By Lambert Strether of Corrente.
“When the time comes, Pence takes the stage and greets the crowd with a booming “Hellooooo, Indiana!” He says he has “just hung up the phone” with Donald Trump and that the president asked him to “say hello.” He delivers this message with a slight chuckle that has a certain, almost subversive quality to it. Watch Pence give enough speeches, and you’ll notice that this often happens when he’s in front of a friendly crowd. He’ll be witnessing to evangelicals at a mega-church, or addressing conservative supporters at a rally, and when the moment comes for him to pass along the president’s well-wishes, the words are invariably accompanied by an amused little chuckle that prompts knowing laughter from the attendees. It’s almost as if, in that brief, barely perceptible moment, Pence is sending a message to those with ears to hear—that he recognizes the absurdity of his situation; that he knows just what sort of man he’s working for; that while things may look bad now, there is a grand purpose at work here, a plan that will manifest itself in due time. Let not your hearts be troubled, he seems to be saying. I’ve got this” [The Atlantic]. Oh, good.
A victory for the plaintiffs could mean a quick redrawing of districts before the 2018 midterm elections — judges to decide on Pennsylvania redistricting case this week https://t.co/fUGCmzzQ8t pic.twitter.com/S09gn2D8s5
— 90.5 WESA (@905wesa) December 4, 2017
“Alabama Senate Special Election – Moore vs. Jones” [RealClearPolitics]. “Moore +1.5” (Previous: Moore +2.6).
“Women are more likely than men to find the allegations credible and to support Jones, with 41 percent of women saying Moore made unwanted advances compared with 28 percent of men saying the same. Moore leads by 15 points among men likely to vote, while Jones leads by 18 points among likely female voters” [WaPo].
“These are the women who could elect Roy Moore” [Ron Brownstein, CNN]. “Moore’s ability to survive the allegations of sexually pursuing young girls, which have rocked his campaign, will likely turn on whether he can maintain his pre-scandal advantage among white women without a college education — even as their college-educated counterparts have moved toward Democrat Doug Jones in much bigger numbers than usual for deeply conservative Alabama, according to public and private polling in the race. With that contrast, the Alabama race is illuminating one of the least understood political trends of the Donald Trump era. Many commentators have warned that Republicans face a systemic problem with female voters under Trump — and could see that difficulty deepen if Moore wins and is seated in the Senate. But that conclusion is far too sweeping. Rather than a monolithic response, the Trump era instead is widening the divide between the political preferences of white-collar and blue-collar white women.”
UPDATE “So the fact that Jones is running within a couple percentage points of Moore is itself pretty remarkable: Moore is performing around 25 points worse than Republicans ordinarily do in Alabama despite there being few swing voters in the state” [FiveThirtyEight]. “Overall, the effects of the scandal seem to be of roughly the same magnitude as those identified in a 2011 paper by Nicholas Chad Long, who found that scandals involving ‘immoral behavior’ hurt incumbent U.S. senators by a net of about 13 percentage points, controlling for their past margin of victory and other factors.” Now that is a neat factual nugget. And: “Long’s paper found that while scandals can have reasonably large effects at the margin, two-thirds of scandal-plagued incumbents nonetheless won re-election to the U.S. Senate between 1974 and 2008.”
“Compared to the behavior voters would like to be able to expect from elected officials, Judge Moore’s actions seem all-but-unforgiveable. But compared to the current crop of scandals from across the partisan aisle, Moore is just another bad actor among many… This is the power of partisanship: If you can get your voters to compare you to your opponents based on party, they can often find a way to believe what they must to give you their support” [Michael Graham, CBS].
“A small-town Alabama newspaper takes a stand on Roy Moore. A very careful one.” [Margaret Sullivan, WaPo]. A sad description of the newsroom…
2016 Post Mortem
Non, je regrette rien:
Interviewer: Do you regret your criticisms of Barack Obama?
Cornell: “Oh, no. I told the truth. When I said drone strikes are crimes against humanity, when I said Obama bailed out Wall Street rather than Main Street — I shall forever support that.”https://t.co/XxSzaFvNCY
— race bully (@HalfAtlanta) December 5, 2017
“What Donna Brazile Left Out Of The Democratic National Committee Story” [HuffPo]. “The DNC ultimately gave Precision and SKDK close to a million dollars over the course of the presidential race. Nearly $400,000 of that came during the primary… [T]hese consulting teams — which were coordinating strategic communications, media relations and research well before the party chose its nominee — included several established Democratic operatives who openly favored the former secretary of state. Many of them had a history with Clinton.” But don’t worry. Under Tom Perez, these consultants are still in control at the DNC. Still slurping at the trough. I guess we won’t be seeing any $27-average-contribution from these guys any time soon!
New Cold War
I think we have another new liberal Democrat icon:
John Yoo (Bush's Asst. AG) is encouraging a thorough investigation of Trump and possible impeachment. https://t.co/3ycGReRVdK
— Christopher Wensley (@mipolitico) December 5, 2017
UPDATE “Trump’s personal banking information handed over to Robert Mueller” [Guardian]. “Deutsche Bank, the German bank that serves as Trump’s biggest lender, was forced to submit documents about its client relationship with the president and some of his family members, who are also Deutsche clients, after Mueller issued the bank with a subpoena for information, according to media reports.”
UPDATE “How the House and Senate tax bills would change America, in one chart” [Vox]. In one enormous chart. “The Senate bill, but not the House bill, would end Obamacare’s individual mandate, cutting health coverage in America by 13 million people. The House bill, but not the Senate bill, would end the estate tax entirely, and add a huge new tax on PhD students and other people receiving tuition waivers from their schools… But the House and Senate bills are remarkably similar in other respects. They now treat the state and local tax deduction identically, ending it for income and sales taxes but merely capping it for property taxes. They take broadly similar approaches to expensing, interest deduction, and international taxation on the corporate side. They both switch to chained CPI, a slower-growing inflation measure that results in gradually increased taxes over time. And, of course, both enact a permanent 20 percent corporate tax rate.” Notice how the Democrat Establishment is silent on Chained CPI, which will cut your Social Security, if you’re on it? They’re silent because they support it.
UPDATE “Liberals need to get a grip about the GOP tax bill” [The Week]. “If Democrats hate the consequences of the 2016 election, as they should, they should oppose those consequences on substance and then hang the dead weight of these terrible policies around the neck of every Republican running for office in 2018. What Democrats should not do is treat the passage of the tax bill as the end of democracy in America. Because it isn’t…. The Trump era is filled with examples of behavior that is in fact truly alarming — including the flagrant shredding of norms of presidential behavior that won’t be easy or in some cases even possible to reverse once the current president leaves office. But the tax legislation in itself isn’t alarming. Republicans passing a massive tax cut that benefits the wealthy and sticks it to the rest of the population is as normal as anything in our politics. Yes, there were some abnormal aspects to the white-knuckled process by which the Senate passed the bill — by a bare majority, and with last-minute major changes made up until a couple of hours before the final vote. But these institutional norms have been in decay for many years, and Democrats have done their fair share of contributing to the breakdown.” Exactly.
Realignment and Legitimacy
UPDATE “How America Became So Divided” [Nancy Gibbs, Time]. Gibbs is the editor of Time. Pulling out two bullet points NC readers will be familiar with. Gibbs is, apparently, chanelling Ray Dalio:
• For the lower 60%, real incomes are flat to down since 1980, to the point that the average person in the top 40% has ten times the wealth of the average in the lower 60, two thirds of whom have no savings.
• Premature deaths are up by about 20% just since 2000, driven mainly by drugs and suicides, which sets America apart from nearly all industrialized countries. Nothing about current trends suggests this will change.
Obviously those are two very serious problems that no elite worth its salt would allow to happen. Now contrast where Gibbs places her hope and trust. I’m sorry to quote so much of this flaccid blather but you might as well get the full flavor:
If we don’t show how democracy can work, does work, if we don’t model what civil discourse looks and sounds like and the progress it can yield, than we can hardly be surprised if people don’t think they really matter.
Some politicians are clearly listening. Fifty freshman lawmakers in the 115th Congress, from both parties, signed a “Commitment to civility” pledge. It acknowledged the “increasing division in and coarsening of our culture fueled too often by the vitriol in our politics and public discourse.” For all the differences in their beliefs, they promised to “set an example of statesmanship,” and maintain “a spirit of mutual understanding and cooperation.”
More than 40 members of Congress, split equally between the two parties, have joined the congressional Problem-Solvers Caucus – agreeing to work toward compromise and vote together on a few of the biggest issues. White House veterans Bill Kristol and Bill Galston, who have never once voted for the same candidate, called for a New Center in American politics to defend basic principles of liberal democracy: “We stand together in defense of constitutional, orderly, and civil self-government that respects civil liberties and equal rights and the rule of law, and rejects bigotry of every kind.” Its pillars? Opportunity, security, accountability, ingenuity.
In a word, centrism. Since when did Centrism ever solve class warfare-type problems like flat wages or increasing mortality?
“Dems warn GOP: We’re prepared for class war” [McClatchy]. Then you’d better throw a lot of your leadership under the bus.
“Presidents Obama And Clinton Failed To Defend The Middle Class: Robert Reich” [International Business Times]. “Reich’s desire to rescue capitalism has become increasingly controversial — with the United States facing stagnating wages, intensifying economic inequality and persistent poverty, public opinion polls show more and more Americans are questioning whether capitalism is the right economic system for the country. In 2016, one poll showed that among millenials, 43 percent said they had a favorable view of socialism and just 32 percent said they had a favorable view of capitalism . That same year, democratic socialist Bernie Sanders received millions of votes for president.”
“The Democrats’ Dangerous Obsession With Impeachment” [Jeet Heer, The New Republic]. “While it is true that [as Ezrra Klein argues] Trump is ‘extremely bad at the job of president,’ using that as grounds for removing him from office would be revolutionary, moving the criteria from the constitutional requirement of ‘high crimes and misdemeanors,’ which is already vague, to the utterly nebulous and subjective ‘extremely bad.’ Klein recognized that normalizing impeachment would turn it into a political weapon, but didn’t wrestle with the fact that this normalization already happened—with the spurious impeachment of Bill Clinton in 1999. That precedent suggests the dangers of further normalization: It will worsen the extreme partisanship and gridlock that is making American ungovernable.” Idea: Democrats should start winning elections?
“The Voices of Trump Supporters” [Cook Political Report]. A focus group in North Carolina by Peter Hart. Summarizing: “The complaints about Trump by his supporters are almost entirely stylistic and behavioral, not substantive or ideological. They still hope he’ll grow into his role, adapting himself to the job rather than adapting the job to himself.” Note that most of these Trump voters are college-educated, one at the graduate level.
Institute For Supply Management Non-Manufacturing Index, November 2017: “Growth cooled noticeably in ISM’s non-manufacturing report with is probably a plus given unsustainably high levels in prior reports” [Econoday]. “[T]he overall results, along with this morning’s PMI services index, do point to slowing for the bulk of the economy in November and also fit in with slowing among several of the regional factory reports during the month. Note that today’s ISM report tracks, unlike the PMI services, construction and mining which were mixed with the former expanding but the latter contracting in November.” And: “‘We had such a high rate of growth and knew there would be some pullback eventually but did not know exactly when,’ said [Tony Nieves, chair of the ISM’s Non-Manufacturing Business Survey Committee] in an interview [Logistics Management]. ‘I always felt the previous rate of growth was not always going to be sustainable, especially with how it popped up in September and October. This NMI is still ahead of the 12-month average. We are measuring change month-to-month so as that bar keeps moving, we would like to see it continue to cascade but that is not reality. All the key metrics still remain above the baseline of 50, which bodes well for things over all.'” And: “Both services surveys are in expansion. I would weight the Markit numbers higher which would indicate a slightly slowing service sector” [Econintersect]. And: “The service sector is a bellwether for the U.S. economy, employing eight of 10 American workers. And right now the bell is ringing loudly. The economy has grown 3% for two straight quarters and could make it three in a row for the first time since 2005. Economists played down the declines in the ISM’s manufacturing and services indexes in November, noting that both are still historically strong” [MarketWatch]. And but: “The surveys are starting to come off their trumped up levels” [Mosler Economics]. And: “This suggests slower expansion in November than in October” [Econintersect].
Purchasing Managers’ Services Index, November 2017: “Markit’s U.S. service-sector sample reported solid growth but still the softest since June” [Econoday]. “Business confidence, getting a boost from planned investment and the rise in new orders, is also very strong though slightly lower than October. Yet the report warns that confidence in the year-ahead outlook “deteriorated” which may point to a rise in risk aversion that could hurt future employment and hiring. A clear negative is a slowing in backlog accumulation in the weakest showing since June.”
International Trade, October 2017: “Fourth-quarter net exports get off to a weak start as October’s trade deficit, at $48.7 billion, comes in much deeper than expected and well beyond September’s revised $44.9 billion” [Econoday]. “Country data show the monthly gap with China deepening $600 million to $35.2 billion and with Japan by $1.6 billion to $6.4 billion. The EU gap widened by $2.3 billion to $13.7 billion. The gap with Mexico rose $900 million to $6.6 billion and Canada $1.5 billion deeper at $1.8 billion.” And but: “The data in this series wobbles and the 3 month rolling averages are the best way to look at this series. The 3 month averages are declining for exports and growing for imports” [Econintersect]. “The data is much worse if one considers inflation is grabbing hold in exports and imports – and the numbers are not inflation adjusted.”
Shipping: “German lender HSH Norbank used to support a shipping-heavy portfolio worth more than $200 billion and now it can’t even support itself. The state-owned bank, once the world’s biggest ship financier, is racing to find a buyer by the end of February or face liquidation…, after suffering massive losses on non-performing shipping loans” [Wall Street Journal].
Shipping: “UPS Inc. said it has implemented changes in the package car driver schedules through the peak holiday season period that, in many parts of the country, will require its drivers to work 70 hours over eight consecutive days” [DC Velocity].
Shipping: ” In a report released in October, the American Trucking Associations (ATA) warned that the industry would be short about 50,000 drivers by the end of 2017″ [DC Velocity]. “As for the reasons for the shortage, some of it has to do with demographics: an aging work force, the 21 minimum age requirement for interstate drivers (which effectively eliminates candidates in the 18-21 age group who are often in the process of choosing careers), and a lack of interest among women in driving as a career. But that’s just part of the story. As we all know, lifestyle issues play into it as well. Few U.S. workers want a job that keeps them away from home for extended periods and forces them to subsist on a truck-stop diet of chicken-fried steak and macaroni and cheese. Further complicating matters, a rapidly strengthening economy means more job alternatives are available to current and would-be drivers.” If only there were some way to compensate drivers for these percieved disadvantages…
Shipping; “Soaring Freight Costs Will Squeeze Traders, Boost Food Prices” [Bloomberg]. “The Baltic Dry Index, a benchmark of shipping rates, surged 73 percent in 2017 to a four-year high because of a slowdown in new bulk freight capacity. More than 85 percent of global trade in grains and oilseeds is transported by dry-bulk carriers, according to Rabobank International.”
Shipping: “Corporate CIOs aren’t shrinking violets when competing for budget dollars. If it walks, talks, or quacks technology, they’ll push ROI projections and lobby hard for the stuff. But mention the word ‘blockchain’ and the CIOs’ attitudes suddenly get adjusted. They become Star Trek’s stone-cold Mr. Spock to the emotional Captain Kirk, forced to tamp down the demands of their besotted CEOs to ‘get me some blockchain!'” [DC Velocity].
Retail: “The strategic implications of the CVS Health Corp. buyout of insurance giant Aetna Inc. may be even bigger than the $69 billion price tag. CVS and Aetna will try to remake the consumer-facing end of the health-care supply chain…, as they look to create an integrated enterprise that isn’t built around doctors” (!) [Wall Street Journal].
Retail: “Dollar General Corp. is a retail success story that hardly suggests broader prosperity in the consumer world. The discount seller is on a strong growth track, boosting sales at a steady clip and adding bunches of new stores…, expanding because rural America is struggling” [Wall Street Journal]. “With its convenient locations for frugal shoppers, it has become one of the most profitable retailers in the U.S., with 14,000 stores that yield more than double the profit of Macy’s Inc. on less revenue. It’s also become a lifeline for lower-income customers bypassed by other major chains, bringing in goods that are sold in small sizes tailored for tight budgets. The growth runs counter to broad trends in retail, including delivery-dependent online sales that don’t fit the company’s tight logistics budget. But Dollar General plans to open thousands of new stores, reasoning the persistent struggles in rural America will bring the business new markets.”
The Bezzle: “Student Loan Debt Is Now As Big as the U.S. Junk Market” [Bloomberg]. “The share of student loan debt that is securitized, meaning it’s backed by assets and known as asset-backed securities, is about $190 billion, according to Goldman Sachs. Of that, about $150 billion is linked to loans where the repayment of the principal is guaranteed by the U.S. government.” Absent levering, we’ll just, as it were, “collapse in place.”
The Bezzle: “Among the many mysteries at the heart of the cryptocurrency market are these: Does $814 million of a digital token known as tether really exist? And what is tether’s connection to Bitfinex, the world’s biggest bitcoin exchange?” [Bloomberg]. “The currency [“tether”], which started trading in 2015, is described as a stable alternative to bitcoin’s wild price swings. A restaurant owner who accepts bitcoin but fears its volatility could shift bitcoin into tether, which can be easier to do than exchanging bitcoin for dollars. Its price has stayed near $1 for most of its life because Tether, the company behind the digital token, says that every tether is backed by one U.S. dollar held in reserve. Since there’s $814 million of tether circulating, there should be $814 million parked in bank accounts somewhere. Not everyone believes there is.”
The Bezzle: “A Reuters examination, including a review of court records…, shows that across China, unqualified borrowers use fake documents to secure mortgages, while loans deceptively obtained for other purposes are funnelled into property. These frauds are often committed with the consent and encouragement of other parties to the transactions, including lending brokers, property agents, valuation companies and the banks themselves” [Reuters]. “And these alleged crimes are rarely punished. Neither Zhu nor Lei suffered any penalty for the fraud.”
The Fed: “Senate Banking Committee overwhelmingly backs Powell to lead Fed” [MarketWatch]. “Powell was backed by all of the panel’s Republicans and Democrats except for Sen. Elizabeth Warren, a Democrat from Massachusetts.” A “resistance” worthy of the name would resist at all points. “Sen. Sherrod Brown, the ranking Democrat on the banking panel, supported Powell but said he was disappointed President Donald Trump did not reappoint Fed Chairwoman Janet Yellen to a second four-year term.” “Disappointed” as opposed to, say, “terrified” or hysterical. Fine.
Five Horsemen: “Techs bounce at the open except for sick man Apple” [Hat tip, Jim Haygood].
Today’s Fear & Greed Index: 68 Greed (previous close: 64, Greed) [CNN]. One week ago: 64 (Greed). (0 is Extreme Fear; 100 is Extreme Greed. Last updated Dec 5 at 12:00pm.
“Among the coconut plantations and beaches of South India, a factory the size of 35 football fields is preparing to churn out billions of generic pills for HIV patients and flood the U.S. market with the low-cost copycat medicines” [Bloomberg]. “U.S. patents on key components for some important HIV therapies are poised to expire starting in December and Laurus Labs Ltd. — the Hyderabad, India-based company which owns the facility — is gearing up to cash in.”
Black Injustice Tipping Point
“Organizer Erricka Bridgeford talks about effort to stop Baltimore homicides” [Baltimore Beat]. “Bridgeford implores people not to be numb, to allow themselves to stop and feel the impact of each of the city’s murders and what the loss means for the city and for the family of the deceased. It’s part of a kind of spirituality that she says she’s been thinking about and building on for a while, but is just now able to really put into words.”
Dear Old Blighty
“How Momentum got Britain’s youth interested in politics” [London School of Economics]. “Jeremy Corbyn’s leadership election campaign in 2015 (and his re-election in 2016) involved three intertwined factors: mass mobilisations, grassroots support, and digital technologies. Notably, there was a database containing information (email addresses, telephone numbers, postcodes, etc) “collected during both of Corbyn’s leadership campaigns, through both Momentum and the official campaigns.” This political communication goldmine was owned by the director of Operations for Corbyn’s leadership campaign, Jon Lansman. He took it with him when he went on to form Momentum in October 2015 as a traditional socialist organisation independent from the Labour Party, but officially supportive of it and Jeremy Corbyn as its leader, thus filling the left-wing political vacuum vacated by New Labour. Momentum used the tactics of the ‘Jeremy for Leader’ campaign to generate support and claimed to have 100,000 online registered supporters by April 2016, 200,000 by January 2017. For paid up members, the number grew from 20,000 to 31,000 members between January and November 2017. Supporters and members can roughly be divided up along generational lines: the older, veteran, traditional Leftists who do not identify with New Labour; and the young, newly politicized movementists, some of whom were not even born when Tony Blair became Prime Minister in 1997.” I think that “paid-up members” part is important. DSA is a membership organization. The Democrats are not.
“The compelling case for working a lot less” [BBC]. What case is that? Not paying my bills?
“A Year of Tech Solidarity” [YCombinator]. Still germane.
“My son’s rag-tag appearance conveys just as clearly that I’m benefiting from my white, middle-class privilege as if I dressed him in a bonnet or a designer bomber jacket” [Quartzy].
“Say It Together: Top Incomes Are Being Driven By Capital” [People’s Policy Institute]. “[W}hen you decompose the top one percent’s income into labor and capital components, what you find is that, for the last 14 years, capital income is the sole driver of the income of the top one percent. In fact, labor incomes for the top one percent have actually declined over that period.”
News of the Wired
— Drew Furgiuele (@Pittfurg) December 2, 2017
* * *Readers, feel free to contact me at lambert [UNDERSCORE] strether [DOT] corrente [AT] yahoo [DOT] com, with (a) links, and even better (b) sources I should curate regularly, (c) how to send me a check if you are allergic to PayPal, and (d) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! If you want your handle to appear as a credit, please put it in the subject line. Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant (KH):
KH writes:”We’ve been traveling through the Four Corners area. I’ve found this stunning shrub in a couple of the national parks. Don’t know what it is but it’s a delicate beauty. Any ideas? Aloha!”
* * *Readers: Water Cooler is a standalone entity not covered by the NC fundraiser. So do feel free to use the dropdown and click the hat to make a contribution today or any day. Here is why: Regular positive feedback both makes me feel good and lets me know I’m on the right track with coverage. When I get no donations for five or ten days I get worried. More tangibly, a constant trickle of small donations helps me with expenses, and I factor that trickle in when setting fundraising goals. So if you see something you especially appreciate, do feel free to click the hat!