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The Wrongologist

Geopolitics, Power and Political Economy

Letter From London – October 12, 2017

A day off, with “American in Paris” on tap for tonight. But today was throwback Thursday, so Wrongo and Ms. Right visited old haunts from Wrongo’s time in London with the global bank. A visit to Harrods was our first stop, where we saw this outrageous jacket:

2017 photo by Wrongo

Wrongo asked a young Harrods employee if this was the most garish jacket in the Men’s department, and he replied “Sorry, it’s just the tip of the iceberg.” And apparently so. There was even one that seemed to be a faux royal military outfit that might have been worn by Michael Jackson back in the day.

We then went to the Food Halls for some sweets:

Hard to believe, logo chocolates! 2017 photo by Wrongo

We moved on to visit the public school Wrongo’s sons attended, which is co-ed now, these many years later. Then to the flat that Wrongo lived in on Cadogan Square in Knightsbridge. It sold recently for about £7.5million, a tribute to how out-of-reach real estate has gotten in central London in the intervening years.

We went to Ottolenghi Belgravia to purchase spices; sumac, and black garlic specifically. By now we were hungry, and moved on to Dishoom, one of the best Indian restaurants in London. For Connecticut residents, quality Indian food is very difficult to find, without driving at least an hour. So when one of the best is a ten-minute walk from your hotel, you have to visit. Maybe twice.

We loved Dishoom’s Mahi Tikka, the Lamb Boti Kebab, and the House Black Daal, among others that were simply terrific.

Last evening we saw “Apologia” at the Trafalgar Studios. The play is about a disastrous family reunion between a Boomer career mother, her two grown male children, and the women in their lives. Stockard Channing is the mom (Kristen) who became an eminent and successful art historian, but was unable to keep custody of, or stay connected to, her two sons when they were young. Joseph Millson plays both sons very effectively. Some in our group didn’t realize the same actor performed both roles. Simon says:

I have to tell you now that the thing I remember most about you is your absence.

Things do not go well at Mom’s birthday dinner. The triggering point is Kristen’s recently published book about her life, in which she fails to mention either son, Peter or Simon. When the sons and their partners Trudi (Downton Abbey’s Laura Carmichael) and Claire (Freema Agyeman) show up for Kristen’s birthday, they want only to confront her about her decisions, both about her career and the book that represents it. Over the course of the evening, Kristen is forced to confront her sons’ antipathy for her, because of her commitment to career over family.

There is plenty of humor to cut the tension of the many confrontations, but ultimately, Kristen is left alone and unloved, a prisoner of the choices she made.

Stockard Channing is the lead, and turns in an excellent performance as Kristen, but it was Laura Carmichael as Trudi, the “Wisconsin nice” fiancée of Peter who knocks it out of the park. Trudi is a born-again Christian who seems naïve, possibly insipid, and a less-than-worthy opponent for Kristen. But it is Trudi who delivers the coup de grace to Kristen in the final moments of the play.

Excellent. See it if it comes to the US.

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Saturday Soother – September 30, 2017

The Daily Escape:

Reflection Canyon, in the Glen Canyon National Recreation Area, Utah. This spot became popular with hikers after Apple used it to promote its Mac Book Pro high resolution with retina display. People first learned about the location after this photograph was taken by Michael Melford in 2006.

Texas has a $10 billion rainy day fund. Now, you would think that when the rains came to Houston, Gov. Greg Abbott would say “It’s a rainy day fund, let’s send some to Houston”.

Nope. The Texas Observer reports: (brackets and emphasis by the Wrongologist)

On Tuesday, after Turner [Houston’s Democratic mayor, Sylvester Turner] made a public request for money from the rainy day fund, Governor Greg Abbott joined in, telling reporters that the fund wouldn’t be touched until the 2019 legislative session. Turner “has all the money that he needs,” Abbott said. “In times like these, it’s important to have fiscal responsibility as opposed to financial panic.” The governor went on to accuse the mayor of using Harvey recovery efforts as a “hostage to raise taxes.”

This is an epic statement of Evil. The Texas rainy day fund has $10 billion. The bill for Harvey is estimated at $180 billion, but Houston has all the money needed.

The Observer also quoted Lt. Governor Dan Patrick from early August, less than a month before Hurricane Harvey made landfall:

Where do we have all our problems in America?…Not at the state level run by Republicans, but in our cities that are mostly controlled by Democrat mayors and Democrat city council men and women. That’s where you see liberal policies. That’s where you see high taxes. That’s where you see street crime.

Ideology always comes first in Texas. You would think that these ultra-conservative chimps would be looking for ways to help Houston, if not its mayor. But, it’s business as usual: Everything good in Texas is to the credit of the brave GOP legislators in Austin, and everything bad is the fault of county commissioners, mayors, city councils and school boards.

Oh, and the immigrants.

Six of the nation’s 20 largest cities are in Texas. And those six have half of the state’s population, and they generate most of its economic activity. But, Republicans consider them a threat, either because of their “liberal” values or the demographic, and thus, the political threat they represent to the Texas Republican Party.

This could be a real problem for the entire country in the future. Increasingly, we are seeing the GOP in red states using their control of the political system to make war on the blue cities in their states. Think about Flint, MI where local interference by the governor and state-level Republicans partly brought about the lead-in-the-water crisis that remains unresolved, and which the state won’t pay for.

Maybe this is a good time to remember that Greg Abbott received a multi-million dollar settlement for an accident that paralyzed him, and put him in a wheelchair. He is also the guy that subsequently proposed, sponsored and shepherded tort reform in the Texas legislature.

He’s the guy that acts as if tort reform doesn’t keep present day accident victims from getting the kind of compensation that he received. He closed the door after he got his millions in a settlement.

Texas is dominated by right-wing extremists determined to turn everything to advance their ideological agenda. Forget that Texas already has massive disparities between whites and non-whites in terms of social services, policing, and most other government functions.

Turning their back on Houston just makes the ideology more visible.

In Texas, they just do everything bigger and badder.

Time to relax and think about summer being over. Fall is officially here, the leaves are turning and falling onto the fields of Wrong. Time to brew up a Vente-sized cup of Durango Coffee Company’s Costa Rica Las Lajas Perla Negra ($16.95/lb.), put on the Bluetooth headphones, and watch the leaves fall.

While you do, listen to “Woods”, the second cut on the 1980 album “Autumn” by George Winston. It was his second solo piano album. Wrongo chose this because of the great fall-inspired video that accompanies the music:

Those who read the Wrongologist in email can view the video here.

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Distressed Communities: Another Divide In America

The Daily Escape:

“Impressions of Lijiang” Show, Yunnan Province China. Lijiang Impressions is a cultural show about the traditions and lifestyles of the minorities in Lijiang. The open-air stage is at 10,000 ft. above sea level. The Dragon Snow Mountains behind the stage are higher than 16,000 ft.

The Economic Innovation Group (EIG) has an interesting report on Distressed Communities in the US. They have surveyed changes in counties in distress, from 2000-2015, using census data. The study notes:

America’s elite zip codes are home to a spectacular degree of growth and prosperity. However, millions of Americans are stuck in places where what little economic stability exists, is quickly eroding beneath their feet.

The study found that the majority of new jobs created as the recovery began came in the 20% of American ZIP codes that were already the most prosperous. The 20% of ZIP codes in the least prosperous areas generated just 1% of jobs created between 2011 and 2015.

This isn’t a Republican or Democratic problem. Both parties represent distressed areas. But the economic fortunes of the haves and have-nots have widened the political chasm between them, and it has yet to be addressed by substantial policy proposals on either side of the aisle.

The EIG study captured 99% of the US population. It covers 26,000+ US zip codes that have a population of at least 500 people, the more than 3,000 counties with at least 500 people, and the nearly 800 cities with at least 50,000 people.

Here is a map from the study showing areas of economic advance and retreat:

Our most significant modern recession and the subsequent deeply uneven recovery has exacerbated the gap between wealthy communities and poorer areas, creating a patchwork map of economic haves and have-nots around the country.

Here is another map from the study, showing the most disadvantaged small and mid-sized cities:

 

In Hartford, CT; Newark, NJ; Stockton, CA; and Trenton, NJ, more than one in five residents are now foreign-born. In general, cities with smaller foreign-born populations are more likely to be distressed: In the average distressed city, 15% of the population is foreign-born; in all other quintiles, the average is between 18 and 19%.

In the Northeast, more than two-thirds of the population living in distressed zip codes reside in high density neighborhoods, so distress in the Northeast is predominantly an urban phenomenon. In the South, nearly 60% of the distressed population resides in low density, mainly rural zip codes.  But, all types of distressed communities can be found in all regions.

A full two-thirds of distressed zip codes contained fewer jobs in 2015 than they did in 2000, while 72% saw more businesses close than open over that same time span. In total, 55% suffered net losses in both categories

Fifty-two million Americans live in the most distressed ZIP codes across the nation. Those people are more likely not to have graduated from high school. The poverty rate in those communities is 11 points higher than the national average. And adults in those communities are twice as likely to be out of work as in the wealthiest counties.

They are also far more likely to live near sites polluted or contaminated enough that the Environmental Protection Agency is working to clean them up. There are nearly 13,000 of these brownfield sites in distressed ZIP codes, compared to 3,700 in the most prosperous ZIP codes.

Those who live in distressed areas have a life expectancy almost five years shorter than those who live in prosperous areas. Rates of cancer, suicide and violence are all markedly higher in the poorest areas, and substance abuse disorders are 64% percent more likely, the report found.

The report concludes by saying:

It is fair to wonder whether a recovery that excludes tens of millions of Americans and thousands of communities deserves to be called a recovery at all.

The days of “pull yourself up by your bootstraps” are gone forever. You can’t use trickle-down economics arguments to fool all of the people all of the time, and you can’t even fool a majority of them for very long.

And now, time’s up.

Capitalism hasn’t worked for all of the people since well, never.

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Where Can The Working Class Afford To Live

The Daily Escape:

Quilotoa Crater Lake, Ecuador. You get there by bus, and it takes six hours to walk around it. 

The Senate is trying to pass their worst possible health care idea. They have already passed a $700 billion military budget, more than even Trump wanted. And they are trying to pass a $1 trillion tax cut for their buddies. Will any of that help you? No.

They should be focused on improving the lives of working class people, but they can’t be bothered with that, because they have no desire to accomplish it. Things are just fine the way they are for Senators.

Wrongo has been remiss by not turning you on to howmuch, a site that creates visualizations about money, and in-depth tools about what things cost in the US. You should spend time checking them out. They created this very interesting chart about where working class people can afford to live in the US:

Source: howmuch

Each bubble represents a city. The color corresponds to the amount of money a typical working-class family would have left over at the end of the year after paying for their living costs, such as housing, food and transportation.

The darker the shade of red, the worse off you are. The darker the shade of green, the better off you are. The size of the bubble has meaning — large and dark red means the city is totally unaffordable. Bigger dark green bubbles indicate a city where the working class can get by. So, where are the best places from a financial perspective for a working-class family to live? These are the top five cities with the net surplus remaining after living expenses:

  1. Fort Worth, TX ($10,447)
  2. Newark, NJ (($10,154)
  3. Glendale, AZ ($10,120)
  4. Gilbert, AZ ($9,760)
  5. Mesa, AZ ($7,780)

The worst five cities are:

  1. New York, NY (-$91,184)
  2. San Francisco, CA (-$83,272)
  3. Boston, MA (-$61,900)
  4. Washington, DC (-$50,535)
  5. Philadelphia, PA (-$37,850)

Yes, a typical working-class family would need to make an additional $91K+ per year in NYC just to break even on a reasonable standard of living. And most job creation is taking place in cities, so the challenge for anyone, working class or higher, is how to afford living in one of them. There are exactly zero affordable cities on the West Coast. More from howmuch:

Of the ten most populous cities in the country, the only place where you can enjoy a decent standard of living without taking on debt is San Antonio. Out of the top 50 largest cities, only 12 are considered affordable. Low-wage workers are better off in smaller cities.

Kevin Erdmann, who blogs at Idiosyncratic Whisk, says the problem is that most coastal cities have closed access to housing, while inland cities have open access. Open access cities have relatively liberal housing and zoning codes that allow for new building, including relatively low-cost housing. Houston is the most prominent example. Closed access cities artificially reduce supply of housing, driving prices up. NYC is the most prominent example. From Erdmann:

You can tell what type of city it is just by looking through the newspaper. In open access cities, people complain that poor people are moving in and taking away jobs, pushing down wages. In closed access cities, people complain that rich people are moving in and bidding up rents.

People in red states have experienced high in-migration of low income people, both natives and immigrants. Poor people are leaving the closed access cities.  So, to someone living in a closed access city, it seems racist for people to focus their ire on Mexican immigrants.

And think about what happens if folks in a bad neighborhood manage to do the hard community work to make it somewhat livable. In New York or Los Angeles, the minute that a neighborhood becomes safe, the plots that hold those $100,000 duplexes will be worth $500,000, and the neighborhood will gentrify.

Rinse, lather and repeat, and the cycle starts again.

Can a working-class family live comfortably in your town? If so, can they find work?

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Houston’s Petrochemical Industry Fails to Protect City

The Daily Escape:

Ranwu Lake Campsite, Tibet photo by Arch-exist Photography. Ranwu Lake is a tourist attraction in SE Tibet, and is called the “Tibetan Switzerland”.

Life in the age of corporatism resembles life in the food chain. In a potentially disastrous outcome from the Harvey flooding, a chemical plant in Crosby, Texas belonging to French industrial giant Arkema, has had several explosions of peroxide and other volatile chemicals. From the NYT:

The company had already ordered all workers to leave the damaged plant, and Harris County ordered the evacuation of residents within a 1.5-mile radius.

These chemicals have to be refrigerated. When the plant’s warehouses lost power, they transferred the product to diesel-powered refrigerated containers. But later, the backup generators were swamped by flood waters, so cooling was lost, and the explosions began. On Tuesday, the company released a statement:

Refrigeration on some of our back-up product storage containers has been compromised due to extremely high water, which is unprecedented in the Crosby area. We are monitoring the temperature of each refrigeration container remotely….while we do not believe there is any imminent danger, the potential for a chemical reaction leading to a fire and/or explosion within the site confines is real.

The rains are over, but the chemical fires linger. Richard Rowe, the CEO of Arkema’s American operations said:

The company has no way of preventing chemicals from catching fire or exploding at its heavily flooded plant…the company has no way to prevent…this worst case outcome.

The CEO says, “No way to prevent explosion“. Back in the olden days, that would be known as a “major design flaw”. Most engineers would have recommended placing the generator sets above at least the 100-year high water mark, just to prevent this kind of fun event. They would also put the diesel tanks above that water line.

Maybe next time. The Houston Chronicle had this amazing map of chemical plants in the Houston area:

In case it is hard to read the map legend, the yellow markers are for petrochemical plants that have a “medium” potential for harm based on their location within the 100-year flood plain. The red markers have a ”high” risk for harm. Houston’s ship channel and the surrounding area along the Gulf coast represent about 40% of U.S. petrochemical manufacturing. At least 25 Houston-area plants have either shut down, or experienced production issues due to Hurricane Harvey’s flooding.

Any guesses that the concentration of plants in the Houston flood zone will cause our corporate overlords to think about relocation of a few of these sites? Or, how they best secure them from the next 500-year flood, which looks like it will happen in say, the next five years? From Forbes:

Harvey was a wake-up call, reminding us that it is time to take a more serious look to ensure the safety of the petrochemical industry and the public at large, just as the nuclear power industry has done in reaction to the Fukushima disaster.

But Arkema has worked hard to change EPA rules in their favor. David Sirota reports that the new rules, which were set to go into effect this year, were halted by the Trump administration after a lobbying campaign by Crosby plant owner Arkema and its affiliated trade association, the American Chemistry Council:

Those rules — which would have taken effect on March 14 — were blocked by EPA administrator Scott Pruitt. The move was a big win for the chemical industry that has spent more than $100 million supporting federal lawmakers since 2008.

Apparently, sacrifices must be made in the name of making America great.

The closures are not just disrupting markets; they’re also causing the release of toxic pollutants that pose a threat to human health. The NYT reports that damaged refineries and oil facilities have already released more than two million pounds of hazardous substances into the air.

The sheer number of facilities around Houston that have to come back online at the same time creates another huge emissions problem. From City Lab:

The real problem is that the plants are allowed to operate so close to residential areas in the first place. Houston’s lack of zoning regulations have been front-and-center in discussions about why Harvey has been so terrible for the city, and that’s no different in the discussion about air pollution.

Not to worry, Houston, your petrochemical corporations will be fine. They have insurance. They will get to write off any damage against their profits. They will get tax incentives to rebuild, or if they choose to move, tax credits from the town down the road.

The people? Most will have no insurance to rebuild their homes or to purchase new furniture.

And the pollution impact? A cost of doing business for the petrochemical industry.

Unfortunately, for the people, pollution’s about their health. And there will be no help forthcoming for the most vulnerable Houstonians.

Have a slice of Texas-themed music: Here is Robert Earl Keen, doing “Corpus Christi Bay” from his 1993 album “A Bigger Piece of Sky”:

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Sunday Cartoon Blogging – August 13, 2017

This just in from PBS shows how badly Democrats have hurt themselves since 2008:

After high-profile candidates lost decisively in the last two elections…the party now finds itself in unprecedented territory for the 2018 ballot: with no major candidate to run. Democratic leaders haven’t yet lined up a substantial name to represent the party and its message despite months of trying.

Ann Richards, elected in 1990, was the last Texas Democratic governor. And now, no major Dem candidate will run for governor. This is despite a booming Hispanic population and Democratic dominance in the state’s largest cities.

Democrats have expanded their advantage in California and New York. Combined, these states gave Clinton a 6 million vote edge, more than twice her national margin. But those two states elect only 4% of the Senate.

We once thought that there was an “Obama coalition” that would only grow because of demographics: Left-leaning populations were growing, America was becoming less white, and this alone would guarantee Democrat majorities well into the future. This idea has failed. Is it time for the DNC establishment to accept the awful truth that they are no longer a national party?

The Cook Political Report says that even if Democrats won every single 2018 House and Senate race for seats in districts that Hillary Clinton won, or that Trump won by less than 3 percentage points, they would still fall short of the House majority and lose five Senate seats. Some permanent majority. Time for a few new Democrats to lead.

On to cartoons. Many people pointed out that there were some similarities between Trump and Kim:

Strategic thinking, Trump-style:

Uncle Rex tells America a bedtime story:

Trump said that his North Korea comments were similar to a few other guys:

Foxconn gets $3 billion in tax breaks in exchange for building a $10 billion factory in Wisconsin. It will take 20 years for the state to break even:

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How Trump Exploited NYC’s Financial Crisis

The Daily Escape:

Iceberg floating near Ferryland Newfoundland, April 2017 – photo by Greg Locke

The Intercept has an interview of Kim Phillips-Fein by Naomi Klein about how Donald Trump made his first big deal during the New York City financial crisis of the mid-1970s. Phillips-Fein’s book is “Fear City”, which describes the NYC fiscal crisis of the 1970s that brought it to the verge of bankruptcy. The WSJ reports:

By June 1975, New York faced default on $4.5 billion in outstanding short-term debt owed to a few big banks and to thousands of unidentifiable small investors. Not only did the city have no way to repay $4.5 billion, it could not meet its routine, daily operating expenses, including payroll.

The WSJ says that between 1970 and 1980, more than 823,000 city dwellers left for (literally) greener pastures.

Ultimately the city did not go bankrupt. The banks and the city’s unions were willing to buy enough of the city’s (otherwise unsalable) debt to avoid bankruptcy. Important to the mix was the creation of the Municipal Assistance Corporation (MAC) run by Felix Rohatyn, who became chief negotiator between the city, its labor unions and its creditors. A new type of agency, The New York State Financial Control Board, that controlled the city’s budget, became the model for the type of emergency city managers that we saw last year in Flint and Detroit Michigan.

The NYC financial crisis helped Donald Trump emerge as a New York deal-maker. Trump convinced New York to let him take over the Commodore Hotel, which we now call the Grand Hyatt, just east of Grand Central station. Trump modernized and renovated it, it was his first construction project in Manhattan. Phillips-Fein picks up the story:

…the Commodore Hotel was a previously very fancy hotel from the early 20th century. I think it opens in 1919 at 42nd Street and Lexington Avenue. And it’s owned by the Penn Central Railroad. And the hotel kind of falls into disrepair and near collapse after Penn Central itself goes bankrupt in 1970.

The Commodore had stopped paying city property taxes and was for sale. The city was terrified that if the Commodore Hotel closed, the blight in Times Square would spread east, into the area around Grand Central Terminal. Trump saw an opportunity, while the city government saw a potential disaster. Together they hatched a plan for Trump to purchase the Commodore Hotel: (parenthesis by the Wrongologist)

What he actually wants to do is buy it and sell it to a state agency, the Urban Development Corporation (UDC)…And then the UDC will lease it back to Trump, [who was] working with the Hyatt organization.

The UDC leased it back to Trump and Hyatt. And this arrangement enabled them to pay substantially lower property taxes than usual. Phillips-Fein:

The New York Times reported that as of 2016, this tax arrangement with the Hyatt had cost New York City about $360 million in uncollected taxes in the years since the development.

Naomi Klein:

So I just want to pause there, because what you’re saying is…Trump and the Hyatt put down $9.5 million…They come up with this…sweetheart deal, a tax dodge. And that $9.5 million outlay translates back into roughly $360 million in tax savings…

The Trump/Hyatt tax deal set the stage for a wholesale change in the city. The fear of bankruptcy was central to understanding NYC politics at that moment: They feared an apocalyptic future. That fear created a need for a savior, and it found two in Donald Trump and Felix Rohatyn.

The NYC government decided that working with the business community was the bail-out it needed. It set the stage for the city’s luxury developments, for using different kinds of tax breaks that stimulated the development of properties primarily dedicated to the needs of corporations and the rich. It set the stage for a wholesale change in city politics from New Dealism to Neoliberalism. And it set the stage for Trump’s political career. Phillips-Fein: (brackets by the Wrongologist)

…you can see the straight line, really, from the Commodore to this skating rink [Wollman Rink in Central Park] to the presidential bid…”I’m not a politician. Washington is corrupt. I know how to do this better…”

Fear makes things that should be impossible suddenly feel as though they’re the only answer. Klein concludes by saying we should be very wary of the political exploitation of our fears, of political exploitation of an atmosphere of crisis.

It is clear that Donald Trump’s career and his fortune were really forged by doing just that.

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Monday Wake Up Call -MLK Holiday Edition

“Civil disobedience is not our problem. Our problem is civil obedience. Our problem is that numbers of people all over the world have obeyed the dictates of the leaders of their government and have gone to war, and millions have been killed because of this obedience….Our problem is that people are obedient all over the world in the face of poverty and starvation and stupidity, and war, and cruelty. Our problem is that people are obedient while the jails are full of petty thieves, and all the while the grand thieves are running the country. That’s our problem.”Howard Zinn

Today we remember the birth of Dr. Martin Luther King, Jr. who was America’s icon of civil disobedience, and a hero to most. And while injustice and inequality continue in the US, the thought that civil disobedience will deliver the astonishing results it did in the 1950s and 1960s seems nearly impossible. In the next four years, we will have trouble enough holding on to the reforms of the New Deal and the Lyndon Johnson years.

Here is a small proof: This week, the city of Biloxi Mississippi tweeted that some municipal offices would be closed on Monday “in observance of Great Americans Day, a state-named holiday”. That was news to citizens of Biloxi. How had the city changed the name of a federal holiday in honor of civil rights leader Martin Luther King Jr to celebrate unnamed “Great Americans”?

It hadn’t. This from the Guardian:

The incident, however, highlighted an awkward truth about Mississippi’s Martin Luther King Jr Day: that it is also Robert E Lee Day…Arkansas and Alabama also jointly celebrate Martin Luther King Day and Robert E Lee Day, despite annual protests.

States and municipalities were slow to recognize the MLK holiday, with New Hampshire being the last state to officially observe the day, in 2000. You may remember Arizona’s resistance to a holiday honoring MLK. It became a big issue in the late 1980s. In 1986, the year the federal holiday honoring King was first observed, Arizona’s House of Representatives voted down a measure observing it. But, Democratic Gov. Bruce Babbitt, who was about to leave office, proclaimed the holiday on his own.

Babbitt’s designation of the holiday became an issue in the next election. Republican Evan Mecham promised to overturn Babbitt’s order if he won. And after his election, Mecham reversed the proclamation. Mecham’s move led to dozens of groups cancelling conventions in Phoenix. After Mecham left office, (he was indicted and impeached), the debate continued, eventually leading to a statewide vote in 1990, but Arizona voters rejected the holiday.

That cost Arizona a chance to host its first Super Bowl in 1993 (the NFL’s decisions are made about 5 years in advance). Losing the 1993 game cost the state at least $200 million. The ongoing refusal to create an MLK Holiday also cost Arizona scores of additional conventions and tourist business. Not long after the vote, the NCAA turned down Arizona State’s request to host a portion of the 1994 NCAA men’s basketball tournament.

It took until November 1992 for the state to finally designate the MLK Holiday.

Does any of this sound familiar? A Republican governor stands against an idea that the majority of America thinks is important, and the right thing to do. The state loses tourism and other business. It becomes a pariah, standing on ground that makes its governor look more like George Wallace than a modern political executive. We’re talking about you, North Carolina! Why is it always a Republican?

In 1991 the rap group Public Enemy released a song called “By the Time I Get to Arizona” on their album, “Apocalypse 91”. They wrote the song in response to Arizona’s’ refusal to create the MLK Holiday. The song is controversial, since the music video showed Public Enemy’s willingness to kill Gov. Mecham. Rolling Stone praised the album, stating that Apocalypse 91attempted nothing short of setting a sociopolitical agenda for the black community.”

Best wishes on MLK day. The struggle is gonna get way more real this year. Here is “By The Time I Get to Arizona”:

Those who read the Wrongologist in email can view the video here.

Sample Lyrics:

I’m countin’ down to the day deservin’
Fittin’ for a king
I’m waitin’ for the time when I can
Get to Arizona
‘Cause my money’s spent on
The goddamn rent
Neither party is mine not the
Jackass or the elephant
Why want a holiday Fuck it ’cause I wanna
So what if I celebrate it standin’ on a corner
I ain’t drinkin’ no 40
I B thinkin’ time wit’ a nine
Until we get some land
Call me the trigger man
Looki lookin’ for the governor

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Trump Promised Jobs. That’s Why He Won

Take a good look at this map. It shows which counties switched parties in the 2016 US Presidential election compared to 2012. Red counties switched from Democrat to Republican, blue counties switched from Republican to Democrat and the vast majority in grey did not switch parties:

counties-that-changed-partys

Source: Brilliant Maps

Of course, it doesn’t show vote margin or size of the total vote in each county. The main thing this map shows is the large number of counties in the North East and Midwest that flipped to Trump, after having been Democratic counties in the prior election. The effect was large enough to deliver the normally Democratic leaning states of Iowa, Michigan, Pennsylvania, and Wisconsin into the Republican camp.

Tim Duy has an article about how economists and most politicians get so wrapped up that they miss the human element in economic dislocations. Duy makes the point that they ignore two of the negative impacts of job losses. First, they say how lost jobs free up human capital for use elsewhere in the economy. Of course, as jobs are added to the economy, skill levels and training determine whether laid-off workers are part of that equation.

“High-skilled” workers is what we need, but they are not always the kind of workers that were laid off.

Second, Duy reminds us that most workers have little ability to move to where better jobs might be found. Politicians tell us that the economy is shifting to urban and suburban areas; to higher skilled jobs; that workers must go and get retrained. That misses the point.

Most new jobs for those who were laid off will only be found if workers are able to relocate, to move from rural or devastated urban locations to geographic areas where jobs are expanding. Duy notes it is particularly difficult for rural areas:

The speed of regional labor market adjustment to shocks is agonizingly slow in any area that lacks a critical mass of population…Relative to life spans, in many cases the shocks might as well be permanent.

We don’t have answers for most of these communities. Rural and urban economic re-development is hard. The people living in these regions have experienced job losses (or no jobs growth) for decades; positive jobs growth has occurred elsewhere.

And the laid-off workforce isn’t mobile. In effect, we have limited access to housing in our major cities by pushing housing costs beyond the reach of most middle class workers. This, from Kevin Erdmann:

If you lost your manufacturing job in Buffalo, and you’re thinking of moving to New York City because there are more jobs there, you might decide not to move because it is too expensive. It is the affordability that is keeping you out. But, even here, the affordability problem is just the messenger. It is the rationing mechanism for a housing stock that is relatively fixed for political reasons.

If you decide to move to the NYC area, you see that the housing supply is largely fixed. New buildings are hard to get through zoning. Construction costs in big cities are very high. Income taxes are rising rapidly.

Erdmann makes the point that housing in big cities doesn’t move up with increased demand:

So, it doesn’t matter if Brooklyn apartments rent for $500, or $1,000, or $2,000, or $4,000. There isn’t one for you. Fixing this by fixing affordability isn’t going to change the supply curve. It’s simply substituting non-monetary rationing mechanisms for the monetary one.

Trump’s message that US firms need to consider domestic jobs as much as their bottom line, also resonated with middle and upper-middle class households. OTOH, it’s not like Trump took on the Coal Industry on behalf of workers. He blamed federal environmental policy, but that isn’t what caused the loss of coal industry jobs.

Trump doesn’t really have any answers, but he pretends to care while pretending to have answers. Pretending to care and pretending to have answers gave him the switched counties on the electoral map above. People want work. They want secure jobs.

Trump might be running a “jobs” scam, but if it fails, what is the Democrats’ alternative?

We have four years until the next election, two if you are looking at Congress. What policies will work? Will we just trade Trump’s scam for another one peddled by the establishment?

Business as usual hasn’t delivered. The idea that economic growth creates jobs is a pipe dream for many: For the past 40 years, economic growth did not improve wages.

Trump’s promise swung the election. If he fails, what will be the Democrats’ response?

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Monday Wake Up Call – November 28, 2016

Someone once said that if the Republican Party was a refrigerator, it would say its job was to let ice melt.

Apparently Ben Carson was offered the job as head of Housing and Urban Development (HUD). This is a cabinet-level appointment. Carson had initially turned down a cabinet appointment at Health & Human Services (HHS) because, (according to his staff) he was unqualified. But he’s changed his mind: (brackets by the Wrongologist)

Ben Carson has demonstrated the ability to do two things at a world-class level: perform surgical operations, and run [several] lucrative scams. By his own admission, he is patently unqualified to run a federal agency. Nonetheless, he is apparently on the verge of accepting a job as secretary of Housing and Urban Development…

History tells us that HUD has had just one use in Republican administrations. The agency’s program structure lends itself to profiteering. HUD works closely with private developers to build affordable housing. Without careful oversight, the agency can easily become a slush fund to distribute sweetheart contracts to the administration’s buddies.

Samuel Pierce, Ronald Reagan’s HUD secretary, did just that. Reagan’s HUD regularly handed out loans and grants on the basis of political contacts. Ultimately, some Reagan-era HUD officials were convicted, including three assistant secretaries, for such crimes as accepting illegal loans, obstructing justice, and illegal gratuities.

George W. Bush’s housing secretary, Alphonso Jackson, resigned in 2008 after a series of scandals, including sweetheart deals and inflated salaries for his friends. He instructed his staff to steer contracts to Bush supporters. Jackson was investigated by HUD’s inspector general, the Department of Justice and the FBI, none of which resulted in a conviction.

Since Trump says that he will continue running his real estate empire in office, a loyalist like Carson, someone with no experience in government, but who has relevant experience in bilking, will oversee an agency whose mission lends itself to corruption.

One of the reasons to appoint Carson is because HUD will likely cease its anti-segregation and anti-discrimination activities as soon as the Trumpets assume control. He is on record supporting ending that mission. This from the WSJ:

Under the Obama administration, the department has beefed up enforcement of fair-housing regulations to combat zoning policies that result in segregation, threatening the loss of millions of dollars in federal funding to municipalities that don’t comply. Mr. Carson sharply criticized those policies as “mandated social-engineering schemes” that repeated a pattern of “failed socialist experiments in this country,” in a 2015 op-ed published in The Washington Times.

If there is a bright side to Ben Carson running HUD, it is that he’s not running HHS with the second largest share of the federal budget. Imagine him saying: “I’m a physician. Med school taught me everything there is to know about health care.”

Remember, HUD spelled backward is DUH…

It’s time to wake up America! The writing is on the wall, Trump’s cabinet hires are terrible, and we have to pressure him to do better than Ben Carson.

You can go to social media and complain directly to your Orange Overlord at: #therealDonaldTrump.

To help you wake up, listen to the Crystals from 1962 singing “Uptown”. Phil Spector originally recorded the song with Little Eva, the 19 year-old babysitter to Carole King and Gerry Goffin. The end result didn’t meet Spector’s standards, so he produced it a second time with the Crystals. Here is “Uptown”:

Those who read the Wrongologist in email can view the video here.

Sample Lyrics:

He gets up each morning
And he goes downtown
Where everyone’s his boss
And he’s lost in an angry land
He’s a little man

But then he comes uptown
Each evenin’ to my tenement
Uptown where folks don’t have
To pay much rent
And when he’s there with me
He can see that he’s everything
Then he’s tall, he don’t crawl
He’s a king

Downtown he’s just one of a million guys
He don’t get no breaks
And he takes all they got to give
‘Cause he’s got to live

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