Elections

If you think Congress does not work, thank John McCain

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John McCain was elected to the Senate in 1986, taking Barry Goldwater’s seat after two terms in the House. In 1987, as a rather naive =freshman Senator, he was involved in the “Keating Five” affair This involved assistance to a constituent of McCain’s but was, in fact, a Democrat influence peddling matter. McCain was included chiefly to make it “bipartisan.”

The five senators—Alan Cranston (Democrat of California), Dennis DeConcini (Democrat of Arizona), John Glenn (Democrat of Ohio), John McCain (Republican of Arizona), and Donald W. Riegle, Jr. (Democrat of Michigan)—were accused of improperly intervening in 1987 on behalf of Charles H. Keating, Jr., Chairman of the Lincoln Savings and Loan Association, which was the target of a regulatory investigation by the Federal Home Loan Bank Board (FHLBB). The FHLBB subsequently backed off taking action against Lincoln.

Lincoln Savings and Loan collapsed in 1989, at a cost of $3.4 billion to the federal government (and thus taxpayers).

This experience affected McCain severely, making him obsessed with his reputation and leaving him open to more manipulation by Democrats. What followed was The McCain Feingold Act also known as the “Bipartisan Campaign Reform Act.” It made a huge change in the way Congress conducted business.

McCain-Feingold tilted influence in our political system toward the ideological extremes. For centuries, political parties played a moderating role: Because they comprise a broad coalition of interests, parties had to mediate among competing constituencies, looking for ­middle-ground positions that would draw maximum support. Traditionally, they used their preponderance of resources to impose discipline on extremists who threatened party comity.

That description is pretty much nonsense. What it really did was to place legislation in the hands of Congressional staffs and lobbyists. Congress members spend their days and months raising money while staffs and lobbyists write the laws. That is why Nancy Pelosi told us that “we have to pass the bill to find out what is in it.” She was referring to Obamacare but it applies to all legislation the past 18 years since McCain Feingold.

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At What Point…

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I have small businesses in two counties here in flyover country. In one county the death rate from covid is .0000035 – thirty five ten thousandths of one percent. In the other, *much harder hit*, .000020 – twenty thousandths of one percent. And this is taking the death tallies at face value, as if the people died FROM covid, vs. they died WITH covid.

In Illinois, Gov. Pritzker is talking about curfew, temp taking, and a number of other ridiculous lock-downy things.

Eventually, they have to let everyone get back to work, or there won’t be any “work” left.

I’m wondering at what point will the citizenry call “bs” on this and just do whatever they want.

Sure, there are hot spots and sure, there are problems, but if we didn’t know about covid in these places mentioned above there would be no panic whatsoever as these aren’t even rounding errors. And the economy is trashed? It’s far more dangerous to drive your car to the store than, well, going inside the store.

To make it all worse, I can’t have a birthday party for my daughter, but it’s ok for the State of Wisconsin to have an election, and for the mayor of Chicago to go get her hair done.

Wages, Employment, and Productivity

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I think President Trump is quite sincere about his oft-stated desire to drive up the wages of low-income workers…especially young and non-college workers…and he does seem to be having some success at this quest.  It has struck me for a while that while this is a very good thing from the standpoint of the overall society, it is also likely to pressure business profit margins, with possible consequences for the stock market as well as for Fed policy.

Yesterday the WSJ noted that “wages for 20- to 24-year olds are increasing twice as fast as for other workers…Overall job satisfaction in 2018 was the highest since 1994.”  At the same time, “90% of blue-collar businesses report operating with unfilled positions, and 29% say this has made them reduce output or turn down business.  Rising wages together with sluggish productivity growth are crimping corporate profits.  Between the fourth quarter of 2014 and the second quarter of 2019, profits for nonfinancial corporations  declined 17% and 46% for manufacturers.   The article quotes the Conference Board:  “The US will not be able to maintain its current standard of living unless the US government acts to significantly increase immigration, improve labor force participation, and, together with employees, raise labor productivity growth.”  To which the WSJ writer adds:  “Maybe the only short-term fix is to increase legal immigration–unless Americans want to see their living standards decline and more jobs exported.”

Higher wages do of course drive productivity improvement…the US has been a pioneer in the mechanization of work in large part because it has been a high-wage country, and that mechanization has helped to enable further wage increases.  This doesn’t always require any new inventions:  there are always productivity tools available that will make sense to a business that is paying $25/hour for labor but would not make sense to one paying $15/hour.  The process isn’t instantaneous, though.

Concerning immigration as a solution to labor shortages: commentators sometimes lose sight of the fact that GDP per capita matters for broad-based prosperity, not just absolute GDP.  And the only way to increase GDP per capita is through productivity improvements and higher labor force participation rates.  Increasing the raw number of workers doesn’t do this.

The Conference Board statement appears to put a lot of emphasis on things that the government should do, and the WSJ emphasizes more (legal) immigration.  Some increases in legal immigration may well be a good idea…as would increases in American fertility rates…but the main issues, I think, are productivity and the labor force participation rate.  The actual productivity numbers don’t reflect all the talk about (and even the realities of) robotics and AI.  Maybe this is largely just a matter of implementation lags, maybe it reflects increasing bureaucratization and ‘compliance’ costs throughout our economy.

My concern is that margin pressure may lead (in conjunction with other factors, like already-high valuations) to a sharp stock-market decline, which could have electoral implications.  Such decline might also lead to many deferrals of productivity-improving investments.  Alternatively, Fed concerns about rising wage rates as a possible signal of incipient inflation could lead the central bank to increase interest rates excessively as a preventative.

And any electoral result which substantially increases Democratic party power could lead to massive upsurges in legal and illegal immigration, with consequent wage pressures, demoralizing many workers who are now on an positive track and deferring the need for productivity investments.  Any attempt to deal with such wage pressures by establishing high Federal-level minimum wages would add much rigidity to the systems, creating problems of many kinds.

Discuss, if you feel so inclined.

Meme Wars

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Michael Bloomberg is apparently spending a bunch of money on the development and deployment of memes.

A meme could, potentially, neatly encapsulate and summarize a real, meaningful argument.   Or it could have the appearance of offering a conclusive argument when no such argument has actually been made.   Or it could be so ridiculous that it has no effect–or an opposite effect from that intended–on its target audience.

William “Boss” Tweed was very upset by the cartoon of Thomas Nast, because, as he famously said:   “I don’t care a straw for your newspaper articles; my constituents don’t know how to read, but they can’t help seeing them damned pictures.”   Perhaps in our own era, there are plenty of people who do know how to read–who may well be college graduates–but whose attention spans are so limited, and who have so little exposure to logical discussion, that memes are the most effective way to reach them.

Discussion question:   What memes have you seen that (a) effectively make a valid argument, (b) look like they are making an effective argument, but are actually doing no such thing, or (c) are so silly that they could convince basically nobody at all?

The fake impeachment is almost over.

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The hysteria that began when Donald Trump won the 2016 election has labored and brought forth a mouse that was dealt with today in the Senate. There are still a few blows to administer, as the State of the Union speech Tuesday before a humiliated Democrat Congress, and the final vote to end the farce Wednesday. The Mueller “Investigation” which ended the Russia Hoax, was anticlimax. Then came the Ukraine manufactured crisis.

The level of corruption by the Biden family, is explored in Peter Schweizer’s book, Profiles in Corruption. All the Bidens, not just Hunter the coke addled son, but the brothers and even the sister, are riddled with corruption. The Ukraine matter is just one of the tales in the book.

The Russia collusion was largely based on a “dossier” paid for by the Clinton campaign and probably the product of Russian disinformation. Thus, the political campaign that colluded with Russia was that of Hillary Clinton, not Trump.

I had my doubts about Trump in the beginning.

I am not a Trump supporter but I am intrigued at the steady progress he is making toward success. I have been a fan of Angelo Codevilla’s characterization of America’s Ruling Class.

The recent collapse of Republican Congressional resistance to the left’s political agenda as noted in the surrender of Paul Ryan to the Democrats in the budget, has aggravated the Republican base and its frustration.

Ryan went on Bill Bennett’s radio show on Tuesday to tell his side of the story, which involves the fact that he inherited from outgoing Speaker John Boehner an unfavorable budget framework, as well as some of the tradeoffs involved (especially defense spending). He also laid out the argument I’ve heard elsewhere, which is that he needed to “clear the decks” so that a real return to “regular order” budgeting next year will be possible. You may or may not be persuaded, but the contrast with Boehner is fairly plain, I think.

Ryan, after the election, was a disgrace.

In spite of Democrat and some Republican hysteria, Trump has moved along, cancelling crippling regulation and negotiating trade reforms with Mexico, Canada and China. Meanwhile the hysteria grew.

Then Mueller flamed out with no payoff for the millions spent.

Mueller’s anti-Trump staffers knew they were never going to be able to drive Trump from office by indicting him. The only plausible way to drive him from office was to prioritize, over all else, making the report public. Then, perhaps Congress would use it to impeach. At the very least, the 448 pages of uncharged conduct would wound Trump politically, helping lead to his defeat in 2020 — an enticing thought for someone who had, say, attended the Hillary Clinton “victory” party and expressed adulatory “awe” for acting AG (and fellow Obama holdover) Sally Yates when she insubordinately refused to enforce Trump’s border security order.

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