21 December 2019

How Selfish and Selfless Overlap

Let us say that you were a complete hedonist. You only did what made you feel good.

Wouldn't you still do things for other people? Given how we are wired, doesn't it make a person about as happy to make someone else happy as anything one can do? For instance, have you ever seen anyone making a baby laugh who looked like they were having a miserable time?

"Bring me a wave separate from the ocean and I will show you a person separate from the universe."
- Alan Watts

14 December 2019

Has Wealth Creation Become More Exclusive?

As managing partner of Andreessen Horowitz, Venture Capitalist Scott Kupor argues that much of the gains from startups have shifted from later-stage, post-IPO to pre-IPO private markets. By the time we normal people get into the market, early investors have already captured a lot of the value.
From Scott Kupor's Secrets of Sand Hill Road (updated with data as of today).

"Consider the following example. Microsoft went public in 1986 at a $350 million market capitalization. Today, Microsoft has a market cap of approximately $1.2 trillion. That's a 3,430x increase in market cap as a public company. [An initial $1,000 investment in MSFT when it went public would now be worth $3.4 million.]
"In contrast, Facebook went public at a $100 billion market cap and now trades around $555 billion.[An initial $1,000 investment would now be worth $5,550.] ... For the public market investors to eventually earn the same multiple on their Facebook holdings as has been the case for their Microsoft holdings, Facebook would have to reach a market of more than $340 trillion. To put that in perspective, US GDP is about $20 trillion and global GDP is about $100 trillion. "

[Ron again, not Scott.]
In other words, folks who bought Facebook stock will never get the returns of folks who bought Microsoft stock.

Two possible explanations - not mutually exclusive.
My notion of the third economy is that finance was democratized (banks and stock markets made tools of us common folks in the same way that the first and second economies made tools of church and state). It seems sad that we've gone backwards on this and so much of the gain on capital has been pushed back into less accessible private markets that fund early stage startups where elite investors can get higher returns.
There may, of course, be another explanation for this. Capital no longer limits but knowledge workers do. Median pay at Facebook is $240k. That's median pay. It might be that the knowledge workers who are the limits to the information economy are now getting the returns that capital used to get.

24 October 2019

Trump as Your Rogue Mailman

Trump creates so much daily chaos that it is easy to lose track of why Congress has moved ahead with impeachment hearings. A simple analogy to explain his conversation with the Ukrainian president might help.

Congress authorizes social security payments. Of course, they are just legislators so they don’t actually deliver the check to recipients. Your mailman – a part of the executive branch – does that.

Imagine that the mailman tells the social security recipients on his route that he’s running for city council and he will give them their check but first they have to make a public statement claiming that his political opponent is involved in a corruption scandal.

Once this is revealed, you would expect an investigation into the mailman’s behavior. You would not be surprised if he were fired.

So, what does that have to do with Trump’s situation?

Congress – the House and Senate – authorized money for the Ukraine. Why? Largely to defend itself from Russia. Russia has already invaded – and now occupies – the Crimea. (Another quick analogy? Imagine that Mexico had taken Texas from the US because a chunk of its residents spoke Spanish. That’s essentially what Russia did by invading and taking Crimea from the Ukraine.) Russia may have plans to take more – perhaps even all – of the Ukraine. The US would rather deter Russia with a show of support than to wait for Russia to again attack and force the US and NATO to either just watch Russia conquer the Ukraine or force a war between NATO (the Ukraine is not a member of NATO but has applied to join) and Russia. Congress wants to check Putin’s aspiration for conquering former Soviet territory.

Trump, apparently, does not.

Just like social security checks, Congress has authorized money for the Ukraine. Just like social security checks, Congress does not actually deliver the check. Trump’s White House – which is, like the post office, a part of the executive branch – delivers that money. And just like our rogue mailman, Trump was using his position of power to withhold money as a way to get something of personal value. He was asking the Ukrainian president to declare that they were investigating Joe Biden for corruption before Trump would deliver the Ukraine money Congress had already authorized.

Trump is not a monarch. He is subject to laws just as every other citizen. And when he uses the executive office to extort foreign heads of state to do him a personal favor, he is as much in violation of law as the mailman who extorts the social security check recipients on his route. 

16 October 2019

Some Policies my Ideal 2020 Candidate Would Pursue

My ideal candidate would take the following positions on these issues.


  • Make it easy for entrepreneurs to succeed.
    • incubators in communities the way earlier generations planted libraries and universities as just one of the many support structures to put in place to make more citizens more entrepreneurial. Do all we can to make citizens wildly successful and then tax the ones who achieve success at high rates (say, marginal tax rates double that of middle class) to pay for investing in the next round of new entrepreneurs.
  • Make a huge investment in research
    • We will spend about $3.5 billion on DARPA - Defense Advanced Research Projects Agency - this year. DARPA has helped to fund amazing technologies that helped birth modern computers, smart phones and satellites. We are still counting the trillions in returns on early investments of millions and billions in DARPA. I would match the DoD's R-and-D spending with similar levels of spending on Department of Education, Department of Energy, etc. to something like the table above. This would not only employ a growing number of doctoral graduates (we could conservatively assume about 140,000 new jobs for staff and leading researchers with the numbers above) but would lead to returns of trillions in the future as we solve problems of energy, commute times, poverty, environment, etc. Entrepreneurs can translate this research into development, creating new wealth and jobs in the process of deploying new processes, services and products that build on this research.
  • Make it easy for employees to use corporations as tools for creating wealth
    • Laws requiring mechanisms inside of corporations that allow employees to create wealth through innovation and entrepreneurship and dictating that between 0.5% to 2% of that corporation's employees are paid more than the CEO as a result.
  • Tax inheritance more than capital gains more than income
  • Massive spending on research on alternative energy, upgrading infrastructure to reduce carbon emissions and the introduction of carbon tax. Innovate our way out of a fossil fuel economy.
Social policy
  • Make it easy for single moms to succeed
    • Make high-quality childcare free
    • Sex is one of the most wonderful acts and rape is one of the worst. The main difference is consent. Pregnancy and childbirth is one of the most wonderful acts ... unless it is forced on you by others, in which case it is one of the worst. It should be the choice of individual women about whether and when to have sex or babies, not the choice of the men in their community. 
  • Annually - and aggressively - reduce childhood poverty
  • Provide universal healthcare
    • This would include death panels and other criteria about what level of care we have a right to and what level of care the community should not be billed for.
  • Transform K-16 into an education system that creates a common sense of community but a wildly diverse workforce that includes the knowledge workers that are the primary focus of schools today AND trades, entrepreneurs, makers, government and service workers and other emerging career paths
  • Treat investigative reporting like research. That is, it should be funded by the government with oversight of the agenda by citizen boards. (We should more aggressively follow the example of the BBC.)
  • People whose data is key to the success of a social platform (e.g., Facebook, Twitter, etc.) should receive a portion of that platform's revenue (idea taken from Andrew Yang).

17 September 2019

A Curious Explanation as to Why Europe's Population Fell During the Dark Ages

Learned something curious from Berkowitz's Sex and Punishment, a book I picked up from the Harvard Bookstore a week ago.

Medieval priests used penitentials to define rules and punishment. A lot of prohibitions involved sex and some were odd. (To be fair, in an age before cars, guns, and corporations there wasn't much other behavior to regulate.) In a few regions, the penalty for performing fellatio on one's husband was greater than the penalty for killing him.

The penitentials offered a labyrinth of penalties and prohibitions. Among other things, it left only about 4 days a month during which it was "legal" to have sex. Even those limits weren't enough: married couples could be prosecuted if they were known to enjoy sex too much. Pope Gregory (~540 to 604) declared that marital sex was blameless only when there was no pleasure involved.

Perhaps unsurprisingly, during the period of the Dark Ages when these penitentials had the most influence - from about 500 to 1050 - Europe's population actually shrank.

So that's kind of interesting.

14 September 2019

Beyond Win-Win or Win-Lose into the Strange Mind of Donald Trump

Stephen Covey's 4th habit is the building block to relationships. It also gives us a way to better understand the danger of Trump.

Think Win-Win is how we approach others. It's a belief that relationships make things better for us and them, for you and me, whether the you is a romantic or business partner or simply a friend.

Covey's 5th habit is Seek first to understand and then to be understood. You have to understand their perspective and their win and then communicate your own. His 6th habit is Synergize which could be stated more clumsily as, Create a solution that will not just give you your win and them theirs but might actually result in something extra that neither of you could have anticipated, a solution that encompasses both of your wins in a manner that might actually create wins you hadn't anticipated - whether for you or people outside the relationship.

Back to the 4th habit of Think win-win, the approach to take into a relationship or even a quick encounter.

To get to win-win, one needs both courage and consideration. You need courage enough to articulate and fight for your own win. You need consideration enough to listen and fight for the other's win. 

If you have only courage but no consideration, you'll likely become either a win-lose person who must beat the other while getting your own win or simply a win person who doesn't care at all whether the other person gets a win or a loss as long as you get your win.

If you have only consideration but no courage, you'll likely become a lose-win person who takes on the role of martyr, simply swallowing your own needs and dreams and deferring to the needs and dreams of others.

I think one obstacle to win-win is that it isn't natural to both be willing for combat for our own win and willing for empathy to understand the other's win. We tend to toggle into either courage or consideration rather than try to encompass both.

Trump introduces a new variable in this model that I hadn't really considered before: the role of comparison or status. It takes him to a new and odd place.

Trump's trade wars seem to have played a factor in the fact that Germany and China's economies are now stuttering. Automobile production has fallen dramatically in Germany. China's growth has slowed. In response to these sorts of issues, bond markets suggest there is a higher probability of a global recession. None of this seems to deter Trump from his trade war.

Part of Trump's bulldoggery of course is related to the fact that Trump has never once admitted to a mistake of any kind. I suspect, though, that it actually points to something else that is so defining of Trump: his quest for status above all else. In the wake of the 9-11 tragedy he called in to announce that with the collapse of the World Trade Center, his building was now New York's tallest. There was a tragedy but it gave him more status and that was what he wanted to talk about. Trump cares less about living in time of antibiotics and internet than being the top dog and if he had to choose between being Attila to the Huns or middle-class guy in a wildly affluent future, he'd choose to be Attila. What matters most is to be at the top.

China's economy has grown more rapidly than ours for the last 20+ years. This makes perfect sense given their relative stage of economic development. (It takes the average Chinese all week to make as much as the average American makes by the end of the day Monday.) This contrast outrages Trump who wants to be better.

I get the very real sense that given the choice between winning less than China wins (for instance, our economy grows 3% and theirs grows 6%) or losing less than China loses (our economy contracts only 1% while China's economy contracts 3%), he would choose losing less. It doesn't matter nearly as much that we're winning as it does that our position is better than our rivals.

Trump's little graph is not about win-win or win-lose quadrants. It is simply this: we're doing better or worse than the other guy. Better can include a loss in real terms as long as our loss is not as bad as the other guy's loss.

The probability that the US economy tips into recession goes up every time Trump's Twitter Tourettes drives him to spew out trade war nonsense. Remarkably, the probability of recession still seems considerably less than 50%; recession within the year is unlikely. In any case, our economy will likely be doing worse in 2020 than it was in 2016 but China and Germany's economies will likely be doing even worse even than ours. The global economy doesn't matter to him. Our relative position does. I'm not even sure what to call Trump's mindset. (Who cares about winning as long as we're doing better than than the other guy?)

Trump's 2020 campaign slogan could simply be, "You should see the other guy."  

07 September 2019

The Economics Behind the 3 Waves of Feminism

Robert Wright's Nonzero forms one of the foundations to my worldview. The other day he interviewed Kat Rosenfield and Phoebe Maltz Bovy on the Wright Show. One of the topics that came up was the three waves of feminism. As Rosenfield and Maltz Bovy defined it, it seemed to me that these three waves of feminism could be defined through economics.

1. Wave one feminism most easily characterized by a woman's right to vote came in the wake of industrialization. (It was 100 years ago that women got the right to vote.)  As labor was less about muscle and more about the mind, women could less easily be ignored as equals.

2. If wave two feminism came after the Pill - approved in 1960 - maybe it was about pointing out that with family planning a woman had even more control over how she timed her entry and engagement in the job market. She had the option to take a role more traditionally associated with men. Her biology no longer kept her home raising children.

3. If wave 3 feminism is happening now, it may be coincident with what I see happening: the beginning of the shift from an information to entrepreneurial economy. If the early 1900s was about a rise in product invention, I think that the early 2000s will be seen as a time of a rise in social invention: changing and inventing institutions to accommodate who we are or aspire to be. The old quip about the Model T, "You can have any color you want as long as it is black," in the early 1900s has given way to UX research that tailors the product to the customers. We judge products by how they perform when we use them; curiously, we still judge students and employees by how well they use schools and workplaces rather than judging schools and workplaces by how well they perform for students and employees. What does this have to do with anything? There are institutional changes that need to be made to accommodate (most? some?) women and it's not enough to say to women, "You just adapt to these institutions and social norms that have been made for men." The most obvious of these is that a woman who does want to raise a couple of children will find herself carrying a heavier load in child raising than a man simply because of the biological reality of pregnancy and nursing, etc. One option is to pretend this away, another is to say that women should just revise their ambitions to accept the fact that they can't engage in the same way as men and a third way is to insist on change to institutions to accommodate both their biological realities and their ambitions.  I think one element of social invention will be intentionally adapting our institutions to the people we are rather than the people our grandfathers imagined themselves to be. What I'd call social invention or entrepreneurship. 

Put more succinctly,
3. Wave 3 feminism is not just about women's right to participate fully but changing defining institutions to adapt to who women are and aspire to be. It's about shifting the burden of adaptation from women to institutions and social norms.

01 September 2019

The Future of Politics Might Be Culture, Not Policy

One of the things that neo-nationalism might signal is a hunger for common culture. We all listen to different music, read and watch different stories and worship at different holy sites.

We share an economy but not a culture. What is economics? A study of how we depend on strangers for our lifestyle. Some people find that unsettling. 

Peter Drucker supposedly said "Culture eats strategy for breakfast." A variant on that is "Culture eats policy for breakfast." Culture excites people and policy makes their eyes glaze over. One of the more enduring elements of culture is music.

It takes less time to listen to a song than read a book or watch a movie. This might be why 4 of the top 5 people (counted by followers) on Twitter are musicians. (Obama tops the list, followed by Katy Perry, Justin Bieber, Rihanna, and Taylor Swift.) Music might be the most effective cultural glue we have.

Prediction? Eventually politics will devolve into a people - bored with policy and disappointed by politicians - voting on what song will be the national anthem for the next couple of years. 

Then politics will really get ugly. 

25 August 2019

It's Time to Stop Pretending That Both Sides are Equal: Trump's Parade is Leading Backwards on Progress

From about 1830 to about 1900, the Democratic party was all madness and defense of the agricultural economy and the Republicans were the progressives. While Democrats were defending slavery, Republicans were figuring out capitalism. Now the Republican Party under Trump has gone full bore mad, fighting for the waning industrial economy the way Democrats once fought for the waning agricultural party. While Trump is fighting trade wars, Democrats are trying to figure out how to finance education and R-n-D for projects like global warming.

This divide between defending an old economy and trying to navigate a new one is why Democratic support is so high everywhere that the economy is strong and Republican support is so strong everywhere the economy is weak. (In the regions with the highest wages, Hillary Clinton won twice as many votes as Trump. (See below for details.)) Communities whose policies support the information economy are more prosperous than those still defending the industrial economy.

One of the many things absurd about this current battle between information and industrial economies is that rather than engage in a really great conversation about policies that better support an information or entrepreneurial economy and how to transition into the latter, we're debating something settled decades ago ... whether we should give preference to policies to support an information or an industrial economy. It is a complete waste of time to defend Trump's 1950s vision of the world and yet that is exactly what you have to do if you're a Republican. It's the political equivalent of selling rotary dial phones. There was no legitimate "both sides are equal" argument in 1870 and there is no both sides are equal argument today. 

Progress is heading in a particular direction and that's not the direction Trump is leading his parade.

The claim that the most prosperous areas voted most strongly against Trump's call to defend the industrial economy is based on facts. Among them is this fact: the 15 counties with the highest average weekly wages voted 2-to-1 for Clinton and against Trump.

The average vote for Clinton in these regions was 66% . (Details here.) 

24 August 2019

Contrasting the Districts that Supported and Opposed Trump: It Comes Down to a Divide Between Industrial vs. Information Economies

Nerd that I am, I collected some data on the 15 congressional districts where Trump won the largest percentage of votes and the 15 districts where he won the lowest percentage of votes. 30 districts out of the 535 lets us look at the contrast by looking at extremes.

The biggest difference is the ratio of folks with Bachelor's degrees or higher to the folks employed in manufacturing. (I still don't know of a simpler proxy for knowledge worker than a Bachelor's degree.)

In the least Trumpian districts, the ratio of folks with college degrees to folks working in manufacturing is 6 to 1. These are districts in the information economy. Not only are they more likely to be knowledge workers than factory workers but they create more jobs. There are 43 jobs for every 100 people living in such districts, 1.5X as many as found in the most Trumpian districts. The information economy is still growing even as the industrial economy shrinks. This not only explains the fact that districts in the information economy have more jobs but likely explains why they're 4 years younger, on average. The regions creating the most jobs are going to attract more people starting their careers.

In the most Trumpian districts, people are 3X more likely to work in manufacturing and household income is $22k lower. These are related. Generally, folks with a degree make about $22k more than folks without one.

Trump is the warrior chief for the folks in the waning industrial economy. It is just one of the ways that he is the opposite of Lincoln, the GOP's first president. In 1860, the industrial economy was cutting edge. Today it is on the wane, being eclipsed by the information economy just as the industrial economy eclipsed the agricultural economy during the time of the first Republican presidents. 

23 August 2019

Republicans - the Party That Does What It's Told

When it comes to how we're wired, liberals prioritize equality and care while conservatives focus more on loyalty, authority and purity. Once Republicans know who the authorities are, they'll reliably do what they're told.

No Republican has been more popular - not Eisenhower or Reagan, not Bush or Bush, not Nixon or Ford - than Trump. Trump defines and owns his Party in a way that no president since FDR has. This is only possible because Republicans so readily cede to authority.

Concerned Republican, "Trump had sex with a porn star while his wife was home with a new baby and then used campaign funds to hush her up. Oh, and then lied about it. We were really upset about sex and lies with Clinton, right?"
"Right. But that doesn't matter now."
"Oh, okay."

Concerned Republican, "Trump has doubled the deficit to a trillion dollars. We were really upset that the deficit grew so fast during the Great Recession under Obama, right?"
"Right. But that doesn't matter now."
"Oh, okay."

Concerned Republican, "Trump has insulted prisoners of war, discounting their sacrifice and heroism. We really love our veterans and in particular those who suffered as prisoners of war, no?"
"No. Not any more. A prisoner of war is a loser who got caught."
"Oh. Okay."

Concerned Republican, "Trump is against free trade. Aren't we against government interference in markets and for free trade?"
"Not anymore. Now we like trade wars."
"Oh. Okay."

Concerned Republican, "Trump is telling businesses that they can't do business in China or with China. Isn't government telling businesses what to do socialism?"
"Not anymore. We like this."
"Oh. Okay."

Concerned Republican, "Russia helped Trump to win. Don't we hate the Russians and isn't that foreign interference in our elections?"
"Not anymore. Democrats just hate Putin because he didn't help them to get elected."
"Oh. Okay."

Concerned Republican, "Every time Trump tweets the stock market falls. Don't we care about the stock market?"
"Not anymore. We think trade wars are more important than prosperity."
"Oh. Okay."

Concerned Republican, "Trump claimed that he was the chosen one and that he is the second coming of God. Should we be worried that he's going crazy?"
"No. He actually is the chosen one. God loves him best."
"Oh. Okay."

Concerned Republican, "Should we be drinking this kool-aid? It looks like it made those other people really sick."
"Everyone feels worse right before they feel better. Just close your eyes and swallow it quickly."
"Oh. Okay."

There was a reason Putin wanted Trump to win. Democrats will reject a Democrat because he posed for a picture pretending to touch a sleeping woman or because she was paid for a speech by bankers. You can't get Democrats to reliably vote AGAINST a madman. Republicans? You just have to tell them to vote for and what to support this year and they'll happily do it. It's a pretty easy group to herd. If you tell them they're supposed to, they'll even reliably vote FOR a madman.

09 August 2019

How Hosting or Squelching Science Determines Where Progress Goes Next

In 1642, Galileo died and Newton was born. That's still a poignant symbol of the hand off from Italy to Britain for progress.

In 1500, Italy's per capita GDP was about 50% higher than Britain's. By 1820, Britain's per capita GDP was about 50% higher than Italy's.

Galileo was arguing that the earth rotated around the sun. The church had the authority of Joshua 10:13, a verse that made it clear that it was in fact the sun that orbited the earth. They put Galileo under house arrest and made it clear that developing theories based on observation was not to be tolerated as long as Italy had the church's authority.

Science traveled north. The Protestants of Northern Europe accommodated Galileo's theories and became host to the scientific method that the Italians had helped revive from Greek and Roman time. Newton went further than Galileo, developing a set of laws to explain what Galileo observed. Newton's science and math became a foundation for the Enlightenment and that, in turn, became a foundation for the Industrial Revolution and Democracy. Italy protected its past and the UK created a new future.

Today, we have a similar inflection point in the transition from fossil fuels to alternative energy. China now leads in the production of wind turbines and solar panels. Meanwhile, we Americans have elected a president intent on protecting coal - an industry that dates back to the time of Newton. Trump - like so many of his supporters - denies climate change in the same way that the Catholic Church denied we orbit around the sun. And science, less interested in the vested interests of coal industry profits or old testament prophets than reality, is shifting away from the greatest home to science since, well, Italy during the Renaissance or the UK during the Enlightenment.

Economic growth and prosperity follows science. It has for centuries. If we continue to deny the reality of climate change and what that means for a shift in strategies and the source of prosperity, we will play the role of Italy in the 1600s. It's not a good role. Shakespeare - born the same year as Galileo - set half his tragedies there.

07 August 2019

We're All Becoming more Individual - or the curious challenge progress poses to politics

It's not just that we're getting more specialized in our work. We're also getting more specialized in our consumption. My lunch is different from yours. The last book I read has nearly a 0% chance of being the same book you last read. The article linked below is a tad wonky but the punchline is that there is a rise in "niche consumption."

This is so fascinating to me because it means that economically we have never been more diverse. I can't do your job and I never see you at my favorite lunch spot. To some degree. our lives are lived in separate economic universes whether we're on the production or consumption side of the economy.

Meanwhile, we have to come together as a community when it comes to the government we choose and the policies we implement. You don't have to live with the consequences of what I choose in the market - which is becoming increasingly fragmented and diverse - but you do have to live with the consequences of what I choose at the ballot box - which still has to hit 51% and by definition cannot be that fragmented. At no time in history have we had to bring so much diversity into one common cause, creating community even with less and less is in common.

In this way, progress poses a curious challenge to politics. Progress makes us all more distinct individuals. Politics is often built on what we have in common. As we make more progress, what is common between us becomes less obvious.

From the summary:

This paper empirically documents a rise in what we call "niche" consumption. Households are increasingly concentrating their spending. This pattern, however, does not appear to be driven by the emergence of superstar products. Rather, households are increasingly buying different goods from one another. The increase in segmentation seen in many other walks of modern life also applies to consumption: our grocery baskets look less and less similar. As a result, aggregate spending has become less concentrated.
From the intro:
We show that over the last 15 years, the typical household has increasingly concentrated its spending on a few preferred products. However, this is not driven by “superstar” products capturing larger market shares. Instead, households increasingly focus spending on different products from each other. As a result, aggregate spending concentration has in fact decreased over this same period. We use a novel heterogeneous agent model to conclude that increasing product variety is a key driver of these divergent trends. When more products are available, households can select a subset better matched to their particular tastes, and this generates welfare gains not reflected in government statistics. Our model features heterogeneous markups because producers of popular products care more about maximizing profits from existing customers, while producers of less popular niche products care more about expanding their customer base. Surprisingly, however, our model can match the observed trends in household and aggregate concentration without any resulting change in aggregate market power. 

26 July 2019

GDP Growth Under Last Four Presidents (Or What Trump Lied About This Time)

This morning the new GDP numbers were announced here. The numbers compare the second quarter of 2019 with the second quarter of 2018.

GDP is up 2.1% for 2Q 2019
Personal consumption is up 4.3%
Private domestic investment is down 5.5%
Exports are down 5.1%
Federal government spending is up 7.9%

So what does this mean in simple English?
GDP growth was below average. Since 1993, quarterly growth has averaged 2.6%. Hitting 2.1% rather than 2.6% is a difference of $100 billion. ($107 billion, to be exact. Which works out to about $300 per American.)  GDP rose because personal consumption and government spending is up and in spite of the fact that exports and investment are down.

It's dicey to play psychologist based on one quarter but this suggests that the great job market, long boom and easy credit have made American consumers more comfortable buying stuff. So personal consumption is up.

Meanwhile, Trump's constant trade war talk has made businesses nervous about investing more and has already hurt their ability to sell to foreign markets. So business investment and exports are down.

Households are comfortable and businesses are nervous. It's tough to sustain increases in household and government spending when investment and exports are dropping.

There is another element worth noting. I've heard from more than one Trump supporter that GDP growth under Trump has been unprecedented and that he's hit quarterly growth levels that Obama thought impossible. Like so many of the claims originating from the fake president, this is an absurd claim that quickly dissolves on contact with facts. 

This graph shows quarterly GDP growth for the last four presidents. Specifically, it shows the average for each one (blue bar), their highest quarter (orange), their lowest quarter (gray) and the difference between the average of their first three quarters (the economy they inherited) and the average of their last three quarters (the economy they left for the next president) (yellow). 

Studying this graph quickly makes a few things obvious. 

Trump has the lowest high. In his best quarter, GDP grew by 3.2% from a year earlier. For Clinton, Bush, and Obama, the highs were 5.3%, 4.3%, and 4.0%. GDP is not growing at unprecedented highs under Trump. It is not even growing at precedented highs. Clinton, Bush, and Obama all had better quarters. (Clinton alone enjoyed 24 quarters of better GDP growth than Trump's best quarter. 24.)

Bush inherited a great economy and made it worse, GDP growth dropping by 2.8 percentage points from what it was in his first three quarters to what it was in his last three quarters. Obama inherited an awful economy and made it better, GDP growth increasing by 5.1 percentage points. Clinton inherited a decent economy and made it great, increasing GDP growth by 1.3 percentage point. Trump? Trump hasn't really changed things. He inherited a good economy and made it somewhat better, an uptick of 0.3 percentage points from his first few quarters to his most recent three. It is fascinating that so many of his critics who thought he would blow up the economy (in a disastrous way, as I did) and so many of his supporters who thought he would blow up the economy (in a great way), have found themselves in the calm before a clear direction. For the most part, the economy has continued on the same trajectory in which he found it.

Of course none of this is what he promised.

Trump promised GDP growth of 4, 5 or 6% after he passed his tax cut. (Video here.) He's currently averaging 2.6%, about two-thirds of what the economy averaged under Clinton and less than half of what he promised. It's not just that his tax bill has doubled the deficit; it has failed to make any discernible change in GDP growth.

If he just shut up, the economy might do better. Businesses might invest more and find it easier to sell abroad without dodging the tariffs of Trump's trade wars. Of course expecting Trump to shut up is like expecting the heads on Mount Rushmore to speak out. 

Catherine Rampell puts the surge in government spending into perspective.

25 July 2019

Progress Has a Direction

When it comes to politics, there are a lot of people who believe that the truth lies somewhere in the middle and that if only we listened to each side we'd find the truth there.

I actually agree with this on one dimension. Imagine a scale of 0 to 100. 0 is a world in which not a dollar of income is taxed, not a dollar of government money is spent, and not a single activity is regulated. 100 is a world where every dollar of income is taxed, every dollar spent is government money, and every activity is regulated. (And you could make this more complex and have three scales for the tax, spending, and regulation.) I have my own opinions about where we should be on this scale and so do you. (Mine involves more hand waving than precision.) It might be a simple thing to have democracy by averages in this instance and simply let every single American pick a value from 0 to 100 and let the tyranny of the average (or median) define our policy. We now have the technology for this. If every voter's opinion matters, we could easily weight every opinion equally and find our truth in the middle and let it move around over time as awareness of problems and possibilities changed.

(And it annoys me that we spend so much time debating this. Again, we have the technology that would let people quickly express their values and opinions on this. Once in place, we could know the answer to the question of where Americans think we should be on this scale in an instant.)

But some policies are not subject to average. Is slavery legal or illegal? Abortion? Do we make schooling mandatory for every child? Do we make child labor illegal? Or more relevant to my own obsession with economic progress, do we put in place policies that assume and support a national industrial economy or a global information economy? Or even better, an economy that popularizes entrepreneurship?

Progress has a particular direction and for me it can be captured along these four dimensions or scales. Progress isn't found in some average on these scales but always in one direction. 

Greater Interdependence and Specialization
Progress steadily makes us part of larger groups. Progress is coincident with greater levels of complexity and interdependence. One of the simpler ways that shows up is that we move from economies largely bound by tribes to city-states to states to nation-states to global markets. Individuals specialize more and more and their work is coordinated with bigger groups (partly through management and partly through markets and partly through platforms like Fiverr). When you are self-sufficient, you have to be a generalist rather than specialist and your living standard is very low. When you are interdependent, you specialize and your living standard has the potential to be very high. Nobody on a deserted island is living a life of luxury; some people in big cities are.

Autonomy Supportive vs. Control or Abandonment
William Deci makes really great distinctions for parents, teachers and managers. You can control a child or employee, driving them towards the fulfillment of your own goals. At the other end of the spectrum you can abandon them, leaving them to do what they want without your control, influence or help. He advocates instead supporting their autonomy by enabling them to define and pursue their own goals. Rather than dictate goals you help them to articulate their own. Rather than shrug and say, "Good luck with that," you help to develop their ability to pursue those goals.

Autonomy supportive is relevant in so many dimensions but for now I'll simply say that it applies in this matter of greater interdependence. Empire is one way to expand the circle of people upon whom we depend. In that sense it is progress. A global market is even better than an empire as a mechanism for increasing our level of interdependence. And of course even better than free markets is a world in which government enables individuals to succeed in markets, is autonomy supportive. What does that look like? Regulating health and safety so that the person can trust the water and transportation systems they depend on. Providing lots of research and education so that the individual has the benefit of a steady parade of new knowledge and best practices. Education and training so the person knows how to be productive. The government neither dictates nor abandons its citizens but instead is autonomy supportive.

Greater Inclusion
At one level of progress, white, male, land-owning Protestants are able to use government as a tool for their goals. At another level of progress, minority women atheists who rent are able to use the government as a tool for their goals. One dimension of progress is Carl Benz inventing the car. Another dimension of progress is Henry Ford applying the concept of the assembly line to building cars and making them affordable for 90% of households. It is the same concept for our government, laws, and institutions. The more people able to use them and call them their own the better.

More Inventive
As we make progress, our world becomes more inventive. We invent computers and canned goods as well as banks and corporations. The speed with which we travel across town is less defined by how fast we can run than it is by whether we have access to a bike, car or subway. Our level of affluence is less dependent on our ability to hunt or build our own hut than our access to great schools or venture capital markets or table saws and nail guns. Progress means increasing reliance on inventions - social and technological. This can be disruptive.

Given the above, progress clearly has a direction. Policies that are autonomy supportive rather than controlling or abandoning represent progress. Policies that help us to become more specialized and more reliant on a larger group are progress. Policies that are more inclusive, that allow more and different kinds of people to have the same access to the institutions - institutions like credit markets, courtrooms and schools - we rely on is progress. Policies that encourage more invention - technological and social - is progress. 

There will be times when we move backwards on these scales. Such movement might even be necessary. For instance, during war we no longer trade with some group of people we were formerly reliant upon. There are people we will have to imprison, to control. Again, that is not progress but is instead a breakdown at the individual level from what is ideal to what is necessary. Moving backwards on these scales is not progress. It is - at best - an interruption to progress.

It is true that for some issues, the best resolution is in the middle. Progress, though, is not somewhere in the middle but further along. 

The Inquisition 2.0, Virtual Bordellos in Every Head, and Elon Musk and the Collective Unconscious

Harper's Weekly Review always serves as a stark reminder of how many truly weird things happen in any given week. This week's account includes these juxtaposed reports:
“These porn sites need to think more,” said the author of a paper that showed that 93 percent of pornography websites sent data to third-party domains, including Google, which had a tracker on 74 percent of porn sites. Elon Musk revealed a technology that could connect the human mind directly to a smartphone with thin threads, which would be installed by drilling small holes in the skull.

This suggests a couple of possible futures. In one, our thoughts are monitored and used for blackmail or control. In another, our impulses - no matter how odd or distasteful - are happily accommodated by for-profit providers of virtual pleasure, private bordellos in every brain.
Imagine the odd texts that you'd generate in the middle of the night while dreaming. How complicated would your relationships get in that world?
"No! It was not me. It was my subconscious!"
"Uh huh. Sure."

23 July 2019

The Christian Equivalent of Sharia Law?

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

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

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

14 July 2019

Do I Have a Surprise for You

Moliere had a character in a play who was terribly surprised to learn that he'd been speaking prose all his life.
Today Trump told democratically elected, native born Congresspeople to go back to their "own countries. Like Obama who he insisted had to have been born in Kenya, these women just happen to all have brown skin. There's a pattern here and guess what? If you support that, like Moliere's character surprised to learn he was speaking prose, you might be surprised to learn that you're racist.

Why Trump Will Lose in 2020

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

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

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

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

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

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

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

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

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

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

10 July 2019

What are the Odds? The Conservative's Unique Place in History

The women's soccer team is fighting for equal pay. A conservative friend thinks this is silly.

It's a curious thing. This friend is not a troglodyte. He does not support keeping women at home and out of the workplace like conservatives would have in, say, the 1960s. He also does not support efforts to get women equal pay now that they are in the workplace.

This is the belief of conservatives. Today, the natural evolution of "We deserve to be admitted to universities and corporate workplaces," to "and it makes no sense that we regularly make tens of percent less than men" gets the first part right and the second part wrong. In their eyes, conservatives who tried to keep women out of universities and the workplace were overly repressive decades ago and progressives who today would push for equal pay are overly progressive.

Think about the odds of this. For thousands of years before the current conservative became an adult, society was too repressive. Societies that have pushed further and now ask for equal pay for men and women have gone too far. Out of thousands of years of history and thousands of years of future, only the society they discovered at the time they became an adult got it just right. Progress had neatly deposited the conservative in just the right place in history and no further.

You would think that conservatives would be happier people. Had they been born even a generation earlier, they'd be outraged at the inequity of repressive conservatives around them not enlightened enough to give women equal opportunity. And had they been born even a generation later, they'd be outraged at the inequity of all the progressives who were stupid enough to insist on equal pay. There was only one generation in history to get it just right and it happened to be theirs. You'd think that would make them feel happy and proud.

"50 years before I was born, the world was in the Dark Ages. 50 years after I turned 18, the world had gone mad. What a joy that I found just the right time to live in, a glorious golden age in which the golden mean was achieved. What bliss. What luck. What perfect timing."

"A conservative is someone who stands athwart history, yelling Stop, at a time when no one is inclined to do so, or to have much patience with those who so urge it."
 - William F. Buckley, Jr.

03 July 2019

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

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

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

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

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

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

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

01 July 2019

One Way to Beat Mitch McConnell in 2020

Here's one possible route to beating Mitch McConnell. I think it may work politically but in any case it presents the truth about Kentucky.

First, McConnell's opponent makes the case that she isn't a racist. This is said casually, sort of a nod to the normal tropes of modern politics. And then she says this.

"I'm not a racist which is why I know that Kentucky is the victim of terrible leadership. It's true that we have only half as many minorities as the average state in this country but that should not account for why we're poorer. Whether measured by median or average, our household income is 20% lower than the rest of the nation. And we have only half as many households that make over $200,000 a year.

"This isn't because the good people of Kentucky are any less as people. Birth doesn't explain this difference. It's not bad genetics but bad leadership that explains why Kentucky is poor. It's because the systems our leaders have developed are inferior. Our education systems. Our health systems. The systems we depend on for creating new businesses and with it new jobs and wealth. All of these are inferior here in Kentucky and that's because leaders like Mitch McConnell have done such a terrible job of nurturing and advancing these systems and the culture that embraces rather than rejects the disruption that comes from new ideas and businesses.

"What we need is a very different set of expectations. Mitch McConnell has kept Kentucky in the past because the ideas he has are anchored in the past. It's time to send someone to DC more intent on making the good people of Kentucky prosperous than he is on fighting to protect that past."

And from then you hammer the point that his terrible leadership is what has caused Kentucky to be 20% poorer than the rest of the nation rather than 25% richer, like Massachusetts (a place which has twice the percentage of minorities that Kentucky has).

The point is to clarify that Kentucky is not destined to be poorer than the rest of the country (while pointing out to the folks who are racists that a lack of diversity is probably one reason they're behind the rest of the nation) and that its culture and institutions - products of leadership and history - are making it poor and need to change. The way to make this change is to create the future rather than defend the past, to change leadership, starting with the most powerful man in the state.

27 June 2019

Bigger is Better

It seems a requirement of modern politics that Democrats criticize big business and Republicans criticize big government.

There is one problem with these shibboleths, these tests of the faithful: they ignore how the interplay between big government and big business has made us prosperous. History suggests that any politician successful at impeding either government or business will effectively slow economic progress.

Some people know the amazing story of Elisha Gray arriving at the patent office just hours after Alexander Graham Bell with his patent application for the phone. Bell went on to fame and fortune and Gray to a life of anonymity. There’s more to it, though. Our founding fathers were intent on creating an accessible, affordable patent system. One might even say it was democratic. Fewer people know that the Italian Antonio Meucci had invented the telephone years – not just hours – before Bell but could not afford to patent it through Italy’s expensive patent system. Had Italy been more visionary about subsidizing the work of its inventors by making it cheaper to file for a patent, it may have hosted the myriad, great inventions that defined the decades around 1900 or had the equivalent of Bell Labs from which communication satellites and transistors emerged as catalyst for huge industries. Our government enabled invention.

In his book The Rise and Fall of American Growth, Robert Gordon shares this story of Bell, Gray and Meucci and gives a host of other examples of government and business interacting to create prosperity.

During the second world war, the federal government led initiatives to increase industrial capacity. The government invested capital equal to half the capital that existed at the start of the war, capital in the form of factories and machine tools (which doubled during the war). Even better was the problem-solving that resulted in better production methods. During the war, Kaiser initially took 8 months to complete a ship; they accelerated that to just a few weeks by the next year. A plane factory of Ford's increased its rate of 75 planes per month in February of 1943 to 432 per month by August of 1944. By D-Day, the Germans could launch only 319 aircraft; the US and its allies launched 12,837. American factories won the war.

After the war, the government turned all this over to private companies. Armed with these investments in capital and knowledge, these companies began making consumer products like cars and TVs. Before the second world war, the economy had lurched in and out of recession. After, it took off. Government regulations helped raise wages and government investment helped raise productivity. Workers both made and bought these new products.

Eisenhower had been a solider during the first world war and was part of a group transporting vehicles across the US. It took them 62 days to go from coast to coast. Head of the Allies’ conquering army, he experienced first-hand the German autobahn and was amazed at the contrast. The interstate highway legislation Eisenhower signed increased American productivity by tens of percent.  Like the railroads the government subsidized a century earlier, the highway system gave customers and producers easier, more affordable access to products and markets. Decades earlier, life expectancy had gone up as a result of similar, local efforts to build out the infrastructure that brought safe water into homes and piped sewage out, another initiative dependent on the cooperation of government and business.

Another outcome of the second world war was increased investment in research and education. In WWII we didn't just pump unprecedented amounts of money into research but FDR asked Vannevar Bush to institutionalize that, which he did with what become the NSF (National Science Foundation) and DARPA (the Defense Advanced Research Projects Agency). From DARPA we got the Internet which has enabled the creation of trillions in new wealth and millions of new jobs. The GI Bill was another product of the second world war and it led to a huge increase in college enrollment, creating a new generation of better educated, more productive workers.

Possibly the most important interplay between big government and big corporations comes in R&D. Research is hugely uncertain and most of it results in nothing. If it does result in something cool it may happen a decade or three later than expected. Also, not every cool thing becomes profitable. Because of this, corporations rarely finance basic research and it needs to be heavily funded by institutions like DARPA or the University of California. This research is crucial to corporations' later developments. "The parts of the smart phone that make it smart—GPS, touch screens, the Internet—were advanced by the Defense Department," as Mariana Mazzucato points out in her book The Entrepreneurial StateCorporations try to find a way to translate research that has taken one to two decades into development that takes two to four years. It's a great system and at its best we tax successful corporations to fund the next round of research which could be transformed into new products by corporations. Symantec and Qualcomm were among the new companies funded by The Small Business Innovation Research program - a program started by Ronald Reagan. Google's basic algorithm was funded with a NSF grant.

Of late, our policies seem less reflective of this interdependence. As corporations pay less in taxes the government has less money for initiatives that could help the next generation of companies and workers to prosper. Our productivity, wages and GDP were growing faster during a time when corporate tax rates were maxed out at about 50% and personal income tax rates maxed out at about 70%. The trick is to tax what is successful now to fund what will become successful next.

Government has an important job as a referee, a role Elizabeth Warren articulates well. Government has an important job of moderating wealth and income inequality. (Trump looked at the world with the biggest gap between rich and poor in history and concluded that the rich were not rich enough and the poor were not poor enough, giving the first a tax break and cutting assistance to the second. Few people would reach such a conclusion.) Those jobs of referee and moderator are important but over the long term, they are not as important as the job of collaborating with business and labor to create the next generation of technologies, products, industries and companies. It is in that direction that lies the kind of progress we had from 1900 to 2000 that increased real incomes by 8X and let us buy myriad objects like airplane tickets, personal computers and antibiotics that did not even exist at the start of the century.

The world is full of communities who would love our problem of big government and big business. Big projects are not done by small organizations. It should be a cliché to say what is too rarely said: progress is not a product of markets or democracies but rather their interaction. Strong companies and strong government go together in vibrant economies. Even within the US, the states that keep taxes and investment lower and have few big companies have lower household income and create fewer jobs. Big businesses and government agencies are not a sign that we’re off the rails. They are, instead, the way we got both the rails and the trains.

14 June 2019

Your Money for Nothing - When Capital is Free

File under: things that mostly just fascinate me but really do affect everyone:
"$20 trillion of the $55 trillion in global sovereign bonds currently yield zero percent or less." From here.

Why does it fascinate me? In our new reality, money is free for countries.
Why does this affect you? It means that we're under-investing in infrastructure, education and most importantly of all, research. All of that can essentially be conducted by nation-states with zero percent loans. A return of even 1% on that investment covers the cost of capital. A lot of what passes for returns to capital now are actually winning bets on entrepreneurship. 

We're going to look back on the first decades of the 21st century as a lost opportunity for massive investments in projects - public sector and private sector (in the form of startups and corporate initiatives) - given that capital was free and we had more university graduates than we were fully employing.

Future generations' assessment of us will be that what we lacked in imagination we more than made up for in risk-aversion. And instead of funding grand projects, we used this free capital to bid up the price of art, stocks and other pre-existing assets.

13 June 2019

Father's Day: How Dad and I Were Just Alike (and so very different) in Our Politics

In late January of 2009, I got a call from mom. Dad was in ER. About 90 minutes later, after midnight, I got up there.

I was chatting with mom after we'd been in to talk to him. I could not figure out what was going on. Finally, mom said, "I think your dad might just be having a stress attack of some kind. He can't believe that we have a black, Muslim socialist in the White House." At that I said, "Oh." And promptly drove back home, leaving him to his self-induced drama.

Growing up, I don't remember hearing about politics much. My parents had a lot of drama in their life and politics wasn't part of it. I read a lot and, as I got older, wrote a lot. It turns out that the combination of reading and writing resulted in a set of ideas that are little connected to my parents'. My dad and I probably cancelled each other's votes 90% of the time.

And yet I have become like my father in how I think about politics. Sort of.

Dad worked for Caltrans in highway design. In his last 5 or 10 years, he worked in traffic safety. They would simply identify dangerous sections of roads and highways based on statistics. On one section of road, accidents are 2X more likely. In another, someone is 20% more likely to die. And so on. They would analyze the data and then the section and redesign it so that accidents, injury and fatalities were less likely.

Police would identify individuals more likely to get in an accident. Lawyers would determine blame. That was not dad's job. His job was to make a section of road safer for everyone.

In that way, my sensibilities are very similar. I have a lot of conservative friends and even recessions they are likely to blame on individuals. I remember one conversation with conservative friends at the height of the Great Recession when the unemployment rate was nearly triple what it is now and they were discussing how someone's brother-in-law had taken a week's vacation (from looking for work) with his family in the midst of his unemployment. As if an outbreak of laziness somehow explained this outbreak of unemployment. They were the cops and lawyers, trying to figure out who was to blame and who to arrest.

I know that individual differences do make a difference. I just don't think those differences are very interesting or relevant. People worked 60 hours a week in 1900 and made about 1/8th of what we do. You might get excited explaining why one guy made 30% more than another in 1900 but that is incidental compared to the difference between that guy and his grandson who makes 800% more. That's fascinating. And relevant. And something you can aspire to "design" with a set of policies and technological and social inventions.

The questions that intrigue me are not the questions of the police about why someone got in an accident. My question is how we design the economy to lower the incidence of those accidents while still letting people drive faster. It turns out that even while I felt such a huge wave of relief to have Obama and Biden in to replace Bush and Cheney and my father thought it was a sign of the apocalypse, our perspectives are similar. (Well, his perspective on highways and mine on economies anyway.) 

This Sunday will be my sixth Father's Day without dad. It is a curious thing how every generation knows what they'll reject from the previous generation but takes longer to realize the ways in which they are just like them.