The Mysteries of Leonardo’s Mona Lisas…

A nude sketch that bears a striking resemblance to the Mona Lisa may have been drawn by Leonardo da Vinci, experts have said.

Scientists at the Louvre in Paris, where the painting is held, have been examining a charcoal drawing known as the Monna Vanna, which had been attributed to the Florentine master’s studio.

The “nude” Mona Lisa

The Prado Mona Lisa

Read the story behind the history…Saving Mona Lisa

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Health Care Fantasies

A couple of articles today outlining how far apart from reality are the pro and con arguments for different possible reforms. This is going to matter at some point soon, if not now.

Socialized Medicine Has Won the Health Care Debate

The first article, by Sarah Jaffe published in The New Republic, suggests that “socialized” healthcare has won the policy debate. Citing opinion polls (for which all questions display a certain bias), the author claims that the American public favors government-run socialized medicine. (Here’s a good example of survey bias: “Do you favor free healthcare for all?” – How many No’s do you think that question elicits?)

Ms. Jaffe explains away Obamacare’s unpopularity with this, “What people don’t like are the inequities that still prevail in our health care system, not the fact that “government is too involved. …The law didn’t go too far for Americans to get behind. It didn’t go far enough. And while single-payer opponents continue to evoke rationed care, long lines and wait times, and other problems that supposedly plague England or Canada, the public seems well aware that the reality for many Americans is far worse.”

Really?

What’s more, what makes her think that government control removes inequalities rather than make them worse according to different selection criteria?

Finally, she proclaims, “This is now an American consensus. And if socialism is the medicine our system needs, the country is ready to embrace it—even by name.”

At no point does Ms. Jaffe discuss the associated costs, who is going to pay them, and what kind of trade-offs this will impose on citizens and taxpayers. This is an argument motivated by political ideology, not reality.

***

This brings us to the second article, by Sally Pipes in Investor’s Business Daily (this should give us a clue that Pipes actually plans to address money issues).

Sanders’ Single-Payer Fairy Tale

Ms. Pipes first gives us an indication of polling bias: “The idea is … enchanting ordinary Americans. Fifty-three percent support single payer, according to a June 2017 poll from the Kaiser Family Foundation. But this supposed support is a mirage. According to the same Kaiser poll, 62% would oppose single-payer if it gave the government too much power over health care. Sixty percent would reject it if it increased taxes.”

Sen. Sanders estimates that “Medicare for all” would cost an extra $14 trillion over 10 years, while the Urban Institute’s analysis of the plan puts the figure at $32 trillion. Our current annual health spending is $3.2 trillion, so Medicare at minimum would double that spending level, with no viable way to pay for it, with taxes or otherwise.

Medicare for the 65+ crowd is already a deficit buster, so the nation will not be affording such care for the entire population and promises to do so are a dangerous fantasy. We do know what will happen – the “free” care we expect will never be delivered and the politicians who sell such snake oil will be long gone.

The real problem with our health care debates is that they focus solely on distribution and not on the real problem, which is adequate supply. If no one is producing health care goods, what is there to distribute?

Constitutional Crisis?

The following was a provocative essay published in the NYTimes. Since it touches on the nexus of economics and politics, I deemed it an appropriate topic for this blog.

Our Constitution was not built for a country with so much wealth concentrated at the very top nor for the threats that invariably accompany it: oligarchs and populist demagogues.

No. It wasn’t.

But we can never seem to anchor our attention on the true determinants of economic power. The distribution of wealth is tilted toward those who control society’s primary productive resources. In feudal and agrarian societies it is land; in industrial and post industrial societies it is energy and finance capital; in the information society it is information data and finance capital.

The imperative for a liberal democracy is to democratize land, to democratize finance, and, especially in the 21st century, to democratize big data. There are trade-offs implied (especially the necessary democratization of investment risk), but the objective must be liberty and justice, not national wealth, because sustainable wealth is only derived from liberty and justice.

Aside from economic inequality there is a related but different plague upon the body politic these days. That is the anti-democratic ideology of identity politics and multiculturalism. These ideologies probably arose as a response to the frustration of economic inequality and power that demanded a division into victims and victimizers. The victimizers, of course, were corporate, white, and male, while the victims were all other identity groups not so defined: ethnic and racial minorities, women, LBGTs, etc.

But a constitution based on compromise through participation cannot possibly manage identity groups based on biology and genetics.  There is no compromising our biological identity, there are only zero-sum battles with winners and losers. Thus, the rule of the victimizers must be torn down, though it cannot end there. Coalitions of identity groups do not hold together after the common enemy has been vanquished, so they turn on each other until we see the complete Balkanization of democratic polities.

We will need to solve both these problems – economic inequality and identity Balkanization – in order for our democracy to restore itself and guarantee liberty and justice for all. Unfortunately this professor, and most of our political leaders in the oligarchy, don’t really have any promising ideas about how to go about that.

There are other things the Constitution wasn’t written for, of course. The founders didn’t foresee America becoming a global superpower. They didn’t plan for the internet or nuclear weapons. And they certainly couldn’t have imagined a former reality television star president. Commentators wring their hands over all of these transformations — though these days, they tend to focus on whether this country’s founding document can survive the current president.

But there is a different, and far more stubborn, risk that our country faces — and which, arguably, led to the TV star turned president in the first place. Our Constitution was not built for a country with so much wealth concentrated at the very top nor for the threats that invariably accompany it: oligarchs and populist demagogues.

From the ancient Greeks to the American founders, statesmen and political philosophers were obsessed with the problem of economic inequality. Unequal societies were subject to constant strife — even revolution. The rich would tyrannize the poor, and the poor would revolt against the rich.

The solution was to build economic class right into the structure of government. In England, for example, the structure of government balanced lords and commoners. In ancient Rome, there was the patrician Senate for the wealthy, and the Tribune of the Plebeians for everyone else. We can think of these as class-warfare constitutions: Each class has a share in governing, and a check on the other. Those checks prevent oligarchy on the one hand and a tyranny founded on populist demagogy on the other.

What is surprising about the design of our Constitution is that it isn’t a class warfare constitution. Our Constitution doesn’t mandate that only the wealthy can become senators, and we don’t have a tribune of the plebs. Our founding charter doesn’t have structural checks and balances between economic classes: not between rich and poor, and certainly not between corporate interests and ordinary workers. This was a radical change in the history of constitutional government.

And it wasn’t an oversight. The founding generation knew how to write class-warfare constitutions — they even debated such proposals during the summer of 1787. But they ultimately chose a framework for government that didn’t pit class against class. Part of the reason was practical. James Madison’s notes from the secret debates at the Philadelphia Convention show that the delegates had a hard time agreeing on how they would design such a class-based system. But part of the reason was political: They knew the American people wouldn’t agree to that kind of government.

At the time, many Americans believed the new nation would not be afflicted by the problems that accompanied economic inequality because there simply wasn’t much inequality within the political community of white men. Today we tend to emphasize how undemocratic the founding era was when judged by our values — its exclusion of women, enslavement of African-Americans, violence against Native Americans. But in doing so, we risk missing something important: Many in the founding generation believed America was exceptional because of the extraordinary degree of economic equality within the political community as they defined it.

Unlike Europe, America wasn’t bogged down by the legacy of feudalism, nor did it have a hereditary aristocracy. Noah Webster, best known for his dictionary, commented that there were “small inequalities of property,” a fact that distinguished America from Europe and the rest of the world. Equality of property, he believed, was crucial for sustaining a republic. During the Constitutional Convention, South Carolinan Charles Pinckney said America had “a greater equality than is to be found among the people of any other country.” As long as the new nation could expand west, he thought, it would be possible to have a citizenry of independent yeoman farmers. In a community with economic equality, there was simply no need for constitutional structures to manage the clash between the wealthy and everyone else.

The problem, of course, is that economic inequality has been on the rise for at least the last generation. In 1976 the richest 1 percent of Americans took home about 8.5 percent of our national income. Today they take home more than 20 percent. In major sectors of the economy — banking, airlines, agriculture, pharmaceuticals, telecommunications — economic power is increasingly concentrated in a small number of companies. [Don’t we need to discuss why before we embark on solutions?]

While much of the debate has been on the moral or economic consequences of economic inequality, the more fundamental problem is that our constitutional system might not survive in an unequal economy. Campaign contributions, lobbying, the revolving door of industry insiders working in government, interest group influence over regulators and even think tanks — all of these features of our current political system skew policy making to favor the wealthy and entrenched economic interests. “The rich will strive to establish their dominion and enslave the rest,” Gouverneur Morris observed in 1787. “They always did. They always will.” An oligarchy — not a republic — is the inevitable result.

As a republic descends into an oligarchy, the people revolt. Populist revolts are rarely anarchic; they require leadership. [See Trump AND Sanders.] Morris predicted that the rich would take advantage of the people’s “passions” and “make these the instruments for oppressing them.” The future Broadway sensation Alexander Hamilton put it more clearly: “Of those men who have overturned the liberties of republics, the greatest number have begun their career by paying an obsequious court to the people: commencing demagogues, and ending tyrants.”

Starting more than a century ago, amid the first Gilded Age, Americans confronted rising inequality, rapid industrial change, a communications and transportation revolution and the emergence of monopolies. Populists and progressives responded by pushing for reforms that would tame the great concentrations of wealth and power that were corrupting government.

On the economic side, they invented antitrust laws and public utilities regulation, established an income tax, and fought for minimum wages. On the political side, they passed campaign finance regulations and amended the Constitution so the people would get to elect senators directly. They did these things because they knew that our republican form of government could not survive in an economically unequal society. As Theodore Roosevelt wrote, “There can be no real political democracy unless there is something approaching an economic democracy.”

For all its resilience and longevity, our Constitution doesn’t have structural checks built into it to prevent oligarchy or populist demagogues. It was written on the assumption that America would remain relatively equal economically. Even the father of the Constitution understood this. Toward the end of his life, Madison worried that the number of Americans who had only the “bare necessities of life” would one day increase. When it did, he concluded, the institutions and laws of the country would need to be adapted, and that task would require “all the wisdom of the wisest patriots.”

With economic inequality rising and the middle class collapsing, the deep question we must ask today is whether our generation has wise patriots who, like the progressives a century ago, will adapt the institutions and laws of our country — and save our republic.

Ganesh Sitaraman, a professor at Vanderbilt Law School, is the author of “The Crisis of the Middle-Class Constitution: Why Economic Inequality Threatens Our Republic.”

G–gle Culture

DO NO EVIL

 

These excerpts are from a recent online interview by Stefan Molyneux of the fired Google employee James Damore explaining himself:

Generally, I just really like understanding things,” he said about his reasons for compiling his argument. “And recently, through interactions with people, I have noticed how different political ideologies divide us in many ways. I wanted to understand what was behind all that.”

“I read a lot into Jonathan Haidt’s work, a lot about what exactly is the philosophy behind all of these things. And that led me to the beginning of the document,” he explained. 

He described his crystallizing moment as: “I could see that all of us are really blind to the other side, so in these environments where everyone is in these echo chambers just talking to themselves, they are totally blind to so many things.We really need both sides to be talk to each other about these things and trying to understand each other.” 

He critiques both the left and right for not working together: “The easiest way of understanding the left is: It is very open, it is looking for changes. While the right is more closed, and wants more stability. There are definitely advantages to both of those. Sometimes there are things that need to change, but you actually need a vision for what you want. There is value in tradition, but not all traditions should be how they are.”

“We create biases for ourselves. This is particularly interesting, when we talk about how it relates to reality,” he said.

“Both sides are biased in a way, they have motivated reasoning to see what they want out of a lot of things,” he continued. 

This happens a lot in social science, where it is 95% leaning to the left. And so they only study what they want, and they only see the types of things that they want, and they really aren’t as critical of their own research as much as they should. The popular conception is that the right doesn’t understand science at all, that the right is anti-science. It is true that they often deny evolution and climate science, climate change, but the left also has its own things that it denies. Biological differences between people — in this case, sex differences,” he explained. 

He described the experience of diversity training at Google, which inspired him to write: “I heard things I definitely disagreed with in some of the programs. I had some discussions with people there, but there was a lot of just shaming. ‘No you can’t say that, that’s sexist, you can’t do this.’ There is so much hypocrisy in a lot things they are saying. I decided to just create the document just to clarify my thoughts.

I have often recommended Jon Haidt’s research presented in his book, The Righteous Mind. It’s worth a read because much of what is happening in social and political discourse these days reflects a psychological pathology that should be completely unnecessary. But getting out of our own way in politics is a difficult challenge.

I find nothing particularly mendacious about Mr. Damore’s document or his intentions to clarify what is basically an empirical puzzle concerning gender differences. Of course, this was all blown way out of proportion because it challenges some unscientific political agenda.

As a scientist, I assume that all empirical phenomena should be open to skepticism and challenges. I’m not sure how we progress intellectually any other way. The attack on Mr. Damore is an attack on science and for me can only reveal an indefensible political agenda. This is sad, if not dangerous, to say the least.

My own approach in this blog has been to suggest analytical frameworks to help understand how human behavior aggregates up into social behavior that defines our civilization; past, present and future (see Common Cent$). The universe is constantly changing, and survival depends on successful adaptation. Unsuccessful adaptation leads to extinction. Thus, the problem for all species is how to successfully adapt.

It seems to me our knowledge-base in the biological and social sciences, and in the arts and humanities can help us humans out here and I can’t understand why anyone who wants to survive would ignore or discount anything we can learn from that wealth of knowledge. Yet, some would choose to ignore anything that might challenge their world-view, even when they know it is false. G–gle seems to have succumbed to that pressure. That’s a shame, but not a path any of us have to accept.

What’s G–gle’s motto again?

 

 

 

 

Economic Inequality??

One can easily misrepresent or exaggerate reality with a few select statistics and come to conveniently chosen conclusions. This doesn’t really help the conversation.

The distribution of wealth and income has become a social, economic, and political problem in recent decades. And not only in the US. But the question is why and what to do about it.

First, we should notice the timeframe of the comparison: 1980 vs. 2014. During these years there has been a massive credit bubble with low to zero interest rates and low inflation, especially over the past 16 years. This has disproportionately rewarded asset holders and debt-driven consumption and the income shares in industries associated with that, like FIRE.

The cheap credit has also led to massive investments in technology and biotech, where income levels have far exceeded those in other industries. This is not necessarily a bad thing, especially for aggregate growth, but it does have distributional consequences for wealth and income. Globalization, through outsourcing, trade and labor migration, has also served to keep labor costs low in developed nations.

So, what to make of this? I would have differences with the suggestions of the author as stated here:

Different policies could produce a different outcome. My list would start with a tax code that does less to favor the affluent, a better-functioning education system, more bargaining power for workers and less tolerance for corporate consolidation. 

First, the problem with the tax code is that it creates barriers for asset accumulation for those without assets. In other words, it favors the haves over the wannabes, even if the wannabes are more deserving. So we need to reduce those barriers. Not by making it harder to get rich, but by making it harder to stay rich and idle sitting on assets that have ballooned in value through no effort on the owners of those assets. Thus, we should look more toward wealth taxes as opposed to income or capital taxes. We should also make capital taxes more progressive so that the have-nots are not doomed to remain so. Have you seen your interest on savings lately?

Second, a better functioning education system is always a deserved policy priority, but it won’t fix this income distribution problem. The cost of education is becoming prohibitive and elitism is turning top universities, where costs are in the stratosphere, into branding agents rather than educating institutions. In other words, the Ivy League degree is more valuable as a signalling device than anything a student may or may not have learned there. Thus we are biasing favoritism over meritocracy.

Third, the focus on wages and organized labor is completely misguided.  Most workers in growth industries in the 21st century eschew labor unions in favor of equity participation and risk-taking entrepreneurship. Does that mean manufacturing labor has no future? Not at all. But it should be bargaining for equity in addition to a base wage. Competing solely on wages means workers are competing with the global supply of labor, which is a losing proposition for developed countries’ workers.

The inability of policymakers to see clearly how the world has changed and how ownership and control structures must adapt to the information economy leads them towards the rabbit hole of universal basic incomes, which fundamentally is a universal welfare program to support consumption. One thing we’ve learned over the past 60 years is that nobody wants welfare, but many become addicted to it. It’s not a solution or even a short-term fix.

Refer to the NYT website link to view the graphs…

Many Americans can’t remember anything other than an economy with skyrocketing inequality, in which living standards for most Americans are stagnating and the rich are pulling away. It feels inevitable.

But it’s not.

 

A well-known team of inequality researchers — Thomas Piketty, Emmanuel Saez and Gabriel Zucman — has been getting some attention recently for a chart it produced. It shows the change in income between 1980 and 2014 for every point on the distribution, and it neatly summarizes the recent soaring of inequality.

 

The line on the chart (which we have recreated as the red line above) resembles a classic hockey-stick graph. It’s mostly flat and close to zero, before spiking upward at the end. That spike shows that the very affluent, and only the very affluent, have received significant raises in recent decades.

 

This line captures the rise in inequality better than any other chart or simple summary that I’ve seen. So I went to the economists with a request: Could they produce versions of their chart for years before 1980, to capture the income trends following World War II. You are looking at the result here.

The message is straightforward. Only a few decades ago, the middle class and the poor weren’t just receiving healthy raises. Their take-home pay was rising even more rapidly, in percentage terms, than the pay of the rich.

 

The post-inflation, after-tax raises that were typical for the middle class during the pre-1980 period — about 2 percent a year — translate into rapid gains in living standards. At that rate, a household’s income almost doubles every 34 years. (The economists used 34-year windows to stay consistent with their original chart, which covered 1980 through 2014.)

 

In recent decades, by contrast, only very affluent families — those in roughly the top 1/40th of the income distribution — have received such large raises. Yes, the upper-middle class has done better than the middle class or the poor, but the huge gaps are between the super-rich and everyone else.

 

The basic problem is that most families used to receive something approaching their fair share of economic growth, and they don’t anymore.

 

It’s true that the country can’t magically return to the 1950s and 1960s (nor would we want to, all things considered). Economic growth was faster in those decades than we can reasonably expect today. Yet there is nothing natural about the distribution of today’s growth — the fact that our economic bounty flows overwhelmingly to a small share of the population.

 

Different policies could produce a different outcome. My list would start with a tax code that does less to favor the affluent, a better-functioning education system, more bargaining power for workers and less tolerance for corporate consolidation.

 

Remarkably, President Trump and the Republican leaders in Congress are trying to go in the other direction. They spent months trying to take away health insurance from millions of middle-class and poor families. Their initial tax-reform planswould reduce taxes for the rich much more than for everyone else. And they want to cut spending on schools, even though education is the single best way to improve middle-class living standards over the long term.

 

Most Americans would look at these charts and conclude that inequality is out of control. The president, on the other hand, seems to think that inequality isn’t big enough.

Culture Wars or Something Else?

Well, not really. See comments below. From London’s The Economist:

Bagehot

The culture wars arrive in Britain

The election reveals astonishing changes in the political landscape

Jun 9th 2017

BREXIT was supposed to let Britain be Britain. Disentangled from the European Union, its island race would rediscover its native genius and embrace a unique mixture of nationalism and globalism. In fact this election suggests that something different is happening: divided and stunned by Brexit, Britain is turning into America.

Over the past 30 years American politics has been transformed from the politics of class into the politics of values. [No. Not really, that’s the media and party narrative.] In the 1970s the Republicans were broadly the party of the rich and rising and the Democrats were the party of blue-collar workers. Thereafter, values edged out class. Ronald Reagan brought blue-collar Democrats into the Republican Party by emphasising traditional values. George H.W. Bush used the “three Gs”—God, guns and gays—to strengthen his hold on blue-collar voters. Under George W. Bush America descended into a full-scale culture war: the Republicans put together a coalition of Evangelicals, working-class conservatives and business people and the Democrats responded with a coalition of knowledge workers, ethnic minorities and social liberals. [Blogger’s Note: No, the Democrats put together their Great Society rainbow coalition after the 1968 Convention in Chicago and in 1972 chose George McGovern as their candidate. Nixon responded with his Southern strategy.]

The cultural division has fed into a generational division: younger voters, particularly unmarried women, have gravitated to the Democrats. It has also fed into a regional division. The Republican Party thrived in the provinces (the suburbs, exurbs and rural America) while the Democratic Party thrived in the cities. There was also a growing division between the Democratic coasts and the Republican heartland and between the Republican South and the more Democratic north-east.

This election suggests that Britain is moving rapidly in the same direction. Look at the electoral map through the prism of class and the picture looks confused. The Tory party has held onto its wealthy heartlands in the rural shires. It has lost other rich areas in the cities, such as Battersea in London. It has also increased its vote share in some working-class areas, and taken some traditional Labour seats such as Derbyshire North-East and Stoke-on-Trent South. The Labour Party has made striking advances in some wealthy places: London and several other cities, particularly university towns. It has had a more mixed performance in working-class areas.

Look at it through the prism of values and the election makes sense. The Tories have been the party of old-fashioned British values: patriotism, self-determination and suspicion of foreigners—especially when they are trying to tell them what to do. These values have united middle-class people in the shires with older working-class people in the post-industrial north. Labour, meanwhile, has been the party of cosmopolitan values: multiculturalism, compassion, dislike of Brexit. These values have united people who might otherwise have little in common: devout Muslims in Perry Barr, Birmingham; struggling students in Newcastle; millionaire human-rights lawyers in Islington; train drivers in Dagenham.

The value division is also a regional division. The Labour Party has thrived in big cities. Jeremy Corbyn’s Labour Party is above all the party of London: Mr Corbyn represents Islington North, Emily Thornberry, his shadow foreign secretary, represents the next-door seat. At the same time the Conservatives have retreated: Justine Greening, the education secretary, saw her majority in Putney slashed from 10,000 to 1,000 and Jane Ellison, the financial secretary to the treasury, lost her Battersea seat. But even as they retreated in the metropolis, the Conservatives have taken some unexpected seats in post-industrial Britain.

The rise of values politics is rife with paradoxes. The Tory party calculated that this new type of politics would favour the right—Theresa May deliberately stirred the pot by telling the 2016 Conservative Party conference that “If you believe you’re a citizen of the world, you’re a citizen of nowhere. You don’t understand what the very word ‘citizenship’ means”. Nicholas Timothy, her co-chief-of-staff and policy guru, believed that the Tories could win over working-class voters by talking about traditional values and patriotism. But the Party failed to recognise that talking about “citizens of nowhere” might do more to repel middle-class voters than to attract working-class ones. The Labour Party is led by two Marxists: Mr Corbyn and John McDonnell, his shadow chancellor, who believe in the materialist interpretation of history. Yet they now preside over a coalition of voters defined overwhelmingly by their shared values.

The value of nothing
The fact that this was a values election is underlined by one of the many oddities of the contest: the absence of any role for business. Business has traditionally been one of the Conservative Party’s most loyal constituencies. The Tory party touts itself as the party of business, boasting of its record of low taxes, job creation and light-touch regulation, and the business community responds by strongly backing it. Not this time. The Tories borrowed most of Ed Miliband’s “business-bashing” ideas from Labour’s 2015 manifesto, including putting caps on energy prices, workers on boards and a ceiling on executive pay. Mrs May’s stinging dismissal of “citizens of nowhere” was directed as much at the Davos crowd as anybody. Business remained more or less silent—partly, no doubt, because nobody likes being bashed by their former allies but, more importantly, because British business is profoundly worried about Brexit. Mrs May’s insistence that immigration can be reduced to the tens of thousands and that no deal is better than a bad deal threatens to drive a wedge between the Tory party and its most loyal constituency.

The politics of values can be exciting. Values stir up emotions in ways that technocratic issues never do. But it can also be dangerous. The example of American politics over the past few decades is depressing. The culture wars have divided the country into tribes that won’t speak to each other. It has made it much more difficult—and sometimes impossible—to address pressing issues such as the Budget. And it has led to a decline in the quality of political life: the Republican Party’s enthusiasm for using cultural issues to recruit downscale voters has led inexorably to Donald Trump, a president who thrives on dividing the country and indulging in cheap demagoguery. Britain is taking its first steps down a dangerous path. [Blogger’s Note: No, these trends are the inevitable result of identity politics practiced by both parties but at the heart of the Left/Liberal parties.There is no compromise at the end of the road of identity politics and that is the tragedy for democracy we are witnessing today.]

 ——————–
My comment:

First, the American “culture war” is a bit of a sideshow that started back in the 1960s, politically with the Great Society programs and the anti-war McGovernites redirecting the Democrat party of JFK. The thrust of this movement was to define the Democrats as a coalition of diverse identity groups: by race, ethnicity, gender, and sexual preference. Nixon’s targeting of the traditional South came after Johnson targeted urban minorities, promising that if they were going to vote, he wanted to be sure they voted Democrat despite the party’s “apartheid” history.

Second, what we see today is not really the inevitable extension of this “culture war,” but a bifurcation of democracy based on policy preferences associated with geography and household formation. This bifurcation is actually dividing us over the disparate effects of globalization, migration, and technology that is loosely associated with where one lives and how one fits into the digital information economy. Most obviously the division is between urban vs. rural/suburban communities and one can see this in the national voting patterns from 2000 onward.

Third, to perceive this accurately one must analyze voting at the county and congressional district level and compare it to demographic variables. What one finds is that 2/3s of the results can be explained by population density and household formation (married vs. not married). But classifying these differences as cultural often becomes a self-fulfilling prophecy and the urban media and political parties have promoted this divide-and-conquer narrative to gain eyeballs and win elections.

Finally, average citizens are starting to see through this charade and are voting against “politics as usual,” by registering their protests with the likes of Bernie Sanders, Donald Trump, Marine Le Pen, and James Corbyn. These candidates are not a cause, but a symptom of the deeper fissures mentioned above, which result from the malicious application of identity politics to a changing world. There is no compromise at the end of the road of identity politics and that is the tragedy for democracy we are witnessing today.

Healthcare Mythologies

First, I will disclose I am no expert on the health care industry, but I am somewhat of an expert on finance theory applied to risk management and insurance pooling. The political healthcare debate is so disconcerting that it’s impossible to sit by and watch without trying to inject some reason. Sorry.

We need health care reform, we’ve needed it for about 20 years now, but it matters what kind of reform we get. Here are two excerpts from recent articles written by Stephen Moore of the Heritage Foundation and Holman Jenkins Jr. of the WSJ that illustrate some of the uncomfortable truths.

First, we need to deal with some reality concerning the Affordable Care Act, aka ObamaCare:

Almost every promise made eight years ago about ObamaCare turned out to be a falsehood. You couldn’t keep your insurance plan, doctor or provider in many cases. It didn’t save $2,500 per family (more like $2,500 more). It didn’t lead to expanded patient choice. And the tax increases badly hurt the economy and jobs market, and the insurance markets really have entered a death spiral that if left unfixed will blow-up the entire insurance market.

The fundamental lie of ObamaCare is revealed in the law’s very title: The Affordable Care Act. Democrats and Barack Obama can sing the praises of this law until the cows come home, but no one with a straight face can say that it has made healthcare more “affordable” — except the millions whom we gave coverage to for free.

So, unless one believes in the “economics of free,” we’ve got a problem here and it’s written into the faulty logic of the plan.

Second, the way out of this quagmire is not going to be led by Bernie Sanders doubling and quadrupling down on “free.” Mr. Jenkins speaks an inconvenient truth:

Down this road [of reform] lies hope that Americans will stop channeling extravagant gobs of their income to the medical-industrial complex. Down this road Medicare could be rethought, perhaps with rational Democrats lending a hand. We know these things will have to happen anyway. Otherwise the country is bankrupt.

P.S. Don’t kid yourself that Democrats have a plan other than blindly defending more and more subsidies for more and more health-care consumers. Single-payer is not a plan. It’s an invitation for the health-care industry—doctors, hospitals, the research establishment—simply to turn their full attention to serving the self-paying rich.

So, as far as I can see, the AHCA is not perfect, but it is a step in the right direction. Do I believe this because I’m partisan? No. A healthcare market can only function to deliver a high-quality, affordable product if there is an abundant supply to meet the desired need/demand. Only a functioning consumer-product market can provide that supply at an efficient price. Yes, we need a safety net for pre-existing conditions and we need to save more for future medical needs. We’ll only be able to do that if we give up the fantasy that health care is a right to be provided “free” from the government.

Lastly, in economics we learn that everything in life is a trade-off. We need to figure out what kinds of trade-offs we want to make, individually and as a society.

The Presumptuousness of Urban Blue America

I had to post this article because it is just too much on the money. There is an historical equilibrium between rural, suburban, and urban life-style preferences in this country – there is no long-term trend in either direction. Our politics mostly reflect that – not the red-blue, sub-cultural civil war nonsense propagated by most of the media.

But for me the truly amusing irony of the self-righteousness of urban blue liberalism is that it turns traditional Marxism on its head. Urban sophisticates who empathize with Bernie/Warren-style socialism now claim that the rural periphery is exploiting the good will of the urban core. “We create all the wealth! We attract all the educated elites! We work and subsidize the ignorant bumpkins!”

This is the exact opposite of how Marx and the neo-Marxists claimed that the capitalist core was exploiting the workers and consumers who lived on the periphery of the capitalist market economy. Today’s neo-Marxist liberal urban sophisticates now claim the opposite to justify their deserved political dominance. Certainly one can see that their presumptuousness is akin to blaming the European colonies for the burdens of their European colonists! Workers of the World, Unite! Well, they have and voted for Trump. Rich.
Now what?

Of course, Marx and the new unwitting anti-Marxists are both half right and half wrong. Periphery and core are co-dependent in a free market economy: imagine Silicon Valley without its Internet users across the 50 states. What is necessary is that the market be free, open, and competitive so that coercive power does NOT determine distributive outcomes. Because humans are power-hungry, that, admittedly, is a persistent challenge.

Outside the Bubble

The Arrogance of Blue America

If you want to see the worst impacts of blue policies, go to those red regions—like upstate New York or inland California—in states they control.

Joel Kotkin

04.29.17 10:00 PM ET

In the wake of the Trumpocalypse, many in the deepest blue cores have turned on those parts of America that supported the president’s election, developing oikophobia—an irrational fear of their fellow citizens.

The rage against red America is so strong that The New York Time’s predictably progressive Nick Kristoff says his calls to understand red voters were “my most unpopular idea.” The essential logic—as laid out in a particularly acerbic piece in The New Republic—is that Trump’s America is not only socially deplorable, but economically moronic as well. The kind-hearted blue staters have sent their industries to the abodes of the unwashed, and taken in their poor, only to see them end up “more bitter, white, and alt-right than ever.”

The red states, by electing Trump, seem to have lost any claim on usually wide-ranging progressive empathy. Frank Rich, theater critic turned pundit, turns up his nose at what he calls “hillbilly chic.” Another leftist author suggests that working-class support for Brexit and Trump means it is time “to dissolve” the “more than 150-year-old alliance between the industrial working class and what one might call the intellectual-cultural Left.”

The fondest hope among the blue bourgeoise lies with the demographic eclipse of their red-state foes. Some clearly hope that the less-educated “dying white America,“ already suffering shorter lifespans, in part due to alcoholism and opioid abuse, is destined to fade from the scene. Then the blue lords can take over a country with which they can identify without embarrassment.

Marie Antoinette Economics

In seeking to tame their political inferiors, the blue bourgeoisie are closer to the Marie Antoinette school of political economy than any traditional notion of progressivism. They might seek to give the unwashed red masses “cake” in the form of free health care and welfare, but they don’t offer more than a future status as serfs of the cognitive aristocracy. The blue bourgeoisie, notes urban analyst Aaron Renn, are primary beneficiaries of “the decoupling of success in America.” In blue America, he notes, the top tiers “no longer need the overall prosperity of the country to personally do well. They can become enriched as a small, albeit sizable, minority.”

Some on the left recognize the hypocrisy of progressives’ abandoning the toiling masses. “Blue state secession is no better an idea than Confederate secession was,” observes one progressive journalist. “The Confederates wanted to draw themselves into a cocoon so they could enslave and exploit people. The blue state secessionists want to draw themselves into a cocoon so they can ignore the exploited people of America.”

Ironically, many of the most exploited people reside in blue states and cities. Both segregation and impoverishment has worsened during the decades-long urban “comeback,” as even longtime urban enthusiast Richard Florida now notes. Chicago, with its soaring crime rates and middle class out-migration, amidst a wave of elite corporate relocations, epitomizes the increasingly unequal tenor of blue societies.

In contrast the most egalitarian places, like Utah, tend to be largely Trump-friendly. Among the 10 states (and D.C.) with the most income inequality, seven supported Clinton in 2016, while seven of the 10 most equal states supported Trump.

If you want to see worst impacts of blue policies, go to those red regions—like upstate New York—controlled by the blue bourgeoise. Backwaters like these tend to be treated at best as a recreational colony that otherwise can depopulate, deindustrialize, and in general fall apart. In California, much of the poorer interior is being left to rot by policies imposed by a Bay Area regime hostile to suburban development, industrial growth, and large scale agriculture. Policies that boost energy prices 50 percent above neighboring states are more deeply felt in regions that compete with Texas or Arizona and are also far more dependent on air conditioning than affluent, temperate San Francisco or Malibu. Six of the 10 highest unemployment rates among the country’s metropolitan areas are in the state’s interior.

Basic Errors in Geography

The blue bourgeoisie’s self-celebration rests on multiple misunderstandings of geography, demography, and economics. To be sure, the deep blue cites are vitally important but it’s increasingly red states, and regions, that provide critical opportunities for upward mobility for middle- and working-class families.

The dominant blue narrative rests on the idea that the 10 largest metropolitan economies represents over one-third of the national GDP. Yet this hardly proves the superiority of Manhattan-like density; the other nine largest metropolitan economies are, notes demographer Wendell Cox, slightly more suburban than the national major metropolitan area average, with 86 percent of their residents inhabiting suburban and exurban areas.

In some of our most dynamic urban regions, such as Phoenix, virtually no part of the region can be made to fit into a Manhattan-, Brooklyn-, or even San Francisco-style definition of urbanity. Since 2010 more than 80 percent of all new jobs in our 53 leading metropolitan regions have been in suburban locations. The San Jose area, the epicenter of the “new economy,” may be congested but it is not traditionally urban—most people there live in single-family houses, and barely 5 percent of commuters take transit. Want to find dense urbanity in San Jose? You’ll miss it if you drive for more than 10 minutes.

Urban Innovation

The argument made by the blue bourgeoisie is simple: Dense core cities, and what goes on there, is infinitely more important, and consequential, than the activities centered in the dumber suburbs and small towns. Yet even in the ultra-blue Bay Area, the suburban Valley’s tech and STEM worker population per capita is twice that of San Francisco. In southern California, suburban Orange County has over 30 percent more STEM workers per capita than far more urban Los Angeles.

And it’s not just California. Seattle’s suburban Bellevue and Redmond are home to substantial IT operations, including the large Microsoft headquarters facility. Much of Portland’s Silicon Forest is located in suburban Washington County. Indeed a recent Forbes study found that the fastest-growing areas for technology jobs outside the Bay Area are all cities without much of an urban core: Charlotte, Raleigh Durham, Dallas-Fort Worth, Phoenix, and Detroit. In contrast most traditionally urban cities such as New York and Chicago have middling tech scenes, with far fewer STEM and tech workers per capita than the national average.

The blue bourgeois tend to see the activities that take place largely in the red states—for example manufacturing and energy—as backward sectors. Yet manufacturers employ most of the nation’s scientists and engineers. Regions in Trump states associated with manufacturing as well as fossil fuels—Houston, Dallas-Fort Worth, Detroit, Salt Lake—enjoy among the heaviest concentrations of STEM workers and engineers in the country, far above New York, Chicago, or Los Angeles.

Besides supplying the bulk of the food, energy, and manufactured goods consumed in blue America, these industries are among the country’s most productive, and still offer better paying options for blue-collar workers. Unlike a monopoly like Microsoft or Google, which can mint money by commanding market share, these sectors face strong domestic and foreign competition. From 1997-2012, labor productivity growth in manufacturing—3.3 percent per year—was a third higher than productivity growth in the private economy overall.

For its part, the innovative American energy sector has essentially changed the balance of power globally, overcoming decades of dependence on such countries as Saudi Arabia, Russia, and Venezuela. Agriculture—almost all food, including in California, is grown in red-oriented areas—continues to outperform competitors around the world.

Exports? In 2015, the U.S. exported $2.23 trillion worth of goods and services combined. Of the total, only $716.4 billion, or about a third, consisted of services. In contrast, manufactured goods accounted for 50 percent of all exports. Intellectual property payments, like royalties to Silicon Valley tech companies and entrepreneurs, amounted to $126.5 billion—just 18 percent of service exports and less than 6 percent of total exports of goods and services combined, barely even with agriculture.

Migration and the American Future

The blue bourgeoisie love to say “everyone” is moving back to the city; a meme amplified by the concentration of media in fewer places and the related collapse of local journalism. Yet in reality, except for a brief period right after the 2008 housing crash, people have continued to move away from dense areas.

Indeed the most recent estimates suggest that last year was the best for suburban areas since the Great Recession. In 2012, the suburbs attracted barely 150,000 more people than core cities but in 2016 the suburban advantage was 556,000. Just 10 of the nation’s 53 largest metropolitan regions (including San Francisco, Boston, and Washington) saw their core counties gain more people than their suburbs and exurbs.

Overall, people are definitively not moving to the most preferred places for cosmopolitan scribblers. Last year, all 10 of the top gainers in domestic migration were Sun Belt cities. The list was topped by Austin, a blue dot in its core county, surrounded by a rapidly growing, largely red Texas sea, followed by Tampa-St. Petersburg, Orlando, and Jacksonville in Florida, Charlotte and Raleigh in North Carolina, Las Vegas, Phoenix, and San Antonio.

Overall, domestic migration trends affirm Trump-friendly locales. In 2016, states that supported Trump gained a net of 400,000 domestic migrants from states that supported Clinton. This includes a somewhat unnoticed resurgence of migration to smaller cities, areas often friendly to Trump and the GOP. Domestic migration has accelerated to cities between with populations between half a million and a million people, while it’s been negative among those with populations over a million. The biggest out-migration now takes place in Los Angeles, Chicago, and New York.

Of course, for the blue cognoscenti, there’s only one explanation for such moves: Those people are losers and idiots. This is part of the new blue snobbery: Bad people, including the poor, are moving out to benighted places like Texas but the talented are flocking in. Yet, like so many comfortable assertions, this one does not stand scrutiny. It’s the middle class, particularly in their childbearing years, who, according to IRS data, are moving out of states like California and into ones like Texas. Since 2000, the Golden State has seen a net outflow of $36 billion dollars from migrants.

Millennials are widely hailed as the generation that will never abandon the deep blue city, but as they reach their thirties, they appear to be following their parents to the suburbs and exurbs, smaller cities, and the Sun Belt. This assures us that the next generation of Americans are far more likely to be raised in Salt Lake City, Atlanta, the four large Texas metropolitan areas, or in suburbs, than in the bluest metropolitan areas like New York, Seattle, or San Francisco—where the number of school-age children trends well below the national average.

This shift is being driven in large part by unsustainable housing costs. In the Bay Area, techies are increasingly looking for jobs outside the tech hub and some companies are even offering cash bonuses to those willing to leave. A recent poll indicated that 46 percent of millennials in the San Francisco Bay Area want to leave. The numbers of the “best and brightest” have been growing mostly in lower-cost regions such as Austin, Orlando, Houston, Nashville, and Charlotte.

Quality of Life: The Eye of the Beholder

Ultimately, in life as well as politics, people make choices of where to live based on economic realities. This may not apply entirely to the blue bourgeoisie, living at the top of the economic food chain or by dint of being the spawn of the wealthy. But for most Americans aspiring to a decent standard of living—most critically, the acquisition of decent living space—the expensive blue city simply is not practicable.

Indeed, when the cost of living is taken into consideration, most blue areas, except for San Jose/Silicon Valley, where high salaries track the prohibitive cost of living, provide a lower standard of living. People in Houston, Dallas, Austin, Atlanta, and Detroit actually made more on their paychecks than those in New York, San Francisco, or Boston. Deep-blue Los Angeles ranked near the bottom among the largest metropolitan areas.

These mundanities suggest that the battlegrounds for the future will not be of the blue bourgeoisie’s choosing but in suburbs, particularly around the booming periphery of major cities in red states. Many are politically contestable, often the last big “purple” areas in an increasingly polarized country. In few of these kinds of areas do you see 80 to 90 percent progressive or conservative electorates; many split their votes and a respectable number went for Trump and the GOP. If the blue bourgeoisie want to wage war in these places, they need to not attack the suburban lifestyles clearly preferred by the clear majority.

Blue America can certainly win the day if this administration continues to falter, proving all the relentless aspersions of its omnipresent critics. But even if Trump fails to bring home the bacon to his supporters, the progressives cannot succeed until they recognize that most Americans cannot, and often do not want to, live the blue bourgeoisie’s preferred lifestyle.

It’s time for progressives to leave their bastions and bubbles, and understand the country that they are determined to rule.

The Deconstruction of the West

What concerns me most from the following article is the misguided notion that pan-nationalism and global citizenship has displaced the sovereign nation-state international system. The sovereign nation-state is all we have to manage global affairs in a representative democratic, people-centered global society. Without it we are all vulnerable to constellations of power among political elites and authoritarians of all stripes.

Reprinted from The American Interest:

The Deconstruction of the West

ANDREW A. MICHTA

April 12, 2017

The greatest threat to the liberal international order comes not from Russia, China, or jihadist terror but from the self-induced deconstruction of Western culture.

To say that the world has been getting progressively less stable and more dangerous is to state the obvious. But amidst the volumes written on the causes of this ongoing systemic change, one key driver barely gets mentioned: the fracturing of the collective West. And yet the unraveling of the idea of the West has degraded our ability to respond with a clear strategy to protect our regional and global interests. It has weakened the NATO alliance and changed not just the global security calculus but now also the power equilibrium in Europe. If anyone doubts the scope and severity of the problem, he or she should ask why it has been so difficult of late to develop a consensus between the United States and Europe on such key issues as defense, trade, migration, and how to deal with Russia, China, and Islamic jihadists.

The problem confronting the West today stems not from a shortage of power, but rather from the inability to build consensus on the shared goals and interests in whose name that power ought to be applied. The growing instability in the international system is not, as some argue, due to the rise of China as an aspiring global power, the resurgence of Russia as a systemic spoiler, the aspirations of Iran for regional hegemony, or the rogue despotism of a nuclear-armed North Korea; the rise and relative decline of states is nothing new, and it doesn’t necessarily entail instability. The West’s problem today is also not mainly the result of the economic decline of the United States or the European Union, for while both have had to deal with serious economic issues since the 2008 meltdown, they remain the two largest economies in the world, whose combined wealth and technological prowess are unmatched. Nor is the increasing global instability due to a surge in Islamic jihadism across the globe, for despite the horrors the jihadists have wrought upon the peoples of the Middle East and North Africa, and the attendant anxiety now pervading Europe and America, they have nowhere near the capabilities needed to confront great powers.

The problem, rather, is the West’s growing inability to agree on how it should be defined as a civilization. At the core of the deepening dysfunction in the West is the self-induced deconstruction of Western culture and, with it, the glue that for two centuries kept Europe and the United States at the center of the international system. The nation-state has been arguably the most enduring and successful idea that Western culture has produced. It offers a recipe to achieve security, economic growth, and individual freedom at levels unmatched in human history. This concept of a historically anchored and territorially defined national homeland, having absorbed the principles of liberal democracy, the right to private property and liberty bound by the rule of law, has been the core building block of the West’s global success and of whatever “order” has ever existed in the so-called international order. Since 1945 it has been the most successful Western “export” across the globe, with the surge of decolonization driven by the quintessentially American precept of the right to self-determination of peoples, a testimony to its enduring appeal. Though challenged by fascism, Nazism, and communism, the West emerged victorious, for when confronted with existential danger, it defaulted to shared, deeply held values and the fervent belief that what its culture and heritage represented were worth fighting, and if necessary even dying, to preserve. The West prevailed then because it was confident that on balance it offered the best set of ideas, values, and principles for others to emulate.

Today, in the wake of decades of group identity politics and the attendant deconstruction of our heritage through academia, the media, and popular culture, this conviction in the uniqueness of the West is only a pale shadow of what it was a mere half century ago. It has been replaced by elite narratives substituting shame for pride and indifference to one’s own heritage for patriotism. After decades of Gramsci’s proverbial “long march” through the educational and cultural institutions, Western societies have been changed in ways that make social mobilization around the shared idea of a nation increasingly problematic. This ideological hollowing out of the West has been accompanied by a surge in confident and revanchist nationalisms in other parts of the world, as well as religiously inspired totalitarianism.

National communities cannot be built around the idea of collective shame over their past, and yet this is what is increasingly displacing a once confident (perhaps overconfident, at times) Western civilization. The increasing political uncertainty in Europe has been triggered less by the phenomenon of migration than it has by the inability of European governments to set baselines of what they will and will not accept. Over the past two decades Western elites have advocated (or conceded) a so-called “multicultural policy,” whereby immigrants would no longer be asked to become citizens in the true sense of the Western liberal tradition. People who do not speak the national language, do not know the nation’s history, and do not identify with its culture and traditions cannot help but remain visitors. The failure to acculturate immigrants into the liberal Western democracies is arguably at the core of the growing balkanization, and attendant instability, of Western nation-states, in Europe as well as in the United States.

Whether one gives the deconstruction of the Western nation-state the name of postmodernism or globalism, the ideological assault on this very foundation of the Western-led international system has been unrelenting. It is no surprise that a poorly resourced radical Islamic insurgency has been able to make such vast inroads against the West, in the process remaking our societies and redefining our way of life. It is also not surprising that a weak and corrupt Russia has been able to shake the international order by simply applying limited conventional military power. Or that a growing China casts an ever-longer shadow over the West. The greatest threat to the security and survival of the democratic West as the leader and the norm-setter of the international system comes not from the outside but from within. And with each passing year, the deconstruction of Western culture, and with it the nation-state, breeds more internal chaos and makes our international bonds across the West ever more tenuous.

Andrew A. Michta is the dean of the College of International and Security Studies at the George C. Marshall European Center for Security Studies. Views expressed here are his own.

Interesting Money Graphics

08-roman-empire-chart

dollar_devaluation

One cannot take these graphs at face value, for example, the long $ decline from 1933 to the present has also been the Pax Americana where the US has dominated geopolitics. Also, the Roman denarius was a commodity based currency, while the US$ is a fiat currency backed by US government taxing power over US assets.

But the larger issue of the costs of empire over time are instructive. One should dig deeper in analysis, but not be too complacent. Especially in light of the currency manipulations of the current age.