that the instant a sperm and egg collide those two tiny little cells too small for the eye to see are no different from a baby that you can't ignore. It's key to clarify two things. One, this is a belief, no different than the belief that the rich should sell what they own and give it to the poor or that when Venus intercepts Jupiter it is a good time to start a new relationship. And - this is really important so pay attention to the next few words - this religious belief about when life starts has nothing to do with Jesus's teaching. Like the guy in Times Square selling $12 Rolex watches, people have slapped Christ's name onto the "abortion is murder" belief but it did not come from Jesus's words. They made this up.

Force is central to this issue. Sex can be one of the most wonderful experiences of a woman's life and rape - sex forced on her - one of the worst. When force or chance terminates a woman's pregnancy it can be one of the most emotionally heavy experiences of her life; when she chooses to terminate a pregnancy it can yield one of her biggest reliefs. Sex and having a child can be radically different experiences depending on whether they are forced upon her or embraced by her.

Again, there is no way that Trump would have won without the vote of people who now believe that their definition of when life starts is God-given and true and that this revelation ought to be the basis for law. The truth? This definition of when life starts has nothing to do with Christ's teaching and even if it did, it wouldn't matter in a country based on religious freedom.

How do I know that it wouldn't matter? Because while Christ said nothing about abortion he was clear that divorce and re-marriage was adultery, a sin. Because of religious freedom, in this country a person is free to divorce and re-marry, as Trump has twice. The abortion is murder people seemingly want to live in a theocracy where religious beliefs are imposed on other people but it's essential to point out that the beliefs they want to impose are not based on Jesus' teaching. All theocracy is bad; theirs is a counterfeit theocracy.

Abortion is murder is a religious belief but not a Christian one. Like any Christian or non-Christian religious belief, it is something that people are free to embrace but not free to impose on others. It should not be the basis for law in this country. Unless of course you trust people who understand Christianity better than Christ and freedom of religion better than our founding fathers. I don't. Not any more than I trust Trump.

The Real Story Behind Trump's Adulation of Putin (and why golden showers is a generous explanation)

Trump has been critical - even dismissive - of Reagan and George W. Bush, Obama and Clinton. Meanwhile, he's had nothing but good to say about Vladimir Putin. Trump's Secretary of State nominee, former Exxon CEO Rex Tillerson, challenged China's claims on the South China Sea in a way that led China's state controlled media to warn that this would led to war between the US and China. War. Mexico's peso has dropped since Trump's election. Trump has never said anything good about the Chinese or Mexicans or tried to appease them. Trump has had only good things to say about Putin and the Russians. Only good. The contrast between how he talks about American leaders and Russia's leader, between how he deals with China and Mexico and how he deals with Russia, could not be more stark.

So why does this matter? Isn't it true that it would be good for the US to get along with Russia, as Trump says? And isn't it an asset that Putin likes Trump?

In fact, it is alarming that Trump is so enamored of Putin.

First of all, Trump has expressed envy for Putin's ability to jail and kill political opponents and critical journalists. You might argue that there is no way that Trump can imitate Putin's dictatorial actions here in the US and I'll say that the very fact that he leans in that direction guarantees that he'll do things no recent president has done. But there is a deeper reason to feel revulsion towards Trump's adulation of Putin.

This is most succinctly captured in the Ukraine's situation.

Eastern Ukraine shares a border with Russia and many of its values. People there watch TV, are fond of strong leaders who don't confuse them with debates and subtleties, they're afraid of the disruption of capitalism and foreign trade and they distrust liberal values that challenge their religion, homophobia and misogyny.

Western Ukrainians aspire to become more integrated with Western Europe, are on the internet, like grassroots movements with all their chaos, uncertainty and debates, yearn for open markets and trade, and prefer science and minority rights.

Putin clearly wants the whole of Ukraine to again be under his influence. He's already invaded the Crimea, claiming that he has a right to do that because people there like him better. In July, the same month in which he won the Republican nomination, Trump stated that he would recognize the Russian "annexation" of Crimea, leaving the invasion unchallenged. A month later, the Trump team made only one change to the Republican platform, leaving everything else untouched. Their only change? They removed a pledge from the Republican Party to provide military assistance to the Ukrainian government against the rebels in the East, rebels supported by Putin.

Trump is doing everything Putin would want while continuing to praise a man Marco Rubio recently suggested was a war criminal (citing not only the massive number of civilians Russian bombs have recently killed in Syria but the 300,000 citizens Putin killed in Chechnya years ago). I actually think the notion that he's doing all of this because the Russians are blackmailing him over sexually compromising videos is one of the more generous interpretations of why he's so enamored of Putin. For people who really like the West and its direction over the last 500 years, the idea that our new president shares their appreciation for Western values but doesn't want people to know about his sexual perversions is a better explanation than that he thinks more like Eastern Ukrainians than Western ones.

I don't know if the Russians are blackmailing Trump. I think it's scarier if they are not, if the real explanation is that Trump truly prefers Putin's model of governance to that of Reagan, Bush, Clinton and Obama's. He's already shown contempt for a free press that would challenge him and expressed an on again, off again desire to "lock up" the woman who dared to run against him. He's got a narcissistic personality and sense of himself as uniquely special; these two qualities alone make him more like dictators than the traditional American president.

Will we ever find out whether Trump's actually being handled by the Russians? That outcome would actually make me feel more relieved than what I currently suspect: Putin doesn't have to do anything but be Putin to win Trump's admiration and friendship.

There is a Japanese proverb that translates to, "When the character of a man is not clear, look at his friends." Out of 200+ world leaders, Trump has already made it clear which one he feels a special affinity for. That should scare everyone more than sexual perversion.

Huston Smith, Religion, and What's Just Made Up

Huston Smith died Friday at 97. He authored what became the standard comparative religions textbook (it sold about three million copies), The Religions of Man. He was born to Methodist missionaries and died a Methodist even while studying, and then incorporating, practices from Buddhism, Islam, and Hinduism.

I think it was Bill Moyers who asked him how he could be so accepting of other faiths and yet still be a Methodist. I don't remember his precise answer but essentially he said, "If I studied languages I would - at the end of the day - still come home and speak English with my wife. We can acknowledge the fact that people communicate in other languages but we still have to choose one language to speak." Another way to put this is that it makes sense that people make sense of their lives in other ways but we have to make sense of things in a way that still makes sense to us. If that makes sense.

In the UK, their wonderful health care system has made huge progress in the battle against a variety of diseases and health conditions. It's led to a curious situation. Now, the leading cause of death among men under 49 is suicide. Having protected their population from outside attacks, they find themselves vulnerable to attacks from within.

There are a number of reasons one might commit suicide but surely a chief one is a crisis of meaning.

Here is the funny thing about the meaning of words. Look up the definition of a word and what do you find? Other words. The meaning of one word is expressed through other words. It would be a really bad dictionary if you looked up the meaning of, say, car and it said, "A car is a car. That's just what it is."

We find meaning outside ourselves, in other lives, in broader goals and tasks, in some arc of history. Religion was perhaps the first way that people made sense of the human experience.

Religion also made the world bigger. Robert Wright in his Evolution of God argues that as kin began to trade outside of their group their god(s) had to become bigger than the tribe. How do you make an enemy a trading partner or even a fellow citizen? You expand your beliefs to make those former strangers friends.  You love your enemy. Money, contracts, employment and trade are all well and good but outside of the context of trust they're ineffectual. The prelude to a global economy is a God of all humanity or at least people who see all of humanity as deserving of trust.

Speaking of trade, money is just made up. The fact that a 20 dollar bill is worth 20 dollars is not a fact inherent in a piece of paper that size and shape. It's only worth 20 dollars because we all agree that is worth 20 dollars. Money is completely made up and it is completely real.

Social invention - agreeing to the rules of a school or bank, agreeing that we will shake hands when we greet or kiss one another on the cheek or bow - is both made up and completely real. Religion falls into that same category. It is just made up that we should love our neighbor or forgive a brother. Such things are made up but their consequences are very real. Living with shame is so very different than living with forgiveness. Living life selfishly is so very different than living life selflessly. (And in truth it is hard to imagine a life that doesn't always have some element of shame and forgiveness, selfish perspective and empathy, but a life can be made very different simply by moving more in one direction than another.)

I agree with my agnostic friends that religion is just made up. I also agree with my religious friends that religion is quite real. Caught up in determinism and what that suggested about us simply being the products of past causes and present conditions, William James struggled with depression and suicidal thoughts. What if nothing he did or believed really made a difference, he wondered. One day he declared, "My first act of free will shall be to believe in free will." From that point on his life was largely different; he was mostly productive and happy. (James wrote the first psychology textbook and was one of the founders of the philosophy of pragmatism, among other things.) Did William James actually have free will or did he just make that up? Yes and yes, it seems to me.

Going back to Huston Smith, at the end of the day we have to speak in some one language in order to make meaning and to understand others, to understand and to be understood. Religions are deeply flawed and they are just made up but they certainly can provide meaning. Life is more than the logistics of work and sleep, food and recreation, or a winning score in a bank account. Realizing that if you had grown up in Indonesia you would likely be Muslim or that if you grew up in Nepal you'd likely be Buddhist or that if you grew up in Iowa you'd likely be Christian and realizing that this is arbitrary doesn't mean that it is meaningless anymore than it is meaningless to realize that if you grew up in China you'd grow up speaking Chinese. Meaning is fragile when we try to make sense of our own lives via a reductionist method that looks at us in isolation. Meaning can be robust when it sweeps out to include others, family, friends, and strangers, and the story of a life as part of some larger arc of history, part of a bigger set of forces that include our own words and actions. Meaning is never self-referential; it comes from the relationship of one word to other words or of one life to other lives. Religion surely isn't the only way to create meaning but it is a way that works for billions. And while you can just make up a language rather than rely on the ones around you, a language that isn't shared isn't much of a language. Religion has its flaws but one big advantage is that it is "spoken" by quite a few people around you. You can say something novel in a very old language. And maybe that's the challenge of a any religion: go beyond rote memorization of what others said to a statement that comes out of a common tradition into your own unique life and time, something that Huston Smith seemed to have done quite beautifully.

What if History Has Only Just Begun? Contemplating a Post Economic Society

If you bring together parents of little ones aged 0 to 3, you'll hear them discuss very similar - nearly identical - stages of development. Getting potty trained, sleeping through the night, learning to walk and talk, and learn self control are constants for every child. Those little ones may grow up to become very different people who make their living, pursue romance, create or engage in hobbies, struggle with wild bout of optimism or depression - that is, live their lives in wildly different ways but in the first few years of their life they're dealing with nearly identical issues.

Which brings me to economic development.

We have this tendency to think of ourselves as having reached the pinnacle of evolution. Probably amoeba and early primates had even greater difficulty conceiving of the possibility that evolution hadn't ended now that they'd arrived, but even we tend to think of ourselves as a culmination rather than an intermediate stop. Not just as humans but as a culture or civilization. And yet, we're so obviously still a work in progress, so obviously not yet done.

I think that we've not only entered a fourth economy but that this fourth economy will be less a culmination than a mere phase, perhaps the equivalent of learning to walk or talk. It will transform what is possible but the talking is incidental to the communication, the walking incidental to getting somewhere. In the same way that writing brought humanity into a new phase of history but didn't end history, so will moving beyond scarcity bring us to a new phase but hardly end the continuation of history. And once we've moved beyond scarcity, economics as we've learned it will be less defining than assumed, in the same way that we don't now talk about different communities around the globe having a talking or writing culture.

Having social inventions that allow us overcome the limits of capital or entrepreneurship will be pretty cool. What is even more interesting, though, is the question of what we do when we've overcome all four economic limits. At that point we have the harder but more difficult work of then determining what sorts of societies we want to create. Or, rather, the generations that will come after us will have that work.

Childhood 200 Years Ago (when it was outrageous to limit work days to 12 hours or offer 30 minutes a day of education)

This little tidbit from Chris Jennings' fascinating Paradise Now: The Story of American Utopianism. The Owen mentioned is Robert Owen who became fabulously wealthy operating factories using the new spinning jenny that boosted productivity enormously. This little excerpt is just a reminder of what childhood was like the early days of the Industrial Revolution and how viciously opposed people are even to the changes that strike future generations as obviously positive.

Owen used his newfound celebrity to back progressive legislation in Parliament. In 1815, he drafted a bill for the "Preservation of the Health and Morals of Apprentices ... in Cotton and other Mills." The bill had three central provisions: children under ten should be prohibited from working in mills; workers under eighteen should not work more than twelve hours a day; and young millworkers should receive a half hour of schooling each day.
Owen to Parliament expecting an enthusiastic response. Instead, the committee assigned to review the bill met him with startling hostility. "The employments of these Children in Cotton Mills is not sedentary [suggesting they were getting opportunities for physical activity]," one of the bill's opponents insisted; "it is neither laborious, nor such as tends to cramp their limbs, to distort their bodies, or to injure their health. Generally speaking those who are introduced young are most orderly, as might be expected from early habits of industry, attention, regularity, cleanliness, and subordination." A coalition of mill owners lobbied against the bill. In familiar language, they decried the proposed intrusion of big government into their industry. "Legislative interference betwixt the free labourer and his employer," they insisted, "is a violent, highly dangerous, and unconstitutional innovation." If children work fewer than twelve hours a day, some critics pointed out, their families will end up on the dole. As for the outlandish notion of providing young workers with thirty minutes of reading and arithmetic lessons each day, the claimed that "the unnatural mixture of education with work proposed by [Owen's] Bill, would not only be expensive and vexatious to the employer but impracticable in execution." Owen's proposed reforms would merely deprive the "heads of families of their natural control over their children," and "reduce the prohibitive labour of the Country." In short, the bill was an unpatriotic, antifamily job killer that would erode the morals of the working class by "throwing them idle and disorderly on the community too early in the evenings."

Nobody Expects the Spanish Inquisition - Trump's Promise to End Religious Freedom

The West led progress for centuries. Not because of superior genes but because of superior memes. The social inventions that have transformed Western Civilization since about 1300 have made lives longer, happier, and more free.

Three big transformations have given individuals in the West freedoms that created this prosperity. The first of the major transformations was religious. In 1300, the church defined orthodoxy - proper belief. Today the individual has religious freedom. Religion went from something society imposed on the individual to something individuals freely chose, rejected or modified. In 1700, you were a subject of the king or queen in your country. Today the individual chooses who will rule and even votes directly on laws. In 1900, private banks controlled money. Today access to investment and credit markets is widespread and monetary policy is managed by a public agency, capital markets subordinate to labor markets and unemployment rates.

Freedom of religion, democracy, and the pursuit of the American Dream - as we now refer to the products of these three revolutions - have indisputably made life better. In the Fourth Economy I argue that doing to the corporation what past revolutions have done to the church, state, and bank is the next big transformation that will dramatically improve life again. (Or more accurately, continue the dramatic improvement of life that has been playing out for centuries.)  Progress stalls when we fail to take the next step; disaster strikes when we go backwards.

One of the reasons I'm so utterly baffled and angry at the fact that my fellow Americans elected Trump is that he promises to take us backwards. Not just a little. He promises to take us backwards by centuries. He promises a religious test for admission to this country, curtailing the freedom of religion guaranteed in this first amendment.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Freedom of religion is foundational to everything we enjoy in the West. For so many reasons.

First the obvious. People believe weird things. Yes, even you. You can kill people with weird beliefs in an attempt to rid the world of improper beliefs but believing that you can kill off all the people with weird beliefs is, itself, one of the weirder beliefs. Plus, even when you take measures that drastic, people with weird beliefs keep popping up. It is simply impossible to live peaceably with fellow humans if you believe that you can or should control their beliefs.

John Locke who defined the modern
separation of church and state.

In the century before our founding fathers defined our new country, Europe was devastated by the thirty years' war, a war with 8 million casualties at a time when Europe's population was about one-tenth what it is today. No war had killed off more of Europe's population. No war involving so many could ever be about just one thing but this war was mostly about religion. With such atrocities in mind, our founding fathers were committed to creating a country where religious freedom not only allowed people to live in good conscience (however weird their beliefs) but saved people from violence because of religious beliefs.

As it turns out, religious freedom is also great for invention and entrepreneurship. Innovation comes from thinking differently, from challenging norms and jettisoning tradition - things that no religion advocates. It wasn't just freedom of religion that our founding fathers granted. It was freedom of thought. You can't really separate those two because beliefs and thoughts are so intermingled they're effectively the same thing. Communities that have imposed no special beliefs on their people are the ones where invention and disruptive change have thrived and lives have improved.

In about two weeks we will swear in a new president who believes that Congress shall make a law disrespecting the free exercise of religion, banning Muslims from entry to the country.

Trump represents a reversal of the three revolutions that have brought us out of the Dark Ages. His minions are fans of the gold standard and gutting the Federal Reserve, essentially making capital scarce again and turning control of credit markets to private banks. He is contemptuous of the workings of democracy, denouncing it as rigged and cooperating with a foreign dictator to win the election. He denounces the free press, suggesting that we need to crack down more on critical journalists in the same way that Putin has, while praising fake news and suggesting that the National Enquirer deserves a Pulitzer. And as if it's not enough to reverse the revolutions of the 20th and 18th centuries, he wants to take us back even further to the 17th century and the time of the thirty years war when religious freedom was not trusted to individuals.

It is hard to over-state how far back into the bowels of history Trump's policies take us. He is a troglodyte who even our bewigged forefathers would look on as anachronistic.

Won't you at least give Trump a chance, friends have asked. A chance for what? To end religious freedom? To gut the people's ability to stabilize credit markets and make financial markets accessible to common people? To gloss over foreign powers' interference in our democracy? (And this doesn't even touch on his disdain for freedom of trade, another pillar of prosperity that inspired the Declaration of Independence but was not captured in the Bill of Rights.)

In my mind, the real question of how to make progress is a question of how to popularize entrepreneurship and that involves changing the definition of employee to someone who has the same sort of freedom within a corporation that a citizen has within a country. Few people believe this (it's a weird belief) but the number who do is growing. To the extent that we delay dealing with this issue, we delay putting median income growth on a path that ensures that each generation will do better than the last.  Freedom of work is a step forward and failing to address it is the one of the biggest reasons that median income growth has floundered in this century.

Not taking this step forward means stagnation. Reversing freedom of religion is, by contrast, a huge step backwards. It's almost comical that in this - 2016 - we would be considering such a move, much less have elected a man who has made it his policy.

How do I feel about 2017? I'm in disbelief that we - as a country - have gone medieval on religious belief, making proper religion a basis for acceptance within our community. I'm in disbelief but as Monty Python warned us, "Nobody expects the Spanish Inquisition."

California vs. West Virginia: A Question About Which Direction the Country is Heading

Even some of my California friends had posted things like, "If you subtract California from the national vote, Trump won the popular vote." My counter to this is, "If you subtract the former confederacy from the national vote, Clinton won by 6.5 million votes."

Apparently there are folks threatening to boycott California because the state is out of sync with Trump nation. Such sentiments inspired this tweet:

Trump won by his biggest margin in West Virginia, by 42.2%. Clinton won by her biggest margin in California, by 30.4%. Let's compare those states and consider what it means to dismiss California as a place that is out of touch with the rest of the country.

California ranks third for median household income.

West Virginia ranks 49th.

California is the most populous state in the union. In 1950 it had 10.7 million and now it has about 40 million, nearly 4X as many. The simple fact that California has grown so rapidly is testament to its ability to create jobs.

West Virginia had 2 million people in 1950. Today it has 1.8 million, a drop of 10%. West Virginia has not been able to create jobs or even a net gain in population.

If you believe that people just are who people are, you might think that it makes sense that West Virginia would register a protest vote against the status quo. It's had trouble in this new economy and of course those poor people will vote for change. But if you believe that people are who their institutions are - if you believe that we're defined by our culture, schools, media, government, policies, and prevailing norms - then it is a terrible thing to follow the lead of a place like West Virginia. Why? Because the policies and norms it has chosen has made its people less able to thrive in the modern economy. History shows us that it's not how hard people work or who they are genetically that determines how prosperous they are. It is, instead, the systems they work with and within. Incomes were 6 to 8X higher in 2000 than they were in 1900 in spite of the average workweek dropping from 60 hours to 40. Incomes weren't higher because people were "better." They were higher because people learned, worked in, and were able to use better systems. If you believe that people can't change, than West Virginia was right to vote for different policies and leaders than California; if you believe that people can change and there is no intrinsic reason that West Virginia can't be as prosperous as California than it's a terrible thing that the nation is now going to follow after policies West Virginia voters think sound great rather than the ones that Californian voters think would be great. West Virginia's thinking doesn't make its people as prosperous as California's.

Here are just a few fundamental issues that Californians would find alarming in Trump's policies that apparently comfort West Virginians: immigration, free trade, and free religion.

California has the largest share of foreign-
born people, West Virginia the lowest. 

Trump wants to limit immigration, both legal and illegal. California is a land of immigrants. About 40% of Silicon Valley startups have at least one foreign founder. On a personal note, I was working with a startup on Google's campus this year and one of the departments (robotic sensors) had five people from five countries: the US, Iran, Italy, Poland, and South Korea. It's a global economy and California doesn't just sell to customers from all over the world, it hires and partners with people from all over the world.

Trump has chastised Apple for manufacturing its iPhone in China. He doesn't really like free trade and has threatened to levy a 35% tariff against Mexico and a 45% tariff against China. This could easily start a trade war. (Does anyone believe that other countries will merely pay huge tariffs and allow the US to continue to sell into their markets without levying an offsetting tariff? How naive do you have to be to believe that?) But it also misses the point. 75% of iPhones are sold outside of the US. Apple is headquartered in the US but it is an international company with an international product, customers, suppliers and partners. This is true of most of the products coming out of Silicon Valley, from Intel's chips to Uber's app.

Finally, Trump wants to limit the immigration of Muslims. This is a special kind of exclusion that is not only anti-constitutional (read the first amendment to be reminded that Congress shall pass no law regarding religion) but shows a complete confusion about where creativity comes from. Trump knows which religion is right and which is not. Really creative people don't even know which process is best or which theory will hold up for a century or will be dis-proven tomorrow. Freedom of thought - freedom to question or challenge established "truths" is fundamental to creativity. It's no accident that the free speech movement began in Berkeley just as the computer revolution was beginning. Freedom of religion is elementary compared to the freedom of thought needed to create new scientific theories, new social paradigms, new technologies, new businesses and new business models.

California has given birth to blue jeans, the Hollywood that generates TV shows and blockbuster movies, and a music industry that gave us acts like the Grateful Dead and the Eagles. It's been the source of so many cultural and business trends.  The most defining "industry" in California is Silicon Valley, a place that gave us Apple, Facebook, Intel, HP, Twitter, the internet, and venture capitalism. The most defining business in West Virginia is coal mining.

To this day we revere the ancient Greeks yet their golden age was only a century or two. Socrates died in 399 BC and Aristotle died in 322 BC. It was during the century or so around their lives that so much of what we know of their inventions - from philosophy to math to theater and democracy - emerged. It was an incredible time that the Greeks experienced only for awhile even though the world has felt its impact for the thousands of years since.

If this move towards West Virginia and away from California proves defining of the country's future, the US will go the way of other great and defining communities in history. We will have had our time and so much of what has come out of the US in the last century in particular is likely to continue to define the world in the way that the Athens of 4th century BC continues to define the world to this day. Civilization continues to carry forward the great inventions like money and democracy, even if it fumbles and drops them from time to time. It builds on what came before. Evolution - biological and social - doesn't throw away so much as build on. In that sense, the US of the 20th century will likely be with civilization for millennia to come. What isn't certain, though, is whether it will - like modern Greece - become just another also-ran as some other community becomes the innovators who we all follow with some odd mix of envy, reluctance, and excited mimicry.

For now, swing voters in the US have decided to follow the lead of a state that hasn't invented a new industry since coal mining in the 1740s rather than a state that is even now incubating industries as different as self-driving cars and genetic engineering. It's chosen to try going back to an earlier time when jobs were being created for coal miners rather than for entrepreneurs. If Trump is successful at creating such jobs it means that we'll be going in the direction of the 1700s rather than the late 2100s. That should be a sobering thought.

Two Religious Divides that Can Ruin Christmas

Even an event as lovely as Christmas becomes a forum for dissent and proselytizing. It's not enough to simply let people enjoy the holidays, someone else has to foist their agenda on us. Here are two big ideological struggles that simply don't receive enough attention because they're so divisive.


Evangelicals: Let's put Christ back in Christmas.
vs
Catholics: Let's put Mass back in Christmas.



Buddhists: Let's be open to the present.
vs
Children: Let's just open the presents.

We're Uncertain Just How Much Economic Uncertainty Trump Has Added

"There are known unknowns and unknown unknowns," Rumsfeld famously said. With the incoming Trump administration we might now say, "There are certain uncertainties and uncertain uncertainties."

The stock market has rallied since Trump's election. Presumably, the reasons for this include expectations of tax cuts, stimulus spending, and deregulation. All of these add to uncertainty, though.

If Trump gets a stimulus package in the form of infrastructure spending, it will boost GDP more than if the stimulus comes in the form of tax cuts. (The tax cuts will overwhelmingly go to the rich. A guy making $500,000 a year is less likely to change his spending in response to a tax cut that puts $1,000 more in his pocket than will a guy who makes only $5,000 a year.) 

Will the stimulus - the assumed rise in deficit spending - boost the economy by 1% or by something negligible? It's uncertain because we don't really know what form the stimulus will come in.

Further complicating this, Trump has appointed Mick Mulvaney to head his Office of Management and Budget (OMB). He'll be responsible for crafting the budgets proposed to Congress. Mulvaney is a fiscal hawk who has voted against raising the debt ceiling and seems committed enough to a balanced budget that he'd shut down government for this. By contrast, Trump has promised tax cuts and boosts to defense spending and infrastructure, which will drive a big increase in the deficit.

Paul Ryan and Mick Mulvaney's desire for balanced budgets will be at odds with Donald Trump's "deficit be damned" policies. Will Trump's proposed budget deficit shrink or even become a budget surplus? It's uncertain.

Deregulation adds the most uncertainty of all. Before the Great Recession, banks were leveraged about 30 to 1. For every dollar they had in deposits, they had loaned out about $30. That gives you great returns but it makes you vulnerable to a credit crunch. Since Dodd Frank,that ratio has dropped to about 10 to 1, which makes for a much safer banking system. Now, the expectation is that a Trump administration will lower regulatory requirements and allow banks to raise that ratio again. Will the ratio go up to just, say, 12 or 15 to 1? That ratio might still be reasonably safe but raise profits nicely. Or will the ratio be allowed to rise all the way to 20 to 1 or even 30 to 1 again? That ratio will greatly raise profits .... and risk. Financial stocks could look really healthy even as the financial system gets sick. 

Will Trump deregulation give finance a little nudge or a dangerous shove? That's uncertain.

Add to this the uncertainty inherent in Trump's trade policies. Will he actually put 35% and 45% tariffs in place against Mexico and China? If he does, WTO will probably slap on retaliatory fines and this could set off a trade war. That path would cost us millions of jobs. If he only talks about trade wars but doesn't actually impose tariffs, it could "just" result in a slowdown in trade. It's uncertain.

And then there is the policy with undocumented workers. Will he actually deport 11 million people? If so, that will crush growth in aggregate demand here in the US and crash house prices. It's uncertain.

Economics is always uncertain but the Trump Administration has added more uncertainty to that than any that I can remember. And perhaps inherent in that uncertainty is an uncertainty about what Trump's victory will mean for the future identity of the Republican Party.

Key Statistics From Obama's Final 2017 Economic Report

The president's economic advisers released their annual report - the 2017 Economic Report of the President - today, 15 December. You can find it here but you might not have time to read through all 599 pages of Barack Obama and Jason Furman's report, so here are some highlights.

Jobs, Unemployment, Wages

Economy has added 14.8 million jobs over 74 months, the longest streak on record.

• Since June 2009, when Chrysler and General Motors (GM) emerged from bankruptcy, the automobile industry (manufacturing and retail) has added nearly 700,000 jobs, the industry’s strongest growth on record.
• The unemployment rate has been cut by more than half to 4.6 percent as of November 2016, below its pre-recession average
  
  
  

  

  Wages for production workers grew faster since 2012 then they did from 1980 to 2007

• In 2015, median household income rose at the fastest rate on record, with the typical family earning an additional $2,800.
• Since the end of 2012 private production and nonsupervisory workers, who comprise about 80 percent of private-sector employment, have seen their real hourly earnings increase by 5.3 percent, more than the total cumulative real wage gains for these workers from 1980 to 2007
• Real wage growth has been faster in the current business cycle than in any since the early 1970s.
• Real median household income increased 5.2 percent in 2015, the fastest growth on record. 
• Households at all income percentiles reported by the Census Bureau saw real gains in income, with the largest gains among households at the bottom of the income distribution.
• The poverty rate fell by more than any year since 1968

Healthcare

     As of 2016, the uninsured rate stands at its lowest level ever.

•      The uninsured rate among children has fallen by almost half since Obama took office
•      20 million more adults have health insurance
•      So do 3 million more children

The growth in healthcare costs has dropped since ACA

Since the ACA was signed into law in 2010, health care prices have risen at the slowest pace in 50 years.

• The average costs for a family with employer-based coverage in 2016 were $4,400 below where they would have been had costs grown at their pace over the decade before the ACA became law

Wealth & Budgets

The 2016 deficit was 3.2 percent of GDP, about a third of the 9.8 percent of GDP deficit recorded in 2009 and equal to the average over the last 40 years

Per capita GDP growth higher in US than Japan or Euro Area

The economy is now 11.5% larger than at its pre-Recession peak

Real household net worth exceeds its pre-recession peak by 16 percent

Energy

     Since 2008, the United States has tripled the amount of energy harnessed from wind and has increased solar generation thirtyfold.

     Today, the United States is less reliant on foreign oil than it has been in nearly three decades.

Innovation

     The America Invents Act (AIA) of 2011 led to a 20% reduction in patent wait times, supporting a 30% increase in patents granted