Archive for the Category Uncategorized


Hispanic votes matter

You won’t find anyone on the internet who’s a bigger critic of Donald Trump than me. More specifically, I’m disgusted by Trump’s racism and the increasing racism within the GOP.

And yet I have trouble understanding what the Democrats are trying to do. Going at least as far back as the Jesse Jackson campaigns, there’s been this “rainbow coalition” idea, a theory that people of color are oppressed by our society and thus are the natural allies of the Democratic Party, which claims to be the anti-racism party.

I’m not Hispanic, but I have to wonder how Hispanics are viewing the events of 2020. The “black lives matter” rallying cry is something close to the new religion within the Democratic Party. By itself, that may not be a big problem, but unless I’m missing something this new anti-racism ideology is increasingly focused on African-Americans, to the exclusion of other people of color. How much discussion have we seen this year about young Hispanic men who are murdered by cops? Or imprisoned for selling pot?

When some uneducated schmuck responds to “black lives matter” with “all lives matter”, he’s told that he’s a racist. How would that make the average Hispanic voter feel? I can’t say, but it’s a question worth considering as polls show increasing Hispanic support for Donald Trump.

The Democratic strategy for future decades seems to hinge on the assumption that working class Hispanics making $43,000/year will continue to have radically different voting patterns from working class whites making $43,000/year. (Even though the two groups often intermarry, and work side by side.) Maybe so, but how likely does that seem in a world where the Democrats increasingly portray blacks as the victims and non-blacks as the oppressor class? What’s the Democratic Party pitch to Hispanics (and Asians?) Recall that the old South Africa had whites, blacks, and “colored”, each treated differently. Is that the plan? No more rainbow coalition?

I’m not saying the Dems are wrong in a moral sense; perhaps this is an incredibly noble and selfless crusade on their part. I have become persuaded that the complaints of the black community are genuine. Rather this post is about strategy—I just don’t see how Dems will win in the long run unless they find some other way to frame the anti-racism issue. A more inclusive framing. A framing describing how we’d all benefit from a color-blind society.

A cynic might say this is all a sort of kabuki theatre by the Democratic establishment. After all, even heavily Democratic California refused to enact some fairly basic policy reforms to get rid of bad cops. What does that tell you about their sincerity?

“To ignore the thousands of voices calling for meaningful police reform is insulting,” Sen. Steven Bradford, D-Gardena, said in a statement early Tuesday morning after his bill to “decertify” officers who commit crimes or serious misconduct failed to get a vote in the final hours Monday. “Today, Californians were once again let down by those who were meant to represent them.”

That’s right; even in 2020, when everyone is falling all over themselves to prove how anti-racist they are, heavily Democratic California legislators refuse to enact a bill that would take away the badges of bad cops. Blue lives matter?

Banana republic watch

With each passing day, the banana republicization of America becomes more pronounced.

1. Here’s the FT discussing the disgraceful attempt by the US government to extort money from TikTok:

After a process in which potential risks to national security have become mingled together with personal political interests, analysts say the battle over TikTok is another example of the Trump administration setting an unstable playing field for companies wishing to do business in the US.

“We may even be going beyond what emerging markets do” to protect economic interests, says Saikat Chaudhuri, executive director of Wharton School’s Mack Institute for Innovation Management. “It’s really extreme and unacceptable for the leading democracy and what’s supposed to be a tech leader and an example for how free markets can work.”

One person close to the negotiations characterised the sale of TikTok as “driven by politics and greed”.

2. Meanwhile, the media (both left and right) is increasingly full of stories predicting chaos after the election. I don’t know if there will be chaos (I’m a bit skeptical), but that’s not the point. You don’t see those sorts of fears expressed in non-banana republics.

3. The Supreme Court has been excessively politicized for quite some time, but now things are reaching a hysterical pitch. Here’s a project for a grad student. Count the number of articles discussing the debate over US Supreme Court picks over the past few decades, and compare with the number of articles in the entire rest of the developed world that discuss controversies over their Supreme Court picks. I follow the news pretty closely and the only time I can ever recall reading controversies over Supreme Court picks is in banana republics such as Latin America and parts of Eastern Europe, or in the US.

Here’s one area where the Dems are also to blame, with some pundits advocating “court packing” should Biden be elected. Even the overwhelmingly Democratic Congress of 1937 rejected FDR’s shameful (and authoritarian) attempt to reduce America’s three branches of government down to two. (Yes, it goes without saying that the GOP is shameless on this issue as well.)

Take a look at how things were done before America became a banana republic:

Section 1. No person shall be elected to the office of the President more than twice, and no person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once. But this Article shall not apply to any person holding the office of President when this Article was proposed by the Congress, and shall not prevent any person who may be holding the office of President, or acting as President, during the term within which this Article becomes operative from holding the office of President or acting as President during the remainder of such term.

[emphasis added]

In non-banana republics, a principled argument for or against against term limits would exempt the current occupant of the office. [In this case, the GOP-led initiative exempted Truman.] A principled argument for a bigger Supreme Court would gradually phase in the expansion, to begin in the term of the following president, not the current occupant of the office.

People sometimes ask me, “What’s wrong with changing the constitution to allow a Putin or a Chavez to serve more than two terms?” There’s nothing wrong with changing terms limits, as long as the change doesn’t apply to the current occupant of the office. There’s nothing wrong with increasing the size of the Supreme Court, as long as it doesn’t allow the current president to engage in court packing.

Here’s a general rule. When thinking about how much power you want to give an executive, think about how you’d feel if that power were held by Hitler, Stalin, Pol Pot, or Mao. If the leader were that bad, would you rather the leader be in charge of a Russian-style executive or a Swiss-style executive? Procedural issues come before everything else.

4. Here’s another example.

5. And here’s another:

Then the agreement collapsed. The breaking point, according to four people familiar with the discussions: Mark Meadows, Mr. Trump’s chief of staff, insisted the drug makers pay for $100 cash cards that would be mailed to seniors before November — “Trump Cards,” some in the industry called them.

PS. I have a piece on AIT at The Hill.

PPS. Good to see a growing awareness that the Fed needs to do more QE.

PPPS. Unemployment insurance data is completely useless.

Their own worst enemy

This set of Matt Yglesias tweets caught my eye:

Yglesias is clearly right, but there’s an even more important point that needs to be emphasized. When left-liberals like Zack Beauchamp criticize their own side, they are helping their cause and hurting Trump. I suspect that many on the left believe exactly the opposite, that Baeuchamp is giving aid and comfort to the enemy.

The cancel culture promulgated by SJWs is one of the few things Trump has going for him this year, given that America is obviously not “great again” in 2020. SJWs believe that no one who voted for Trump should be allowed to have a job in academia, publishing, high tech, and many other industries, at least if their choose to honestly speak their minds. That’s almost half of the country! But it’s even worse than that; SJWs also believe that outspoken swing voters like me should not be allowed to have a job in any intellectual field. Only those who adhere to a radical left wing ideology should be able to work in those fields, unless they keep their mouths shut. Heck even Marxists like David Shor now get cancelled.

I hope I don’t need to explain that the cancel culture is extremely unpopular among the sort of swing voters who will determine the outcome of the election. Even many Democratic voters are opposed. So those left-liberals who try to get their own side to avoid the worst excesses of political correctness are actually helping the broader progressive cause.

I see modern conservatives as crafty villains, and modern leftists as well meaning fools. The left seems to think the best way to get white working class people to vote against Trump is to criticize Bernie Sanders for saying “all lives matter”. Seriously.

Trump’s operatives are privately gleeful watching the left commit political suicide.

A recent comment by PRC caught my eye:

Slightly offtopic, but fits into that note with Central Americans. There was a funny graph I saw awhile back where it showed that Trump was doing best (around 50+%) support with Central American(MesoAmerican Indigenous Hispanics) versus around 30% with the more “White” Hispanic groups(Venezuelans, Columbians, etc).

The most bizarre political phenomenon I have seen is that Trump does really well with non-Whites he routinely attacks(Indigenous people, Muslims), but he does bad with groups he doesn’t really overtly attack(East Asians, Jews, African Americans). I think he got 7x more Muslim support in 2016 and 2018 than McCain and Romney.

Obviously with TPS [i.e. deporting refugees], this is an extreme attack, but he tried to do it before and he was still relatively popular with those voters, what gives?

There’s a double irony here, which needs to be unpacked. Immigration restrictionists often argue that we don’t want to accept people from developing countries because they will bring along their illiberal cultural values. They may end up voting for socialists or authoritarian nationalist demagogues. One irony is that restrictionists were essentially warning that immigrants would vote for people like Trump. And the second irony is that maybe they will!

There is a very high rate of intermarriage among whites, Asians, and Hispanics. Thus I’ve always assumed that it’s only a matter of time until the white and Hispanic working classes voted in the same way. In the 1960s, that would have meant voting Democratic, in the 2040s it might mean voting Republican. Indeed that’s my prediction. And when the make up of political parties changes, their positions on the issues will also change.

I’m not sure if it’s true that Hispanics are trending toward Trump, but let’s consider why that might be the case. Further immigration could be seen as providing competition for Hispanic workers that are already in America. Yes, some Hispanics fear deportation, but I suspect that very few Hispanic voters fear deportation.

My own view is that immigration should be greatly expanded (one billion Americans!), and this view in no way depends on whether I happen agree with the political views of most potential immigrants. My view on immigration is based the the 64,000 foot high perspective, from which I have no reason to assume that my political views on the appropriate size of government are superior to Paul Krugman’s views. My political views shape my views on public policy, they do not shape my views on the appropriate ideology of immigrants.

In this blog, I probably appear overconfident in my beliefs. But I can assure you that I have enough self awareness to understand that I’m nobody special, and that there’s no objective reason to privilege my political views over anyone else’s.

As an analogy, I predict that Trump will win. But there is no objective reason to favor my prediction over the betting market’s current view that Biden will win.

The remainder of the decade

The Fed has given us its inflation forecast for the first 4 years of this decade.

2020: 1.2% inflation
2021: 1.7% inflation
2022: 1.8% inflation
2023: 2.0% inflation

But what does it expect for the remainder of the 2020s?

I’m not sure, but unless it looks a lot like the following, then the AIT policy has no real meaning:

2024: 2.15% inflation
2025: 2.25% inflation
2026: 2.30% inflation
2027: 2.25% inflation
2028: 2.20% inflation
2029: 2.15% inflation
2030 and beyond: 2.0% inflation

That averages 2.0% for the entire 2020s.

Obviously my figures are not a precise description of their current intention, but I’d challenge anyone to convince me that these figures aren’t at least close. My claim is that if this isn’t pretty close to what the Fed means by average inflation targeting, then the policy is essentially meaningless.

After all, they talk about inflation being moderately above 2% for some period of time to make up for the current shortfall, such that inflation averages 2% in the long run. So what else could it mean? The most common sense interpretation is that ‘moderately’ is a few tenths of a percent above, and “some period” is a few years, not a few months, a few decades or a few centuries.

BTW, I favor a more expansionary policy during 2020-23 so that less make-up is needed in the out years. I’m just taking today’s SEP forecast (with its 130 basis point total shortfall) as the Fed’s current intention, and drawing out the long run implications of that forecast.

So why can’t the Fed do what I just did? Probably because FOMC members are not in agreement as to exactly what AIT means. Vagueness implies a lack of consensus.

Target the forecast

The Fed is targeting inflation at above 2% in future years, in order to create an average inflation rate of 2%. The Fed is predicting inflation will be at or below 2% in future years. The Fed needs to change policy until the forecast for inflation is equal to the target for inflation.

I’ll probably add some updates later today.

Update: Here’s what reporters should have asked Powell:

“Mr. Chairman. You’ve just said that the Fed is definitely not out of ammo. What would be the downside of boosting asset purchases above the current $120 billion/month with the goal of getting to 2% inflation sooner, and having labor markets recover faster? You’ve said that current policy is appropriate, but what specific bad outcome do you fear would occur with bigger asset purchases that led the Fed to avoid adopting a more expansionary policy today?”