Politics is weird, business is normal

That is the theme of my latest Bloomberg column, here is the concluding bit:

As for 2017, I have been concluding that I should raise my relative opinion of business and lower my view of government. I’m still waiting for millennials — a relatively left-leaning generation — to reach a similar position.

Sometimes we forget about companies, in part because it is the business of business that we don’t notice it too often for the wrong things. And don’t forget that most of the weird stories about Trump or politics refer to a pretty small slice of our world, further amplified by social media.

In a war between the boring and the weird, don’t be surprised if the weird commands the most notice. But the normal and the boring have enormous powers of inertia on their side, not to mention human goodwill, and they are doing better than it might at first seem. So if you think America is falling apart, give the corporate world another look.

I believe that right now we are all too entranced by the “news of the weird.” On the side of business, there are problems with productivity growth and perhaps excess monopoly, but arguably those are about the most normal problems you could have.  I suspect the world of American business is these days a bit too normal, and could use a marginal dose of some more Elon Musk.

As you might expect, they came up with a good photo for the column.


Apparently you have far more faith in the capacity of Millennials to jettison some of their leftist positions, let alone gain an appreciation for the American business world, than I do.

It is my suspicion that it's only forced maturation (otherwise known as the passing of time) that weans young 'uns from their left leaning views. That is, they get jobs, mortgages and families and realize that sooner or later you can run out of other people's money. But I'd be pleased if you were right.

We have 3 in our family. One has an advanced degree and is a Director at 29. One is in the army in Kuwait. And one is still in college. The kids are alright.

Along with jobs, mortgages and families comes medical bills, it now cost $30,000 in medical bills to have ababy if you do not have insurance and the median wage is $40,000( less for the young). Unless wages increase or health care cost fall, this pretty much insures that the young will stay left.

First, it costs a lot more than $30k to raise a child, so the cost of delivering a child is not necessarily the cost to focus on, nor should that cost be compared against an annual wage unless one plans to have a child every year. Second, the left generally favors restrictions in supply through regulation and subsidies to demand, both of which lead to higher costs. Third, redistributionist policies do not lead to affordability *over the whole population*. The same redistributionist policies that may allow one to receive subsidies for one's own childbirths also ensure that one has to pay for *everyone else's* $30k childbirths. To truly reduce costs, one needs to undo the supply restrictions and/or demand subsidies. Recognizing these truths is part of the "maturation" that @Thor refers to.

To truly reduce costs, one needs to undo the supply restrictions and/or demand subsidies.

...and then, over time in the deregulated market, the largest, most successful vendors buy up/squeeze out smaller competitors, reducing competition and slowing innovation. Incumbent vendor priorities shift toward rent-seeking, minimizing competition, and creating captive markets. Incumbents then form cartels and, through various mechanisms, restrict supply and seek to maximize demand, both of which lead to higher costs.

Yeah, exactly. I mean, look what A&P did did to crush consumers when they dominated retail. Oh, wait I mean Sears. Wait, no I mean Walmart. Oh, shoot sorry - I mean Amazon. Obviously incumbents always win.

CntFenring: Yeah, exactly. I mean, look what A&P did did to crush consumers when they dominated retail. Oh, wait I mean Sears. Wait, no I mean Walmart. Oh, shoot sorry – I mean Amazon. Obviously incumbents always win.

...and with each shift you describe, each retail hegemon more thoroughly dominated the market than the previous one.

and with each shift you describe, each retail hegemon more thoroughly dominated the market than the previous one.

And you have the financial statements of 1928 at your fingertips?

As we speak, WalMart's revenue accounts for 28% of retail sales and Amazon's for 7% of retail sales in this country. Gross profits of each account for 11% and 4.3% of value-added in retail sales in this country. That's not what 'hegemon' means.

"...it now cost $30,000 in medical bills to have a baby if you do not have insurance"

That's not even close to true. I think it's pretty fair to discount your opinion pretty heavily since it's clear that you don't have good grasp on reality and you don't bother to double check your opinions. It's trivially easy today to look up basic facts. Is saving 1 minute of your time worth being an ignorant person?

"Castlight's data shows that the average national cost for a routine vaginal delivery is $8,775. The national average for c-sections is $11,525, according to the report, which defined price as what an employer-sponsored health plan paid for the delivery plus what the covered person paid out-of-pocket."

So, the total price without insurance is going to run between $9-11.5K.

For comparison, the average new vehicle in the US sells for $33.5K.

I checked on internet and found your numbers. They did not include prenatal care or newborn care and were from almost a decade ago. I used $30,000 because that was what my granddaughter's baby cost. However she lives in CA which may be higher than national average.

"I checked on internet and found your numbers. They did not include prenatal care or newborn care and were from almost a decade ago. "

The numbers are from 2016.

Source: http://www.cnbc.com/2016/06/30/costs-of-delivering-babies-vary-widely-in-us-california-cities-most-expensive.html

" I used $30,000 because that was what my granddaughter’s baby cost. However she lives in CA which may be higher than national average."

Yes, parts of California are insanely high.

"Castlight Health's home city of San Francisco had the highest observed price for a routine vaginal delivery, a whopping $28,541. "

"The highest average prices for vaginal deliveries likewise were in California, in Sacramento, where the average was $15,420. San Francisco's average was a close second, at $15,204.

Those eye-popping averages compare to an average price of $8,857 for vaginal deliveries in Charlotte, North Carolina, which holds 16th place for U.S. cities for its price for that type of delivery.

The least expensive city for routine vaginal deliveries was Kansas City, Missouri, where the average price was $6,075."

So, it's really expensive to live in California. Which is why the state now has the highest PPP poverty rate in the country. If you are struggling to live in California, that's a hint. Leave the state and move to somewhere more affordable.

Yeah once people have bills and more debt piling up and stagnant, crappy wages and precarious "careers" THEN they'll really be happy to embrace big business. I think you're in for a big disappointment.

How to solve the "millennial" issue - massive expansion of house building. Housing starts are too low, about half compared with the boom last decade, and population has grown since then, https://tradingeconomics.com/united-states/housing-starts If you get married and buy a house and have kids you automatically become a conservative. What's stopping them for forming households is that they are not able to buy houses near to high growth in work areas. So pass a national house building bill, with the focus on the 10 major cities in the North East US. This would create a corporation with the right to buy land by eminent domain to create new townships, with the land being sold off ready for building in large plots. The corporation would be required to finance infrastructure additions, including public transport. Houses should be single family homes. Target at least 1 million houses per year to get back above the boom peak. Prioritise young families with children via a lottery. Finance the mortgages with State money, then sell them off directly.

Nimby's will cry, but conservatives should prefer this scenario to one where the millennials become permanent big government supporters.

No one is being forced to stay in the NE. It unfortunately comes across as I am entitled to live in the expensive NE, and I want a national program ( where's the money going to come from to subsidize?) to make that happen.

Possibly loosening up regulations would be a better start than jumping in to subsidize me immediately.

It probably takes $20 to 50K in materials to build a basic livable dwelling (600 to 1200 sqft), cinder blocks as walls/structural support, painted plywood as flooring, contractor grade windows etc.. If millennials could stop whining, and do the construction themselves, there would be no need to get deeply into debt. It is city councils with ripoff mafia fees, and nepotist cost structure and regulations against basic safe & dry dwellings that makes housing un-affordable.

If the right of association in the constitution were actually protected, anybody could start a township wherever land is cheap, and avoid debt slavery, and only allow new members if the old members agree.

I don't understand the impulse to steal the land by eminent domain.

"It is city councils with ripoff mafia fees, and nepotist cost structure and regulations against basic safe & dry dwellings that makes housing un-affordable." - totally agree, plus the other regulations. But the nimbies are never going to let you override them. So the best you can do is the Robert Moses solution - don't ask the frogs about draining the swamp.

I've decided that it's quite natural for young people to be drawn to the idea of "from each according to ability, to each according to need", and almost creepy for someone to have never passed through such a phase.

And university is the place were such notions get a thorough working out. But is there anything new about this? I recall from Farrell's Studs Lonigan that The University of Chicago was considered a hotbed of atheists and communists by the south side working class Irish almost a century ago.

On top of this, the recent recession was a real body blow to cohorts who came of age in 2008-2010. Capitalism doesn't look so good from underneath sometimes.

For Tyler to confess waking up to the idea that there is more to life than the Beltway carnival in 2017, then immediately admonishing Millennials for being slow on the uptake here strikes me as poor form.

I graduated in 2008 and have since done exceedingly well on the income side but where my cohort really got screwed is asset prices. Interest rates are so low that housing is insanely expensive where I live and while I could easily get a bank to finance something I like, I really question a 2 million investment in real estate in the current market. Most of my similarly earning peers feel the same (as one puts it, it may not be sensible to buy a McLaren but sure as hell more affordable than housing) .

Pensions aside I have also resisted investing into financial markets as I was expecting a correction for years now (as did many around me). Instead the insanity - driven by boomer controlled central banks - got worse...

Yeah, I didn't have your personal travails particularly in mind.

Also, just maybe your understanding of financial markets, real estate, and central banking is a tad incomplete. Old people (Boomers) benefit from tight money, which is what we have gotten for years.

I get that you want to humble brag about being in iBanking or something related but that's not even remotely close to be being remotely close to the typical Person in this cohort so your entire comment is garbage.

Millennial here! My wife and I have jobs, a mortgage--not quite a family yet (but we're working on it). Its our money that subsidizes those "other people". As a millennial though, I see the consequences of globalization and automation better then the baby boomers. Through a number of fortunate breaks and connections I did pretty well. However, a number of my peers, though hard working, don't have a middle class lifestyle (they often live in their parents basements). They can't just exit high school and join get a great paying steel mill job like your generation. Those jobs are long gone--low paying retail is often their best option. Those that do go to college are saddled with debt as it costs orders of magnitude more then it did decades ago. Many industries, such as construction, while still a pretty good option, has had lower wage growth due to immigration. Personally, I support this (though I would never say so to my friends who are losing out on jobs). Immigrants benefit everyone a little at the expense of a few.

At any rate, I guess my point is, I don't think maturation has anything to do with it. Its the completely different viewpoints the generations have been exposed to

But they could pack up and go work in the oil industry for a couple of years and save their money.

On the other hand, what is the millenial mentality about working with one's hands? Manufacturing, mechanic, electrician, plumbing, etc.

Yes, some millennials can and do (did?) travel hundreds/thousands of miles to N. Dakota where they had no support network, housing was ludicrously expensive, and no guarantee the skills they were learning would continue to be valuable--as we are now seeing. I'm not suggesting no opportunities abound for millennials, just that compared to earlier generations they are limited.

As too working with hands--yes, I agree, that's still a relatively good opportunity, and we should be encouraging more of that. But wages are still being held down by immigrants and even these jobs are being replaced by automation. Relatively is a key word here. They look great compared to retail jobs, not compared to blue collar jobs of yesteryear

I would stick with the data. While you can identify individual or even groups of crazy leftists, they are far from power. They are not the Democratic voting coalition. There are not 65,844,954 people in ski masks in Berkeley, heckling science professors, or doubting that gender is rooted in biology.

We are still suffering asymmetrical polarization, which anecdotes aside, looks like this:


You couldn't be bothered to read the whole tweet??

Interesting. Until accessing it that way I did not see that the tweet was a thread. Interesting throughout.

But I am going to say that the first graph still captures our experience, especially what got us a Flight 93 Election.

Hillary was fundamentally a centrist, neoliberal, only seen as an extreme candidate because her opposition focused their funhouse mirror upon her. "Benghazi" mattered more than her ability to speak coherent paragraphs of policy.

The funhouse mirror is still in play, the defense for Trump, that the "counterfactual" is some idiot fantasy.

Strawman argument. No one disputes she was a neoliberal. The problem was that she was an open borders supporter and would have appointed another liberal to the supreme court, guaranteeing another generation of liberal rule.

Come on man, you even know how to run a search?

"But it is vital to understand what happens if Hillary Clinton wins the presidency. This country will be so far from what the Founders wanted, so different from what the #NeverTrumpers have always fought for, that it is almost impossible to see how America would recover from her — or any Democrat’s — victory."

Read more at: http://www.nationalreview.com/article/438590/hillary-clinton-socialism-transforming-america

The subsequent graphs in the tweet exactly contradict the point of your post.

And you wonder why your side loses.

I don't think Clinton's positions added up to her being a "centrist", except perhaps in foreign policy.

She supported expanding the ACA and a number of government programs, raising the minimum wage to $12, increasing union power, cap and trade, increased subsidies for green energy, appoint leftist judges, etc.

"No they didn't Al"

See how easy it is to make empty comments that have no content for actual discussion?

Dan, I'm sorry. There is a key difference here. One side spoke in pages and pages of real policy. The other side spoke in gibberish that has been contradicted on the same day and every day since.

Frickin' "$12 per year" health insurance.

You may argue that a $12 minimum wage is too high for you but it was more moderate then the $15 liberal demand. I mean sure, we did see Hillary pulled a bit left by Bernie in the primary, but you should probably admit that wasn't her natural temperament.

@ʕ•ᴥ•ʔ I wasn't arguing for Trump; I was merely arguing that Clinton was not a centrist.

I thought Trump was a disastrous candidate, and I didn't vote for anyone.

I got that Dan, but I saw Clinton as center-left pretending to be a bit more left because that was the primary's theme: a new but ultimately losing assault from the far left.

2020 is sure to replay that, but I hope a better packaged centrist prevails.

Anyone can make up numbers and call it data.

And after answers like that I can skip all your comments

I doubt they'll stop being leftist when they mature. Previous generations did, the sixties "youth rebels" are now Trump supporters. Why do I think the younger generation, my generation, isn't?

1. The displacement of Whites. The browner younger generation won't be getting any whiter as it aged

2. The Left has succeeded in portraying themselves as the winners in the status war amoung Whites. And much of this is due to the fact that the Right is made up of signallers like Tyler,(this article is a good example of his signalling) who, even as they know the Left is wrong, seek its approval for psychlogical, economic, or i-need-to-get-laid-tonight reasons, and do so by signaling that they buy into its cultural narrative. Its he younger generations are the most keyed into this status game. For older people, it's still 1980, still a status war between hippies and squares. As The millennials age, it will be the current year for a long time.

So get ready for more Leftism. Get ready for America to relearn the lessons it had to, in the decades after the 1960s, about socialism*, the perverse incentives of welfare, and crime.

*I mean the Sanders kind, not the so-called socialism of Obamacare.

You do deserve some credit for seeing the difference between Saunders' socialism and the kind Democrats have been accused of for decades.

I knew you weren't really going to ignore my comments, but I thought you'd wait more than 3 minutes to reply again. An empty threat if there ever was one.

I am a good-hearted person so I gave you a second chance

Income is almost certainly a more important factor infleucing one's economic views than age. The people who become wealthier as they age are more likely to become libertarian or conservative while the ones who struggle or stagnate tend to have liberal or at least centrist economic views.

This shouldn't be surprising and is analogous to the old saw about how a conservative is a liberal who has been mugged.

The correlation between income and voting behavior is less strong than the correlation between age and voting behavior. Look up the exit polls, this isn't 1980 anymore.

Links for the lazy?

I was talking about views on economic policy, not voting behavior. Most senior citizen Republicans (who are indeed more numerous than senior citizen Democrats) don't want their representatives to cut Medicare and Social Security.

Come up with a realistic, effective plan--not slogans, not tired libertarian boilerplate, not bullshit fairy tales, but an actual fucking plan--to dismantle casino economics, and make it possible for the bulk of the population to earn, not just win, their way to prosperity again, and the Millennials might give you a second look.

Crony capitalism has to die. Warmed over, Calvinist "bootstrap" mythology has to die. "Greed is good" has to die. The John Galt fantasy bullshit has to die.

Until then, there's nothing to discuss.

It's not surprising that we see a generation gap. The older cohort has benefited more than the younger cohort from the current system.

Boomers got free or nearly free college degrees and were able to work their way through school. Modern college graduates just can't do that anymore. Student loan debt increased by 300% between 2004 and 2015

Rent is sucking up a much greater % of incomes than in the past. That's fine for older people who either own their own homes or are landlords themselves. It sucks to be 29 years old and still living with roommates because you can't afford to move out on your own.

Health care costs more than ever and is eating much of the nominal wage gains that middle class people would be receiving.

So until the Right comes up with a viable solution to the big three economic quality of life issues that middle class young people are facing (Housing, Health Care and Higher Education), they're not going to win over a majority of this cohort.

The siren call of "free health care" is more appealing than "tax cuts" when you don't have much income to tax but you're paying $800/month in health insurance premiums.

What is fascinating about the current saga is how shallow and stupid our betters are. Across the board, both parties. A bunch of blithering idiots that would cut off the branch they are sitting on to spite someone.

As for business, the products need to get made, transported, sold, bought, delivered, installed, warranted. Payroll happens every two weeks. As the skilled generation retire, these useless but expensive young folks need to be moulded into productive workers in spite of themselves.

You don't think this sentiment has been said literally every generation since the dawn of history?

"They [Young People] have exalted notions, because they have not been humbled by life or learned its necessary limitations; moreover, their hopeful disposition makes them think themselves equal to great things -- and that means having exalted notions. They would always rather do noble deeds than useful ones: Their lives are regulated more by moral feeling than by reasoning -- all their mistakes are in the direction of doing things excessively and vehemently. They overdo everything -- they love too much, hate too much, and the same with everything else."

Bravo! And this: "They trust others readily, because they have not yet often been cheated. They are sanguine; nature warms their blood as though with excess of wine; and besides that, they have as yet met with few disappointments. Their lives are mainly spent not in memory but in expectation; for expectation refers to the future, memory to the past, and youth has a long future before it and a short past behind it: on the first day of one's life one has nothing at all to remember, and can only look forward. They are easily cheated, owing to the sanguine disposition just mentioned." ... and Progressives are such notorious cheaters.

Maybe that's because it's true of every generation. Since we're quoting people here: "Each new generation born is in effect an invasion of civilization by little barbarians, who must be civilized before it is too late." --Thomas Sowell

Yeah, though each generation of old people thinks the current young people are uniquely terrible.

Perhaps "All happy generations are alike; each unhappy generation is unhappy in its own way"

Yeah, though each generation of old people thinks the current young people are uniquely terrible.

Never seen that in meatworld. My grandparents' contemporaries and my parents' were baffled at some of the impulses and problems in living that their juniors were having, because those were outside their own experience and their origin was obscure. An element of that could be seen in mass entertainment narratives of the 1970s - button-down accomplished father and young adult son who cannot hold a job. Kinda passe now. The young-adult ****ups of 1975 are now grandparents (and have grandchildren with odd habits but not on balance substantively less capable).

What is fascinating about the current saga is how shallow and stupid our betters are. Across the board, both parties. A bunch of blithering idiots that would cut off the branch they are sitting on to spite someone.

I think the decay in the quality of human being we breed in this country largely occurred between the 1938 and 1958 birth cohorts. You've had some marginal deterioration since in culture (and some improvement in behavior - street crime is a much less popular past time than it was among my contemporaries). They're less verbally fluent, but more technologically adept. As for the federal elites, Robert Bork and Conrad Black have identified 1981 and 1993 as points of inflection, which would correspond to the 1926 and 1938 cohorts. Black's assessment - that the political elite has loused up every notable issue of the post-Cold-War era except for welfare reform - seems about right. You look at how deftly demobilization was handled in 1945-47 and how a qualified remobilization was handled in 1950-54 (my grandfather's contemporaries calling the shots and my father's providing the troops) and you look at the Washington clown car today and it all makes you wanna holler.

TL;DR version: conservatives gotta conservative. Also you kids get off my lawn.

The best thing about crotchety old people complaining about young people is the young people will be around when the old people are gone.

..."the young people will be around when the old people are gone."
Though by then they will be the old people complaining about the new young people.


Art Deco's statements are a mix of opinions and facts.I don't think the statements of the efficiency of mobilization and demobilization is BS. on the other hand "loused up, decayed" are simply normative statements of little value. Lastly, the statement about Washington clowns is quite apt, democrats controlling senate, congress and presidency was unable to create a health care bill that reduced costs, rather they made one that big pharma, hospitals and doctors were happy about, and republicans in the same situation are unable to undo the damage.

Since you seem to be into personal attacks rather than facts, as a 40+ year Portlander, did you wear a black ski mask and close the freeways last November?

LOL no

Art's the biggest personal attacker here. Also the most humorless poster.

I must agree about no humor!

Art Deco’s statements are a mix of opinions and facts.I don’t think the statements of the efficiency of mobilization and demobilization is BS. on the other hand “loused up, decayed” are simply normative statements of little value. Lastly, the statement about Washington clowns is quite apt, democrats controlling senate, congress and presidency was unable to create a health care bill that reduced costs, rather they made one that big pharma, hospitals and doctors were happy about, and republicans in the same situation are unable to undo the damage.

You mean my normative statements are of little value when you don't agree with them and "quite apt" when you do.

Since you seem to be into personal attacks rather than facts, as a 40+ year Portlander, did you wear a black ski mask and close the freeways last November?

I'm not 'attacking' any particular person. There's a vulgar Mercatus employee who posts under a number of sock-puppets. That rather damaged person is stalking me, not the other way around.

If you run down the social statistics, it's hard to argue that my parents' contemporaries do not sweep the board in every category when compared to their juniors. The way to argue that point, is to develop alternative value scales. I have a relation in the mental health trade who has tried that gambit. I don't think it's been working out for him or his in-laws, for the most part.

I've never been to Portland.

@Art Deco

I thought the cranky old man analogy of msgkings was a personal attack on you, and I asked him if he is one of the anarchists.

However, he might take that as a compliment.

I don't see you attacking anybody.

I take it more as amusement. If you think I'm an anarchist, who am I to stop you?

Art insults everyone, any time they disagree with him or he disagrees with them. Usually it's calling them some variation of stupid, immature, or evil.

Also, do you really think I'm from Portland? Interesting...

Don't forget, however, that politics is reaching peak weirdness when we got a businessman as president.

Correction. Not a businessman. A showman/conman. You wouldn't say that Kim Kardashian is a representative of business, would you? Yet she and Trump have a lot more in common than Trump has with Trump has with, say, Steve Jobs or Jack Welch.

This is a no true Scotsman argument. Trump is definitely a businessman (even if a rather atypical one).

So, Kardashian too? Don't forget: everyone makes money at what they do but you wouldn't call a bureaucrat a businessman just because he gets paid for it. Kardashian is in the business of building up and living on the celebrity brand of Kardashian. Trump, since he stopped being a real estate developer after his 1990s near-death experience, is basically in the same business.

I wouldn't call a bureaucrat a businessman, but I would call the chairman and president of a large business a businessman. Trump owns golf courses, hotels, and a still a lot of real estate, among other stuff, in a company worth at least a few billion dollars. How is that not business? His celebrity derives from a reputation developed in business, not the other way around.

His celebrity is the result of Trump's unwavering decades long devotion to becoming a celebrity.

@P_A, very true, but he used his business activities as the means to do that.

'but he used his business activities as the means to do that'

Sort of - but his devotion to dating models, his self PR (John Miller), and his flamboyance in the public sphere were not precisely due to his businesses. Of course, his businesses provided him the resources, not to mention the opportunity to plaster his name on every property he acquired. Celebrity was what Donald Trump sought, and business success (think failed casinos) was secondary. It can be argued either way of course, as the two are not really possible to split.

prior is spot on here

I agree up to a point but Trump is famous because he made huge amounts of money in the 80s. Kim Kardashian is famous because her dad was an O.J. attorney and she was in a sex tape. Trump's fame is at least attached to some early successes in the real estate world. By the early 90s, I agree he became more like a Kardashian, extending his 15 minutes of fame indefinitely by getting the media to talk about him on a regular basis.

Trump made huge amounts of money in the 80s, and then lost huge amounts of money in the 90s, on real estate. This is the nature of real estate, which is a highly volatile asset that is typically leveraged (and therefore even more volatile). This is why fortunes made in real estate must always be viewed with a great deal of skepticism. Luck plays a huge role, as do "relationships" (often corrupt) with local officials and bankers.

Trump's real estate wealth is related to a very small number of buildings (eg., the Trump Tower) which date back to the 1980s or 1970s. His second most valuable buildings are owned in a partnership with the Vornado REIT, where Trump is the passive partner and the buildings are managed by Vornado. I repeat my statement that Trump has not been a real estate developer of any size for a long time.

Trump's recent business ventures consist primarily of selling his brand to various enterprises -- buildings, universities, steaks, wine, etc., etc., etc. -- where Trump has basically no operational responsibility. In fact, when he has been sued in these businesses (which happens a fair amount), his usual defense has been that he is simply licencing his name and has no other responsibilities. This is why I say that Trump's business is primarily brand management, like Kim Kardashian, which is not something that I think qualifies him as a "businessman."

You are a dork. Simply managing the operations if a business valued at 3+ is amazingly difficult.

Saying that trump is not a businessman is the height of stupidity. Please never post again.

On mobile, that should have said 3+ billion.

The Trump Organization employs 22,000 people and has $9.5 bn in revenues, but it's not a business. The things you learn from partisan Democrats.

Where did you get those figures? Because I think that they are almost certainly (1) completely inflated bullshit and (2) to the extent that they bear any relationship to reality, they are consolidations of businesses where Trump has no operational role but where he has franchised his name. Trump routinely conflates his own business with businesses where he has franchised his name in order to exaggerate the scale of his business. Of course, when these businesses are sued -- which happens not infrequently -- he quickly retreats and claims no operational responsibility.

For your information, I am not a Democrat, partisan or otherwise. I have been a Libertarian, including running for the party, since I could vote, although I sometimes tactically vote for Republicans. I am also a very successful and now retired, at a very young age, real estate investor for various banks (Goldman Sachs, Deutsche Bank, Merrill Lynch) and finally my own company. I would venture to say that I know a bit more about the real estate business than you do. Just a bit. I can also tell you that, among real estate professionals, the Trump Organization is not held in high regard -- to put it mildly. Nor is it really considered to be a real estate business. Trump is no Sam Zell, Jon Grey or Steve Roth. As I said before, he's Kim Kardashian.

Boom goes the dynamite. Roger, prepare for a reply from Art that involves the phrases "in your addled mind", "childish fixation on the drug laws", and "I cannot comprehend it for you".


The source is PrivCo. Why not write them, send a resume and a cover letter, and explain to them how your leetle grrey cells (or, more likely, you rectum) are superior to their methods.

Dammit, I didn't see "rectum" coming...

Art Deco

I have clicked through the various links that you have provided and run into a rather sizable pay wall at PrivCo, a company that I do not know and for which I have no reason to accept (or reject) their figures without review. I do not -- unlike the partisan imbecile that you have accused me of being and which you likely are -- simply accept statistics that happen to coincide with my worldview. (As an aside, the former managing editor of Fortune (your first citation), Andy Serwer, is a former classmate of mine in Bowdoin College. Although he attended the tutorials I ran for the Economics Department, he was not my brightest pupil -- popular financial publications almost always choose on the basis of writing and not analytical skills. So, no, I do not consider Fortune to be a definite source.)

Based on my direct information about the real estate business and Trump's standing in it, I stand by my statements.

Yeah, let's talk about Trump. No one ever talks about Trump.

There is a crazy new episode to "West Wing - Apprentice(*)" every darn day.

I have to admit I didn't see this Sessions thing coming. As people have been noting for some time, this show has great writers. They never let things settle or become boring. This ain't CSPAN.

* - "The Americans" component tbd

Oh, by the way, in terms of this season's plot, I think Scaramucci is running a con, mostly on Trump. The reveal will be epic.

There is an amazingly simple path back to normalcy:

One guy resigns.

That's it. Done. His successor will not please everyone, but he will not be a chaos monkey on this epic and historic scale.

Trump's election suggests that there is a lot more systemic weirdness and dysfunction than we realized. It's not just one person.

Millions of voters elected Trump, something I never would have expected. I think this was the wrong choice. But they largely did so because they viewed the establishment as fundamentally broken, and I think they had a point about that. Neither Republicans nor Democrats have covered themselves with glory in the Trump era.

That said, his resignation would be a big step in the right direction.

The sad dynamic was that Bill Clinton and Obama could be centrist and neoliberal presidents .. but face this rising tide calling them socialists out to destroy America.

I mean it is striking, Bill Clinton's presidency was marked by more deregulation than socialism. But he became the devil all the same.

If the opposition was nuts, maybe the problem was of the opposition was nuts.

On the other hand, GWB greatly expanded the size and scope of government and was painted as a dangerous right wing extremist by opponents. As were McCain and Romney.

Maybe the problem with America is that we are all nuts.

I really don't know how you can extract the Iraq War experience from the George W Bush presidency.

There were tax cuts and some slow down on some services, but it is pure counterfactual how that would have been received without these wars we still can't quit.

dan1111: bingo

@ʕ•ᴥ•ʔ was the Iraq war an example of right wing extremism? More than 100 Democrats in Congress voted for it, including a majority of Democrats in the Senate.

There is an ongoing debate about to what extent Bush exaggerated the evidence on WMDs. But nobody disputes that current intelligence assessments concluded that Iraq probably had WMDs. And Congress also had access to a lot of intelligence reports and other information about the issue, so it's not like they only had administration statements to go on. Even if we accept the leftist narrative about Bush lying, this would have hardly made enough difference to convert an extreme right wing issue into a centrist issue with strong bipartisan support.

You can make a case that Bush really bungled the Iraq war and that proves his incompetence. But it is not credible to paint it as an example of extremism.

On the other hand, GWB greatly expanded the size and scope of government and was painted as a dangerous right wing extremist by opponents. As were McCain and Romney.

He did neither. There was some increase in military spending (which never exceeded as a share of gdp the Cold War trough), a prescription drug benefit, and a miscellany of small-ball discretionary initiatives. The scope of the federal government's activities changed not at all; you'd be hard put to find a notable activity of the federal government that was not being performed in 1970. The ratio of public expenditure to domestic product remained within the narrow band it has occupied since 1974. It was the Democratic Congresses and BO who attempted to reset that ratchet.

You can make a case that Bush really bungled the Iraq war and that proves his incompetence.

Actually 11 of Iraq's 18 provinces (which encompass 1/2 the country's population) are quiet and have been quiet for nearly a decade. It's the provinces which have a critical mass of Sunni Arabs that are wracked with violence. N.B. the surge in 2007-08 was a great success. The ISIS disaster in Iraq happened years after GWB had left office (and now ISIS is on the verge of being ejected from the country entirely).

That is really not the meaning I intended, Dan.

I am saying we don't know what the right left politics of the George W Bush era would have looked like, because it was confounded by this orthogonal war anti-war drama.

The George W Bush Legacy will always and correctly be about the Iraq and Afghanistan Wars. Economics in that era was window dressing.

Maybe without the wars the inattention to bubbles and the true risk of financial deregulation would be better discussed but I mean who even looks back at that now?

@art, yeah, I overstated my case on the issue of Bush and big government. But he was not really a limited government conservative.

As for Iraq, I think there is a wide range of credible interpretations, given the unknown counterfactuals, complex geopolitical situation, and shared responsibility for the status quo between Bush and Obama.

@ʕ•ᴥ•ʔ I was only arguing that Bush was a moderate, but painted as an extremist anyway. Whether he was good is another matter. A moderate can be a terrible president.

@art, yeah, I overstated my case on the issue of Bush and big government. But he was not really a limited government conservative.

The most plausible hypothesis re what makes the Bushes run was offered by Steve Sailer: "competitiveness'. ("If his father owned the biggest junkyard in town, he'd want to own the biggest junkyard in two towns"). I think he was less opportunistic (and less accomplished) than his father. He had commitments and perhaps dispositions, but not convictions. Ted Cruz, Rick Santorum, Ron Paul, Mike Huckabee, Ronald Reagan, John Anderson, Nelson Rockefeller, and Newt Gingrich on alternate Tuesdays are the only notable Republican presidential candidates in my memory who were nor careerists nor demonstration candidates (e.g. Pat Robertson, Pat Buchanan &c).

The Republican caucuses in Congress are hopelessly ineffectual. Even if most of them are on the level, there's a critical mass of careerists and patronage-brokers who will frustrate anything those who are the real deal attempt to do. The Senate Majority Leader is one among them. See the recent House Appropriations committee vote to finance the NEA, NEH, IMLS &c. The lead perpetrator there was a greasy character named Ken Calvert who brought along 1/4 of the Republican caucus on the Appropriations Committee. See AM McConnell's scheme to revive the ExIm Bank. These agencies are no-brainer low-hanging fruit. If you cannot shut them down, you cannot shut anything down. .

I happened to see McCain speak today on the Senate, health care, the need for deliberation and bipartisanship.

I probably really am a moderate and a pragmatist because I consider that the best and most important political speech of the year. I am surprised by the knee-jerk reactions from the far right and left against it. It makes sense. Period. Doing what he says would take us to a better place. Period.

That it is an honorable man's death speech means it should be given a good listen, but few seem willing to give it that much respect.

@ ʕ•ᴥ•ʔ: agree 100%, hats off to an actual American hero. He was not the right choice for president in 2008, but he's got more class in him than just about every other senator put together.

Of the candidates who competed well in 2016, only John Kasich was a presidential contender of the conventional sort. Cruz (who is exceedingly bright and principled) and Rubio (who is not either) are wet-behind-the-ears U.S. Senators; prior to 2004, you had some popular demonstration candidacies (Steve Forbes, Pat Robertson, Jesse Jackson), but these aside no one whose preparation for the office maxed-out at a half-dozen years in Congress had been seriously considered by party sachems or party electorates in a many decades). Bernie Sanders is like Hubert Humphrey - time as a mayor followed by a long run in Congress; it's just that Sanders had never run in a Democratic primary before. Gary Johnson was running 3d party.

Keep in mind the Clintons are filthy dirty. You'd be hard put to find a presidential nominee who fit that description in the last 4 generations bar John Kennedy and Lyndon Johnson (whose transgressions were carefully concealed). The screens up used to prevent such types from standing for or obtaining marquee offices.

Those screens didn't work so well if JFK and LBJ were as "filthy dirty" as you say. Of course, they weren't.

It's good to let them yell:


I can recall an editorial, showing (Johnson ?) lifting Ross Perot by the ears. Somthing like that is really hard to find in Google.

I meant editorial cartoon!

Didn't realize the Age of Em referred to Elon musk.

Perhaps Corporate America is doing well because it is less by one weird person.

If Trump is going to do basically nothing for 4 years and just leave the Obama economy on cruise control so be it. He can't steal enough to really harm the economy, and his ICE policies should certainly clarify minds one way or another on immigration. Hopefully the world will cooperate and save any acute crisis for the next president.

Trump isn't the problem. Congress is the problem.

Dear Mr Cowen,

I have to take issue about this left/right thing once for all. There is really no difference among the two sides of traditional politics. It's time we recognize that Sanders or Trump are the same, they are different in rhetorics, but at the end they are both extreme statist, with maybe a slightly different constituency. For what is the difference between somebody that protects his constituency through welfare benefits paid by taxes, or somebody doing the same through tariffs paid by every consumer? Same shit, different name.

The battle is between liberty and the State, our enemy. And the field of battle is ideology, not politics. Thinking that politics drives the battle is like in military issue to think that tactics drives the war: strategy and logistics drives the outcome, in the long term tactics is a wash-over.

Who do you think will be remembered in 200 years, Hayek or Clinton? Trump or Coase?


Hayek, maybe.

In 200 years we're either crawling out of the ruins again or we've abolished Scarcity, so probably not even Hayek.

Trump is the most likely to be remembered in 200 years, since he is president of the U.S. Leaders of powerful countries are much better remembered than economists. What percentage of people know about Hayek or Coase even now?

Tariffs are only the same on taxes when the taxes are on a purchased good. Most of the feds money comes from taxing income. If that income isn't spent on goods (which for the 1 percent most isn't) then, no, they are not the same

Idiots like yourself, making the perfect the enemy of the good, will lose the political battle, and lose the ideological one too.

Trump Vs Sanders is like Marx Vs Bakunin ;)

I suspect you spellchecker betrayed you. I agree about Groucho Marx, but it should read Barnum instead of Bakunin :-)

Regarding Dan's post, there are a lot of people (well, at least outside Trumpsters and Berneds) that knows about Smith, not too many about George III or The earl of Guilford (British PM in 1776, I had to Google it myself)

I bet that George 3 is better known than Smith, at least among Americans, due to his role as a British leader during the American revolution.

This is exactly correct, in the age of 'Hamilton' as well. George III's character steals the show.

Careful, Tyler, about using Elon Musk as your exemplar of an aggressive, disruptive businessperson. Some day, this will seem like using Elizabeth Holmes as an example.

I don't think we are going to be zooming around in underground tubes any time soon, but that's rather unfair to Musk.

Only time will tell, but I think that the ratio of overpromise to underperform for Musk and Tesla is not materially smaller than it is for Holmes.

Well, Musk also started from nothing and build a software company which he sold for $300,000,000, founded the online payments service that became PayPal, and founded a rocket company with $4 billion in revenue.

I'm still somewhat skeptical about the viability of mass-market electric cars, and I think it likely that Tesla is overvalued. But they have already gone much further than I ever expected an electric car company could. And they have some significant technical achievements, especially in lowering battery costs. I think that at this point, at least some success has to be acknowledged.

My point is that Musk over-promises and under-performs in a way that tests the line between "puffery" and "fraud," just like Elizabeth Holmes did (although I think that she clearly crossed the line). At the very least, I am amazed that the SEC has not been on Musk's case, which I can only attribute to the general PC climate associated with his activities.

Here are some examples off the top of my head:

* tweeting continuously about deposits for the Model 3 when it was first announced and the deposits were growing, but then providing no further information, despite repeated analyst requests, when the deposits have ceased to build and have probably even started to fall
* same on the Powerwall, where demand was initially tweeted to be "off the hook" and since then, silence
* calling something "Autopilot" which is, in fact, just the standard driver assistance features that many premium brands have and then having the equipment provider sever relationships with Tesla because of worries about product liability and misrepresentation
* selling a new version of "Autopilot 2.0" for $5,000 which promises premium features, which were going to be activated shortly in an OTA software update, which is now months behind and for which Tesla is being sued by multiple parties; in the meantime the car has worse features than "Autopilot 1.0"
* being massively behind in the capital expenditure and hiring commitments it has made to the states of Nevada and New York regarding the highly subsidized battery factory in Reno and solar panel factory in Buffalo
* announcing that it has hit "guidance" on deliveries in 2Q 2017, but then mysteriously, and unlike all other quarters, not announcing the number of cars that were being shipped to customers at the end of the quarter; when finally forced to respond by repeated questions, not surprisingly, the number of cars in shipment had fallen sharply, showing the guidance was only hit by eating into the future delivery pipeline

And I could go on, including consistently missing targets on delivery dates for products, profitability, cash flow, capital raising needs, etc. In fact, I would go so far as to say that Tesla has not met a single financial target it has announced. In terms of operating targets, it frequently hits these only by putting out untested "beta" products that no other operator would dare to unleash on an unsuspecting public. He is getting ready to do it again with the Model 3.

I don't know -- and, I would submit, neither do you -- what Musk has done in his earlier ventures and with Space X (which may be another massive money loser), but with respect to the two public companies where Musk has been involved, Tesla and Solar City, the operating performance has been awful. The share performance will eventually catch up.

Thought about taking a job with Tesla. Decided against primarily because they do not seem to have a good grasp on operations. It's the boring competency combined with operations level vision and direction that they are not good at. Maybe they'll make Optimus Prime. But manufacturing a product at six sigma level quality is beyond their management capabilities. For now. And rent seeking will only get them so far. Managing PayPal and managing a manufacturing company require a different skill set. Also, I assume at some point their workforce in California will unionize and that will force a move. Which will destroy their political credibility.

They do have gyms on site and free food though. So they got that going for em. I'm sure theyre fun to work for.

Uh...going from nothing to RTLS first stage in ten years?

Business has become more democratic as government has become less democratic. I do not consider this a good development. The people's voice was meant to be realized through our representatives, but they are busy kowtowing to business. Each week I receive an update email from one of my senators and my representative. What have they been doing? Meeting with chamber of commerce and business associations. No town halls or surveys.

As a member of Gen X, I lean progressive. I do not view business as altruistic. Since the Great Recession business has become more self aware, but I chalk that up to changing demographics in their customer base (women, minorities, younger, educated). Government is the tool of the people, not our enemy. The younger generations will simply need to reclaim control from corporate interests.

but they are busy kowtowing to business.

No. The U.S. Senate kowtows to their donors and both parties have mindsets which derive from the origins of their legislators (in the Democrats' case, the legal profession and the education and social services apparat; in the Republican's case, the legal profession, real estate, and miscellaneous business).

It's not about reals, Art. It's about feels. Mood affiliation. Judging organizations by their stated intentions, their wokeness, how many transgender black members they have on their board of directors...

Companies in the non public sector do the job that the government and nonprofits cannot: we employ people to make/deliver services/products that people are willing to pay for. We do not ask for handouts, and we enable people to make money to live their lives. We do not ask for laws to force companies to buy our products/services.

Our intention is to make money, and by the magic of incentives people apply to work for us to make money. And no force is required.

I think the Republican slogan in liberal states should be : Democrats don't believe in consent.

The Third Reich was efficient. Is that the standard by which Cowen would judge the efficiency of government. Republicans complain that government is inefficient, and then when they are in control of government go about proving it. Trump would like to make government efficient again, and no doubt has the Third Reich as his model. I'd prefer Republican incompetence over government efficiency. I could be wrong. Trump might have as his model his own businesses, which have been remarkably efficient at conning other businesses and investors into losing money while Trump prospers. I'd prefer the Trump con of America over government efficiency of the Third Reich kind. I would remind Cowen and readers that the Founders' intent was to make government inefficient, to reduce the risk of government efficiency of the Third Reich kind. As for American business that Cowen so admires, I agree American business is efficient but it's neither democratic nor remotely egalitarian. Would Cowen prefer that government be run like a business, of the Third Reich kind?

Wow, where did that come from?

It's pretty much the standard type of post from rayward.

The Third Reich was efficient.

See Wm. L Shirer's reporting on the intramural operations of the Nazi government: all things considered, not particularly.

When you look at the composition of Hitler's cabinets, what strikes you is the number drawn from Germany's professional establishments; some had no Nazi Party membership and some others were proforma members who only joined after 1936. The Nazi elite itself did not have the skilled personnel to staff those positions.

Nazi Germany in 1939 was a joke of an economy. The best description I know is in "The vampire economy", published one month before the invasion of Poland in New York by Gunter Riemann, a surprisingly brilliant German communist. You can find a free copy in PDF at mises.com. It was strangely similar to today's Venezuela, not a free economy, nor an economy completely geared for war. Being Germans, a bit more efficient than the hapless Venezuelans. It became a totalitarian war economy only under Speer, from early '42. In this sense, I agree that Trump instinctual idea is to build an economy similar to the early war nazi economy, not the exhilarating schumpeterian free capitalism nor the brutally murderous single-objective Soviet top-down economy, but some type of fascist híbrid. It is really "the valley of death" of economies. Strongly anti-trade, corporativist, with different components of the State meddling schizophrenically on enterpreneurs´ job.

The most dangerous aspect is the close nature of the American economy, where trade represents a pretty small percentage of total GDP, being the US so gigantic. This could allow an implantation of many characteristics of such a delirious system without the check of reality, that would be the case, for example, for the U.K. Trump is not a simple "being there" figure. It got to power like the Peter Seller character, but he delusionally thinks he can improve matters with some top-down direction.

As far as dynamism goes, government's share of total employment in the good old USA has fallen from a high of 19.4% in July 1975 to just 15.3% in June of 2017. Of the 69.6 million new jobs added in the past 42 years, 89% have been in the private sector. 100% of the 8.9 million jobs added since the previous employment peak in January 2008 are in the private sector. This is a good trend.


This site shows totally different numbers than what you list:


Well yes, because (government employees) / (total population) = (government employees) / (total employees) only if (total population) = (total employees).

Most definitely the same trend, though. Thanks Obama et al.

My numbers came from BLS (trigger warning: division involved).


"Thanks Obama et al."

This trend apparently pre-dates Obama's election by decades, but in reality the numbers are driven by state employment. So, Obama gets neither the credit nor the blame. He's more of an Empty Chair when it comes to this statistic.

Here's two sets of numbers from the BLS:


1990: Gov/Total = 18.3K/124.3K = 14.7%
2000: Gov/Total = 20.7K/145.6K = 14.2%
2004: Gov/Total = 21.6K/144.0K = 15.0%
2014: Gov/Total = 21.8K/150.5K = 14.5%

And according to your quote: "15.3% in June of 2017."

You'll note if there's any significant trend, it's upward over the last 30 years. In reality, I'd call it flat.

You could easily get from 9 to 15% if one number counts direct employees, and the other number also includes contractors, Boeing and Lockheed employees that exist only because of military contracts etc.

Obviously the definition of "government employment" does not include most of the education, health care and defense industries?

Most folks in education are government employees, and there were plenty of private sector defense contractors back in 1975.

You have a bit of a point on health care, which isn't very dynamic.

But the trend remains impressive and encouraging. I'm sorry, everything is not quite going to hell in a handbasket like the softest generation ever thinks.

"But the trend remains impressive and encouraging."

The data doesn't seem to support your trend.

I had you figured for someone interested in truth rather than just winning.

I think I'm right, but my denominator is "total nonfarm". Our figures for government jobs line up. Your figures for total jobs look curious, they come from two different links, and they indicate a substantial decline in private employment between 2010 and 2014 that I find difficult to swallow.

My data come from a single BLS data source that goes back to 1939.

My comment goes back to 1975. The pattern since then is clear: declines in government job share, punctuated by increases during recessions.

"I had you figured for someone interested in truth rather than just winning."

Come on Brian, don't go for cheap rhetoric. I provided BLS data.

"and they indicate a substantial decline in private employment between 2010 and 2014 that I find difficult to swallow."

Ok, I understand that, but it's not like I'm pulling data off of some dodgy web site. Those are BLS numbers and specific links I provided.

"My comment goes back to 1975. The pattern since then is clear: declines in government job share, punctuated by increases during recessions."

I'm not disputing that there has been a drop since 1975, I'm pointing out that according to the BLS numbers I'm linking to, the drop was before 1990. It's one thing to say that was have a steadily improving trend downward, it's quite another to say we had a drop that leveled out 30 years ago.

I provided data. You provided different data from the same source. You concluded: "The data doesn't seem to support your trend."

This is the wrong move, and lazy. The right move is to try to understand the differences between the two sources of data. You didn't do that.

I have made some effort to do that, and, at this point, I tentatively conclude that my original point was essentially correct.

Have a nice day.

"I provided data."

Perhaps that is the issue. When I follow the link you provided, I don't see the data you are commenting on. Can you provide another link? Or tell me the path you took to get from the link you provided to the data you are referring too?

Click this link:


Tick the boxes for 'total nonfarm' and 'total private' under 'seasonally adjusted'.

Scroll to the bottom of the page and click on "retrieve data'.

Change the 'From' drop down box to 1939.

Click 'Go'.

Download Excel file and make cool graphs.

While I find Musk's ventures interesting, I'd prefer more Bezos and less Musk.


Overall, I agree. But let's not forget that Bezos thought the Segway was a great idea.

Musk hasn't trashed a major newspaper.

Speaking of business efficiency (or complacency if one follows Cowen), here is an excellent analysis by Neil Irwin of why productivity growth has been slow: https://www.nytimes.com/2017/07/25/upshot/maybe-weve-been-thinking-about-the-productivity-slump-all-wrong.html And here is my comment to Irwin's article: "Excellent analysis. One should also consider the opportunity cost of investing in productive capital, namely investment assets (such as stocks, real estate, etc.). If asset prices are rising faster than profits/economic growth, why not invest in assets (even a company's own stock) rather than in productive capital (the fuel for productivity growth). After all, asset prices have been rising relatively fast the past couple of years, and the Fed has been at least partly (some would say primarily) responsible."

I've been cucked too many times by these cuckservatives, even though I do love it I'm getting a bit tired of it

Don't forget that we elected a businessman for president, too. I've definitely revised my opinion of business as a result.

Another poorly written article from Tyler. Judging from the pasting it received in the comments I suspect it is another one of Tyler's trollbait articles rather than any real attempt to write with substance.

"A lot of this progress has yet to trickle down to the small-scale auto parts store in your old hometown"

Because now auto parts come from Amazon - I just bought a replacement side mirror from there!

A "marginal dose of some more Elon Musk" is hardly the opposite of government:

"AB 1184, a bill recently passed by the state Assembly and awaiting Senate action: “CA bill would make up for federal electric-car incentives as they expire.”"


you lost me at "more Elon Musk;" continuing the cultish praise for a flim flam man whose greatest talent has been the diversion of tax dollars into his corporate coffers

When you go into a private business, you see signs saying something like "Tell us how we're doing". In the DMV, for example, you see signs saying something like "It is illegal to bother the employees"

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