I want to thank Scott Sumner for bringing economist Lawrence Summer’s remarks from a lecture at Harvard to our attention. He takes note of “misconceptions” including

• the objective of economic policy is to maximize the number of jobs
• these have not been good decades
• the world hasn’t done well
• trade liberalization has caused problems for us
• the reindustrialization of the United States is the most important issue for the U. S. going forward

There is some confusion in the cited passages due to Dr. Summers’s switching back and forth unexpectedly from misconceptions to assertions but the piece is certainly interesting.

I would love to debate Dr. Summers. For example, riffing on the quoted passages

RESOLVED: the objective of economic policy at the federal level is to maximize the availability of goods at low
cost to consumers and firms

or

RESOLVED: for the last two decades economic policy has resulted in net benefits for the lowest third of income earners

I would say that welfare policy has been good for the lowest third of income earners but not economic policy which has been bad for them.

I agree completely with this claim:

And in some ways most fundamental and important, this month, we celebrate the 78th anniversary of a situation where there has been no direct war between major powers. You cannot find a period of 78 years since Christ was born when that was the case. So, the idea that we’ve been doing it all wrong is, I would suggest, a substantial misconception.

but I would attribute it to the preeminence of U. S. economic might over that period. Will that continue without the U. S. reindustrialization he dismisses as unrealistic?

I would promise not to take advantage of Dr. Summers’s youth and inexperience.

One thing I should mention. I think there is a difference between “net benefits”, “average benefits”, “median benefits” and so on unappreciated by Dr. Summers.

In his Wall Street Journal column William Galston declaims that Americans long for a “new beginning”:

In a recent poll from the Pew Research Center, 10% of Americans reported that thinking about U.S. politics made them feel hopeful, and 4% were excited. By contrast, 55% said they were angry, and 65% were exhausted.

This isn’t the first poll to note a pervasive sense of exhaustion, and I suspect it won’t be the last. Americans are tired of partisan quarrels that rarely reach a resolution. Issues like immigration reform linger for decades, and the Supreme Court has brought new ones such as abortion back into the arena.

and

It isn’t surprising that the share of Americans with unfavorable views of both parties has reached a record high (28%), up from only 6% three decades ago, or that 37% wish there were more parties from which to choose. Nor is it surprising that challenges to the major-party duopoly are proliferating—from Cornel West’s Green Party and a likely No Labels bipartisan centrist ticket to the insurgent candidacy of Robert F. Kennedy Jr., whose grievances against Democratic Party officials seem to multiply by the day.

Voters might be in a better mood if they believed that these third-party campaigns were likely to improve the political system. But two-thirds of the public think it’s unlikely that an independent candidate will win in the next 25 years, and only 26% say that having more political parties would make it easier to solve the nation’s problems. (About the same proportion believe that additional parties would make problem-solving harder.)

I hate to disabuse Mr. Galston but there will be no “new beginning”. The system is rigged in favor of the present political parties, at least if Illinois is any gauge.

For any candidate to have his or her votes tabulated, they must follow certain rules and those rules are sufficiently stringent it means that only established parties need apply. Write-in campaigns are impossible in practice—a write-in candidate must follow essentially the same rules as the party candidates to get on the list of “authorized write-ins” which largely negates the purpose of a write-in campaign.

I don’t think it’s an accident that the last two Illinois governors’ campaigns have been, essentially, self-financing.

Maybe it’s different elsewhere but I suspect not.

My wife visited family in California last week.

At Financial Times Oren Cass wonders whether Republicans are winning the national argument over immigration:

Conservatives in the GOP have pushed border enforcement for years, but have always run into two political problems, which seem increasingly surmountable. One is the challenge of telling a positive story about the aspiration for a secure border. “Making the case for why we should control immigration,” observes former senator and Trump’s attorney-general Jeff Sessions, “will be essential to achieving an immigration policy Americans can be proud of.” 

Highlighting the depravities of the status quo — the human and drug trafficking, the abuse and exploitation — is important, but that is not enough. Conservatives also have to make the case that they, too, want a generous and humanitarian immigration system, as do most Americans, but that an emphasis on enforcement is the only way to ever achieve it. This has been a hard sell in the past, but now conservatives can expect to win the argument that border security enforcement is both non-negotiable and achievable. 

The other problem for conservatives has been the business lobby, which covets the deep pool of cheap and exploitable labour that illegal immigration provides. On no other issue does it leverage its power within the Republican party so aggressively, both to undermine genuine efforts at enforcement and to demand a range of politically unpopular expansions in legal immigration that dilute any bill’s message and appeal. Conservatives often lose the battle just to mandate that employers use E-Verify, a government system for confirming that new hires are authorised to work — a modest measure and an absolute necessity for any effective enforcement regime. 

I think he’s wrong and as an illustration of that I will point out that President Trump resisted enforceable protections against the exploitation of workers in the country illegally on the grounds that it would discomfit employers. Where is Mr. Cass’s evidence to the contrary? It doesn’t exist.

What I think is actually happening is that nobody wants to pay for the millions of entry-level workers coming into the country. The difference between what those workers are paying in taxes and what they require in terms of local, state, and federal services is a subsidy being paid to import those workers and it must be paid by someone. Presently, that’s some combination of taxpayers (by which I mean people who actually pay taxes on net), the previous cadre of immigrants (who are least able to afford it), and putting those subsidies on the national credit card. That can never make sense.

What makes sense is a head tax which businesses would pay on a per employee basis. That would destroy the business models of many businesses including farms, fast food, and hospitality.

The argument about immigration is one that has been going on since the beginnings of the republic. I see no signs of anyone winning the argument. There may be a slight present political advantage for those arguing for enforcing the laws but the argument won’t end.

I think that Walter Russell Mead exhibits confusion in his latest Wall Street Journal column. In it he laments the “quiet disintegration”: of the rules-based international order:

Even as the global geopolitical crisis becomes more acute, the core institutions and initiatives of the American-led world order and the governments that back them are growing progressively weaker and less relevant.

He goes on to illustrate the futility of the United Nations General Assembly, the G20, and the WTO. He’s mistaken. The “rules-based international order” is and always has been a pious fantasy. What existed in the past was U. S. hegemony in which the U. S. ignored the rules while insisting that other countries comply.

The U. S. dictated the UN Charter and the Universal Declaration of Human Rights. The permanent members of the UN Security Council are the World War II Allies. The World Trade Organization and its predecessor, General Agreement on Tariffs and Trade (GATT), were largely created as attack vehicles against a weakeningly hegemonic United States, The G20 began as an instrument of the hegemonic United States and evolved into an attack vehicle against it.

Our notional allies in Europe like to imagine a rules-based international order that restrains the United States but are disinterested in one that promotes U. S. interests. If we wanted a rules-based international order we would feel restrained by its rules. We don’t.

All countries have national interests. The United States has national interests. France has national interests. China has national interests. Russia has national interests. Ukraine has national interests. These interests are not necessarily compatible, indeed, they are frequently incompatible as illustrated by the ongoing war between Ukraine and Russia. China embraced the WTO when it was in its national interests to do so and ignored it when it was not. We do the same thing. We shouldn’t be surprised or outraged at these differences.

Contrariwise, if we wish to maintain the rules-based order that we are free to ignore, we need to have an economy that supports the sort of hegemony we experienced from 1945 to 1975 or thereabouts. I don’t think we’re prepared for the policy implications of such an economy and such hegemony which is why I think that Dr. Mead’s knickers are in a twist.

If you’re looking for a briefing on the circumstances surrounding New Jersey Sen. Robert Menendez, you could do worse than David Dayen’s piece at The American Prospect. Here’s a snippet:

Democrats allowed Menendez to climb back to his ranking membership despite the fact that the bipartisan Senate Ethics Committee found that he “violated Senate Rules, federal law, and applicable standards of conduct” in the Melgen case by failing to disclose the gifts. If the indictment is correct, Menendez went right back to using that perch to favor-trade with his new girlfriend’s wealthy associates.

The indictment says that Menendez explicitly secured military support for and weapons sales to Egypt, which he was in a position to influence as Foreign Relations Committee ranking member and then chair. “I am going to sign off on this sale to Egypt today,” Menendez texts his wife at one point. Incredibly, the indictment supplies evidence of Menendez ghostwriting a letter on behalf of the Egyptian government to persuade his Senate colleagues to lift a hold on $300 million in foreign aid. Nadine Menendez is placed at the meetings with Egyptian officials, including some in Menendez’s Senate office, where these activities were being plotted.

Menendez also made calls to the Trump administration to pressure them into facilitating talks aimed at getting a dam built over the Nile River, a priority of the Egyptian government. He sent what was described as “highly sensitive” nonpublic information about American embassy personnel in Cairo to Nadine, who then passed it directly to an Egyptian government official. And he pressured the Department of Agriculture to lift its opposition to Hana’s halal certification monopoly, which the Justice Department says is where Hana acquired the funds to finance the bribes.

I see any number of problems with the New Jersey Democratic Party’s strategy of primarying him. For one thing what if he wins? For another when you’re trying to disqualify a former president not disqualifying a pretty obviously guilty senator is really a bridge too far.

I agree with the thrust of Daniel Runde’s argument in his op-ed at Newsweek to the extent that we should continue to provide aid to Ukraine. Here’s his peroration:

On its own, Ukraine will run out of weapons, and the morale of the soldiers will plummet. The government will struggle to finance both its operations and the war effort, leading to more Ukrainians leaving the country.

but I believe that I disagree with his supporting arguments which appear to be the aid we will have provided to Ukraine to date will have been wasted (it’s a sunk cost—that’s a fallacious argument) and that it will encourage China to invade Taiwan. I think that China will decide when and if to invade Taiwan on its own calendar and for its own reasons. They will do so or decline to do so regardless of what befalls Ukraine.

Here’s a counter-argument from Leighton Woodhouse:

If the counteroffensive fails and Russia maintains control of Crimea, the only way Ukraine could prevail over the long term would be with NATO troops directly in combat — a suicidal situation that would invite a global nuclear confrontation. And even then, a victory for Ukraine that comes years rather than weeks from now could come at the price of the total destruction of the entire country.

In interviews, Ukrainians have characterized the counteroffensive as a “disappointment.”

“I want the price they paid to be reasonable,” the wife of a combat veteran told the Washington Post in August. “Otherwise it’s just useless, what they went through.”

Her husband, who lost a leg to a landmine, told the Post that soldiers on the frontline are unprepared and unmotivated. Another Kyiv resident said that new soldiers last just two to three days on the front.

And yet, the Biden administration is pushing for another $24 billion aid package for Ukraine. “There’s no alternative,” President Biden said about continued financing of the war.

Ukraine is turning into the proxy version of Afghanistan or Iraq: an endless conflict in which victory is always around the corner, in which the Pentagon and the defense industry push for escalation after escalation regardless of the reality on the ground, in which deaths mount and a country is destroyed only to end in defeat or a Pyrrhic victory years later, once enough American voters have had their fill of war.

My view is that Crimea is lost and, possibly, Donetsk and Luhansk as well. Mr. Runde’s claim that Ukrainian elections have been democratic depends on your definition. They were democratic if you exclude most of those who might have voted against the present government, an interesting and inconsistently applied definition. Nonetheless we should continue to support Ukraine, using whatever leverage that provides us to encourage Ukraine to settle for less than its stated objectives. I also think we need to provide more oversight in how what we are providing to Ukraine is used but that’s a different topic.

The editors of the Wall Street Journal scoff at Chicago Mayor Johnson’s proposal for ending “food deserts” on the South and West Sides:

Has Mr. Johnson considered why the stores are closing? In 2016 then-mayor Rahm Emanuel stood beside Whole Foods Co. CEO Walter Robb to celebrate the opening of the new store in Chicago’s Englewood neighborhood. The two cheered greater access to fresh fruit and vegetables and a healthy anchor for the community. By 2022 it had closed.

The city had subsidized the store with $11 million in tax financing, according to local PBS news station WTTW. But that wasn’t enough. After the closing in 2022, Whole Foods said the company “regularly evaluate(s) the performance and growth potential of each of our stores” in order to “position Whole Foods Market for long-term success.”

Walmart closed four stores in Chicago because they were losing tens of millions of dollars a year, and CEO Doug McMillon said annual losses had doubled in the past five years.

The problem isn’t corporate racism. It’s crime. In 2022 Chicago reported 54,000 thefts and a mere 4% resulted in an arrest. Of the 8,730 retail thefts, there were 1,450 arrests, or less than 17%, according to Wirepoints and the Chicago city data portal.

Chicago’s arrest rate for retail theft fell to 16.6% in 2022 from 42.5% in 2019. Retailers say there is little they can do when groups of people walk into their stores, grab arm-loads of merchandise and walk out with impunity.

No doubt Chicago’s government will bring its legendary efficiency to the grocery business, though we hope it does better than it does running the failure factories that are its public schools. But we wonder what Mr. Johnson will do to prevent theft at his government grocery chain. Will he consider the losses to be merely the cost of doing good socialist business?

The answer, of course, is in the statistics they produce above. When the city’s crime resolution rate is as low as it is, it isn’t providing the security that is its most basic mission. Mayor Johnson’s stores won’t be stores at all. They’ll be empty shelves with occasional deliveries that are bought and/or looted quicker than they can be replaced.

On the talking heads programs this morning nearly every individual interviewed on every network to which I listened was asked whether New Jersey Sen. Robert Menendez should resign in the wake of his having been charged with illegal corruption. Nearly every one regardless of political party said he should resign. The more discreet said something along the lines of “he should consider very carefully…” which I interpreted as a way of saying he should resign without actually saying as much.

I found it amusing in a perverse sort of way. They all knew he was corrupt. Now they’re just doing damage control for a simple reason: if every corrupt senator were convicted or otherwise left office, you couldn’t get a bridge game together let alone do what is laughingly referred to as “the people’s business”. Sen. Menendez just violated what is called the “Goldilocks rule”.

My own preference would be that only constituents should be able to lobby senators and representatives. Foreign governments and companies are by definition not constituents. Violation of that rule should be grounds for removal.

Update

In the interest of fairness I think that what Justice Thomas has been doing may not be illegal or technically unethical but it is corrupt. If Supreme Court Justices want to lead “lifestyles of the rich and famous”, they should resign from the court and get jobs working for big law firms.