I wanted to share an interesting graph. This is sampled from a Hamilton Project paper.

As you can see the results of the household are diverging from those of the establishment survey, at this point by more than two percentage points of total employed. The household survey has some significant differences from the establishment survey including:

• Each individual is counted only once
• It is not limited to people over 16
• It includes some number of people who are working “off the books”

At the Associated Press Kevin Freking, Haleluya Hadero, and Mary Clare Jalonick report that the House of Representatives has passed what is being described as a “TikTok ban”:

WASHINGTON (AP) — The House on Wednesday passed a bill that would lead to a nationwide ban of the popular video app TikTok if its China-based owner doesn’t sell its stake, as lawmakers acted on concerns that the company’s current ownership structure is a national security threat.

The bill, passed by a vote of 352-65, now goes to the Senate, where its prospects are unclear.

TikTok, which has more than 150 million American users, is a wholly owned subsidiary of Chinese technology firm ByteDance Ltd.

The lawmakers contend that ByteDance is beholden to the Chinese government, which could demand access to the data of TikTok’s consumers in the U.S. any time it wants. The worry stems from a set of Chinese national security laws that compel organizations to assist with intelligence gathering.

My feelings about such a ban are pretty strong. Unlike some I do not believe that it violates deeply held American values. Foreign governments do not have a generalized right to gather intelligence within the United States and only a First Amendment absolutist sees it any other way. There are such absolutists. For example, consider this post by Matthew Petti at Reason.com:

Competition is the strongest force keeping the internet free. Whenever users find a topic banned on TikTok, they can escape to Twitter or Instagram to discuss the censored content. And when Twitter or Instagram enforce politically motivated censorship on a different topic, users can continue that discussion on TikTok.

Forcing TikTok under American control is a way to block that escape route. Instead of protecting Americans from Chinese censorship, it would bring Chinese-style censorship home.

I have no idea what the bill’s prospect will be in the Senate.

I should also add that I can be persuaded to change my views—I’m soliciting arguments from my readers. Should TikTok be banned from operating in the United States?

If this description by Billy Perrigo at Time is an accurate characterization:

The U.S. government must move “quickly and decisively” to avert substantial national security risks stemming from artificial intelligence (AI) which could, in the worst case, cause an “extinction-level threat to the human species,” says a report commissioned by the U.S. government published on Monday.

“Current frontier AI development poses urgent and growing risks to national security,” the report, which TIME obtained ahead of its publication, says. “The rise of advanced AI and AGI [artificial general intelligence] has the potential to destabilize global security in ways reminiscent of the introduction of nuclear weapons.” AGI is a hypothetical technology that could perform most tasks at or above the level of a human. Such systems do not currently exist, but the leading AI labs are working toward them and many expect AGI to arrive within the next five years or less.

It’s hard for me to imagine a more feckless, superficial set of recommendations. It’s not merely bolting the barn door after the horses have already fled, it’s bolting the barn door after the horses have died of old age.

To continue with the analogy used, to nuclear weapons, imagine that everyone knew how to make an atomic bomb and that it could be made in your basement with stuff you can find ordinarily in your home. Deterrence would be a sad joke. Let’s ask the obvious question. Even if all of their recommendations were adopted how would it change North Korea’s hypothetical use of artificial intelligence? India’s? China’s?

Not only would it do nothing to change any of those countries’ programs, it would do nothing to change thousands of private Americans’ ability to pursue artificial intelligence development.

Try again.

I struggled a bit to come up with a title for this post. My original choice was “You Can’t Have It Both Ways”. An op-ed by Aaron MacLean in the Wall Street Journal expresses a view I have been waiting to hear for some time. Mr. MacLean is concerned about the implications of Europe rearming itself:

Hastings Ismay, NATO’s first secretary general, famously said that the alliance’s purpose is “to keep the Russians out, the Americans in and the Germans down.” The Russian leg of this stool gets the most attention, especially and understandably in light of Vladimir Putin’s aggression. But calls for greater European autonomy raise a second and more fundamental issue for American strategy—the German part of Ismay’s formula.

A net consequence of American security policy since 1945 has been the suppression of European politics: the process by which armed states consider the full range of policy ends and means. The success of postwar liberal politics, the dominance of social-democratic domestic priorities, and the progress of supranational political union—each supported by the American military—have had a pacifying effect.

Looking to Europe, many Americans complain that our costly diplomatic and military strategies have made unseriousness on the Continent possible. But is that bad for America? Do we want European states to rearm, to achieve something closer to strategic self-sufficiency, perhaps including nuclear proliferation to the east?

It isn’t Germany, specifically, that need preoccupy us—though the contributions of a unified Germany to international security over the past 150 years have been mixed. Ismay’s comment ought to remind us of the possibility of European politics more broadly. Perhaps we forget the vast slaughterhouse into which the Continent transformed on two occasions in the first half of the last century. Its wealth and leadership did little to retard and much to accelerate the industrial and pitiless cruelty, the movements of populations, the murders of whole peoples, and the conscription and sacrifice of millions. Twice, reluctantly, America sent its own youth, many of them victims of the Minotaur of European “progress.”

Our alternatives are limited.

1. We can do what we’ve done. We pledge to defend Europe. Europe dearms and uses the money it saves for other priorities. We maintain a war machine (including industry) capable of defending ourselves and Europe. We bear the costs as the price of that decision.
2. We can do what President Trump has threatened to do: if Europe doesn’t increase its military spending, we won’t defend it. That’s pretty hard to make stick and in all likelihood an idle threat.
3. We could behave like a real empire and exact tribute from European countries to defray the expenses of our military machine (see above).
4. We could pull out of NATO and leave Europe to its own devices. It’s not that important to us anymore.

My preference is the last. When Germany reunified in 1990 Lord Ismay’s formula became obsolete. When the Soviet Union collapsed in 1991 it became surreal. Expecting the Europeans to have our best interests at heart when we don’t even do that ourselves is delusional. Whether the Europeans like it or not we’re more concerned about East Asia than we are about them.

The editors of the Wall Street Journal see President Biden’s budget proposal, released yesterday, as a flight from reality:

Most U.S. presidential budgets are exercises in fiscal deception, but even by that standard President Biden’s Monday proposal for fiscal year 2025 sets a record for unreality. It proposes defense spending as if the world is at peace, entitlement spending that isn’t sustainable, and tax increases that would hurt the economy if they passed, which they won’t. Congratulations, Team White House.

For me the most telling passage of their editorial is:

As a share of the economy, Mr. Biden wants spending to reach 24.8%, or a quarter of national wealth. The 1974-2023 average was only 21% and, as Mr. Biden told the country last week, the Covid crisis is over. But instead of letting outlays fall as a share of GDP, as they always have after a recession or crisis, the President wants the government to stay at a new and higher spending plateau.

I’ll return to that later.

Meanwhile, the editors of the Washington Post express a somewhat more charitable view of the budget proposal:

Like most presidential budgets before it, President Biden’s fiscal 2025 tax and spending blueprint is more of a political statement than an actual legislative proposal. Basically, it’s a reelection pitch straight from the “Middle Class Joe” playbook he ran on in 2020: raise taxes on the rich and businesses and spend much of the proceeds on federal support for child care, health care and housing. These traditional Democratic priorities failed to become law even when Mr. Biden’s party narrowly controlled Congress, so there is zero chance of enactment now.

with this as what I would assess is the most significant passage:

The short version is that Mr. Biden’s tax plan would be fairer and more fiscally responsible than Mr. Trump’s. The longer version is: Despite this reality, the country needs a reckoning on its unsustainable budgetary path, and Mr. Biden’s proposals, though better than the alternative, do not envisage one.

I have two questions for the White House and, I guess, the editors. First, federal revenues as a percent of GDP remaining fairly constant goes back a lot farther than 1973 as this graph from the St. Louis Federal Reserve illustrates:

Even at the height of World War II it was only 19%. Since World War II local and state government revenues as a percentage of GDP have ballooned from 7% of GDP in 1930 to nearly 10% now:

Here’s my question. How will the federal government increase its revenues as being proposed by the White House? Increasing marginal tax rates on individuals and corporations does not answer the question. Over the last 90 years marginal tax rates have varied enormously but the revenues as a percentage of GDP has hardly budged. More explanation is needed.

And then there’s the follow-up question. In January 2018 the prime rate was around 4.5%. Now it’s 8.5%. Here’s the market yield on Treasury securities:

As you can the rate is presently higher than it has been since the Bush II Administration. Interest on the debt is increasing faster than revenues by a considerable amount and the White House’s budget does nothing to address that. What is their plan for dealing with a budget that will grow fast regardless of whether federal spending on budget items other than interest increases or decreases?

I’ve been thinking about starting a recurring feature, “Ironic Juxtapositions of the Day”. For example, on Saturday one of the news aggregators that try to keep me informed had these two

“Immigrants are less likely to commit crimes than U.S.-born Americans, studies find”

and

“Juan Orlando Hernández, Former President of Honduras, Convicted in Manhattan Federal Court of Conspiring to Import Cocaine into the United States and Related Firearms Offenses”

which I found pretty ironic. BTW the flurry of corrective articles like the first one represent what I would call a “category error”. At least to me the question is not whether migrants commit fewer or less felonies than native-born citizens but whether migrants who have been convicted of violent felonies in their countries of origin continue to commit them when they come here. I suspect the answer is “yes” but determining whether that’s the case is actually quite difficult.

IMO we should be deporting non-citizens who have been convicted of violent felonies in their countries of origin who commit violent felonies here without any disagreement about it but that does not presently appear to be the case.

Last njght I watched nearly the entire Academy Awards ceremony for the first time in years. My wife and I have observed over the years that Oscars seem to be awarded in waves. Last night was no exception: it was clearly a Poor Things and Oppenheimer night.

Cillian Murphy was an obvious shoe-in for Best Actor for Oppenheimer although I was rooting for Paul Giamatti. If you haven’t seen The Holdovers, I recommend it (it’s streaming on Peacock which I get with my cable subscription). It’s a fine film, sort of a throwback to pictures that were made decades ago—no car chases or explosions, lots of dialogue. Da’Vine Joy Randolph won the Academy Award for Best Supporting Actress which I thought she deserved. Like all of the characters in The Holdovers, her role was a complex, layered one.

For me the toughest category to pick was Best Supporting Actor. I was gratified that Robert Downey, Jr. won for his performance in Oppenheimer but Mark Ruffalo, too, has been nominated many times without winning. IMO he’s one of the finer Gen X actors.

I was surprised that Emma Stone won Best Actress for Poor Things. I haven’t seen it yet but I probably will.

That Godzilla Minus 1 won for Best Film Effects was not a surprise but it did illustrate the conundrum in which Hollywood finds itself. GM1’s total budget was about $15 million—less that a tenth of the Hollywood blockbusters being produced these days. Clearly, there’s something wrong in Hollywood. They’re too darned expensive for such mediocre results—something that was called out, ironically, in one of the acceptance speeches. The chap doing the complaining had it wrong, though. Not only is it possible to make 20 $15 million dollar movies rather than one $300 million stinkeroo, it’s being done. The issue is distribution rather than production. And those $15 million dollar movies will have less box office appeal in China and India. Car chases and explosions translate better than dialogue.

One speculation is that its movies are being produced by committee. I suspect that, like all too many American enterprises, they are engines for making big bucks for a handful of people and have lost sight of their markets.

Last night I tried to listen to President Biden’s last State of the Union message of his first term. At one point I fell into a troubled slumber. It was largely a shouted wishlist interrupted all too frequently with rowdy outbursts. The Republicans cooperated by being surly and lacking in decorum.

The targets of the speech were Republicans, large corporations, individuals earning more than $400,000 per year, credit card companies, and landlords.

I was clearly not the audience for the speech. It was largely a campaign rally, presented on a take it or leave it basis. I suspect its intent was more to shore up the president’s support among Democrats wondering if he’s up to the job than to convince moderates or independents. Some are characterizing the speech as “fiery”. I thought the president looked old, frail, and doddered at times. It was little more incoherent, halting, or rambling than any other Joe Biden campaign speech.

As President Biden prepares to give his State of the Union message for 2024 which some of his supporters are saying provides him with the opportunity of resetting his reelection campaign, I thought it might be fun to do a little retrospective on his previous SOTU messages.

This evening’s SOTU will find the president not with the lowest net approval rating of his presidency but with the lowest at the time of any SOTU message:

In my memory no SOTU message has been a barnstormer of the sort that some, e.g. Robert Reich, are advising. All have been dreary wishlists, landing like dead cats, forgotten within days of their delivery.

The targets that have been leaked include big corporations, centimillionaires, credit card companies,

To date none of President Biden’s SOTU messages have been followed by sizeable improvements in his popularity. Will this time be different?