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.

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.

Listen. Time for New Thinking.

One thing I have noticed in this political environment is that people do not listen to political views that diverge from their own. They believe what they believe, and that’s the end of it. Then they project bad intentions on anyone who disagrees. It makes for useless, though necessary, conversations.

This writer makes a good case for some rational reasoning through the imperative of listening to our politics rather than shouting them. We need to chart the correct path forward and it’s not by turning to the recent or distant past. Those mostly provide warning signs for the consequences of foolish mistakes.

History tells us that populist waves can lead to disaster or to reform…So how might we tilt the odds from disaster to reform? First, listen.

It’s Time for New Economic Thinking Based on the Best Science Available, Not Ideology

A new narrative for a complex age

By Eric Beinhocker 

If 2008 was the year of the financial crash, 2016 was the year of the political crash. In that year we witnessed the collapse of the last of the four major economic-political ideologies that dominated the 20th century: nationalism; Keynesian Pragmatism; socialism; and neoliberalism. In the 1970s and 80s the center right in many countries abandoned Keynesianism and adopted neoliberalism. In the 1980s and 90s the center left followed, largely abandoning democratic socialism and adopting a softer version of neoliberalism.

For a few decades we thought the end of history had arrived and political battles in most OECD countries were between centre-right and centre-left parties arguing in a narrow political spectrum, but largely agreeing on issues such as free trade, the benefits of immigration, the need for flexible efficient markets, and the positive role of global finance. This consensus was reinforced by international institutions such as the IMF, World Bank, and OECD, and the Davos political and business elite.

In 2008 that consensus was rocked, last year it crumbled. Some will cling on to the idea that the consensus can be revived. They will say we just need to defend it more vigorously, the facts will eventually prevail, the populist wave is exaggerated, it’s really just about immigration, Brexit will be a compromise, Clinton won more votes than Trump, and so on. But this is wishful thinking. Large swathes of the electorate have lost faith in the neoliberal consensus, the political parties that backed it, and the institutions that promoted it. This has created an ideological vacuum being filled by bad old ideas, most notably a revival of nationalism in the US and a number of European countries, as well as a revival of the hard socialist left in some countries.

History tells us that populist waves can lead to disaster or to reform. Disaster is certainly a realistic scenario now with potential for an unravelling of international cooperation, geopolitical conflict, and very bad economic policy. But we can also look back in history and see how, for example, in the US at the beginning of the 20th century Teddy Roosevelt harnessed populist discontent to create a period of major reform and progress.

So how might we tilt the odds from disaster to reform? First, listen. The populist movements do contain some racists, xenophobes, genuinely crazy people, and others whom we should absolutely condemn. But they also contain many normal people who are fed up with a system that doesn’t work for them. People who have seen their living standards stagnate or decline, who live precarious lives one paycheque at a time, who think their children will do worse than they have. And their issues aren’t just economic, they are also social and psychological. They have lost dignity and respect, and crave a sense of identity and belonging.

They feel – rightly or wrongly – that they played by the rules, but others in society haven’t, and those others have been rewarded. They also feel that their political leaders and institutions are profoundly out of touch, untrustworthy, and self-serving. And finally, they feel at the mercy of big impersonal forces – globalization, technology change, rootless banks and large faceless corporations. The most effective populist slogan has been “take back control”.

After we listen we then have to give new answers. New narratives and policies about how people’s lives can be made better and more secure, how they can fairly share in their nation’s prosperity, how they can have more control over their lives, how they can live with dignity and respect, how everyone will play by the same rules and the social contract will be restored, how openness and international cooperation benefits them not just an elite, and how governments, corporations, and banks will serve their interests, and not the other way around.

This is why we need new economic thinking. This is why the NAEC initiative is so important. The OECD has been taking economic inequality and stagnation seriously for longer than most and has some of the best data and analysis of these issues around. It has done leading work on alternative metrics other than GDP to give insight into how people are really doing, on well-being. It is working hard to articulate new models of growth that are inclusive and environmentally sustainable. It has leading initiatives on education, health, cities, productivity, trade, and numerous other topics that are critical to a new narrative.

But there are gaps too. Rational economic models are of little help on these issues, and a deeper understanding of psychology, sociology, political science, anthropology, and history is required. Likewise, communications is critical – thick reports are important for government ministries, but stories, narratives, visuals, and memes are needed to shift the media and public thinking.

So what might such a new narrative look like? My hope is that even in this post-truth age it will be based on the best facts and science available. I believe it will contain four stories:

  • A new story of growth [see this post]
  • A new story of inclusion [see this post]
  • A new social contract
  • A new idealism

This last point doesn’t get discussed enough. Periods of progress are usually characterized by idealism, common projects we can all aspire to. Populism is a zero-sum mentality – the populist leader will help me get more of a fixed pie. Idealism is a positive-sum mentality – we can do great things together. Idealism is the most powerful antidote to populism.

Finally, economics has painted itself as a detached amoral science, but humans are moral creatures. We must bring morality back into the center of economics in order for people to relate to and trust it. All of the science shows that deeply ingrained, reciprocal moral behaviors are the glue that holds society together. Understanding the economy as not just an amoral machine that provides incentives and distributes resources, but rather as a human moral construct is essential, not just for creating a more just economy, but also for understanding how the economy actually creates prosperity.

In short, it is time to forge a new vision that puts people back at the center of our economy. To paraphrase Abraham Lincoln, it is time to create an economy that is “of the people, by the people, for the people.” We are truly at a fluid point in history. It could be a great step backward or a great step forwards. We must all push forwards together.

Based on remarks originally delivered to the OECD New Approaches to Economic Challenges workshop, December 14, 2016, Paris.

The return of the nation-state

The lesson is that it’s a mistake to predict the inevitable decline of things that give meaning to people’s lives and involve fundamental human attachments. 

Mr. Lowry has got this mostly right. Trump is merely one actor in this play as national sovereignty and national identity is being reasserted in Great Britain, France, Germany, Greece, Russia, etc. across the globe. Some automatically associate nationalism with interstate conflict (i.e, war), but that is not necessarily the path it takes, especially in the liberal western democracies.

Also, people migration is not the most serious challenge facing the modern nation-state, but it’s the easiest to scape-goat. It’s deflected by cultural assimilation.

Samuel Huntington is worth reading.

The return of the nation-state

The first week of the Trump administration has been a vindication of the American nation-state.

Anyone who thought it was a “borderless world,” a category that includes some significant portion of the country’s corporate and intellectual elite, has been disabused of the notion within about the first five days of the Trump years.

Trump’s inaugural address was widely panned, but early polling indicates it was popular, which isn’t surprising since the broadly nationalistic sentiments in the speech were bound to strike people as common sense.

“At the center of this movement is a crucial conviction: that a nation exists to serve its citizens.” Whom else would it serve?

“We are one nation . . . We share one heart, one home, and one glorious destiny.” What’s the alternative — two nations, with two hearts and homes?

“From this moment on, it’s going to be America first.” Why would anything else come first?

“We will seek friendship and goodwill with the nations of the world — but we do so with the understanding that it is the right of all nations to put their own interests first,” Trump said.

Trump’s speech was less poetic, but in one sense more grounded than George W. Bush’s call for universal freedom in 2005 or Barack Obama’s vision of international cooperation leading to a new era of peace in 2009. Trump spoke of “the right of all nations to put their own interests first.”

If Bush was a vindicator of universal freedom, and Obama, in his more soaring moments, a citizen of the world, Trump is a dogged citizen of the United States concerned overwhelmingly with vindicating its interests.

His executive order authorizing the building of the wall is an emphatic affirmation of one of the constituent parts of a nation, namely borders. Trump also began the process of going after sanctuary cities as entrepôts of illegal immigration acting in defiance of the nation’s laws.

In general, immigration is an important focus for Trump’s nationalism because it involves the question of whether the American people have the sovereign authority to decide who gets to live here; whether the interests of American or foreign workers should be paramount; whether we assimilate the immigrants we already have into a common culture before welcoming more.

The Trump phenomenon is pushback against what the late political scientist Samuel Huntington called the “deconstructionist” agenda, whose advocates seek to undermine America’s national identity through mass immigration and hostility to assimilation and opposition to the teaching of US history from a traditional, patriotic perspective, among other things.

Huntington argues that until the late 20th century, these elites promoted national unity, as one would expect. “Then in the 1960s and 1970s,” he writes, “they began to promote measures consciously designed to weaken America’s cultural and creedal identity and to strengthen racial, ethnic, cultural, and other subnational identities. These efforts by a nation’s leaders to deconstruct the nation they governed were, quite possibly, without precedent in human history.”

Trump is a welcome rebuke to this attitude, though caveats are necessary:

A proper US nationalism should express not just an affinity for this country’s people, as Trump did in his address, but for its creed, its institutions and its history. These are absent from Trump’s rhetoric and presumably his worldview, impoverishing both.

Trump’s nationalism has the potential to appeal across racial and ethnic lines, so long as he demonstrates that it isn’t just cover for his loyalty to his preferred subnational group.

If Bush was overly expansive in his international vision, Trump could be overly pinched. Bush’s anti-AIDS program in Africa was unvarnished humanitarianism — and will redound to his credit, and the credit of this nation, for a very long time.

Finally, Trump’s trade agenda is also an expression of his nationalism. Trade deals should be able to pass the national-interest test — we shouldn’t embrace them for the sake of helping other nations, or out of strict libertarian principle. But protectionism is, historically, a special-interest bonanza that delivers benefits to specific industries only at a disproportionate cost to the rest of the economy.

All that said, the nation-state is back, despite all the forecasts of its demise.

The lesson is that it’s a mistake to predict the inevitable decline of things that give meaning to people’s lives and involve fundamental human attachments. The nation is one of them, something that Trump, if he gets nothing else, instinctively understands.

At Long Last, the Fed Faces Reality

The Fed faces reality? After 8 years, I’m not holding my breath…

Unconventional monetary policy—including years of ultralow interest rates—simply hasn’t delivered.

By GERALD P. O’DRISCOLL JR.

WSJ, Dec. 15, 2016 

As was widely anticipated, Federal Reserve officials voted Wednesday to raise short-term interest rates by a quarter percentage point—only the second increase since the 2008 financial crash. The central bank appears to have finally confronted reality: that its unconventional monetary policy, particularly ultralow rates, simply has not delivered the goods.

In a speech last week, the president of the New York Fed, William Dudley, brought up “the limitations of monetary policy.” He suggested a greater reliance on “automatic fiscal stabilizers” that would “take some pressure off of the Federal Reserve.” His proposals—such as extending unemployment benefits and cutting the payroll tax—were conventionally Keynesian.

Speaking two weeks earlier at the Council on Foreign Relations, Fed Vice Chairman Stanley Fischer touted the power of fiscal policy to enhance productivity and speed economic growth. He called for “improved public infrastructure, better education, more encouragement for private investment, and more effective regulation.” The speech, delivered shortly after the election, almost channeled Donald Trump.

Indeed, the markets seem to be expecting a bigger, bolder version of Mr. Fischer’s suggestions from the Trump administration.

• Infrastructure: Mr. Trump campaigned on $1 trillion in new infrastructure, though the details are not fully worked out. The left thinks green-energy projects—such as windmill farms—qualify as infrastructure. Living in the West, I’d prefer to build the proposed Interstate 11, a direct line from Phoenix, to Las Vegas and then to Reno and beyond.

• Education: Nominating Betsy DeVos to lead the Education Department shows Mr. Trump’s commitment to real education reform, including expanded school choice. Much of America’s economic malaise, including income inequality and slow growth, can be laid at the feet of deficient schools. Although some students receive a world-class education, many get mediocrity or worse.

• Private investment and deregulation: Mr. Trump promises progress on both fronts. He is filling his cabinet with people—including Andy Puzder for labor secretary and Scott Pruitt to lead the Environmental Protection Agency—who understand the burden that Washington places on job creators.

Businesses need greater regulatory certainty, and reasonable statutory time limits should be placed on environmental reviews and permit applications. That, along with tax cuts, would do the trick for boosting investment.

All that said, central bankers have a role to play as well. The Fed’s ultralow interest rates were intended to be stimulative, but they also squeezed lending margins, which further dampened banks’ willingness to loan money.

There’s a strong case for a return to normal monetary policy. The prospects for economic growth are brighter than they have been in some time, and that is good. The inflation rate may tick upward, which is not good. Both factors argue for lifting short-term interest rates to at least equal the expected rate of inflation. Depending on one’s inflation forecast, that suggests moving toward a fed-funds rate in the range of 2% to 3%.

The Fed need not act abruptly, but it also does not want to get further behind the curve. Next year there will be eight meetings of the Federal Open Market Committee. A quarter-point increase at every other meeting, at least, would be in order.

This could produce some blowback from Congress and the White House. Paying higher interest on bank reserves will reduce the surplus that the Fed returns to the Treasury—thus increasing the deficit. But the Fed could ease the political pressure if it stopped resisting Republican lawmakers’ effort to introduce a monetary rule, which would curb the central bank’s discretion and make its policy more predictable. This isn’t an attack on the central bank’s independence, as Fed Chair Janet Yellen has wildly argued, but an exercise of Congress’s powers under the Constitution.

The one big cloud that darkens this optimistic forecast is Mr. Trump’s antitrade stance. Sparking a trade war could undo all the potential benefits that his policies bring. David Malpass, a Trump adviser and regular contributor to these pages, argues that trade deals like the North American Free Trade Agreement are rife with special benefits for big companies, but that they do not work for America’s small businesses. The argument is that Mr. Trump wants to renegotiate these deals to make them work better. I hope Mr. Malpass is correct, and that President-elect Trump can pull it off.

But for now, a strengthening economy offers a chance to return to normal monetary policy. Fed officials seem to have come around to that view. With any luck, Wednesday’s rate increase will be only the first step in that direction.

WTF Happened? Pick Your Poison.

I can agree with the headline of this article, reprinted from the Huffington Post, but the majority of the analysis is plainly inconclusive (see comments). The Big Lesson is: Don’t believe everything you read in the media.

The Big Lesson From 2016 Is That Neither Party Has A Winning Vote Coalition

The Obama coalition turned out to be pretty weak, but Trump’s might be even weaker.

11/25/2016 03:49 pm ET

Donald Trump won the Electoral College by a 306-232 margin, but lost the popular vote by a more than 2 million votes (and still counting) ― more than any previous presidential winner ever has in a split decision. How this happened is a complex story, much more nuanced than most “here’s why Trump won” stories imply. [We don’t seek complexity, but clarity and accuracy.]

Almost all of those stories contain a piece of the puzzle, but in order to see the real story you need to consider all of the explanations combined. Neither party has much reason to celebrate the outcome of the 2016 election. Republicans have a demographics problem, and Democrats have a geography problem compounded by turnout issues. [Fair enough.]

At the state level, the 2016 vote patterns seem to show a sea of red states with blues isolated to the coasts plus Colorado, New Mexico, Minnesota and Illinois. Looking county-by-county, it becomes clear that the divide isn’t just coasts vs. flyover territory; it’s rural-urban. Pockets of blue in the major cities, college towns and a handful of majority-black areas in the South are evident in this view. TheNew York Times’ graphic below shows just how little actual land area went to Hillary Clinton at the county level: She won 15 percent of the land to Trump’s 85 percent.

 

Yet declaring the United States a country divided by population density overlooks several trends that are key to understanding Trump’s success. The urban-rural split is nothing new; perhaps it’s more exaggerated in 2016 than before, but we’ve known for a long time that rural areas are conservative and urban areas are liberal. But if we consider gradations ― not just dividing counties by which candidate a majority of voters selected, but shading by the proportion of Trump and Clinton voters in each county ― the story is far less clear.

If we can’t blame everything on the rural-urban divide, then what happened? There’s not one single reason why Clinton lost several states where majorities voted for President Barack Obama twice: there are several reasons. [Blogger’s Note: Of course there is more than one reason (i.e., variable) that explains this election outcome. The scientific question is what matters most. Again it is the enduring urban-rural divide and how these match up with the parties’ platforms. All these other explanations are anecdotal to this particular election, in other words, not part of a trend. The interesting new trend is the continued weakness of both party coalitions that has been unfolding over the past 25-40 years.]

These Purple States of America

A few, significant, subplots played out in the supposed Democratic “firewall” states of Pennsylvania, Michigan and Wisconsin, and the perennial battleground of Ohio. These states have been close recently, but in 2008 and 2012 Democrats were able to generate support among the rural working class to win over majorities of voters in the states.

But there was a sizable shift in 2016. It’s unclear how many people voted for Trump that had voted for Obama, but Trump did pull a larger percentage of the vote in many counties: more than Mitt Romney did in 2012. That could be in part different groups of voters turning out in 2016 as compared to 2012, but anecdotal stories and survey data reveal that there were some party switchers.

Turnout is part of the picture, though, particularly in Michigan and Wisconsin. AsHuffPost previously reported, turnout was down in Detroit’s Wayne County, Michigan and Milwaukee County, Wisconsin, in numbers large enough to swing the election in those states. Clinton received nearly 78,000 fewer votes in Wayne County than Obama did in 2012, and lost Michigan by under 12,000 votes. She underperformed Obama by 39,000 votes in Milwaukee County and lost Wisconsin by just over 27,000 votes.

Similar patterns of lower urban turnout were evident in Philadelphia and other cities in the Midwest. The numbers suggest these people didn’t vote for Trump: they just didn’t vote at all. And according to reports, the Clinton campaign didn’t make concerted efforts to get them to the polls. Many of these nonvoters were likely minorities who Democrats assumed would support the party in large numbers ― which they do, when they vote.

An additional subplot involves suburban areas and white women. Democrats hoped to make gains in these areas, particularly among typically-conservative women who might be turned off by Trump’s actions and rhetoric. That hope proved false. Nationally, suburban areas and white women voted for Trump in very similar proportions to their votes for Romney in 2012. Romney received 50 percent of the suburban vote, and Trump garnered 59 percent. Fifty-six percent of white women voted for Romney, and 52 percent supported Trump. [All exit poll data – see comments below.]

Nationally, as well as in the Rust Belt, Democrats lost support among the least educated groups. According to the exit polls, education didn’t matter much in 2012: Obama won college graduates by 2 points and non-college graduates by 4 points. Clinton won college graduates by 10 points and lost non-college graduates by 7 points. Relative to Obama’s totals, Clinton gained 2 points among college graduates and lost 7 points among non-college graduates.

The difference is even more stark among whites: Trump won white college graduates by 2 points, but he won white non-college graduates by 37 points. The racial breakdown isn’t provided in the 2012 results, but it’s safe to say there wasn’t that sharp of a divide among whites or there would have been a gap in the overall numbers. Among minorities, Clinton won college graduates by 50 points and non-college graduate by 56 points. Once you account for the educational divide, income doesn’t seem to make a difference in vote choice.

Yet despite all these trends that favored Trump, Clinton won the popular vote by a wider margin than several past presidents. Clinton cut the Republican advantage to around 5 points in the red state strongholds of Arizona and Georgia, and Texas dropped from a 16-point Republican advantage in 2012 to a 9 point win for Trump. California is still counting, but it looks like Clinton blew Trump out by nearly 30 points in the state ― substantially more than Obama’s 23-point win over Romney four years ago. [Duh. CA is an outlier in national politics these days.]

These results were likely driven by high support for Clinton among minority populations, particularly among Latinos and Hispanics in the Southwest. And although there’s some dispute over just how strongly that group supported Clinton, the most conservative estimates from the National Exit Polls indicate that Clinton won Latinos by 36 points. Other pre-election polls show even stronger Democratic leanings among the group.

Republicans also struggled with black voters. Trump’s 8 percent support is actually slightly more than Mitt Romney’s 6 percent in 2012, but slightly less than George W. Bush’s support among black voters in 2000 and 2004. Black turnout was slightly lower this year compared to 2012 as well, which helped states like Georgia stay red. An uptick in turnout among a group that so heavily favors Democrats has considerable potential to shift those states. [Hispanics, blacks, women, whites – these group identity variables are all driven by exit poll data, not reality.] 

The problem is that none of these states actually switched directions. Had Clinton won Arizona’s 11 electoral votes and Georgia’s 16 electoral votes, she still would have been short of the 270 mark, but it would have compensated for the losses in Michigan and Wisconsin, which combine for 26 electoral votes. But neither state appears as close to turning blue as some polls had indicated. So these gains meant nothing for the Electoral College, which is what really matters.

To state the obvious, as long as the Electoral College determines the winner, Democrats can’t rely on increasing support in already-blue states, and it seems that key red states aren’t ready to flip yet. The best strategy for 2020 will be to focus on the very narrow losses in the Rust Belt and win those voters back ― which probably means convincing them that Democrats are a better option for improving their economy than Republicans. Democrats clearly lost that battle this year. [That means a tough economic and social policy reversal for Democrats.]

Meanwhile Republicans will try to hold onto those gains and build their very fragile coalition that won the Electoral College. Whether it survives beyond 2016 is anyone’s guess. The Obama coalition didn’t outlast Obama, but the Trump coalition might not survive Trump.
………………..

A caution: most of the interpretations draw data from exit polls, which usually support the kind of personal narrative desired by media. In other words, the idea that our differences are driven by voter group characteristics is baked in the cake of exit polling. The dominant factor of geography and lifestyle choices is obscured by exit polls. Discount the exit poll inferences accordingly, but then what would journalists write about?

Taken at face value, the argument presented here merely outlines how the Obama era was a one-off and the same may hold true for the Trump regime. (Hillary Clinton could have won and that conclusion would still hold true, as confirmed by down ballot results.) But we have no real indication yet of Trump’s fate and reading the tea-leaves (“might not survive”) is a sign of wishful thinking, not objective analysis. I don’t expect much more from the inherent biases of the Huffington Post.

 

 

 

 

Ten Things We Now Know About American Politics

Ahem. We seem to have been graced by the Chinese proverb, “May you live in interesting times.” The surprising upset by Donald Trump over Hillary Clinton has left many people flabbergasted. Since I live in Los Angeles, it seems a lot of those people live around me.

But there were many hints of this possible outcome going back months if not almost a year. The results seem to have confirmed some new “realities” to replace former “speculations.”

  1. The polling surveys proved to be less than accurate-to say the least-but this had been going on since the early primaries. Remember, Trump was never supposed to get past the first couple of primaries. The Hollywood adage that “Nobody knows anything,” held true to the end.
  2. The Republican party has been split between its party regulars or leaders and their voters. The voters won handily, now the party will need to respond with some supplication. Trump is a symptom, not a cause. Despite being counted out, the Republicans managed to retain the Senate and the House, awarding President-elect Trump a golden opportunity to enact his agenda, whatever that is.
  3. The Democratic party establishment apparently sold their voters a pig in a poke. It was not hard to see a year ago that Hillary Clinton was probably the weakest candidate the party could have selected given the political climate. She represented the status quo, promising Obama’s third-term, after two midterm elections that repudiated his policy agenda. Moreover, she came in carrying a 25 year load of baggage that caused voters to question her authenticity and candor, to put it politely. Her tenure as Senator and SOS did little to promote her candidacy. It seems that the fact that she was the wife of Bill was her most valuable asset, but even that was tarnished as voters were reminded of Bill’s former scandals and tawdry reputation. The voters had little choice and Sanders appeal should have been the first clue that things were going very wrong, again, for Clinton. The flip of the Rust Belt is another warning signal that the party has gone astray.
  4. The mainstream media pundits once again have egg on their faces. The politicization of coverage backfired and the more they pushed, the worse it got for their favored biases. They failed miserably at their efforts to shape political opinion instead of informing objectively. Now some of the more prominent talking heads should probably seek a new profession since the public has turned them off. But no, stupid will likely double down, until they discover nobody who matters is really listening.
  5. The Bush-Clinton-Bush-Obama/Clinton era is over, as each administration’s overreaching came back to bite them with a vengeance. Obama and his policy legacy is a casualty of this collapse of a 28 year party era. As painful as it might seem to some, Obama’s presidency helped to bring about the collapse of his party and the rise of an outsider like Trump. He now owns it, just like Bush wears the Iraq albatross.
  6. We have divided ourselves into a 50-50 nation, polarized by population density: urban vs. rural and suburban.* This means the popular vote will be less of an indication of true, broad support and may often diverge from the Electoral College vote. Thus, the EC is crucial to securing a clear electoral and governing mandate. It appears Clinton eked out a popular vote victory, but more importantly, Trump won the decisive margin in the EC. The swing state problem is that we don’t have enough swing voters at the center of our divide.
  7. We should probably be thankful that media and political transparency is being forced on us by technology. It is too ironic that we are getting our political insights from hackers and Wikileaks.
  8. “Politics as usual” was a big loser. The people took control of this election, for better or worse, so elites had better pay attention while the rest of us figure out how to move people power toward the broader good, rather than the narrow. When failure occurs, we need to see it clearly and own it. I’m wondering how many can do that after this election. Too many will probably respond angrily, but that’s self-defeating.
  9. The wise among us will try to figure out why our popular narrative for understanding American politics has been so wrong and what needs to change. The demonization of voters seems to be highly counterproductive in an open media environment.
  10. Lastly, political correctness and identity politics have suffered a severe backlash. Perhaps it’s time to put aside these punitive speech codes and divisive political strategies. We can only hope.

BTW, I voted for Gary Johnson, just for the 2%. He outperformed and got 3%!

*This urban-rural split is a historical divide that has defined much of our nation’s politics for the past 200 years.  We’ve managed it thus far and we can continue to do so if we can see it clearly. It’s NOT about biological identity – it’s about class interests, lifestyle choices, and political priorities. We can find compromise on all these issues.

It’s The Fed, Stupid! Again.

Really, I wish we could get serious…

Trump Tees Up a Necessary Debate on the Fed

Sixty percent of stock gains since the 2008 panic have occurred on days when the Fed makes policy decisions.

By RUCHIR SHARMA

Wall Street Journal, Sept. 28, 2016 6:43 p.m. ET

The press spends a lot of energy tracking the many errors in Donald Trump ’s loose talk, and during Monday’s presidential debate Hillary Clinton expressed hope that fact checkers were “turning up the volume” on her rival. But when it comes to the Federal Reserve, Mr. Trump isn’t all wrong.

In a looping debate rant, Mr. Trump argued that an increasingly “political” Fed is holding interest rates low to help Democrats in November, driving up a “big, fat, ugly bubble” that will pop when the central bank raises rates. This riff has some truth to it.

Leave the conspiracy theory aside and look at the facts: Since the Fed began aggressive monetary easing in 2008, my calculations show that nearly 60% of stock market gains have come on those days, once every six weeks, that the Federal Open Market Committee announces its policy decisions.

Put another way, the S&P 500 index has gained 699 points since January 2008, and 422 of those points came on the 70 Fed announcement days. The average gain on announcement days was 0.49%, or roughly 50 times higher than the average gain of 0.01% on other days.

This is a sign of dysfunction. The stock market should be a barometer of the economy, but in practice it has become a barometer of Fed policy.

My research, dating to 1960, shows that this stock-market partying on Fed announcement days is a relatively new and increasingly powerful feature of the economy. Fed policy proclamations had little influence on the stock market before 1980. Between 1980 and 2007, returns on Fed announcement days averaged 0.24%, about half as much as during the current easing cycle. The effect of Fed announcements rose sharply after 2008 when the Fed launched the early rounds of quantitative easing (usually called QE), its bond purchases intended to inject money into the economy.

It might seem that the market effect of the Fed’s easy-money policies has dissipated in the past couple of years. The S&P 500 has been moving sideways since 2014, when the central bank announced it would wind down its QE program.

But this is an illusion. Stock prices have held steady even though corporate earnings have been falling since 2014. Valuations—the ratio of price to earnings—continue to rise. With investors searching for yield in the low interest-rate world created by the Fed, the valuations of stocks that pay high dividends are particularly stretched. The markets are as dependent on the Fed as ever.

Last week the Organization for Economic Cooperation and Development warned that “financial instability risks are rising,” in part because easy money is driving up asset prices. At least two regional Fed presidents, Eric Rosengren in Boston and Esther George in Kansas City, have warned recently of a potential asset bubble in commercial real estate.

Their language falls well short of the alarmism of Mr. Trump, who in Monday’s debate predicted that the stock market will “come crashing down” if the Fed raises rates “even a little bit.” But it is fair to say that many serious people share his basic concern.

Whether this is a “big, fat, ugly bubble” depends on how one defines a bubble. But a composite index for stocks, bonds and homes shows that their combined valuations have never been higher in 50 years. Housing prices have been rising faster than incomes, putting a first home out of reach for many Americans.

Fed Chair Janet Yellen did come into office sounding unusually political, promising to govern in the interest of “Main Street not Wall Street,” although that promise hasn’t panned out. Mr. Trump was basically right in saying that Fed policy has done more to boost the prices of financial assets—including stocks, bonds and housing—than it has done to help the economy overall.

The increasingly close and risky link between the Fed’s easy-money policies and financial markets has been demonstrated again in recent days. Early this month, some Fed governors indicated that the central bank might at long last raise interest rates at its next meeting. The stock market dropped sharply in response. Then when decision time came on Sept. 21 and the Fed left rates unchanged, stock prices rallied by 1% that day.

Mr. Trump was also right that despite the Fed’s efforts, the U.S. has experienced “the worst revival of an economy since the Great Depression.” The economy’s growth rate is well below its precrisis norm, and the benefits have been slow to reach the middle class and Main Street. Much of the Fed’s easy money has gone into financial engineering, as companies borrow billions of dollars to buy back their own stock. Corporate debt as a share of GDP has risen to match the highs hit before the 2008 crisis.

That kind of finance does more to increase asset prices than to help the middle class. Since the rich own more assets, they gain the most. In this way the Fed’s policies have fueled a sharp rise in wealth inequality world-wide—and a boom in the global population of billionaires. Ironically, rising resentment against such inequality is lifting the electoral prospects of angry populists like Mr. Trump, a billionaire promising to fight for the little guy. His rants may often be inaccurate, but regarding the ripple effects of the Fed’s easy money, Mr. Trump is directly on point.

Why it’s impossible to predict this election

The bottom line is that in a bizarre election like this one — with so many variables and so much emotion — polls may well under- or over-predict votes for the two major candidates.

What this essentially means is that strategic voting is a crapshoot. Most emotional partisans (like Dershowitz in his last sentence) will claim that a protest vote is a vote for the other candidate. Or that protest votes will determine who wins this election. This is pure nonsense and contradicts everything he wrote previous to that last sentence.

To paraphrase Hollywood: there are three things that will determine the result of this election.  But nobody knows what they are.

I will stand by my original analysis from my post last week. Vote sincerely, not strategically.

From the Boston Globe

By Alan M. Dershowitz   SEPTEMBER 13, 2016

DESPITE THE POLLS, the outcome of this election was unpredictable even before Hillary Clinton’s recent health scare. It was only a month ago that The Washington Post predicted: “Hillary Clinton will defeat Donald Trump in November. . . . Three months from now, with the 2016 presidential election in the rearview mirror, we will look back and agree that the presidential election was over on Aug. 9th.”

On Aug. 24, Slate declared, “There is no horse race: it’s Clinton by a mile, with Trump praying for black swans” — only to “predict” one week later “Trump-Clinton Probably Won’t be A Landslide.” A few days ago, in a desperate attempt to analyze the new polls showing Trump closing in on Clinton, Slate explained sheepishly, “Things realistically couldn’t have gotten much worse for Trump than they were a few weeks ago, and so it’s not a shock that they instead have gotten a little better of late.” Some current polls even show Trump with a slight lead.

The reality is that polling is incapable of accurately predicting the outcome of elections like this one, where so many voters are angry, resentful, emotional, negative, and frightened. In my new book, “Electile Dysfunction: A Guide for the Unaroused Voter,” I discuss in detail why so many voters now say they won’t vote at all or will vote for a third-party candidate. As The New York Times reported, “Only 9 percent of America chose Trump and Clinton as the Nominees.” Or, to put voters’ frustration with the candidates more starkly, “81 percent of Americans say they would feel afraid following the election of one of the two politicians.” [Note: If that’s the way you feel, vote accordingly.]

The bottom line is that in a bizarre election like this one — with so many variables and so much emotion — polls may well under- or over-predict votes for the two major candidates. Think about the vote on Brexit. Virtually all the polls — including exit polls that asked voters how they voted — got it wrong. The financial markets got it wrong. The bookies got it wrong. The 2016 presidential election is more like the Brexit vote in many ways than it is like prior presidential elections. Both Brexit and this presidential election involve raw emotion, populism, anger, nationalism, class division, and other factors that distort accuracy in polling. So those who think they know who will be the next president of the United States are deceiving themselves.

One reason for this unique unpredictability is the unique unpredictability of Donald Trump himself. No one really knows what he will say or do between now and the election. His position on important issues may change. Live televised debates will not allow him to rely on a teleprompter, as he largely did in his acceptance speech or in his speech during his visit to Mexico City. He may once again become a loose cannon. This may gain him votes, or it may lose him votes. Just remember: Few, if any, pundits accurately predicted how far Trump would get when he first entered the race. When it comes to Trump, the science of polling seems inadequate to the task.

Clinton’s political actions are more predictable, although her past actions may produce unpredictable results, as they did when FBI director James Comey characterized her conduct with regard to her e-mails as “extremely careless.” It is also possible that more damaging information about her private e-mail server or the Clinton Foundation may come from WikiLeaks or other such sources.

Another unpredictable factor that may have an impact on the election is the possibility of terrorist attacks in the lead-up to the voting. Islamist extremists would almost certainly like to see Trump beat Clinton, because they believe a Trump presidency would result in the kind of instability on which they thrive. If ISIS attacks American targets in October, that could turn some undecided voters in favor of the candidate who says he will do anything to stop terrorism.

A final reason why this election is so unpredictable is that the voter turnout is unpredictable. The “Bernie or bust” crowd is threatening to stay home or vote for the Green Party. Young voters may do here what they did in Great Britain: Many failed to vote in the Brexit referendum and then regretted their inaction when it became clear that if they had voted in the same proportion as older voters, Brexit would likely have been defeated. Some Clinton supporters worry that black voters who voted in large numbers for Barack Obama may cast fewer votes for Clinton in this election. Voters who usually vote Republican but can’t bring themselves to pull the lever for Trump may decide to stay home. The effect of low voter turnout is as unpredictable as turnout overall.

So for all these reasons and others, no one can tell how this election will ultimately unfold. It would be a real tragedy, and an insult to democracy, if the election were to be decided by those who fail to vote, rather than by those who come out to vote for or against one of the two major candidates.