Thursday, November 30, 2017

Hypocrisy

   By definition, a hypocrite is a person who says one thing but does another. Put another way, dictionaries define the word hypocrisy as claiming to have moral standards or beliefs to which one's own behavior does not conform.
   Hypocrisy is derived from the ancient Greek word for actor, and the pretense of having a virtuous character that the person does not have.
   This comes to mind after hearing a defender of the president say that media personalities recently accused of inappropriate sexual behavior "were not elected," as if such behavior indulged in by elected officials were somehow acceptable because they were elected.
   Can you say "circular logic" and "hypocrisy"?
   
   The Declaration of Independence states clearly that "all men are created equal," and that they are all endowed with certain rights. But with rights come responsibilities. And while elected officials have more responsibilities, they do not have additional rights, and are not exempt from standards of moral and legal behavior. In fact, as elected officials, they set an example for the rest of the citizenry to follow.
   It follows, then, that if elected officials can indulge in sexual harassment, assault and other forms of morally unacceptable behavior, then so can the rest of the population.
   Reality check: Government officials are not above the law, and that especially applies to the president, who as chief executive of the nation's laws, has the responsibility not only to carry out and enforce the law, but to set an example for all to follow.
   This does not seem to be happening. It's time for the president, and all other government officials, to set an example of moral and legal behavior even as they enforce laws defining unacceptable behavior.
   Example: If Rep. John Conyers and Sen. Al Franken, both Democrats, should resign over allegations of inappropriate behavior, then so also should Republicans who have been likewise accused.
   Another defense of some Republican high officials is that they have denied the accusations, while some Democrats have admitted to the charges.
  There is no double standard, and the phrase, "Do as I say, not as I do" does not apply.

Wednesday, November 29, 2017

Growing Pains

   The Commerce Department reported that the U.S. economy grew at an annualized pace of 3.3 percent in the third quarter, up from an earlier estimate of 3.1 percent.
   Meanwhile, the Federal Reserve Board, in its latest Beige Book summary, said the national economy "continued to increase at a modest to moderate pace in October and mid-November" across all twelve Fed districts.
   So with the economy growing steadily, corporate profits at record levels, the jobless rate at a full-employment level and the total number of jobs rising, watch for the Fed to boost interest rates as a way of taking some of the wind out of the economy's sails.
   The Fed has hinted at doing just that at its next meeting, in mid-December, to maintain a growth rate closer to 2 percent yearly.
   The question now is whether the historically independent Fed will follow the president's wishes and keep interest rates low so the economy can "take off like a rocket," as the president urged, reaching growth rates of more than 4 percent or even 5 percent.
   The current Fed Board of Governors chair, Janet Yellen, was passed over for renomination in favor of Jerome Powell, largely a Trump supporter. Nonetheless, Powell told a Senate committee that he favored continuity in the Fed's monetary policies. However, he also said some banking regulations could be eased, even as he called political independence vital for the Fed's role in helping to moderate the economy and prevent disastrous surges that lead to rapid "corrections," or crashes.
   And he also hinted that the Fed would likely raise interest rates at its next meeting, in December.
   That calls for a wait-and-see attitude as to whether the nation's leading banking and money supply regulator stays with its traditional independence or follows the Trumpian path toward trickle-down economics, which says tax cuts for major corporations and the wealthy will gradually, eventually, over time, trickle down to workers in the form of greater investment in productive capacity and thus more jobs.

Tuesday, November 28, 2017

Knowledge Transfers

   Success in one field does not translate to expertise in another.
   A prominent surgeon, for example, may conclude that because he is expert in medicine he will also be successful in economics or politics.
   Granted, some folks do succeed in a new field as they retire from another and are intelligent and clever enough to be expert in more than one field. But there are no guarantees, even if the two or more fields are somehow related. And, of course, there is old proverb warning of those who become a "jack of all trades but master of none."
   This not to say there is no room for generalists, who develop a basic knowledge of many fields and are able to deal with developments in each of them. Such people are often found in journalism, where such general knowledge is important.
   Reporters, however, do not claim to be experts. Rather, they go to experts for information and interpretation and are able to understand to pass on to the public what the new developments are and what they mean.
   The danger is when an expert in one field believes he or she is therefore qualified to speak with equal qualification about an entirely different field.
   A mathematician, for example, deals with numbers and relationships. But so also does a corporate marketing executive, an advertising sales agent or an economics professor. Each may also know a good deal about several other fields, and may achieve a modicum of success in one before switching.
   A sales pitch often persuades many customers to buy the product or service, and by that measure the salesman is successful. But when the product or service turns out to be defective, the salesman simply transfers his pitching skills to a new product, abandoning the first one.
   Does that mean the salesman is successful? Yes. It also means that the customer may feel cheated.
   Nations are often plagued by a swarm of sales agents masquerading as experts in fields for which they not only have little knowledge or expertise, but are frankly ignorant. But because the size of an ego is important in sales, it can overwhelm any cautionary warning to be careful when entering a second field unrelated to the first.
   Government and economics, for example, when a successful real estate pitch man enters politics.

GPS for Writers

Grammar, Punctuation, Style and Spelling

   A Global Positioning System for writers not only enables readers to know where they are in the text, but ensures that writers as tour guides can also convey their positions on controversial issues.
   Even when authors and journalists are tour guides for news and information without expressing their opinions on the subject at hand, the system helps improve communication because both writer and reader know the standards and rules.
   These rules are known as grammar, punctuation, style and spelling.
   And don't think that because your computer has spell check and grammar check programs that you are exempt from knowing and using GPSS rules.
   A spell check program only flags words it does not recognize. The word may indeed be spelled correctly, according to a dictionary, but be the wrong word -- what your grade school teacher would call a "sound-alike," a word that is spelled correctly by itself but has a different meaning from the one intended in context with the rest of the sentence. Here's an example: to, too, two.
   In brief, that's the problem spell check programs have. They don't understand the context -- only the word in isolation.
   Or it could be a typographical error, when a finger hits the wrong key.
  Here's a sample sin tense were itch work is spilled correct and well past an spill chuck program.
   Meanwhile, writers must remember that a reader's eye sees what the brain knows should be there. That's how errors get into print.
   All writers should proof read their own copy, but none should be the only one to proof read or edit their copy.
   And in this editor's opinion, grammar check programs are not worth the space they take up in the digital memory. Try using the subjunctive and watch the reaction.

Time Out

"I don't want to play your stupid game anyway," said the child when passed over for a place on the baseball team.

   The president says he rejected an invitation from Time Magazine to be on the cover as Person of the Year in its annual special edition.
   He claimed it would have meant sitting for an interview and a portrait for the edition, and he doesn't have the time.
   Cautionary note: Since when did the magazine's editors ask permission ahead of time when making their choice for the person -- man or woman -- who was most influential, for good or ill, in the world over the past year?
   Next question: Should they be required to ask permission before running any story about anyone?
   Traditionally, journalists have believed that the fastest way to get your name in the newspaper is to try to keep it out.
   It's not that the president has never appeared on the cover of Time Magazine. He was, a year ago, as Person of the Year in January when he took office. And there have been other times when a cartoon likeness appeared to illustrate coverage that was not entirely complimentary.
   And, of course, there was the fake cover that he had made up himself and posted at his golf resorts.
   So much for fake news.
   In any case, Time magazine had no comment on the president's claim that he was invited but turned down the offer.
   One wonders whether he was in fact contacted at all about his likeness appearing anywhere in any issue.
   When the journalistic profession reaches a point where editors must request clearance and permission before running a story, then the First Amendment is pointless.

Privatizing the Internet

   In the beginning was the abacus, a mechanical gadget that enabled faster arithmetic calculations.
  Then came numerals, developed in the Arab world for faster and easier addition, subtraction, multiplication and division. It was so useful that it was adopted by speakers of many other languages around the world.
   Soon enough came mechanical adding machines and electronic calculators, which eventually became computers.
   But the problem was that while computers were and are wonderful devices by themselves, they could not always communicate with other computer systems at other facilities.
   Government-sponsored research groups scattered around the country and at various universities were unable to share the results of their work, so the government's Defense Department sponsored a network system the allowed them to do so. It was called ARPANET or DARPANET, from Defense Advanced Research Projects Agency network.
   This system was so successful that it moved to the civilian world, and the Internet -- Interconnected Network -- of computer systems was born, using a programming system called "hypertext transfer protocol," or https, which is still in use.
   However, even this was not enough, so a programming expert developed and sponsored what he called the Worldwide Web (www), enabling any computer anywhere to tap into the Internet and communicate with other computers. Moreover, this expert -- Tim Burners-Lee of Britain -- refused to patent or claim ownership of the system because he felt it was too important to remain controlled by a single person or group.

   Now there is a move afoot in Washington to privatize operation and control of the Internet, giving corporations the ability to pick and choose who gets priority access to the system, what fees to charge, and what content can be posted on a system that was developed and paid for by government agencies using taxpayer funds and perfected by a scientist who refused to take money for his work.
   What does it all mean? It means that a communications system developed for the free exchange of information and opinion, open to everyone worldwide at little or no cost except for a low access fee will be controlled by corporations or government agencies more concerned with profit and propaganda than with freedom of information sharing, freedom of speech and freedom of the press as guaranteed by the Constitution of the United States of America.

Monday, November 27, 2017

Internet Interference

   Should the Internet be neutral as to who gets to post what and who gets to see what, how soon and how often?
   Or should an Internet Service Provider (ISP) be able to charge higher fees to some so they have faster, more complete access to potential readers and viewers?
   That's what the government is looking to do, overturning the Federal Communications Commission's policy of Net Neutrality.
   Compare this plan to your home telephone, another technology that the FCC regulates, along with broadcasting and telecommunications generally. Suppose the phone company wants to offer faster dial tones to telemarketers (for a price) and to limit the time available to teenagers to gossip with friends so the marketers can call at dinnertime to make their sales pitch?
   Historically, the phone company has been neutral in providing service to customers, with rates varying according to volume and distance. Access, however, has been equal to all. Having to wait for a dial tone is anathema.
   Suppose, however, that did not apply to Internet service providers? They could then offer faster, better access to the network and to its users who pay a higher fee, and perhaps even monitor the content of stuff that users post on their blog sites.
   So much for Freedom of Speech.

Media Muddle

   The independent -- and often liberal -- voices heard and seen in American journalism may be in danger of being silenced as conservative corporate and political interests move to acquire news outlets that don't always agree with their agendas.
   Last week it was the president speaking out against AT&T's proposed acquisition of Time-Warner unless CNN is dropped from the deal.
   Today, the report is that the Koch brothers are behind a plan for their Meredith Corp. to buy Time Inc., which still owns many magazines after selling off its film and television units.
   One clear implication is that the Koch empire will revamp the Time perspective to more closely reflect conservative views and polices, and away from its traditional independent journalism practices.
   Couple these developments with the president's assertion that the licenses of such outlets as CNN and NBC should be reviewed and perhaps cancelled because of the way they cover the president's comments and activities.
   There's only one problem with that demand.
   CNN and NBC don't have licenses. They are not broadcast entities. Only local stations that use the broadcast spectrum need licenses from the Federal Communications Commission, a practice that goes back to the early days of radio, when the government stepped in to regulate who could operate on what frequency and in which city. This was necessary to eliminate the chaos of competing broadcasters operating on the same radio frequency or too close to another city.
   That's why, for example, New York City television stations broadcast on channels 2, 4, 5, 7, 9, 11 and 13, while Philadelphia outlets are on 3, 6, 8 and 12.
   Networks, however, don't have licenses. Nor do cable operations, so the government can't take away what doesn't exist, no matter how loud and long the president may complain.
   As for arch-conservative rich folk buying independent and objective news operations and changing their neutral coverage to emphasize corporate and right-wing plans and objectives, that's a danger that America may now be facing.
   Meanwhile, there are still many news outlets that rely on the First Amendment guarantee of free speech and free press to criticize the government when appropriate.
   And, of course, there is the Internet, which enables every citizen to vent opinions and criticism of government when appropriate.

Radical Righteous

Politics and religion don't mix.

   Conservative religionists are happy that the proposed federal tax reform bill would end the ban on churches and non-profit groups from political activity.
   Sounds like a good idea if you want to spread your ideas and make them part of the law of the land.
   But if the radical righteous can foist their stringent views of morality on the general public, then so can other religious groups and church-affiliated organizations.
   The Vatican, for instance.
   Granted, the Pope cannot get directly involved in U.S. politics. But indirectly, through messages from archbishops, bishops and parish priests speaking to the congregations, perhaps he can.
   
   Already, many ordained ministers push the envelope by speaking out on political issues and even running for political office.
   Rarely, however, do clergy connected even remotely to the Vatican make political recommendations from the pulpit or anywhere else.

   Be careful what you wish for. You may get it.

Saturday, November 25, 2017

Dismantling Government

   Pruitt and Zinke are not a vaudeville comedy team, and their act toward America's national resources is no joke.
   They are, in effect, part of the Trump Administration's effort to dismantle government in the name of free enterprise, thus enabling private enterprise to exploit formerly protected national forests and monuments for corporate profits.
   Scott Pruitt, the new head of the Environmental Protection Agency, is not protecting the environment, but just the opposite, as he has admitted his opposition to the EPA's "activist agenda." During his political campaign for the post of Oklahoma attorney general, Pruitt got financial support from the fossil fuel industry.
   As the state's attorney general, he sued the EPA fourteen times over the federal agency's actions. Now he's in charge, and has barred scientists from advising the agency on environmental issues, instead preferring to appoint industry executives.
   Ryan Zinke, the new chief of the Interior Department, wants to remove regulations that protect wildlife from hunters and trappers in National Park Service preserves in Alaska.
   And he wants a "review" of federal policies that protect some 27 national monuments nationwide, to allow mining, drilling and tree harvesting, as well as fishing rules in parts of the Atlantic and Pacific oceans.
   The Wilderness Society has called this "a sellout" of lands and waters "to drilling, mining and logging interests."
  And the National Parks Conservation Association was outraged at Zinke's recommendations to the president, charging that the president "has no legal authority" to make the proposed, and that only Congress has that authority.
   So unless there is a rebellion in Congress against the president's plans and policies, it looks like corporate America -- with the approval of one of its own now in the Oval Office -- will get its wish to freely develop and profit from natural resources now protected by federal law.

Thursday, November 23, 2017

Fallacies

"It ain't necessarily so." -- from "Porgy and Bess."

   Logic 101 teaches several basic fallacies common to human thinking, one of which is known as the "propter hoc, ergo propter hoc" fallacy. Translated from the Latin, it means, "after this, therefore because of this."
   An example is when people see the sun rise in the east, they assume that the earth stands still and the sun revolves around the earth. It took a while, but science proved that the reality is the other way 'round.
   So it is with politicians, who claim credit when things go well and blame others when they don't. A recent example is the claim by the current resident of the Oval Office that he is responsible for the "all time high" in stock market averages.
   The reality is that "all time high" numbers are a regular occurrence on stock markets and have little to do with politicians' claims. Put another way, Wall Street is less a barometer of national economic performance than it is of investor exuberance, hopes and expectations for corporate sales and profits.
   Just because stock market averages have gone up since the new president took office is not necessarily because of the new guy.
   Meanwhile, this president is claiming that his plan to cut corporate taxes will cause the economy to "take off like a rocket," while economists point out that this is not likely to happen. Put another way, "trickle down economics" does not work.
   On top of that, the Federal Reserve Board has been watching economic performance carefully, and plans to boost interest rates to stabilize the U.S. economy, take some heat out of the growth rate and prevent a "rocketing" takeoff.
   In a very long summary of its most recent meeting -- more than a dozen pages of minutes from the meeting -- the Fed in effect declared its independence from political posturing and stressed its traditional goals of full employment and low inflation, which it endeavors to reach by controlling interest rates.
   This declaration came soon after the president refused to renominate the Board of Governors chair for a second term and instead named one of his own favorites, in the expectation that the new guy will lead the board down the Trumpian path of less control so business and the economy can cruise its own merry way to ...
   Separately, watch for the president to choose several more of his kind to fill vacancies on the Fed Board of Governors, as well as numerous vacancies for federal judgeships around the nation, all as part of his overall plan to move government further to the political right and away from guardianship and oversight of corporate and public behavior.
   Many of these nominations require Senate approval, and that also is something to watch for.
   So the question becomes whether the nation is ready for, or even should, shift its political, social, and economic attitudes further and further toward less and less regulation of how corporations behave in their search for increased profits and higher share prices, with little or no concern for how their corporate goals affect the rest of the nation and its people.

Tuesday, November 21, 2017

News Daze

Newspapers and broadcast media don't mold public opinion so much as they reflect it. If they don't like the coverage, readers and viewers go elsewhere.

   What a time to be in the news biz!
   Stories pile on top of one another so fast that it's tough to decide what to put on Page One, since they can't all go there. A guideline is that Page One of a major metro broadsheet daily has room for seven to nine stories on any given day.
   These days, so many stories break so fast that not all can fit, so some editorial judgement comes into play.
   Of course, that means that politicians and others can and do regularly criticize the choices, especially when a story puts a negative light on them. Nonetheless, that's journalism's job, to cover all the news and to decide which stories are most important for readers to know about.
   And, of course, when readers don't like the editor's choices, they cancel subscriptions. Likewise, when viewers don't approve of the coverage, they change the channel. Realistically, there are some who become so disgusted or angry that they tune out entirely. Therefore, it's up to the writers, editors and news directors to present the stories in such a way to maintain interest even as they educate, inform and entertain.

   So what's it been like, recently? Sexual misconduct by celebrities and politicians -- these are the juicy stories -- economic issues, stock market performance and politicians who claim credit for it, government officials who try to interfere with news coverage, government agencies that try to block fully free access to the Internet, allowing (or encouraging) carriers to decide who gets priority in transmitting stuff, a president who tells the Justice Department to block a communications business merger because he doesn't like the way one of the companies reports on what he does, or delays humanitarian aid to an island (Puerto Rico) struck by two hurricanes even though its people are American citizens, or stops another program that allowed its people (Haitians) to come to America after their homes were devastated by an earthquake, or plans to reshape the Federal Reserve Board to reflect his free market-trickle down economic theories, or wants to reshape the judicial system to conform to his views on how the law works.

   Here we pause to take a breath.
   All these stories and more are what keep journalists busy and interested in what they do, and excited about the opportunities to inform the public on the doings --  good and otherwise -- of political and government officials.
 
   Here are some examples of the hot stories in America this week:
   -- Janet Yellen will leave the Federal Reserve Board as her successor as chair steps in. President Trump did not nominate her for a second term as chair, which has been customary for years.
   -- As noted here ten days ago, the government wants to block AT&T's acquisition of Time Warner, unless CNN is dropped as part of the deal.
   -- Trump ends a program that has allowed Haitian earthquake refugees to come to the U.S.
   -- The head of the Consumer Financial Protection Bureau is quitting as the White House pushes deregulation.
    -- Increasingly, news media present examples of the president's ignorance of history and economics, as he claims credit for things that happened before he took office or would have happened anyway. Usually, this is for the good stuff. Like most politicians, if it was something bad, he blames his predecessor.
   For that, here's a link to an excellent piece that appeared in the Irish Times, explaining how the new guy in the Oval Office doesn't really understand how the stock market works: https://www.irishtimes.com/business/personal-finance/six-stock-market-lessons-for-donald-trump-1.3294367

Sunday, November 19, 2017

Economics vs Business

   The social science of economics studies what people do with what's available, and how they use resources to enhance their lifestyle -- at root, it's the study of food, clothing and shelter, with all the variations employed to make maximum use of these resources.
   Business, while it is also the study of what people do with what's available, is primarily how producers market and sell their products and services to others, providing the most benefit to the business operators.
   These definitions are simplistic, of course, but it's a good way to start understanding conflicts between producers and consumers, management and workers, as well as government and business.
   In short, economics deals with what is, while business focuses on what should be. Meanwhile, there is some overlap of business and government policy, and depending on a group's preference, politicians may emphasize benefits to consumers or benefits to business.
   
   An example of this conflict is the strategy currently employed by conservative Republicans in Washington who want lower taxes on business as a way to encourage production, which would mean more sales and more profits, contributing to more overall economic growth as expressed in a Gross Domestic Product increase of 3 percent or more.
   This is an example of what academics call "supply side economics," which stipulates that "if you make it, they will buy." Assuming, of course, that "they" -- consumers -- have the wherewithal to increase their spending on food, clothing, shelter and other necessities and luxuries.
   Another assumption is that the benefits of lower taxes will lead to more investment and production, which will bring more hiring and higher wages for workers, who will then use that increased income to buy more stuff.
   That's an example of academics call "trickle down" economics. This is a variation of "supply side" economics, as opposed to "demand side" economics.
   So which comes first? The idea that "If you make it, they will buy," or the premise that says producers make what people want -- that they supply stuff to satisfy a demand.

   A  stark reality is that neither dominates any market for any length of time. There have been products offered for sale that people didn't know they wanted or needed, until a successful marketing campaign persuaded them that they did. One example is Post-It notes. The product was introduced but went nowhere until after 3M gave it away as part of its campaign to educate and persuade people that they really, really needed it.

   Currently, we are seeing a campaign by politicians to emphasize supply side and trickle down economics to boost GDP growth to 3 percent and more, claiming that this rate, shown recently, can be encouraged and will continue for years.
   Enter the Federal Reserve Board, the independent monitor of the nation's money supply and economy, which believes that a long term growth rate of about 2 percent is the safer route. The Fed's primary tool in encouraging or slowing economic growth is controlling the money supply, which affects the interest rate, which in turn boosts or limits investment in production capacity. Next in line is hiring workers and raising wages in response to demand for products and services.
   Clearly, this is a very tricky balance to strive for, especially in the face of government policies that stress supply side and trickle down theory.
   So there can be a strong conflict between government desires and the Fed's actions. And that is what is currently brewing in Washington.
   Bottom line: Watch for the Fed to increase rates to prevent an over-heated economic growth rate, something it has hinted at several times recently, even as the White House touts policy that would have the economy "take off like a rocket."
   Now the question is, when will the Fed shoot down that rocket, opting for a steady cruiser instead?

Saturday, November 18, 2017

Chasing the Big Story

Words and numbers are different species, but they each have messages and stories to tell.

   The more juicy the story, the more it attracts news media attention. This is as it should be, but sometimes the journalistic wolf pack passes by other stories that are in some ways more important, and if they are covered at all they are relegated to the back pages.
   Often, these stories have to do with business and economics, and many reporters rationalize their non-coverage by saying they are "dull" or "too hard" to deal with.
   That's a reason, but not an excuse. No story is, in and of itself, "dull." It only becomes dull when the writer makes it so, or perceives it to be dull before making any effort to understand it and to write about in such a way as to attract reader attention.
   Therein lies the challenge.

   Granted, stories about crime, corruption and political machinations are juicy, easy to cover, and practically write themselves. That does not, however, excuse journalists from ignoring other stories that have as much, and sometimes more, influence on society.
   Recently, we have seen a national pack of journalistic wolves chasing one of the juiciest stories in a generation. And this is as it should be. The bigger and juicier the story, the more media attention it attracts.
  Meanwhile, there are other things happening in the nation and the world that the public needs to know about. To ignore them and chase down the easier story is certainly understandable, and the Big Story deserves all the attention it deserves.
   But there are other things happening in the nation and the world which the public also deserves to know about. They may be more difficult to dig out, but that's the challenge that good reporters enjoy.

Thursday, November 16, 2017

Data Doldrums

   Monthly statistics don't always give a clear picture of progress, especially in economics. But they can be useful when gathered together and then tracked over time.
   In addition, some are collected through surveys and polling, which cannot detail a complete set of everything that's going on. When done well, however, statisticians can get a pretty good idea of what's happening, even when they don't have every last bit of data.
   With those caveats in mind, consider these: U.S. import prices rose by 0.2  percent in October, while export prices were basically unchanged, according to government reports.
   The Consumer Price Index for all items increased 0.1 percent while hourly earnings fell by 0.1 percent. And the Producer Price Index rose by 0.4 percent.
   The number of job openings is holding, at about 6.1 million. The U.S. economy added some 261,000 jobs in October, which helped to bring the unemployment rate to 4.1 percent.
   And the total value of all goods and services produced in America rose by 3 percent in the three months ending September.

   When you look at some sets of statistics, the economy is doing well. But if you're someone who is out of work, or has a low-paying job, the numbers that say prices are rising while wages are not, tell you a very different story.
   So who's right, the commentator who says things are great, or the one who says many people are squeezed between increasing costs and static pay?
   One answer is that they both are. There will always be some who benefit in a rising economy, and some who are left behind. The reasons for this are legion, including skill levels, education, regional differences in supply and demand for workers and goods, as well as  attitudes on the part of workers, employers and government policies and assistance programs.
   The best we can hope for is cooperation and coordination among people, companies and government to work toward programs that do the most good for the most people, while causing the least harm over all.
   That's where politics and economics meet.

Monday, November 13, 2017

Carlinomics

"It's all about stuff." -- George Carlin

   What is a trade gap and why is it "bad"?
   Some folks would have us believe that a negative balance of trade is somehow evil incarnate, and a nation must avoid it at any cost or face bankruptcy and extinction.
   At root, a trade gap is when we buy more stuff from them than they buy from use, and therefore "they," whoever they are and whatever nation they occupy, are somehow defeating us and that situation must change.
   To the ultranationalists, the other way around is better. The important thing is to win, and the way to do that is for us to sell more stuff to them than they buy from us. That way, we collect all the money, and therefore we win.
   A nice thought, but if we have all the money, it follows that they have none, and therefore cannot buy any more stuff from us. Likewise, if they have all the stuff, we would have none.
   Therefore, one side goes hungry and cold.

   Consider this, from what might be called the George Carlin School of Economics: "It's all about stuff," as the comedian put it for one of his sketches.
   Or, from an economist's viewpoint, each side has stuff. But each side has more stuff than they need, so they offer to trade. I have more of this kind of stuff, but not enough of some other kind of stuff. But the other side says I don't need any more of that kind of stuff. I need this kind of stuff, but you don't have any
   It turns out, however, that a third party has an excess of this kind of stuff, but doesn't need the kind of stuff that the first party has. So the three sides get together and invent money.
   One definition of money is anything that facilitates trade, which then enables the three parties to do business, trading stuff for money, and then money for some other kind of stuff.
   Simplistic, yes, but that's the way things work in the wacky world of economics.
   Eventually, while there may be some lags in the three-way trading, all things balance.
   
   In politics, there are winners and losers. In economics, every side benefits and there are no losers.
   Political leaders, however, insist on winning. There must be a winner in everything, and for that to happen, there must be a loser.
   In the economic short term, there may indeed be winners and losers as people compete, selling some of their stuff and collecting money from others. Over time, however, all things will balance and everyone benefits.
   If one side wins all the money but has no stuff -- including foodstuff, clothing stuff and shelter stuff -- they are the worse for it. Conversely, if another side has all the stuff but no money, they will soon use up all the food, clothing and shelter stuff, and won't be able to acquire more.
   What happens then, unfortunately, is war.
   Currently, there are too many nations, including the U.S., where politics is dominated by those whose only goal is winning. There is no room for cooperation and mutual benefit  from fair trade.
   For them, international trade is useful only as a way to win.
   That way madness lies.
   Politics and economics are like love and marriage. You can't have one without the other, but unless there is mutual understanding, respect and cooperation, the relationship is doomed.

Saturday, November 11, 2017

The Politics of Me

   What works in corporate business seldom works in national economic policy.

   Voters across America sent a message to the White House this week, but whether the message will be acknowledged or ignored is an open question.

Noteworthy words:
   Only I can fix it.
   I'm the only  one that matters.
   I'm a pretty smart guy.
   I'm rich. (By how much?) That's none of your business.
   He lost because he didn't embrace me and my policies enough.
   I have the world's greatest memory.
   I don't remember anything about that meeting.

   A selective memory and a focus only what matters to the self is very useful when you're sliding to oblivious.

Thursday, November 9, 2017

Art of the Media Deal

   Presidential message to AT&T: Sell CNN to Fox and I'll approve the deal to buy Time Warner. That way I'll get more favorable coverage from CNN.
   Not exactly the way he phrased the message, but that's what it comes down to.
   AT&T wants to buy Time Warner, which owns the CNN cable news network in addition to Time Magazine, the Warner Bros. movie firm in Hollywood, and other stuff for $85.4 billion, and the deal seemed likely to close before the year is out.
   However, the Department of Justice stepped in and challenged the deal and told AT&T it should sell Turner Broadcasting, which owns a bunch of cable TV channels including CNN, in return for government approval. Otherwise, there are antitrust issues to cope with.
   An alternative, according to published reports, would be for AT&T to spin off DirectTV, a very profitable satellite operation.
   So there's the riddle: Sell a profitable content provider or dump a news operation, presumably to another news company more favorable to the president, who has often assailed CNN as a "fake news" operation.
   The public kerfuffle prompted the CEO of AT&T, Randall Stephenson, to comment, "I have never offered to sell CNN and have no intention of doing so."
   As early as a year ago, before the election, candidate Donald Trump, during a speech in Gettysburg, Pa., vowed his administration would not approve such a deal, "because it's too much concentration of power in the hands of too few."
   Our resident cynic Pug Mahoney refrained from commenting on the irony in that statement.

Tuesday, November 7, 2017

Guns and People

Guns don't kill people; people kill people, says the NRA.
People use guns to kill people, says Pug Mahoney.

   "That's the price we pay for our right to bear arms under the Second Amendment," say gun advocates.
   What's with this "we" stuff?
   Speak for yourself. That may be the price you are willing to pay. But it's really being paid by others, not by you. When someone close to you becomes that price and you watch them die, then you can say it was an acceptable price. Then you can talk about a price you are willing to pay. Until then, be quiet.
         
   There are now more guns in America than there are people. Some 370 million guns in a country with a total population of 350 million, according to a summary of various estimates.
   But no matter how you count them, it's clear that America leads the world in the number of guns available to people, and also leads the world in the number of gun deaths, including homicide, suicide and accidental shootings.
   Conclusion: More guns leads to more deaths.
   Fewer than 5 percent of the world population is American, but they own 42 percent of all the guns in the world. And Americans were responsible for fully one-third of all mass shootings worldwide from 1966 to 2012, according to a study by Adam Lankford of the University of Alabama.
  America's gun homicide rate was 33 per million in 2009, according to a report in the New York Times, compared to 5 per million in Canada and 0.7 in Britain. (Here's a link to that report: https://www.nytimes.com/2017/11/07/world/americas/mass-shootings)   
   Each time there is a mass shooting in America, the current president proclaims, "Now is not the time" to talk about stricter gun control.
   But when is the time? When will that time come? How many more must die before government officials wake up and smell the gun powder?
   
   The president has also said that mass shootings are a mental health issue, not a gun issue. That's only partly true, and it's no reason to accept these tragedies as "the price we pay" for the Second Amendment's guarantee of the right to bear arms. 
  Moreover, this attitude ignores the opening phrase of the Second Amendment: "A well regulated militia ..." The rest of the amendment refers to this militia as being "essential to the security of a free state," and the right of a state's "people" -- plural -- to keep and bear arms. There is no reference to the right of an individual to have as many firearms as one might want.
   Clearly, a person with an unhealthy or dangerous mental status should not have access to a high-capacity, military style weapon, or even a single-shot pistol.
   Nevertheless, gun advocates insist there is little that can be done to limit, much less eliminate, mass shootings such as those so common in America. Studies have shown a clear correlation between the number of guns in a country, and the number of violent deaths caused with these firearms. Further, the extent of mental or emotional health issues had little bearing on the final statistic, that more guns means more death.
   To claim that mass shooting is primarily or solely a mental health issue and not a gun issue is to ignore fact and reality, and therefore little can be done. It is the price we pay for the right to keep and bear arms, according to that argument.
   It is a fallacy to believe that understanding means acceptance and acceptance brings agreement.
   Reasons are not always excuses.
   We can understand the reasons for a person's speech or behavior, but that does not mean we must accept it or agree with it. Some speech or behavior is unacceptable no matter the reasons or circumstances. We may understand the reasons, but that does not excuse the speech or behavior.
   This is especially true for gun violence. Too often, guns and people don't mix.

Saturday, November 4, 2017

Altruism vs Greed

   For the past one hundred years and more, every president of the United States has had a background and experience in politics, government, or the military.
   The exception is the current occupant of the Oval Office, who has experience in none of the above.
   Beginning with Franklin D. Roosevelt, experience in politics and government was the primary background for presidents. Harry Truman served as governor of Missouri and as a U.S. senator before being elected vice president with FDR, then was elected to the presidency in his own right.
   Dwight D. Eisenhower had a distinguished military career, then became president of Columbia University before being elected president in 1952.
   John F. Kennedy served in the U.S. Navy during World War 2, later to become a senator, and was elected president in 1960.
   His successor, Lyndon B. Johnson, spend many years in the Senate and as vice president under JFK, moving to the presidency after Kennedy was assassinated.
   Richard Nixon, Gerald Ford and Jimmy Carter each had successful political and government careers before moving to the presidency.
   Ronald Reagan, at first an actor, became active in politics and was elected governor of California before moving up to the White House as president.
   George H.W. Bush first served as director of the Central Intelligence Agency before becoming vice president under Reagan and then elected president himself.
   Likewise Bill Clinton and Barack Obama, who each had long and successful careers in politics and government before moving into the White House as president.
   In between those two was George W. Bush, who grew up in a political family and served for years in government before being elected president.

   Now we have a salesman and developer who amassed a fortune in real estate before moving to a reality TV show and then deciding to use his skills as a pitchman to sell himself to the American public as a politician and expert in government.
   "Only I can fix it," he has said, and "I'm  the only one that matters" when it comes to making foreign policy decision. Not the career people in the State Department.
   Persuasive rhetoric is one thing. Successful sales pitches is another. Neither is an adequate substitute for experience in politics and government, especially when perched atop an ego the size of Mount McKinley (with apologies to the president after whom that mountain was named.)

Friday, November 3, 2017

Jobs, jobs, jobs

Correlation is not causation

   Hurricanes or no, the U.S. economy added 261,000 jobs in October, led by food services and drinking places, according to the Bureau of Labor Statistics. The gain offset a decline in September, the agency said, due largely to the impact of Hurricanes Harvey and Irma.
   Professional and business services, manufacturing and health care also posted increases.
   All together, the growth brought the unemployment rate down another notch, to 4.1 percent. In addition, the number of people out of work declined by 281,000 in October, the BLS reported.
   So what does it all mean? As the jobless rate remains at full employment level, people looking for jobs are finding them and, coupled with the separate look at national output (Gross Domestic Product), which grew at an annualized pace of 3 percent in the third quarter of this year, it means that America is doing well.
   Moreover, the economic recovery of the past seven years is continuing, and investors in the stock market are recognizing that as they push Wall Street averages to record levels.
   That does not mean, however, that continuing economic recovery will boost the stock market to higher and higher levels. Nor does it mean that higher stock indices are a barometer of future national economic performance. Stock prices are a reflection of investor attitudes, not of consumer purchasing and corporate production.
   Correlation is not necessarily causation.
   The stock market crash of 30 years ago was largely caused by automated computer-driven sales, not of human reflection on what a dip might portend. The machines were programmed to sell if they perceived a drop in prices. In turn, this tipped other computers also to sell. Result: An avalanche of selling.
   Since then, experts have modified their computer selling instructions to account for occasional slight dips, telling them not to panic.
   But does that mean humans are immune to panic selling? No. But it does diminish the risk.
   All that said, there is still the chance that the market averages have reached the point where a "correction" is in order.
   Or, as J.P. Morgan is reported to have said when his elevator operator asked him what the market will do, "It will fluctuate."

Thursday, November 2, 2017

Power Play

Be careful what you wish for. You may get it.
What's good for the goose is good for the gander.

   Some time ago, the U.S. government demanded a trove of emails from Microsoft in a case involving an accused drug dealer. Microsoft refused the warrant, on the grounds that the computer server holding the stuff was not in the U.S. but in Ireland, and therefore the U.S. warrant had no jurisdiction.
   Government lawyers pursued the case through several levels, and now it's headed for the Supreme Court.
   This could have been avoided, according to a former attorney general for Ireland, if the U.S. had simply asked the Irish government for the information. The Irish government then could go to an Irish court for an Irish search warrant. But no, U.S. prosecutors insisted that a warrant issued to an American company must be complied with, no matter where the relevant stuff -- in this case digital emails -- was stored. In this case, it was an American company with facilities in Ireland. The Irish government itself did not have the data.
   Now here comes the problem. If the U.S. Supreme Court upholds the warrant and rules against Microsoft, then every piece of data owned by anyone in the world, if stored on an American-owned computer server, could be subject to a warrant issued by an American court against an American company. This would include Apple, Google, Yahoo and other U.S. companies as well as Microsoft.
   It could also affect American operations of foreign owned businesses. And if the U.S. can issue search warrants against overseas operations of American companies, it follows that other nations could follow that legal precedent and issue search warrants for data stored on computers in the U.S.
   Be careful what you wish for. You may get it.

Precedent President

   Rather than renominate Janet Yellen to a second four-year term as chair of the Federal Reserve Board, as has been customary when a new president takes office, Donald Trump passed over her and picked another board member, Jerome Powell, instead. Powell is known as a moderate in his positions.
   Why the president changed this precedent is open to speculation, but a likely reason could be that Powell's background and business leanings are near the top of possibilities. News reports point out that Powell is a deep-rooted establishment Republican with strong ties to the financial industry, as a lawyer and an investment banker.
   This suggests that Trump picked Powell because he is more likely to follow the president's preferences, so the Fed's monetary policy would be more in line with the government's fiscal policy. His appointment as chairman must still be approved by the Senate.
   Yellen will remain as a member of the Fed's board of governors after her term as chair expires in February.
   In his thank-you note to the president, Powell gave no hint that he would attempt to change the Fed's attitudes, and that he would follow the Fed's "longstanding tradition of monetary policy independence."
   The nomination came a day after the Fed announced it was holding its target for its key lending rate at the range of 1 percent to 1.25 percent. The same day, the Bank of England announced it was raising its key lending rate to 0.5 percent from 0.25 percent. It was the first time in a decade that the British central bank raised interest rates, and came as the United Kingdom faces potential problems as the nation makes plans to leave the European Union.

Wednesday, November 1, 2017

Independent Fed

   The economy is doing well, but the Federal Reserve said it's not ready to tap the brakes to prevent an unmanageable surge.
   The Fed's Open Market Committee said it will hold its key lending rate where it has been for some time now, in the range of 1 percent to 1.25  percent, partly because inflation remained below its 2 percent target rate even as unemployment low, at just about full employment.
   Something to watch, however, is whether the president will nominate Janet Yellen for a second term as chair of the monetary watchdog board or replace her with someone more in tune with his own preference for less regulation in any and all government activities.
   Even so, the two potential nominees are generally regarded as moderate, and whether they stay in that mold, even keeping to the Federal Reserve Board's traditional independence, will be something to watch for.
   President Donald Trump has  been talking up the need for looser reins overall so the nation's economy can "take off like a rocket." GDP has been growing at 3 percent, but if a surge shows up, the Fed traditionally has acted to prevent sudden surges.
   Meanwhile, as the Fed voted to keep the key lending rate low, the Bank of England is expected to boost its key rate when it meets this week.

It's Mueller Time

Be afraid. Be very afraid.

   The special counsel probe into government wrongdoing and possible collusion with foreigners during the presidential election campaign is led by a federal prosecutor who took down the Brooklyn Mafia, the Enron company, and the Arthur Andersen accounting firm.
   So this legalistic pit bull, as the New York Times characterized Andrew Weissman, should be afraid of the Trumpian machine because ... ?
   Meanwhile, the president's squad continues its distraction tactics to refocus  public attention away from the probe to its allegations of wrongdoing by Hillary Clinton and the Democratic Party.
   Good luck with that one, considering that there is little or no evidence to support their charges.
   
   Nevertheless, they persist in what can be called the "Yeah But Syndrome," which manifests in such defensive claims as "Yeah, but they do it too." Or, "Yeah, but she hit me first." Or this one: "Yeah, but the other guy is even worse."
   That final claim is the defense of last resort for those who eventually admit that their guy really is the arrogant, ignorant liar that the evidence has been showing for months.
   Which means they remain loyal to their hero regardless of the list of failings that grows longer by the day.
   Reality check: Hillary Clinton did not gain the presidency, so it doesn't matter what she may or may not have done during the campaign. Donald Trump did win through to the Oval Office, so it matters a great deal what he  and his team said and did during the campaign and what they now say and do, because this affects the entire nation.
   
   Anyway, soon the Traveling Twit will leave for an extended visit to the Far East, including Japan, South Korea and China. On the good side, this may mean that he will be out of Twitter range for perhaps a week.
   Then again, maybe not.
   Meanwhile, the president and his devotees keep lashing at Democrats and Hillary Clinton, insisting that the probe by Robert Mueller and his crew should really be focusing on what the Dems did, and not on what they insist is the guy who now sits in the Oval Office or his associates.
   However, to paraphrase what Trump himself has said, it's because you are the president, and she's not.
   Add to that the reality that two close members of the Trump team have been indicted, and a third has copped a plea of guilty to a range of charges dealing with a bunch of stuff. (You could look it up. It's too long to detail here.)
   One more thing to keep in mind: The defenders respond loudly that since the allegations show no immediate, direct connection to the president, that means there is no evidence or proof of collusion.
   Yet.
   Stay tuned.