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The Wrongologist

Geopolitics, Power and Political Economy

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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A Different Way to See Middle Class Voters – Part II

The Daily Escape:

This is the last in a series from the NJ Grounds for Sculpture – 2017 photo by Wrongo

Today, we continue with G. Mark Towhey’s idea that our political parties no longer work well enough to be relevant to a large segment of middle class voters. He says that the parties must appeal to the voters he calls pragmatists:

The opening episode of the fourth season of Aaron Sorkin’s Emmy-winning TV series The West Wing... [places]…what typical Americans want from government…into perspective for…Toby Zeigler and Josh Lyman, both senior White House staffers in the show. They’re…in a hotel bar and strike up a conversation with a middle-aged “typical American” who’s spent the day touring the University of Notre Dame with his college-aged daughter.

The man and his wife together earn $80,000 a year and, he laments, ‘I never imagined I’d have trouble making ends meet. I spend half the day thinking about what happens if I slip and fall on my front porch. It should be hard. I like that it’s hard. Putting your daughter through college…that’s a man’s job, a man’s accomplishment. Putting your kids through college, taking care of your family… [But] it should be easier, just a little easier, because in that difference is…everything.’

That guy doesn’t want welfare reform, or tax reform. He wants government to focus some of its resources and brainpower on making his everyday life “just a little easier.” The typicals don’t want perfection, just small, concrete steps that improve their lives.

They are the pragmatists.

We shouldn’t confuse “pragmatists” with centrists who are in the space between the Left and the Right. They are not necessarily moderates. Pragmatism isn’t a moderate ideology, but a different prioritization of issues. From Towhey: (emphasis by the Wrongologist)

It’s a focus on the concrete, rather than the abstract. It targets immediate, specific problems rather than deep, systemic causes. It prefers clearly defined and implementable solutions rather than aspirational visions…what if, instead of referring to a place on a Venn diagram, the pragmatic-idealistic divide actually functions like a different political axis?

In other words, don’t appeal to them with policies, speak about solutions. Towhey thinks we should imagine the traditional Left/Right political spectrum on a horizontal line, the “x-axis,” running naturally, from left to right. Now imagine a vertical line that intersects the x-axis at its center. That’s the “y-axis.” At the top of this vertical line, we’ll put people who place a high value on ideals and ideologies that affect society in the abstract. The top end of the y-axis is the “idealist” end. At the opposite end of the y-axis are people who place a high value on practical solutions and actions that help them personally. This is the “pragmatic” end. Here is a representation of Towhey’s matrix:

Prepared by Wrongo from Towhey’s article. Position of politicians by Wrongo

Towhey thinks that the y-axis (Pragmatists to Idealists) shows how most Americans see the world: how a policy affects the world, versus how it impacts me; people who’ve succeeded in the current system, versus people who are struggling in it. Those at the pragmatic end struggle to make it under the status quo. They’re people who want small, but real improvements, a few practical solutions.

Pragmatists are too busy to worry about the future. Whether they’re on the left or right on the x-axis, they share a focus on more immediate needs. And today, voters don’t move along the x-axis as easily as they may have in the past.

If Democrats are to compete in this “pragmatic” voter segment, they need to recognize that the typicals comprise many American citizens, enough to have elected a president in 2016.

The lesson for Democrats is to support leaders who will perform the basics of government exceptionally well. Mayors are great examples of this.

On the national level, health insurance is a great example. Pragmatists want action on health insurance, not on health insurance ideology. If Trump can’t form a coalition with an ideologue GOP Congress, pragmatists would be happy if he worked with pragmatic Democrats, so long as the new health insurance law makes their lives easier. It doesn’t have to be perfect, as it has to be for idealists on the right or the left.

This is the message of pragmatism: less ideology, more action. Small steps, not grand gestures. Results, not principles. And pragmatists are up for grabs. They can, and will vote for Democrats.

They’ll follow a politician who unites them behind a few plans that people think will deliver tangible results. That is how Bernie out-polled Hillary, who had 39 positions on her campaign website.

But, if Democrats can’t make this shift in thinking and leadership, new candidates and new alliances may form, and pragmatists will vote for them.

It could lead to the end of the Democratic Party as a national political power.

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A Different Way to See Middle Class Voters – Part I of II

The Daily Escape:

Emerald Lake, Yoho National Park, British Columbia – 2017 photo by Shelley VanKempen

Yesterday, we discussed how building consensus among voters was the best way to beat the disruptive, and in many ways, destructive efforts by Donald Trump to change our democracy.

When Democrats bring up Clinton’s winning of the popular vote in 2016, they overlook the reality that Democratic congressional candidates lost in 23 districts that Clinton won, including seven in California. Imagine, those voters didn’t want Trump, but liked what their local GOP candidate for Congress stood for enough to split their vote.

Trump won the white vote by 58% to 37%, while 51% of American women also voted for him.

To beat Trump, or whoever might be next, Democrats need to move from following a few failed strategies. First, they have been trying only to win the White House, not the Congress. Being a presidential-only party is a powerful thing, until you lose the White House. Second, they need to move away from identity politics. People know the size of the pie is relatively fixed, and the effort to fix the problems of one group can easily be a zero-sum game for others.

An interesting analysis in American Affairs by G. Mark Towhey says that our traditional view of voters as positioned along a spectrum of left to right is no longer germane. He argues for a new grouping of “pragmatists”, who are everyday middle class people:

This bloc of typical citizens—overstressed, under-informed, concerned more with pragmatic quality of life issues than idealistic social goals—has become a powerful political movement…Conventional political leaders seem to completely misunderstand them…

They are not among those of us who read (or write) long-form blogs or articles. We aren’t typical Americans:

We have time to read…we can pause our breadwinning labor and child-rearing duties long enough to consider hypotheticals and to ruminate…on an idea or two. We may not recognize this as a luxury in our modern world, but we should.

Typical Americans don’t read lengthy articles. They: (brackets by the Wrongologist)

Get up far too early in the morning, after too little sleep, [and] work too hard for too long in a job that pays too little, before heading home, feeding the kids, cleaning the house, and collapsing into bed far too late. He or she has precious little time to consume news…maybe a two-minute newscast on the radio if they drive to work or a few minutes of local TV news…It is through this lens that typical Americans view the world beyond their personal experience and that of friends and family. It’s through this lens that they assess their government and judge their politicians.

Towhey says that these people elected Donald Trump.

We all know that there is a gap between the lifestyles, perspectives, and priorities of the most successful Americans and the “typical Americans.” The people who make the decisions that matter in America are, by definition, our political and business leaders — people who have been successful under the current system. They believe that the system works, because it has worked well for them.

The smart people that lead our politics believe the typicals don’t really know what’s best for them. The typicals want to end immigration, hoping it will increase wages, but we smarties know better. From Towhey:

A politician who promises to deliver the demands of an ignorant electorate is a “populist,” and that is a very bad thing. A politician who equivocates during the election, then does nothing to impede immigration, on the other hand, is a wise man skilled in the art of political campaigning and governance.

Typical Americans have always elected the smart people who call themselves Republicans or Democrats. After each election, the typicals wait for their lives to improve, but nothing changes. Most typical Americans don’t simply divide the world into Left and Right. Instead, they instinctively divide the world into things that affect them and things that don’t, things that help them, and things that won’t.

In 2016, the typicals decided that it was time to elect someone from outside the system. Maybe it won’t work out, but electing smart status quo types hadn’t worked out so well for typical Americans, so what did they have to lose?

(Tomorrow we will talk about the emerging political power group of middle class voters that Democrats need to satisfy if they want to remain relevant, the group that Towhey calls “pragmatists”.)

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Monday Wake Up Call – Totality Edition

“Mama always told me not to look into the eyes of the sun
Whoa, but mama, that’s where the fun is” – Bruce Springsteen

The Daily Escape:

“Diamond Ring” portion of a total solar eclipse, 2009 − photo by Rick Fienberg

Welcome to totality Monday. We live in a time when few things are certain, but eclipses are highly predictable. Some think that a total eclipse is awe-inspiring, and possibly, life changing. Count Wrongo as a non-believer, despite the fact that this is the first total eclipse in the continental US for 99 years.

Wrong advice? Go outside, but despite Springsteen’s thinking, do not look directly at it, unless you have the correct protective glasses. Get the flavor, and watch it later online.

Over the weekend, country singer Charlie Daniels compared the removal of Confederate statues in the US to ISIS’ demolition of historical sites in Iraq and Syria:

That’s what ISIS is doing over in places…there were pieces of history that they didn’t like, they were taking them down…

Wrongo had a similar thought, but lands in a completely different place. Everyone was appalled when the Taliban blew up the world’s two largest standing Buddhas in Afghanistan in March, 2001, six months before 9/11. We were also appalled when ISIS  rampaged through Iraq’s Mosul Museum with pickaxes and sledgehammers, and again, when they destroyed the Temple of Baalshamin in Palmyra, Syria in May, 2015.

The Muslim radicals claim the destruction of ancient sites is a religious imperative. They have targeted ancient sites, graves and shrines belonging to other Muslim sects as well as those of non-Muslims to conform to their religious beliefs. Most Americans regardless of politics or party, denounced what the Taliban and ISIS did to these antiquities.

Today, Americans are angrily divided about the removal of Confederate monuments. Is Charlie Daniels correct? Are those who would take down the statues no better than ISIS?

This is a false equivalency. ISIS is an extremist movement. Americans who want to remove Confederate statues are morally opposed to slavery, and understand that their goal will only be accomplished lawfully. Many have ancestors who were slaves, and feel that statues celebrating the Confederacy are morally wrong.

This debate has been hijacked by today’s white supremacists, white nationalists and American Nazis who say they wish only to “defend” the appropriateness of Confederate monuments in the public square. Their view is promoted by the “both sides do it” talking points in the media, by Donald Trump, and by Charlie Daniels.

The Taliban and ISIS destroy religious monuments and statues either because they are not Islamic, or because they were not their particular flavor of Islam. The push behind removal of Confederate statues comes from a different place. They symbolize the Secession, and Slavery. Those who would remove Confederate statues see the Confederates as people who placed preservation of the unjust economic system of slavery above the very idea of our nation.

ISIS destroyed antiquities, while the vast majority of Confederate statues were placed by neo-confederates less than 100 years ago to celebrate the Confederacy, an insurrection that lasted just four years. One similarity that Charlie Daniels missed is that ISIS and the neo-confederates both try to manipulate reality, one by building, the other by destroying, monuments and statues.

One stark difference is that ISIS cuts people’s heads off, and eats their livers. That isn’t the modus operandi of Americans who want the Confederate statues removed.

Charlie Daniels, wake up. Just because an idea flits through your mind is no reason to spew.

To help you reflect on all of this, hear the great Carlos Santana in collaboration with the Isley Brothers. Together, they have just released the album “Power Of Peace”. The album covers peace-and-love-themed songs such as “Higher Ground“, “Gypsy Woman”, “Mercy Mercy Me (The Ecology)”,What The World Needs Now is Love Sweet Love”, and others. Here are the Isleys and Santana with “Love, Peace and Happiness” originally by the Chambers Brothers:

 

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FCC Says America Doesn’t Need Fast Internet

The Daily Escape:

Gibraltar, looking toward the Atlantic, 2016 – photo by Wrongo

The FCC has just said that Americans might not need a fast home internet connection. Instead, mobile internet via a smartphone might be all the public needs. From Ars Technica:

The suggestion comes in the FCC’s annual inquiry into broadband availability. Section 706 of the Telecommunications Act requires the FCC to determine whether broadband (or more formally, “advanced telecommunications capability”) is being deployed to all Americans in a reasonable and timely fashion. If the FCC finds that broadband isn’t being deployed quickly enough to everyone, it is required by law to “take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market.”

Today’s Wrongologist column is for all of those people who said “both parties are the same, it doesn’t matter who you vote for”. Nothing like the “small government” folks at the FCC telling America what type of internet access we need.

During the Obama administration, the FCC determined that broadband wasn’t reaching Americans fast enough, particularly in rural areas. And, they did not consider mobile broadband to be a full replacement for a home (or “fixed”) internet connection via cable, fiber, or other technologies.

Last year, the FCC concluded that Americans needed BOTH home and mobile access:

34 million Americans, about 10% of the country, still lack access to fixed broadband at the FCC’s benchmark speed of 25Mbps for downloads, 3Mbps for uploads…

The FCC also concluded under then-Chairman Tom Wheeler that since home internet connections and smartphones have different capabilities and limitations, Americans should have access to both instead of just one or the other.

But now we have a Republican administration. Ajit Pai, the GOP’s new FCC Chairman, is poised to change that policy by declaring that mobile broadband with speeds of 10Mbps downstream and 1Mbps upstream is all anyone needs. This is a deep tongue kiss from the FCC to the broadband industry.

More from Ars Technica: (brackets by the Wrongologist)

This [Agit’s plan] would be the first time that the FCC has set a broadband speed standard for mobile; at 10Mbps/1Mbps, it would be less than half as fast as the FCC’s home broadband speed standard of 25Mbps/3Mbps.

In Europe you can now routinely get 250Mbps internet service, and higher speeds in parts of Asia. Good job FCC!

The changes were signaled in an FCC Notice of Inquiry, the first step toward completing a new analysis of broadband deployment. The document asks the public for comments on a variety of questions, including whether mobile broadband can substitute for fixed Internet connections.

Pai has previously made it clear that he thinks mobile broadband can substitute for fixed connections. In 2012, Pai’s first year as a member of the FCC board, he criticized the then-Democratic majority for concluding that mobile internet service can’t replace home Internet.

Those who work from home need faster speeds, and the number of “at home” workers is growing. Companies have learned that letting employees work from home gets them a lifestyle improvement by ending the weeks of their year spent commuting. Working from home also lets companies lower their commercial rents.

Consumer internet usage will increase. With the current costs of mobile data, an evening of Netflix delivered by smartphone will put the average US consumer over their data plan maximum. The data caps in most mobile plans are low, and the costs of overages are high. Reliability is another issue. The service is fragile in storms, and unstable under high volume usage, such as at large public gatherings.

Do you remember the good old days when we made fun of Russia and China for their quaint infrastructure? Now, Republicans are trying to pretend the future doesn’t exist.

Maybe America doesn’t need interstate highways, local roads might be good enough. Pai is playing to Trump voters: Why would they want anything faster than mobile? They get Trump’s Twitter feed, so what else to they need?

You don’t like this? Is it making you angry?

You should know what to do by now. Hint: It usually happens on a Tuesday.

Music appreciation: Today we hear “Hymn to Freedom” by the Oscar Peterson Trio. It was written in 1962 in support of the Civil Rights movement. Here it is live in Denmark in 1964, with Oscar Peterson on Piano, Ray Brown on Bass and Ed Thigpen on Drums:

Freedom from the FCC and the Ajit Pai’s of the world is what we need.

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

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Silicon Valley Will Escape the Revolution

The Daily Escape:

Waterfall Jumping Competition (from 69 feet up), Bosnia, August 5th – photo by Amel Emric

Antonio Garcia Martinez:

Every time I meet someone from outside Silicon Valley – a normy – I can think of 10 companies that are working madly to put that person out of a job…

Well, that makes most of us “normies”. In context, we are the people who do not work in Silicon Valley. We are the people who use technology, rather than invent technology, and many of us ought to see technology as a threat to our jobs and our place in society.

We are not in the beautiful peoples’ club. Our names are not on the list. We’re not software engineers who work just to pay the taxes on their company stock.

And who is this Martinez guy? From Mashable:

He’d sold his online ad company to Twitter for a small fortune, and was working as a senior exec at Facebook (an experience he wrote up in his best-selling book, Chaos Monkeys). But at some point in 2015, he looked into the not-too-distant future and saw a very bleak world, one that was nothing like the polished utopia of connectivity and total information promised by his colleagues.

Martinez pointed out that there are enough guns for every man, woman and child in this country, and they’re in the hands of people who would be hurt most by automation:

You don’t realize it but we’re in a race between technology and politics, and technologists are winning…

Martinez worries about how the combination of automation and artificial intelligence will develop faster than we expect, and that the consequences are lost jobs.

Martinez’s response was to become a tech prepper, another rich guy who buys an escape pod somewhere off the grid, where he thinks he will be safe from the revolution that he helped bring about. More from Mashable: (brackets by the Wrongologist)

So, just passing [after turning] 40, Antonio decided he needed some form of getaway, a place to escape if things turn sour. He now lives most of his life on a small Island called Orcas off the coast of Washington State, on five Walt Whitman acres that are only accessible by 4×4 via a bumpy dirt path that…cuts through densely packed trees.

He’s not alone. Reid Hoffman, co-founder of LinkedIn told The New Yorker earlier this year that around half of Silicon Valley billionaires have some degree of “apocalypse insurance.” Pay-Pal co-founder and venture capitalist Peter Thiel recently bought a 477-acre escape hatch in New Zealand, and became a Kiwi. Other techies are getting together on secret Facebook groups to discuss survivalist tactics.

We’ve got to expect that with AI and automation, our economy will change dramatically. We will see both economic and social disruption until we achieve some form of new equilibrium in 30 years or so.

It will be a world where either you work for the machines, or the machines work for you.

Robert Shiller, of the famous Case-Shiller Index, wrote in the NYT about the changing meaning of the “American Dream” from the 1930s where it meant:

…ideals rather than material goods, [where]…life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement…It is not a dream of motor cars and high wages merely, but a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable…

That dream has left the building, replaced by this:

Forbes Magazine started what it calls the “American Dream Index.” It is based on seven statistical measures of material prosperity: bankruptcies, building permits, entrepreneurship, goods-producing employment, labor participation rate, layoffs and unemployment claims. This kind of characterization is commonplace today, and very different from the original spirit of the American dream.

How will the “Normies” survive in a society that doesn’t care if you have a job? That refuses to provide a safety net precisely when it celebrates the progress of technology that costs jobs?

The Silicon Valley survivalists understand that, when this happens, people will look for scapegoats. And we just might decide that the techies are it.

Today’s music is “Guest List” by the Eels from the 1996 album “Beautiful Freak”:

 Takeaway Lyric:

Are you one of the beautiful people
Is my name on the list
Wanna be one of the beautiful people
Wanna feel like I’m missed

Are you one of the beautiful people
Am I on the wrong track
Sometimes it feels like I’m made of eggshell
And it feels like I’m gonna crack

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

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Trump’s Termites

The Daily Escape:

Missouri Breaks, MT – photo (via)

US Interior Secretary Ryan Zinke announced that there would be no change for the Missouri Breaks National Monument. Zinke is from Montana, so saving one for his peeps isn’t a big surprise.

Missouri Breaks is one of 27 monuments established during the previous 20 years by presidents using the Antiquities Act. The Antiquities Act allows presidents to set aside objects of historic or scientific interest to prevent their destruction. The law was created in 1906 to guard against looting of sacred American Indian sites.

In April, Trump ordered the Department of the Interior to review the status of every national monument designated since 1996. As a result of the review, these cultural and/or natural treasures could be significantly reduced in size or even eliminated, and the Antiquities Act itself could be severely limited. The land would remain owned by the federal government, but might lose its protected status, and be contracted to private enterprises. When you allow corporations to ‘lease’ land for oil, fracking, mining, ranching, etc. fences go up, private police forces are hired to keep people out for their ‘safety’.

Not everyone agrees that Trump has the authority to do what he wants. From the Washington Times:

If President Donald Trump or any successor desires the authority to revoke national monument designations, they should urge Congress to amend the Antiquities Act accordingly. They should not torture the plain language of the Act to advance a political agenda at the expense of regular constitutional order.

The LA Times disagrees:

Indeed, those who claim that the Antiquities Act does not grant a reversal power cannot find a single case in another area of federal law that supports that contention. To override the norm, legislators have to clearly limit reversal powers in the original law; the plain text of the Antiquities Act includes no such limits.

Who knows? Next, Der Donald will lease the Grand Canyon to China for use as a landfill.

But the bigger picture is that behind the smoke and mirrors of Trump’s pathological lying and the media’s obsession with Russia, his cabinet appointees are working like industrious termites, eating away much of the support beams of our nation’s rules-based edifice.

Consider Attorney General Jeff Sessions. From the New Yorker: (brackets and editing by the Wrongologist)

He [Sessions] has reversed the Obama Administration’s commitment to voting rights…He has changed an Obama-era directive to federal prosecutors to seek reasonable, as opposed to maximum, prison sentences for nonviolent drug offenders…he has revived a discredited approach to civil forfeiture, which subjects innocent people to the loss of their property. He has also backed away from the effort…to rein in and reform police departments, like the one in Ferguson, Missouri, that have discriminated against African-Americans.

Although candidate Trump promised to protect LGBT rights, President Trump last week vowed to remove transgender service members from the armed forces, and Sessions…took the position in court that Title VII, the nation’s premier anti-discrimination law, does not protect gay people from bias. Most of all, Sessions has embraced the issue that first brought him and Trump together: the crackdown on immigration…

All across the government, Trump appointees are busy chewing through the existing regulatory edifice, ending not just Obama-era rules, but others that have been in place for decades.

Another truly damning thing is Trump’s surrogates’ efforts to undermine foreign policy. The WaPo reports:

Trump signed off on Iran’s compliance with profound reluctance, and he has since signaled that when Iran’s certification comes up again — as it will every 90 days, per a mandate from Congress — he intends to declare Iran not in compliance, possibly even if there is evidence to the contrary.

According to the New York Times: (brackets by the Wrongologist)

American officials have already told allies they should be prepared to join in reopening negotiations with Iran or expect that the US may [unilaterally] abandon the agreement, as it did the Paris climate accord.

It is difficult to see how this ends well for the US. Imagine, Iran and North Korea both pursuing nuclear weapons to deploy against the US. Why would we want to engage on two fronts, when one (North Korea) is already so problematic?

What is the Trump agenda? Are there any articulated goals? What are the strategies to achieve them?

Have we heard a concrete proposal for any of his big ideas (health care, tax reform, or infrastructure)?

We have not, but his termites keep chewing, and soon, our whole building will be compromised.

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IMF Reports US Standard of Living is Falling

The Daily Escape:

Haleakala Crater, Maui

Is it the best of times or the worst of times? This is no longer a partisan discussion. We have an economy in the midst of a long expansion, the third longest since 1850. The statistics say we are close to full employment. But, our mortality rate is moving in the wrong direction, and we have an opioid epidemic that is serious enough to cause jobs to go unfilled. The NYT reports that in Youngstown Ohio, middle class factory jobs go begging:

It’s not that local workers lack the skills for these positions, many of which do not even require a high school diploma but pay $15 to $25 an hour and offer full benefits. Rather, the problem is that too many applicants — nearly half, in some cases — fail a drug test.

The Fed’s regular Beige Book surveys of economic activity across the country in April, May and July all noted the inability of employers to find workers able to pass drug screenings.

So the best of times? Probably not. Bloomberg reports that the International Monetary Fund (IMF) looked at the US economy. This is what they see:

For some time now there has been a general sense that household incomes are stagnating for a large share of the population, job opportunities are deteriorating, prospects for upward mobility are waning, and economic gains are increasingly accruing to those that are already wealthy. This sense is generally borne out by economic data and when comparing the US with other advanced economies.

The IMF then goes on to compare the US with 23 other advanced economies in the Organization for Economic Cooperation and Development (OECD) in this chart:

The chart is a bit of an eye test unless it’s viewed on a big monitor, but its overall point is that the US has been losing ground relative to its past OECD reports by several measures of living standards. 35 countries make up the OECD. The members include all of Western Europe, Russia, Japan, Australia, and several developing nations like Korea and Panama.

This from Bloomberg:

And in the areas where the US hasn’t lost ground (poverty rates, high school graduation rates), it was at or near the bottom of the heap to begin with. The clear message is that the US — the richest nation on Earth, as is frequently proclaimed, although it’s actually not the richest per capita — is increasingly becoming the developed world’s poor relation as far as the actual living standards of most of its population go.

This analysis is contained in the staff report of the IMF’s annual “consultation” with the U.S., which was published last week. The IMF economists haven’t turned up anything shocking or new, it’s just that as outsiders, they have a different perspective than what we hear from our politicians and economists.

For example:

Income polarization is suppressing consumption…weighing on labor supply and reducing the ability of households to adapt to shocks. High levels of poverty are creating disparities in the education system, hampering human capital formation and eating into future productivity.

What is to be done? Well, the IMF report concludes:

Reforms should include building a more efficient tax system; establishing a more effective regulatory system; raising infrastructure spending; improving education and developing skills; strengthening healthcare coverage while containing costs; offering family-friendly benefits; maintaining a free, fair, and mutually beneficial trade and investment regime; and reforming the immigration and welfare systems.

In other words, they suggest substantial reform. It’s doubtful that America can take care of these things anytime soon.

The subtext to most of their suggestions is that other affluent countries have found ways to improve in these areas, while the US has not. We don’t have to look too far into the past to see when those countries were modeling their economies on ours. But today, on all sorts of issues, like taxation, labor markets, health care, and education, the opposite is now true.

One major difference between the US and the rest of the developed world is ideological: Voters and politicians in the US are less willing to raise taxes to finance a better life for our citizens.

Other wealthy countries have figured out how to raise revenue, provide quality education, help the the unemployed, reduce poverty, and keep their citizens healthier than America has.

We must catch up, or admit our time as the world’s indispensable economy is over.

Today’s music (dis)honors the turmoil in the White House. See ‘ya Mooch! Remember that in just six months, Trump has gone through two National Security Advisers, two Chiefs of Staff, two Communications Directors, two Press Secretaries, and two Directors of the FBI.

Here is “Disorder in the House” by the late Warren Zevon and Bruce Springsteen:

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

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