Relevant to one of my posts of yesterday, in a Washington Post op-ed John Sides and Lynn Vavreck of the Nationscape project, purportedly contracting the prevailing wisdom, end up confirming it:

To many observers, the Democratic presidential primary has highlighted the “profound ideological divides between the Democratic Party’s moderate and progressive wings,” as an Associated Press article put it — two wings locked in a bitter fight for control. The division supposedly shapes the race in profound ways. The New York Times has written that Sen. Elizabeth Warren (D-Mass.) and South Bend, Ind., Mayor Pete Buttigieg “are running in different ideological lanes,” for instance, and suggested that if voters sour on former vice president Joe Biden, they would mostly turn to Buttigieg, a fellow moderate.

Perhaps that’s how Democratic leaders and activists see the primary. But there’s just one problem: Someone forgot to tell Democratic voters.

However, when a plurality of Sanders supporters favor Warren as their second choice and a plurality of Warren supporters favor Sanders as their second choice, it’s a stretch to claim that ideology plays no or little role in their choices. What might be a more accurate representation is that ideology isn’t the only factor.

What else plays a role? As it turns out publicity:

In general, voters appear to be focused not on “lanes” but on the candidates who are getting news coverage and who thus appear viable contenders for the nomination. So when asked their second choice, supporters of each front-runner — Biden, Warren or Sanders — default to other front-runners, ideology aside.

Ideology aside except that Sanders supporters prefer the highly publicized candidate whose positions most closely comport with Sanders’s and Warren supporters prefer the highly publicized candidate whose positions most closely comport with Warren’s.

But what seems to be the case is that the media are shaping people’s preferences not merely reporting them.

As I’m sure I mention every year at about this time, “Black Friday” is called that because retailers went “in the black”, i.e. started making money, on the Friday after Thanksgiving. Forbes reports that the time they are a’changin’:

RetailNext provided an early look at in-store shopping activity across tens of thousand of stores operating under its RetailNext smart-store platform.

The results: Traffic was down 2.1%, average transaction values dropped 6.7%, and overall sales declined 1.6%.

This was confirmed by Sensormatic as the Associated Press reports:

Johnson Controls today announced that Sensormatic Solutions, its leading global retail solutions portfolio, released preliminary shopper visit data for brick-and-mortar retail stores and shopping centers on Thanksgiving Day and Black Friday. Findings indicate that shopper visits resulted in a combined 3 percent decline for the two-day period compared to last year. However, we saw a shift that included a 2.3 percent increase in traffic on Thanksgiving Day and a 6.2 percent decline in traffic on Black Friday versus 2018. Additionally, there was a small shift of in-store traffic away from the beginning of the week and into both Thanksgiving and Black Friday, dispelling the idea that in-store traffic is moving away from the holiday and farther into November.

On the bright side online shopping is increasing and BOPIS (“buy online pick up in store”) is booming (from the Forbes article linked above):

E-commerce retailers killed it this Black Friday, with digital sales up nearly 20%, reaching $7.4 billion across the 4,500 retail websites that Adobe Analytics tracks. It became the second-largest online shopping day in history, eclipsed only by Cyber Monday last year, when $7.9 billion in sales were done.

Adobe predicts Cyber Monday 2019 will blow last year out of the water, to the tune of $9.4 billion in sales, a nearly 20% increase.

Not only did consumers shop more online, but they also sidestepped the wait for delivery in record numbers, driving a 43% uptick in buy-online-pickup-in-store (BOPIS) orders, a sign the company said of retailers “successfully bridging online and offline retail operations.”

The average order value for the tracked online retailers also showed a boost, up 6% to $168, as Adobe remarked that “consumers got more comfortable buying more and bigger ticket items online.”

But still not that bright. Online is only around 11% of total retail. A 20% increase is just not that much of a boost. Not enough to make up for the decline in in-store sales.

That’s consistent with what we’ve been seeing for the last several months: the economy is slowing down. It’s not close to recession territory but it’s not booming, either.

But I think we can see the time when stores stock relatively little inventory and are largely used as depots from which customers pick up what they’ve ordered online. Expect them to be optimized for that purpose. That’s bad news for malls.

I only have one thing to say in response to Simon Johnson’s full-throated defense of Elizabeth Warren’s “Medicare For All” plan from the Wall Street Journal:

A millstone hangs around the neck of every company in America, and this dead weight gets heavier each year. Americans currently spend nearly 18% of gross domestic product on health care, with some projections suggesting this will reach 21% by 2027 before continuing to rise. Since the 1970s the U.S. has failed to control the cost of care, and a great deal of this burden falls directly on companies and new entrepreneurs. These costs undermine competitiveness and make it harder to create jobs and pay decent wages.

The health-care burden hurts American business in three main ways. First, there is the onerous contribution most companies are required to make through employer-sponsored insurance. Every business owner wants employees and their families to have health insurance, but the cost rises inexorably. Mandatory employer coverage is like a tax on businesses, with a major difference that private insurance companies take a cut of the revenue. Under current law, firms with more than 50 employees must either offer employer-sponsored coverage or pay a fine—so in effect the government forces employers to pay private insurers.

Second, companies cannot by themselves easily constrain health-insurance premiums. They need healthy workers who are not ruined financially when a family member is rushed to the emergency room. In most competitive markets across the U.S., if an employer cuts back on health benefits (or raises deductibles, copays or out-of-pocket expenses), it raises the burden on employees and increases the risk that the best will leave.

Third, the unpredictable nature of health-care costs makes it significantly harder to start and run a company. Every year, entrepreneurs and managers hold their breath while insurance companies decide what to charge them. The Affordable Care Act slowed the growth of medical costs—for a while. But under the Trump administration, health-care sector mergers (such as Cigna-Express Scripts, CVS-Aetna and Optum-DaVita) have effectively reduced competition and increased pricing power.

To address this triple threat, Republicans have tried to make the health-care system more “competitive.” But the competition they seek has failed to constrain costs. Rather, it has created an incredibly opaque price system with powerful players grabbing excess profits at every opportunity—the main reason medical care in America costs so much more (relative to income) than it does in any comparable country. The Republican approach is a recipe for human and economic disaster.

Some Democrats propose to restrain the price of health-care to consumers by adjusting the Affordable Care Act in a modest fashion, such as by adding a public option. This has short-term appeal but would not address the deeper long-term problem: the rising underlying cost of care, which private insurance companies have consistently failed to bring under control. None of the proposals for partial reforms—such as those proposed by presidential candidates Joe Biden and Pete Buttigieg—would be likely to lower costs relative to the current law’s baseline.

By contrast, Sen. Elizabeth Warren’s Medicare for All plan would cut costs by reducing inefficiency, eliminating predatory pricing (for example, for prescription drugs) and using the purchasing power of a single-payer system. Her plan would also constrain the growth rate of underlying medical costs. This is exactly what America’s peer countries do to keep costs under control. U.S. companies consequently struggle to stay competitive in international markets. If health-care costs continue to grow unchecked, America’s businesses will be ruined.

Most medium and large companies self-insure. His entire argument founders when you understand that.

I think that in his latest Washington Post column, E. J. Dionne, like most other media pundits, is characterizing the contest for the Democratic Party’s nomination for president incorrectly:

The campaign for the 2020 Democratic presidential nomination is radically unsettled because the party’s primary voters are in a deeply uncertain mood. They try on candidates, find them wanting and move on to someone else.

Further confusing the contest is the success of two candidates, former vice president Joe Biden and Sen. Bernie Sanders (I-Vt.), in maintaining bases of support large enough to block the way of other contenders.

The loyalty of Biden’s enthusiasts among older voters, particularly African Americans and more moderate whites, has made it very difficult for Sens. Amy Klobuchar (D-Minn.), Cory Booker (D-N.J.) and Kamala D. Harris (D-Calif.), among others, to break through. Both the Booker and Harris campaigns now seem in jeopardy.

Let’s stop right there and consider three things: the party’s structure, the actual situation, and the factor that makes the 2020 election very much like the 2016 election. Let’s start with structure.

Today the Democratic Party has two major wings, each with about half of Democratic voters: the progressive wing and a more moderate wing. With Democrats comprising about 30% of voters and most progressives being Democrats, that means that 15% of voters are progressives. They’re the wrong half. A progressive presidential candidate won’t be able to woo more moderate voters without discouraging even more progressive voters.

Now let’s talk about the actual situation. Joe Biden is the frontrunner. There is a second tier of candidates presently consisting of Bernie Sanders, Elizabeth Warren, and Pete Buttigieg. There is a third tier of candidates with support in single digits. Biden’s support has varied from 20% to 40%. Sanders and Warren supporters combined just about equal Biden’s support. I am at a loss to explain why Sanders and Warren are being given as much attention in the media as they are. I can only speculate that they represent the preference of the media.

What makes the 2020 election resemble the 2016 election are that a) every one of the likely nominees is seriously flawed and b) they will be running against Donald Trump.

I think it’s obvious that those factors in aggregate are what caused Michael Bloomberg to throw his hat in the ring. And progressives are the dog in the manger. They won’t take Biden for an answer. That is probably why Barack Obama has been making noises lately, somewhat unusual in former presidents.

In his Washington Post column Robert Samuelson finally gets to where the wheel hits the road in thinking about health care:

The idea that most middle-class Americans have been treading water economically is conventional wisdom. It is already playing a role in the 2020 campaign, as the Democratic presidential candidates propose policies (Medicare-for-all, free college tuition at state schools, subsidies for child care, to mention a few) intended to relieve the financial stress on millions of middle-income families.

But the conventional wisdom is wrong — or at least misleading. Although the squeeze is not a myth, it’s highly localized: uncontrolled medical spending. This is crowding out other spending, from wages to defense budgets. If we don’t stabilize health costs (and there is little sign that we will), we should expect the squeeze to continue indefinitely. Income inequality would also probably worsen.

We now have a new study from economist Richard Burkhauser of Cornell University that illuminates health care’s peculiar role. A standard benchmark of economic well-being is median income: It is the earnings in the middle of any distribution of income figures. The higher the median, the better off people are assumed to be. In recent decades, the median income of U.S. households has grown slowly, stagnated or declined. In 2018, according to the Census Bureau, the median household income was $63,179; in 1999, it was $61,526.

But wait: The official figures don’t count health insurance, whether private or public (employer-paid insurance, Medicare and Medicaid — federal health coverage for the elderly and poor).

To remedy this omission, Burkhauser and his collaborators (economists James Elwell and Kevin Corinth) estimated median income based on varying definitions. The simplest definition included labor income: wages, salaries, farm income and self-employment. Defined this way — and adjusted for inflation — median income has dropped 21 percent from 1970 to 2016. This explains why so many Americans feel squeezed.

However, that’s not the end of the story. A broader definition of income includes all labor income, interest and dividend payments, Social Security, other government transfers and — most important — the value of private and public health insurance. Under this definition, median income rose 68 percent from 1970 to 2016. By this definition — and reflecting the impact of health insurance — typical households have enjoyed a slow increase in living standards over nearly half a century.

Which definition of income to believe? Why, both, of course.

We have the worst of both worlds. We don’t count health insurance as a form of earnings that would improve median income. People consider health spending separate and apart — something that is deliberately open-ended, because, as Sen. Bernie Sanders (I-Vt.) repeatedly reminds us, it is a “right” to be exercised when needed.

He goes on to analyze how employers shifting health care costs has adversely affected on workers and the economy in general.

Health care is consumption but it’s a different sort of consumption. When you go to the store to buy a box of corn flakes, it’s because someone in your family likes corn flakes. Health care is different. Very few people seek care because they like care—indeed, that’s considered pathological. It even has an ICD code—F68.1. But we pay for care while what we really want is health.

Most of the focus on health care reform has been on answering the question who pays? For some reason we hope that paying for their own care directly will of itself lower costs. I’m skeptical. As long as incentives are misaligned health care spending is unlikely to decrease. IMO what is needed is to recognize that health care is devouring the economy, as Mr. Samuelson notes in his column, and that reducing overall spending on health care regardless of who pays is the sine qua non of health care reform.

At The Hill Republican speechwriter Douglas MacKinnon remarks on the Trump presidency:

From day one, a continual knock against President Trump from these elites has been that “Trump is a one-man-band who can’t be controlled.”

Newsflash: It is precisely because he is a one-man-band who can’t be controlled that he got himself elected president and is transforming a calcified government into a more fluid process that better reflects his vision and experience.

Because Trump is the outsider-of-all-outsiders to these elites, they refuse to give him credit for any positive momentum or accomplishment — none.

continuing by pointing out that the outsider defeated 16 seasoned, well-financed Republican opponents to get the Republican nomination. He concludes:

Yes, Trump has reinvented the presidency. He plays by his own rules. He has changed the tenor and tone of the Oval Office, made it his own — as every president does to a degree.

You don’t like that? There is a solution. Stop whining and wasting your time trying to steal back the White House and simply gear up to try to beat him at the ballot box.

That’s not quite right. Assuming that the Democratic leadership, unlike in 2016, has actually read the Constitution, get out the vote campaigns in New York, Massachusetts, and California will not be enough to defeat Trump in November of next year. They will actually need to collect more electoral votes than Trump does and that may be more difficult than it sounds.

I genuinely wonder what the Democratic leadership want? Are they planning to draw themselves up to their full height and stand firmly on principles that are shared by, perhaps, 15% of the American people?

Let’s consider the state of the Democratic field. Joe Biden’s support has never gone below 26% of Democrats been as high as 41% of Democrats. There’s a three-way contest for second place. Let’s look at that tier of candidates.

It needs to be said. Bernie Sanders is not going to be the Democratic nominee. There’s a simple reason for that: he’s not a Democrat. A president is not only the leader of the executive branch of government, he or, perhaps someday, she is also the leader of her or his party. Nominating an independent undercuts the very notion of party affiliation. The DNC simply cannot allow that and expect the party to survive.

Elizabeth Sanders is, basically, Hillary Clinton 2.0 without as much political experience and a thinner resume. What states will she carry that Hillary Clinton did not? Fraudulently claiming Indian ancestry to get a job isn’t going to help her, either.

The reason that Joe Biden has held his lead is that he’s supported by blacks as a known quantity. That’s the reason Pete Buttigieg won’t become the Democratic nominee.

All of the other candidates are in single digits. A whole group of solid, experienced candidates have dropped out of the race, largely because they’re just too moderate to gain the support of Democratic primary voters, darn it.

That’s the reason that everybody who can finance his own campaign and has ever wanted to be president is jumping into the candidate. There’s a solid leader in the race for whom very few have any real enthusiasm.

The editors of the Wall Street Journal analyze President Trump’s foreign policy initiatives:

First, the good news: Mr. Trump signed a pair of Congressional bills that support Hong Kong’s cry of freedom. The signature showed that America is unified behind the autonomy that China guaranteed the territory in its treaty with Britain. Hong Kongers responded by waving American flags in the street in a reminder that the U.S. still represents the hope of liberty to millions around the world.

China huffed and puffed, with a Foreign Ministry factotum calling it “serious interference in China’s internal affairs and a serious violation of international law.” The audience for that bluster is the domestic Chinese public. The Communist Party needs to blame Hong Kong’s homegrown protests on outside interference lest citizens in the Mainland get the idea that they need more liberty too.

But note that China isn’t letting the Hong Kong bills interfere with trade negotiations with Mr. Trump. Chinese President Xi Jinping will agree to a trade deal that he thinks is in his interests no matter how many American flags are waving in Hong Kong. Mr. Trump can also follow a two-track strategy of negotiating a better trading relationship with China while representing American values by speaking up for freedom in Hong Kong and China.

Meanwhile, the bad news in North Korea is that Kim Jong Un is acting up again by firing missiles and reiterating a deadline of year’s end for a deal with Mr. Trump over its nuclear program. Mr. Kim wants to coax Mr. Trump into easing sanctions. The implication of these small-scale shows of military force is that Mr. Kim could resume firing intercontinental missiles that could hit the U.S. and make Mr. Trump’s claims of diplomatic progress look like a failure.

when you include Afghanistan, the not yet ratified trade agreement with Canada and Mexico, and the ongoing war in Syria, IMO the most optimistic possible assessment is an “Incomplete”. I suspect that the Chinese and North Koreans expect Trump to be gone in either 2020 or, at the latest, 2021 so I would not expect positive developments on those fronts in the foreseeable future.

There are some other negatives among which I would include support for the Saudi war against Yemen. On the positive side DAESH’s caliphate is no more and DAESH itself is much diminished. See also the report from the Council on Foreign Relations, which gives him an overall D+.

Disruption is hard.

Which do you think is the greatest threat?

1. Overpopulation
2. War (including nuclear war)
3. Terrorism
4. Starvation
5. Climate change
6. Antibiotic overuse and misuse

The editors of the Washington Post remark on the threat of antibiotic resistance:

THE CENTERS for Disease Control and Prevention has published a disturbing new report on antibiotic resistance, the first since its benchmark survey in 2013. Antibiotic resistance is the tendency of pathogens — bacteria and fungi — to fight back against antibiotic drugs, making some infections harder to treat, or untreatable altogether, one of the most severe public health threats in the world today. The CDC’s report offers a glimmer of hope that resistance can be slowed, but it also shows how the dangers are deepening and changing, including with a new pathogen that wasn’t even on the radar screen six years ago.

Antibiotics, the miracle drugs invented in the mid-20th century, have made possible a revolution in modern medicine — for example, enabling organ transplants — and have spared countless individuals from death and illness. When bacteria became resistant in the early years, new antibiotics were readily created. But more recently, the pipeline of antibiotic development has slowed, and patients are again confronting untreatable illnesses.

The CDC knew this when it estimated in 2013 that 2 million Americans had suffered antibiotic-resistant infections resulting in 23,000 deaths a year. But using improved data methods, the CDC has now revised the estimates to 2.6 million infections then, and 44,000 deaths, nearly twice as many as thought. Today, the agency says there are 2.8 million infections and 35,000 deaths a year. The number of deaths due to antibiotic-resistant infections has dropped by 18 percent, according to the CDC, largely because of successful interventions by hospitals.

More and more bacteria are becoming resistant to existing antibiotics even as the pace at which new antibiotics are developed slows. The time may come when discovering a new antibiotic may be very rare.

I think the answer to my question is F. To understand why you need only reflect on what life was like a century ago. Surgery was frequently a death sentence due to infection. Many diseases that are readily treated today were frequently fatal in the past. Death in childbirth was much more common, frequently from sepsis. In my own family my maternal grandmother had four siblings. Three of them died before reaching the age of 30 of diseases readily treated with antibiotics. My father had three uncles. One of them died in his 20s of a disease treated today with antibiotics. One of the reasons the flu pandemic of 1918 killed so many people was bacterial superinfection for which there were no treatments. Life today would be tremendously different in a world without antibiotics.

Among the causes of antibiotic resistance are antibiotic misuse and overuse. In many of the countries of the world antibiotics are routinely sold over the counter including Mexico, Brazil, China, India, Indonesia, Pakistan, and Nigeria. Overuse of prescribed antibiotics is commonplace in the developed world. Here in the United States the CDC claims that 30% of prescriptions for antibiotics are unnecessary.

Overpopulation, starvation, and war are all possibilities. Antibiotic resistance due to the overuse and misuse of antibiotics is already here, getting worse, and is a threat that doesn’t heed borders, ethnicity, income, or social class.

In an article that would delight a former regular and much-missed commenter here, Noah Smith writes about cooperatives at Bloomberg:

Corporate profits now represent about 6.6% of U.S. gross domestic income, while labor compensation is 43.2%:

That means that if profits flowed to workers instead of distant shareholders, the average worker could get a raise of about 15%.

What’s more, cooperatives might help reduce inequality. Workers in a cooperative can vote to pay executives less and pay themselves more, making the compensation structure more egalitarian for the entire company. There is some evidence that this happens. Mondragon Corp., Spain’s largest worker-owned business, pays its chief executive officer just nine times as much as the average worker — a much lower ratio than most companies in the U.S.

It’s hard to measure, but flatter corporate hierarchies might yield intangible benefits, too. Instead of feeling like rented labor, workers who own part of their employer might feel a greater sense of ownership, pride, control and loyalty.

The former commenter regarded such organizations as a form of socialism; I think it a form of capitalism.

Such organizations have been studied. They have advantages and disadvantages:

Data on this question is mixed. A landmark 1995 study of plywood manufacturers by economists Ben Craig and John Pencavel found that in terms of output per hour, conventional businesses had higher productivity than cooperatives, but in terms of total factor productivity — which measures the efficiency with which companies use all their inputs — the co-ops had the edge. This suggests that cooperatives don’t encourage greater effort, but they do organize production in more efficient ways. A 2012 paper by economists Fathi Fakhfakh, Virginie Perotin and Monica Gago found a similar result for cooperatives in France.

A final benefit of cooperatives is that they might be less subject to asset-stripping by short-term investors and shed fewer workers in recessions. There is some evidence that cooperatives have higher survival rates than other businesses, especially during the recent recession. These effects might be magnified in the U.S., with its more rapacious private-equity industry.

I would ask different questions than Mr. Smith does. My question would be why do so few private sector unions hold their pension funds in the stock of the companies for which their members work? I think doing that would align incentives much better. I presume that participatory labor practices, like those employed in Japan, are responsible for the “total factor productivity” benefits suggested above.

Whose interests does a starkly adversarial relationship between management and labor promote?