The winners and losers of the Mueller revelations

As the information trickles out that the Mueller report probably will not end the Trump administration, it is worth thinking about how the broader landscape has changed, and who might be the winners and losers.

Politically, the biggest loser is probably Joe Biden.  The belief that he can run as the “safest,” most vetted Democrat against an ailing, politically destroyed Trump all of a sudden seems less relevant.  It now seems more important that Biden has run for president several times before, and never done extremely well, in part because he has not been an entirely convincing campaigner.  He’s never come close to winning the nomination.  He is a candidate of the past, for better or worse, but the dominant mood may not be one of restoration.  The Mueller report makes it clear that we really are in a post-Obama era, and that even Trump critics need to be thinking about what comes next rather than looking to the past.

Which candidates then are helped the most?  Most likely that would be the dynamic or potentially dynamic, relatively centrist Democrats, and that includes Beto O’Rourke, Pete Buttigieg (dynamic in a Mister Rogers sort of way), and Kamala Harris.  I don’t see the candidates further to the left getting a boost from this development.  Many Democrats might have been tempted to think: “Trump is so sure to lose, this is our chance to get a real radical in.”  That now seems like a less convincing chain of reasoning.

There is another reason why Beto and Buttigieg might benefit, and that has to do with the risks from not so securely vetted candidates.  It now seems they can survive in office, even if they partially screw up, as long as they don’t commit too many obviously treasonous crimes.

On the Congressional side, Nancy Pelosi looks wise for having talked down impeachment fervor in advance.  Her political capital ought to go up and it probably will.

Many Democratic Congresspeople are better off too.  Had the report levied stronger charges against Trump, they would have faced pressures from their base to impeach, even though impeachment might not have played well with independent and centrist voters.  It is now likely those charges have been defused.  Policy wonks may come back into fashion again, at least relative to where things stood a month or two ago.

Within the Republican Party, the Never Trumpers lost further ground, and in any case the momentum has been turning against them.  Mike Pence has kept whatever political future he had, and he will not seem unacceptable as a president, due to moral taint, if say Trump later has to step down because of illness.

The media comes up as one of the biggest losers.  While Matt Taibbi’s recent critical account is exaggerated, the mainstream media did talk up the Russia collusion story for two years plus, and now it seems overdone.  After the media botched the “Hillary’s emails” story, there was plenty of talk of “never again.”  It now seems that all along a new false set of stories was being created, albeit in a different direction.  That will be perceived as a significant loss of media credibility, even if you think there is a more finely grained exculpatory story involving accountability some highly suspicious circumstances.

The bigger negative effect may be on media profitability.  Trump- and Russia-related stories often have done very well for getting clicks, and indeed the dramatic stakes with those issues have been very, very high.  But now it is easy to see the American public losing a lot of its interest in this line of inquiry.  The line of “Trump is still corrupt and New York state now will get at him,” while quite possibly correct, isn’t nearly as big of a draw.

Among intellectuals, Glen Greenwald has been insisting throughout that the Russia collusion story was phony.  Whether or not his extreme skepticism was entirely correct, he is due to rise in status.  Ross Douthat of The New York Times also had been suggesting that the Russia collusion angle may not pan out and some of his columns now seem pretty wise.  John Brennan loses big time.

Oh, and another beneficiary is Steve Moore, Trump’s most recent nominee to the Federal Reserve Board.  He has come in for a great deal of critical commentary, but at this point Republican Senators are less likely to cross a jubilant, resurgent Trump on the matter of a single nomination, and not one very much in the public eye.

The biggest winner of course is the United States of America.  It seems, after all, that we did not have a president, or even presidential staff, who colluded with the Russians.  Maybe you wanted Trump to go down on this one, but that is most of all big reason to celebrate.

Sunday assorted links

The economic ecology of Jews as a rural service minority

The five million Jews who lived in the Pale of Settlement at the turn of the century were overwhelmingly over-represented in towns and in cities. They specialized in seemingly urban occupations, were relatively literate, and were almost absent in agriculture. This pattern persisted overseas where one third of them would eventually immigrate. Hence, Jews were typically characterized as an urban minority. I argue that the opposite was true. The economic ecology of the Jews, the patterns of choices of occupation and location, are described in a model in which Jews were countryside workers with a comparative advantage in rural commerce, complementing agricultural workers, and without comparative advantage in denser urban settings. Using data from the 1897 census, I show that the cross-sectional patterns across districts and localities were consistent with all the predictions of this model. When the share of Jews in the population grew, Jews spilled across two margins—occupational, as manufacturing workers, and geographic, as rural frontier men. Non-Jews were imperfect substitute for Jews, rendering the latter indispensable to the countryside economy. No evidence of urban advantage is evident in the data. Turn of the century Pale of Settlement Jews ought to be understood as rural workers, in and of the countryside. In this light, the patterns exhibited in the US after immigration appear as a sharp break from, rather than a continuation of, old country economic tradition.

That is the abstract of a new paper by Yannay Spitzer.  For the pointer I thank Ilya Novak.

What do concert audiences really want?

Audiences only really like two parts of a show — the beginning and the end.  You should prolong the former by rolling directly through your first three numbers without pausing.  Then make sure you end suddenly and unexpectedly.  Audiences rewards who stop early and punish those who stay late…

Finally, there’s nothing an audience enjoys more than hearing something familiar.  If you think your songwriting and all-round musical excellence are enough to entertain a bunch of strangers for an hour with songs they have never heard before, bully for you.  The Beatles didn’t, but what the hell do they know?

That is from the entertaining and insightful David Hepworth book Nothing is Real: The Beatles Were Underrated and Other Sweeping Statements About Pop.  He lists the following as the ten best blues songs ever:

Memphis Jug Band: K.C. Moan

B.B. King: You Upset me Baby

Blind Willie Johnson: Dark Was the Night

Mississippi Fred McDowell: Shake ‘Em On Down

Lightnin’ Slim: Rooster Blues

Muddy Waters: Too Young to Know

Elmore James: I Can’t Hold Out

Otis Rush: All Your Love

Richard ‘Rabbit’ Brown: James Alley Blues

Blind Blake: Too Tight

By the way, Paul and the Beatles really did record both “I’m Down” and “Yesterday” in the same day.

Ross Douthat on some reasons for the electoral college

Is there a case for a system that sometimes produces undemocratic outcomes? I think so, on two grounds. First, it creates incentives for political parties and candidates to seek supermajorities rather than just playing for 50.1 percent, because the latter play is a losing one more often than in a popular-vote presidential system.

Second, it creates incentives for political parties to try to break regional blocs controlled by the opposition, rather than just maximizing turnout in their own areas, because you win the presidency consistently only as a party of multiple regions and you can crack a rival party’s narrow majority by flipping a few states.

According to this — admittedly contrarian — theory, the fact that the Electoral College produces chaotic or undemocratic outcomes in moments of ideological or regional polarization is actually a helpful thing, insofar as it drives politicians and political hacks (by nature not the most creative types) to think bigger than regional blocs and 51 percent majorities.

That is from the NYT, he also considers some arguments against.

Saturday assorted links

Missing markets in everything?

Or do the offer curves simply not intersect?:

Just over half of Americans between the ages of 18 and 34 — 51 percent of them — said they do not have a steady romantic partner, according to data from the General Social Survey released this week. That 2018 figure is up significantly from 33 percent in 2004 — the lowest figure since the question was first asked in 1986 — and up slightly from 45 percent in 2016.

Here is the story, via the excellent Kevin Lewis.

How bad would a hard Brexit really be?

This account has some gloomy rhetoric, but doesn’t drum up such an awful scenario, for instance:

Among the little-noticed impacts: U.K. citizens and businesses will no longer be able to register internet sites using the .eu domain, and any U.K. entities that currently have such sites will not be able to renew them.

As mentioned, no doubt British truckers would be badly hurt, but what else?  This sounds correct to me:

Custom delays could create food shortages. The U.K. is vulnerable because an extreme heat wave and summer drought caused by global warming have already reduced food output.

Tariffs would be reimposed. They are as high as 74 percent for tobacco, 22 percent for orange juice, and 10 percent for automobiles. That would hurt exporters. Some of that pain would be offset by a weaker pound.

Tariffs would increase prices of imports into the U.K. One-third of its food comes from the EU. Higher import prices would create inflation and lower the standard of living for U.K. residents.

Is this the biggest danger?:

Health Secretary Matt Hancock has warned medical drug companies to expect six months of “significantly reduced access” to the main trade routes between Britain and Continental Europe if there is a no-deal Brexit.

This one seems exaggerated:

“Bodies may remain uncollected and children might miss exams due to gridlocked roads in the event of a no-deal Brexit”, the report said.

So people, what’s the deal?  Put aside the longer and medium-term effects on gdp and the like, what are the greatest short-run dangers of a hard Brexit in the weeks to come?  Or is it a big, overstated worry, the new Y2K?

The Hayek auction results are very impressive

You will find them here, for instance Hayek’s copy of Wealth of Nations went for almost 200k, it was estimated in the 4k to 6k range.

“Desktop ephemera and personal effects” were estimated at 200-300 British pounds, went for 87,500 British pounds.  Crazy!  Many of the items went for 10x or 20x their original estimates.

Perhaps Hayek is back in fashion again, if only with the wealthy.

For the pointer I thank Lotta Moberg.

Addendum: Here is BC from the comments section:

So, the central planners couldn’t accurately estimate the values of Hayek’s personal effects because the necessary information was distributed among all the auction participants?

The culture that is Alexandria, VA

A proposal to open a halal butchery facility in Alexandria hit a snag Saturday after some local business owners and dog owners objected. DC Poultry Market wants to open a facility that would sell fresh, humanely killed chickens on Colvin Street in a mostly industrial area of Alexandria between Duke Street and railroad tracks. There are no residential properties in the immediate area, but pet businesses abound: Pinnacle Pet Spa & More, Frolick Dogs, Dogtopia, and the Wholistic Hound Academy.

Therein lay a problem. Though city staff and Alexandria’s planning commission recommended approving DC Poultry Market’s application, dog  lovers showed up to the Alexandria City Council’s March 16 meeting to object on olfactory grounds (“My dog can smell when there’s a cookie down the block,” one resident said) and on proximity to poultricide (“Knowing that my dogs may be walked by a business that holds chickens in a windowless room before their throats are slit while fully conscious does not make me feel that my dogs are in a safe environment,” another said).

Here is the full story, via Bruce A.  Few seem to be complaining about the chickens.

Friday assorted links

Sentences to ponder

Oregon lawmakers are considering raising their annual pay by nearly $20,000, a move the sponsors say will attract more diverse candidates to the statehouse.

“We’re a diverse state, we need a diverse legislature,” Senate Majority Leader Ginny Burdick, one of the legislators leading the effort, told Oregon Public Broadcasting. “Because of the low pay, we are automatically screening out people who really should be represented here.”

That may sound cynical, but in fact the case for doing this is not crazy, and in general the U.S. underpays many (not all!) of its public sector employees:

The move comes only a few weeks after a 28 percent legislative pay raise went into effect. Lawmakers were not behind that raise, and the increase was tied to collective bargaining agreements that affected nearly 40,000 state employees.

Legislators now make $31,200, plus an extra $149 a day when the Legislature is in session.

Here is the full story, with further detail of interest, and for the pointer I thank Mark West.

What is wrong with social justice warriors?

Curious if you’ve read this (has a PDF link):
http://libjournal.uncg.edu/ijcp/article/view/249

Is this paper bad? If it is bad, what is bad about it? How would you describe “what is bad about it” in a way that would connect to a college freshman who finds his/her economics and critical race theory classes to be equally interesting and deserving of further study? This extends to broader questions about “what precisely is undesirable about the state of social-justice-oriented academic study?” I have seen a lot of backhanded stuff from you on this topic, but not a centrally articulated, earnest answer.

That is from my email, and I would broaden the question to be about social justice warriors more generally.  Most of all, I would say I am all for social justice warriors!  Properly construed, that is.  But two points must be made:

1. Many of the people who are called social justice warriors I would not put in charge of a candy shop, much less trust them to lead the next jihad.

2. Many social justice warriors seem more concerned with tearing down, blacklisting, and deplatforming others, or even just whining about them, rather than working hard to actually boost social justice, whatever you might take that to mean.  Most of that struggle requires building things in a positive way, I am sorry to say.

That all said, do not waste too much of your own energies countering the not-so-helpful class of social justice warriors.  It is not worth it.  Perhaps someone needs to play such a role, but surely those neuterers are not, or at least should not be, the most talented amongst us.

No matter what your exact view of the world, or what kind of ornery pessimist or determinist or conservative or even reactionary you may be, you should want to be working toward some kind of emancipation in the world.  No, I am not saying there always is a clear “emancipatory” side of a debate, or that most issues are “us vs. them.”  Rather, if you are not sure you are doing the right thing, ask a simple question: am I building something?  Whether it be a structure, an institution, or simply a positive idea, proposal, or method.

The answer to that building question may not always be obvious, but it stands a pretty good chance of getting you to an even better question for your next round of inquiry.

The case for real estate as investment

That is the topic of my latest Bloomberg column, here is one bit:

The authors of the aforementioned study — Òscar Jordà, Moritz Schularick and Alan M. Taylor — have constructed a new database for the U.S. and 15 other advanced economies, ranging from 1870 through the present. Their striking finding is that housing returns are about equal to equity returns, and furthermore housing as an investment is significantly less risky than equities.

In their full sample, equities average a 6.7 percent return per annum, and housing 6.9 percent. For the U.S. alone, equities return 8.5 percent and housing 6.1 percent, the latter figure being lower but still quite respectable. The standard deviation of housing returns, one measure of risk, is less than half of that for equities, whether for the cross-country data or for the U.S. alone. Another measure of risk, the covariance of housing returns with private consumption levels, also shows real estate to be a safer investment than equities, again on average.

One obvious implication is that many people should consider investing more in housing. The authors show that the transaction costs of dealing in real estate probably do not erase the gains to be made from investing in real estate, at least for the typical homebuyer.

Furthermore, due to globalization, returns on equities are increasingly correlated across countries, which makes diversification harder to achieve. That is less true with real estate markets, which depend more on local conditions.

Do read the whole piece.

Work as a safe haven (*Big Business*)

Another surprising feature of these results is that the “work as a safe haven” effect was stronger for poorer people. We don’t know if that is true more generally across larger samples of people, but it points to a potentially neglected and egalitarian feature of life in the workplace. In contemporary American society, poorer individuals are more likely to have problems with divorce, spousal abuse, drug addiction in the family, children dropping out of school, and a variety of other fairly common social problems. These problems plague rich and poor alike, but they are more frequent in poorer families and, furthermore, very often wreak greater devastation on poorer families, which have fewer resources to cope with them. The workplace, however, is a partial equalizer here. At least in this sample, the poorer individuals found relatively greater solace in the workplace than did the richer individuals. The poorer individuals, of course, were paid less at work. But in terms of psychological stresses, a lot of corporations are creating “safe spaces” for individuals who otherwise are facing some pretty seriously bad situations.

That is from my forthcoming book Big Business: A Love Letter to an American Anti-Hero, due out April 9.