I stumbled across this piece by Terry Glavin in Canada’s National Post. He’s outraged that people in the West don’t recognize that revolution is taking place across the Middle East. After recounting accounts of demonstrations in Lebanon, Iran, Iraq, and Syria, he declaims:

It is against this backdrop that Prime Minister Justin Trudeau’s plaintive appeals for “de-escalation” in the region ring hollow. Trudeau deserves credit for refusing to be goaded into blaming Trump for the downing of Flight 752, which took the lives of 57 Canadians, although by his equivocations and banalities — “If there was no escalation recently in the region, those Canadians would be right now home with their families” — he’s come perilously close.

It’s the “escalation recently” that gives away Trudeau’s woeful unfamiliarity with the course of events across the Middle East over the past decade, a bloody “escalation” that did not begin with Trump. It is an “escalation” that has led to the greatest refugee crisis since the Second World War and the bloodiest upheavals since the implosion of the Ottoman empire that followed the First World War.

It is perhaps understandable that some of the candidates in the ongoing contest for the Democratic ticket in the November presidential elections might suggest such an outlandish scenario, pitting Trump as the arch-villain of the latest drama. And certainly no Canadian politician risks losing stature by saying an uncharitable thing about the impetuous, mercurial and vulgar American president.

There is a revolution going on. It has been underway in fits and starts for years. It unites Lebanese, Syrians, Iranians and Iraqis. Its object is the sundering of a bloody Khomeinist despotism that runs from the IRGC’s Quds Force in Tehran through the Assad regime in Damascus to Hezbollah in Lebanon, and Hamas and Islamic Jihad in Gaza, and the Hashd al-Shaabi militias in Iraq, which have now insinuated themselves into every branch of the Iraqi state.

It’s all very well for Trudeau and the United Kingdom’s Boris Johnson and German Chancellor Angela Merkel and France’s Emmanuel Macron to want to force Tehran to get back in line with Barack Obama’s nuclear-rapprochement arrangement, which Trump has renounced. But the genie will not be put back in her bottle so easily.

It was Obama’s Joint Comprehensive Plan of Action that freed up the Quds Force to enforce its ghastly Khomeinist hegemony throughout the region in the first place, and now, Iran’s Hassan Rouhani is warning that it’s European soldiers in the region, not just American soldiers, that may soon find themselves on the Quds Force target list. Counselling a return to the JCPOA status quo is not a call to de-escalation. Don’t believe it.

Now, I’m unsure of his take on the demonstrations in Iran. I’ve read accounts that say that there are far more demonstrators in support of the regime than against it, that the number of anti-regime demonstrators is actually quite small, and that there are as many basiji and police as there are demonstrators.

Beyond that I’m unsure of his interpretation. For most of the last millennium there has been a conflict going on in Islam between urban elites who have typically favored a more liberal interpretation of Islam and rural people and the urban poor who have favored a strict, literal, fundamentalist interpretation. Is what’s going on just the modern reflection of that conflict?

Additionally, while I wish those who seek freedom well, I don’t believe we should be championing their cause or riding in to support them. The Middle East is so fractious IMO our best posture with respect to it is from a distance.

Over at CNN’s web site, Joe Lockhart makes a good point—Bernie Sanders hasn’t received a great deal of serious scrutiny:

(CNN)As a party loyalist, as opposed to someone supporting an individual candidate, the most important thing to me is nominating a candidate who can win in the general election. And a key component of that goal is making sure your party’s nominee is fully vetted and scrutinized before they win the nomination, not after.

There are several reasons for this. First, you want to make sure the nominee can take a punch, because once the opposing party gets involved, you can be sure these will be delivered aggressively. Second, and as important, you want to fully air all controversial statements, votes and other activities before the general election, so that your nominee can legitimately claim these issues are old news and have been addressed. There is nothing more dangerous than having a new issue raised by your general election opponent at a key moment in the race.

Thus, while it may seem counter-intuitive, I want all the primary candidates to scrutinize their opponents, attack their records and have full coverage of it in the media. These scrutiny stories need three elements — good opposition research, an enterprising reporter and another candidate willing to make the case in public for the relevance of the information.

In the race for the Democratic nomination, the process has worked fairly well. Opposition researchers, reporters and other candidates have made strong cases raising questions about the records of former Vice President Joe Biden, Sens. Kamala Harris and Elizabeth Warren, and former South Bend Mayor Pete Buttigieg. With differing degrees of success, each of these candidates has been forced to deal with their own political vulnerabilities. At a minimum, most of what President Donald Trump will attack them on has already been litigated in the primary run.
The exception to this rule, and a worry to many Democrats, has been the relatively lax scrutiny of Senator Bernie Sanders.

The most votes he’s ever received is 207,848. Let’s put it this way. Lori Lightfoot got more votes when she was elected mayor of Chicago. The only state smaller than Vermont in population is Wyoming. So far he’s been shielded from that kind of scrutiny, probably because the press didn’t take him seriously.

Mr. Lockhart goes on to list a number of things that could use a close, hard look:

• Support for Fidel Castro
• Criticism of the Democratic Party and Barack Obama
• Opposition to the Brady Bill
• Call for the abolition of all laws that interfere with the constitutional right of citizens to bear arms

and then, of course, there’s his embrace of the label “socialism”, his support for Chavez, and his recent exchange with Elizabeth Warren.

I have a feeling it’s going to be a long few months.

At the New York Daily News Errol Louis provides some sound advice for the Democrats:

On paper, the plans advanced by Sanders and Warren would tax corporations and wealthy Americans to collect the trillions of dollars that Medicare for All would cost. But in the real world, there’s no reason to believe such a plan would have a prayer of passage in Congress.

Nor, for that matter, should Democrats expect a candidate promising so much economic disruption to carry the states needed to defeat President Trump in November.

At some point in every campaign season, voters must judge future leaders by what they can realistically accomplish. For Democrats, right now would be a good time to adopt a left-leaning version of the so-called Buckley Rule.

Years, ago, conservative author and commentator William F. Buckley was asked which candidate right-leaning Americans should support in the 1968 Republican presidential primaries. He famously replied: “The wisest choice would be the one who would win. No sense running Mona Lisa in a beauty contest. I’d be for the most right, viable candidate who could win.”

Conservatives who followed Buckley’s advice decided Richard Nixon hit the sweet spot: he was further to the right than Govs. George Romney of Michigan and Nelson Rockefeller of New York, but arguably more electable (at that moment, anyway) than the more conservative Gov. Ronald Reagan of California.

The strategy worked: Nixon won the nomination and the White House in 1968. Fourteen years later, Reagan was judged to be more conservative and more electable than George H.W. Bush, and swept to victory.

Klobuchar, polling in fifth place in Iowa, is in effect asking her fellow Dems to adopt the Buckley Rule of party discipline that brought conservatives a generation of success at the polls.

The question is whether they will take it? Magic 8 Ball says “Reply hazy, try again”. During the 2016 primaries there were some who said that Bernie Sanders was running to move the “Overton Window”, the range of policies politically acceptable to the mainstream population at a given time. Whether that was the case or not he was certainly successful in moving it. Anyone who was around in 2016 and compares what was being said then with what is being said now would have to acknowledge that.

I don’t think there’s much doubt that Bernie Sanders is running for president this time around. The question if he should become the Democrat’s candidate this time around is whether 51% of Democrats is actually enough to win in the general election. Frankly, I doubt it.

That in turn means that those inclined to vote for Bernie Sanders need to do some soul-searching. Is it better vote for the candidate they really want and lose the election or a candidate they don’t much care for and win?

After a lengthy fallow period, today there is an abundance of things I found worth commenting on. Is it just me? For example, I found this article by Lisa Russell at The New Republic on the havoc being wrought by the “gig economy” interesting. Here’s a notable snippet:

“Gig companies have developed a business model that has been geared toward evading labor and employment law and shifting all costs and risk onto workers.”

Yuh think? That has been the case for some time—far preceding the invention of the “gig economy”. 40 years ago substantial education allowances paid by the company were a commonplace in large corporations. Now they’re practically unheard of. A company-paid health care plan meant just that. Companies offered generous pension plans. All of those costs have been shifted to workers.

I don’t know if it’s just Chicago but AFAICT a lot of Uber’s and Lyft’s drivers, frequently the same people, are not ordinary people trying to supplement their incomes by occasionally giving rides to strangers and getting paid for it as was advertised by the ride-sharing companies but foreign-born workers trying to earn their full livings that way. It would be interesting to see how many of these drivers are refugees, how many people who’ve just overstayed their visas, and how many are people who have been sponsored by other immigrants.

Back when I was in my twenties it was not uncommon for a Chinese doctor to open up a Chinese restaurant and sponsor all of his cousins to immigrate and go to work for him in his restaurant. Are automobiles the new Chinese restaurants?

It’s off the front page now but I didn’t want this post of Tyler Cowen’s at Bloomberg to get by without comment. Wage growth has been very, very slow:

The most disappointing feature of the most recent jobs report is that wages did not grow very much, even though the U.S. economy is at or near full employment. For 2019, wages grew at 2.9% — but, since inflation is about 2%, real wage growth is about 1%. That’s hardly impressive. The last decade was the second-slowest for payroll growth since the 1940s.

If the roots of this slow wage growth were better understood, there might be better ideas about how to boost it. Unfortunately, there are few easy fixes, and at this point there is not much the Fed can do about it.

He recounts a number of different explanations for slow wage growth:

• The growth in the cost of employer-paid benefits
• Slow productivity growth
• Outsourcing, whether onshore or off
• Some firms today can generate a lot of revenue with relatively few employees
• Income substitutes (stock options, etc.)

I don’t believe for a second that last suggestion has much effect at all. I just don’t believe many people have such things available to them.

Also, what do they teach in school these days? Back in days of yore when I took economics, I was taught that productivity growth was a consequence of business investment. IMO that’s a key point. The result of financialization of the economy is that half or less as much of business investment is actually devoted to expanding facilities or anything else that will produce more or produce more efficiently which would imply greater productivity. Let’s say that 30 years ago you had to increase business investment by 10% to realize a 1% increase in productivity. Assuming a straight line relationship that would mean that today you would need to increase business investment by 20%.

Any here are his recommendations:

• more business investment—I’ve already talked about that. You need to run twice as fast nowadays.
• more governmental support for R&D—we already know there are decreasing returns for that.
• Reduce the costs of housing, health care, and education on the principle if you can’t raise the bridge, lower the river. IMO those all present the same challenges. It’s darned hard to provide artisanal goods and services to a mass market at lower cost.

My solution would be to change tax policy so that the incentives were much, much more targeted.

I laughed out loud when I read the title of Phil Gramm and Michael Solon’s Wall Street Journal op-ed: “The Plot to Politicize Banking”. Here’s a snippet of the piece:

To resist President Trump’s campaign of economic reform and deregulation, his critics usually attempt to portray long-overdue, common-sense policies as assaults on the poor. A good example is the controversy regarding the Community Reinvestment Act, or CRA, which requires banks to meet the “credit needs” of their “entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of such institutions.” The media howled at a plan to rein in abuses of the law—despite its role in fueling the subprime crisis—setting off a fight among regulators.

Bank regulators started using the CRA in the mid-1990s to pressure banks to make subprime loans. Congress used quotas to force government-sponsored enterprises to buy these loans, and regulators set capital standards to induce banks to hold them. By 2008, roughly half of all outstanding U.S. mortgages were high-risk, as measured by down payments and creditworthiness. The federal government itself guaranteed, issued or held 76% of subprime loans. The term “subprime” originated from the implementation of the CRA.

To curb this abuse and encourage sounder lending, the comptroller of the currency proposed new benchmarks last month to measure CRA compliance and require full reporting and accountability. His reforms represent an essential step toward relieving the pressure banks face to lend to politically favored, uncreditworthy entities—the policies that helped cause the subprime crisis.

Yet after the proposal was tarred by the media as an attack on poor neighborhoods, a Federal Reserve Board member proposed an alternative that largely preserves the Obama CRA policy. Disputes among bank regulators are rare, and President Trump should help resolve this one by publicly supporting the comptroller’s reforms.

While policy makers fight over CRA abuses, another effort is under way to politicize credit. This time, instead of steering credit to the favored uncreditworthy, activists want to deny credit to the disfavored creditworthy. Banking was used as a weapon against legal, solvent businesses by the Obama administration during Operation Choke Point, a program to deny the disfavored access to banking services. The Federal Deposit Insurance Corp. labeled certain businesses “high risk,” including firearms and ammunition dealers, check-cashers, payday lenders and fireworks vendors. Unelected regulators, not Congress or courts, marked these industries as “dirty business” and made it “unacceptable for an insured depository institution” to offer them banking services.

When has the banking industry not been politicized? The financial sector as a whole spends $2 billion per year on lobbying, by far the most of any sector of the economy. It’s paid off. The purpose of FICA and all of the other banking regulations are not to protect consumers. They’re to protect the banks. They give people confidence to continue relying on banks and prevent upstart competition.

Had the federal government done what it should have during the financial crisis of 2007-2008 is would have nationalized the big banks and liquidated them as Sweden and Iceland did during their financial crises. We would have recovered much faster as they did. Instead not only did we preserve the big banks, we went after a bunch of smaller banks and forced them to liquidate, allowing them to be absorbed by the big banks which because that much bigger.

Obviously, Sen. Gramm and Mr. Solon aren’t worried about politicization. They’re worried about the type of politicization. I’m all for depoliticizing banks. Ban branch banking.

Judging from the coverage and commentary I’ve read on last night’s Democratic presidential candidates’ debate, the news outlets are doing their level best to convince themselves Bernie Sanders and Elizabeth Warren are winning candidates.

I think they’re wrong both for reasons they have in common and reasons distinct to each. The reasons they have in common are that they’re too old and they’re too far left. Progressives of their stamp represent 51% of the Democratic Party and a lot lower percentage of a country which Gallup just reaffirmed is a center-right country. They each represent states that are among the whitest in the Union and the best educated states in the Union. Neither one of them has any skills or experience that would lead one to conclude that they’d make good presidents. Finally, incumbency is very, very powerful.

Elizabeth Warren will not be able to escape her pretense of being a Native American even if it were done innocently. She and her institution benefited from the pretense which aggravates it.

Not only do I find it very difficult to believe that anyone who spent his honeymoon in the Soviet Union will be elected president, he’s not a Democrat which seems to me would be a requirement for running for president on the Democratic ticket. What you can conclude from that is that he’s not a team player. The Democratic leadership will see that as too big a risk.

There’s a lot of bickering back and forth about the wisdom of the assassination of Qasem Soleimani and the implications of the Iranians’ having shot down a Ukrainian jet, as they now acknowledge they did.

I’ve already expressed my opinion of the former and now I’ll tell you what I think about the latter. The Iranian regime’s position, that it was a “mistake”, is a laughable understatement. If it were just a mistake, not merely the Iranians but we would be shooting down airliners taking off from our airports regularly. People make mistakes all of the time.

What it actually tells you is that the Iranian military is on a hair trigger and they have no effective command structures that could prevent such ghastly actions from being taken.

Now imagine a nuclear-armed Iran.

Update

The Guardian’s editors make an observation very closely allied to mine:

These and other catastrophic shortcomings suggest a startling lack of military and technical proficiency on the part of the Islamic Revolutionary Guards Corps, from whose base outside Tehran the fatal missile was launched. Few in Iran have hitherto dared to challenge the IRGC, which enjoys the patronage of the supreme leader, Ayatollah Ali Khamenei, has large financial and commercial interests and operates independently of the armed forces and foreign ministry.

Recall that during the Iran-Iraq war Iran’s military doctrine was, essentially, a century behind the times. Maybe they’ve matured. This incident suggests they have not.

One of Yogi Berra’s great, wise observations is that in theory there is not difference between theory and practice but in practice there is. At Bloomberg Noah Smith muses over what paradigm will replace “free trade”. Thankfully, he gets to one of the key problems with free trade as an objective quickly—there is no such thing as free trade:

The second problem is that actual trade agreements tend to bear only a passing resemblance to the idealized notion of free trade in an economics textbook. Thanks to lobbying by business interests, real trade agreements are tangles of rules and regulations that can restrain competition. One well-publicized example of this is the investor-state dispute settlement (ISDS) system, designed to shield intellectual property in international markets, which has been roundly criticized as a way to protect corporate profits over the interests of local populations.

IMO his remedy for such phony “free trade” agreements is fanciful—redistributive taxation:

At the very least, trade policy can be improved by increasing redistributive taxation and by removing corporate carve-outs from trade agreements.

for two reasons. The first reason is that we just don’t do that. What we actually do is redistribute from the rich to other, just slightly less rich people, paying them to perform services on behalf of poorer people. We don’t actually know whether that equalizes anything. We just hope it is.

The second reason is that the level of taxation that would be required to do that would be truly unimaginable. Take the steel industry, for example. In 1960 there were about 600,000 steelworkers in the U. S. Now there are 140,000. There are a quarter as many UAW members now as there were as recently as 1979. Add all of the other American industrial workers who’ve been displaced and a little back-of-the-envelope calculation tells you that to make up the difference in pay for the mostly minimum wage jobs available now and the wages they were receiving (in real terms) would take hundreds of billions of dollars. Said another way the effective tax rate would need to be half again what it is now. What would that take in nominal tax rates?

And, as Mr. Smith notes, a government paycheck is no substitute for a good job.