Even Deep History is Not That Far Away

The Dunbar Number is 150. It is an estimate of the number of people one might have in a social circle.

If we go back 150 lifetimes - assuming 40 year life expectancies - we go back 6,000 years, which takes us to around 4000 BC.

4000 BC corresponds roughly to the early Bronze Age, a time when human societies were increasingly using metalworking, developing urban centers, and establishing complex social structures in various parts of the world.

How far back is that?

Well, Mesopotamia was just in the Copper Age, leading into the Early Bronze Age. Mesopotamia, particularly in the region of modern-day Iraq, was seeing the rise of complex societies. These groups would eventually develop into the Sumerian civilization, one of the world's first known civilizations, which arose in the later parts of the 4th millennium BCE. No dynasties had yet emerged in what would become ancient Egypt, China, or the Indus Valley.

The people you know represent enough lifetimes to take us back to pre-history.

What do I take from that? Even deep history is not that far away - fewer generations than the number of people we know.

 

Time to Move Beyond Blase to Bedazzled at Biden's Policies and the Biden Economy

The Biden presidency is setting a bar for economic performance that has never before been hit and is unlikely to be matched again. This is not by chance.

A few things to remember about Biden.

1. Obama gave him responsibility for leading the 2008 Great Recession recovery efforts. Obama was opposed at every step of his presidency and in the economic recovery, with unemployment persistently and depressingly high, his recovery plan was one more defined by austerity than stimulus. The unemployment rate in his first term averaged 9%. That was an extraordinarily painful period for Americans that - unsurprisingly - created extremists on both side of the political divide, from the Occupy Wall Street crowd who denounced markets and banks to the Tea Party folks who denounced government and regulation. Biden clearly learned that cautious recoveries are of little benefit to communities, families, or government budgets. Austerity in the face of a recession is a ridiculous way to recover.

2. Biden has been around forever and this is an asset. Biden knows the personalities and weaknesses of world leaders you've heard of and policy makers and staffers who you've never heard of. Biden knows which sharp policy wonks have ideas for stimulating investments, create jobs, and lower carbon emissions. He knows how to get people from across the aisle to vote for his infrastructure spending. Put more simply, Biden knows policies, policy makers and politicians - American and foreign. This makes him incredibly effective.

3. Biden's policy wonks are at work on programs that will never get properly covered because they're largely too ... well, wonky to appeal to the average reader who just wants to hear why they should be offended at Trump today or get confirmation that this week - sure enough - Biden is another week older. Someday some of his policy makers will write fascinating books about the causes and consequences of this economy and a few of us weird people who delight in things like that will delight in that; most people will remain blissfully unaware.

4. Biden consciously incurred a big fiscal deficit in his first year knowing that the best way to reduce long-term debt is to stimulate an economy to its full potential. He realized that the first priority was to put Americans back to work and then household and government budgets will strengthen. But his policy was not a one year, one trick policy. He's stimulating investments in local communities that result in new infrastructure, new factories, and new training programs. And the result is dramatic: projections of long-term deficits have halved since Biden has taken office. link

Biden's policies are stimulating the economy from a number of directions. He's ignited a variety of infrastructure projects. The interstate highway bill Eisenhower signed into law stimulated GDP growth by roughly 0.5% per year for decades. (And when average GDP growth is close to 2%, 0.5% extra is extraordinary.) The interstate highway bill stimulated the economy during highway construction. That won't surprise you. And then it stimulated the economy as people used it, stimulating travel, trade, and inter-city and interstate exchange as chains like McDonalds and Hilton Hotels emerged. Biden is not just stimulating the economy with various infrastructure projects and subsidies to alternative energy projects and manufacturing, he's setting us up for years of extra economic activity as these new bridges continue to stimulate trade and travel and these new factories continue to support jobs and productivity.

The most extraordinary outcome of Biden's policies is the incredible rate of job growth. One of the elements behind that that is rarely reported? The extraordinary rate of new business formation. This statistic gets hardly any coverage and yet seems to me the most important of all economic statistics - speaking as it does to the levels of optimism and long-term implications for the creation of new jobs, new products, new services, new markets, and new wealth. New business formation in the decade of the 2020s is running at TWICE the level it did in the decade of the 2000s. Double. 2X. So, so much more. And the ripple effect of that is one reason that in the first quarter of 2024 - now in the fourth year of the recovery from the worst of COVID - job creation is running at an even higher rate than it did last year.

The phenomenal rates of business formation and job creation are not the product of chance. They are the result of policy choices from a politician who delights in politics and policy in a time when it is so very stylish to hold politicians, politics and policy in contempt. Fortunately, Joe Biden still thinks that politics and policy matter, and rather than blow things up the way his predecessor did, he's building an economy that creates jobs and businesses at the fastest rate in your lifetime.

Lincoln's 44 Days Without War

In 1861,
March 4, Lincoln was inaugurated for his 1st term as president
April 12, Confederates fired on Fort Sumter, officially beginning the Civil War.
Lincoln had 39 days of peace in his first term.

In 1865,
March 4, Lincoln was inaugurated for 2nd term
April 9 - Sunday - Lee surrendered to Grant at Appomattox
April 14 - Good Friday, Lincoln was shot
April 15 - Saturday morning - Lincoln died
Lincoln had 5 days of peace in his second term.

In the 1,504 days of his presidency, Lincoln had only 44 days without war.


"There have been 16,000 books and articles published on Lincoln—125 on the assassination alone—more than any other American."

Regret in the UK - Post-BREXIT GDP Slowdown and the Case for Globalization

It was the British and Dutch who became the wealthiest communities in the world by pioneering globalization. BREXIT was a decisive vote to withdraw from the world as part of the retreat from globalization. Brits - whose economy has been in a slog since voting for BREXIT - now regret it.

How much of a slog? Look at the graph below. Real GDP growth in the UK in the 6 years before BREXIT was 13.0%. In the 6 years after it has been only 7.7% - a drop in growth rate of about 40%. (By contrast, US GDP grew by 12% in the 6 years before and by 13.1% in the 6 years after.)

This isn't complicated. Communities that become part of the larger world prosper.

Communities that cut themselves off - or are cut off - from the world languish.

Reversing globalization is fear-based politics that is bad for the economy. It's exciting to attack globalists but they're right about the benefits of being connected to the world outside your borders.

Communities that Least Understand the Economy Are Most Likely to Find Trump Persuasive

One of the most underreported facts of the modern world is simply this:

communities that know how to create great paying jobs overwhelmingly reject Trump's policies. Communities that can't create great paying jobs think he knows what he's talking about.

Nationwide, Trump got 47% of the vote.

In the communities that create the highest paying jobs, Trump got only 20% of the vote.

In the communities with the lowest-paying jobs, Trump got 58% of the vote.

Put differently, people who least understand the economy are most likely to find Trump persuasive.

In the 10 counties with the highest average wages, Biden got nearly 4X as many votes as Trump.
In the 10 counties with the lowest average wages, Biden got only 0.8 votes for each vote Trump got.
What is the difference in wages in the 10 highest and 10 lowest paid counties? The highest make 2.7X as much on average.

Here is the latest data (3Q 2023) on the 10 highest and 10 lowest paying counties.
Average Annual Wages
US: $69,368
Bottom Ten Counties: $46,160
Top Ten Counties: $123,415

The Land Battle for States Gives Way to the Cultural Battle for Nations - the Modern World as a Lava Lamp

Imagine a map with all its neat lines and borders, like a giant puzzle where each piece is a different country, clearly marked and separate. That's a state, like the one you live in, defined by those lines on the map.

Now, think about your favorite playlist, the sports you follow, the memes you share, and the beliefs you stand up for. That mix, the feeling it provokes, isn't tied to a line on any map. It's more like the shifting shapes in a lava lamp, always moving, coming together, and breaking apart. That's what a nation is all about - it's the music, the games, the drama and comedy, and the serious stuff that matter to you and yours.
In the 20th century, people fought with tanks and planes over those map lines, trying to say, "This land is mine." But now, the big battles are more about who we are and what we believe in, like sustainability, equality, rules, and investments. These fights aren't about grabbing a piece of land; they're about shaping the world with our ideas. And of course these battles don't end with a flag in the ground. They keep going, evolving, just like the ever-changing swirls in a lava lamp.

I've been staring at this lava lamp for decades. It's mesmerizing.

The Religious Right's Pyrrhic Victory (Or, The Cost of Using Trump As A Representative)

Trump began selling Bibles this week to raise money for his trial for using campaign funds to pay for sex with a porn star.

There is nothing else you need to know about the intersection of for-profit religion, crime and politics in these United States. The religious right got their ban on abortions by making Trump their partner. They have also lost another swath of active church members who've simply walked away from churches in the last few years. (According to a study by Faith Communities Today, the median congregation size dropped from 137 people in 2000 to 65 by 2020. There is evidence that it has fallen further since.)

The religious right may think they are selling bibles. Others may simply see it as selling out.

Kahneman On Substituting Easy Questions for Uesful Questions

Daniel Kahneman died this week. He won a Noble Prize in Economics made remarkable by the fact that not only did he not have a degree in economics, but he never even took an economics class.
Here is a blog post from 2011 that I wrote about one of his key ideas – our tendency to substitute trivial questions for hard questions.

One of the great mysteries of life is how we get sucked into political arguments of no consequence. Can you burn a flag? Can he wear a dress? Can she say that?

Which questions, by contrast, have real consequence? Questions like Will this economic policy make more people rich? Will that economic policy make fewer people poor? Will this political policy give more people rights? Will this policy extend or shorten life expectancies?

I think I found the answer to why we waste so much time trying to sound smart talking about such stupid issues in Daniel Kahneman’s new book, Thinking, Fast and Slow.

One concept Kahneman shares has to do with our tendency to substitute easy questions for hard ones. For me, this explains why so much airtime in politics is taken up with questions of little consequence.
Kahneman gives an example of an analyst who bought stock in Ford. Asked why, the analyst replied that he'd just been to a car show and left convinced that Ford "sure can make great cars." As Kahneman points out, the real question when buying stock is whether or not the stock is undervalued. But the analyst substituted that difficult question for the simpler question of whether Ford was making good cars. All of us, when faced with a difficult question, tend to substitute a simpler - albeit irrelevant - one.
It seems to me that the big question in politics should be, How do we improve quality of life for more people? That’s a big question and answering it is one that isn’t easy. It is a challenge to feel confident about one's ability to answer it.

By contrast, the little and largely irrelevant questions – silly questions best characterized by whether or not we should be able to burn the flag or use a bathroom that says Woman or Man – are ones for which we have clear answers as long as we have strong opinions. We don't need data. We don't need studies. Answering these questions leaves us feeling confident in our own judgment. Answering the big questions, by contrast, makes us feel uncertain. For most of us, we prefer feeling confident to feeling ignorant. The result? We choose questions because of how they make us feel rather than what their answers will do to improve the world.

And that’s a pity. Just think what we could do with all the attention paid to politics if it were focused on real, albeit difficult, questions. Questions that have the potential to make us more humble and the world better - rather than make us more smug and make the world no better.

Benjamin Franklin's Power over Power

Benjamin Franklin was involved with two great shifts in power: the creation of the world's first modern democracy and experiments that demystified lightning, transforming it from divine judgment into something that could be mitigated by a lightning rod. It turns out that man, and not God, could control or divert the power of lightning or governments.

Money Saving Tip - Hacking into Advertising

Here's a money-saving tip. Next time you see an ad for an enticing product, just re-enact the ad. Skip the product altogether and go straight for the joy the product delivers.
"Should we go shopping?"
"No. Just smile more."

It Is No Coincidence - How the Loss of Aspiring Novelists Has Undermined the Power and Purpose of the Daily Newspaper

Once upon a time, the first draft of history - our newspaper articles that let us know each day about what was happening - was written by aspiring novelists. Ernest Hemingway, Mark Twain, Charles Dickens, Gabriel García Márquez, George Orwell, Joan Didion, Truman Capote, and Tom Wolfe were a few of the reporters who became famous novelists but the newsroom was full of journalists who aspired to be like them. A story rich with characters and taking its time to unfold was the standard. A world that would - after suspense and confusion - eventually make sense lay behind the daily reports.

One of the reasons that the world feels more chaotic now is that the folks reporting it to us don't understand fiction, don't understand stories. There's always been chaos. News - to make any sense at all - has to construct a narrative. The aspiring novelist - who saw daily events as part of a bigger narrative - were better at that important task.

It's no coincidence that steam-powered presses made daily newspapers popular in the mid-1800s, about the same time that the nation-state emerged. Newspapers gave communities a common narrative, a shared set of interests and issues. They were the source of the ideas from which nation-states were debated and built.
It's no coincidence that we're increasingly divided as newspapers drift into obsolescence and we lose the narrative glue that binds together imagined communities like nation-states.

And it's no coincidence that coincidence is not enough to hold our attention or hold us together. For that you need a story.

The Whimsy and Magic of Physico-theology

Physico-theology, an idea that gained prominence in the 17th and 18th centuries, refers to a theological doctrine that seeks to demonstrate the existence and attributes of God through the observation and study of nature.

This from Ritchie Robertson's book on the Enlightenment.

"In Germany, physico-theology gave rise to a large number of specialisms praising different aspects of creation, such as ichthyotheology (fish), petinotheology (birds), testaceotheology (snails), melittotheology (bees), chortotheology (grass), brontotheology (thunder) and sismotheology (earthquakes), each of which had at least one book devoted to it. The Netherlands produced also theologies of snow, lightning and grasshoppers."

How could anyone read this and not be left wanting to know more about the theologies of bees, snow or grasshoppers? What DO bees believe?

Trump Threatens a Bloodbath

Trump warned that if he is not elected there will be a bloodbath. A clear threat to again resort to violence as when he lost in 2020. Later he claimed that he was talking about what would happen to manufacturing jobs if he lost.
Here's a little reminder that every time we have Republican presidents in office - every time - the number of manufacturing jobs goes down. As it did with Trump. And by contrast, every time a Democrat is in the White House the number of manufacturing jobs goes up. As it has with Biden. Republican policies haven't created manufacturing jobs in a century.
So, he might be threatening violent mobs if he loses, Or he might be lying about how another Biden term will destroy manufacturing jobs. If the first, he's assuming that Americans are cowards; if the second, he's assuming Americans are stupid. Me? I'm assuming that in either case he's just projecting.

California - land of the most successful capitalists in the history of the world

At today's market close, the 50 most valuable companies around the world had a combined market cap of $27.9 trillion.

Portion of total from companies founded in

• the US: 89% ($24.8 trillion)

• the West Coast: 64% ($17.7 trillion)
• California: 44% ($12.3 trillion)
• California's Bay Area: 43% ($11.9 trillion)

One of the weirder things about the Republican Party is how they've convinced their base that California is the land of socialists when it is so demonstrably the land of the most successful capitalists in the history of the world.

The Stark and Persistent Labor Market Difference Between Democratic and Republican Presidencies

Those of you who find this kind of thing interesting might find this fascinating.

What is good? A negative number. It shows that the unemployment rate dropped during that presidency.
What is bad? A positive number. It shows that the unemployment rate rose during that presidency.

Red bars indicate a Republican presidency.
Blue bars indicate a Democratic presidency.

There is a stark and persistent difference.

These are not random. Post-FDR, Democratic presidencies have made labor markets a priority when making policy. Republicans continue to make capital markets their priority.

4 Year Anniversary of COVID in the USA - and how deadly it was to be an American during the pandemic

4 years ago today ...

President Trump declared a national emergency in response to coronavirus on March 13, 2020, to provide emergency funding of up to $50 billion to state and local governments. (The US ended up spending $1.6 trillion on the COVID response in 2020. So, slightly more than first estimated.)

10 months later, 25,000 Americans a week were dying. About 1.2 million Americans have died of COVID.

Trump never did take responsibility for responding to COVID, insisting that states manage the response to this global pandemic.

The US death rate was awful in comparison to other countries. As of February 2022, Canada had fewer than 1,000 COVID-19 related deaths per million people, with a total of 919 deaths per million. Japan was noted for having the fewest deaths and infections among the G10 countries, with 156 deaths per million, despite having the oldest population and imposing the mildest restrictions. The United States had a significantly higher rate, with 2,750 deaths per million, which was the highest among the mentioned countries.

So, to repeat, per million death rate from COVID
Japan - 156
Canada - 919
US - 2,750

Which is to say, Americans died from COVID at 3X the rate as Canadians and at 18X the rate as the Japanese. It was pretty deadly to be an American during the pandemic.

Trump Refers to the US as a Third-World Country - Unclear if That's a Campaign Promise or Threat

Trump is the first president to use the words bleed, carnage, stolen, tombstones, and trapped in an inaugural address, a man who tried to overthrow democracy to stay in office after losing outside of the former confederacy by more than 10 million votes. This week he referred to the US as a third world country and made it clear that he doesn't want any Republicans in the party who had supported apostates like Romney or Liz Cheney, people who failed to treat him with all the reverence accorded to Jim Jones. (Trump famously does not drink alcohol. He prefers to serve Kool-Aid.)

Republicans get all excited by that sort of talk - still recovering as they are from the trauma of the "great doubling of egg prices in 2023."

One Reason a Nation Might Turn to a Tyrant

A simple - possibly flawed - explanation for Trump's appeal: when people are frustrated with institutions they turn to a tyrant to blow up the bureaucracy.
People who don't know any history might actually fall for that offer and think that trading sclerotic bureaucracies for an unchecked despot is a good trade. It never is.

Another Sign the Job Market is Cooling: Wage Hike for Job Switching Has Dropped From Its All-Time High

On average, you get a wage hike for switching jobs. August of 2022, though, offered by the far largest premium for switching jobs, an average of 2.8% bigger raise than if you'd stayed in the same job. These last couple of months, though, that premium has returned to normal, suggesting that the job market is cooling.

Real GDP Growth Highest in 18 years

Real GDP growth in 2023 was 3.1%.
The three years with highest real GDP growth in the last 19 years:
2021: 5.8%
2005: 3.5%
2023: 3.1%

In simpler terms, GDP growth over the last few years - adjusted for inflation - is the best it's been in decades.

data:

https://fred.stlouisfed.org/series/GDPC1?fbclid=IwAR0d2FTpi3tD7B1iI5VyVVj5dutShzylWtweN5KLsx54QO7K5_2Umj6aoVg#0

26 US Counties with Highest Wages - Silicon Valley Continues to Dominate

Silicon Valley wages continue to be the highest in the country, the only 3 counties where wages average more than twice what they average across the whole country.

Raw data:

https://www.bls.gov/news.release/cewqtr.t01.htm

A Market Economy - Or What It Will Be Like When the Price of Lunch Bounces Around Like Stock Prices - Wendy's Adopts Dynamic Pricing

This amuses me far more than it should.

Everyday - all day - stock prices bounce up and down. I've wondered how long it'll be before all prices behave like that. Now Wendy's is adopting "dynamic pricing," creating a world where the price of lunch combos do indeed bounce around during the day, depending on fluctuations in supply and demand.

Imagine an exasperated guy telling his partner, "Look at that! You had to visit the bathroom first. And then you had to let that lady with the kids cut in front of us. And now! Now french fries have gone up a dollar. Way to go Stephanie."

"Well, we could just sit here until prices drop again."
"What? For a dollar an hour?"

My cousin in Montana just had a bull sale. Those are auctions and maybe that's what the restaurants will try next. Hordes of hungry office workers and school kids bidding on the price of ramen or burgers like traders in the pits from the 1990s.

"I hear $9.99, $9.99 ... oop! $10.99 to the kid in the hoodie... $10.99 ... going once ... twice ... Sold!"

A market economy.

Invented Word of the Day: Petipreneur

I'm coining a few words today.

Petipreneur, noun. A person who engages in small acts of entrepreneurship that result in new routines, practices, or relationships that have the potential to spread or outlast them.

Petipreneurship, verb. A small act of inspiring or creating a new group, practice, or shared value. Less about creating an institution (which is better described as entrepreneurship) than about changing some portion of it or daily life.

Petipreneurial, adjective. A person who tends to create new practices, social norms and relationships.

Let me know if you have occasion to use it in conversation. Or even better, practice it.

The Curiously Recursive Problem of the Meta-Fictional Genre

His creative potential was never realized for the simple fact that he never could decide between doing documentaries about fictional work or fictionalized versions of documentaries. All he could be sure of is that he wanted to prove a point about how arbitrary was the line between fiction and nonfiction and as a consequence was never able to actually move from the concept - his fictional notions of the project - into the reality - the actual product that could share his ideas about reality with an audience. He'd encountered a curiously meta-fictional problem of being unable to document his fiction. The good news is that he'd pioneered a meta-fictional genre. The bad news is that this genre - by its very nature - could never become a reality he could share with anyone else. It was itself - like its imagined products - meta-fictional.

Trump Needs the Support of Reasonable Republicans to Win. In November We Learn Their Price

Trump can't win with just the support of the MAGA boys who thrill at Donald's casual racism and misogyny and enabling the invasion of Western Europe. He needs votes from reasonable Republicans who have voted for Trump because they have considered themselves Republicans because they really like lower taxes but they also consider themselves more aligned with the morals of a Mitt Romney than convicted rapist Donald Trump.
Biden made a promise he's kept: he won't raise taxes on incomes less than $400,000. What that means is that if - say - you make $500,000 a year and the difference in marginal tax rate from a Trump to a Biden is 2%, you would pay $2,000 more under a Biden than a Trump presidency. (And actually that has not yet happened but its a fear among many Republicans.) Out of a half a million income. So, essentially 0.4% (that four-tenths of a percent) of your total salary in additional taxes.
Trump will deport young adults who have never known any country but the US but came here "illegally" when they were little kids. Trump will enable Putin to invade countries throughout Western Europe. (Putin is the first European leader since Hitler to invade a neighboring country. Trump supports that.)
If the reasonable Republicans decide that they would need to be paid more than $2,000 to ruin or end so many lives, Trump has no chance of winning in November. The MAGA boys are not enough for a national victory.

McGilchrist on Truth and Trust

"Truth and trust, words that come from the same root, naturally go together. One cannot have trust in a society where no one is speaking the truth. and one cannot report truth to a society where there is no trust. Confucius told his disciple that a stable society needs three things: weapons, food, and trust. If you must forgo one of these, you should first forgo weapons. Then food. Without trust we cannot stand. Trust cost nothing but the time to build it. Once built it is a fantastically efficient way for any human enterprise to operate. There is a Dutch proverb, Trust arrives on foot but leaves on horseback."
- Dr Iain McGilchrist

 

The Engineering of Consent and the Invention of Propaganda - Freud's Nephew Edward Bernays (1891 to 1995)

"The engineering of consent is the very essence of the democratic process, the freedom to persuade and suggest."

"We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of."

"The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country."

These quotes are from Edward Bernays, Sigmund Freud's nephew. Bernays was the first to apply psychological principles to influence public opinion and market products. He was said to have "invented propaganda" for business and politics in a time of mass media, his life spanning the invention of the radio, the TV, and the internet. Bernays was born in 1891, in Vienna, Austria and died in 1995, in Cambridge, Massachusetts.

Bernays originally used the term propaganda but once Hitler so openly used propaganda and Bernays' methods, Bernays changed the term to public relations.

Trump's Tactical Error That Will Cost Him the Election

Many nerds like me tend to think that politics is about facts and policies and programs. Here's a counterargument to that.

Hillary Clinton was more prepared and knowledgeable than any candidate in history. She had numerous policy papers.

Trump didn't bother with policy papers. He just wrote Tweets.
Clinton's 2016 policy papers had more than 50,000 words total.
In 2016, Trump's tweets were never more than 140 characters. (The limit at the time. And those were characters, not words.)
No one read Clinton's policy papers. Everyone read Trump's tweets.
Trump kept everyone's attention and in 2016, he won.

In 2017, Twitter doubled its limit to 280 characters and in 2020, Trump lost. His tweets had become too long to hold our attention.

Now in 2024, Trump only posts to Truth Social, which has a 500 character limit.

A bloat from 140 to 280 to 500 characters, each iteration more demanding to read. Trump's biggest weakness as a candidate is his unfounded optimism about how much the attention-span of average Americans has grown in the last 8 years.

[A friend calls me aside. "Ron. It's like you don't even read your own posts. Do you actually think anyone has read this far? You think that people will make it to your conclusion?"
"I just thought ..."
"- Ron. Nobody is going to read this far."
"But ..."
"Shhh. Just read your own post. Nobody else will."]

Progress Comes From the Interplay of Technology, Social Invention and New Ideas of What it Means to Be Human

Most people around the globe today are better off than our ancestors because citizens and workers in early industrial societies organized, challenged elite-dominated choices about technology and work conditions, and forced ways of sharing the gains from technical improvements more equitably.

- Daron Acemoglu and Simon Johnson

Progress comes out of an interplay of technological and political advances, social invention and technological invention continually disrupting and reshaping each other, democracy and capitalism never getting the upper hand for long, and continually changing reality, people, and their institutions and each other. Economic progress includes technological change, cultural change, changes to processes and politics, and even to our notions of what it means to be human and what is possible. Progress impacts everything and is impacted by everything.

Economic Reporting As if It Were a Romance Novel

In romance novels:

"It's a beautiful, sunny day Heathcliff. My heart is full. Please kiss me!"
Heathcliff, mournfully, "Someday we are all going to die." 

 Meanwhile, in economic reporting:

"Unemployment is at its lowest in 60 years! The stock market is at record highs! Inflation has dropped to 2%. New business formation is 50% higher than it has ever been!"
"Yes but the economy will eventually fall into a recession. It might not be for a decade. It might start next month. But it will eventually falter. And that bad news - however speculative and far into the future - is the real news."

 

Biden's Mixed Feelings About Trump Learning That Presidents Are Not Immune From Prosecution

"A federal appeals court on Tuesday rejected former President Donald J. Trump’s claim that he was immune from prosecution for any crimes committed while in office." - NY Times, 2/6/2024

President Biden had mixed feelings about this. On the one hand, his political opponent still faces criminal charges for plotting to subvert the 2020 election. On the other hand, he had to cancel the SEAL team he had scheduled to, er, take advantage of his presidential immunity for any crimes committed while in office.

[If you're going to claim that presidents have immunity for any crimes committed while in office, you probably want to do that when you - and not your political opponent - are in office.]

The Egg, the Potato, and the Coffee Bean in Hot Water

Just heard a new twist on an old story.

Put a potato, an egg, and a coffee bean into boiling water for a time.

What happens to the first two you've probably heard before.
The egg is made hard by the experience and the potato is made soft, By the exact same experience. So there's that.

The new (to me) story continues to point out that the coffee bean adapted to the situation, not becoming hard or soft but just going with it.

I think a more interesting interpretation is that the coffee bean changed the situation: it turned the water into something different, turned it into coffee.

Interesting choices. Could be made hard by the experience, made soft by it or change the experience from a trial into something stimulating. Or maybe just something that's kind of bitter and keeps you up at nights. (I may need to work on this lesson a bit.)

Powell's Risk Has Shifted from Inflation to Unemployment

I don't pretend to have any special insights into financial markets and inflation so feel free to roll your eyes at this and scroll on to that funny meme about the Super Bowl but ...

Fed Chair Powell's insistence on seeing data to prove that inflation has come down or that job markets are faltering before he cuts rates seems to me to ignore the inevitable lag in the effects of higher rates. The data we see this month is a function of forces from months ago. If you wait for evidence, you'll wait too long.

The Fed has a dual mandate: keep inflation AND unemployment low. In my opinion, without a near-term rate hike, the risk of inflation above 2% is now much lower than the risk of unemployment rising above 4%. Put differently, I think it's time for Powell to start worrying more about continued strength in the job market and less about inflation again rising. It will be too late if he won't change until he has proof.

The Absurdly Good Fourth Quarter of 2023 (a heck of a way to run a recession)

The 4th Quarter of 2023 was almost comically good.
(All averages are for this 21st century.)

Inflation:
target: 2%
actual: 2%
Avg: 2.6%

Job creation for quarter:
494k
Avg: 275k

Unemployment rate:
3.7%
Avg: 5.8%

NASDAQ change in 4th Q:
Up 14%
Avg: Up 2.7%

GDP Growth for 4Q 2023:
Up 3.3%
Avg: 2%

It's a heck of a way to run a recession.

2024 Year of the Dragon - Boldness, Enthusiasm, Innovation and ... Imagination

We're just a couple of weeks away from the Year of the Dragon. The dragon is the most promising - and definitely the coolest looking - of the 12 Chinese animals. February 10 marks the start of a year for boldness, enthusiasm, and innovation. You know - for a change.

And when the animal for a year is imaginary, that has to say something about the importance of imagination, right?*  In any case, it's a second chance to start the new year right.

*

"What's this new year like?" 

"A dragon."

"What's that like?" 

"Well, it's not real so I guess whatever you imagine." 

Now that sounds like a year when a person can fully explore the notion of free will.

Economic Data on Jobs, S&P 500, GDP Growth and Deficits From Reagan Through Biden's Presidencies - Spot the Patterns

Spot the patterns.

It seems to me that there are 2.

1. Deficits grow under Republican presidents and shrink under Democratic presidents.
2. Job creation is stronger during Democratic presidencies.

These could be random but I doubt it.

Republican presidents consistently cut taxes. (Trump rather famously cut taxes by about a trillion - a cut that went disproportionately to the rich) Cutting taxes without cutting spending leads to deficits. That's not fancy philosophy. That's arithmetic. Deficits inevitably grow under Republican presidents because they have a clear plan for cutting taxes but no plan for cutting spending.

Job creation is stronger under Democratic presidents because they are the party that focuses more on labor and the job market in contrast to Republicans who focus more on capital markets. Keynesian economics is largely dismissed by Republican presidents and largely supported by data. Timely stimulus can help job markets to recover. And as importantly, unfettered or unregulated capital markets will invariably lead to booms and busts that are particularly tough for the labor market (which is to say, those people who depend on jobs and not wealth to support their living expenses).

Perhaps you can see other patterns. I'd be curious as to what those are.

You Must Be This Angry to Vote - Donald's Republican Party

"America is too great for small dreams."
- Ronald Reagan

“We’re a nation whose economy is collapsing into a cesspool of ruin. We have become a drug infested, crime-ridden nation, which is incapable of solving the simplest of problems.”
- Donald Trump

Reagan's "It's morning again in America," has become Trump's campaign marked by "mourning again in America."

This negativity is helped along by almost laughably negative economics coverage. 

If it were a novel, it would include dialogue like this: 

"It's a beautiful, sunny day Heathcliff. Kiss me!"

Heathcliff, through clenched teeth, "Someday we are all going to die."

But given it is "news" coverage, it sounds like this: 

"Unemployment is at record lows! The stock market is at record highs! Inflation is dramatically lower!"

"Yes but the economy will eventually fall into a recession. It might not be for a decade. It might be next week. But it will eventually falter. And that bad news - however speculative - is the real news."

There is a new, not so amusing sign, hanging outside today's Republican Circus - I mean Party.

Haecceity: the irreducible determination of a thing that makes it this particular thing

Haecceity is a term from medieval scholastic philosophy, first coined by followers of Duns Scotus to denote a concept that he seems to have originated: the irreducible determination of a thing that makes it this particular thing.

I kind of love this: the irreducible determination of a thing that makes it this particular thing. Or, the irreducible determination of a person that makes it this particular person.

So, what is your haecceity?

The Odds of Layoff Are the Lowest They've Been in Your Career (and what the unemployment claims stat would look like as a cartoon)

Initial claims for unemployment came in at their lowest level in 18 months. The last time they were lower than that - lower than September of 2022 - was in the late 1960s - when the labor force was half the size it is today. 

It is no exaggeration to say that this is the period with the lowest chance of being laid off during the career of anyone working today.

If stats were cartoons, this stat would look like this:

American women don't like Trump and Trump doesn't like American women - and one of the most stunning stories lost in chaos of Trump's last week in office

American women don't like Trump and Trump doesn't like American women.

Donald has been married three times, once to an American for 4 years. Every other woman he marries is an immigrant.

He made that American – Marla Maples – sign a prenup, a document in which he claimed to be worth $1.17 billion and offered Marla only one million dollars – with no alimony – when they divorced. His child support for Tiffany would continue only to 21 and would stop if Tiffany got a job or joined the army or Peace Corp.

[source: https://www.vanityfair.com/news/2019/06/marla-maple-prenup-donald-trump-marriage ]

Ivana – the mother of three of his children – is rather bizarrely buried in one of his golf courses. Her burial does grant Trump certain tax breaks on the New Jersey golf course where she is buried. “The New Jersey tax code does exempt cemetery land from all taxes, rates, and assessments. Potentially, her grave could save the property from paying a significant sum in a state with high tax rates.”

[source: https://www.snopes.com/fact-check/ivana-trump-golf-club-burial/ ]

In the 2020 election, it was women who elected Joe Biden and sent Trump back to Mar-a-Lago. 52% of voters were women and they voted for Biden by a 15-point margin – 57% of women voted for Biden and only 42% voted for Trump.

[source: https://www.nytimes.com/interactive/2020/11/03/us/elections/exit-polls-president.html ]

The day after Trump’s inauguration, the Woman’s March was the largest single-day protest in American history – involving somewhere between 1.0 to 1.6 percent of all Americans – about 3 to 5 million people.

And of course, Donald doesn’t like American women. At least 18 women have accused this man - who bragged that if you are a star you could grab women by the p**** - of sexual harassment. A judge in the Jean Carroll case that found Trump guilty clarified that the charge against him did qualify as rape. Donald owned the Miss Teen Beauty Pageant and bragged about how that allowed him to walk into the dressing area to ogle the teenage girls as they got dressed for the contest.

The policy that Trump is proudest of - appointing Supreme Court justices to overturn Roe v. Wade - shifted the most personal and important choice a woman can make from that woman to the state.

One of the clearest indications of Donald’s feelings for women was lost in the noise of 3,000 Americans a day dying from COVID and the aftermath of the January 6th assault on the Capitol. The two women he appointed to his Cabinet resigned after that assault on democracy. And what did Donald make a priority amid the turmoil of a riot, an attempted coup, cabinet resignations, and a pandemic?

On January 13, with only one week left in his presidency, Trump rushed through the execution of Lisa Montgomery. Her death marked the first federal execution of a woman in nearly 70 years. Donald made her execution a priority and one of the last things he did before leaving office.
[source: https://www.nytimes.com/2021/01/13/us/politics/lisa-montgomery-execution.html ]

Donald. American women don’t like him and he doesn’t like them. Given the poor judgement of American men, we can only hope that women again save this country in November. Maybe even a few more men will have sense enough to side with them.

Unemployment, inflation, job creation and COVID-related deaths - before, during, and after a global pandemic.

Pre-pandemic
2019 - low inflation and unemployment and 2 million jobs created


Pandemic
2020 - drop in demand results in huge layoffs and drop in household spending translates into a sharp rise in unemployment - more than 9 million jobs lost - and a drop in inflation along with demand.
2021
Worst year for COVID deaths and yet - as more Americans are vaccinated - economy opens back up. Inflation spikes while the economy creates a record number of jobs, bringing unemployment back down to below 4%.

Recovery
2022
Recovery begins in earnest. The rate of job creation is still higher than any year on record - except for 2021. With the economy so strong and demand so high, inflation begins to drop but is still high. 

Normalization
2023
COVID deaths now - like flu - are part of annual death toll. By yearend, unemployment had been at a sub-4% level for longest stretch since the 1960s. As job creation slows, inflation slowly falls back to a normal range (but still roughly one point higher than pre-pandemic.) 

2024
The economy - and society more broadly - absorbed an historic spike in loss of life and jobs for a couple of years and has largely returned to normal. It is hard to imagine that it could have turned out much better. Easy to believe that it could have turned out much worse. (The economy has never before created more than 7 million jobs in a single year - or even 5 million jobs for that matter. This recovery - getting back to unemployment below 4% - could have easily taken years longer.)

The only comparable wave of death and economic contraction was the Spanish flu in 1918 and after, the recovery from which was a contributing factor to the roaring '20s. There is a very real possibility that these 2020s will represent another roaring 20s. 

Some Stark Contrasts Between The 2024 Candidates

It is 2024 and Americans will choose between Trump and Biden to be president from 2025 to 2029.

Trump - 

• Spent a record amount of time as president tweeting, watching TV and golfing. (Trump sent an average of 33 tweets per day, roughly the number Biden sends each month.)
• Cheated on his third wife (who was home with their newborn) with a porn star (who he paid with campaign funds). He is the favorite of evangelicals.
• Insisted that the national government had no responsibility for COVID response - that a pandemic sweeping across the globe should be the responsibility of state and local governments and not his administration - and had Americans dying of COVID in his last month in office at a rate of more than one 9-11 per day, a pandemic that was particularly deadly for the elderly. He is the favorite of old people.
• Holds the record for worst job creation (or best job destruction) during a presidency since modern records began after the Great Depression. He is the favorite of people who say he's good for the economy.
• Incited an insurrection to overturn the election results from 2020 and has promised to use the office for retribution against political enemies once re-elected. 2 states have already pointed to the 14th amendment as reason to take him off their ballot for the 2024 election. He is the favorite of folks who talk about the importance of the constitution.
• Presided over the worst rise in violent crime in American history. He is the favorite of Americans who want someone tough on crime.

Since Biden took office,

• Weekly rates of death from COVID have fallen to 3% of what they were under Trump. (He treated the COVID response as a national - not a local government - issue.)
• The unemployment rate is at its lowest rate for the longest time since the late 1960s. (He signed a stimulus bill that rapidly lowered unemployment.)
• During Biden's presidency, violent crime has dropped to its lowest levels since the 1960s.
• New business applications are at a record level. Not just up slightly. They are up almost 50% from what they were a short time ago. stats here: https://www.census.gov/econ/bfs/visualizations/interactivegraphs.html 

Biden and Trump hold the record for jobs created during the first term: Biden for the most jobs created and Trump for the most jobs destroyed. (And Biden still has 13 months to build on - or even reverse - this record.)

35 months into Biden's presidency, the economy has created 14.3 million jobs. In Clinton's first term, the economy created 11.6 million and in the first of his terms for which BLS posts numbers, the economy created 11.2 million jobs under FDR. The two worst first terms in modern times were under George W. Bush - the economy created about 100,000 jobs - and Trump, during which the economy lost 2.6 million jobs Thus far, the economy has created 2.7 million more jobs under Biden's presidency compared to Clinton, who has the second best numbers. The gap between Trump and W. Bush is also 2.7 million - but of course Trump's gap is 2.7 million worse than it was under Bush.

Trump is - obviously - the front-runner in this election.

The Percentage of Americans Who Made $1 Million in Wages in 2022

2022 wage information (does not include rental income, profits, earnings or gains from the sale of assets, etc.)

Of Americans who reported an income on W-2 forms,

• 90% earned at least $5,000.
• 50% earned at least $40,847.18 - the median wage.
• 10% earned at least $120,000
• 1% earned at least $350,000
• 0.1% earned at least $1 million
• 0.003% - or more than 5,000 - earned at least $10 million in 2022.
• Only 227 earned $50,000,000 or more.

data:
https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2022

In a Parallel Universe - Feminists' January 6th Attack on the White House that Nancy Pelosi Provoked

In a parallel universe.

On January 6th of 2021, after losing her Democratic majority and Speakership in what she insisted was a rigged election, Nancy Pelosi held a rally that she concluded by telling the feminists and Black Lives Matter crowd gathered that they would march on the White House. She then added, "We fight like hell. And if you don't fight like hell, you're not going to have a country anymore." Some say that her willingness to tell it like it is was one of the chief reasons that she had become the first woman to be Speaker of the House and admired her bold words. Others claimed her speech was incendiary.

The liberal crowd, angry at Donald Trump, began to march towards the White House. The number of secret service members standing at the barricades put up around the White House were wildly outnumbered and soon the protesters overwhelmed them and were in the White House itself. Some of the rioters broke into the Oval Office and put their feet up on Trump's desk, lighting up cigars. Others roamed the halls of the White House chanting, "Donnie!" Portraits were torn from the wall, random items broken or taken. Secret service, wildly outnumbered, continued to retreat from the angry feminists. Meanwhile, Trump and his family hid in a secret location, away from protestors who became more brazen, taking souvenirs from his office and randomly damaging furniture and fixtures in this historic building that did so much to define the world's oldest democracy.

The aftermath of what some called just a peaceful protest and others called a riot led to a flurry of arrests and sentences and Pelosi continued to insist that the protestors who stormed the White House menacingly calling out "Donnie!" had love in their hearts. Others said it was no different than any White House tour. More than a year later, one of the liberal radicals broke into Donald Trump's house and attacked Melania with a hammer, leaving her with a serious injury that required surgery for her fractured skull.*

The January 6th attack on the White House is still described by Pelosi and others as a peaceful protest. Others think otherwise. Perhaps we will never know.

* Yes. This actually happened to Nancy Pelosi's husband, who was attacked in his own home by one of the demented MAGA boys.

Why Democratic Presidencies Have Created 100,000 More Jobs Per Month Than Republican Presidencies Since 1939

Since Nixon - who quipped, "We're all Keynesians now" - the simplest distinction between Republicans and Democrats has been the belief in Keynesian economics.

Keynes was a savvy investor who died wealthy. He didn't just manage his own investments but also managed the portfolios of institutions like King's College at Cambridge.

Keynes - like modern Republicans - was a big fan of capital markets and their ability to create wealth. He also knew that capital markets sometimes need intervention - something most Republicans still don't admit.

A simple example of when markets need intervention is when there is a recession. When spending and hiring is down, the rational investor will abstain from making investments. This - of course - means that the downturn could be prolonged or even worsened. Everyone is doing what is best for them as individuals and as a result doing what is worst for them as a group. The simplest understanding of Keynes is that he argued that government should stimulate overall markets (with spending or tax cuts or both) during downturns in order to return the economy to full employment and entice rational investors to again expand, hire, or start new businesses.

Republicans are more likely to see downturns as good for the economy and are reluctant to intervene. A Republican president will happily sign a budget that results in deficits but is less inclined to do that simply because unemployment is up. One of the big differences between Romney and Obama in 2012 is that Romney advocated for letting the car companies in Detroit go bankrupt rather than intervening to save the companies and the jobs they represented.

So the simple question is, do presidents more sympathetic to Keynes preside over periods of higher rates of job creation? The answer is yes. Since 1939, 3X as many jobs have been created under Democrat presidents than Republican presidents. And this is not simply because Democratic presidents have been in office more years. Since 1939, the economy has produced about 100,000 more jobs per month under Democratic rather than Republican presidents.

Lincoln's huge breakthrough was to make the creation of capital even more important to economic progress than conquering new land. FDR's huge breakthrough was to make labor markets the simplest measure of economic health and tailor policies towards full employment and wage growth (and all the R&D and education policies that suggested in addition to stimulus programs).

There are plenty of Republicans who still haven't updated their ideas about the policies that make for a healthy economy since the time of Coolidge roughly a century ago. The difference in the rate of job creation is a simple consequence of their resistance to that update.

[Numbers updated through December of 2023, as of 5 Jan 2024]