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.