I posted this piece, which I’ve run a couple of times here, over at Ricochet, in slightly modified form. A comment thread is developing, if anyone is interested in participating. (Ricochet comments can be read without membership, but you have to be a member to add comments.)
48 thoughts on “The Phobia(s) That May Destroy America”
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The piece is half right. The main thrust is wrong, in that the “elite”, cosmopolitan class doesn’t fear Christians, rural people, Southerners, etc. They HATE them. The secondary point about in/out groups/others is correct. They hate those not like them, and they attack them so overtly because they don’t fear them at all.
David,
The “Cultural Other-izing” of American rural christian culture began with the “Rural Purge” of network broadcast television by what we would recognize today as “Social Justice Warriors” in the executive broadcast television suites.
See wikipedia here:
The Rural Purge
https://en.wikipedia.org/wiki/Rural_purge
And this Medium piece here:
Remember TV’s Rural Purge
https://medium.com/@ChrisXMorgan/remember-tvs-rural-purge-b0a115c2a2b2
Effectively Fred Silverman “other-ized” the older white male rural demographic in favor of pushing “edgy” urban fair that reflected reflected the cultural mores and aspirations of high class secular-Jewish New York.
All in the fadish pursuit of “younger audiences” which was the “Advertising El Dorado” for New York media executives. All of whom — TV executives and Advertising Executives — were secular leftist with secular leftist phobias about rural white Christians.
Rinse and repeat for 45(+) years with a self perpetuating Urban secular leftist media elite and here we are.
It is an essay that is well worth reading once, and twice…
https://chicagoboyz.net/archives/50624.html
https://chicagoboyz.net/archives/32937.html
The accumulated “Cultural toxic waste” of this “Edgy Urban” self perpetuating media/political elite has resulted in a rural/urban polarization that has been visible for decades.
The following is a comment from Tom Holsinger on a 2010 Angelo M. Codevilla article from an e-mail list I run that pretty much predicted Trump’s take over of the GOP by Codevilla ==
America’s Ruling Class — And the Perils of Revolution
By Angelo M. Codevilla from the July 2010 – August 2010 issue
http://spectator.org/archives/2010/07/16/americas-ruling-class-and-the/print
https://medium.com/@ChrisXMorgan/remember-tvs-rural-purge-b0a115c2a2b2
Codevilla feels the “outs” need a third party to replace the GOP because he doubts that they can totally take over the GOP. Codevilla was not, however, a specialist in electoral politics. His article shows awareness that the country just doesn’t have the money to afford continued dominance by the existing elite, so he admits something has to give. He just doesn’t realize that what will give is his preconception that the “outs” (he calls them the “country party”) have to totally take over the GOP to bring about the changes he knows are necessary.
If he had any old relatives of British ancestry (not Irish, though Scots-Irish are okay), he’d be more aware of the adage, “Needs must when the Devil drives.”
If things can’t go on as before, they won’t. And, since we both feel the economic collapse of the United States, even in a mild form a la Weimar Germany, won’t happen, the existing elite will be overturned. I expect Codevilla will end up mealy-mouthing his definition of “control” of the GOP by the outs into something less total than what he says in this article.
And he does not at all expect that there will be blood. I think that is a real possibility, and it would definitely change his definition of “total” if that happens.
And let’s be very clear, it was the Trump campaign’s mobilization of “spotty” white Christian rural voters that gave him the 2016 election.
See this video at the 1:30 to 4:00 minute marks
How did the Trump campaign calculate a presidential victory?
https://www.youtube.com/watch?v=3lIG2q0FHuw
And a slightly more concise version here:
Campaign data analyst on Trump’s path to victory
https://www.youtube.com/watch?v=2hyA6JHHueg&t=85s
Also see this on Kushner’s tight organization of data, mail, fund raising, volunteer and GOP GOTV efforts.
It also helped that Trump’s Digital Media Director for Donald Trump’s 2016 presidential campaign, Brad Parscale, was from Kansas:
Trump’s digital guru on the winning campaign operation
https://www.youtube.com/watch?v=_fFbVwuU8bM
Making Marketing Great Again: Inside the Trump 2016 Advertising Campaign
https://www.youtube.com/watch?v=ats-ep1asLU
Trump Campaign Manager Says Facebook, Twitter Are Inherently Biased
https://www.youtube.com/watch?v=jX64uAknbUI
Overall the older white rural Trump vote was 25% higher than Romney 2012.
It is a mark of how horrid McCain and Romney were as candidates that all that Trump was doing to win was re-invent a lot of Bush 2004 campaign did with rural white christian evangelical voters.
For which see:
American Politics In The Networking Era
By Michael Barone, National Journal
© National Journal Group Inc.
Friday, Feb. 25, 2005
http://nationaljournal.com/about/njweekly/stories/2005/0225nj1.htm
Over two years, the Bush campaign built an organization of 1.4 million active volunteers. This was unprecedented. By way of comparison, the Democratic National Committee has said it enlisted 233,000 volunteers during the 2004 campaign. The Bush volunteers worked not just in heavily Republican neighborhoods — only 15 percent of Republican voters, Mehlman calculated, live in precincts that vote 65 percent or more Republican. Instead, they went everywhere, especially to rural counties, many of them slow-growing places where most politicians figure there are no more votes to be won, and to the fast-growing exurban areas at the edges of metropolitan areas, where most of the young families moving in tend to be Republican. Just as Sam Walton figured he could make huge profits selling things to people in low-income rural areas and in low-fashion exurbs, so Mehlman calculated that he could wring votes out of areas that most political strategists and political reporters ignored.
To make sure that those volunteers were achieving their goals, Mehlman established metrics — numerical goals, measured by third parties. Every week, the leaders of the local, state, and national organizations got reports on whether those metrics had been achieved. Productive volunteers were given positive reinforcement, sometimes a call from Mehlman himself. Unproductive volunteers were replaced or persuaded to do more. Mehlman’s management was very much like former Mayor Rudolph Giuliani’s management of the New York City Police Department: Precinct commanders were given goals — low crime numbers — which were independently validated. Those who produced were promoted; those who failed lost their jobs. As a result, crime in New York was cut by more than 50 percent — more than even Giuliani thought was possible.
This is not command-and-control management, but management by networking, by holding people accountable and letting them learn from each other how to do better. And in post-industrial America, it got better results than command-and-control management. In crucial states with the largest volunteer organizations, the numbers speak as loud as Giuliani’s — turnout rose 28 percent from 2000 in fast-growing Florida and 20 percent in slow-growing Ohio.
Trent…the Rural Purge…fascinating.
Interesting to speculate about the degree to which the executives making these decisions were driven by a genuine belief that they were doing the right thing for the long-terem benefit of their business (there is this thing called fiduciary responsibility) versus to what extent acting based on personal preferences. Most likely, I would guess, they were doing the second and persuading themselves that they were also doing the first.
From my quick reading of the links, it sounds like the (the networks) ALL did pretty much the same thing over the same time period. Sheeplike fad-following exists in all industries, of course; still, there was probably an opportunity for one of them to focus on the niche abandoned by the others.
Yup – sheep-like, following the latest trends. It’s really sad, though, how limited that made broadcast television. The only show that I can think of, off the top of my head, which had a rural/small-town setting in my TV-watching lifetime was Northern Exposure. Small town, rural Alaska, with the fish-out-of-water guy from the Big City…
The Daughter Unit and I were kind of inspired by it to do the Luna City chronicles, by wondering what Cecily, Alaska, would be — if it was set in South Texas. Luna City would make a wonderful TV series, or so we have always thought.
http://lunacitytexas.com/
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I just quit for the second time. The first time I was attacked form writing that I would not write a letter of recommendation for a medical school applicant who did not believe in evolution.
My reason was/is that molecular biology and genetics are going to dominate Medicine the next 50 years.
I was attacked pretty vociferously and had not a single defender.
I quit after that.
At the request of a friend, I joined again last year but was “suspended ” for two days for using the term “TDS” for one of the rather unhinged Trump haters over there.
I’m done.
Mike K — Fully understand your position re Ricochet. If any commenter really wants to pay so that he can be abused and berated, we already have the institution of marriage. (Joke! Honestly!!)
Seeing Ricochet’s “Pay to Comment” policy reminded me of my first visit to Oman. Like many other countries, Oman has a Visa On Arrival system; however, unlike places such as Dubai, Oman charges for the visa — in effect, it is an admission ticket. a little like visiting a theme park. (By the way, Oman is a wonderful country — well worth the price of admission).
I believe a large additional factor is the simple desire for power. They hate another tribe because they want to rule in Washington, and that tribe is in some form its major competitor. That power is desired in order to accomplish things, certainly. Yet I also think it is the simple primitivism of “If my tribe is in power I am more likely to have food, status, mates, jobs, etc. We desire power because we know those evil others would starve us.” While part of that may be conscious, some of it is simple reaction. Those Others break their eggs on the wrong end. They are not My People. If they are in power I am in danger of not getting resources.
Even though food is no longer an issue in a wealthy country, we respond as if it were. Another tribe in power is a danger to us.
One irony is that the group they hate is more patriotic, and starts from the premise “Hey, aren’t we all Americans and in the same tribe?” It is they who split themselves off from the rest of the country to join an international, largely Western European liberal tribe instead. The liberals and Democrats of the generation before mine wore flag pins and marched on Memorial Day with pride. No longer.
As for Trump’s election strategy, a note of caution: https://assistantvillageidiot.blogspot.com/2018/07/63000000.html
My wife and I listened to Conrad Blacks’s Trump bio while driving to and from Bisbee AZ today,
I’ve listened before but she hadn’t. It is excellent. He especially goes into all of Trump’s idiosyncrasies and his negative adventures. Black knows him as an equal, not an employee, and his account is entertaining and informative.
I’ve read his Nixon and Roosevelt bios and they are also excellent.
I’m about to begin a DeGaulle bio which looks intimidating. It must be 2,000 pages.
Regarding the rural purge, Beverly Hillbillies never did much for me, but those first few seasons of Andy Griffith were some of the best TV of all time. I’ll take Andy jamming with the Darlings any day of the week over those big city sophisticates with their high cotton multi-camera live studio audience.
The only show that I can think of, off the top of my head, which had a rural/small-town setting in my TV-watching lifetime was Northern Exposure. Small town, rural Alaska, with the fish-out-of-water guy from the Big City”¦
That is the only TV series I ever watched. My office girls (sorry) told me I needed to watch and I did.
It got weird the past season, probably because the writers ran out of ideas.
I also watch Doc Martin on British TV, which has some of the same theme. He is a London surgeon who develops an intolerance for the sight of blood. He moves to village as the country GP.
It is enormously popular in Britain. It has run for ten years.
The other theme is that he is a curmudgeon who tells people off right and left.
I see a notice that the series will end this year after 14 years on ITV.
As for Trump’s election strategy, a note of caution:
There is also the idea that the electoral world has been permanently changed by Trump and his supporters, so the others better get on board. That might be, but it is too soon to tell. All sorts of realignments might be in the future. Or not.
The coming election will be the most important since 1856. The 1932 election was also a huge paradigm shift.
If the Democrats take the House, the Norks will realize they are safe and Trump will be occupied with the antics of the left for two years. I suspect they have backed off and are waiting to see what the elections results are.
“If the Democrats take the House, the Norks will realize they are safe”
I’m kind of partial to the theory that NK is a puppet slate of the ChiComs, with Kim III originally only placed in charge for public consumption, and Team Trump is working on a way to extract them out from under Beijing’s thumb. So if the Dems gain control in any way before that can happen, the Norks won’t be safe, they’ll be doomed to continued slavery to the Chinese.
Brian, I meant the leadership, of course.
I think they have backed away from the deal with Trump while they watch the election results.
The same applies to China which is having its own troubles.
China has its own debt problem, although they built “empty infrastructure “with it.
Is that a good thing ?
China itself appears to be taking the risk of a trade war seriously, imposing retaliatory tariffs of up to 25 percent on 128 food imports from the U.S., an understandable negotiating posture given its position as a major creditor nation. But the very fact of its creditor status might presage problems for Beijing. If anything, history has shown that it is trade surplus nations, not debtors, that tend to be the biggest casualties of trade wars, as this account of America’s ill-fated Smoot-Hawley tariff imposition illustrates:
The China boycott of US soybeans seems to have been a bust.
I meant the leadership as well. I think Trump’s pitch to KJU and crew is, Westernize and you can be like Singapore. It’s a good pitch. Beijing’s pitch is, Westernize and we turn you to mulch. In many ways, that’s a better pitch. The question is how to help them?
It’s a theory. Seems to me a likelier one than the notion that they’re independent psychopaths and can’t be controlled by China, who is oh so frustrated by them and need to be wooed to help out.
I spotted these comments over at the Conservative Tree House web site and I think these comments are worth sharing in the context of this thread.
Short form — US energy independence in terms of oil production in 12 to 18 months.
This is roughly +2% to current GDP in the six months before Nov 2020 because of the energy trade balance going from deficit/negative to export/positive.
———-
https://theconservativetreehouse.com/2018/09/02/september-2nd-2018-presidential-politics-trump-administration-day-591/comment-page-2/#comments
Ghost says:
September 2, 2018 at 2:28 am
Observations from a smaller limb.
The Canadian oil industry has the third largest oil reserves. It is the fifth largest producer and fourth largest exporter. The problem is they are over regulated and heavily taxed, also they are about to lose their largest market.
Their financials were just beginning to operate in the black. Now they killed their best hope a new pipeline they are heading into trouble, even before that happened the forecast was only 2,150 new job creations in the next five years ,yes I said five years
On the other hand in the U.S. recent discovery in Alaska’s north slope’s Nanushuk fields it look like the previous target of 500 Mmbbl maybe low by 300 Mmbbl.
The Texas permian basin seems that 3 more drilling sites have been found, Expected capital spending projected 1 trillion, yeah 1 trillion over the next ten years.
Let’s not forget the folks lining up for new sites in the Wyoming powder river basin. Meanwhile taking a look elsewhere in the world.
Exxon mobile execs are are positively crowing about the offshore finds of Guyana basin. Estimate are 4 billion barrels recoverable. Finally it seems our Australian friends have found their largest oil strike in 30 years off shore in the canning basin.
Baker Hughes rig count just for a little comparison.
US.. working rigs 1048 weekly +4 yearly +105
Canada working rigs 228 weekly -1 yearly +27
International working 997 weekly + 38 yearly + 38
I’m thinking energy independence next 12 to 18 months from now. Just amazing what VSGPDJT policies are doing. Eventually fueling the engine for expanded growth in other sectors of the economy, lowering production cost and saving all of us $$$ on energy cost in the future.
Sarah said “drill baby drill” ! VSGPDJT has put policies in place to make it happen! I’m a happy camper. Winning again.
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rbrtsmth says:
September 2, 2018 at 2:44 am
Are there any estimates what the US daily production might rise to as a peak? We’re somewhere around 10.6 million barrels per day right now?
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Ghost says:
September 2, 2018 at 3:14 am
Currently at 11.8 MBL/D, some project 13.5/1 MBL/D next year. projection to 17MBL/D in 5 years and I’m thinking they are low. The news finds I posted are within the last month after last major projections were published, though they updating them constantly. Saudi’s currently at 14 MDL/D
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Ghost says:
September 2, 2018 at 3:16 am
oops missed, 13.5 /14 MBL/D 18 months
———–
Some Further thoughts:
The Texas papers have the Baker Hughes rig count so much of the comments above checked out.
Please carefully note the following points —
1. Permian Cap-Ex at $1 trillion over the next 5 years.
2. Trump’s Chinese/EU metals tariffs mean the majority of the metal in the Cap-Ex will be USA sourced.
3. The coal to make that Permian Cap-Ex steel will be US sourced
4. Trump’s enforcement of immigration laws will see to it that wages for US Citizens in the energy, metal and coal industrial sectors grow like Topsy.
Essentially the old Democrat industrial Mid-Western “Blue Wall” is now part of Trump’s “Red Sea” because it’s industrial economy will be rocking for the first time in 30(+) years with GDP growth rates not seen there since the 1960’s.
The interesting thing as far as demographics of that is how much family formation good economic times will bring. A 1960’s class economy may well yield a 1960’s class baby boom.
And the biggest life change that turns Democrat voting single white females into GOP voters is getting married and having kids.
The confounding factor here is that college educated women won’t marry non-college educated men and college educated men know enough not to marry a woman with a six figure college loan debt.
A further confounding demographic factor is that this economic growth will not be on the east and west coasts. It will be concentrated in the interior and Gulf Coast, mainly outside densely populated urban areas. AKA the fair maid of economic growth will be passing by the Democrat Party tax collectors by.
-If- there is a baby boom in the interior to go with the jobs growth, a re-elected Pres Trump will be in charge of the census to count it.
All of the above is going to defuse the political polarization of the Right, move a lot of the urban lower classes out of the cities and into the middle class, while diving the Urban left to absolute insanity.
Trent..interesting chain of logic.
“Trump’s enforcement of immigration laws will see to it that wages for US Citizens in the energy, metal and coal industrial sectors grow like Topsy.” Indeed, if you combine this with tariffs then one would expect this impact. It does seem clear that Trump desires to drive wages up through supply-and-demand processes as opposed to the Dem model of minimum wage laws.
One would also expect, though, that higher wages would have a negative impact on corporate profitability, which has been running at high levels. Reversion to the mean suggests that this couldn’t have gone on forever in any case; still, the effect on the stock market is likely to be negative, with negative political implications for the Republicans.
“One would also expect, though, that higher wages would have a negative impact on corporate profitability”
Would one really though? How strong is the correlation? You don’t maximize profitably by minimizing costs. If wages grow organically I don’t see why it should necessarily reduce profits.
Trent, very interesting re the Rural Purge.
I would conjecture in relation to this:
Effectively Fred Silverman “other-ized” the older white male rural demographic in favor of pushing “edgy” urban fair that reflected reflected the cultural mores and aspirations of high class secular-Jewish New York.
that the relevant cultural mores and aspirations were those of ambitious Jewish New Yorkers in the news and entertainment industry who came from leftist lower- and middle-class households and aspired to the cultural status of educated WASPS.
Isn’t the goal of much capital investment to raise productivity. I think American business
has a pretty good record in this regard. Since the crude oil price collapsed in late 2015,
frackers have driven well completion costs down markedly. Now I read that one company (whose
name escapes me) is looking at reducing proppant injection rates to reduce fracking costs.
We rely on productivity increase to fund wage increase.
An interesting statistic I read some years ago. The fracking industry used 28 million tons
of sand in one year (’14 or ’15 I think).
ambitious Jewish New Yorkers in the news and entertainment industry who came from leftist lower- and middle-class households and aspired to the cultural status of educated WASPS.
Prime example was Carl Reiner basically made a show about his life shpritzing jokes for Sid Caesar, and then he hired Dick Van Dyke to portray it. Cocktail parties, song and dance numbers, spunky wife, suburban tract home, chaste bedroom furnishings. He checked all the boxes there.
Brian/Raymond…if I as a business have to pay more to my employees, then profits will go down UNLESS I can either improve productivity or raise prices. It is only productivity improvements that allow higher pay while keeping prices constant, or even down. But one can’t guarantee that the productivity improvements will show up synchronously with the higher wage demands, so if Trump is successful in driving up wages, which I hope he is, I would expect some decline in margin percentages, which may or may not be made up for by volume growth. And stock valuations are already pretty stretched, IMO.
Also, I would expect a lot of demand for automation systems & services.
Re the comment Trent reported on the Permian Basin — here is something a little removed from the Original Post, but may be of interest.
There is a research company in Houston focused on state-of-the-art studies of hydraulic fracturing in shale plays like the Permian Basin. Their best estimate is that currently only about 10% of the fluids, chemicals, and proppants injected so expensively into shale wells ends up contributing to oil production. 90% is wasted.
There is clearly great room for improvement in the economic efficiency of shale wells. Mainly through a process of trial & error and inspired experimentation, the industry has got to 10% efficiency. As knowledge accumulates and understanding of what is happening in the deep inaccessible sub-surface grows, the industry should be able to do better, much better — and the ultimate recovery of shale oil could grow substantially. We are only at the beginning of a long process — analogous to building row-boats, with sailing ships and steam ships still far in the unseen future.
the ultimate recovery of shale oil could grow substantially.
A friend’s son was studying engineering at U of Arizona. I suggested he get into Chemical or Petroleum engineering and maybe get a roughneck job summers in an oil field.
He got his Masters in Engineering but has now joined the Navy and is off to Flight School.
His father and grandfather were Marine fighter pilots,.
Probably a family tradition.
His older brother is a Marine helo pilot.
I just heard the most remarkable segment on NPR. Apparently increased wages means higher prices which means fewer jobs. So Trump’s NAFTA renegotiation is bad. Apparently this is now NPR position. Also the position of the head of the AFL/CIO. I don’t know what to even begin to say. But I’m sure this logic of course does not apply to minimum wage laws, EPA regulations, etc.
David Forester,
Regards these comments —
>>Indeed, if you combine this with tariffs then one would expect this impact. It does seem clear that Trump desires to drive wages up through supply-and-demand processes as opposed to the Dem model of minimum wage laws.
>>One would also expect, though, that higher wages would have a negative impact on corporate profitability, which has been running at high levels. Reversion to the mean suggests that this couldn’t have gone on forever in any case; still, the effect on the stock market is likely to be negative, with negative political implications for the Republicans.
I disagree for reasons I’ll lay out below.
First, I credit President Trump for being different that the rest of the US elites to his being a hotel casino and high end hotel developer, particularly his Atlantic city casino properties. The gambling industry was into “Big Data” a decade and a half before Silicon Valley, and they have paid their analysts better than the tech-lords. (And that little fact showed up with the superior performance of his political campaign data operation.)
I’ve gambled in Trump’s Atlantic City and Las Vegas casinos. Trump’s customers in Atlantic city were primarily the elderly to retired working and middle class. Thus Trump had a data rich ‘court side seat’ to watch their economic collapse over the decades.
What Trump’s “America First” economic policies have shown me is the hollowing out the working & middle class in the late and post Cold War period was an artifact of American Cold War Macro-Economic policy to re-industrialize the rest of the Western World, and later China, as a tool to fight the Soviet Union.
This policy killed the growth of American productivity in the early 1970’s because the bond markets could make more via foreign investment via defacto and de jure US Government subsidies than they could investing in the USA. (The former being in the form of allowing European/Asian trade barriers to US goods and the latter being US Government foreign default guarantees).
The run down in US capitol investment in the 1960’s through 2000’s combined with the arrival of “the Box” AKA ISO standard cargo containers — See: Marc Levenson’s “THE BOX: How the shipping Container Made the World Smaller and the World Economy Bigger” https://press.princeton.edu/titles/10724.html — meant the Mid-Western industrial economy collapsed from a prolonged starvation of capitol investment.
Effectively the Midwestern economy was strangled in a US Government macro-economic siege driven by the Financial “Renter class” in the NY City Bond Market from 1989 onward.
Going a couple of decades backwards chronologically at the same time all this started, to get big business to buy into this policy in the long term in the early 1960’s. Sen Kennedy in 1963 got “Open Borders” immigration to keep US labor costs low via foreign immigration. Today’s US population would be 200 million vice 300 million simply based upon that immigration legislation.
Moving back to the immediate post-Cold War era, NAFTA and all the other multinational trade deals were the final victory of the multi-national financial and corporate “renter class” over the American national economy and it was cemented by the Clinton Administration and ratified by both the George W Bush and Obama Presidencies. The American financial/Multinational Corporate Renter class’ victory was so complete they lost sight of the real roots of American political power, the white working and middle class.
All this macro-economic policy over 50 years meant the coasts prospered while the heartland suffered and became foreigners in their own country.
And Trump waited and watched for the last 30 years planning to do something over it.
Now that Trump has arrived to wipe out the high foreign tariff’s and open borders that the Renter class relied upon to rule. The pattern of economic growth he is igniting is going to have huge impact on American politics because the pattern of run down transportation infrastructure, particularly rail infrastructure, in that period is going to favor “Red” areas over “Blue Islands”.
I sent this passage to John Ringo in an 2012 message on 1920 to 1940 industrial electrification —
Adding transportation infrastructure in manufacturing productivity revolution is a license to print money. The larger your efficient transportation network in a productivity revolution, the faster & larger your economy grows from the effects of economic specialization in a larger market.
Any evaluation of Keynesian economics that does not take into account the special economic conditions of hugely increased productivity from electrification is utter horse s**t. That especially includes economic multipliers from government spending.
And note, in terms of transportation infrastructure, the USA has been spending infrastructure money to remove heavy freight transportation infrastructure at an accelerating rate. The total rail line track mileage has been diving for decades, most especially in urban areas. In Texas I have seen major double track rail lines moving mile long double-decker container trains eight times a day in Houston eaten for a four lane expansion of Katy freeway. In Dallas, the city fathers are spending lots of Obama infrastructure cash to turn rail lines into BIKE PATHS!
Both are perfect examples of why the economic multipliers for government infrastructure spending have gone negative in America.
That is one of the reasons why economic downturns for the last 30 years are so tightly correlated with falling gasoline usage. When people and trucks are not driving, it is a straight line signal of reduced economic activity, because rails and water traffic are incapable of providing alternate distribution to where people live.
Any evaluation of Keynesian economics that does not take into account the special economic conditions of hugely increased productivity from electrification is utter horse shit. That especially includes economic multipliers from government spending.
I’ve lived a lot of my youth on US Army bases which were essentially all built or upgraded in WW2. They all have an infrastructure look due to railway infrastructure, even after the rail lines are dug up for the scrap value of the steel rails.
My job as a DoD truck inspector had me monitoring rail and road shipments of the trucks I was auditing for 14 years. I also did auditing of depot level rebuilds of my FMTV trucks in Texarkana Army Depot which is heavily rail infrastructure developed, despite being mainly semi-truck shipment dependent.
All this experience has taught me that most American small towns in rural areas have not torn down their rail ways. They still exist to support the agricultural economy and Trump’s new nationalist macro-policy industrial revolution means they will be developed because only railways can support the volume of industrial product which will come on-line soon with the 3D industrial revolution.
And 3D printing will at the same time collapse the distance of supply chains because 3D printing results in much fewer “intermediate products” that require human assembly.
Basically the Red areas that have been hollowed out are about to be filled up with blue collar industries at the expense of the choked out by bike-paths inland blue island-cities and blue coastal international trade & Finance centered urban areas.
The “Cold Civil War” by the Blue areas on the Red areas is about to “get real” for the Renter class.
Funny how that works out, isn’t it.
Interesting analysis. The fall election will be an inflection point. Can the left and its Deep State allies fool the voters into keeping them in power?
I just don’t know. I think people are too smart but HL Mencken was not too sure.
Trent…thanks for extended comment. It’s late & i can’t right now read it as carefully as it deserves, but for now….which part of my comment are you disagreeing with?
Do you disagree that Trumpian policies will (and are intended to) drive up wages, especially for the non-college-degreed who have been hurting badly in recent decades?
and/or
Do you disagree that these increases will *in the short term, ie maybe 1-3 years* have a negative impact on average corporate profitability as a % of revenue?
thx
Also…
I am definitely a believer in freight rail, and have invested significantly in RRs and sometimes in RR supply companies. I think the US freight rail network is a tremendously important asset, which tends to get ignored when the Progs are going into ecstasies over European & Asian passenger rail.
Industrial recovery will certainly create additional demand for freight rail, especially given the difficulties that trucking firms are now having hiring drivers. However, I’m not sure 3-D printing will be a direct driver of same; indeed, if products or spare parts can be fabricated at lower scale points, the average delivery distances will shrink, often to points where trucking will be more efficient.
The Blue areas have indeed mostly made themselves inhospitable to manufacturing…taxes, regulations, transportation congestion, general cultural hostility.
Mike K,
Pres Trump has unleashed political and economic forces that have destroyed the old uniparty invade-all, invite-all, globalist bond-market uber ales political-economic order. A temporary win of the House by the Democrats won’t stop any of the following:
1. America will be energy independent in early 2020.
2. Pres. Trump’s tariff’s will block Chinese access to America’s domestic markets.
3. Pres Trump will enforce the immigration laws and reduce the H1B and H2B foreign worker visa numbers.
4. Pres. Trump’s continued deregulation of the Federal Administrative state.
Those four things taken together will see his re-election in 2020 because not a single state that voted for Trump in 2016 will flip to vote for Sen Kamila Harris or whomever the socialist is that the Democratic primary voters select. The economy will be too good for the white working and middle class non-college educated voters. Voters who became “politically aware” for the first time in their collective lives via voting for Trump in 2016.
Those voters went for Trump at rates of between 3 and 3.5-to-1 in 2016 depending on the state. A 6% GDP growth of an energy independent and high tariff USA for the Mid-West Coal & Steel belt and the Gulf Coast energy states will make the floor for that demographic something like 4-to-1 with a higher 2020 turn out.
And Pres. Trump is testing his 2020 campaign messages right now and has a winner with “The Democrats are trying to steal your Medicare to fund their socialism” which even has the nice thing of being true. This will keep Florida in his camp regardless of the economy
Pres Trump being in charge of the 2020 census is going to put a world of hurt on the Democrat Party like you won’t believe.
“Pres Trump has unleashed political and economic forces that have destroyed the old uniparty”
Well, Trump recognized certain forces and faultlines, and has been moving to exploit them, but it’s tough to upend 60+ years of bipartisan consensus. Trump recognized that trade and immigration split the Democrat party voter base–working class / union voters aren’t in favor of “free trade” and neither they nor black voters are in favor of open borders. The response from the advocates of the status quo (in both parties) has been as fierce as expected, but no matter how they counter Trump, these differences aren’t going to go away. One thing we can be sure of is that on the next day that the Dems are in charge of Congress and the White House, all illegal immigrants will be granted citizenship (the legislative filibuster will be abolished to enable this). Why they think this will somehow “fix” anything is incomprehensible instead of push levels of anger and resentment even higher, but the Dems are looking at the last two decades in California as their roadmap, which seems insane, but they are now in complete and total control of that state, and apparently think they can do something similar at the national level following the same plan. Seems unlikely.
it’s tough to upend 60+ years of bipartisan consensus.
This is at the root of his personnel problem. This is why some anonymous person can get the NY Times to publish an anonymous op-ed attacking him in the same terms as Woodward’s book.
The anonymous person, probably a speech writer, is most likely Woodward’s source.
Trump did not have a pool of loyal “shadow government” types like Romney had ready to staff an administration.
Michael Ledeen and the “Morning Report” blog both mention that Trump loyalists were denied jobs in the administration.
Probably Reince Priebus was responsible for staffing it.
I’ve tried to explain this phenomenon before. The short explanation is: every bureaucrat in Washington believes he or she should be president, no matter who technically holds the title. This is true in all agencies, at all levels. Never mind the claim that the author is a “senior official” somewhere or other. Anyone from the level of deputy assistant secretary to special assistants to Senate-confirmed ranks can make such a claim. If you want documentation, have a peek at all those employees expected to show up for work during a “government shutdown.” They’re all desperate to be classified “essential.”
Thousands of them abound in the long, grey corridors of the government, and all of them ask the mirror every morning: “How come that idiot is making decisions that YOU should make?”
It’s what Washington is all about. It isn’t treasonous or cowardly, it’s about ambition. You cannot imagine it until you see it unfold. When I worked for then-Secretary of State Haig, I was in a staff meeting one morning where Haig gave an explicit order to an assistant secretary, who of course responded, “Yes, sir.” Whereupon, within hours, he did the opposite. And kept his job! Really.
I recall proposing that Trump shouldn’t appoint anyone to any position who hadn’t publicly supported him in Jan 2016. So what if that narrowed the field.
Of course, that wouldn’t protect from the career trash. My guess is this “senior” official is a careerist in some department, with a fancy job title but a few layers down from any real decision making authority. Every major headline about someone “quitting” in disgust at Trump has been career trash up for retirement anyway. The MSM is garbage.
Trump needs to fight far more overtly against DC. Put out an EO mandating that each department present a plan for relocation in the next fiscal year to some interior state. Push for a term limit amendment. Etc. Fight DC more, the MSM less.
Put out an EO mandating that each department present a plan for relocation in the next fiscal year to some interior state.
That would be fun to watch. The Deep State would go nuts. Alexandria VA would revolt and secede
Barrons has a piece on employment and wages: When Will Rising Wages Threaten Profits?
The real news was that average hourly earnings were up 2.9% from a year ago, the fastest year-over-year pace since June 2009. From workers’ standpoint, the 2.9% increase in average hourly earnings only keeps them running in place after the same rise in the consumer-price index over the past 12 months, notes David Ader, chief macro strategist of Informa Financial Intelligence.
Employers, meanwhile, have been able to absorb those raises. Nonfarm productivity also grew at a 2.9% annual rate in the second quarter, according to separate report from the Labor Department released Thursday. Unit labor costs, a broader measure that takes in pay and benefits, actually fell at a 1% annual rate during the period.
The 2.9% increase in average hourly earnings in the past 12 months may actually understate the pace of pay gains as businesses replace older, retiring workers with lower-paid new entrants into the labor force. That’s the finding of San Francisco Fed economists, which I have had pointed out previously in this column.
“This effect is even more pronounced than usual because of the large-scale exit of higher-paid baby boomers from the labor force. With so many of this generation still approaching retirement, the so-called Silver Tsunami will continue to be a drag on aggregate wage growth for some time,” they wrote in the bank’s blog.
Even so, there remains a reserve army of unemployed still to draw upon. While the labor-force participation rate is creeping up, it remains 1.5 percentage points below its precrisis levels for prime-age workers, points out Michael Darda, chief economist and market strategist at MKM Partners.
“Nearly two million more people would be in the labor force if were to fully recover, although a full recovery may not be possible given that an alarming proportion of prime age non-participants may be addicted to opioids and physically/mentally indisposed,” he writes in a client note.
>>Do you disagree that Trumpian policies will (and are intended to) drive up wages, especially for the non-college-degreed who have been hurting badly in recent decades?
Absolutely.
President Trump’s economic policies are meant to provide huge incentives for American manufacturing industrial investment. His tax rate cuts and lower taxes on the repatriation of profits are laser focused on doing that.
Now that the capital is available through Pres Trump’s fiscal policies. Simultaneously creating a labor shortage situation via tariffs and immigration law enforcement, while increasing returns on domestic capital investment, will force this investment into increased productivity per worker with the least amount of long distance trucking transport.
The process name for that sort of supply chain is 3D Printing or “Additive manufacturing.”
Pres Trump’s goal here isn’t higher wages, although it will happen in the short run to mid-term. It is to re-industrialize the USA during his two terms in office and make it demographically/politically self-perpetuating.
America, historically, was always in labor shortage. So there were huge industrial incentives for more labor saving/higher productivity.
The inflection point in the rate of growth of American productivity growth compared to the rest of the world happened in 1968 — as Europe & Japan were now industrialized with advantageous tariff’s — and the labor market effects of Sen Kennedy’s open borders immigration policies and the Vietnam’s wars Federal government deficits crowded out private industry capital investment in higher productivity.
By 1970 the marginal returns for productivity investments in America went negative and so did America’s rate of productivity increase.
>>and/or
>>Do you disagree that these increases will *in the short term, ie maybe 1-3 years* have a negative impact on average corporate profitability as a % of revenue?
The premise of your statement shows you are unclear on the concept of what Pres. Trump’s economic and fiscal policies are trying to do.
Short form:
Pres. Trump is removing the American economy from the globalist economic model.
Long form:
The consequence of this action is globalist multinational arbitrage of labor costs and tariff’s will end. This will “hollow out” financial institutions and multinational corporation profits of firms structured as primarily as international arbitrage organizations as opposed Nationalist American “value added” manufacturing and financial services institutions.
If average corporate profitability goes down in the next 1-to-3 years, it means that the mass of corporate leadership traded in American stock markets are not shifting with Pres Trump’s fiscal and economic incentives and are attempting to use domestic American politics to maintain their old economic model.
That would be a good thing in that it will leave economic room for new domestic firms to overturn the existing political-corporate oligopoly. IMO, this economic disruptive change will appear in Pres Trump’s second term in the run up to the 2020 mid-terms.
David Foster,
Please carefully note Pres. Trump’s latest tweets visa vi globalist trade arbitrage —
Donald J. Trump
✔
@realDonaldTrump
“Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the U.S. because of the prospect of higher U.S. Tariffs.” CNBC. This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!
8:49 AM – Sep 9, 2018
35.8K
14.3K people are talking about this
Donald J. Trump
✔
@realDonaldTrump
If the U.S. sells a car into China, there is a tax of 25%. If China sells a car into the U.S., there is a tax of 2%. Does anybody think that is FAIR? The days of the U.S. being ripped-off by other nations is OVER!
9:01 AM – Sep 9, 2018
47.1K
19.6K people are talking about this
Trent,
I agree that Trump wants to “re-industrialize America” (although I’m not that fond of the “re-industrialize” term, because there is still plenty of industry in the country…rather, he wants to grow this segment considerably.) His *reason* for doing this, though, is in part that he wants to help a segment of people who he feels have been left out…wants to do this for political reasons, or because he really cares, or most likely both.
“If average corporate profitability goes down in the next 1-to-3 years, it means that the mass of corporate leadership traded in American stock markets are not shifting with Pres Trump’s fiscal and economic incentives and are attempting to use domestic American politics to maintain their old economic model.”
Even given excellent management, productivity improvements take time; often equipment must be ordered and installed, people must be trained, processes must be adjusted, etc. And by no means all American companies have excellent management.
My concern is that a squeeze of profitability over the next couple of years, when combined with stock valuations that are already, IMO, stretched, will result in an overall stock market decline that will greatly reduce the odds of a Trump re-election or indeed of any Republican win(s) in 2020. I don’t think there is any magic answer to this; it’s possible that extremely rapid economic growth could be enough to overcome the problem. If revenue is growing fast enough, then one can afford some reduction in gross margins.
>>My concern is that a squeeze of profitability over the next couple of years, when combined with stock valuations that are already, IMO, stretched, will result in an overall stock market decline that will greatly reduce the odds of a Trump re-election or indeed of any Republican win(s) in 2020.
Frankly, whatever.
The profit margins of globalist multinational organizations are not the concern of the Trump Administration.
The profits of the multinational corporate oligarchs are why we have President Trump.
As for the markets, they have been up 40% since Trump came into office. The markets go up, they go down. There is no sign they are going to tank before November 2018 and plenty of signs they will continue to go up.
The BLUF here is that the structural reform of the USA to a non-globalist economic model means business organization like the Silicon Valley tech lords and Archer Daniels Midland are going to suffer profit issues because their economic profit model is structured on the international arbitrage of American labor and tariffs.
Because they ‘made their bones’ on the back of politics these last 16 to 25 years — YMMV — multinational corporate leadership don’t know any other way to operate. So they will be less profitable until they get new leadership or die.
President Trump’s nationalist tariff and tax code structural reforms make them the inevitable losers, just like the arbitrage corporate model made American textile & steel workers the inevitable losers in NAFTA.
Restarting the job opportunities engine of tens of thousands of new small businesses inside the USA — and growing the American national economy — are the Trump Administration’s concern…and they are doing a good job of it
This is why competitive labor wage rates cost more. And why a trained just out of high school M.I.G. welder can make more in the Permian basin right now that an recent Ivy League graduate degree in finance can in a bank…without a six figure college loan debt.
>>Even given excellent management, productivity improvements take time; often equipment must be ordered and installed, people must be trained, processes must be adjusted, etc. And by no means all American companies have excellent management.
Historically, real productivity increases come from new business entrants and not established business players.
That is why dynamic growth economies will see big companies fall as small ones rise.
“Historically, real productivity increases come from new business entrants and not established business players.”
Largely but not always true. But for startups to start and get sufficient traction to have an influence on the economy takes, again, *time*.
“The profit margins of globalist multinational organizations are not the concern of the Trump Administration.”
Yet Trump talks a great deal about the performance of the stock market, which is comprised largely of those same organizations. If there is, say, a 30% decline in the S&P between now and the 2020 election, Democrats will throw those comments back in his face, and there may well be no second Trump administration, not to mention the influence on the composition of Congress.
Again, I hope the economy shows sufficient dynamism that this will not occur, but it is IMO a nontrivial risk.
David,
You cannot save the Harley Davidson’s of the world from their own Globalist management making bad decisions.
As for this —
>>If there is, say, a 30% decline in the S&P between now and the 2020 election, Democrats will throw those comments back in his face, and there may well be no second Trump administration, not to mention the influence on the composition of Congress.
By 2020 America will be a net oil exporter as well as with Coal and LNG. That is plus 2% to current GDP based on the trade accounts alone.
If America is chugging at +6% annual GDP in 2020 with the stock market down 30% from today. Trump’s Mid-Western voters won’t notice. And Trump’s 30 state victory in 2016 will be eclipsed by a 40 state victory in 2020.
That the other 10 states that got fat for 30 tears on arbitraging American economic decline don’t get to share in Red State reindustrialization in Pres. Trump’s North American Trade Bloc is why I used the term “The Cold Civil War.
Technological innovation can be tricky to manage. Eastman Kodak invented the digital camera.
That product killed their business model.
Facebook is beginning (I hear) see more subscribers quitting. I no longer use Google for searches.
I do not trust Wikipedia on any topic with political implications.
I have not watched TV for anything but sports in years. I used to watch Sunday talk shows but not since November 2016.
The November election will be a huge indicator. I think the most significant since 1932.
Mike K, David Foster,
The BLS said American productivity went up 2.9% the last quarter.
And as for manufacturing growth? See this:
https://www.marketwatch.com/story/american-manufacturers-growing-at-fastest-pace-in-14-years-ism-finds-2018-09-04
Marginal incentives matter a great deal.
Taxes and tariff’s are a “Magic Wand” in that regards, if you are willing to use them in a nationalist as opposed to globalist economic model.
“Marginal incentives matter a great deal.”
My only concern is whether the illiterate left is capable of seeing what is in front of their nose.
RE: Mike-K,
The Illiterate Left can not see beyond the fantasy that they are watching on what the MSM and the Democratic-Socialist Party provides on their eToys. Cheap Thrills and synthetic goodness. All else is “Hate” and “Deplorable”.
Enjoy.