By Lambert Strether of Corrente.
Readers, I had a household event in the midst of posting, so I’ll add a smidge more in a bit. –lambert UPDATE 2:40PM All done!
“Yes, Trade Deficits Are Hurting American Manufacturing” [Industry Week]. “Perhaps the best argument in support of trade deficits comes from the Hoover Institute. Russ Roberts of the Institute summarizes his aggregate argument by saying, ‘by directing resources to where the economy is most competitive, it creates new opportunities and society-wide advances that improve life for everyone in unforeseen ways. Rather than protecting struggling industries, he says, policy should focus on giving people the skills to compete and flourish.’ The fact is that one of these struggling industries that he does not want to support is manufacturing. Roberts also makes it sound easy to give the losers of trade deficits the skills to compete. But …I agree that American manufacturing, more than any other sector in the economy, is hurt by trade deficits. It is important to point out that more than 70% of our current trade deficit of $566 billion (as of 2017) is in manufactured goods—not services. If we are going to make any progress to reduce the trade deficit, we must increase exports. About 70% exported goods are manufactured goods. We must increase our exports, and that can’t happen unless we can save and grow American manufacturing.” • And then on to… currency manipulation. What about industrial policy?
“U.S. Customs and Border Protection early this morning began collecting a 25 percent duty on an additional $16 billion worth of Chinese goods — including chemicals, industrial products, semiconductors and a range of consumer goods like electric scooters, e-cigarettes and selfie sticks….The latest escalation comes as a Chinese delegation led by Commerce Minister Wang Shouwen is in town for talks with a U.S. team led by Treasury Undersecretary for International Affairs David Malpass. The Treasury Department’s press office has ignored repeated requests for information on U.S. goals for the talks, which are the first since Commerce Secretary Wilbur Ross traveled to Beijing in early June” [Politico]. “So far, China has matched Trump’s tariffs on a dollar-for-dollar basis, with Chinese duties on $16 billion worth of U.S. goods also set to go into force today. That includes American-made cars, propane, paper, chemicals and other products.”
UPDATE “Joe Biden is best hope for Democratic Party in 2020” [Steve Israel, The Hill]. “When I chaired the Democratic Congressional Campaign Committee, I’d brief President Obama and Vice President Biden on House races. Obama would process the information in a studious manner, nodding as he leafed through my presentation deck. Biden would spread his knees and pitch forward, as if diving into the data. Then we’d go into his office and delve even deeper. He wanted to travel to House districts where he’d have the greatest impact. So we’d chart the path: Pennsylvania, Ohio, Michigan, Florida, Wisconsin and others. Those states had pools of once-blue, middle-class districts. Now those pools were frothing and rust-colored, the tide having shifted towards the Republicans. Biden innately connected with these communities. He could stem that tide.” • This is amazing chutzpath. The “path” “charted” by these guys led to the Democrats losing 1000 seats and all three branches of government! Please kill me now.
UPDATE “Think Elizabeth Warren And Bernie Sanders Are The Same? She Doesn’t.” [Buzzfeed]. “For those on the left, the difference between Warren and Sanders has less to do with policy or ideology. Really, they say, it’s a question about progressive power — about two vastly different theories of change. It’s ‘the preacher vs. the teacher,’ as one former Sanders adviser put it. Now, when Warren gets the question, she has her answer ready. ‘He’s a socialist,’ she’ll say, ‘and I believe in markets.'” • The triumph of hope over experience….
UPDATE “Sen. Elizabeth Warren Releases 10 Years of Her Tax Returns” [Time]. • She’s running. This also dings Sanders, who released one years’-worth.
74 days until Election Day. 74 days is a long time in politics.
“Could the 2018 Midterms Be the Year of the Young?” [Governing]. “One analysis that received wide media attention found that ‘registration rates for voters aged 18-29 have significantly increased in key battleground states over the last seven months.”‘…. Subsequent data, however, has cast some doubt on this analysis. In Florida, research by the University of Florida and the Associated Industries of Florida, found no dramatic increase in youth voter registration compared to the 2014 midterm cycle…. ‘,’ says [University of Florida political scientist Michael McDonald]. ‘Numerous studies find that voter registration activity skyrockets as elections near, when the registration activity is tied to an intention to vote. If we are going to see unusually high youth voter registration activity that will translate into votes, it will be then.'”
“House Update: 12 Ratings Changes” [Larry Sabato’s Crystal Ball]. “We suppose it’s possible that the threat of impeachment could rally Trump’s core supporters, but a bigger problem for Trump and the Republicans than a motivation problem with their core supporters is a persuasion problem with soft Republicans in the suburbs who don’t like the president much and probably aren’t going to dislike him less after seeing key figures close to him on the wrong side of the law. In other words, if one believes the Democrats are favored in the race for the House — and we do, although we don’t think the result is locked in concrete — then something in the political environment needs to change, in a positive way, for Republicans to regain the advantage. The Cohen/Manafort news was not that.” • Yep.
“Trump plans ambitious campaign travel ahead of midterms” [The Hill]. “The president is planning at least 40 days of campaign-related travel between Aug. 1 and Election Day — a whirlwind schedule that seeks to outpace the midterm campaigning of any president in recent history, administration officials said Tuesday…. Trump’s focus in the coming weeks will be on Senate races as he waits for the House map to come into clearer focus, officials said. But they cautioned that the president’s travel schedule was tentative and that he could quickly pivot to different races as needed… The president has already proven himself to be an adept fundraiser for Republicans. Administration officials said Tuesday that Trump has already helped raise $227 million for the Republican National Committee (RNC) in the 2018 cycle, as well as $175 million for Republicans running for reelection.” • At this point we remember that Trump defeated not one, but two party establishments in 2016.
UPDATE “The Down Side of Winning the White House” [Cook Political Report]. “Republicans are coming to terms with the reality that the 2018 midterms are shaping up to be a train wreck, a slow-moving and agonizing collision between what they have wanted—unified Republican government—and the inevitable consequence of having total responsibility and accountability for federal and state government. Midterm elections tend to be bad for the incumbent party, but when it holds all of the reins of power, they tend to be even worse. It is an exaggeration to say that Republicans would need a miracle to retain their House majority, but that is certainly closer to being true than suggesting that House control is a 50-50 proposition. Today, the most likely outcome in the House would be a Democratic gain of between 20 and 40 seats, with the chances of it being more than 40 greater than it being under 20. Put another way, the House odds are not a symmetrical bell curve, but rather a curve with a fat tail for Democrats—in other words, the downside risk for the GOP of an unmitigated disaster are greater than a not-as-bad-as-expected outcome.”
“Pelosi says she deserves to be House Speaker: ‘Nobody wants to sit across the table from me'” [CalMatters]. “Pelosi did her best to present her party as a high-minded, bipartisan-inclined, and pragmatic alternative to the status quo. She quoted President Ronald Reagan and spoke favorably of President George W. Bush. She promised to protect Medicare, Medicaid, and the Affordable Care Act while decrying the “unfortunate” federal tax law changes. And she vowed to restore an environment of comity on Capitol Hill should the Democrats win the House and should she become its leader…. [She] questioned the realism of moving to a national single-payer health insurance system, though she was careful not to dismiss the idea entirely. Earlier in the day, she said that impeaching the president should not be a political priority for the party.” • Nobody needs to sit across from her. She’s already sitting on their side!
SD Senate: “Personality and Party Clash as Senate’s Most Vulnerable Democrat Fights to Survive” [Roll Call]. “‘He’s going to be a factor. He’s popular in North Dakota,’ Heitkamp said of the president in an interview at Bismarck’s Amvets Club last week. Meeting with veterans, she touted the bipartisan banking deregulation bill she worked on, making sure to note that the president signed it. She was at Trump’s side when he signed it into law at the White House.'” • Attagirl! I’m sure your stellar work will be remembered the next time the banks crash the economy…
UPDATE CA-50: “CA-50: Hunter Indictment Moves Race from Solid to Lean Republican” [Cook Political Report]. “This military-heavy San Diego County seat is the most ruby red district in Southern California: it voted for President Trump 55 percent to 40 percent in 2016 and reelected Hunter with 64 percent. But Hunter received just 47 percent in June’s top-two primary, while two other Republicans combined for 15 percent…. [I]t could take weeks to determine how Hunter responds to the indictment and whether the indictment suddenly makes voters more inclined to vote for a Democrat.”
UPDATE CA-50: “Why We’re Not Changing the Rating in Duncan Hunter’s Seat, Yet” [Inside Elections]. “When New York Republican Chris Collins was indicted a couple weeks ago, we shifted New York’s 27th District from Solid Republican to Likely Republican. It was an acknowledgement that an indictment at least warrants a district be on the list of competitive races. But we’ve had California 50 rated as Likely Republican for most of the cycle, based on Hunter’s known legal problems…. So for now, we’re maintaining our Likely Republican rating, waiting for the situation to further develop and, most importantly, waiting for survey data to see how voters in the 50th District respond to the latest news.”
2016 Post Mortem
“Despite Comey Assurances, Vast Bulk of Weiner Laptop Emails Were Never Examined” [RealClearInvestigations]. “Comey later told Congress that ‘thanks to the wizardry of our technology,’ the FBI was able to eliminate the vast majority of messages as ‘duplicates’ of emails they’d previously seen. Tireless agents, he claimed, then worked ‘night after night after night’ to scrutinize the remaining material. But virtually none of his account was true, a growing body of evidence reveals. In fact, a technical glitch prevented FBI technicians from accurately comparing the new emails with the old emails.
New Cold War
1/ In a few minutes of airtime today, Michael Cohen attorney Lanny Davis has rejected a key Steele dossier claim, and, more significantly I think, the basis for all of the ceaseless, frenzied speculation that Cohen has something to offer Mueller on Trump-Russia collusion:
— Aaron Maté (@aaronjmate) August 23, 2018
So Cohen flips to Clinton’s fixed, and all we get is a damp squib?
“Cohen Hit With NY Subpoena Connected to Trump Probe” [Courthouse News]. “News of the subpoena comes two months after Underwood brought a $2.8 million lawsuit in Manhattan Supreme Court to dissolve the Donald J. Trump Foundation for violations of state and federal law. Underwood’s fiery 41-page petition condemned the foundation for lacking oversight and internal controls. ‘In the absence of a functioning board, Mr. Trump ran the foundation according to his whim, rather than the law,’ the petition says.”
Realignment and Legitimacy
UPDATE Fine word, legitimate:
It’s weird to live in a society in which launching an illegal $2 trillion war based on lies that kills 100s of thousands of people is seen as totally fine & not even an impediment to a high-profile pundit career, but possibly paying $100K hush money to a porn star is impeachable.
— David Sirota (@davidsirota) August 23, 2018
Iraq could be seen as a policy debacle, hence not impeachable. But Bush committed multiple felonies with his warrantless surveillance program, and should have been impeached for that.
“Trump’s War Against Blue States” [Bloomberg]. “The economic and cultural divide between red and blue states in America may be the Athens vs. Sparta for our times,” with the Blue States being, one presumes, Athens. But who won? Another case where it’s counterproductive to imagine that Trump, despite all the chaff and distraction and noise, doesn’t think strategically. Well worth a read for the bill of particulars.
“data for politics #14: Who is Trump’s Base?” [Data for Progress]. “If we define the base as a group making up a non-trivial share of the electorate that overwhelmingly prefers one party, it is fair to call white evangelicals Trump’s base. If we define the base purely by the size of the coalition, we might prefer instead white non-college voters or whites over 50, both of whom make up more than half of Trump’s voters. If we want to analyze specifically “Trump’s” base, or voters that gravitated toward Trump but might not have for a normal Republican candidate, traditional narratives about non-college whites are correct. However, perhaps surprisingly, Trump also converted some white evangelicals who had voted for Obama.” • Interesting and well worth a read, but it doesn’t distinguish between Trump’s base and Trump’s margin; I’m sticking to my story that working class voters who flipped from Obama gave Trump his margin, which, conveniently or no, this article does not address.
“It’s Too Late to Protect the 2018 Elections. But Here’s How the U.S. Can Prepare for 2020” [Alex Stamos, LawFare]. “For states’ autonomy to thrive, it is critical for every state to follow the lead of Colorado and a handful of others in building competent statewide election security teams that set strong standards for verifiable voting, perform security testing of local systems, and provide a rapid-reaction function in case of an attempted attack. The federal government could support the growth of these statewide functions with funding, intelligence and training, and by finding ways to harness the capabilities of private IT workers.” • At least as far as voting goes, it’s very hard to believe that it’s not possible to set up a system of hand-marked paper ballots, hand-counted in public by 2020. This Stamos dude doesn’t mention that, so he fails my litmus test for integrity when discussing voting systems. More strongly, he’s a corporate shill and an IT grifter, or, as Stoller puts it, a “tobacco scientist” talking about tobacco. And looky here—
“DNC says suspected hack attempt turned out to be a security test” [WaPo]. “What the Democratic National Committee this week thought was an attempted hack of its valuable voter file turned out to be a security test organized by a state party, unbeknown to the national organization.” • Cited above by Stamos in his lead.
I certainly hope that Stamos’ budget for “rapid response” includes improved gaslighting infrastructure:
It's okay, just because @nytimes ran a fake news story on Russian hacking doesn't mean they'll stop relying on the proverbial "two anonymous officials" + a for-profit cybersecurity contractor for their next one pic.twitter.com/Zrh2l7BI5x
— Mark Ames (@MarkAmesExiled) August 23, 2018
“L.A. County gets state approval of new vote-counting system using open source software” [Los Angeles Times]. “The ballot-counting equipment is part of a broader redesign of Los Angeles County’s voting system, which will include new equipment while relying on a traditional paper ballot. The county’s existing system, portions of which are now decades old, has been targeted for replacement for several years.” • I take the strong view that there should be nothing digital anywhere in the process. Are really to believe that scanners won’t be hacked?
Purchasing Managers Index Composite (Flash), August 2018: “Reflecting moderation in employment and new orders, growth slowed more sharply than expected” [Econoday]. “A benefit of the slowing is an easing in cost pressures to the least severe rates so far this year. Despite the easing, the samples continue to report rising prices for steel-related items along with rising wage pressures. And the service sample is reporting the fastest rise in selling prices in four years. Indications in these reports hit a peak in May and have been slowing since. Yet rates remain constructive for these samples.” And but: “Despite the slowdown, any number over 50 signifies expansion, and results above 55 [as this month] are considered exceptional” [MarketWatch].
Kansas City Fed Manufacturing Index, August 2018: “This morning’s manufacturing PMI as well as last week’s Philly Fed report both showed slowing in August, as does the Kansas City manufacturing index.” Below consensus [Econoday]. “Based on advance indications from small sample surveys like this report, August may prove to be relatively soft for the nation’s factory sector giving manufacturers some needed breathing room to expand capacity.” And: “Kansas City Fed manufacturing has been one of the more stable districts and their index is now in the lower range of values seen in the last 12 months. Note that the key internals remained in expansion” [Econintersect].
New Home Sales, July 2018: “The headline shows a decline but the message from the July new home sales report is nevertheless mostly positive” [Econoday]. “The overall year-on-year rate of growth is at 12.8 percent which if sustained would point to a badly needed uplift for the housing sector in general going into the second-half of what has been a very subdued 2018.” And: “This month the backward revisions were upward. Because of weather and other factors, the rolling averages are the way to view this series. This month was better than last month – and the rolling averages improved” [Econintersect].
FHFA House Price Index, June 2018: “Indications on home prices continue to moderate” [as they had better!] [Econoday]. “Levels in this report remain quite favorable though the recent direction is not, perhaps reflecting less favorable mortgage rates and a general lack of interest in home ownership that has been evident since the subprime housing meltdown 10 years ago. Yesterday’s existing home sales report likewise showed moderation in price data.”
Jobless Claims, week of August 18, 2018: Fell [Econoday]. “[A]ll readings in this report consistent with strong demand for labor.” And: “This marks 176 consecutive weeks of initial claims below 300,000, the longest streak since 1970” [Econintersect].
Coincident Index: “July 2018 Philly Fed Coincident Index Year-over-Year Rate of Growth Improved” [Econintersect]. “The year-over-year rate of growth relative to the previous month of the US Coincident Index marginally improved…
UPDATE Retail: “Another Sears Holdings Spinoff Dies” [Wolf Street]. “[Orchard Supply Hardware’s] 98 stores in California, Oregon, and Florida will be closed, along with its distribution center in Tracy, California. Its 4,000 employees will be let go. Liquidation sales start Thursday.”
Shipping: “Smart bill of lading makes first successful trial” [Splash 247]. “The first ever blockchain-based CargoX Smart Bill of Lading has successfully completed its historic mission during a trial shipment from China to Europe with the tech company claiming in a release: ‘The logistics documentation revolution can now be unleashed!’… ‘We are extremely happy to be able to confirm that all went well with the new blockchain-based electronic bill of lading, as this will give us the opportunity to lower the cost of importing goods significantly. We import hundreds of teu from the Far East, and we are always trying hard to optimize our supply chain. If it raises the safety and reliability of the document transfer, that is an added value for us as well,’ commented Miloš Košir, a logistics manager at [clothing firm] Metro.”
Supply Chain: “The Rise of Amazon Logistics” [Transport Topics]. “What about how Amazon’s logistics plans play out in plain view … on its career site?… Diving into the senior positions a little further, it became clear exactly where the company is moving — cross-border trade and international logistics, while improving courier delivery…. The lion’s share of the 14 jobs requiring more than 10 years of experience are either technology related, like a principal machine learning scientist, or long-distance freight, whether it’s a European Union supply chain program manager, a senior intermodal manager or a principal for Amazon Global Logistics’ cross-border unit… There are also four non-assistant logistics roles in Amazon’s secretive Lab126, responsible for Amazon’s in-house devices such as Kindle and Echo. These positions are focused on operational roles for rapid manufacturing, inventive packaging and fulfillment. … Only three logistics job descriptions explicitly mention ocean freight, backed by 10 research and development jobs related to inbound ocean freight, as well as a customer service role. However, the three ocean freight roles are all pivotal and have all been posted in the last couple of months.” • Well worth a read for Amazon buffs.
Supply Chain: “A new supply chain is forming in a dusty corner of California on the edge of the desert. Specialized companies are setting up there and in other locations to bring together marijuana growers and processors under unified distribution operation” [Wall Street Journal]. “The services run from testing and tax payments to transportation, and they’re the result of California legalization of recreational marijuana use which comes along with strict state-wide and local rules that can make it tough to run a home-grown operation. The nascent distribution networks are being strung together as legalization is gaining traction across U.S. states and in Canada, and as cannabis-infused products are moving into mainstream consumer-goods distribution channels. Forecasters say a legal U.S. cannabis market could be worth more than $10 billion this year.” • In other words, the Calfifornia Democrats corporatized the cannabis business. I’m shocked.
UPDATE Transportation: “Electric Trucks Facing Long Road to Unseat Diesel Engines” [Bloomberg]. “While electric trucks will curb pollution, it’s not clear the industry is ready to switch, said [said Jon Mills, a spokesman for engine maker Cummins]. For starters, long-haul truckers would need a place to recharge during cross-country trips. Plus, batteries are heavy, and adding weight cuts into the cargo truckers are paid to haul….. There are other issues that concern truckers. A 500-mile range is fine for shorter delivery routes but diesel trucks typically go much further before refueling, sometimes more than 2,000 miles. Also, some drivers get paid by the mile, and wouldn’t make money while batteries recharge.”
Mr. Market: “Here’s why a rising Trump impeachment threat isn’t rattling stock-market investors” [MarketWatch]. “Why is the market so resilient? J.P. Gravitt, chief executive of research firm Market Realist, said the answer is two-fold. For the market to selloff on impeachment fears, investors would ‘have to suppose that Trump is responsible for everything good in the market to suppose that the opposite would be true, and second we would have to know with a capital K that he will be gone and when any changes would be made to reverse his policies,’ he said.” • So that’s the case that Trump needs to make to wealthy suburbanites…
UPDATE The Bezzle: “Details Of Uber Harassment Settlement Released” [NPR]. “Fifty-six people are set to receive an average payout of nearly $34,000 because they filed specific claims of ‘incidents of discrimination, harassment, and/or hostile work environment and connecting their experiences to their race, national origin or gender,’ court documents state…. Fifty-six people are set to receive an average payout of nearly $34,000 because they filed specific claims of ‘incidents of discrimination, harassment, and/or hostile work environment and connecting their experiences to their race, national origin or gender,’ court documents state.”
“California lawmakers pass bill to erase old cannabis convictions” [CBC]. “The state DOJ estimates that almost 220,000 cases are eligible for erasure or reduction. The DOJ has until July 1, 2019, to compile the list of eligible cases and forward it to the appropriate district attorney’s office.” • These are the “innovators” and “disruptors” who made the cannabis market. Sadly, the market now having corporatizes, it’s unlikely they’ll be rewarded with the fruits of their labor.
“How New York Taxi Workers Took On Uber and Won” [Labor Notes]. “‘The overwhelming majority of Uber, Lyft, and app-based for-hire vehicle drivers are immigrants, and two-thirds of them are driving full-time, but 85 percent don’t earn a living wage,’ said New York City Councilmember Brad Lander in a hearing. ‘Forty percent of them have incomes low enough to qualify for Medicaid.’ The 500 percent growth in cars is what has made that happen.'” • Lots of good detail on the taxi business in New York.
UPDATE “Entrepreneurs, Chance, and the Deterministic Concentration of Wealth” [PLOS One]. From 2011, still germane. From the abstract: “We present an intentionally simplified individual-based model of wealth generation among entrepreneurs to assess the role of chance and determinism in the distribution of wealth. We demonstrate that chance alone, combined with the deterministic effects of compounding returns, can lead to unlimited concentration of wealth, such that the percentage of all wealth owned by a few entrepreneurs eventually approaches 100%. Specifically, concentration of wealth results when the rate of return on investment varies by entrepreneur and by time. This result is robust to inclusion of realities such as differing skill among entrepreneurs. The most likely overall growth rate of the economy decreases as businesses become less diverse, suggesting that high concentrations of wealth may adversely affect a country’s economic growth. We show that a tax on large inherited fortunes, applied to a small portion of the most fortunate in the population, can efficiently arrest the concentration of wealth at intermediate levels.” • Hmm….
News of The Wired
“DNA shows girl had one Neanderthal, one Denisovan parent” [Ars Technica (CL)]. “Running Denisova 11 through an analysis of these differences showed she was a nearly even mix. Instead of being mostly Neanderthal, as you would expect from the mitochondrial DNA, only 39 percent of the DNA fragments were clearly Neanderthal. Another 42 percent, by contrast, were Denisovan, meaning she was nearly an even mix of the two groups of archaic humans.”
“10 Crazy Things You Didn’t Know About Bees” [Family Handyman]. “[Bees are] mighty mathematicians, capable of solving what mathematicians call the “traveling salesman problem,” that even stumps some computers. The traveling salesman problem asks the following question: “Given a list of cities and the distances between each pair of cities, what is the shortest possible route that visits each city and returns to the origin city?” Researchers at Royal Holloway University in London found that bumblebees fly the shortest route possible between flowers, making them the only animals known to able to solve the problem.” • Animals including homo sapiens. If we haven’t figured it out, why not just ask the bees?
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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 place it at the start of your mail in parentheses: (thus). Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant (PD):
PD writes: “A tree grows in Brooklyn’s botanical garden.” Relatable.
Readers, thanks for reducing my angst!
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