In his Substack today Nate Silver introduces a taxonomy of the factions in the modern Democratic Party as a jumping-off point for his critique of Heather Cox Richardson and the faction she represents. Here’s the taxonomy:

I’d argue that there are three main factions of the Democratic Party as the jockeying is already underway for the 2026 and 2028 primaries. First, there’s the Capital-L Left: populist, deservedly feeling recharged by the success of Zohran Mamdani and a backlash to the increasingly politically assertive billionaire class.

Next, there’s what you might think of as the Abundance Libs: technocratic, more willing to find common ground with Republicans, and more sympathetic to market-based solutions. I’m a big fan of Ezra Klein and Derek Thompson, the authors of Abundance, but I think the project is more neo-liberal than left-wing — to me, not such a bad thing! That’s a subject for a different newsletter, however.

The third faction Richardsonism or a term I’ll treat as synonymous with it: #Resistance Libs. They’re older, with extremely high educational attainment, predominantly female, and very highly politically engaged. This is the audience for a cluster of political activism encompassing things such as the No Kings protests and some highly popular anti-Trump Substacks along with certain prominent podcasts and much of Bluesky.

I think that Nate’s taxonomy is fine as a political science exercise but it suffers from some defects in helping us understand today’s Democratic Party and the challenges it faces.

The alternative taxonomy I would propose also consists of three factions:

1. People who want something from the government

   This group includes poor and middle income beneficiaries, students, and people whose primary political calculus is distributive. Their moral logic is “Government exists to help people like me.”

2. People who see politics and government as a way of making a living, even becoming wealthy

   This group consists of politicians, bureaucrats, NGOs, consultants, defense contractors, and regulators. Their moral logic is cloaked in public purpose but is essentially self-interested. It is a very large and powerful group.

3. People who want to accomplish things that require government intervention

This group is small but not non-existent and is frequently overruled by the other two factions. Their moral logic is that some problems cannot be solved without state power.

There are a number of differences between Nate’s taxonomy and mine. My taxonomy points to the political economy of the Democratic Party, pointing out that there are large groups that are economically dependent on government expansion regardless of ideology and why failure does not lead to reform. Nate’s taxonomy does a better job of explaining electoral coalitions and messaging strategies and explaining why Democrats squabble so bitterly among themselves even when their material interests align.

Nonetheless, I think my taxonomy has a number of strengths. For one thing it explains why win or lose Democratic campaigns are so expensive. If my view is correct, it suggests that voters are noticing that the Democrats promise outcomes but deliver procedures and funding to intermediaries and are tired of it which leads to declining turnout, particularly in midterm and off-year elections, ticket splitting, and the rise of “burn it all down” candidates.

We’ll soon have an opportunity to test my hypothesis in the 2026 midterms and the 2028 general election. In 2026 Nate’s model would predict that #Resistance purists re-activate around Trump, democracy, courts, and norms and that Democrats regain some ground through turnout and if Democrats lose, the party will adjust its ideas. My model on the other hand predicts that Democrats will run on affordability, ironically since the policies they espouse have the opposite effect, in the midterms campaign spending will be very great, possibly unprecedentedly so. Outcomes will underperform relative to spending, surprise pundits, and evoke post-mortems without reform. If the Democrats fail they will blame it on “the rich” or “corporations”.

In 2028 Nate’s model predicts a better message, a better candidate, and favorable conditions will produce an electoral recovery.

My model predicts that barring external developments in the form of a charismatic outsider, a financial crisis, or generational upheaval, etc. the election will be quite close. The Democratic standard-bearer may well be a billionaire.

Democrats are not losing because they have the wrong ideas; they are losing because the people who depend on how the party works are not the people who depend on it winning.

As you undoubtedly know by this time actor and director Rob Reiner and his wife have died, apparently stabbed to death by their own son. At Variety Chris Morris laments:

Rob Reiner, who segued from starring in “All in the Family” to directing movies including “This Is Spinal Tap,” “A Few Good Men” and “When Harry Met Sally…” was found stabbed to death Sunday afternoon in his Brentwood home alongside his wife Michele Singer. He was 78.

The LAPD said in a statement that “Nick Reiner, the 32-year-old son of Robert and Michele Reiner, was responsible for their deaths.” Nick Reiner is being held at Twin Towers Correctional Facility in Los Angeles after being booked for murder.

“It is with profound sorrow that we announce the tragic passing of Michele and Rob Reiner. We are heartbroken by this sudden loss, and we ask for privacy during this unbelievably difficult time,” his family said in a statement.

Reiner’s most recent film was “Spinal Tap II: The End Continues,” the sequel to the 1984 classic “This Is Spinal Tap.”

The son of the noted writer, director and comedian Carl Reiner, he first attracted attention as Michael “Meathead” Stivic, hippie son-in-law of Carroll O’Connor’s bigoted, blustering blue-collar worker Archie Bunker, during nine seasons of CBS’s topical sitcom. He collected Emmys as best supporting actor in a comedy in 1974 and 1978.

With credits as a writer on “The Smothers Brothers Comedy Hour,” “Happy Days” and “All in the Family” and a pair of TV movies under his belt, Reiner moved into big screen work as a director, writer and co-star in 1984’s “This is Spinal Tap,” the cherished, improvisational mockumentary about a thick-headed heavy metal band.

That project was succeeded during the next decade by a run of box office hits and popular favorites, which demonstrated his uncommon assurance working in a variety of genres. These included “Stand By Me” (1986), a coming-of-age drama with a youthful cast, adapted from a Stephen King short story; the fantasy “The Princess Bride” (1987); the new-look romantic comedy “When Harry Met Sally…” (1989); another King adaptation, the thriller “Misery” (1990); and the Tom Cruise-Jack Nicholson court martial drama “A Few Good Men” (1992).

That run of films is remarkable not simply for its commercial success but for its range. Few directors have demonstrated comparable confidence moving between genres without leaving a signature of strain or self-consciousness behind. Reiner did not impose a stylistic “brand” on his films so much as an assurance of craftsmanship: a feel for structure, pacing, and performance that allowed very different kinds of stories to work on their own terms.

What is especially striking in retrospect is that several of these films have aged better than many more formally ambitious works of the same period. The Princess Bride and When Harry Met Sally… in particular have become cultural touchstones, quoted and revisited across generations, while Stand by Me and Misery remain effective because they take their material seriously rather than ironically. A Few Good Men now feels almost like a period piece—not because of its themes, but because of its confidence that institutions, however flawed, are still capable of producing moral drama.

I’ve read a number of encomiums of him but none made this particular point which I consider vital. Like Jackson Browne in popular music, Rob Reiner’s films portrayed the peculiar voice of his generation, the Baby Boomers, with uncanny accuracy. Ironic without being negative or, worse, nihilistic. Idealistic without being fatuous. In his films the hero always wins but the victory is frequently diluted with sorrow.

Consider, for example, the famous courtroom scene in A Few Good Men. Tom Cruise and Jack Nicholson are stand-ins for their respective generations: Cruise, a Baby Boomer, coddled, opinionated, cocky, and right; Nicholson, of the Silent Generation, bitter, equally opinionated, and right in his own way but also tragically wrong.

We shall not see his like again. Just images flickering on a screen but images that will not be forgotten.

I disagree with much of both the Trump Administration’s approach to Venezuela and the way that approach has been covered by the American press. The administration’s rhetoric and actions suggest a growing willingness to use force or coercion to effect regime change, while much of the commentary surrounding it treats such measures as either routine or cost-free. Neither assumption is justified, and both reflect a failure to grapple with the legal, historical, and political realities that govern U.S. relations with the rest of the hemisphere.

Let’s start out with the Trump Administration’s recent attacks and saber-rattling. As I’ve written before I don’t think that sinking Venezuelan boats is legal or justified let alone the “double tap” attack on the boat sunk in September. Even if they are carrying drugs for sale in the U. S. Even if the Venezuelan drug cartels are in collusion with the Venezuelan government. And a land attack on Venezuela to remove Maduro as at least implied in an interview with Politico is completely beyond the pale. As I’ve said before, it would not merely be a crime it would be a mistake.

Over the last 200 years the United States has attacked or invaded a half dozen Central and Caribbean countries and meddled in the internal politics of nearly all Central and South American countries. Invading Venezuela to effect regime change would poison relations with the other countries of this hemisphere for decades.

I am no supporter of the present Venezuelan regime, and President Maduro is a particularly nasty customer. Still, there is a critical factor that American politicians and journalists alike often overlook. Hugo Chávez was first elected president in 1998 in an election declared “clean and transparent” by international observers, and he was re-elected in 2000 in what appeared to be a similarly fair contest.

What followed was a steady erosion of electoral integrity and institutional checks, culminating in the deeply flawed processes that brought and kept Nicolás Maduro in power. Recounting this history is not meant to justify the current regime but to underscore its origins. The political system that produced today’s Venezuela began with a popular mandate freely given by Venezuelans themselves. The subsequent collapse of democratic norms and economic performance was widely predicted at the time and, in retrospect, was tragically unsurprising.

Under these circumstances, it seems to me that only Venezuelans can ultimately choose a legitimate alternative. If an external power—particularly the United States—removes the current regime, there is little reason to believe that the result will be durable or better. Absent internal legitimacy, nothing prevents the re-emergence of an equally corrupt or authoritarian successor. Prosperity, freedom, and democracy cannot be imposed from outside; they must be demanded and sustained by the people who live under them.

In the first part of this series I discussed the effects of the Industrial Revolution on employment. In this segment I’ll conduct a similar analysis of the Digital Revolution. For purposes of this discussion by “Digital Revolution” I mean the widespread adoption of computers which I would reckon as between 1983 and the present. The reason I pick 1983 as the start of the Digital Revolution is that the IBM PC had been introduced in 1981. IBM’s dominance gave corporations permission, as it were, to use personal computers but there were three developments in 1983 that supercharged the adoption of personal computers. One was the introduction of the IBM XT, a substantial enhancement to the PC, a second was the release of Lotus 1-2-3, the first “killer application” on the IBM PC/XT, and the introduction of the Apple IIe which I would mark as the predecessor of the Mac.

There are reasonable alternative start dates for the “Digital Revolution”. In the 1960s the penetration of computers was largely limited to the largest companies. The ARPAnet, the prototype Internet, was limited to colleges, government, and a few laboratories when it was introduced in the 1970s. I think the real start date is when desktop computers and their “killer apps” took root in the economy and the society.

I want to emphasize that in this post I am going to focus on the effect of the Digital Revolution on work in the United States not globally. While the global impact may be even more important than the impact on work in the U. S. it is beyond the scope of this post.

As I noted the Industrial Revolution shifted substantial numbers of jobs from agriculture to industrial sectors but that is not its most significant effect. It actually changed the nature of work, from primarily agriculture to primarily manufacturing and services.

The Digital Revolution has

• eliminated many routine/manual jobs and reshaped service and clerical roles
• created new digital and tech-enabled occupations
• changed the nature of work dramatically

Jobs Eliminated

The Digital Revolution has resulted in the elimination of 7 to 12 million jobs, particularly in

• manufacturing
• clerical/administrative support
• retail support roles
• routine bookkeeping and office jobs
• telephone operators and related categories

In 1983 U. S. manufacturing employment was roughly 17 million; it is roughly 13 million at present. A substantial share of those jobs were lost to automation and digitization. It was not completely due to offshoring although the Digital Revolution facilitated offshoring of manufacturing jobs but any discussion of that is beyond the scope of this post.

Between 1983 and the present almost 4 million clerical jobs were eliminated, largely having been automated by word processors, spreadsheets, and database programs. When I started working, roughly sixty years ago even small companies employed clerk typists, bookkeepers, and other clerical workers.

or a reduction of about 3.6 million clerical jobs.

Digitization in the form of scanners, point-of-sale terminals, inventory automation, and eCommerce has also affected jobs in retail. According to the Bureau of Labor Statistics that has eliminated between 1.2 million and 1.5 million retail support and cashiers’ jobs.

There has also been a decline in transportation jobs and jobs in printing/publishing due to digitization of about a half million.

All told it is estimated that between 7 and 12 million jobs have been eliminated as a consequence of the Digital Revolution.

Jobs Created

Like the Industrial Revolution before it the Digital Revolution has created more jobs than it has eliminated. It is, however, difficult to estimate how many jobs have been created because they are distributed across the economy.

In the technology sector 7 to 8.5 million jobs have been created consisting of the 5 to 5.6 million jobs created in software publishing and the information technology sector, the .5 million to 1.5 million jobs in telecommunications and Internet services, and the .5 million to 1 million jobs created in electronics, semiconductor, and computer hardware.

In eCommerce, logistics, warehousing, and distribution 5 million jobs have been created consisting of more than 2.5 million jobs in warehousing and fulfillment, more than 1.5 million in parcel delivery and logistics coordination, and more than 1 million in eCommerce corporate and operational roles.

Something like 3.5 million to 5 million jobs have been created in professional services that did not exist prior to the Digital Revolution including digital marketing, cybersecurity, data science, IT consulting, computer-aided healthcare roles, and business services based on analytics.

Finally, something like 3.5 to 4 million jobs have been created in the gig economy, creator economy, and remote digital freelancers.

These categories are not mutually exclusive, and some overlap is unavoidable; the purpose here is to establish scale rather than produce a perfectly partitioned taxonomy.

All told 15 to 20 million jobs have been created in the United States as a consequence of the Digital Revolution.

Discussion

In 1983 there were roughly 93 million jobs in the U. S. By 2023 there were something like 156 million jobs in the U. S. for an increase of something like 64 million jobs. A reasonable guesstimate is that the Digital Revolution accounts for about 25–30% of all new jobs in that period. The jobs eliminated were mostly highly routine and more jobs were created than destroyed. The jobs eliminated were overwhelmingly located in the U. S. while the jobs created were both in the U. S. and offshore. The jobs in the section above are U. S.-located jobs only. In addition millions of jobs were created offshore but that is a topic for another post. The bottom line is that the Digital Revolution replaced millions of Americans doing routine tasks
with millions of foreign workers performing new digital tasks and millions of domestic workers performing new nonroutine tasks.

That was not entirely benign. Middle-skill jobs fell sharply. High-skill jobs rose sharply. Low-skill service jobs rose somewhat. The offshoring of jobs resulted in creating a wage ceiling on IT wages at all but the topmost levels, back-office administrative jobs, and telephone support wages. That in turn tended to increase income inequality in the U. S. There were other causes as well but that, too, is beyond the scope of this post.

There is another important difference between the Industrial Revolution and the Digital Revolution which is the pace of the change. The Industrial Revolution in the United States took place over something between a century and a century and a half while the Digital Revolution has taken place over about a 40 year period, in one working lifetime. This compression of disruption into a single working lifetime sharply constrained the ability of educational institutions, labor markets, and political systems to adapt.

In the next post in this series I will discuss the present Artificial Intelligence Revolution.

Sources:

BLS Current Employment Statistics
BLS Occupational Employment Statistics
Census IPUMS microdata
Daron Acemoglu & Pascual Restrepo, “Robots and Jobs: Evidence from US Labor Markets” (Journal of Political Economy, 2020)
David Autor, David Dorn, Gordon Hanson, “The China Shock” (American Economic Review, 2016)
David Autor, Frank Levy, Richard Murnane, “The Skill Content of Recent Technological Change” (QJE, 2003)
Autor & Dorn, “The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market” (AER, 2013)
Others to a significantly lesser degree

The Challenge of Artificial Intelligence: Part I—the Industrial Revolution

At Reuters it is being reported that the oil tanker boarded and seized by U. S. forces was operating under a false flag:

GEORGETOWN, Dec 10 (Reuters) – Guyana’s maritime authority said on Wednesday that supertanker Skipper carrying Venezuelan oil, which was seized by the United States, was falsely flying Guyana’s flag.

“The Maritime Administration Department has observed the proliferation and unacceptable trend of the unauthorised use of the Guyana flag by vessels that are not registered in Guyana,” it said in a statement.

The authority, which was informed by the U.S. government of the tanker’s seizure, plans to take action against the unauthorized use of the country’s flag, it added.

Under UNCLOS Article 92, ships on the high seas are subject to the exclusive jurisdiction of their flag state. That protection applies only if the vessel is validly registered and genuinely entitled to fly that flag. UNCLOS Article 110(1)(d) explicitly allows warships (and government vessels clearly marked and authorized) to board a vessel on the high seas when there are reasonable grounds for suspecting that the ship is without nationality.

That changes my opinion somewhat. The Trump Administration was acting legally in boarding and seizing the oil tanker. Either the U.S. had prior intelligence indicating the vessel’s lack of nationality, or it established that fact during the boarding itself—both of which satisfy the UNCLOS standard.

That suggests that the coverage of this story has been a predictable deficiency of event-driven reporting. The information above should have been front page news. At least it should have received the same level of coverage that the boarding and seizure itself did. AFAICT that has not been the case. While Reuters reported the false flag detail, its legal significance—namely that the vessel was stateless and therefore subject to boarding by any state—was largely unexplored. That omission materially affected how the event was understood.

Remember Jonathan Swift’s witticism: “Falsehood flies, and truth comes limping after it, so that when men come to be undeceived, it is too late; the jest is over, and the tale hath had its effect.”

Updata

Maybe I wasn’t hearing right but the “talking heads” news programs this morning didn’t mention the “false flag” or legality issues in any discussions of the oil tanker. IMO that was a serious omission.

You often see laments about a supposed “decline in American leadership,” especially from European commentators who want Washington to be more assertive, more engaged, or more willing to underwrite their preferred outcomes. But I think that misstates the real problem. What we are witnessing is not a leadership deficit on Washington’s part so much as a followership deficit among our NATO allies.

European governments have interests of their own, and those interests diverge increasingly from ours. That shouldn’t be surprising: Europe faces different threats, different demographics, different economic pressures, and different political constraints. Yet the commentary class continues to speak as though American leadership is a constant and allied alignment is the variable—when the opposite is equally, if not more, true.

The uncomfortable truth is that many allies won’t follow where we lead, often because they don’t want to go where we are going. Washington’s preferred strategy toward Russia, toward China, toward energy, and even toward industrial policy is not universally shared in Europe. In some cases, allies are hedging; in others, they are free-riding; in still others, they genuinely believe our approach is mistaken or misaligned with their domestic politics.

Complaints about “U.S. abdication” are therefore a way of shifting blame. They imply that if only America were more decisive, the alliance would function smoothly. But NATO is a coalition of sovereign states, not a chain of command. Leadership is only meaningful when others are willing to be led.

Seen that way, the so-called leadership crisis looks much more like a crisis of followership—one rooted in structural divergence, political fragmentation, and a reluctance to bear costs. The United States can set priorities, propose strategies, and shoulder burdens. But it cannot make others want to come along.

I want to give two examples of how the United States is doing diplomacy wrong, one from several years ago and one just recently. In 2023 Secretary of State Antony Blinken received a phlegmatic greeting when he landed in China. Khaleda Rahman reported at Newsweek:

U.S. Secretary of State Antony Blinken received a muted greeting as he arrived in China on Sunday to kick off high-stakes diplomatic talks.

He was welcomed by Yang Tao, Director General of the Department of North American and Oceanian Affairs of the Foreign Ministry, and U.S. Ambassador to China, Nicholas Burns, as he landed in Beijing.

Blinken is the first top U.S. diplomat to visit China in five years, continuing frosty U.S.-China relations. A February trip was postponed following the diplomatic tumult sparked by what the U.S. said was a Chinese spy balloon flying over American airspace.

I think the Biden Administration bungled its response to what was rather obviously a deliberate slight by the Chinese leadership. They would have interpreted that as our acceptance of a lower status. My kneejerk reaction was that the next time that President Xi went to the White House he should have been admitted through the tradesman’s entrance. Or placed off-center in all photo opportunities. At the very least his visit should not have been with a military band and red carpet treatment but by a low level protocol officer. There are even more provocative alternatives but you get the idea.

The private signal would have been “Don’t do that again. We respond.”

Here’s the more recent instance. We’ve just learned that the Venezuelan oil tanker was not the first time the Trump Administration had used the military to interdict a shipment. Benoit Faucon and Lara Seligman report at the Wall Street Journal:

A U.S. special operations team boarded a ship in the Indian Ocean last month and seized military-related articles headed to Iran from China, U.S. officials said, a rare interdiction operation at sea aimed at blocking Tehran from rebuilding its military arsenal.

The ship was several hundred miles off the coast of Sri Lanka when the operatives boarded it and confiscated the cargo before letting the vessel proceed, the officials said. The U.S. had been tracking the shipment, according to the officials and another person familiar with the operation.

The previously undisclosed raid was part of a Pentagon effort to disrupt the Islamic Republic’s clandestine military procurement after Israel and the U.S. inflicted heavy damage on its nuclear and missile facilities during a 12-day conflict in June.

It was the first time in recent years that the U.S. military is known to have intercepted cargo with Chinese origins on its way to Iran. The name of the ship and its owner couldn’t be determined.

I think that was another bungled opportunity, guided by a lack of understanding. My inclination would have been to return the crew of the ship to the Chinese authorities with a statement to the effect that since we know that China would never condone such activities we are confident that these are criminals that should be returned to you. A useful comparison is the 1993 Yinhe incident. I think that was similarly bungled and now that it has been made public the Chinese are likely to respond now as they did then—with large, public demonstrations for greater Chinese nationalism.

My interpretation of those incidents is that at best our public diplomacy is tone-deaf. At worst we are communicating the wrong messages due to cultural ignorance. How the U.S. handles maritime interdictions with China matters far more for future relations than the actual cargo.

I find the Trump Administration’s seizure of a Venezuelan oil tanker deeply troubling. Even if one accepts the administration’s stated justifications at face value, the action is strategically unsound, legally questionable, and likely to further poison our already strained relations with other countries in the hemisphere.

The United States helped establish the international process for resolving disputes of this sort, and we have treaty obligations under the UN Charter and the Inter-American system to bring grievances that cannot be resolved through diplomacy or economic sanctions before the United Nations Security Council. We should abide by the rules we expect others to follow.

Actions like this also set a dangerous precedent. If the United States asserts a right to seize foreign vessels unilaterally, do we want China—or Russia—to behave in the same way?

Most importantly, we should never undertake military action against Venezuela without a formal declaration of war by Congress. Anything less would violate both our constitutional structure and the norms we claim to champion.

The argument over the budget between the mayor and the City Council continues. In the latest salvo Mayor Johnson has proposed raising the number of employees and the tax: only companies with 500 or more would be subject to the tax which would be $33 per month per employee.

Frankly, I’m skeptical of City Hall’s numbers. The mayor has said that 175 companies would pay the new proposed tax which would raise $82 million.

Chicago used to have a head tax. The last year in which it was levied was 2014. It applied to companies with 50 or more employees and it raised only $35 million. It doesn’t feel to me like the numbers will add up.

Furthermore, it sounds to me as though the tax is likely to fall primarily on companies that would find it easy to adjust their numbers (or move) to avoid the tax. In other words JPMorgan, Accenture, and some other big consulting and financial companies. Maybe some hospital chains. The only retailer I can identify that would pay the tax would be Target—the other just don’t have enough stores or enough employees to make the cut.

At this point my bet would be that Brandon Johnson becomes the only mayor in Chicago’s history to preside over a shutdown of the city.