Did I make a mistake?

 

As I confessed earlier, I cast my vote for President-elect Biden in the general election.  I realized at the time that I was sentencing myself to 4 years of asking “Did I make as mistake?”  It’s early days yet, and the answer is certainly still occluded.

Part of the answer comes in the form of the flickering cave shadows cast by Biden’s first few appointments.  I write with some trepidation here because far more politically astute observer was scolded, scalded, and kicked to the side in this morning’s Washington Post Op-ed page for his view that the foreign policy team “… will be polite and orderly caretakers of America’s decline.”

This is actually a pretty fair assessment, even if it did come at the end of a sentence full of the petty anti-elitism the Republican Party has disgraced itself with over the past several years.  But as to the conclusion, it very much sounds like my stock answer over the past few years to the question, “Well, running dog Republican, what do you think of the Trump administration now?”

I’d generally answer along the lines of, “It’s a complete dumpster fire [apologies to WMX], but the alternative would not have been good policy.  Rather, it would have been the continued slow erosion of America’s power, position, and prestige in both international and domestic affairs.” 

In the foreign policy arena, I am not at all sure the new team understands their mission: Advance the interests of the United States of America.  Not advocate, not explain, not put forward, but advance the interests, foreign and domestic, of the United States of America.  The first test of their understanding will come in the execution of what have been announced as “day one” actions, rejoining the Paris Climate Agreements and the World Health Organization (WHO).

If, as I suspect, they go to Paris and Geneva and politely ask, “Please, pretty please, will you let us back?  We’ll be good. We’ll pay our full dues and maybe even a fine for delinquency.  Please, pretty please,” then we’ll know.  We’ll be in the hands of that cabal that holds that American policy should be multilateral, collaborative, and apologetic.

At the very least they should, as prerequisites to the United States resuming their disproportionate financial burdens of these international institutions, require renegotiation of the more-onerous-to-us terms of the Paris Agreements and removal of the executive team at WHO that conspired with the Red Chinese to hinder the world’s response to the Covid-19 crisis.

The outlines of the domestic side of the Biden team are also beginning to emerge.  So far, the selections have looked pretty good.  I am a little concerned about the reception the selection process is getting in the press.  The New York Times recently listed eight attributes the President-elect had to consider when making selections.  “Competence” came in at number six.  Sounds like the left still focuses on what seems cool to them—ideology, gender, racial identity, party affiliation, etc.—rather than what’s important in governing a complex business economy. 

What the economic and domestic policy team need to focus on is the urgent need to get money into the hands of tens of millions of individual Americans who have been locked out of work by order of various government entities.  As necessary as these measures have been—and as much fun as it would be to point out that the urgency was magnified by China’s duplicity, WHO’s complicity, and Trump’s utter incompetence and indifference—the stark reality is that millions of workers are still living on unemployment insurance, many thousands of businesses are on or past the edge of bankruptcy and closure, and not one Biden appointee could be suspected of knowing in any detail what a workout specialist does for a living.

Even after all this cavil, I still believe, uncertainly, that I did the right thing in voting for Biden.  After all, it is a common bit of folk wisdom that if you find yourself at the bottom of a deep hole, stop digging.  The 2016-2020 era marked a deep hole; hell’s bells, it was a catastrophic crater of an administration.  My fear is that the new administration of the left is not going to pull the Nation out of the crater but will carry on with the slow erosion program that marked their ideological predecessors. 

The first advice-and-consent selections posted

 

The Biden-Harris transition announced three Senate-confirmation level foreign affairs selections recently:  Antony Blinken as Secretary of State, Jake Sullivan as National Security Advisor, and Linda Thomas-Greenfield as Ambassador to the United Nations.  All three look decently qualified and have significant experience in the foreign affairs playground.

Stop. Put a hold on the snickers about my word choice. I took an undergraduate course in international law several decades ago.  In our discussion of the “self-enforcement” of international law (a classic doctrine under which aggrieved states may inflict various reprisals against other nations  thought to have breached their legal obligations toward the nation of the first part), the professor remarked that if we wished to see the self-enforcement mechanism in its purest state we should go to a playground and observe 5-year-olds in the sandbox.

My concern with the Biden selectees is that, despite Ivy League law degrees in the first two resumes, they may not be as effective as those 5-year-olds at enforcing their own rights and insisting that others honor their obligations.  As we move leftward through the ranks of Democratic Party foreign policy thinkers, we will be finding that more and more of the players will be drawn from that subset of the intelligentsia that spells America with a “K” and believes our international posture should be multi-lateral, collaborative, and apologetic. These topside appointments need to be regarded with that in mind.

The meager publication records that are quickly sourced on-line (yes, I mean Wikipedia) are not definitive for any of these three selectees.  Blinken, apparently while in law school, wrote a book that used the Siberian pipeline explored the pitfalls of reprisals and how even non-armed-force measures can have unintended consequences. Fortunately, the book is out of stock at Amazon so I’ll feel no obligation to read the whole thing.  Other publications show a predilection for policy on values, perceptions, and ideas; what Morgenthau would call policies of prestige compared with policies of realism.

The available citations for Sullivan and Thomas-Greenfield are sparser, although Sullivan wrote an article on evolving notions of American exceptionalism for The Atlantic that I have bookmarked.  Thomas-Greenfield has spent more time at the diplomatic coalface than the other two combined.  In general, these seem to be sound appointments.  But let’s be alert to the leanings of the rest of the foreign policy elite as they are identified and nominated.

Some catch-up bleets

 The volume of stuff happening is pretty near too much to handle intelligently or responsibly, so I'm whittling down my clipping pile using the Twitter convention of 280 (nee 140) characters per "bleet."

‣ Someone at Washington Post noted recently that the Biden pandemic team did not include an economist, not even a health economist. They do need someone who's training includes considering cost, not just doing whatever it takes to eradicate the virus.

‣ Beside lacking a clear specialist in working out the finances of businesses under stress, the Biden economic team doesn't have a public health expert.  That task force will need to be told when Plan X may cost Y thousand more deaths. 

‣ 12 million could lose UI at the end of the year.  How much more has to be said to coax a basic coronavirus relief package out of Washington.  Ignore the Gong Show going on down west on Pennsylvania and do something, Majority Leader McConnell and Speaker Pelosi.

‣ One of the explanations of the increasing capitalization of "white" in description of people is that some European immigrants were victimized when they got off the boat.  While I struggle to maintain a straight face, please see the last five words in the preceding bleet.

‣ Another explanation has been that "White [sic] people must be made to understand that race is a thing and they are complicit in it," or words to that effect.  Again, think very hard about whether you want whites to get hard core about racial identity; so far it hasn't looked all that good for anybody.

‣ The Biden teams have, so far, been rational about lockdown: not what they want to do.  What should always have been the message is “Stay home as much as you can.  Mask up and keep a polite distance when you can’t. Wash hands a lot and don’t hang out in bars." Is that so hard?

Biden's economic team thin in a critical area

 I have been scrolling through various lists of personnel being considered for President-elect Biden's economic team.  As one would expect, the lists are chock-a-block with experience, expertise, and academic degree.  There is one thin spot on the roster though; there is nobody that know much about getting a struggling business onto life support and subsequently moving the enterprise off life support and into successful operation.

As I hastily closed out my last post on the 13th, I mentioned this need briefly.  The macro stabilization needs are pretty obvious, so let's get at least one more round of income replacement out really quickly.  In fact, put that ahead of rejoining the Paris Climate Accords and World Health Organization.  Actually, put it even ahead of sending these foreign syndicates the terms we need to see met before we start renewing our disproportionate subscription to bearing their costs.

But back to the soft spot in the new economic policy structure.  I didn't find anyone who has been involved in the nitty-gritty details of running a business, or even been involved in providing technical or financial support to such enterprises in any of the lists I reviewed.  One of the huge problems that will be coming up is the shattered financial structure of independent businesses.  No one on any of the short lists I could find quickly as a background that even suggest that they give a damn about the financial problems of running a business. 

The closest I could get was Richard Cordray at the bottom of a list compiled by CNBC.  His actual background was defending consumers from the depredations of the consumer finance interests. The article did report that "Cordray has sounded the alarm on both the current and impending consumer debt crisis and proposed measures to rein in what he describes as ‘vehement’ debt collectors."  If his analytical and policy scope can be enlarged to include business debtors of relatively small scale, perhaps he will be able to help business owners channel some of the stimulus money into making a profit and defend those entrepreneurs as well from debt collectors, who will very likely include the government.  

Unfortunately, Cordray and the others on the lists are generally drawn from that part of the wonky class that sees profit as the embodiment of evil and business owners, especially successful business owners, as the spawn of Satan. Thus, one key set of actors is not going to much help getting over the hills they are looking up at from the Biden administration. Where will they then turn?

This is not your father's business recession

 The response to date to the Covid-19 pandemic has caused an unprecedented "recession" in economic activity.  I quote-mark recession because the plunge was so steep and deep and because the recession was caused by the various governments' response to the coronavirus pandemic.

I worked in and around employment and unemployment statistics for about 30 years and have stayed fairly aware of how they were doing even after I kicked the habit.  I have never seen the unemployment rate rise almost 10 percentage points in 3 months.  Heck, the highest I had ever seen the unemployment rate was 10.8 percent at the worst of the double-dip recession of the early 1980s.  I had never seen, nor ever expected to see, the word "plummeted" in the BLS employment report.  Language like that may have been joked about in early drafting sessions, but there it was in print on May 8 in reference to jobs in the leisure industry.  

These numbers are something economists more clever than I, a large class, may be able to get their minds around.  But these are mere numbers and I haven't even heard of someone working on the real difference between this and a regular economic crisis.  The current recession was the result government edicts at the state and local levels to shut down, lock down, go home, stay home, and damn the consequences.  The consequences were more than 20 million jobs off the payrolls in 2 months.

The public health emergency was absolutely real but the lack of a public health response showed a stunning lack of readiness.  The result was that the authorities had to ban broad categories of economic activity, rather than implement policies such as masking, distancing, washing, testing, and then isolating infected persons.  These may not have been enough, but at least a track record of trying to do the least harm would have been established.  Instead, the track record was to shut down the last mile of the economy, the actual sale of goods and services. About 7.6 jobs, were lost from February to April in retail trade and food service and drinking places. This was about a third of all jobs lost.

The insistence of the public health scientists and experts that the rest of us blindly follow their advice and accept 21 million layoffs as a fair price for the experts missing the signs eventually meant that refusing to accept the basic civic duties of wearing a mask, limiting social interactions, and being aware of unhealthy environments become symbols of "liberty from the pointy heads", rather than mere annoyances.  These are more akin to fastening your seatbelts than to bending the knee to the Mother of Dragons, but have turned into mouth-foam talking points in certain quarters.

So, the scientists and experts left us with a 20-some-odd million layoff mess to clean up.  The reaction at the state level was hampered by the fact that unemployment income replacement systems were both old and set up more to reduce fraud than to quickly get some sort of income stream to the millions of new applications the employment security agencies were getting from laid off workers.  

I'd bet that there also are exacerbated problems with the financial condition of the unemployment  insurance plans.  I'd bet farther that these problems will be met, at least in part, through the experience rating process in which employers are penalized for laying off the people who are now receiving unemployment checks.  I'll leave it to you to imagine how the employers' cries that the government made them conduct the layoffs is going to go over.

So the music stopped at the Federal government's chair.  To their credit, they did the things they generally do in times of recession fairly well and promptly.  What they generally do is dispense gobs of money, in this case trillions of dollars.  I'm going to be generous and suppose that there was not much more fraud, waste, and abuse than is generally the case.  Unfortunately, the problem is that this is not a recession, it's a government ordered shutdown that has had a huge impact on the most financially delicate part of the economy, the small, customer-facing businesses that had to lay off millions of workers.

This raises two problems.  First, these ex-employers of millions have little or no revenue any more while at the same time have quite a few fixed obligations such as rent, equipment leases, insurance payments, supplier credits, and whatever else I've miss because I've never operated a small business.  Second, the individual payments to have largely been expended on necessities such as rent, mortgages, car payments, utilities, food, and so on.  If you got the full $1,200, the Federal government has, after much straining and heavy lifting, subsidized you to the tune of $171.43 per month--maybe a car payment? Oh I see, you want my rent and car payment to be the same check.

The second problem is the more urgent.  Please, will somebody step up and show some leadership and deliver another round of individual relief?  Drop the rest of the stuff until next year. It all seems to be ideological crap mixed with the usual pablum from the two sides:  Corporate welfare from the Republican Senate and green dreams from the Democratic House.  Cut it out, Winter is coming.

The first problem runs a lot deeper.  I studied economics and practiced a primitive form of it for a decently successful career and I never saw attention given to the potential problem of nursing an economy sucker punched by government ukases into recovery.  We've already seen the traditional macroeconomic income stabilization approach go pretty much as far as I've ever seen it pushed. This was all entirely necessary and woefully insufficient.  

I hope brighter minds than mine are trying to figure out some creative approaches to bankruptcy law, credit analysis, bank portfolio rating, UI tax policies, and myriad other "how the hell can I meet payroll this week" issues.   This, not traditional counter-cyclical policy,  is where the recovery will catch on or not.  If not, it will be a very long winter.

No Vice President Biden, you don't have a mandate for that

 Vice President Joseph Biden is widely acclaimed as the winner of the 2020 presidential election.  I join in that acclamation and urge every good American to do the same.  The rest of you know who and what you are.

Already, however, the presumptive, and somewhat presumptuous, President-elect is writing checks with his mouth that his slender (thank goodness) mandate won't be able to cash.  In remarks yesterday concerning the foolish and politically inept challenge to the Affordable Care Act (ACA) by the current administration, President-elect Biden indicated that, once actually in office he intended to move quickly to expand ACA coverage dramatically, yet somehow decrease health care costs.  These policy goals are recklessly profligate and irresponsible in the first instance and complete rubbish in the second.

ACA was recklessly profligate and irresponsible when it was enacted in 2010.  At that point, subsidies to the state-run health insurance exchanges and subsidies (tax credits) to individual health insurance customers were projected by the Congressional Budget Office (CBO) to average about $47 billion a year  over a 10-year span.  Two years later, CBO projected those costs to run about $73 billion a year, a 55 percent increase, over an 11-year span.  I know I'm old-fashioned, but even the original $47 billion sounded like real money to me.

As far as the reduced costs go, they are always illusory.  It's like the siding salesmen and other sharpsters who tell you the utilities savings alone will pay for the project.  It just ain't so.  And the usual go-to for restraining costs, reducing payments to  health care professionals will eventually lead to a decline in the quantity and quality of the industry's labor supply.  Will all die cold and poor while our health care team is out looking for leeches.

ACA , is  part of the fundamental structure of our society now, as the Supreme Court seems ready to keep it. Ignoring your fiduciary duty by massively expanding the program is not, however, within your narrow mandate President-elect Biden, no matter what the electorate in the great state of Georgia have to say in a few weeks.

Some thoughts about blue walls and electoral mandates

 Already the Democrats look like they intend to compete with the incumbent president in the post-election exaggeration game.  Much as the incumbent claimed the most decisive electoral college victory ever, President-elect Biden and his supporters are suggesting that the recent results represent a mandate for near-revolutionary changes in American policy.

The empirical evidence for this "mandate" is tenuous, as we polite folk say when a statement is just plain rubbish.  The electoral vote is a massive two votes higher than the result the incumbent misspoke about 4 years ago; the popular vote, it's actually nice to see, confirmed the very average electoral college score, but at the time of this writing was pretty tight.  The claim that this represents the largest number of votes cast for a presidential candidate tries to obscure the fact that the incumbent's total is a fairly close second.

Even more damning for the mandate exaggeration is the results in the House of Representatives.  This is the chamber the left wing values more because it more closely reflects a raw majoritarianism that appeals to their lust for government power.  The Blues lost seats in the House of Representatives.

A narrower majority in the House is the best thing to come out of this election so far.  The Democrats should listen to their beleaguered moderates who know that dancing about singing "Defund the police, abolish ICE, and here's your green new deal (the directions to the unemployment office are on page 53 of the appendix)" has cost the party a chance to actually get a mandate any time in the foreseeable future.  For now, the stunning incompetence and smug superiority complex of the progressive left has kept us safe.

Another claim being made by President-elect Biden and his enablers is that the have rebuilt the "blue wall" of mid-sized states that border the Great Lakes.  From right to left, in deference to the preferred order of things in the minds of the blue party, those states are Pennsylvania, Ohio, Michigan, Indiana, Illinois, Wisconsin, and Minnesota.  In the 18 Presidential elections that have been held in my lifetime, the "blue wall" was a complete or almost complete structure five times.  If we're honest, you can't rebuild something that wasn't really there.

A sad coda to the blue cubicle divider narrative is that the real blueness of those states was the blue-collar, often unionized, working class that used to be the backbone of the Democratic Party.  These are the people, generally white, usually without education beyond high school, often skilled at a manual trade, fond of pickup trucks, church-going, and firearms-owning people that the Democratic Party officially labelled "deplorable" 4 years ago.  

Non-Hispanic white males who have attained up through a high-school diploma and no further formal education make up 11 percent of the voting age population.  The Democratic Party chooses to demonize them and then wonders why they vote for Republicans. Go figure.

There is no easy s*#t

 Yesterday, I outlined the most important-and-urgent issues facing the next administration. Today is only the second day, but I am going to rest a little and look at the less-important and lower-pressure matter of statues. More specifically, what do we do with statues of historical figures whose attitudes, beliefs, and actions would be suspect almost anywhere today.

The first two rules should be pretty easy:

Rule 1.  If the statue is of a person or persons whose main claim to fame is military leadership in an insurrection against the Constitution of the United States, remove the damned thing.  To those who say these are accomplished men (generally) who are part of history, I say, "Right the part of history marked by treason, bigotry, and chattel slavery; take the damned thing down, it's not helping deal with what's still going on.

Rule 2.  If the statue is of a person or persons whose main claim to fame is starting this country or defeating the secessionists and insurrectionists covered in Rule 1, grant some easement.  And remember, you're not perfect either.  Figure out a way to make the monument a learning tool for dealing with what's still going on.

The third rule was a little harder for me to formulate:

Rule 3.   If the statue is of a person who served as President of the United States, it really ought to stay. Even Woodrow Wilson, a damned Democrat. It's a terrible job that you are completely unfit to do, so show some awareness. Again, figure out a way to make the monument a learning tool for dealing with what's still going on. And again remember, you're not perfect either.  

I'm going to stop at three rules because a wise man taught me that once you go past three points, point one goes right out the mental back door and thus what was the most important thing you wanted to say is lost. Confederate generals were traitors, and were much too close to being successful to be worshipped now.

This is what passes for easy stuff for the next administration. None of it is easy. Neither candidate will like having to actually deal with any of this, but they asked for the job. 

What's going to be out in front of the fan when the s*#t hits

What the heck. In the last sane moments before election coverage really heat's up, let's use one of those cool tools the time management seminar industry is so fond of--the 2 x 2 importance-urgency matrix so scope out the agenda of the next administration. One axis is (duh) the importance of an issue--how much of an impact does it have--and the other its urgency--how quickly it should be addressed. In terms of presidential-grade issues, importance is divided between "absolutely critical" and "pretty damned important" and the urgency between "yesterday or sooner" and "any other time". The absolutely minimalist array facing us looks something like

                                  Absolutely Critical          Pretty Damned Important

 

 Yesterday or sooner  COVID-19 pandemic           Back to school

                                  Economic restoration       Border control

                                  Black Lives Matter

 Any other time         Health care and finance     Statues

                                 Climate and environment

                                  Immigration policy 

The upper-left quadrant will require any new administration to change its heart, mind, and soul on at least one issue. Both sides really need to work out how to help restore the economy after a government-imposed shock. Unemployment remains at deep-recession levels even after several months of recovery. Income maintenance for those still out of work is drying up quickly, even in those cases where relief has been granted. Tens of thousands of layoffs have been planned and announced for the coming weeks.

Yes, both the public health and the private economy must recover for any real economic growth to resume in the long term. Right now, the policy classes seem to be content that in the long run, we are all dead, and in the short term, we are all broke. Whoever wins, come up with a better idea.

Black Lives Matter is the only leftish slogan that I can abide. It does have its flaws--it's divisive in structure and rhetoric. At least one leader has said explicitly that it means "anybody but white." But those who snarl back "all lives matter, [expletive]" have to think it through enough to recognize that as of this minute, black lives are not treated as mattering as much as, well let's say mine. What we need to find is not a way to make my life matter less, I'm opposed to that on principle and in practice, but to make sure every life enjoys the mattering, as modest as it has been, that my life has.

Time expires. I'll try to deal with some of the less important and less urgent issues after the dust settles.