My reaction to our present political situation is disappointment. I’m disappointed with both of our political parties.
The Republicans accomplished a veronica (definition 3) in passing the “big beautiful bill”. Unfortunately, they were more motivated to extend the tax reforms of the first Trump administration than they were to improve on them. They didn’t rebuild the U. S. military, basically cutting military spending in real terms. Their “cutting” of Medicaid isn’t nearly as draconian as their political opponents would have you believe but they will certainly make for good campaign ads for the 2026 midterms. My concerns about the BBB are that I suspect it isn’t likely to spur investment much if at all but it will reduce consumption, particularly in combination with import duties.
I’m no happier with the Democrats. We are in circumstances which if not unique are at least unusual. I don’t believe we’ve had a situation in which the the president’s political party controlled both houses of Congress by such small numbers in my lifetime—I think the closest was when Woodrow Wilson was president. Under the circumstances, I think the Democrats should have produced an alternative budget proposal. That has been the practice within recent history. Instead they opposed any proposed budget. That doesn’t tell us much about what they support only what they oppose. We already knew they detested Trump.
Past assessments of allowing the tax cuts of Trump’s first term to expire, for example from the CBO, have suggested doing so would cause a reduction in GDP in the short term but that continuing to run at a deficit would enhance growth in the long term. I continue to look for complete assessments of the consequences of the enacted budget from reliable sources. Those I have read to date are partial assessments, typically not including both the spending and tax portions of the legislation.
After 21 months of devastating warfare, Israel and the terrorist group Hamas appear tantalizingly, frustratingly close to a ceasefire that could lead to the release of some Israeli hostages and a flow of desperately needed food and medical supplies into Gaza. But close is not a deal. We’ve been here before, only to see hoped-for ceasefires fall apart.
They say that the “outlines of a deal” are obvious.
The contours of a new ceasefire deal — and a permanent end to the conflict — are plain to see. In the first phase, a 60-day truce, Hamas needs to account for the 50 remaining Israeli hostages (some of whom are believed to be dead), and release at least half. Israel must release hundreds of Palestinians and let the United Nations and other international aid agencies into Gaza to start providing food, fresh water, cooking oil, infant formula, diapers, medicines and other essentials.
During the ceasefire, Hamas must be forced to accept — through Qatari and Egyptian mediators — that its reign of terror over Gaza’s population must end. Now might be a good time to coerce Hamas. The group’s main benefactor, Iran, has been weakened by U.S. and Israeli airstrikes, and Israel has degraded Iran’s main regional proxy, Hezbollah.
I’m completely baffled by that. Such polling data as exists tells us that the majority of Gazans still support Hamas and blame Israel for, well, everything.
Other than the situation in Iran little has changed since October 8. Hamas continues to reject any ceasefire and is supported by Gazans. It continues to hold hostages including the population of Gaza. What is there for Hamas if its control over Gaza ends? How do they envision that Qatar and Egypt will “coerce” Hamas?
Why should Israel accept that Hamas remain in place, holding half of the remaining hostages? Showing mercy on the Gazans? It is to laugh.
My personal view remains the same: the conflict between the Israelis and the Palestinians remains a “wicked problem”. It has no solution acceptable to both parties and the role in it most favorable to the United States is sorrowful silence.
In the many reactions to the flooding in Texas I’ve read one with which I agreed wholeheartedly from Tim Palmer in the New York Times. His message is simple: stop building in floodplains.
Most of the rest have been partisan bickering.
Just for the record I think that Federal Emergency Management Agency should continue to exist and has a valuable role to perform. But I have a question. What should FEMA’s role be?
In FEMA’s empowering legislation, the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, FEMA role is set out as to provide assistance from the federal government to state and local governments, development mitigation plans as guidelines for how the damage from natural disasters, may be minimized, etc. It doesn’t empower FEMA to take the lead in all disaster situations. That remains the responsibility of state and local governments. I agree with that.
There would appear to be several alternatives:
FEMA could retain its statutory responsibility and act as a backup to state and local governments.
It could automatically take the lead in all disaster situations.
Some hybrid of the two?
What should FEMA’s role be?
I certainly don’t think it should facilitate states maintaining low taxes or allow high-tax states to use their funds for other priorities. The moral hazard of that is obvious.
The statistics tell us that crime is decreasing. That’s truth of both violent and non-violent crimes. You don’t need to take my word for it. A quick Google search reveals that.
However, indirect measures seem to tell a somewhat different story. Those indirect measures include businesses leaving major cities, individuals leaving major cities, one-way van rental, etc.
As I write this, we are witnessing a decline in violent crime approaching the one that occurred in the 1990s. If the lessons of that decade are a reliable guide, public confidence in urban safety should be bouncing back again. This time, though, it isn’t happening.
The numbers themselves, especially the latest ones, are pretty striking. According to the FBI, the number of murders in the United States fell in 2023 by the steepest rate ever recorded. That pattern persisted in 2024. As of October, homicides were down about 16 percent nationwide, just compared with the previous year.
Not all cities enjoyed the same relief, but most did. Detroit was on track in 2023 to record its lowest homicide rates in 57 years. Washington, D.C., which had a disturbingly high rate of violent crime in 2023, saw it drop precipitately in 2024. Killings in the district fell from 273 to 190 during the same period. After a spike in violence that coincided with the worst period of COVID-19, the numbers in many places were lower than they were before the pandemic came along.
The streets may have grown significantly safer in a remarkably short time, but so far at least the public doesn’t seem to be buying it. A 2024 Gallup poll found that 25 percent of respondents identified crime as an extremely serious problem, one of the highest rates of concern in a long time. In another survey, two-thirds of respondents said they believed crime was increasing.
He went on to remark on how shoplifting, in particular, was increasing and becoming more organized and how random many crimes seemed to be.
I’ve already documented why there’s plenty of room to be suspicious of crime statistics here in Chicago except for homicides. However, our homicide rate adjusted for population is at the lowest level since 2015.
Do the statistics actually reflect the reality? Or is people’s behavior a better gauge of reality than the statistics? Or is it possible the statistics to tell us the crime is down are right but people are correct in believing it isn’t?
Here’s something else I’ll believe when I see it. I just heard Sens. Lindsey Graham and Richard Blumenthal declaring their joint support for a piece of legislation that would grant President Trump the authority (without additional Congressional supervision) to impose additional 500% tariffs on goods from China, India, and Brazil on the grounds that those counties are financing Russia’s war against Ukraine by purchasing oil and reselling it.
There are so many “ifs” in that statement that sounds to me more like a campaign promise than a policy. If Congress passes the bill… If President Trump imposes the tariffs without suspending them… If sky-high tariffs are enough to deter China, India, and Brazil from purchasing Russian oil… If removing Chinese, Indian, and Brazilian purchases of Russian oil is sufficient to bring Russia to end its aggression on Ukraine…
And, of course, if that can be done without producing a serious recession in the United States.
Winston Churchill once stated, “There is only one thing worse than fighting with allies, and that is fighting without them.”
Although the United States has been united by treaty with its NATO allies for nearly 80 years, in the years before Donald Trump becoming president, the United States would have had to fight any major war in Europe effectively alone.
Since the end of the Cold War, Europe’s combined military capabilities had steadily degraded to the point of almost total impotence. Fortunately, President Trump’s decade-long calls for NATO allies to contribute more to shared security have recently been answered with a historic commitment among allies to spend a once-unthinkable 5% of gross domestic product on defense ? a number that reflects both fairness and strategic wisdom.
Last month’s NATO summit in The Hague gave off the disturbing impression of an alliance finally crossing the fine line between serious defence policy into the realm of make-believe. The main outcome was presented to the world as a “new 5 per cent defence spending pledge” by all allies. The previous target, dating from 2014, was 2 per cent. President Trump naturally claimed the new benchmark as a “big win”, with the White House calling it a “monumental victory” and a “dramatic” increase in defence contributions across the alliance. Yet hardly any of this is true.
Of the 5 per cent, 1.5 is to be counted as any spending intended to “protect critical infrastructure, defend networks, ensure civil preparedness and resilience, innovate, and strengthen the defence industrial base”. In other words, this part of the grand new defence commitment is really an exercise in accounting, as a variety of existing types of rolling domestic investments can simply be designated as “NATO spending”. Italy already plans to declare a €13.5 billion bridge to Sicily as a contribution towards defending Europe – which would be funny if it weren’t a logical outcome of what NATO defence policy has devolved to.
It’s the other 3.5 per cent that is supposed to provide the real (so-called “core”) defence uplift, though. But even this – leaving aside the separate 1.5 per cent nonsense just mentioned – is merely a target to be achieved by 2035, ten full years from now. Given that Russia is supposed to invade us much sooner than that – according to the usual hysterical European warnings – a 2035 target becomes superfluous as it is clearly disconnected from all official strategic calculations. Not to mention that the previous target from 2014 remains unmet 10 years on, with several NATO members not spending even 2 per cent on defence – among them, major countries like Italy (1.49 per cent), Spain (1.28) or Canada (1.37) – and most of the others hovering just above the threshold by intense cooking of the accounting books.
He goes on to document two reasons these countries won’t live up to these pledges. The first is that they lack the fiscal headroom to do it:
Of course, more money for defence could be raised, in principle – in the UK just as in any other European country – either by cutting spending on welfare, by increasing taxes, or by somehow growing the economy. The well-known problem is that neither Britain nor most of its European peers can afford any of these, let alone hope in some miraculous economic growth. They are too weighed down by regulation, taxes, Green costs, expensive energy, deindustrialisation, an aging population and a migrant onslaught to be able to splurge on rearmament at scale.
The second that they lack the political will to do it:
The third main issue standing in the way of getting even to the 3 per cent is that the the domestic situation across many European countries, especially the deeply sclerotic and mismanaged West European ones is becoming more, not less, socially and economically explosive as time goes by. This means more instability going forward, and therefore more need to divert resources and attention to domestic issues as opposed to worrying about Ukraine. Indeed, it is likely that in the coming years – if it takes that long – more politicians might come to see substantial benefits in extricating their country from the Ukraine imbroglio, as a way to save money, tap into new voting pools, and even obtain better energy prices for their debilitated industries.
He concludes:
For all these reasons, and more, it is almost clear that not only the “5 per cent” NATO target is a chimera, but also the 3.5 by 2035 and even the 3 per cent by 2030 (or later). Whether we believe our own fantasies is neither here nor there, except for the fact that it undermines the credibility of the defence capacity we do have. The problem is that the adversary likely doesn’t share in our beliefs – because, whether it is the Russians or the Chinese, they look at facts and realities as they are and make their strategic moves accordingly.
We, on the other hand, choose to live in a world of our own artificial making, increasingly disconnected from the realities and the real balance of power. What we have now is a make-believe European defence policy, in which the US pretends it still guarantees our security and we pretend to pay for it. Let’s hope we won’t be tested anytime soon.
That last witticism is from a Soviet-era wisecrack: “We pretend to work and they pretend to pay us”.
Will the Europeans reform their economies, reduce their spending on welfare, and increase their spending on defense? I’ll believe it when I see it. Here’s France’s military spending as a percent of GDP from MacroTrends:
Can someone explain to me why Jared Bernstein is referred to as an “economist’? My understanding is that his undergraduate degree is in music and his graduate degrees in social work. I’ve never looked at his transcripts but it’s quite possible he’s never taken a course in economics.
BTW that’s my main argument against technocracy. Just because you’re an expert on something does not mean you’re an expert on everything. Indeed, my experience is that it’s almost the opposite of that. The more focused you are on a single subject the less you tend to know about other subjects. There aren’t a lot of true generalists out there.
The Trump administration has a message for China: Keep off the farm.
Agriculture Secretary Brooke Rollins said Tuesday the administration will work with state lawmakers to ban sales of U.S. farmland to buyers from China and other countries of concern, citing national-security interests.
Rollins, joined by Defense Secretary Pete Hegseth and Homeland Security Secretary Kristi Noem, said the government is ratcheting up scrutiny on existing land owned by Chinese buyers and is looking at ways to potentially claw back past purchases.
“We’ll never let foreign adversaries control our land,” said Rollins.
State and federal lawmakers for years have warned that China and other countries could use U.S. farmland to facilitate spying or wield influence over the U.S. food-supply chain. Chinese-owned entities hold nearly 300,000 acres—roughly 0.02%—of U.S. farmland, according to Agriculture Department data, an area about the size of Los Angeles.
Republicans and Democrats alike have sought to curb foreign ownership of American farmland, at times seeking to increase government scrutiny of purchases and investments. Critics have raised fears that foreign owners could drive up land prices or sidestep environmental rules.
In general “fee simple” is the private ownership of real property in which the owner has the right to control, use, and transfer the property at will. It is the form of real estate ownership that is the norm in the United States but not worldwide. I have long believed in reciprocity with respect to land ownership, that is, foreign individuals and entities should only be allowed to own U. S. land if American individuals and entities are allowed to own land in those countries in fee simple ownership. You might be surprised at how many countries in which that is not the case.
WASHINGTON—Two Republicans named Kevin are vying to be the next chairman of the Federal Reserve. One is rising to the top of the list of potential candidates, while the other is facing skepticism from President Trump’s allies.
Kevin Hassett, one of Trump’s closest economic advisers, is emerging as a serious contender to be the next Fed chair, according to people familiar with the matter. Hassett’s rise threatens the other Kevin—former Fed governor Kevin Warsh—an early favorite for the job who has angled for the position ever since Trump passed him over for it eight years ago. Some people close to the president worry that Warsh, who isn’t in Trump’s inner circle, won’t be a champion of lower rates.
What is unfolding is quintessential Trump: two ambitious men competing for his approval in a high-stakes contest that echoes the boardroom drama he once promoted on “The Apprentice.”
Hassett met with Trump about the Fed job at least twice in June, according to people familiar with the matter. The discussions marked a shift for Hassett, who previously had told allies he wasn’t interested, but now says he would take the job if offered.
Warsh has discussed traveling to Washington this month to meet with Treasury Secretary Scott Bessent about the Fed position, according to people familiar with the matter.
Hassett and Warsh didn’t respond to requests for comment. “President Trump has been clear about the need for the Federal Reserve’s monetary policy to complement the Administration’s pro-growth agenda,” White House spokesman Kush Desai said. “He will continue to nominate the most qualified individuals who can best serve the American people.”
I only have two observations.
First, we should have more bankers and fewer economists as governors of the Federal Reserve, particularly as members of the FOMC. The difference between bankers and economists resembles that between chemical engineers and chemists. Historically, Federal Reserve governors have tended to have been bankers.
Second, here’s a graph, courtesy of MacroMicro of the Fed funds rate (short-term interest rate) implied by the Taylor Rule vs the effective Fed funds rate:
I think that’s a powerful argument for automating the operation of the FOMC, at least more than at present. Note, too, that it suggests President Trump’s assessment of the present EFFR is wrong.
But while we may mock the radicalism of Mr. Mamdani and his fellow socialists seemingly on the rise in the Democratic Party, I see in the man’s appeal, his evident popularity among a certain type of young voter especially, more signs of the continuing crack-up of American politics. Many Republicans like to think that the extremism represented by the likes of Mr. Mamdani and Rep. Alexandria Ocasio-Cortez is a signal of the Democrats’ growing irrelevance and unelectability. But his ascent—provisional though it may still be—is more likely a reflection of the fissures that continue to stretch our national cohesion than some proof of the marginalized nature of Donald Trump’s opponents.
Confronted with the electoral success of a radical shift by their opponents, political parties have two choices. They can accommodate the new electoral reality, acknowledge that the other side has captured fresh truths that command popular majorities, and accept that the Overton window has shifted. In these circumstances the distinctive proposition they offer to the voters becomes a promise merely to moderate the more extreme elements of the new governing dispensation, softening its edges to appeal to those most skittish about it, without fundamentally challenging its supremacy. The so-called abundance Democrats seem inclined to this sort of accommodation.
Alternatively, they can reject the revolution, refuse to reconcile with the new order, and put their faith in the physics of Newton’s third law of motion to produce an equal and opposite reaction. The successful radicalism of the other side has demonstrated not a rightward (in this case) shift in the nation’s center of gravity, but a potent popular openness to radical solutions of all sorts.
The latter seems closer to the temper of our times. While Mr. Trump and the Republicans have enjoyed not only electoral superiority but remarkable governing success in the past six months, there is little evidence of a wider political paradigm shift. The president and his party have succeeded in executing radical new approaches to immigration, foreign policy, trade and international economics, and have just passed one of the largest and most consequential pieces of fiscal legislation in the past 20 years, but with very few exceptions, Democrats seem in no mood to endorse the change. Not a single Democrat in either house voted for the One Big Beautiful Bill Act; few have shown any sign of temporizing on any of the other MAGA Republican initiatives.
Instead the temptation for Mr. Trump’s opponents may be to double down on the resistance and take their chances on the easy appeal of radical ideas. They can take inspiration from the apparent success of a reality-challenging radicalism evidenced in key elements of the MAGA agenda.
but I disagree as to the nature of the resemblance. I don’t think that the resemblance is the radicalism of their policies but that both are populists and both have made effective use of social media.
