Republican Sweep

Donald Trump has apparently been elected president of the United States with 276 electoral votes to Hillary Clinton’s 218. Neither Trump nor Clinton appear to have gained a majority of the popular vote although Hillary Clinton may have a small plurality.

I was wrong. The editors of the Washington Post echo my thoughts here:

DONALD TRUMP was elected the 45th president of the United States on Tuesday. Those are words we hoped never to write. But Mr. Trump shocked the pollsters, riding a wave propelled in part by rural and Rust Belt voters who felt the political establishment had cast them aside. While Mr. Trump might not have done the same for his rival, Hillary Clinton, had she won, all Americans must accept the voters’ judgment and work for the best possible outcome for our country and the world.

President-elect Trump held the states carried by Mitt Romney in 2012 and added Florida, Iowa, Ohio, Pennsylvania, and Wisconsin and probably Arizona, Michigan, and New Hampshire although those three states have still not been declared for him. That defies the predictions of pundits and pollsters.

In addition to Donald Trump’s victory Republicans have retained control of the House and the Senate.

I literally have no idea of what a President Trump will do. I think it’s almost completely unpredictable.

I believe that the greatest likelihood is that he will build his wall. It was his central campaign promise. I’m skeptical that it will have much effect but he’ll build it.

I doubt that he’ll be able to repeal the Patient Protection and Affordable Care Act outright. It may be allowed to collapse of its own weight, it may struggle on, or it may be amended beyond recognition. I just don’t know.

I’m very interested in seeing what the detailed breakdown of the exit polls have to tell us. I suspect that it reflect something more complicated than the story that’s being told of a “whitelash against the first black president”.

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Election Night, 2016

It’s past my bedtime so I’m going to bed. It looks like the presidential election won’t be decided until the wee hours of the morning if then. I wouldn’t be at all surprised if when I rise in the morning (at 5:00am) we still don’t know who’s been elected president.

The map above shows the results as of 10:30pm or thereabouts. If all of the states that are presently leaning to Trump go to Trump and all of those presently leaning to Clinton go to Clinton, Trump wins. I still think that Hillary Clinton will eke out a victory but as of this writing it looks like her margin of victory will be much, much narrower than many had predicted.

There are some things we already know for sure. It won’t be a landslide for either candidate. Florida will conduct a recount. Under state law that’s mandatory for 3 point elections. Virginia was significantly closer than had been assumed.

Assuming we actually have tentative results tomorrow, I’ll write a post on the lessons we’ve learned this cycle. There have been a number of them.

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Election Day, 2016

I think I’ve mentioned it before but my dad was heavily involved in politics practically from birth. One of his earliest jobs was handing out pints of booze from his little red wagon at the polling place on election day.

Those were the days! It was a grand old tradition that went all the way back to George Washington.

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Getting on the Anti-GDP Bandwagon

Economist Edoardo Campanello appears to be jumping on the anti-GDP bandwagon in his post at Project Syndicate:

In a year of populist discontent across the West and narrowing prospects for major emerging economies, the future may end up being shaped in an unlikely setting: the world’s statistical offices. Among ordinary people and specialists alike, there seems to be an increasingly powerful sense of dissatisfaction not only with the pace of economic growth, but with how that growth is defined and measured.

There are two reasons for this. First, aggregate economic growth in the developed world has brought little, if any, benefit to the vast majority of citizens in recent decades – a trend that has been particularly pronounced against the backdrop of the 2008 global financial crisis. As Nobel laureate Joseph Stiglitz reminds us, “in the ‘recovery” of 2009-2010, the top 1% of US income earners captured 93% of the income growth.”

But second, and arguably more important, defining welfare solely in terms of what can be measured by markets misses much of what contributes to – or detracts from – human wellbeing. In 1968, Robert Kennedy, campaigning for the presidency of the United States, lamented that this approach “measures everything except that which makes life worthwhile.” It says nothing, for example, about environmental quality, the cohesion of communities, or the stability of individual and group identities – all of which clearly influence wellbeing.

I’m not entirely sure what he’s getting at. Is it that in a globalized world an increase in economic growth in the developing world may not be reflected in an increase in wellbeing (however measured) in the developed world? Is it that economic inequality in the developed world stands in the way of the benefits of trade being realized by most people? Why would you expect policies directed at increasing measurable economic growth to address that?

Note that he proposes no alternative to GDP as a guide or benchmark for policy. He merely points out its inadequacy as the be all and end all of policy. I agree.

I think he should be more cautious in what he wishes for. The proper alternative to an inadequate measurement is a better measurement—not no measurement. All mainstream schools of macroeconomic thought rely on some more or less objective measurements of economic activity for their policy prescriptions. To reject measurement is to reject any organized attempt at changing things, including on the part of government.

In the much more succinct phrase attributed to the great writer and scholar of management, Peter Drucker, if you can’t measure it you can’t manage it. And if you can’t manage it it should not be the object of government policy. I suspect that precisely the opposite message will be inferred, a license for abuse.

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Yuh Think?

At the New York Post Nicole Gelinas’s column is titled “Elite cities are pushing out the working class”:

Global-city residents are struggling not because factories closed and jobs vanished. Nor are they leaving because they’re fed up with crime and other “inner city” woes Trump talks about.

They’re leaving because the new economy where they live has been too good, pricing them out.

The stark numbers come from Trulia, the real estate information firm. In a study highlighted last week by the Wall Street Journal, Trulia analyzed who moves away from the country’s 10 most expensive cities, all on the East Coast or in California.

Answer: disproportionately, the poorest — those making $30,000 or less. But they weren’t exclusively poor: People earning $30,000 to $60,000 also left in numbers that exceed their share of the population.

That’s not just a feature of Rahm Emanuel’s Chicago. I see no other viable explanation than that it’s a strategy. Presumably envious of the cool kids in New York and Los Angeles, his priorities have been projects that primarily benefit the well-to-do while neighborhood schools are closed and homicide and crime rates soar on the South and West Sides.

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Probability Zero: After the Storm

I’m still seeing lots of calls from various pundits for national reconciliation after the election. At the New York Times television news analyst Frank Luntz contributes the following proposed victory speech:

“My fellow Americans, I stand before you tonight, humbled. There is no greater honor than to serve as president of the United States — and no greater responsibility.

“For many, this is a night of celebration. But I recognize and respect the millions who preferred a different path. And so I ask one last sacrifice from my supporters who have worked so hard to make history happen. Instead of your cheers, I ask for your silence so that I might speak directly to my opponent and to the people who are discouraged and disheartened with tonight’s results.

“Our political system has too often drowned you out. Our economic system has too often left you behind. But no more. Tonight, I hear you. I feel your frustration. Your hopes and dreams are just as important as those of the people in this room. Your concerns are just as real. I get it, and I will act on it.

“Throughout this election, we’ve said things to each other that were harsh, negative and inappropriate. Our divisive words too often distract us from the challenges we need to solve. From failing schools to rapidly rising health care costs, from immigration to Social Security, the challenges we face as individuals, as communities and as a country are immense and demand the best minds and best ideas from across the political spectrum. In the months ahead, my administration will set the example. We are more than just Democrats. We are more than just Republicans. We are Americans.

“And so I ask my supporters to have empathy and understanding for those who are commiserating across town and across the country tonight. And let us all tonight pledge allegiance to one nation, indivisible. I’ve always promised to fight for you, but that doesn’t mean we need to fight against them. Let’s mark tonight by finding our common ground and moving forward together.”

while at the Washington Post Michael Gerson takes a somewhat different tack:

Who among our political leaders is calling for mutual understanding and practicing it? This would involve the concession of truth on both sides.

It is true that the United States has two economies — one for those who have the skills favored by globalization and one for those who don’t. At the bottom of the Great Recession in 2010, the unemployment rate for people without a high school degree was 15 percent. For college graduates, it was 4.7 percent. A portion of America is in a more or less permanent recession, no matter what the stock market does.

It is true many of the beneficiaries of globalization have little contact with those who bear its costs.

It is true that many blue-collar and rural men and women have witnessed their way of life decline, have seen the sources of their deepest beliefs dismissed by the broader culture and increasingly feel (in Arlie Russell Hochschild’s phrase) like “strangers in their own land.”

But it is also true that for some Americans, the idealization of a lost America has little appeal. If you are an African American, or a gay person, or someone in a racially mixed marriage, or a woman seeking a leadership role in society, your life has improved greatly over the past few decades. For many Americans, the full promise of liberty has arrived lately.

I would reckon the likelihood for either a genuine plea for understanding and temperance or truth-telling as roughly zero.

Actions speak, too. If a victorious Hillary Clinton names people other than those in her inner circle of friends and advisors to positions of power, especially her White House Chief of Staff, there is a real possibility of reconciliation. If a victorious Donald Trump constructs a national unity government consisting of leaders from both major political parties, there’s some possibility of unity.

Otherwise this election will be the beginning rather than the end of the discord.

When a marriage is in distress there are only a handful of possibilities. They can reconcile, which generally requires both parties to abandon some grievance. They can divorce and go their separate ways. They can maintain a cold, angry truce in which both parties wage a quiet passive-aggressive war against the other. I’ve actually witnessed that and it’s ghastly.

Or they can start waging war with every resource they can bring to bear.

I think this election has revealed that we’ve reached that point of distress. Which of the alternative paths are followed is to be determined but I wouldn’t give you any odds on either of the first two.

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The New Strategy

Old strategy: our policies will increase economic growth! New strategy: economic growth is a poor measurement of well-being.

There are so many things wrong with Alana Semuels’s article at Atlantic that I hardly know where to start. Why does Atlantic have people who clearly know little or nothing about economics, policy, politics, or government writing about economics, policy, politics, or government?

Here’s a true statement from the article but it almost gets lost in the fog:

Without growth, said Gordon, the Northwestern economist, if the country wanted to add those programs within its existing budget, it would have to cut something else or raise taxes. “There’s always a demand for more services, whether there’s growth or not. Growth gives you the funding to pay for it,” Gordon said. This goes for paying Social Security and Medicare, too, which are funded through taxes. As the population ages and more people receive Social Security, the economy needs to grow so their benefits can be paid for, he said.

If you’re going to support a government that subsidizes ever more services, you need to accept less growth. Look up deadweight loss. It is not possible for philosopher-kings to produce greater wellbeing for people than they can provide for themselves. They do not have the information to do it and, indeed, the mere attempt obscures the information they need. The Soviet Union did not fail because the Soviets were stupid. The Chinese did not remain impoverished until they adopted some level of a market system because of official corruption or some sort of plot against them. It was because it could be no other way.

When growth becomes low enough, in order to start providing higher subsidies to some people you’ve got to start taking them away from others. And at some point the people who are losing their subsidies will become very, very unhappy.

All of this is vastly complicated by our byzantine and perverse system. We do not tax the rich and give the proceeds to the poor. We tax the rich to give the proceeds to a different group of the rich. We justify this by saying it’s to help the poor. We also tax the poor to give the proceeds to the rich. We use a variety of dubious pretexts to explain that.

Bottom line: growth is better than no growth. Our problem isn’t that we’re growing too fast or that we’re spoiled by growth that’s been too fast. Our problem is that the benefits of growth are being realized by so small a group of people. Solve that problem before you start rationalizing slow growth.

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Winning Is Something

It’s times like these that I’m glad I’m not a Republican. If John Tamny’s recent column at Forbes is any gauge, Republicans have already decided that Trump will lose the election and are casting around for explanations for how Republicans will benefit from his defeat:

Can any Trump partisans imagine their candidate working tirelessly to convince others of the good or bad of a policy sans obnoxious rhetoric, and better yet, anyone listening to this most empty-headed of candidates? Regardless of Tuesday’s outcome, can anyone honestly say Trump will leave behind any kind of legacy that actually advances the policy debate?

Donald Trump is quite simply the most policy ignorant presidential candidate to ever emerge from the Republican primaries. But it’s not Trump’s stunning ignorance about seemingly everything policy-related that makes him such a lousy candidate, and such an embarrassment to the GOP. Figure that we’re advantaged economically and also in terms of freedom when presidents do nothing. Trump’s problem is that he combines policy ignorance with an impressive lack of common sense, and then tops it off with a desire to actually turn his know-nothingness into law. This is worth mentioning simply because yours truly would be cheering for Trump rather boisterously if he advertised his total cluelessness alongside an expressed desire to sit on his hands for four years. The problem with Trump once again is that he’s got lots of policy ideas. They’re nearly all bad. And the manufactured facts supporting them are nearly all wrong.

Read the whole thing.

Keep in mind that I hope with every fiber of my being that Donald Trump is not elected president but also bear in mind that I don’t care about the fate of the Republican Party one way or another. Basically, I think that the benignity of political parties is enormously overstated.

Winning may not be the only thing or even the most important thing but at least it’s something. Losing is nothing. If losing weren’t worse than winning, nobody would ever try to win anything. Losing is so much easier.

So a loss is a loss and IMO whether Donald Trump is elected or not the Republican Party will be damaged by the experience.

I’d like to make one final observation about Mr. Tamny’s column. He writes:

Countries don’t trade. Individuals trade, and by definition their trade balances.

IMO a very myopic view of trade. When an American person or company buys goods or services produced or performed in China, they pay in dollars. They give their dollars to the Chinese individual or company with whom they’re trading and receive the goods or services in exchange.

What happens to the dollars? They cannot be used to purchase goods or services by the Chinese in China. They can be stuffed into a mattress, they can be used to purchase interest-bearing financial instruments of some sort (which means that they’ll be used to obtain more dollars at a later date), they can be used to purchase capital assets in the U. S., or they can be used to purchase goods and/or services produced or performed in the United States.

The U. S. is running an enormous trade deficit with China, well over $350 billion per year. That means that Americans are buying more goods and services from the Chinese than the Chinese are buying goods and services from Americans. By definition that reduces U. S. economic growth. What are they doing with all of those dollars? Some are being used to purchase goods and services not produced in the United States but denominated in dollars anyway, mostly oil. But a lot of those dollars are being used to purchase interest-bearing financial instruments.

I’m completely in favor of the sort of free trade in which Americans and Chinese trade goods and services with each other in near complete parity. I do not care for the sort of trade we have in which the Chinese hold over a trillion dollars dollars worth of T-bills rather than buying other U. S. goods and services. In effect we’re purchasing inexpensive manufactured goods from the Chinese and exporting employment. That might be good for politicians and people in the financial sector but I don’t think it’s very good for you and me.

The balance of Mr. Tamny’s column is filled with anarcho-capitalist half truths. For example this:

Economic growth within these borders ensures a continued inflow of people into the United States.

Uh, no. Cost-benefit analysis of coming into the country illegally ensures a continued inflow of people into the U. S. Growth has little to do with it. I could go on almost indefinitely.

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The Warning

By comparison Bill Scher, also writing at RealClearPolitics, gives a timely warning:

No matter what happens on Election Day, tens of millions of Americans are going feel like they got punched in the gut.

He thinks as I do that Trump supporters will be the ones experiencing the gut punch. If it’s Clinton supporters I can’t even imagine the implications.

I’ve heard lots of brave noises over the last couple of days about national reconciliation in the aftermath of the election. Do either of the presidential candidates strike you as people who are gracious in defeat? Or in victory for that matter?

I heard some of the talking heads yesterday talking about Hillary Clinton forming a national unity government following her victory. I don’t think I’ve ever heard a bigger load of codswollop. There was no reconciliation following Barack Obama’s victory in 2008 and he’d run in part on reconciliation. Blame it on who you will but there was no reconciliation.

But I’ll play along. How would each of the candidates go about “healing the nation’s wounds” after her or his victory? I can’t see it but I’ll listen to those who see more clearly than I.

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What’s Wrong With This Picture?

I believe that David Shribman, writing at RealClearPolitics, is trying to assuage my concerns by noting that harsh words have been part of our political discourse prior to the 2016 campaign:

Years before he became president of the Confederacy, Jefferson Davis was the target of unforgiving opprobrium from Sam Houston, who criticized the Mississippi senator by saying he was as “ambitious as Lucifer and cold as a lizard.” In “Profiles in Courage,” John F. Kennedy wrote this of Thomas Hart Benton, who served in the Senate from 1821 to 1851: “Pouring out his taunting sarcasm in short, bombastic thunderbolts of gigantic rage, hate and ridicule, day after day, in town after town, he assailed his opponents and their policies with bitter invective.”

but he’s falling short of the mark. Both of the examples he cited are about the run-up to the American Civil War. Yes, strong words preceded the shooting. Emphasis on the word “preceded”.

He goes on to ask a number of presumably rhetorical questions:

By contrast, this election raised questions that the end of the campaign will not resolve. Here are six among them:

• Is the Republican Party, since 1909 the party of the Establishment, going to relinquish that role and banish its own party establishment?

• Will the Democrats, since 1932 the party of the poor and striving, take on the tint of the elitist party, its power centers being gentrified urban areas and college towns?

• Will the Republicans, within the lifetimes of many voters the party of social rest, emerge as the party of cultural unrest?

• Will the Democrats, in recent years the party of insurgency, retreat into a new, sleepy life as the party of the status quo?

• Will the Republicans keep the support of blue-collar voters that their leaders spent decades fighting in labor battles but whom Donald J. Trump attracted into their column in 2016?

• Will the Democrats embrace the nostrums of Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts and surge leftward?

Leaving the presumably unintended comedy in some of those questions aside, there’s another alternative: we’re going to see a Great Reshuffling and neither party will emerge unscathed.

I think that those who are gleefully predicting the collapse of the Republican Party are looking at American politics from a distance. The Republican Party hasn’t held more governorships, controlled more state legislatures, or had a stronger latch on the House in decades. It’s not going away any time soon.

Similarly, the Democrats’ loss of governors’ mansions, state legislatures, and the House will have implications that we’ve already seen in this election but that I suspect most don’t fully appreciate.

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