When I read John Lichfield’s analysis of the state of French politics in Politico, I didn’t know whether to be amused, shocked, or astonished. For example this:

The last two presidents from the center right, Sarkozy and Jacques Chirac, were both convicted of corruption after they left the Elysée. Five of the last six French center-right prime ministers have faced criminal charges of various kinds. Two, Edouard Balladur and Dominique de Villepin, were acquitted. Three, including Chirac, were found guilty.

Alain Juppé (prime minister from 1995-1997) was convicted in 2004 for helping Chirac to misappropriate Paris taxpayers’ cash to run their political party in the 1980s and 1990s. François Fillon (PM 2007-2012) was convicted last year of falsely claiming a parliamentary salary for his wife.

The wrongdoing is not confined to the center right (although their record suggests they have been more active, or careless, than other political families).

In the late 1980s, senior officials from the French Socialist Party were convicted of extorting money for party finances for public contracts. Jean-Luc Mélenchon’s hard-left France Unbowed is under investigation for allegedly claiming money for “fake jobs” in the European Parliament.

The far-right leader, Marine Le Pen, likes to accuse other parties of being tous pourri (all rotten). Yet since 2017, she has been under formal investigation for the alleged embezzlement of €6.8 million in EU funds. Both Mélenchon and Le Pen dismiss the investigations as politically motivated.

That sounds like Illinois! Although the infractions he lists are mostly related to financing political campaigns while here in Illinois personal wealth and power are the underlying offenses.

In an opinion piece at The Hill Jessica Tarlov writes about “cranky Democrats”:

No one has ever mistaken me for a Bill Maher fan. His standup never really appealed, and I was one of those snowflakes who was deeply offended by his use of the N-word in 2017 and sided with Ben Affleck that Maher’s comments about Islam were more Islamophobic than “classical liberal.” But now, even though my memory isn’t short — I do know how to hold a grudge — this season of “Real Time with Bill Maher” hits all the right notes for me. I’ve been loving it.

From having the scientists behind the “Dark Horse” podcast on to discuss the origins of COVID-19 and the vaccine, to Democratic wunderkind David Shor who managed to survive his “cancellation” by the woke mob, to tough talk by Sen. Jon Tester (D-Mont.) on the future of the Democratic Party and how it must include white people like him, Maher and those who book his guests are totally speaking my language: irreverent, researched, controversial and, most of all, thought-provoking.

A recent episode featured American linguist and Columbia professor John McWhorter and his perspective on what he calls “Black fragility,” the problem with “mean woke” people, and the importance of challenging the orthodoxy that Black Americans operate as some kind of monolith instead of the diverse and varied group they are. I’d recommend that you watch the entire 15-minute interview, but what particularly resonated with me is a new term McWhorter and Maher used to describe themselves: “cranky liberals,” or “cranky Democrats.” They’re not disaffected, they’re not disengaged, they’re just really cranky.

She goes on to list some issues which she thinks are contributing to the crankiness:

• Calls to defund the police
• Cancel culture
• The “anti-racism” curricula

I don’t consider myself disaffected, disengaged, or even cranky although I think my views are more closely aligned with those of the “cranky” than they are with those of progressives. I see myself as a good government Democrat. One of the best descriptions of my views has been “eclectic”.

In my view Ms. Tarlov is merely noticing something I’ve pointed out from time to time: progressives are not liberals and today’s progressives are making a mad dash away from the views of the majority of the Democratic Party. They’re pulling a lot of very prominent Democrats along with them. Will they succeed in remaking the Democratic Party in their own image? Or will they just leave a lot of people behind with no other real alternatives?

I wonder if Sue Halpern has thought the argument she’s making in her New Yorker piece all the way through? In the piece she characterizes the ransomware attack on Colonial Pipeline Company as highlighting “the perils of privately owned infrastructure”:

Eighty per cent of the energy sector, which includes pipelines, power generation, and the electricity grid, is privately held. D.H.S.’s “energy-specific plan,” also from 2015, noted that “because of the shared responsibility to secure North America’s energy delivery systems against cyber threats, a common vision and framework is needed to guide the public-private partnerships.” But that vision and framework doesn’t exist.

For years, businesses have resisted efforts from the federal government to hold them to robust cybersecurity standards, or to report cyberattacks. They typically argue that such requirements would be prohibitively expensive and damaging to brand identity, because the brands would lose consumers’ trust. Companies have also been stymied by a dearth of cybersecurity talent in this country. Colonial, for instance, had been advertising an open cybersecurity position for at least a month before the ransomware attack. (A company spokesperson told the Atlanta Journal-Constitution that filling the position would not have made a difference in this case.)

Let’s interrupt her there. We’re not alone. Every country has “a dearth of cybersecurity talent”. Cybersecurity is a highly sought-after skill but you can’t just whip up a new batch of cybersecurity experts overnight. Like all information technology it’s something that’s largely undertaken by amateurs with knowledge gained on the job. In practice cybersecurity didn’t become a topic until the advent of computer networking and it didn’t become a hot topic until Internet use started to become widespread in the 1990s. Yes, there are training courses and even college majors. DePaul and ISU both offer undergraduate cybersecurity majors. But that won’t make you a cybersecurity expert with five years of experience and getting that experience can be tough.

She concludes:

On May 12th, Biden issued another executive order. It had been months in the making, but the announcement was terrifically well timed, because the East Coast pipeline had come back to life less than an hour earlier. (It was several days, though, before sufficient fuel deliveries could be made to bring things back to normal.) “Much of our domestic critical infrastructure is owned and operated by the private sector, and those private sector companies make their own determination regarding cybersecurity investments,” a White House fact sheet stated, acknowledging that Biden was no less hamstrung by the private ownership of critical infrastructure than previous Presidents had been. Nonetheless, the order, which is largely directed to federal agencies and their contractors, requiring them to abide by a host of stringent new cybersecurity regulations and reporting requirements, is a clever and significant workaround of the problem. Many of the cloud services and software packages used by government agencies are also used in the private sector. By demanding that “all Federal Information Systems should meet or exceed the standards and requirements for cybersecurity set forth in and issued pursuant to this order,” the President is creating the conditions for those standards and requirements to be more broadly adopted. It’s like auto-emissions standards: when California raised its standards, twelve other states decided to adopt those requirements, and five automakers agreed to design all their new cars to meet them. Something similar is likely to occur here, too. “The Federal government must lead by example,” Biden stated.

His executive order is likely to do more than that: it also creates a Cyber Safety Review Board, to investigate cyberattacks in the same way that the National Transportation Safety Board studies air disasters. It will be tasked not only with forensics but with making “concrete recommendations for improving cybersecurity.” The order also requires I.T. service providers, and companies overseeing the software that operates industrial-control systems, to inform the government about cybersecurity breaches that could affect American networks.

Will any of this stop the next pipeline, hospital, or water-treatment-plant attack? Maybe. Will it stop the one after that? Maybe not. A President can only do so much. As Senator Mark Warner, of Virginia, who is the chair of the Senate Intelligence Committee, wrote in response to Biden’s executive order, “Congress is going to have to step up.” Until the private companies that own much of our critical infrastructure—including our election systems—are required, by law, to meet rigorous cybersecurity standards, we all remain vulnerable.

I want to make three points. First, software monoculture is inherently insecure. It drastically lowers hackers’ opportunity costs. One vulnerability in one piece of software that’s used everywhere exposes tens of thousands of companies to attack.

Second, there is an implication in her piece—not stated explicitly but strongly implied—that the public sector takes cybersecurity more seriously than the private sector. Suffice it to say that has not been my experience and I’ve been involved in security reviews of public sector departments. Take every problem you can imagine in the private sector and add dependence on old hardware and software and far too many “experts” who gained their expertise 25 years ago and haven’t learned anything since.

Third, there are actually laws already in place—Sarbanes-Oxley just to name one. SarbOx doesn’t happen to apply to Colonial Pipeline because it’s a privately held company. Crafting a law that would apply to such a company could be quite tricky.

But back to the point of my title. What’s the alternative and where do you draw the line? In addition to things we conventionally think of as infrastructure the Obama Administration declared the chemical sector, the financial services sector, agriculture, and healthcare “vital infrastructure”. For the last several months the Biden Administration has been adding things to that list including child care, elder care, and education. What does she think should be done? Nationalize all of them?

As I’ve said before my solution to making businesses take cybersecurity more seriously is to increase their liability for breaches. How would you do that in the public sector with the shield laws that are in place?

I see several contrasting views about the violence presently going on between the Israelis and the Palestinians. In his Washington Post column David Ignatius sees the U. S. playing a useful role:

The United States detached from the Palestinian leadership during the Trump administration. Now it’s time to reconnect and rebuild.

Economic development is the easiest piece of this puzzle. It just takes money — and Israeli recognition that a more prosperous Gaza and West Bank will be less threatening. There’s even a road map for economic development, thanks to Jared Kushner, former president Donald Trump’s son-in-law and Middle East fixer. Saudi, Emirati, Qatari, European and American money will back those projects if the Palestinians can be convinced to play.

Security is the hardest problem. Israelis and Palestinians must be confident their families won’t be ravaged by bombs and rockets. For the Palestinians to deliver, they will need a non-Hamas security force that’s tough enough to maintain order without becoming an oppressive secret police.

Here’s an unlikely but time-tested formula: The Palestinians need a training and liaison partnership with the CIA. Director William J. Burns, who speaks Arabic and has served as ambassador to Jordan, is the perfect person to lead that effort.

while in his Wall Street Journal column Walter Russell Mead sees the deteriorating situation as a sign of declining U. S. influence and engagement in the region:

Meanwhile, Washington has less leverage than ever. Everyone in the region knows that since the 2012 Benghazi debacle, the chief goal of U.S. policy has been to reduce America’s Middle East footprint—a goal that has so far spanned three presidencies.

Concerns about the declining value of their American alliance—rather than enthusiasm for the statesmanship of Jared Kushner —drove Arab and Israeli support for the Abraham Accords. Since the small share of U.S. military aid that went to Israeli companies is being increasingly directed to American firms, few Israelis fear military aid cuts from the Biden administration. Even fewer Palestinians believe that the U.S. can or will force Israel to make the concessions on Jerusalem and settlements they demand. So don’t expect words from Washington to stay their missiles. The Hundred Years’ War between Israelis and Palestinians, alas, isn’t close to an end.

I wish that Dr. Mead had considered the last century a little more closely. The reason 1920 marked the first Jewish-Arab violence in Palestine is that the Ottoman Empire had collapsed and lost its hold on Palestine. The Turks who, importantly, are not Arabs had been suppressing these sorts of actions among the Arab Palestinian population. Without a similar boot the conflict will continue and the U. S. has no interest in furnishing that boot.

There is a solution entertained by neither Dr. Mead nor Mr. Ignatius: broaden the problem to solve it. Hamas is receiving substantial financial support from Qatar; without that continuing violence will be a lot less profitable. Does the U. S. have substantial influence over Qatar or is it the other way around?

I frequently wonder if people in major media outlets are reading my work. It’s gratifying when somebody with a much larger megaphone than mine echoes points I’ve made in an earlier post. That’s the case in William Galston’s latest column in the Wall Street Journal:

There are risks on both sides. After the 2007-09 recession ended, premature fiscal restraint slowed the recovery and consigned too many workers to extended unemployment that could have been averted. On the other hand, if inflation rises faster and longer than expected, the Federal Reserve may feel compelled to raise interest rates, which will put pressure on households, the federal budget and the job market.

Because inflation has been on a downward course for most of the past four decades, an entire generation of citizens and experts haven’t experienced its ravages and can barely imagine a world of rapid price rises. This would make its recurrence even more disruptive.

Amid this uncertainty, public officials have to make choices—and doing nothing is itself a choice. Prudence suggests some rules of thumb. One is to imagine the worst case—an inflation surge that forces policy makers to slam on the brake—and try to minimize its likelihood by gradually reducing fiscal and monetary stimulus as the economy rebounds. Betting everything on the option that promises the largest reward can be a winning strategy for poker players and entrepreneurs, but rarely for a country.

Another prudent policy is to develop detailed contingency plans in case things go wrong. Although improvising under pressure can work, organizations that often confront crises—police, firefighters and the military—strive mightily to avoid it. Policy makers should do the same.

That conclusion is the mitigation plan I wrote about earlier. That’s harder than it may sound because an effective mitigation plan would go against every instinct of the Biden Administration, economic as well as political. When problems are being caused by the rapid infusion of cash into the system, you can’t change that by infusing more cash into the system.

I really liked this post at Fisher Investments on taxes and cryptocurrencies:

When you buy something with normal money, like dollars or pounds, the only tax you pay is sales tax. When you pay with bitcoin, it is quite different. A payment is a disposition—aka, selling your bitcoins. That means—you guessed it—your transaction is subject to capital gains taxes. It wouldn’t surprise us if this, not environmental concerns, were really behind Tesla chief Elon Musk’s widely discussed decision to stop accepting bitcoin as payment for cars. Not just because it would add tax headaches for customers, but because every transaction would complicate the company’s own taxes—each one would add a new lot with a different cost basis to Tesla’s own bitcoin stake. Have fun calculating that tax bill.

Considering one of the most prominent questions on IRS Form 1040 aims to discover all taxable crypto transactions, you might think we are stating the obvious. But the IRS still wins the gold medal for unnecessary confusion, so the relevant question reads: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” We can kinda see how someone who bought a car with bitcoin would see that question and think, “Does this apply to me? I didn’t sell my bitcoins on an exchange. I didn’t swap them for dogecoins. I didn’t send one to my aunt for her birthday.” If the form actually, clearly stipulated that paying for goods or services was a taxable transaction, we reckon there would be a lot less confusion—both in the world of tax compliance and about cryptocurrencies themselves. Then again, that could create a scramble to comply.

I expect much tighter regulation of cryptocurrencies in the coming years even if it has the predicted consequences of taking the luster from them.

File Joel Kotkin’s article in Newsweek, “How Los Angeles Descended Into Neo-Feudalism—and How to Fix It” under “asking a question but not really answering it”. This appears to be the closest he comes to telling us how it happened:

For much of the 20th Century, Los Angeles was led by aggressive business leaders. Many were self-made, often somewhat nasty moguls, men like Jack Warner, Walt Disney, Lew Wasserman, Mark Taper, Howard Ahmanson Sr, Donald Douglas, Jerry Buss. They faced derision from eastern elites but they didn’t care; they consistently pushed for all the things that made for L.A.’s ascendency, from roads and bridges to arts institutions and glittering office parks to housing tracts.

Today there are few such figures. Once a beacon for up-and-coming companies, L.A.’s corporate community is diminishing, and the person who had the most potential, Elon Musk, recently announced his departure for Texas. Southern California is home to just 19 Fortune 500 companies today, equal to Denver and Seattle and roughly half the number in the Bay Area, Dallas and Houston, not to mention New York and Chicago. This year, a long time corporate power, the real estate firm CBRE, decided to move from its downtown L.A. office to Dallas.

and

At root of this neo-feudal reality is an economy that no longer provides much opportunity for most residents. Over the past decade, according to research by Chapman University’s Marshall Toplansky, the vast majority of L.A.’s new jobs in the area paid below the median income, many of them under $40,000. In contrast, creation of high wage positions has lagged the national average.

while here’s his prescription for fixing it:

The most important solution to the city’s dystopic class divides is also the most obvious: creating more middle class and good blue-collar jobs for Angelinos and prospective newcomers. Green pietism, curbs on the enforcement of non-violent crime, density policies to peripheral growth as well as the massive spending on transit may sound good to the media claque, but they undermine the very fluidity and sense of personal freedom that made L.A., well, L.A.

To revive, L.A. must change direction. Pouring more money into transit, where $20 billion in spending has resulted in a smaller share of commuters than thirty years ago, is far less important than more prosaic things like fixing roads, filling potholes, enhancing telecommuting, reducing crime and working on new, innovative transportation like autonomous taxis.

which I find pretty superficial. It’s actually another way of saying that Los Angeles will continue its descent into “neo-feudalism”. Why?

First, how could it be otherwise with the city and county importing a landless peasantry as fast as it can? Digging even deeper here is Los Angeles’s employment by economic sector:

Government and its handmaiden industries, healthcare and education, account for 30% of employment and incomes in those sectors are both higher than the median. Incomes in other leading sectors, leisure and hospitality and retail, are far below that. Manufacturing and natural resources, e.g. oil, have been declining in Los Angeles for fifty years.

Seventy years ago it was a lot different. Los Angeles was the most important agricultural county in the U. S. and oil was a much more important component of LA’s economy. Manufacturing, particularly aerospace was growing rapidly.

Suffice it to say that all of Los Angeles’s advantages he lists

L.A. still has great assets—lovely neighborhoods, the nation’s dominant port, Hollywood and legacy industries, notably Space, that still lead the global market. The weather remains unsurpassed, the beaches alluring and the topography still spectacular.

are just as appealing to the poor as to the rich and the poor are less likely to flee to avoid California’s taxes. And those taxes are what feed government, education, and health care. It’s a positive feedback loop.

I wanted to pass along a particular passage in Matt Taibbi’s most recent offering:

Our biggest corporations spent decades steeping the public in weird Me Generation propaganda stressing the primacy of personal fulfillment, which fast became our real national faith as traditional religion lost influence. The result was a work-centric culture most of the rest of the world looked on as a kind of insanity. Alone among peoples who have a choice in such matters, Americans have long bragged about working themselves to death, feeling real pride in putting off distractions like marriage, kids, or “meaning” as they ran hamster wheels in pursuit of status and rock-hard abs, alone and at full speed toward the great beyond.

Americans in my age group, Gen-Xers, were poorly prepared for corporate jobs in that a lot of us were somehow surprised to learn our ethnomusicology or (in my case) creative writing degrees were fairly useless for finding paying work. In conjunction with the huge sums many people borrowed to get those educations, the whole thing was a bit of a scam, though of course we should have known better.

Millennials had it worse. They attended the same academic resort spas, and were handed the same oft-preposterous degrees, but were additionally indoctrinated in affirming ideological oat-baths stressing the righteousness of their lived experiences. If the big surprise my generation faced was that our educations were worth bupkes to employers, the next generation had to deal with the shock of corporate bosses being indifferent to their emotional needs.

Meaning, we’ve come full circle. After training generations of Americans to forego personal lives and work their brains to mush in service of bigger profits, corporate leaders are waking up to find their companies staffed by people so psychologically dependent upon validation from work that they’re a net minus from a production standpoint, forcing bosses to beg them to shut up, go home, and get lives.

Each cohort has its own cross to bear and, as my wife frequently says, quoting Honoré in the movie Gigi, I’m glad I’m not young anymore. Although Mr. Taibbi appears to understand his own cohort pretty well, I wonder if he understands the particular pain of being a member of the Silent Generation, those born from 1928 to 1945? They’re firmly in charge of the country and have been for many years. As just one measure of that the president and all of the Congressional leadership except Chuck Schumer are members of the Silent Generation. In my experience they tend to have deep-seated feelings of insecurity. They’re afraid to let go.

You may recall that I am generally opposed to the corporate income tax, frequently on the grounds that it is an “inefficient tax”. This article in the Economist does a pretty good job of explaining what that means. Here are some selections from the piece:

Other things being equal, a tax on corporate profits should hit shareholders—a group wealthier than the population as a whole—by shrinking the money available for dividend payments or reducing share values. But other things are never equal. Firms invariably respond to new taxes in order to minimise their costs. Depending on precisely how they seek to escape the tax, some of its burden may be passed on to others.

[…]

Increasing corporate tax in one country might then encourage owners of capital to move activity abroad, diminishing the amount of capital per worker at home, and potentially reducing workers’ productivity and pay. Indeed, research by Laurence Kotlikoff of Boston University and Lawrence Summers of Harvard University showed that in very small, very open economies the burden of a rise in corporate-income tax could fall almost entirely on labour.

The size of an economy and its openness to capital flows are just two of the five factors that most influence an economic model’s conclusions regarding the incidence of corporate-tax changes, argued Jennifer Gravelle Stratton, then of the Congressional Budget Office, in a paper published in 2013. (Size matters because changes in the capital stock of larger economies have a greater influence on the worldwide return on capital.) Another factor is how seamlessly production may be moved abroad in response to tax changes. Similarly, the ease with which labour may be substituted for capital determines how badly workers’ economic prospects are affected when capital flees the country (or threatens to). Last, who pays most depends critically on how capital-intensive the corporate sector is: the greater the level of capital per worker, the more each worker suffers if a corporate-tax rise affects where firms choose to deploy their capital.

What’s worse to whatever extent the cost of the tax is passed along to workers, it’s regressive, i.e. it falls hardest on the workers compensated the least. What makes that fair?