I haven’t filled you in on the latest shenanigans in Chicago politics. The entire board of the Chicago Public Schools is resigning. Sarah Schulte and Eric Horng report at ABC 7 Chicago:

CHICAGO (WLS) — The entire Chicago Board of Education will resign, the office of Mayor Brandon Johnson said Friday.

The Chicago Public Schools shakeup with the mass resignation of all seven members of Johnson’s hand-picked board paves the way for the mayor the reappoint a board who will be willing to act on Johnson’s wish to oust CPS CEO Pedro Martinez.

Messages left by ABC7 for the school board president and multiple board members have not been returned, so ABC7 hasn’t heard directly whether the board members resigned in protest or were forced out.

The mayor is moving quickly to name new board members. That will happen Monday morning. However, the action is still unsettling to many in the district.

“It’s shocking,” CPS parent Sarah Strasser said. “We’re all, I guess, going to have to find out what comes out in the wash. I would love to know what was said behind closed doors.”

The outrage over which the board is resigning is the mayor’s insistence on the CPS CEO’s resignation which Mr. Martinez, also appointed by the mayor, has refused to do. The basis of the mayor’s displeasure is Mr. Martinez’s refusal to do something egregiously stupid: borrow to pay operating costs.

I had thought that no mayor could possibly be as bad as our previous mayor, Lori Lightfoot, but I obviously was wrong. Not that I voted for Brandon Johnson. I voted for the other guy. Mayor Lightfoot’s mistake was in not doing what she was elected to do—reform the Chicago Police Department. The problem with Mayor Johnson is that he is doing precisely what anyone who was paying attention should have expected him to do.

This turmoil is more opportunistic than ironic. Democrats have long been striving for an elected Board of Education and they will get their wish in November at which time we will have the opportunity to elect some of the board members. Mayor Johnson wants to appoint a new Board of Education that will do his bidding before the November election.

Mayor Johnson’s approval rating has declined to 25% according to a recent NBC poll. His disapproval rating is 60%. I’m surprised his approval rating is that high.

I genuinely wonder what Mayor Johnson’s supporters, that 25%, expected him to do. He’s doing exactly what I predicted he would do—whatever the Chicago Teachers Union want him to do.

All of this highlights a desire I have mentioned before. I think that Illinoisans deserve the ability to recall any elected official. At present the only elected official whom we have the power to recall is the governor under the Blagojevich Amendment.

The “fog of war” does not pertain only to war (the concept although not the precise phrase is attributed to von Clausewitz). What’s actually going on in the aftermath of Hurricane Helene? I’ve heard people claiming that FEMA has everything under control and I have heard people saying that FEMA is actually impeding relief after the flooding in North Carolina. I’ve heard people claiming that FEMA is running out of money and that FEMA has plenty of money (sometimes the same people). I’ve heard people claiming that FEMA has spent money supporting migrants and that FEMA has done no such thing.

I have no idea what’s actually going on. They all may be true. My predisposition was to give the administration the benefit of the doubt and let the dust settle (or, maybe more appropriate, the flood waters recede) before commenting.

Today the talking heads programs are devoting a lot of time to damage control which I presume they think of as refuting disinformation, producing plenty of disinformation of their own in the process.

Ruy Teixeira examines the recent polling data:

Among Hispanics under 35, Harris only leads Trump by 10 points, a 34-point drop from their 2020 merged data.

and

Among Latino men under 50, Trump actually leads Harris by 9 points. Trump also leads by 13 points among all working-class Latino men.

and

Interestingly, while Trump is preferred over Harris among all Hispanic voters on dealing with inflation and the cost of living and the economy generally, his biggest lead over Harris (13 points) is actually on “securing the border and controlling immigration”(!)

The quotes above are regarding a recent NBC/Telemundo poll.

Here’s his conclusion:

Combined with general deterioration among working-class voters of all races, it appears Democrats, win or lose in this election, are in urgent need of a new theory of the case for growing their coalition. Without it, any majorities they attain will be tenuous, undercutting their ability to govern effectively. And, no doubt, leaving the American people increasingly frustrated.

Those results certainly conflict with the prevailing narrative. When a majority of Hispanic voters are voting Republican, I won’t be surprised if the Democrats’ view of immigration shifts dramatically.

In an op-ed in the Wall Street Journal two consecutive commissioners of the Bureau of Labor Statistics make a plea for increased funding for the agency to enable it to calculate the rate of unemployment accurately or at least reasonably so:

We were appointed as commissioner of the Bureau of Labor Statistics by Presidents Trump and Obama, respectively. We ran the BLS for a combined eight years. Today, we’re raising an alarm: Perhaps the most vital indicator the agency uses to understand our nation’s economy—the U.S. monthly unemployment rate—is in imminent danger.

Once a month (usually on the first Friday), policymakers and financial traders react to the so-called Jobs Day report from the BLS, which estimates the monthly unemployment rate. Unfortunately, this nonpartisan fact-finding agency has been underfunded for more than a decade.

The BLS needs adequate funding to help run the Current Population Survey, which feeds into Jobs Day reports. At current funding levels, cuts to the survey’s sample size in 2025 will be unavoidable. That would endanger the quality and variety of estimates the BLS can produce. As technology evolves, people are less likely to answer calls from an unfamiliar number or open the door for a stranger. When the pandemic hit, without safe ways to conduct in-person surveys, response rates dropped to all-time lows. They’re still trending down.

I found this startling:

Because BLS began publishing monthly unemployment rates for Native Americans only two years ago, policymakers didn’t know until 2022 that the unemployment rate spiked to nearly 29% for Native Americans in 2020—about double the national rate. Even now, BLS can’t break down unemployment rates for specific racial and ethnic minorities in many states due to funding shortages. Veterans, teens, seniors, people with disabilities, women of color and other population subsets won’t be perceived or appropriately supported if they disappear from future Jobs Day reports.

I used to follow the BLS’s monthly Unemployment Situation report faithfully. I gave up when I recognized how phony it is. The commissioners cite some of the reasons it’s phony but not the most important reason. The statistics reported include a “fudge factor” based on something called the “birth-death ratio” (rate at which new businesses are formed and old ones are closed) and that fudge factor is not empirically based. When the fudge factor exceeds the actual numbers being reported, the statistic becomes purely political.

Furthermore, there are two important sources for information about employment: the employers report and the household report. The employers report is derived from payrolls reported by employers while the household report is based on a survey of households. There is a notable gap between the two reports (Mish Shedlock reports on this occasionally). The greater the gap the less reliable what the BLS is reporting about unemployment.

I also wonder how one calculates the rate of unemployment in a service economy? Is a sole proprietor or sole practitioner without clients or customers employed or unemployed? They are not deemed as unemployed by the BLS. The more “gig workers” (however you characterize them) the less relevant the unemployment rate.

I concur with the editors of the Palm Beach Post:

GThe vice presidential candidate debate was the exchange America wanted. Unlike the presidential debate, this one will not be remembered as a political beatdown. Democrat Gov. Tim Walz and Republican Sen. JD Vance actually talked issues, at times seeming to agree on some of them. The conversation was mostly civil and, more importantly, informative.

and

Both men did their jobs in defending the positions of their running mates. The reality is that the two are running for vice president, not the top job. Nobody, for example, recalls the accomplishments of the Pence administration. The role of the vice president, whoever the voters send to Washington, is to back the president’s policies; they can offer advice, even object, but the final say belongs to the president, not the person who’s a heartbeat away.

Granted, Walz struggled when asked to explain why he has said that he was present in Beijing’s Tiananmen Square during the bloody 1989 student-led protests. He wasn’t. And Vance mixed in a fair share of historic revisionism, non-answers and at times outright lies when pressed. Former President Trump, for example, didn’t try to save the Affordable Care Act – he worked hard to kill it. And, for the record, Vance has supported a national ban on abortion. The Republican’s failure to respond to whether he believed Trump lost the 2020 election, was, as Walz put it, ” a damning non-answer.”

Still, the debate showed a cordiality, even shared empathy that has been lacking in this presidential election season. The final decision comes next month. The candidates for vice president did their part, and the electorate is better off for it.

Why don’t we get more of that? And, related, whom does the contentious, incoherent appeal to emotions serve? I’m going to speculate. College-educated voters under 35 without the patience or, maybe, the ability to follow the less agonistic style of the vice presidential debate.

Two days after it began the East Coast dockworkers’ strike has ended. Ry Rivard, Nick Niedzwiadek, and Lauren Egan report at Politico:

A dockworkers strike that threatened the U.S. supply chain weeks before an election is over just days after it began — a resolution that White House officials credited to weeks of quiet engagement with both sides, punctuated by President Joe Biden’s public efforts to heighten the pressure on shipping companies to reach a deal.

The union that represents tens of thousands of East Coast dockworkers and the shipping industry announced Thursday evening that they had reached a tentative agreement on wages and are extending an expired contract through Jan. 15. That outcome defuses a political time bomb for Democrats, especially Vice President Kamala Harris, who needs all the union support she can get but could not afford a prolonged strike that would have soured voters on the economy.

“Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume,” the International Longshoremen’s Association and the alliance of shipping companies that employ dockworkers said in a joint statement.

The increase is expected to be around 60 percent over six years, according to a person familiar with the matter. That would be a substantial raise for the union members, some of whom already do well by blue-collar standards, earning six figures a year. The workers load and unload cargo containers at ports along the East Coast and the Gulf of Mexico, a critical conduit for goods including automobiles and bananas.

That outcome should bring the wages of East Coast dockworkers into line with those of West Coast dockworkers which is the outcome that I thought was appropriate. The union’s opposition to automation is deeply troubling and likely to remain a sticking point.

An anecdote from the distant past. My godmother’s husband was a lithographer. Some time back in the 1950s his organization transitioned completely to offset printing and, as part of the settlement with the union on this issue, he effectively retired in his 50s. I suspect some sort of settlement of that sort is what the dockworkers are seeking. The circumstances in the United States are very different than they were 70 years ago. I’m skeptical the dockworkers will get the deal they are seeking. The most they are likely to achieve is to make the U. S. non-competitive.

In an op-ed in the Wall Street Journal econ prof Martin Eichenbaum argues against the idea that we need to do more manufacturing:

According to the Bureau of Labor Statistics, manufacturing’s share of nonfarm employment declined from roughly 32% in 1947 to approximately 8% at the end of 2023. Yes, there was a slight increase in the rate of decline around 2001, when China entered the World Trade Organization. But you have to stare pretty hard to see the effect. In any event, that effect is trivial compared to the long, slow, inexorable decline in the importance of manufacturing as a source of U.S. jobs.

I found that puzzling. It’s not hard at all:

U. S. Manufacturing Employment

Here’s his conclusion:

I started my career teaching at Carnegie Mellon University in Pittsburgh. There was real suffering when manufacturing declined in that area. Retraining a 45-year-old steel worker to become a biotech engineer is hard. Proponents of free markets sometimes forget that there are real political consequences of ignoring the human cost of change.

The right answer to the challenge of change involves at least three initiatives. First, the government must materially help the people who are affected and help them find jobs in which they can take pride. Second, parents and educators must provide children with the skills they need to thrive in a constantly changing world. Third, politicians must remove unnecessary regulations and other barriers to growth in emerging sectors of the economy.

The wrong answer is to pine for a mythical golden age that never existed. Pittsburgh is now a thriving center of education, research and health services. It didn’t get there by trying to bring back the 1950s.

He fails to define “thriving”. Pittsburgh’s population in 1950 was 677,000 people. Today it’s 303,000—less than half of that. Most of that decline had been accomplished by 1990, long before trade with China was a factor but it dropped by 1% between the 2010 and 2020 censuses. Pittsburgh’s real per capita income has declined slightly from 1950 to the present (from $44,000 in 1950 to $42,000 now in today’s dollars). That does not sound like thriving to me. It sounds like “declining but not collapsing”.

I suspect he’s making a false analogy. Let’s consider a highly simplified version of what’s happened to agriculture, looking at wheat production only:

Do I need to document that we are producing wheat with a lot fewer farmers than we used to? But:

I think those tell different stories. I wonder what Dr. Eichenbaum thinks?

Rather clearly for the last 25 years we have increasingly been transitioning to a service economy. It’s easy to measure the productivity of wheat farmers or steelworkers. You just divide the amount of steel by the number of workers (or thereabouts). Measuring the productivity of workers in a service economy is considerably more difficult. It’s almost entirely political.

Just to take one controversial example, how do you measure the productivity of physicians? Milton Friedman thought that the productivity of physicians was, essentially, flat. Physicians strenuously object to using any outcome-based measurement which is handy for them. The metric being used is something called “relative value units” (RVUs). There’s a discussion of RVUs here. Basically, you count “procedures” and then adjust that based on the relative values of the procedures. That’s basically circular.

My view is that measuring productivity based on procedures is not only circular but actually perverse. Our rate of iatrogenic morbidity and mortality (i.e. physician-caused) is too high. Just how high is controversial but it’s something between 45,000 and 450,000 deaths per year. IMO one of the factors in that is the predisposition to treat which is encouraged by using procedures performed as a metric for physician performance.

A similar story can be told for every service. How do you measure the productivity of an economics professor? Without such metrics things like “gross domestic product” (GDP) have no validity and formulating policies based on whether GDP is increasing or decreasing is fraught. Trying to measure in dollars leads you to the parable of the three merchants.

I haven’t posted about the dockworkers’ strike on the East Coast for a couple of reasons. First, it’s still early. Second, most of what I’ve read so far is just counting partisan coup. And, finally, I’m of very mixed minds about it.

The strike and the aftermath of the hurricane are a real double whammy for the affected parts. It may be that the strike is opportunistic but it’s certainly heartless. On the other hand the discrepancy between what dockworkers are paid on the West Coast and what they’re paid on the East Coast is enormous. Dockworkers on the West Coast earn about $55 an hour while dockworkers on the East Coast earn about $39 an hour. That’s a substantial gap.

On the third hand I’m not particularly sympathetic with the dockworkers’ opposition to automation. Port automation is the future. Worldwide there are around 70 automated ports and they’re being added every year. The U. S. only has three fully-automated ports and they’re all on the West Coast. The dockworkers’ unions are the main obstacle to their acceptance in the U. S. To the extent that the days of Terry Malloy weren’t over decades ago, they soon will be and the only thing the dockworkers can accomplish is making the U. S. quaint and old-fashioned by world standards.

I wanted to address something that has been claimed from time to time. I have heard people saying that the reason there was no major international conflict involving the U. S. during Trump’s term of office was that he was deterring Russia, Iran, China, etc. I think that’s true but, as the “fact-checkers” put it, it needs context.

I don’t think they were deterred for the reasons usually given but because he was an unknown quantity. They didn’t know what the heck he would do. There are positives and negatives to that. “Strategic ambiguity” is a time-hallowed diplomatic posture. Shooting from the hip, on the other hand, is risky.