Working from home brings its own set of distractions

Living in LA, I do most of my work from the patio. I generally have the area to myself with little but my short attention span to keep me from concentrating, but yesterday I found myself caught in the middle of a territorial dispute that went on for most of the morning.

Yes, IP matters

 Albert Burneko (late of Deadspin) has a wonderfully snarky rant on the demise of Quibi.

Quibi, the subscription digital streaming platform that aired five-to-10-minute TV episodes exclusively on mobile devices, died yesterday. Personally I like to imagine that it happened because Quibi gained sentience just long enough to hear a one-sentence description of itself, and then immediately lowered itself into a vat of molten steel like the Terminator. 

The official story is a lot more boring, though not without its charms. The brainchild of megalomaniacal former Disney and DreamWorks head Jeffrey Katzenberg and serial executive-class remora and wildly failed gubernatorial candidate Meg Whitman, Quibi burned through, at a conservative estimate, somewhere between $1 billion and $1.75 billion in investment or seed money or whatever over the slightly more than two years of its existence, only for its creators to discover within three months of its actual product launch that, whoops, no one, anywhere, wanted to pay money to watch seven-minute TV episodes on a phone. Here is a fun detail from the Wall Street Journal‘s story about the company’s demise:

    The decision to hire the reorganization firm came after starting a process to sell the company, The Wall Street Journal reported. Quibi pitched suitors including Comcast Corp.’s NBCUniversal on a sale, according to people familiar with the matter, but would-be buyers were put off by the fact that Quibi doesn’t own many of the shows it puts on its platform.

This touches on one of those ideas that has been lurking in the background of a lot of the posts we’ve done over the years. There is a growing disconnect between the way business analysts and accountants value businesses and the investors and business journalists see them.

One of the many ways that Quibi pushed the business plan of Netflix past the point of parody was with its approach to intellectual property. NF spends a substantial chuck of its budget for originals on shows it has little or no ownership of. This fact isn’t hidden but it’s been downplayed by the company and virtually ignored by the financial press.

Quibi took this to the next level and purchased almost no rights to the content it produced. Once again, the press and the investors paid no attention – based on the “rules” (I’m sorry but I can’t bring myself to type the word without scare quotes) of the new economy, these things don’t matter – but when serious professionals tried to value the company, the fact that it had spent $1.75 billion dollars and had nothing to show for it but a crappy brand was something they found difficult to overlook.

Noah Smith draws an essential distinction in the progress and innovation debate.

Check out the recent post at Noahpinion on what Smith calls techno-optimism. I'm not sure I buy all of his arguments, but he makes some good points, especially this one.

 

Technology vs. “Tech”

At this point it it’s important to differentiate technology from “tech” as it’s popularly conceived. “Tech”, “Silicon Valley”, or “the tech industry” has come to mean either the software industry, plus anything funded by venture capital, plus anyone who’s perceived to be culturally affiliated with the aforementioned (e.g. Elon Musk). It doesn’t typically include older companies like General Electric or General Motors, biotech/pharma companies, or government-funded science.

Americans could be forgiven for thinking that technological progress mostly comes out of the tech industry. Since 1980, many of the products that changed our lives the most — computers, the internet, smartphones, social media — came out of that industry, as did the Big 5 tech companies (Microsoft, Apple, Amazon, Google, and Facebook) that together now represent about a fifth of the entire U.S. stock market. To some degree, the archetype of Steve Jobs building computers in a garage has replaced the image of a scientist in a lab coat in popular imagination.

But that tech industry lies downstream of a vast ecosystem of science and innovation. Most published science comes out of universities, which are funded by a combination of government grants, tuition dollars, and corporate joint-venture money. (Big corporate labs used to do a sizeable chunk of research, but this is no longer true, though Google’s efforts in AI might represent a partial return of that trend.)

The private sector does spend a lot on R&D. But the “tech” industry as we know it only accounts for about a third of that spending:

 

“Tech” is certainly very important, but it’s certainly not the whole ball game.

Also, most product innovation is done by big companies rather than startups. Economists Daniel Garcia-Macia, Chang-Tai Hsieh & Peter J. Klenow recently tried to estimate how much productivity growth comes from improvement of existing products — loosely corresponding to what Clay Christensen called “sustaining innovation” — rather than from creative destruction. They found that it was about 75% to 25%.

Furthermore, lots of technological progress gets implemented through channels other than downloading apps from the App Store or buying electronics at Best Buy. As the amazing and apparently successful COVID-19 vaccine effort shows, plenty of innovation makes its impact through the medical system. The rollout of solar and wind power will be done mostly via utility companies, and electric cars will come from big manufacturers. And the military uses a lot of technology as well, though I hope we aren’t reminded of that via a major war anytime soon.

 

Rolling Stone: "Elon Musk is the Messiah" Vanity Fair:"Hold my beer"

Admittedly, Nick Bilton's profile lacks the Christ imagery of that notorious Rolling Stone cover story, but in terms of buying into the myth of Elon bullshit, we may have a new winner.

Here's a heavily annotated taste:

Elon Musk is on a mission. He’s on a mission to Mars. He’s on a mission to save humanity from its reliance on fossil fuels, which could destroy the planet and kill us all. [EVs, while helpful, address only a part of fossil fuel dependency. Tesla is just one of the EV makers. Musk didn’t found Tesla (except in the retcons). Other than that. -- MP] He’s on a mission to save us from artificial intelligence algorithms going rogue and machines ending human life as we know it. [It’s not at all clear that  Neuralink is serious about its technology which, even if it works will almost certainly won’t accomplish what it claims and will not even in theory address major concerns over unintended consequences of AI. --MP]
He’s on a mission to help save a group of boys trapped underground in Thailand. [Do I even need to comment? -- MP] A mission to transport people from Los Angeles to San Francisco in giant air tubes. [It takes a lot of time to debunk a hyperloop story. When dealing with a writer who describes a maglev vac-train as “giant air tubes,” it’s almost certainly not worth the effort. -- MP] A mission to build ventilators for hamstrung hospitals during the coronavirus pandemic. [Musk boasted  that he could make all ventilators ICUs would need. When he was caught in the lie, he bought a load of surplus sleep apnea machines and claimed those were the kind of ventilators he had been talking about all along. -- MP]

He’s on a mission to prove the coronavirus fatality rate is greatly overstated. [That one I’ll have to give Bilton. -- MP] To dig tunnels underground to alleviate the fatuous cycle of traffic jams. [Once again, Musk made some wild claims then, discovering he was supposed to follow through, had his engineers slap together a half-assed demonstration that literally involved bolting wheels to the side of a Tesla. -- MP] To save journalism. [“Save” in the sense of preventing it from saying critical things about Elon Musk. (though Bilton does acknowledge this deep in the profile) -- MP] To mitigate the effects of climate change. [By setting up a Ponziesque solar panel company to screw over taxpayers and Tesla shareholders -- MP] To transport people in earthbound rockets from one continent to the next in mere minutes. [Once again a claim with little to support it. -- MP] To inhabit other planets before the sun explodes and turns our oceans into boiling vats of water, our skies into steam-filled death, our lands into carbon crusts of darkness. [Bilton’s grasp of science here is actually weaker than Musk’s. -- MP] He’s on a mission to inhabit other star systems. [Calling your rocket a starship doesn’t actually make it capable of interstellar travel. -- MP]  All of these missions are completely possible in the realm of physics and science, especially with Elon Musk’s brain working to solve these problems.

And it just goes on and on and on. The level of fawning and credulousness seen here is both stunning and sickening, comparable and in some ways worse than the most sycophantic Trump coverage from Fox or OAN. Musk is "a true genius" with "superhuman abilities" who is "not merely changing the world but the very fabric of the universe."

Bilton doesn’t have even the courage of his lack of convictions. He tries to hide his sycophancy and lack of professionalism behind touches of hip detachment without showing any skepticism or real distance. The mad genius/flawed messiah narrative is fundamentally dishonest but it allows journalists to maintain a pretense of doing their job.

Perhaps in these times, we should demand more than that.

Sir Arthur strikes back

We've been talking for years now about why Arthur C. Clarke's often prescient speculations about the impact of telecommunications were so badly off when it came to what we would call telecommuting. Now the good people at Pew are suggesting that maybe the problem was less with his predictions and more with his timeline.

Samantha Fields reporting for Marketplace:

Nearly 90% of people who have been able to work from home during the pandemic do not want to go back to the office full time, even once it’s safe to do so, according to a new study out today from Pew Research. And employers are already thinking about how that’s going to change their workplaces.

Jonathan Soon is in that majority of people who would like to keep working from home permanently. 

“At home, I have a window by where I work, so I can open it and get fresh air, or just look out the window,” he said.

Pew Research found that more than half of people whose jobs have allowed them to work from home during COVID-19 want to keep doing it all or most of the time. Another third say they’d like to at least some of the time. 

“That’s creating a lot of conversation about how we’re going to operate in summer 2021,” said Justin Draeger, who runs the National Association of Student Financial Aid Administrators, a nonprofit in Washington, D.C., with about 45 people on staff. Nearly all of them now say they want to be able to divide their time between home and the office. And Draeger’s OK with that.

“This idea of being in the office five days a week, I think, is a bygone era for companies that have successfully moved to telework,” he said.

And a lot have. Kate Lister, with Global Workplace Analytics, said the companies she’s talking to in tech, law, banking and insurance are planning to keep doing it after the pandemic ends.

“We’ve reached the tipping point where there’s enough companies that are going to be offering it, that if you’re a company that doesn’t offer it or allow it, you’re simply not going to be able to hold on to your people or attract the best talent,” she said.

Before the pandemic, most of the people who have jobs that can be done remotely rarely, if ever, worked from home, the study found. 

 

Our annual Toys-for-Tots post (pandemic edition)

[Obviously, safety comes first. If you can pick up these toys without making an extra trip, please do so, but if it's a choice of going out or staying home, shop online.]

 

 A good Christmas can do a lot to take the edge off of a bad year both for children and their parents (and a lot of families are having a bad year). It's the season to pick up a few toys, drop them by the fire station and make some people feel good about themselves during what can be one of the toughest times of the year.

If you're new to the Toys-for-Tots concept, here are the rules I normally use when shopping:

The gifts should be nice enough to sit alone under a tree. The child who gets nothing else should still feel that he or she had a special Christmas. A large stuffed animal, a big metal truck, a large can of Legos with enough pieces to keep up with an active imagination. You can get any of these for around twenty or thirty bucks at Wal-Mart or Costco.

Shop smart. The better the deals the more toys can go in your cart;

No batteries. (I'm a strong believer in kid power);*

Speaking of kid power, it's impossible to be sedentary while playing with a basketball;

No toys that need lots of accessories;

For games, you're generally better off going with a classic;

No movie or TV show tie-ins. (This one's kind of a personal quirk and I will make some exceptions like Sesame Street);

Look for something durable. These will have to last;

For smaller children, you really can't beat Fisher Price and PlaySkool. Both companies have mastered the art of coming up with cleverly designed toys that children love and that will stand up to generations of energetic and creative play.

* I'd like to soften this position just bit. It's okay for a toy to use batteries, just not to need them. Fisher Price and PlaySkool have both gotten into the habit of adding lights and sounds to classic toys, but they remain playable long after the batteries have died.

So what is the business strategy now?

This is Joseph.

Uber is selling off its autonomous vehicle division. This does, however, bring up one important question -- namely, what is Uber's unique value proposition? 

It is quite clear that Taxi businesses are able to develop and deploy applications to make it easier to order a taxi. So it cannot possibly be the IT piece of the equation, which is broadly imitated, even in cities that ban Uber and Lyft. 

But the number of other differences are tiny. Maybe they are shifting the capital costs to owner/operators, but this is also a taxi business plan as well. Certainly, I have known people who owned their own car and rented access to dispatch and a taxi license as a part of the taxi business.

So it looks a lot like the two things left are:

1) Network effects

2) Regulatory arbitrage

The first is not to be minimized, for visitors and people from out of town. But it isn't likely to be a major draw for people who already live in the location. Price also seems to be a part of this, but there has to be a way that Uber gets cheaper rates than a traditional business. That seems to be based on evading traditional employee protections, a new strategy that is being led by the state of California who has enacted massive legal protections for these companies. 

My question, perhaps too late, is whether this is a good idea. The idea of making money by eroding employment protections isn't new and it is unclear how it accelerates things like innovation. If anything, like slaves in ancient Rome, artificially cheap labor can actually slow innovation. Yeyt, with this move, I cannot interpret the jump in Uber's stock price as anything but a cheap labor ploy. 

Why, California, why? 

On the bright side, how much damage could one of the world's three richest men with the personality of a cult leader do?

Cult is a dangerous term to throw around and it obviously doesn't apply in the narrow sense to Musk's followers, but there are some aspects that give one pause.

Take a look at the following list from former FBI agent Joe Novarro [emphasis added]:

If you know of a cult leader who has many of these traits there is a high probability that they are hurting those around them emotionally, psychologically, physically, spiritually, or financially. And of course this does not take into account the hurt that their loved ones will also experience. 

Here are the typical traits of the pathological cult leader (from Dangerous Personalities) you should watch for and which shout caution, get away, run, or avoid if possible:

    He has a grandiose idea of who he is and what he can achieve is preoccupied with fantasies of unlimited success, power, or brilliance.

    Demands blind unquestioned obedience.

    Requires excessive admiration from followers and outsiders.

    Has a sense of entitlement - expecting to be treated special at all times.

    Is exploitative of others by asking for their money or that of relatives putting others at financial risk.

    Is arrogant and haughty in his behavior or attitude.

    Has an exaggerated sense of power (entitlement) that allows him to bend rules and break laws.

    Takes sexual advantage of members of his sect or cult.

    Sex is a requirement with adults and sub adults as part of a ritual or rite.

    Is hypersensitive to how he is seen or perceived by others.

    Publicly devalues others as being inferior, incapable, or not worthy.

    Makes members confess their sins or faults publicly subjecting them to ridicule or humiliation while revealing exploitable weaknesses of the penitent.

    Has ignored the needs of others, including: biological, physical, emotional, and financial needs.

    Is frequently boastful of accomplishments.

    Needs to be the center of attention and does things to distract others to insure that he or she is being noticed by arriving late, using exotic clothing, overdramatic speech, or by making theatrical entrances.

    Has insisted in always having the best of anything (house, car, jewelry, clothes) even when others are relegated to lesser facilities, amenities, or clothing.

    Doesn’t seem to listen well to needs of others, communication is usually one-way in the form of dictates.

    Haughtiness, grandiosity, and the need to be controlling is part of his personality.

    Behaves as though people are objects to be used, manipulated or exploited for personal gain.

    When criticized he tends to lash out not just with anger but with rage.

    Anyone who criticizes or questions him is called an “enemy.”

    Refers to non-members or non-believers in him as “the enemy.”

    Acts imperious at times, not wishing to know what others think or desire.

    Believes himself to be omnipotent.

    Has “magical” answers or solutions to problems.

    Is superficially charming.

    Habitually puts down others as inferior and only he is superior.

    Has a certain coldness or aloofness about him that makes others worry about who this person really is and or whether they really know him.

    Is deeply offended when there are perceived signs of boredom, being ignored or of being slighted.

    Treats others with contempt and arrogance.

    Is constantly assessing for those who are a threat or those who revere him.

    The word “I” dominates his conversations.

    He is oblivious to how often he references himself.

    Hates to be embarrassed or fail publicly - when he does he acts out with rage.

    Doesn’t seem to feel guilty for anything he has done wrong nor does he apologize for his actions.

    Believes he possesses the answers and solutions to world problems.

    Believes himself to be a deity or a chosen representative of a deity.

    Rigid, unbending, or insensitive describes how this person thinks.

    Tries to control others in what they do, read, view, or think.

    Has isolated members of his sect from contact with family or outside world.

    Monitors and or restricts contact with family or outsiders.

    Works the least but demands the most.

    Has stated that he is “destined for greatness” or that he will be “martyred.”

    Seems to be highly dependent of tribute and adoration and will often fish for compliments.

    Uses enforcers or sycophants to insure compliance from members or believers.

    Sees self as “unstoppable” perhaps has even said so.

    Conceals background or family which would disclose how plain or ordinary he is.

    Doesn’t think there is anything wrong with himself – in fact sees himself as perfection or “blessed.”

    Has taken away the freedom to leave, to travel, to pursue life, and liberty of followers.

    Has isolated the group physically (moved to a remote area) so as to not be observed.

Hyperloop stories really demand Gawker-level snark

 Fortunately, Albert Burneko (late of Deadspin) is on the case.

CNN’s article about this event paraphrases a Virgin Hyperloop executive claiming that the hyperloop pods “can travel at the speed of aircraft.” Which is true, in the sense that commercial aircraft with dozens if not hundreds of people aboard do sometimes travel at 100 miles per hour, on the ground, for seconds at a time, during takeoff or landing, when they are going only a fraction as fast as they’re capable of going. It is also true in the sense that, strictly speaking, a paper airplane is a form of “aircraft,” and you can really whip some of those suckers across a room. A more accurate but perhaps less flattering claim would be that my Honda Odyssey can travel at the fastest speed Virgin Hyperloop has yet attained, and with four times as many people riding in it.

Hell, for that matter, as a Twitter user helpfully pointed out, a freaking steam locomotive hit 126 miles per hour in England, 82 years ago, in 1938.

Yeah, but, when it’s done, it’ll go 600 miles per hour, you’re whining, and it’ll have 25 to 30 people in a pod! When exactly will that be? France opened the TGV in 1981. Japan’s oldest high-speed line debuted in 1964—1964!—and was better and faster then than Amtrak’s Acela trains go now. Shanghai’s maglev train has been operable since John Kerry was campaigning to unseat George W. Bush as president. Measure speed by the number of riders the respective services will have moved by, say, 2050. Measure it in carbon emissions. By the year 2020, the best-funded and most sophisticated high-speed rail developer in the United States moved two (2) people 500 meters.

Perhaps not that unexpected

Sidney Powell, who is greeted like a rockstar by the large crowd in Georgia, just now said she would “encourage Georgians to not vote at all until your vote is secure. I mean that regardless of party.”

— Caitlin Dickson (@CEDickson) December 2, 2020

Five years ago, Joseph and I were having a lot of discussions about what might happen if Trump lost the nomination. Here's one of the scenarios we came up with.

In recent years, a large part of the foundation of the GOP strategy has been the assumption that, if you get base voters angry enough and frightened enough, they will show up to vote (even in off year elections) and they will never vote for the Democrat (even when they really dislike the Republican candidate).

Capitalizing on that assumption has always been something of a balancing act, particularly when you constantly attack the legitimacy of the electoral system ("The system is rigged!" "The last election was stolen!" "Make sure to vote!"). With the advent of the Tea Party movement, it's gotten even more difficult to maintain that balance.

I don't want to get sucked into trying to guess what constitute reasonable probabilities here – – I'm just throwing out scenarios – – but it certainly does seem likely that, if he doesn't get the nomination and does not choose to run as an independent, Trump will still make trouble and things will get ugly.

Keep in mind, Trump's base started out as the birther movement. They came into this primed to see conspiracies against them. Now the RNC has given them what appears to be an actual conspiracy to focus on.

I don't think we can entirely rule out the possibility of Trump calling for a boycott of the vote to protest his treatment but even if it doesn't come to that, it seems probable that, should we see a great deal of bitterness and paranoia after the convention, the result will not help Republican turnout.

How to be a Tesla bull -- keep repeating EVs = Tesla

  This is perhaps the primary pillar in all attempts to justify valuing a small, marginally profitable niche car maker at a larger market cap than the three biggest money-making auto companies combined. The arguments boil to "In the near future gas-powered autos will be phased out, therefore most cars will be made by Tesla." Bulls spend a great deal of time supporting the premise (which needs little support), and remarkably little arguing for the conclusion.

 Recently one prominent analyst used this line of reasoning to defend a bull case for trading Tesla at a p/e of around 2000.

Tesla Inc. shares could double from current levels as global electric vehicle demand ramps up over the next five years, according to one Wall Street analyst.

Global demand for electric vehicles could reach 10% of auto sales by 2025, up from its current 3%, wrote Wedbush Securities analyst Dan Ives.

He raised his price target to $560 a share and his bull-case scenario to $1,000 on the belief that Tesla could deliver 1 million vehicles by 2023 (possibly 2022).

...

 European efforts to reduce carbon emissions and increased regulatory scrutiny will drive a wave of demand led by France, Germany, Italy and the U.K. Tesla is aiming for its Berlin Gigafactory to begin production in July.

 

Let's take a closer look at the European market.

In case the last few quarters of profitability haven't hipped you to this, Tesla sells a lot of electric cars. This is true pretty much everywhere that it operates. However, according to a report published Wednesday by InsideEVs, Tesla is no longer the biggest fish in Western Europe.

While other electric vehicle makers have had a relatively slow increase in sales compared to Tesla's big spike and subsequent plateau starting in January of 2019, the slow and steady route seems to be paying off for the Renault Nissan Mitsubishi Alliance and the Volkswagen Group, both of which eclipsed Tesla's sales as of August of 2019.

That trend has continued, with industry analyst Matthias Schmidt stating that Tesla's Western European (this includes the EU plus UK, Iceland, Norway and Switzerland) market share has fallen from 33.8% down to just 13.5% over the last year. That's a massive drop, but why is the Big T losing ground?

Part of it has to do with the fact that Tesla is a single brand going up against multibrand conglomerates. Next, Tesla doesn't really sell super-affordable electric cars; the competition has more entry-level EVs available for people, even though they don't offer anywhere near the range or performance of a Model 3, for example.

Lastly, and this is a big one, many of these competitor companies are likely willing to sell their EVs with a much smaller profit margin to meet corporate emissions targets. They can use the EV sales to shore up the emissions side of things while their diesel and gasoline product sales keep the lights on, so to speak.

 

On a related note, check out Warren Buffett's explanation of the investors' fallacy that investing in a winning technology translates to investing in a successful company.

 

“[H]as the potential to cause some problems with GOP messaging.”

Following up from last week's post.

Just to be clear, these posts are making any predictions about any upcoming races. Instead, this is one more data point in our long-running thread about how Straussianism's reliance on propaganda and disinformation can yield impressive results at first, but it's fundamentally unstable. Sooner or later the wrong people start believing the lies and you lose control of the narrative. 

From Talking Points Memo. 

“I choose not to vote in another fraudulent election with rigged voting machines & fake mail ballots,” Lin Wood, an attorney suing elections officials over wild fraud accusations in Georgia, tweeted Sunday night. By Monday morning, he asserted the January runoff elections “will have to [be] replaced with [a] new down ballot election.”

It’s difficult to tell how widespread the Trump dead-ender phenomenon is. “Anyone who thinks the election is rigged will shy away from polls for the same reason,” Jeffrey Lewis Lazarus, a political science professor at Georgia State University, told TPM.

But while Lazarus said it’s nearly impossible to poll the effect of voters’ doubts about election integrity, he noted some warning signs for the GOP, pointing to an episode over the weekend involving GOP Chair Ronna McDaniel.

At an event in Marietta on Saturday, one Republican voter made a comment to McDaniel referring to evil forces “switching the votes” away from Trump and Pence: “We go there in crazy numbers and they should have won!”

Another person chimed in after him: Why bother expending “money and work, when it’s already decided?” she asked.

“It’s not decided!” McDaniel pleaded.

“How do you know!” the woman shot back.

“There were several people in the audience who were convinced the November election was rigged,” Lazarus said — people who, it appeared, “wanted to vote for Trump on January 5 and wanted to overturn the results of the election.” That’s evidence that at least some Republican voters are buying into the Trump camp’s conspiracy peddling and doubting the validity of the election, he added.

That schism within the party, Lazarus said, could prove additionally problematic for Republicans. A civil war with Republicans like Georgia Secretary of State Brad Raffensperger on one side and Trump and Sens. Kelly Loeffler (R-GA) and David Perdue (R-GA) on the other “has the potential to cause some problems with GOP messaging.”

...

But the Powell and Wood are hardly alone: Ali Alexander, the far-right organizer of various “Stop the Steal” protests around the country, including a recent demonstration in Georgia, told the Daily Beast recently that Trump supporters would boycott the runoff unless Perdue and Loeffler called for a special legislative session to investigate the results of the presidential election.

“Kelly Loeffler and David Perdue can either do what we said, because we are their voters, we are their donors, we are their volunteers, or we literally won’t vote,” he said, before characterizing the typical GOP counterargument: “‘Oh, but Ali, then Democrats will take the Senate?’ I would rather an enemy in my face than a traitor behind.”

Please make it stop: deficit edition

 This is Joseph

So, I know that inflation is a potential menace and ignoring debt has gotten many an advanced nation into trouble. These are all reasonable things to be concerned about. But, via Yasha Levine, I want to bring your attention to the views of the frontrunner for incoming treasury secretary:

So, there are several issues all bundled together here. First, can we stop putting Medicare into the same bucket as the (less generous) Medicaid and the (quite sustainable) Social Security. The problem with Medicare, insofar as there is one, is an issue of medical cost inflation and that's an independent policy problem that has little to do with the budget (except  as a motivation to solve it). 

Second, there is always money for expensive adventures and tax cuts. The Iraq War cost 1.06 trillion dollars. Tax cuts from Trump cost 1.5 trillion and maintaining the Bush tax cuts from 2012 to 2021 cost 4.6 trillion. And the cost of saving social security is low:

As indicated in the 2009 Trustees Report, the 75-year shortfall projected under intermediate assumptions for the OASDI program could be met with benefit reductions equivalent in value to a 13 percent immediate reduction in all benefits, an increase in revenue equivalent to an immediate increase in the combined (employee and employer) payroll tax rate from 12.4 percent to 14.4 percent, or a combination of these two approaches.

I am not saying these programs should never be considered for cuts, but that we should be very careful about not framing this as a choice to have lower revenues which require cuts. You could also raise the payroll tax cap on the taxes, which could solve up to 90% of the problem and, by definition, only apply to people making greater than the cap (around $118K/year). 

Third, can we finally kill off the idea of the Laffer curve as being especially relevant to tax policy? We are nowhere near where it would kick in, which is around a 70% tax rate. The United States is a complicated country, so there might be somebody who faces a marginal tax rate of > 70% but it isn't a common tax situation. There are also cases where tax rates are extremely low, like this person who paid $750 in taxes despite a robust revenue stream. Nor is it clear that income maximization is the only goal of tax policy; it could also consider equity. 

Again, this is not to say that lessons could not be learned. Karl Smith:

A chorus of commentators, myself included, pushed back, arguing that by running the economy hot, it was possible to draw people back into the workforce. Powell and the Trump administration took these criticisms to heart, producing the strongest economy for workers since at least the 1990s.

and

These misjudgments alone do not disqualify Yellen. But they do raise concerns that she could shift the debate prematurely toward deficit reduction and away from increasing employment. This is precisely the mistake made during Barack Obama’s presidency. 

So I do not claim any special insight. But one thing Trump did that was novel and perhaps helpful, was to threaten the Federal Reserve to make it reluctant to try and slow employment growth. There is a principal agent problem with the president controlling fiscal policy but that doesn't go away if the people doing it are market economists from elite backgrounds. Look at some recent backgrounds of chairs: Jerome Powell (Princeton and JD from Georgetown), Janet Yellen (Brown and a PhD from Yale), Ben Bernanke (Harvard and MIT PhD), and Alan Greenspan (NYU and a PhD from Columbia). Do these strike you as typical working class backgrounds or people who are exposed to the concerns of the working poor? 

Now, none of these points suggests that we should set sail into aggressive experiments without careful planning. But it does suggest that it is odd that we are sailing from Ireland to New York, and begin by setting course for Italy. Why are we so afraid of robust wage growth among the working class? We go so far as to suggest ideas like a "Skills Gap", which blames the people without skills, without noting that this gap goes away rapidly once wages start rising and employers start training again. 

There is a lot of food for thought in charting the next few years. 

This may be crazy talk but there might be a subtle flaw in the tactic of telling your base votes don't matter

Anne Applebaum doesn't see it [emphasis added]

I’m afraid that I think it’s a little bit more sinister than that. I think that — certainly on Trump’s part, and other Republicans are probably coming to see this the same way as well — this is an attempt to create a new kind of base: an enraged receiving base, which will always think that the election was stolen and which will always assume that something went wrong and will always feel that they were deprived of something. And this base will then have uses in the future.

I don’t believe it will be all of the Republican Party. I can’t tell you right now how many of them it will be. But it will be a significant number of people. And in some congressional districts and some states, it could even be a majority. And this will be a base that is usable. This will be a base that not only dislikes the Democratic Party or disagrees with them, it will think that the Democratic Party is evil and anti-democratic — that they have stolen the election.

Think about what that means. That means that they aren’t even a legitimate political party. It means that there is a base of people who will be not just skeptical of mainstream media — whatever you think mainstream media is, which may even include Fox now. They will be not just skeptical of Fox, CNN, MSNBC, the New York Times, and the Philadelphia Inquirer. They will think all of those institutions are part of a deliberately constructed conspiracy to steal the presidency. And that kind of feeling — that conviction that the other side isn’t just wrong, it’s evil and traitorous — that’s then a useful group of people who can be motivated politically and maybe in other ways in the future.

Lots of this is familiar ground, particularly to long-time readers who have suffered through about a decade's worth of posts on the conservative movement's use of disinformation/war on data and its implications.

 Here's a relevant bit from 2015 [emphasis added]

I've been arguing for quite a while now that we need to pay more attention to the catharsis in politics (such as with the reaction to the first Obama/Romney debate), particularly with the Tea Party.  Conservative media has long been focused on feeding the anger and the outrage of the base while promising victory just around the corner. This has produced considerable partisan payoff but at the cost of considerable anxiety and considerable disappointment, both of which produce stress and a need for emotional release. 

 And from 2019 [again emphasis added]

I don't want to get too caught up in the finer distinctions between catharsis, emotional release, relief of stress, etc. What matters is that the conservative movement has spent more than a quarter century using distorted news and disinformation to cultivate a base motivated by anxiety bordering on panic and anger bordering on rage. It is easy to see why the leaders believed that having a base this motivated and hostile to the opposition would be to their advantage. It is not so easy to see why they believed they could control it indefinitely.

 

 There's no question that convincing your base "that the other side isn’t just wrong, it’s evil and traitorous" is potentially useful, nor is it a new idea. Conservative media has been focused on this, with considerable success, since Clinton first took back the presidency in '92. Go back and listen to some Rush Limbaugh shows of the era.

 But this has always been a balancing act. Every claim that a loss was due to betrayal and corruption had to be matched with an equally persuasive claim that next time would be different. Your vote didn't count last time but it's essential you show up at the polls next time. Selling that message has become more challenging.

 

Some Trump supporters on Parler want to boycott the Georgia runoff — or even write in Trump’s name!#Genius pic.twitter.com/XpRu644jkO

— Marcus Baram (@mbaram) November 20, 2020

And here's Josh Marshall.

It’s hard to manage party enthusiasm and unity when you’re arguing that the state GOP is actually a front for the Democratic party. This was the third rail – Republican control of the Senate – that Powell touched. Whether McConnell picked up the phone and communicated this directly to Trump or whether he got the message in another way, this is almost certainly what led to her ouster.

Just to be clear, the GOP may hold both these seats -- I'd be reluctant to bet against them -- but it seems overwhelmingly unlikely that the base's delusions about stolen elections and betrayals from within are helping. The Republican may retake the House in 2022 and the White House in 2024, but it is difficult to see how convincing the majority of your supporters that elections are fixed is an effective way of getting out the vote.

"As God as my witness..." is my second favorite Thanksgiving episode line [Repost]

 



If you watch this and you could swear you remember Johnny and Mr. Carlson discussing Pink Floyd, you're not imagining things. Hulu uses the DVD edit which cuts out almost all of the copyrighted music. [The original link has gone dead, but I was able to find the relevant clip.]

As for my favorite line, it comes from the Buffy episode "Pangs" and it requires a bit of a set up (which is a pain because it makes it next to impossible to work into a conversation).

Buffy's luckless friend Xander had accidentally violated a native American grave yard and, in addition to freeing a vengeful spirit, was been cursed with all of the diseases Europeans brought to the Americas.

Spike: I just can't take all this mamby-pamby boo-hooing about the bloody Indians.
Willow: Uh, the preferred term is...
Spike: You won. All right? You came in and you killed them and you took their land. That's what conquering nations do. It's what Caesar did, and he's not goin' around saying, "I came, I conquered, I felt really bad about it." The history of the world is not people making friends. You had better weapons, and you massacred them. End of story.
Buffy: Well, I think the Spaniards actually did a lot of - Not that I don't like Spaniards.
Spike: Listen to you. How you gonna fight anyone with that attitude?
Willow: We don't wanna fight anyone.
Buffy: I just wanna have Thanksgiving.
Spike: Heh heh. Yeah... Good luck.
Willow: Well, if we could talk to him...
Spike: You exterminated his race. What could you possibly say that would make him feel better? It's kill or be killed here. Take your bloody pick.
Xander: Maybe it's the syphilis talking, but, some of that made sense.