There are credible Democratic presidential aspirants and there are authentic Democratic presidential aspirants but there are no authentic, credible Democratic presidential aspirants.

Is it a coincidence that 2020 will mark the 100^th anniversary of H. L. Mencken’s famous remark that “there is a well-known solution to every human problem—neat, plausible, and wrong” and that Elizabeth Warren with her various plans is the living epitome of that observation? In her Washington Post column Megan McArdle summarizes Elizabeth Warren’s recently published plan for financing “Medicare For All”:

And even if she somehow pushed her program through, there’s a good chance that courts would strike it down, because so many of the revenue-raisers may be unconstitutional. Between the problems with her wealth taxes (Article I, Section 9), her plan to divert employer premiums to the government (ex post facto taxation of health benefits) and her requirement that state and local governments toss $3 trillion into the kitty (anti-commandeering doctrine), Warren would be a couple of adverse court decisions away from a $15 trillion hole in her $20 trillion plan.

Stripped of the Warren plan’s math-like veneer and the unreasonable reasoning, this is all rather embarrassing — or to steal a phrase, more of a slogan than a plan. It’s certainly not one of the highlights of Warren’s campaign.

Besides being politically difficult, of questionable popularity, and unconstitutional, Sen. Warren’s plan suffers from the deficiency, as I have previously noted, of bad assumptions. To believe that it will actually “work” you need to believe that the Congress will do something it has refused to do in the past—hold the line on Medicare reimbursement rates—and that providers a) have excess capacity and b) will be willing to work more for less money. None of those are credible.

I was prepared to detest Mihir Sharma’s column at Bloomberg criticizing a proposal from Dani Rodrik, Jeffrey Lehman and Yang Yao for ending the trade war between the U. S. and China. It begins as a lament for the fall in prominence of neoliberal policies but improves:

Now, an international group of economists led by Harvard University’s Dani Rodrik, New York University law professor Jeffrey Lehman and Yang Yao, dean of the National School of Development at Peking University — as well as five past winners of the Nobel Prize — have tried to address one of the symptoms of this crisis, the Sino-U.S. trade war. Last week, they released a plan for the future of trade that seeks a middle path between what they fear are two excessively limiting options: forced reform of the Chinese economic model, which they call “deep integration,” or alternatively a “decoupling” of the world’s two biggest economies that could lead to severe welfare losses for both sides.

Their solution: In essence, to expand the group of “permissible” trade policies to include what China is already doing. If the U.S. wished to prevent some trade-distorting internal policy from taking hold in China, it would have to directly and bilaterally compensate Beijing; or else it would be permitted some proportionate response.

This is, I have no doubt, a well-meaning effort. But it is theoretically and practically misguided. It does little more than legitimize past trade-distorting behavior while limiting possible responses going forward.

or, in other words, damage control. So far so good. He continues:

Worse, it is founded on a basically mistaken assumption: that both “deep integration” (by infringing on the ability of nations to determine their own economic policies) and “decoupling” are equally bad outcomes. In fact, the former is not just vastly preferable to any intermediate path — it was the unwritten agreement underlying China’s acceptance into the global trading system in the first place.

This is the direction about which I was initially concerned:

Even if side deals of the sort that the authors recommend are permissible under WTO rules, they are designed to privilege the biggest trading nations — those with the most to lose, the most resources to use for “compensation” and the biggest capacity for trade blackmail. It is a recipe for undermining multilateralism, normalizing America’s disruptive recent politics and entrenching the advantages built up by China over the past decades.

but, fortunately, he did not veer from there into some sort of massive international redistribution system from which only the administrators of the system would benefit which is what I was concerned about. Instead he makes this very good point:

The central problem with the Sino-U.S. trade war is that it is a Sino-U.S. trade war, rather than a broader effort to rebalance a broken multilateral trading system. The economists’ suggestions emerge from the assumption that China’s outsize presence in manufacturing trade — driven, many believe, by hidden subsidies and the deployment of state power in unfair ways — damages countries, particularly the U.S., in clear and quantifiable ways. Their remedy, therefore, is not to force China to correct any unfair practices, but to consider what actions might be available to the U.S. and to make sure they are proportionate to the harm that has been seen to be done.

Only bilaterally, and for countries that already have a manufacturing base, can such a mechanism work even in theory. But what of countries such as, for example, India? The possibly quantifiable damage that has been done to manufacturing in the developed world is an order of magnitude less severe than the quite unquantifiable damage done to countries that have not been able to develop goods exports under the shadow of Chinese dominance.

The point of a multilateral trading system is not to protect existing industry. It is to allow everyone a good chance of building industries that export to the world, so small and underdeveloped countries, too, can start climbing the ladder to prosperity.

Bilateral deals between the old and new rich leave the poor out in the cold. The latter do not need the dubious freedom to implement industrial policy; many already had that freedom to some degree. What they need is for protections and subsidies to be dismantled elsewhere.

The emphasis is mine. I wish he had been more explicit about what he actually means. What actions would those be? For example, I think that U. S. and European subsidies for their agricultural sectors are unconscionable but so are India’s massive import barriers. Substituting a mercantilist India for a mercantilist China would not be much of an improvement in global trade.

You might be wondering about the relevance of the title of this post. You’re probably familiar with the millennium-old proverb, “You can lead a horse to water but you can’t make it drink”. My wife has her own version of that saying: “You can lead a horse to water but that won’t make it into a duck”.

China has seen the benefits of trade but it has violated the “unwritten agreement” under which they were admitted to the international trading system at every turn and all of its written agreements as well. What we have learned is that a country as large as China and as mercantilist as China is disastrously harmful not just to the already developed countries of North America and Europe but even more to the developing world whose path to development has been cut off by a China with tremendous over-capacity. Just as a single example China not only has enough automobile productive capacity to produce all of the automobiles it needs, it has enough productive capacity to produce all of the automobiles the entire world needs several times over. That is repeated in many industries, many sectors.

We cannot make China into a duck, a well-behaved trading partner, we should accept that, but we should also recognize that the risks of trading with China far exceed the rewards.

There’s a good primer at RealClearDefense by David Uren on how China came to dominate global rare earths production:

As the Cultural Revolution subsided and the administration of Deng Xiaoping began focusing on China’s economic development, exploiting natural resources and adding value to them became a priority. In 1986, Deng approved a national high-tech research and development plan to help China ‘to gain a foothold in the world arena; to strive to achieve breakthroughs in key technical fields that concern the national economic lifeline and national security; and to achieve “leap-frog” development in key high-tech fields in which China enjoys relative advantages or should take strategic positions’.

Although I think that reversing the present situation is a vital national security priority, it’s unclear to me how we can manage that. Producing and refining rare earths is environmentally damaging. I’m not sure how we could go about selling the notion that we should be subsidizing domestic rare earths production but that’s what we’d need to do to avoid being dependent on a strategic rival that isn’t hesitant about using their dominance as a weapon for materials we need to maintain both our military and domestic economy.

Does anyone else have the problems that I do with the “place-based visas” that John Lettieri proposes in his op-ed in the Washington Post?

Immigrants — skilled immigrants, in particular — bring an array of benefits to declining communities. They fill empty housing stock, reduce crime rates and spur new business creation. Where there is a shrinking tax base, they bring fiscal stability for schools and first responders. Where there is a dwindling local workforce, immigrants enable employers to expand. Many struggling cities have underused assets and infrastructure built for much larger populations; new immigrants activate such latent capacity.

We shouldn’t be surprised. Immigrants have long been a key ingredient in the most vibrant areas of the country. The problem is that our skilled immigration policy fails on two fronts: It welcomes too few workers, and it primarily serves to strengthen already successful and fast-growing areas of the country by tying a visa to a single employer. As a result, the areas that could most benefit from an infusion of skilled immigrants are the least likely to be served by current policy.

This is a policy choice. What if we chose differently?

The idea of “place-based” — rather than employer-based — visas has been already implemented in countries such as Canada and Australia. Recently, the Economic Innovation Group released a paper calling for a specific place-based visa program — a “heartland visa” — aimed directly at helping struggling regions break the economic and demographic declines they are experiencing. Such a program would open a new door — without reducing the slots available through other programs — for skilled workers who could meet a range of local needs, from helping grow a local robotics hub, to filling small-town physician shortages. But instead of relying on employer sponsorship, heartland visas would be tied to communities — ones that qualify based on a stagnant or shrinking local workforce, or other economic criteria. The draw could be considerable. Many demographically stagnant U.S. communities offer an enormously attractive chance for a better life for would-be immigrants.

To participate in the program, eligible communities would be required to opt in and commit resources — perhaps matched by federal dollars — to implement the program and assimilate new arrivals. Welcoming communities would rally to attract human capital much as they do for a new corporate headquarters — by showcasing their local amenities, quality of life, job opportunities and growth potential.

Visa holders, in turn, would commit to settle in an eligible community for a set period — say, three years — in exchange for being fast-tracked for a green card and permanent status. They would have a wide array of choices for where to settle and full job mobility within their chosen labor market. While some visa holders would eventually relocate, many would put down permanent roots. Over time, areas that find success implementing this program would see their populations rise and prosper.

Under the present system people who come from other countries on H-1B visas are in effect captives of the companies that sponsored them. Increasingly these sponsors are outsourcing companies who, using the power they have over those they’ve sponsored, keep their wages low. Those low wages in turn keep the wages for native-born workers with whom they compete low. It is one of the reasons for very slow wage growth in recent years.

Under Mr. Lettieri’s proposal another group of people from other countries would quite literally be “bound to the soil”, as they used to say about serfs in medieval Europe. If the companies for which they worked relocate and there are no other jobs in the areas to which they are committed, would they be returned to their countries of origin? If not, what would the commitment contracts mean?

I see that proposal as contrary to American practice and traditions, difficult to administer, and inevitably gamed.

I agree with him that there is a problem but my solution to it would be quite different: stop subsidizing cities. An enormous number of federal programs effectively subsidize cities, everything from the home mortgage interest deduction to the Federal Highway Trust Fund. Here in Illinois our real estate tax formula is essentially a subsidy to downtown Chicago at the expense of non-downtown Chicago and the adjacent suburbs.

This morning I saw in comments an assertion about corporate political contributions that I recognized not to be true so I thought I’d comment on it. The site Open Secrets posts statistics about political contributions. Based on their figures for the most recent cycle, here’s how political contributions stack up so far:

Counterintuitive, no? I suppose you could further subdivide that between large for profit corporations on the one hand and not for profits, unions, etc. on the other hand but contributions by for profit corporations still don’t go lopsidedly to Republicans. Large corporations tend to hedge their bets, contributing to both political parties. To which company they contribute more tends to depend more on who the incumbents are in the states in which they have operations.

Similarly, large individual contributions tend to be split between the two major political parties.

So, following the lead of the large fact checking sites, I would characterize the claim that large organizations give overwhelmingly to Republicans as false and the characterization that large for profit companies give overwhelmingly to Republicans as mostly false.

The lesson here is phrase your claims about political contributions very carefully. If you phrase it narrowly enough, you can prove practically anything you care to.

Chicago has only seen measurable snow on Halloween six times in its history. Yesterday, Halloween, Chicago received the greatest Halloween snowfall in recorded history. In my neighborhood it was around 3.5″. In some places it was as much as 6″. Basically, it’s a mess. Snow-covered trees in full leaf, a few so burdened down with snow that branches have fallen.

The Chicago Teachers Union and the Chicago Mayor Lori Lighfoot have reached an agreement after 12 days of strike, an agreement that might have been reached without a strike at all. The CTU are getting large raises, there will be more hiring, and the city will pay for half of the strike. Here’s the assessment of the editors of the Wall Street Journal:

The mayor is touting the new contract as the most generous in Chicago history, and she’s right. Even before the strike, the city had given in to most of the union demands. The new contract includes a 16% raise over five years (not including raises based on longevity), a three-year freeze on health insurance premiums, lower copays, caps on class sizes, and more than 450 new social workers and nurses.

Estimated cost to follow, but you can bet it will be expensive. Last week the mayor proposed a slew of tax increases including levies on ride-hailing services and restaurant meals. This week her staff suggested that property taxes may have to increase . . . again. Michelle Obama the other day complained that white people were leaving the city to escape minorities who are moving in. No, they’re fleeing Chicago’s high taxes and lousy schools—and so are minorities

Unfortunately for all of us, Mayor Lightfoot is unable to pay for these commitments. Her present budget already relies heavily on two assumptions: a generous refinancing of the city’s debt and a bailout from Springfield, neither of which are likely to come to pass.

The Chicago Public Schools are one downgrade from being unable to borrow at all. Chicago’s sales tax is already the highest of any major city in the country. Property taxes, also the highest in the country, are rising fast. My annual tax bill is already 10% of the original purchase price of my house and housing prices haven’t risen here in 25 years. No one doubts that our property taxes will rise. Those taxes will fall most heavily on the poor. Both the prosperous and less so are leaving the city in numbers.

The firefighters and police officers are next in line. They’ve been working without a contract for more than a year. Expect them to match or exceed the teachers’ demands.

The editors of the Wall Street Journal remark on the now-official impeachment inquiry that has begun in the House:

The question is why Mrs. Pelosi thinks this helps the impeachment cause. She must know that a partisan impeachment will be less credible with the public. It is unlikely to change the minds of swing voters, much less of Republicans who could sway Senators.

Then again, maybe she and Democrats don’t care. Perhaps they believe, in these polarized times, that they are unlikely to change many minds. Maybe they want to charge ahead on a partisan basis simply to satisfy the Democratic voters and interest groups that have long wanted Mr. Trump gone. Brand the President with the scarlet I and use that as another tool for motivating Democratic voters in 2020.

This is defining impeachment down. Holding Presidents accountable under the Constitution is among the most serious issues in American democracy. Bill Clinton committed a crime by lying under oath to a grand jury. Democrats said that wasn’t impeachable. Richard Nixon was forced to resign when the tapes revealed he had obstructed justice by ordering a cover-up of the Watergate break-in. When the facts were fully known, Republicans and most of the country agreed.

Democrats want to impeach Mr. Trump for asking a foreign government to investigate his political rival for corruption, though the probe never happened, and for withholding aid to Ukraine that in the end wasn’t withheld. Assuming the facts bear this out, the attempt was self-serving and reckless and a long way from the “perfect” behavior Mr. Trump claims.

But Democrats will need more than the facts on the public record so far to justify short-circuiting a Presidency. Their partisan rush to impeachment suggests that their real purpose is revenge for the humiliation of having lost in 2016 to a man they think is unworthy of the office. The impeachers have the burden of showing why this shouldn’t all be left to the judgment of American voters in 2020.

This is impeachment as part of the continuous campaign. Speaker Pelosi seeks to hold her caucus together, retain the Speakership, and motivate Democratic voters to come out in 2020. The risk is that she will fail in holding her caucus together, motivate Republican voters to come out in 2020, and has lowered the bar for impeachment sufficiently that every succeeding president is likely to face impeachment when his or her party does not hold the House.

I have said in the past that I consider Nancy Pelosi the worst Speaker of the House of Representatives of my lifetime. The last three months has not changed my view. We’ll see how things work out.