In a Washington Post poll from just four days ago, Donald Trump had nearly double the support of his two leading competitors.
Serious political commentators see the Donald as a side show, a troll, a clown who knows how to distract the audience from what's going on in the main ring of the circus. They argue that Donald knows how to tell voters what they want to hear, isn't seriously dealing with real policy issues, and is thus not a serious candidate. The theory behind this misses something, though. It assumes that the other candidates are more serious.
Scott Walker, the governor of Wisconsin, is second in this poll. Is he a serious candidate? Scott did not complete his bachelors degree and argues that such a degree ought not to be a requirement for teaching in public schools. This would hardly be a serious policy proposal in 1915, much less 2015.
Jeb Bush is next in the polls. Beyond the fact that Jeb doesn't actually seem to have revised his worldview or policy proposals based on his big brother's disastrous results, his "boldest" proposal so far is 4% GDP growth. "There is no excuse" for GDP growth lower than that, he says. This might be an incredibly subtle slam of his father and brother (who each presided over GDP growth of about 2%). What it is not is a serious policy proposal. Not only has GDP growth of over 4% never occurred throughout the whole of anyone's presidential administration (Clinton came closest but even he and Reagan did not have that kind of luck for long), but more importantly, Jeb is not actually making any policy proposals that would drive such growth. This is an important point that gets completely glossed over: a goal without a plan is a kind of fiction. Jeb offers no stunning insight into what flaw was made by each of the previous 43 presidents. He just says that he can do better. Than all of them. Every president in history is less able than Jeb. And we're to take this seriously?
Walker and Bush are considered serious candidates but it is not clear why. They are telling voters what they want to hear and they're not starting with facts (global temps are rising, for instance, as is income and wealth inequality). They are adept at politics even if they're poor at policy. How is this different from Trump?
Donald Trump is not a crasser version of many of the other GOP candidates. He's a better version of them. His outrageous claims are more interesting, said with more conviction and sincerity, and just as free from fact or nuance. He talks about Mexicans as rapists and criminals but is his distortion of facts all that different from the mainstream GOP? An article of faith among Republicans is that illegal immigration is a growing problem. The fact is that the number of illegal immigrants has been dropping since its peak in 2007. It's true that suggesting the Mexicans coming north are rapists is more offensive than suggesting that a growing number of illegal immigrants are coming from Mexico. It's not true that either shows much regard for reality.
Starting with the Bush Cheney administration under Karl Rove's guidance, the Republican Party showed its willingness to subordinate good policy to good politics. The Iraq war was a policy disaster but it helped with W.'s re-election. Great politics don't always translate into great policy. Donald Trump is not an aberration from the Karl Rove model. Instead, he is its natural outcome. If the Republican Party had serious conservative candidates like, say, the UK's Prime Minister David Cameron, they'd be right to take offense at Donald Trump's lead in the polls. Instead they have candidates who can't admit that economic policy might require more subtly than another round of tax cuts or that 98% of scientists might understand climate change better than talk show hosts. Once you choose to go down a path that shows a disregard for expert opinion and instead relies on gut instincts, you're heading down the path towards a Donald Trump. And getting that much closer to becoming to the 21st century what the Whigs were to the 19th century.
23 July 2015
10 July 2015
Pope Francis Continues Tradition of Papal Confusion
This week the pope apologized for the Catholic Church's role in the exploitation of the people of the Americas. That was nice. 500 years late but still nice.
Then he spoke out against a new colonialism. What is that? It's capitalism, which he believes is fostering inequality and exploiting the poor. His criticism of markets is something that some future pope will be left to apologize for. Hopefully it won't take centuries.
Popes seemingly make a habit of being wrong.
Markets are hardly perfect but they make life better for most people most of the time. This last decade has been a rough one. It included the worst global recession in nearly a century. But even then, markets made life better.
Between 2001 and 2011, the percentage of the world's population living in poverty - defined as living on $2 a day or less - dropped by half. Markets are not increasing the rate of poverty. They're lowering that rate. And it is this force that the pope speaks out against?
The pope is the world's last absolute monarch. The centuries when this power actually extended over most of Europe (and not just the Vatican, an area of land smaller than the average Ted Turner ranch) was called the Dark Ages. It was a time of misery, ignorance, intermittent starvation, abject poverty and a life expectancy of less than 30 years. Compared to today, it was a living hell. This is the kind of world you get without markets and the pope has the audacity to criticize the economic force that supplanted that system.
We do need someone to speak out for the poor. Markets don't make life better for everyone. Religion, charities, aid programs, and government programs can help the poor who markets ignore. Someone like the pope would seem like a natural spokesperson to speak out on their behalf. But to insist that the fruits of powerful markets be more widely shared is very different from criticizing powerful markets. It is one thing to ask for more porridge and another to spit in the serving bowl.
The pope has the authority to speak out on behalf of the poor. If the pope were an authority on economics, the time when popes ruled the West would be known as a time of Enlightenment and prosperity instead of the Dark Ages.
Then he spoke out against a new colonialism. What is that? It's capitalism, which he believes is fostering inequality and exploiting the poor. His criticism of markets is something that some future pope will be left to apologize for. Hopefully it won't take centuries.
Popes seemingly make a habit of being wrong.
Markets are hardly perfect but they make life better for most people most of the time. This last decade has been a rough one. It included the worst global recession in nearly a century. But even then, markets made life better.
Between 2001 and 2011, the percentage of the world's population living in poverty - defined as living on $2 a day or less - dropped by half. Markets are not increasing the rate of poverty. They're lowering that rate. And it is this force that the pope speaks out against?
The pope is the world's last absolute monarch. The centuries when this power actually extended over most of Europe (and not just the Vatican, an area of land smaller than the average Ted Turner ranch) was called the Dark Ages. It was a time of misery, ignorance, intermittent starvation, abject poverty and a life expectancy of less than 30 years. Compared to today, it was a living hell. This is the kind of world you get without markets and the pope has the audacity to criticize the economic force that supplanted that system.
We do need someone to speak out for the poor. Markets don't make life better for everyone. Religion, charities, aid programs, and government programs can help the poor who markets ignore. Someone like the pope would seem like a natural spokesperson to speak out on their behalf. But to insist that the fruits of powerful markets be more widely shared is very different from criticizing powerful markets. It is one thing to ask for more porridge and another to spit in the serving bowl.
The pope has the authority to speak out on behalf of the poor. If the pope were an authority on economics, the time when popes ruled the West would be known as a time of Enlightenment and prosperity instead of the Dark Ages.
07 July 2015
The Real Greek Tragedy - Europe's Stagnant Economy
"Most problems cannot be solved. And most problems are made irrelevant by success."
- Peter Drucker
If the Eurozone had grown by an average of 2.3% since 2006, Eurozone GDP would be 3 trillion euro bigger than it is now. To put that in perspective, 3 trillion euro is about 18X Greece's total GDP.
Now obviously the Great Recession played havoc on economic growth, but even if you go back 20 years, to 1995, Eurozone GDP growth has averaged less than 0.4% (that's not forty percent or even four percent - that's four-tenth of a percent).
The real tragedy is not that Greece is struggling to pay back the loan that either they were foolish enough to borrow or the Germans were foolish enough to loan (if anyone is a fool not to have seen this coming, than surely everyone is a fool; if Germany wasn't foolish to loan the money than surely Greece wasn't foolish to borrow it). The tragedy is that Eurozone GDP has not grown enough that Greek debt would be a rounding error. Indeed, if GDP had grown at a healthy rate, the entire Greek economy would be a rounding error.
Greece's economy is only 1.3% of the Eurozone GDP. Sadly, everyone is fixated on the Greek debt as if solving this little problem of their debt matters even half as much as the really, really big problem of stagnant growth. Healthy growth of 2.6% would mean the Eurozone was growing by TWO Greece GDPs a year. This would be sufficient to solve any debt problem.
Instead, the best minds, politicians, analysts, and reporters are wasting their time, attention, and imagination thinking up ways to "solve" the Greek debt problem rather than solving the European growth problem. That is the real tragedy of this crisis.
- Peter Drucker
If the Eurozone had grown by an average of 2.3% since 2006, Eurozone GDP would be 3 trillion euro bigger than it is now. To put that in perspective, 3 trillion euro is about 18X Greece's total GDP.
Now obviously the Great Recession played havoc on economic growth, but even if you go back 20 years, to 1995, Eurozone GDP growth has averaged less than 0.4% (that's not forty percent or even four percent - that's four-tenth of a percent).
The real tragedy is not that Greece is struggling to pay back the loan that either they were foolish enough to borrow or the Germans were foolish enough to loan (if anyone is a fool not to have seen this coming, than surely everyone is a fool; if Germany wasn't foolish to loan the money than surely Greece wasn't foolish to borrow it). The tragedy is that Eurozone GDP has not grown enough that Greek debt would be a rounding error. Indeed, if GDP had grown at a healthy rate, the entire Greek economy would be a rounding error.
Greece's economy is only 1.3% of the Eurozone GDP. Sadly, everyone is fixated on the Greek debt as if solving this little problem of their debt matters even half as much as the really, really big problem of stagnant growth. Healthy growth of 2.6% would mean the Eurozone was growing by TWO Greece GDPs a year. This would be sufficient to solve any debt problem.
Instead, the best minds, politicians, analysts, and reporters are wasting their time, attention, and imagination thinking up ways to "solve" the Greek debt problem rather than solving the European growth problem. That is the real tragedy of this crisis.
03 July 2015
Observations from Recent Trips Around the Country (Many Reasons for Optimism and One for Concern)
The media works hard to find the worst among us. They have thousands of employees whose job it is to find the corrupt bureaucrats, the cheating spouses, the crazed killers, and the simply peculiar. One advantage to wandering the country, able to meet people at random, is the realization that most people are delightful and good.
In the last five weeks I've been on business trips to Portland, San Francisco, Washington DC, Del Mar, California, and Boise, Idaho. We help companies to manage product development projects and when we're busy it is often a leading indicator of good things to come. When companies want to accelerate product development it means that they're optimistic about market potential and are willing to pay extra now for more revenue later. Often, our planning sessions result in their realization that in order to launch their product on-time or early, products often worth millions a day in revenue, they'll have to hire more of a particular skill set. They don't just pay us (we are typically a rounding error in their business in any case); once they see what they need to do to really accelerate, they pay more in hiring, subcontractors, and investment in equipment. All that to say that what our being busy suggests is that businesses are optimistic about future prospects. When they're worried, they focus more on trimming certain costs (that is, they don't hire us) than accelerating uncertain revenues.
We are Still in a Stage of Expansion and Hiring
It seems like we've entered a stage at which companies are less focused on getting more with less (which often means, "You'll do the work of two people for now, Joe, because we can't afford to hire anyone to replace Amelia,") than getting proper staffing. They're hiring.
When I start with a new client, I have to get processed for a badge so I can get in and out of their facility. On one of my trips, I found myself in the midst of a small covey of new employees, all looking baffled that they were just one of many starting that very Monday. "How many new employees do you hire on an average Monday," I asked the folks taking photos and making badges. "It's about 30 to 50 lately," came the response. For the one site.
At a conference for project managers in the pharmaceutical industry, about every break someone else was standing up to say that they were hiring. Then they did a little ad for their company, obviously working to make it sound appealing in their efforts to gain interest. It did not sound to me like an employers' market. On the negative, most of the jobs seemed to be in places like San Francisco and Boston, where cost of living is a big obstacle.
What We Americans Look Like to Europeans
Many of the teams I work with have a mix of nationalities. Just in the last month I've worked with folks making computer chips, medical devices, new drugs, and nanotechnology and as a general rule, the more specialized the technology skill sets, the more varied the accents. In particular, the teams I've worked with recently had more than a few Europeans. Out to dinner one night, I was sitting with a few guys from the Netherlands, one from Germany, and two from Czech. We were all eating burgers and about three bites in I felt like a barbarian. I was the only one not eating my burger with a knife and fork.
Chatting with a German from another client who had just moved to the US about four weeks earlier, I asked him what was most remarkable about the US in his brief time. "Just the waste," he said. "You buy four items at the store and they give you three bags. You order a meal and they give you enough for two people. It's amazing."
A British client has been living in the US for decades. He said, somewhat tongue in cheek, somewhat seriously, that every 4th of July he felt offended. Finally, one year he decided to take his sailboat up to Vancouver British Columbia. He was delighted with how British it seemed up there, even down to the red mail boxes. Plus he was avoiding the 4th. He felt almost giddy. Then he was driving somewhere and was shocked at how much traffic was there.
"What is going on," he asked.
"It's Canada Day," they told him.
"What's that?"
"We're celebrating our independence from Britain," they told him.
"Oh crap," he exclaimed.
Abnormal (Weather) is the New Normal
Of course everywhere seems extreme in comparison to San Diego, but even by the standards of locals the weather is extreme.
Boise got to 109 and was over 100 every day of the week I was there. Portland is setting records for hot. The grass along the runway in Seattle was uncharacteristically brown. From Seattle to Vancouver, BC, the summer has been hot and dry.
Meanwhile, the east coast and great lakes region is another kind of extreme. In four days, I had two big rain storms - complete with lightning - in DC, leaving puddles deep enough to submerge socks. Chicago set a new record for rainfall in June, getting nearly 9 inches. In one month.
Every City is Getting Better
I love San Diego. I'm happy I live here. When I started traveling regularly, about 20 years ago, I rarely found myself anywhere that I felt I'd be happy to live, much less give up for San Diego. In the last five to ten years, though, every city I visit has become more interesting. Some I would even be content to live in.
Local government has created public works that make life better. For instance, Boise has a beautiful green belt area along the river through downtown. You can walk or jog through beautiful copses of trees. Families raft from one place to another. It's delightful.
And businesses have also upped their game. It used to be that you had to choose between local businesses with a lot of personality but bad prices, selection, and decor or mass manufactured chains that were consistent in quality but offered boring fare, products, and decor. Now, more and more local businesses have personality and quality, offer distinct products at good prices, and keep your attention. Cities are simply more interesting and safe and it is largely because of local entrepreneurs and social activists who have upped their game. The standard is high and getting higher.
The list of cities that I would be content to live in has grown in recent years. I still have no plan to move but as often as not, instead of coming home from a trip relieved that I don't live in the city I just visited, I feel like, "I could live there." Even Cleveland, Ohio, where I traveled about a year ago, left me feeling that way. (I know. I know. I wasn't there in winter. But even so, they sell heaters and jackets.)
No one will tell you this because it makes all the angry pessimists even angrier, but the country is getting better. It's a great time to be alive and - at this rate - will be even better for our grandkids. That's reason enough to have a happy 4th of July.
In the last five weeks I've been on business trips to Portland, San Francisco, Washington DC, Del Mar, California, and Boise, Idaho. We help companies to manage product development projects and when we're busy it is often a leading indicator of good things to come. When companies want to accelerate product development it means that they're optimistic about market potential and are willing to pay extra now for more revenue later. Often, our planning sessions result in their realization that in order to launch their product on-time or early, products often worth millions a day in revenue, they'll have to hire more of a particular skill set. They don't just pay us (we are typically a rounding error in their business in any case); once they see what they need to do to really accelerate, they pay more in hiring, subcontractors, and investment in equipment. All that to say that what our being busy suggests is that businesses are optimistic about future prospects. When they're worried, they focus more on trimming certain costs (that is, they don't hire us) than accelerating uncertain revenues.
We are Still in a Stage of Expansion and Hiring
It seems like we've entered a stage at which companies are less focused on getting more with less (which often means, "You'll do the work of two people for now, Joe, because we can't afford to hire anyone to replace Amelia,") than getting proper staffing. They're hiring.
When I start with a new client, I have to get processed for a badge so I can get in and out of their facility. On one of my trips, I found myself in the midst of a small covey of new employees, all looking baffled that they were just one of many starting that very Monday. "How many new employees do you hire on an average Monday," I asked the folks taking photos and making badges. "It's about 30 to 50 lately," came the response. For the one site.
At a conference for project managers in the pharmaceutical industry, about every break someone else was standing up to say that they were hiring. Then they did a little ad for their company, obviously working to make it sound appealing in their efforts to gain interest. It did not sound to me like an employers' market. On the negative, most of the jobs seemed to be in places like San Francisco and Boston, where cost of living is a big obstacle.
What We Americans Look Like to Europeans
Many of the teams I work with have a mix of nationalities. Just in the last month I've worked with folks making computer chips, medical devices, new drugs, and nanotechnology and as a general rule, the more specialized the technology skill sets, the more varied the accents. In particular, the teams I've worked with recently had more than a few Europeans. Out to dinner one night, I was sitting with a few guys from the Netherlands, one from Germany, and two from Czech. We were all eating burgers and about three bites in I felt like a barbarian. I was the only one not eating my burger with a knife and fork.
Chatting with a German from another client who had just moved to the US about four weeks earlier, I asked him what was most remarkable about the US in his brief time. "Just the waste," he said. "You buy four items at the store and they give you three bags. You order a meal and they give you enough for two people. It's amazing."
A British client has been living in the US for decades. He said, somewhat tongue in cheek, somewhat seriously, that every 4th of July he felt offended. Finally, one year he decided to take his sailboat up to Vancouver British Columbia. He was delighted with how British it seemed up there, even down to the red mail boxes. Plus he was avoiding the 4th. He felt almost giddy. Then he was driving somewhere and was shocked at how much traffic was there.
"What is going on," he asked.
"It's Canada Day," they told him.
"What's that?"
"We're celebrating our independence from Britain," they told him.
"Oh crap," he exclaimed.
Abnormal (Weather) is the New Normal
Of course everywhere seems extreme in comparison to San Diego, but even by the standards of locals the weather is extreme.
Boise got to 109 and was over 100 every day of the week I was there. Portland is setting records for hot. The grass along the runway in Seattle was uncharacteristically brown. From Seattle to Vancouver, BC, the summer has been hot and dry.
Meanwhile, the east coast and great lakes region is another kind of extreme. In four days, I had two big rain storms - complete with lightning - in DC, leaving puddles deep enough to submerge socks. Chicago set a new record for rainfall in June, getting nearly 9 inches. In one month.
Every City is Getting Better
I love San Diego. I'm happy I live here. When I started traveling regularly, about 20 years ago, I rarely found myself anywhere that I felt I'd be happy to live, much less give up for San Diego. In the last five to ten years, though, every city I visit has become more interesting. Some I would even be content to live in.
Local government has created public works that make life better. For instance, Boise has a beautiful green belt area along the river through downtown. You can walk or jog through beautiful copses of trees. Families raft from one place to another. It's delightful.
And businesses have also upped their game. It used to be that you had to choose between local businesses with a lot of personality but bad prices, selection, and decor or mass manufactured chains that were consistent in quality but offered boring fare, products, and decor. Now, more and more local businesses have personality and quality, offer distinct products at good prices, and keep your attention. Cities are simply more interesting and safe and it is largely because of local entrepreneurs and social activists who have upped their game. The standard is high and getting higher.
The list of cities that I would be content to live in has grown in recent years. I still have no plan to move but as often as not, instead of coming home from a trip relieved that I don't live in the city I just visited, I feel like, "I could live there." Even Cleveland, Ohio, where I traveled about a year ago, left me feeling that way. (I know. I know. I wasn't there in winter. But even so, they sell heaters and jackets.)
No one will tell you this because it makes all the angry pessimists even angrier, but the country is getting better. It's a great time to be alive and - at this rate - will be even better for our grandkids. That's reason enough to have a happy 4th of July.
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