Mayor Lori Lightfoot is about to face her first major challenge as mayor. WGN News reports that the Chicago Teachers Union, undeterred by an independent fact-finding report, are poised to strike:

CHICAGO — The Chicago Teachers Union took a step closer to going on strike after rejecting an independent fact-finder report on Chicago Public Schools.

At a news conference Monday, Chicago Teachers Unions President Jesse Sharkey formally rejected the report, which became public Monday. Read the full report here.

Among several issues, the union is unhappy that CPS may reduce the number of school librarians. Mayor Lori Lightfoot had campaigned on a promise to have a librarian for each school.

The CTU has already been offered a 16% raise over the next 5 years which they have deemed inadequate. Over the last five years Chicago’s population has declined. Presumably, they want to levy higher taxes on Chicago’s shrinking populace. As a point of comparison my pay is exactly what it was five years ago and my house is probably worth less than it was five years ago.

Will the new mayor repeat Rahm Emanuel’s missteps? I am not sanguine. I strongly suspect she will.

Presently, there are three candidates for president in the Democratic field who have credible chances of winning the nomination: Joe Biden, Bernie Sanders, and Elizabeth Warren. The editors of the Washington Post have evidently decided that the weakest in that pack is Bernie Sanders and have decided to go after him. In response to his climate change proposal they write:

As with practically every grandiose program Mr. Sanders proposes, we are left wondering what the democratic socialist would actually do as president. Nothing resembling his climate plan could pass Congress, even with a strong Democratic majority. Mr. Sanders typically retorts that he will lead a political revolution. But he will not change the fact that the nation is ideologically pluralistic.

On climate policy, the key is to get the most bang for the nation’s buck. The task is so large that direct government spending on projects such as power plants is a recipe for unconscionable waste. Mr. Sanders’s promise to divert national wealth into proven boondoggles such as high-speed rail is another red flag.

No central planner can know exactly how and where to invest for an efficient and effective energy transition. That is why economists continue to recommend that the government take a simple, two-pronged approach: invest in scientific research and prime the market to accept new, clean technologies with a substantial and steadily rising carbon tax. People and businesses would find the most effective ways to avoid the increasingly high, tax-inflated costs of using dirty fuels. Maybe that would mean building huge new solar farms throughout the country. Maybe it would mean massive energy efficiency gains driven by home retrofits or new appliances. Maybe it would mean continuing to accept some role for nuclear power.

I wonder if they appreciate the peril in the position they just articulated. Bernie Sanders is not the only “central planner” in the Democratic field. They’re all central planners, most importantly, Joe Biden and Elizabeth Warren are.

If only there were a system which in which local issues and local variation in ideology and needs could be addressed on a systematic basis. Perhaps we can create a federal bureaucracy stationed in Washington, DC to tackle that problem.

The editors of the Washington Post point out that there are critical shortages of certain categories of workers:

OCCUPATIONAL AND physical therapists. Religious workers. Plant operators. Railway personnel. Construction workers. Maintenance and repair workers. Firefighters. Social workers. Nurses. Funeral workers. Truckers. That’s only a brief sampling of the jobs in the United States for which there are severe shortages of available employees, and way more openings than applicants.

and then point to their one-size-fits-all solution to the problem:

rational immigration system, one that meets the labor market’s demands for workers in an array of skill categories and income levels, is the obvious antidote to chronic and predictable labor deficits. Unfortunately, the Trump administration, heedless of the pleas of employers, has implemented and proposed measures whose effect will deepen existing and future shortages. And it has done so even as the unemployment rate, now 3.7 percent, continues to bump along at near-historic lows.

Just to take the category of workers with whom they open their editorial, they are right that there are critical shortages of speech language pathologists, occupational therapists, and physical therapists, particularly localized shortages but their solution is claptrap. We can’t fill those jobs by importing workers. To do a satisfactory job in those fields you must be fluent in English and be equally fluent in our cultural norms in a way that is only possible for someone reared in the culture.

In many places the issue is not that the wages being offered are inadequate. It’s too late to address one of the primary reasons for the problem—increased demand. We have known there would be more elderly people in 2020 for more than 70 years. It has hardly snuck up on us.

More to the point the number of positions in programs has not kept pace with the increase in population being served and the requirements have inflated equally rapidly. Increasingly, doctorates are required.

I also can’t help but wonder if one of the reasons for the shortages is that young people are simply not aware of the opportunities and with such a long launching pad it’s difficult to prepare for jobs in those fields without having started in high school.

On the talking heads programs this morning I heard quite a few people complaining about the fires in Brazil. I think we should all be able to agree that’s a Bad Thing.

However, I’m a bit confused. Are people unaware that Brazil is another country? What do they have in mind for our controlling what Brazilians do? How will changing our behavior change the behavior of Brazilians?

At the Foundation for Economic Education Nicholas Anthony muses over whether central banks are trying to engineer a return to the gold standard:

In game theory, opponents can make threats and promises, but this is mostly considered cheap talk. There’s no cost to say it and there is no cost to receive it. So, why not do it? It is for this reason that no player will change what their strategy is in response to cheap talk. However, signaling is a different matter. A credible signal is costly and separates the aces from the jokers.

Accumulating gold is a costly, credible signal.

In the case of the US-China trade war, China could use gold holdings to dump the dollar. If so, the US would incur a cost much higher than the revenue from tariffs levied on Chinese businesses and American citizens. By accumulating these holdings, China signals that coordination is a better long-term policy.

The Chinese authorities could always make the yuan fully convertible and try to have the yuan replace the dollar as the world’s reserve currency. Just a thought.

Here’s an exercise for the interested student. Assume that the EU, China, and India all return to the gold standard. What would the implications be for the United States? I would speculate that no American politician would have the vaguest idea of what to do under a gold standard and would frantically try to pursue a decreasingly convincing business as usual.

That’s not actually something I’m particularly worried about for simple reason. China, the EU, and India are all in worse shape than we are.

Nouriel Roubini, “Dr. Doom” himself, has an op-ed at Project Syndicate in which he lists the likely “negative supply shocks” that could bring on a recession:

he first potential shock stems from the Sino-American trade and currency war, which escalated earlier this month when US President Donald Trump’s administration threatened additional tariffs on Chinese exports, and formally labeled China a currency manipulator. The second concerns the slow-brewing cold war between the US and China over technology. In a rivalry that has all the hallmarks of a “Thucydides Trap,” China and America are vying for dominance over the industries of the future: artificial intelligence (AI), robotics, 5G, and so forth. The US has placed the Chinese telecom giant Huawei on an “entity list” reserved for foreign companies deemed to pose a national-security threat. And although Huawei has received temporary exemptions allowing it to continue using US components, the Trump administration this week announced that it was adding an additional 46 Huawei affiliates to the list.

The third major risk concerns oil supplies. Although oil prices have fallen in recent weeks, and a recession triggered by a trade, currency, and tech war would depress energy demand and drive prices lower, America’s confrontation with Iran could have the opposite effect. Should that conflict escalate into a military conflict, global oil prices could spike and bring on a recession, as happened during previous Middle East conflagrations in 1973, 1979, and 1990.

predicts a stagflationary recession, and makes some recommendations for dealing with it:

Given the potential for a negative aggregate demand shock in the short run, central banks are right to ease policy rates. But fiscal policymakers should also be preparing a similar short-term response. A sharp decline in growth and aggregate demand would call for countercyclical fiscal easing to prevent the recession from becoming too severe.

In the medium term, though, the optimal response would not be to accommodate the negative supply shocks, but rather to adjust to them without further easing. After all, the negative supply shocks from a trade and technology war would be more or less permanent, as would the reduction in potential growth. The same applies to Brexit: leaving the European Union will saddle the United Kingdom with a permanent negative supply shock, and thus permanently lower potential growth.

I think he mischaracterizes the second supply shock. The Chinese authorities want to dominate emerging technology markets and all future technology markets as they do the present, low-margin commodity technology markets through a combination of theft, other illegal practices, homegrown R&D, and low production costs. We don’t want them to because that would leave us stuck in the unprofitable middle ground not to mention leaving us strategically vulnerable.

Note that other than mouthing a few platitudes about trade and globalization Dr. Roubini has little to say about the roots of the conflict between the United States and China. The Chinese authorities have pursued a concerted, illegal, and mercantilist bundle of policies that are the opposite of free trade. Under a system of free trade the parties benefit in direct relation to how free their trade is. Under the present system the more you trade with China the worse off you are.

The particular victims of the Chinese authorities’ policy are people in smaller developing countries like Mexico whose trade with China should result in the Chinese buying more manufactured goods from them, making both China and Mexico better off. Instead the Chinese primarily buy raw materials from their trading partners, dumping subsidized manufactured good on them.

In his Chicago Tribune column John Kass ‘fesses up and acknowledges the kind of president he would prefer:

Some readers, who’d like nothing better than to jeer at my sightless head on a pike, keep making a mistake in thinking that I’m a Trump guy because I’m not of the left.

But I was for Republican Sen. Rand Paul of Kentucky in 2016. Why? I loathed the Clintons. And I thought Paul, unlike Trump, had the temperament to be president. And Paul talked constantly and in glowing terms about the Constitution.

The republic is what I care about. And the only way to keep it is through the Constitution.

The framers truly understood human nature, the temptations that come with holding awesome federal power, and the problems with factions and blind partisanship.

They understood what would happen if a people lost faith in their institutions, if those institutions were shaped, in grotesque partisan fashion, to serve only the elite, now often called the best and the brightest.

I think his support for Rand Paul was misguided. What we really need is something that may well be impossible: someone who is on the inside but not of it. The “Deep State” is too deep, so intertwined, and so corrupt that it cannot be reformed from outside.

I think that’s why, in desperation, some people put their faith in Trump. I may be mistaken but I think he’s about as much a political and governmental outsider as anyone who’s ever been elected to the presidency and, frankly, the Deep State has kept him tied in knots for more than two years now, will continue to do so, and are fully able to continue to do so throughout a second term. It’s why I’ve said that had I been in Trump’s shoes I would have fired every political appointee in the federal government on the day that I took office.

Now many people are longing for a “return to normalcy” but I think that dream is in vain. IIRC the phrase was the campaign slogan of Warren G. Harding which should tell you something. I believe it is the earliest known use of the word “normalcy”. The media have spent the last 2+ years undermining our institutions. The “collusion” case on which they staked so much has failed to gain the empirical support they assumed just must be there so in turning their attention to white supremacy they will further undermine our institutions, presumably in the hope that something good will rise from the ashes. That hope is forlorn. I think they are more likely to move whites to vote as an interest group than to impel a return to normalcy.

The City of San Francisco adopted the phoenix as its symbol following the earthquake in 1906. Keep in mind that San Francisco’s homeless are covering the city with human excrement. That city, increasingly divided between the rich and the poor, may be a fine example of what will emerge from the ashes of American institutions.

For sheer comedy it’s hard to beat Justin Fox’s observation at Bloomberg. Of the G-7 leaders only Japan’s Shinzo Abe is more popular than Donald Trump:

Donald Trump is an unpopular president. According to the Real Clear Politics polling average as of Friday afternoon, only 43.3% of Americans approve of his performance. FiveThirtyEight, which weights polls by quality, sample size and partisan lean, puts the average at 41.6%.

But as the president meets with leaders of the other G7 countries in the French resort city of Biarritz this weekend, he can take solace in the fact that he’s more popular than almost all of his peers. The lone exception seems to be Japanese premier Shinzo Abe, whose cabinet’s approval rating is 48.8% (to only 35% disapproval) in the Japan Political Pulse poll aggregator maintained by the Sasakawa Peace Foundation USA.

Only 32% of Germans polled for broadcaster ARD a few weeks ago said they were satisfied with German Chancellor Angela Merkel’s government. In Canada, Prime Minister Justin Trudeau’s approval rating was 41% in one recent poll and 39% in another (and in the second poll, by Ipsos, only 33% agreed that he “has done a good job and deserves to be re-elected”). In the U.K., only 31% have a positive opinion of brand-new Prime Minister Boris Johnson, according to YouGov. Italian Prime Minister Giuseppe Conte just resigned, so while he remains in office until a new government is formed and the current governing coalition still has a majority in polls, I don’t think he can really be counted as riding on a wave of approval.

Then there is French President Emmanuel Macron, the one other more or less directly elected head of state (as opposed to leader of a parliamentary government) coming to Biarritz. In so many ways, he’s the diametric opposite of Trump: young, cosmopolitan, well-spoken, technocratic. He’s the least popular of the lot, with a 28% approval rating in the most recent poll listed by the diligent editors of the “Opinion polling on the Emmanuel Macron presidency” Wikipedia page and 22% percent in the one before that.

According to Gallup, Trump is almost precisely as popular as President Obama was at this point in his presidency, a little less popular than Bill Clinton or Ronald Reagan, and a lot more popular than Jimmy Carter was.

At the Wall Street Journal Swedish author and historian Johan Norberg explains Sweden’s system:

Sweden was one of the world’s fastest-growing economies for nearly a century. But by the 1960s, the country began to take its wealth-creating prowess for granted. I tell Mr. Norberg about New York Mayor Bill de Blasio ’s assertion: “There’s plenty of money in this world, it’s just in the wrong hands.” In 1960s Sweden, Mr. Norberg replies, “that’s almost verbatim what they said back then: ‘Now we’re this rich. Shouldn’t we just distribute it, and give it to the people and the places we like?’ ” Such thinking overtook the country’s dominant center-left Social Democratic Party.

“We thought we could do anything, and we had all of those other preconditions: the work ethic, some sort of social pressure, which meant that people were doing the right things, and they wouldn’t want to live on the dole,” Mr. Norberg says. “And then for 20 years, from 1960 to 1980, we doubled the size of the government spending as a percentage of GDP. That’s the aberration in Swedish history.” The Swedish welfare state first was a safety net for the needy. Over time the political class moved to “socialize the lives of the middle classes as well.” The plan: “Increase their taxes, and their benefits, and then they will buy into this system.”

The consequences were predictable. “It resulted in less work, people preferring to stay at home and paint the house rather than hiring someone to do it, general lack of getting the kind of education that matters. It led to entrepreneurs leaving Sweden.” Private-sector employment declined from the 1970s to the ’90s, while disposable-income and economic growth was relatively slow. Some of the country’s best companies and brightest minds fled an onerous inheritance tax.

Plenty of economists knew Sweden needed reform, but undoing the damage would take years. A critical figure was Prime Minister Carl Bildt of the center-right Moderate Party. He came to power in 1991, as the rigid Swedish economy struggled to cope with an economic crisis. Mr. Norberg calls the former prime minister “an ideas politician” who understood free-market principles. Mr. Bildt’s coalition government cut capital-gains and corporate taxes, while the top marginal income-tax rate shrank to 50% from around 90%. Sweden deregulated the telecom and energy industries while introducing school vouchers and other market-oriented reforms. The Social Democrats retook the government in 1994, but the trend toward economic liberty continued for another quarter-century.

“One thing the left gets wrong is that they think that Sweden has this sort of warm, friendly, fuzzy capitalist thing—no layoffs, no fierce competition, protecting the old companies and so on. And it’s really the total opposite,” Mr. Norberg says. “It’s more deregulated. The product markets are much fiercer competition, much more free trade. All of the companies know that they have to be world champions or they will be destroyed.”

American leftists, even those who shy away from the “socialist” label, generally call for higher taxes on “the rich” to support an expanded welfare and entitlement state. That, too, misapprehends the Swedish example. “We have much higher taxes on the poor and the middle classes than you do,” Mr. Norberg says. “And this is the dirty little secret that no one in the American left wants to talk about.” Nonprogressive taxes on consumption, social security and payroll are 27% of Swedish gross domestic product, 16 points higher than in the U.S.

Assumptions about Swedish health care often are wrong too: “Lots of Americans think it’s a Medicare for All thing. But it’s not even a national system. It’s a regional system.” Largely funded by a flat tax, the system isn’t all government-run: “We had a problem with productivity and investment in the health-care sector. So now we have more freedom of choice and more competition in the provision of health care.” Whereas American Democrats aspire to abolish private insurance, “one of the biggest hospitals in Stockholm was privatized, and you can go to private providers. And the first line of health-care defense, in a way, is often private clinics.”

There are some things that Denmark, Norway, Sweden, and Finland (allegedly the happiest country in the world) have in common and it’s not socialism. It’s that they’re all nation-states (a nation state is one in which ethnicity and citizenship are identical), culturally Lutheran, with high levels of societal cohesion and social consciousness. Their governments and other bureaucracies tend to be honest and efficient, simply because doing anything else would be wrong.

Those who look to Sweden as a model tend to look at a single point in time: 1970. Those days are gone, even in Sweden.