Yet another Chicago politician has had his home searched by federal agents. The Chicago Tribune reports:

Federal agents have raided the home of a second ally of Illinois House Speaker Michael Madigan, this time former Southwest Side Ald. Michael R. Zalewski, his attorney said Saturday.

Thomas Breen, the former 23rd Ward alderman’s lawyer, confirmed that a search warrant was carried out at Zalewski’s home. Breen told the Tribune that he could not comment further.

“Michael has been known to be a hardworking straight shooter his entire life. We do not think that this investigation will change his good reputation,” Breen said Saturday.

Citing unnamed sources, the Better Government Association and WBEZ-FM 91.5 reported Friday that the Zalewski raid involved an attempt to get work for Zalewski at ComEd and “interactions” between Madigan, Zalewski and Mike McClain, a veteran former ComEd lobbyist and Madigan confidant. None could be reached for comment.

Don’t be concerned that the feds will run out of Chicago politicians. As long as a politician can get a cushy, high-paying job following their political careers from organizations they’re supposed to be regulating, there will be plenty of new politicians to take their place.

According to the Wall Street Journal the immigration enforcement “raids” have begun:

Federal immigration authorities attempted raids in at least two neighborhoods in New York City on Saturday, according to a person familiar with the matter, a day prior to when President Trump had said Immigration and Customs Enforcement agents would begin national roundups of people illegally in the U.S.

In New York City, ICE agents went to residences in the Harlem section of Manhattan and Brooklyn’s Sunset Park neighborhood, the person said. The agents were rejected by people at the residences because they didn’t have warrants, but plan to return at least to Sunset Park tomorrow, according to the person.

A spokeswoman for ICE in New York said that the agency won’t offer specific details related to enforcement operations. “As always, ICE prioritizes the arrest and removal of unlawfully present aliens who pose a threat to national security, public safety and border security,” the spokeswoman said.

The attempted raids in New York come as Democratic city officials and community activists across the U.S. have been mobilizing for the planned roundup.

After word of the raids leaked last week, President Trump on Friday told reporters before embarking on a fundraising trip to Milwaukee that the roundup would begin on Sunday “and they’re going to take people out and they’re going to bring them back to their countries.”

Mr. Trump said the raids would focus on criminals, saying agents would “take criminals out, put them in prison, or put in them in prison in the countries they came from.”

As long as those being apprehended are on final deportation orders, I think that Democratic politicians who’ve been quite vocal in their defense of these illegal migrants are overplaying their hands. When asylum requests are rejected those making the requests are by definition no longer “asylum-seekers”. These politicians need to be seen to be showing more sympathy for legal immigrants and American citizens than for those entering the country illegally.

The Wall Street Journal reports that there’s good news and bad news in the early results of President Trump’s tariffs against Chinese imports. Good news first. Supply chains are moving out of China:

U.S. manufacturers are shifting production to countries outside of China as trade tensions between the world’s two biggest economies stretch into a second year.

Companies that make Crocs shoes, Yeti beer coolers, Roomba vacuums and GoPro GPRO -1.62% cameras are producing goods in other countries to avoid U.S. tariffs of up to 25% on some $250 billion worth of imports from China. Apple Inc. also is considering shifting final assembly of some of its devices out of China to avoid U.S. tariffs.

Furniture-maker Lovesac Co. is making about 60% of its furniture in China, down from 75% at the start of the year. “We have been shifting production to Vietnam very aggressively,” said Shawn Nelson, chief executive of the Stamford, Conn., company. Mr. Nelson said he plans to have no production in China by the end of next year.

The moves by U.S. companies add up to a reordering of global manufacturing supply chains as they prepare for an extended period of uneven trade relations. Executives at companies that are moving operations outside China said they expect to keep them that way because of the time and money invested in setting up new facilities and shifting shipping arrangements. Companies said the shifts accelerated after the tariff on many Chinese imports rose to 25% from 10% in May.

“Once you move, you don’t go back,” Mr. Nelson said.

That last passage is the most important. The changes are likely to be lasting. Now the bad news. American companies are not onshoring their production:

There is little evidence, though, of U.S. manufacturers bringing production from China back to the U.S., a move the Trump administration hoped the tariffs would encourage.

While imports from other Asian countries have climbed, U.S. manufacturing output has declined 1.5% through May from a recent peak reached in December, according to the Federal Reserve. The Institute for Supply Management said earlier this month that its manufacturing index slipped again in June to the lowest level since 2016.

“If we were to try to do a factory in the U.S., it would be enormously expensive,” said John Hoge, co-owner of Sea Eagle Boats Inc., which makes 85% of its inflatable kayaks, canoes and fishing boats through contract manufacturers in China. Mr. Hoge said the network of manufacturers and suppliers in China that makes boats for Sea Eagle and many of its competitors isn’t as comprehensive in any other country.

“It took us 20 years to build up the supply chain in China,” he said. Mr. Hoge estimated the 25% duty on his products that took effect in May would double the Port Jefferson, N.Y., company’s tariff expenses to about $500,000 a year.

I don’t believe that either Asian or American companies understand the implications of that last paragraph. Supply chain management is much more agile than it was 20 years ago and will become more so. What took 20 years then will proceed much more quickly now. In the future companies will change suppliers much more rapidly than they have been predisposed to do. There’s a simple reason for that. To maintain production companies need second sources and a different nameplate doth not a second source make.

While I suspect that some manufacturing will be onshored (also known as “reshored”) I think the broader pattern will be diversification of sources and that’s a good thing. For one thing we should be much more cautious in how we do business with a country that is engaging in industrial and military espionage against us at the scale at which China has done so.

Update

A. T. Kearney’s remarks on its reshoring index casts more light on the subject:

Vietnam is not the only beneficiary of changes in US trade policies. As the US and China escalated tensions, Mexican imports to the US picked up considerable steam. In 2018, Mexico increased its exports to the US by $28 billion, a growth rate of 10 percent over 2017—the fastest growth Mexico has seen in the past seven years.

While Mexico and the US have had their fair share of trade-related conflicts this past year, the magnitude of these disputes resembles a sibling quarrel compared to the brawl with China. US–Mexico tensions are calming; the US threat in June 2019 to place tariffs on 100 percent of Mexican goods until Mexico acted to reduce the flow of immigrants crossing the border was quickly resolved, with minimum sacrifice by either Mexico or the US. Renegotiation of USMCA is nearly complete, and the new agreement—which largely keeps intact the overall NAFTA framework—is likely to be ratified by all three countries’ legislatures by the end of 2019, especially given the administration’s recent lifting of Section 232 steel and aluminum tariffs on Mexico.

“Nearshoring” will become more important, something I think is an unmixed good. They go on by expanding on what would be necessary for reshoring:

One of the conditions that needs to be in place to incentivize reshoring is the presence of a stable and predictable business environment that enables companies to deliver their products freely to the end-markets of their choice. The US has taken a step backward on this front, as the discussion above indicates. But leaving trade wars aside for a moment, what else is needed for manufacturers to start bringing jobs home at a significant rate?

Chief among manufacturers’ needs is a robust labor force available at an attractive cost and composed of the right percentage of skilled workers. Last year’s 2017 Reshoring Index report commented on the continued lack of skilled labor as one of the top constraints on the growth of US-based manufacturing. In this year’s report we revisited the numbers, and the story did not change.

I agree with the first point and am skeptical of the second. I don’t think we should be too determined to match China’s or Vietnam’s price. A better strategy is to start encouraging manufacturing techniques that don’t depend on labor costs as much as those of the past have.

My first eye exam was administered by the ophthalmologist my father had been seeing for years, old Dr. Alvis. Reminiscent of the 1970s BBC farce, Are You Being Served?‘s Grace Brothers department store with “young Mr. Grace”, a doddering ancient, and “old Mr. Grace” (“old Mr. Grace doesn’t get out much any more”) Alvis and Alvis were father and son ophthalmologists. Dr. Alvis Senior continued to work into his 90s, performing glaucoma tests by hand. A remarkable man.

The eye test consisted of showing me a series of slides and having me identify what I saw: dog, cat, chicken, etc. The final slide was a close-up, much enlarged picture of a mouse which I dutifully and with a certain amount of alarm identified as an elephant, much to Dr. Alvis’s and my mother’s merriment, presumably the desired effect. The point of this story is that perspective is important.

I was depressed by this article in The American Interest by Peter Pomerantsev on the “polarization spiral” in news coverage. The article included some interesting insights or, at least, useful ways of thinking about things, for example:

The very architecture of the internet fosters an environment where it is profitable for news organizations and individual users to take ever more extreme and polarizing positions1—an algorithmic logic that in turn encourages the populist politicians. They, in their turn, create content that mainstream media feels they are obliged to describe…and so the spiral spins on.

This spiral can be clearly seen in action in Italy, where politicians like the Minister of Interior, Matteo Salvini, have learned to dominate the information space.

Why did I find it depressing? Here’s an example of his prescription for breaking the deadly spiral:

Breaking the polarization spiral will require, first and foremost, greater public oversight of the algorithms and social media models that currently encourage extremism. Such regulation is already well on its way in Europe, and public pressure is growing in the United States. It is important that any regulation is focused not on censorship and content “take-downs,” but on encouraging accurate content, high editorial standards, and providing people with a balanced diet of content instead of encasing them in “echo chambers.”

Breaking the polarization spiral will also mean reforming the ad-tech system. As a new white paper by the Global Disinformation Index elaborates, this will require both automated analysis that looks at the metadata of news domains to see whether they show telltale signs of being created in nontransparent ways, as well as a qualitative review of the content and editorial practices of news sites to determine which ones follow journalistic standards around accuracy, transparency, corrections, and reliability.

The reason I find it depressing is that every incentive points in the opposite direction. In Europe the form that “greater public oversight” is taking is towards increasing censorship. Examples of that are easy to find. Viewpoints that are not officially sanctioned are simply banned. That’s one way of dealing with the situation but not one that I find encouraging.

A different but related resolution would be for a single, private viewpoint to dominate the “information space” completely. In the U. S. presently there is a trend towards such a viewpoint and it is one held by, perhaps, 8% of the American people.

The present, uncomfortable equilibrium is between two competing narratives, epitomized by MSNBC on the one hand and Fox News on the other. It reminds me of nothing so much as the trench warfare of World War I.

You can also see the nature of the problem in how every “fact-checking” site has evolved. Although they may begin by actually checking facts there is a tremendous tendency for them to start “fact-checking” opinions, political positions, and wisecracks as though they were assertions of fact.

I believe that the best solution resides in a well-informed public, able on its own to distinguish between fact and politically-motivated fiction but that, too, is a fantasy. But how can you evaluate the factual basis of any report in the absence of trust or some yardstick against which to measure it? Without perspective?

Downwards facing dog.

As I’ve mentioned before I’ve been listening to old radio programs a lot these days. They provide a tonic for the generally upsetting news of the day. One of the programs included a public service spot from Bill Goodwin, longtime announcer for Burns and Allen on the radio which concluded: “If we can laugh together as a people, we can live together as a nation.”

Consider that in the context of this article at The Atlantic on the decline of the Hollywood comedy:

The decline of the comedy is a trend that has been under way for a while now. Hollywood’s reluctance to make comedies is also explained by declining DVD sales, itself caused by growth in streaming services like Netflix (which are commissioning their own original content, including comedy television).

Still, over the years, comedy figures (like Jerry Lewis, weirdly popular in France) have occasionally been a useful “soft power” foreign policy tool for the U.S. At another time of geopolitical uncertainty, if the world doesn’t think America is funny anymore, could it actually be a problem?

or this from the Hollywood Reporter:

Comedy lovers, not to mention fans of Emma Thompson and Mindy Kaling, took succor in early June from the promising limited opening of Late Night. The picture, which Amazon Studios acquired at Sundance for a reported $13 million, debuted the weekend of June 7 to a per-screen average of $62,414, second only this year to Marvel’s Avengers: Endgame.

A week later, the picture fizzled when it went wide, earning $5.1 million, or $2,314 per screen (a third of Men in Black: International’s per screen take, itself a disappointment), thereby proving itself the latest in a string of comedy casualties at the box office.

Attributed to many but apparently original to Carol Burnett, “Comedy is tragedy plus time” is appropriate. Is the decline of comedy because everything is so ephemeral these days, present today forgotten tomorrow (unless it’s useful in raking up an old score), or because when you see tragedy as central to your identity nothing can possibly ever be funny?

Many U. S. cities are on tenterhooks today in anticipation of the ICE raids to enforce the deportation of people already on deportation orders. Chicago is one of those cities and the Chicago Tribune reports:

For the second time in less than a month, immigrants and their advocates in Chicago and other major cities are girding for the prospect of a large-scale Immigration and Customs Enforcement deportation campaign reportedly set to begin this weekend.

With President Donald Trump hinting that sweeps targeting undocumented families and those with final deportation orders would begin soon — after announcing and then postponing the planned raids last month — activists in Chicago are again mobilizing resistance and advising immigrants of their rights.

On Thursday, Mayor Lori Lightfoot reiterated that Chicago police won’t cooperate with agents from U.S. Immigration and Customs Enforcement on the campaign and blasted the president for “fear-mongering” and “making immigrants scapegoats … who are just here to live their life. That’s not who we are or should be as Americans.”

I hope the mayor and officials across the country continue to tread lightly. There can be a very fine line between non-cooperation and obstruction, between protest and lawlessness. The president’s authority to send troops into American cities to quell disturbances was greatly broadened by the Congress in 2006, something that I opposed. The old wording of the Insurrection Act of 1802 was “insurrection, domestic violence, unlawful combination, or conspiracy”. The new wording is “natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition” in addition which could mean just about anything the president decides it means.

Tread lightly.

At Bloomberg Noah Smith is skeptical about the findings in the CBO report on the effects of a $15/hour minimum wage. Here’s the kernel of his article:

When employers have excessive power, minimum wages cause much fewer job losses, and modest pay increases can actually raise total employment by drawing marginal workers into the labor force. An interesting new paper by economists José Azar, Emiliano Huet-Vaughn, Ioana Marinescu, Bledi Taska, and Till Von Wachter found exactly this sort of effect. The authors concluded that when there are fewer general merchandise stores (think: Wal-Mart) in a particular area, minimum wages tend to cause less unemployment among store workers. In areas with only a very few stores, higher minimum wages actually raise the number of store employees — just as monopsony theory would predict.

This single study isn’t definitive, and needs to be replicated with alternative methodologies. But it suggests that minimum wages could work very differently from how the CBO predicts. The CBO’s analysis relies on the idea that the job loss from minimum wage is proportional to the amount that it would raise earnings in a given area — in places like rural Kansas, where wages are low, this implies that the impact of a federal $15 minimum wage could be ruinous. But since small towns are precisely the kinds of places that are likely to have only a few employers, the negative impact of a higher federal minimum wage might be more muted than the CBO expects.

This seems like a good place to remind people of how the Congressional Budget Office operates. Typically, they receive a request from Congress for an analysis, stating the parameters and constraints of the analysis. We don’t know what the CBO was asked to do but, based on what they did, we can guess. They were asked to provide an analysis of three different minimum wage levels to determine the employment effects of the different scenarios and was probably asked not to consider run-on effects.

I should also point out that retail (“think: Wal-Mart”) is not the right comparison. The hospitality industry, mostly fast food and casual dining, is the right one since that is where most minimum wage employees are employed. Those are not in a monopsony position. They’re in competition with most homes and many grocery stores. As I have pointed out before these establishments operate on very narrow margins. Just a few points of additional costs can make the difference between profit and loss.

I do agree that more study is needed. Marry in haste, repent at leisure. Additional, broader studies should be done, focusing on regional and sector impact.

And let’s not lose sight of the underlying problem. The minimum wage is intended as an entry-level wage, mostly paid to people just entering the labor market to enable them to gain experience and go on to a better-paying job. The problems are that we’re not creating enough better-paying jobs, the number of entry-level workers is increasing faster than expected, and adults are trying to support families on what should be a wage for single young people.

Just about every major news story these days reminds me of George Santayana’s remark: “Fanaticism consists in redoubling your efforts when you have forgotten your aim.” Sometimes I’m not certain whether today’s fanatics have forgotten their aims so much as that they are afraid that their aims will be revealed.

Just about every story of the day opens with partisan bickering. It’s hard to get a purchase on their merits under the circumstances.