At RealClearWorld Ken Pollack remarks on President Trump’s Iran policy:

In May 2018, Secretary of State Mike Pompeo laid out a dozen far-reaching steps that Iran will have to take to get the administration to reverse course. While nothing short of regime change in Tehran would realistically fulfill those conditions, these were probably part of a maximalist bargaining position — an opening bid. Trump never expected to get all or even most of them. So, what does the president want?

It seems increasingly clear that all Trump really wants is a new nuclear deal with Tehran. He wants it to be better than the one his predecessor Barack Obama sealed — the 2015 Joint Comprehensive Plan of Action. Trump believes that by placing enormous economic pressure on Iran, he will force the Iranians back to the negotiating table. Once there, Trump believes he will have the leverage he needs to extract bigger concessions from Tehran than what Obama got, possibly in return for fewer benefits than Obama gave.

I think that’s a remarkably optimistic view. I’m not sure how well it comports with reality.

I’ve always found the JCPOA puzzling because I thought it was only useful if it was unnecessary, an inherently contradictory situation. I wish more people were observing that Iran’s rapid restocking of its inventory of refined uranium demonstrated just how limited the JCPOA’s utility was.

Recently, someone made a case to me that I found intriguing and persuasive. The purpose of the JCPOA from our point of view was not to change Iran’s behavior, reduce its stockpile or refined uranium, or to halt its nuclear development program. It was a confidence-building move. IMO that would have been a worthwhile goal.

Unfortunately, that seems to have failed as well.

That is the somewhat counter-intuitive and certainly counter-narrative conclusion of the book, Identity Crisis: The 2016 Presidential Campaign and the Battle for the Meaning of America, reviewed by George Hawley at Library of Law and Liberty. Here are some of the factors the authors say were not significant in shaping the outcome:

• Russian interference
• Clinton’s campaign tactics
• Clinton’s emails (that lets James Comey off the hook)
• Economics

and here’s what they say was significant:

After demonstrating why other factors had, at most, a modest influence on the election result, Sides, Tesler, and Vavreck conclude that racial attitudes were a key predictor of vote choice. I hasten to add, they carefully note that the relationship of such attitudes to electoral behavior was complicated—the election was not merely a story of white racial animus, or Trump normalizing racist and nativist language.

They also note that, contrary to conventional wisdom among liberal commentators, there is little evidence that Trump increased racism in the electorate. In fact, polling shows that feelings of prejudice among whites have decreased since 2016. This change has only occurred among white Democrats, however—white Republican attitudes have not changed very much in either direction.

Although Trump’s rhetoric did not stir up white anxiety or feelings of racial identity and resentment, he did make these politically salient. That is, there was a weaker correlation between racial attitudes and vote choice in previous elections, including 2008 and 2012, when Barack Obama was the Democratic nominee. Because race was a central element of Election 2016, apparently, racial attitudes were a more important predictor of vote choice in both the GOP primary and in the general election.

The emphasis is mine. Read the whole thing and draw your own conclusions.

Speaking of unintentional humor, in his Washington Post column Charles Lane is worried that we’re borrowing from foreign countries to finance political squabbling:

What accounts for the current ramp-up in the debt, at a time of relative peace and steady if unspectacular economic expansion? On June 25, the Congressional Budget Office reported that, under the most politically realistic forecast, the debt will hit 105 percent of gross domestic product by 2029, a level not seen since World War II.

Obviously, federal spending exceeds revenue, as it has every fiscal year since 2002. On a deeper level, though, the explanation is that the United States is at war — with itself. It is manifestly not a shooting war such as the one between 1861 and 1865, which drove the federal debt to a then-record of just over 30 percent of GDP.

Yet polarized and mutually distrustful Republicans and Democrats are engaged in a Cold Civil War, and have been for years, even before the Trump presidency. The impasse has rendered impossible the compromises and trade-offs — tax increases and spending cuts, or some combination thereof — needed to adjust the existing array of government programs to modern priorities, and to available national resources. Two such deals in centrism’s last heyday, the 1990s, helped create a balanced budget from fiscal 1998 through fiscal 2001, the first and only ones of the past half-century.

In more recent years, however, politicians keep the government more or less going via short-term deals (usually increasing outlays on existing programs and priorities) and borrowing, borrowing, borrowing — to the tune of 42 out of every 1,000 dollars the U.S. economy will produce in the current fiscal year, according to the CBO.

Okay, I’ll bite. According to the Treasury during fiscal 2018, foreign purchasers reduced their holdings of Treasuries from $6,433.3 billion to $6,180.5. How does a net reduction finance anything?

Spending exceeds revenues because we’re spending too much. Full stop. We are borrowing consumption from the future to pay for today’s consumption. We’re also deluding ourselves into thinking that it’s investment. Whatever else they are, end of life care for the elderly, pensions, endless foreign wars, and college degrees which do not lead to gainful employment are not investments in any measurable sense. They are consumption. We need to reduce consumption and increase proper investment. Renaming consumption investment does not make it investment.

I almost laughed out loud at Megan McArdle’s most recent Washington Post column. I don’t think she intended it as humor. Here’s its kernel:

Pelosi’s caucus is near open rebellion, most recently last week over funding the Senate’s emergency border aid package. Hard-liners in the party had wanted her to amend it, but Pelosi ultimately capitulated to pressure from her centrist wing, whose districts won’t countenance using the misery of migrant children as a negotiating tactic. Since those districts are vital to maintaining the Democratic majority, Pelosi allowed the bill to come to the floor, giving moderate Democrats an opening to join Republicans in passing it. House progressives went berserk.

It was a stunning — and increasingly common — display of party disunity.

The Democratic Party has been in disarray for living memory. Back in the 1920s when asked if he were a member of an organized political party humorist Will Rogers’s response was “No, I’m a Democrat”. Somehow they always seem to do just fine.

I’m more worried about the party unifying behind Bernie Sanders’s platform and adopting a gaggle of unworkable or harmful policies than I am disunity.

The editors of the New York Times celebrate the tenth anniversary of the economic expansion that began in 2009 by telling us what they think is wrong with it:

Through the first quarter of 2019, the nation’s gross domestic product had increased by 25 percent during the current expansion. Between 1991 and 2001, economic output expanded by 42 percent. Between 1982 and 1990, output increased 38 percent. And between 1961 and 1969, output grew by 52 percent.

The distribution of the gains is even less satisfying.

Truck drivers still earned, on average, slightly less in 2018 than in 2009, after adjusting for inflation. Executive compensation, by contrast, went up, up and away. Chief executives of companies in the S&P 500 stock index — a list that includes most of the nation’s largest corporations — made an average of $14.5 million in 2018, increasing by $5.2 million in the past decade, according to data compiled by the A.F.L.-C.I.O.

The wealthy have also reaped most of the gains from rising stock prices. The least affluent 70 percent of American households had less wealth at the end of 2018 than at the beginning of 2007, according to the Federal Reserve. The top 30 percent of households saw at least some increase, but the big gains were heavily concentrated at the very top, in the hands of a small proportion of extraordinarily wealthy families.

Unfortunately, they don’t provide us with an explanation of why this has happened or how it may be remediated. The evidence it can be remediated via the tax system is zero. It’s one of those facile answers that just don’t pan out in real life.

I’ve expressed my opinion of what caused the distribution of income from poor to rich many times:

• The Clinton era change in business taxes that allowed businesses to compensate management with stock options without incurring tax liabilities.
• The feckless policy of opening trade with China without ensuring that the Chinese authorities actually followed through with their promises.
• Increased migration of unskilled workers. That of itself creates greater income inequality. Sit down with a piece of graph paper, draw it out, and you’ll see what I mean.
• Competition with relatively unskilled immigrant workers at the low end and with outsourcing and H-1Bs in the middle.
• The explicit policy of the Federal Reserve.

Mitigation and remediation require that those issues be addressed. So far I’ve been disappointed by the Democratic presidential candidates. They don’t seem to want to address any of them. I also have yet to see an explanation of how increasing taxes on businesses and increasing the taxes on capital gains will encourage investment, the most obvious need in our current economy which, to their credit, the editors do mention.

There’s an old one-liner: “We lose money on every sale but we’ll make it up in volume!” I don’t know how old it is but I suspect it’s well over a century old.

Is it my imagination or are we hearing that repeated with a straight face a lot these days?

Here’s Christian Taylor’s take at The Conversation on where Al Qaeda stands today:

Al-Qaida is no longer a hierarchical organization taking orders from its famous, charismatic leader, as it was on 9/11.

But it is stronger and more resilient than it was under bin Laden. And the “war on terror” has helped, not hurt it.

Read the whole thing. I take that as a complete vindication of the positions I’ve staked out over the last 18 years and a nearly complete repudiation of the positions of our political leadership and punditry. Sometimes the only way to win is not to play.

At Geopolitical Futures George Friedman has some interesting observations about capitalism and socialism as being discussed in the U. S. today:

Democratic socialism cannot be democratic because of the scope and scale of modern economies. It either evolves in a Soviet direction, to name one extreme, or, as in oft-cited Sweden, leaves most investment decisions to private investors, taxing them and transferring money to the rest of society. In the Soviet model, the state tries to manage mid-level civil servants by terrifying them with death. In the Swedish model, the battle is formed by demands of increasing social benefits and decreasing investment capital.

Under capitalism, the diversification of capital sources protects against bad decisions made by centralized governments. But it must, by its nature, create inequality and occasional social crisis. The flow of money into the hands of the investor class must generate crises as industries are shut down and as new ones are created. The speed of what Joseph Schumpeter called “creative destruction” generates rapid and intense crises that can turn just as rapidly into social unrest, chaos or repression. Capitalism has generally solved this in the same way that social democracy has: It has left investment to private investors and then imposed taxes on them to cushion social dislocation.

In short, the distinction between modern industrial capitalism and social democracy is minimal. Leaving aside socialist fantasies about the abolition of greed or capitalist fantasies in which a state will expect nothing from its citizens, the two systems have more or less merged. Capitalists and socialists accept private investment. Both expect economies to grow and from that growth they will pay taxes. In both Sweden and the United States, taxes are hated by the public, but the benefits are loved. Still, the political system decides the taxes and the politicians do what they were meant to do in a democracy – pander to the public. What may differentiate one politician from the next is the amount of taxation they propose, but even that is used to balance the system.

My complaints about capitalism and socialism are reciprocal. Capitalism is not nearly capitalistic enough and socialism not nearly socialistic. Capitalism in which you cannot bear to allow a business whose managers make terrible decisions to fail is not capitalism. Socialism in which somehow party apparatchiks manage to become millionaires is not socialism.

There was one thing that puzzled me about the editors of the Washington Post’s prescription that Congress raise the legal smoking age and enforce it:

Raising the smoking age must be one part of a comprehensive strategy that also looks at access and marketing to tackle this public-health crisis. Cigarette smoking and secondhand smoke cause more than 480,000 preventable deaths each year — more than opiate overdoses, gun violence and automobile crashes combined. Congressional action to curb underage tobacco use is long overdue.

and that was how do they plan to enforce it? Just passing a law won’t do it. There has been a law against marijuana use not just by teenagers but for everyone for as long as I can recall. Somehow nearly half of all kids have at least tried marijuana by the time they’re out of high school. The drinking age is 21 in all or nearly all states. Somehow nearly 5% of kids under 17 suffer from alcohol use disorder.

Passing laws is easy. Enforcing them is hard.