Economic Related Incompetence

Here's a few funny economics-related items I'm late in commenting on that reflect how ignorant, incompetent, and out of depth the Trump administration is. 

First, Trump thinks that he came up with the common economic stimulus metaphor "priming the pump". Here's the transcript from his interview with The Economist:

But beyond that it’s OK if the tax plan increases the deficit? 

It is OK, because it won’t increase it for long. You may have two years where you’ll…you understand the expression “prime the pump”?

Yes. 

We have to prime the pump.

It’s very Keynesian. 

We’re the highest-taxed nation in the world. Have you heard that expression before, for this particular type of an event?

Priming the pump? 

Yeah, have you heard it?

Yes. 

Have you heard that expression used before? Because I haven’t heard it. I mean, I just…I came up with it a couple of days ago and I thought it was good. It’s what you have to do.

It’s… 

Yeah, what you have to do is you have to put something in before you can get something out.

The "prime the pump" metaphor has been around since at least the Great Depression, back when people actually had to prime pumps. Trump is such an ignorant dumbass that he's never heard this common term before and he thinks he invented it recently, or he forgot he's heard it before and thinks it popped into his head because he's so clever.


Second, the White House Office of Budget and Management made a multi-trillion dollar math error that its director couldn't even catch, or admit to making afterwards. Basically, they assumed that their proposed tax cuts (estimated to cost trillions over a decade) would pay for themselves through induced higher economic growth. Which is nonsensically optimistic, but whatever. 

So the tax cuts will supposedly generate growth required to make them deficit neutral. Then, to close a $1.3 trillion deficit by 2027 in Trump's budget proposal, they assume that tax cuts will increase economic growth enough to close the gap. Notice the problem? It's the same trick twice. How could the tax cuts be revenue neutral and increase revenue on net? Maybe they meant the tax cuts would be revenue positive, but they never made that claim. This is a very dumb, simple mistake. That it escaped the notice of everyone at OMB who laid eyes on it, including the director, further displays the utter incompetence of this administration. 

OPEC Extends Production Cuts

AKA OPEC provides guidance to shale oil producers in the United States that they can continue to produce as much if not more oil and be about as profitable as they are now for at least nine more months.

He Mad

"I got dirt on you doggie"

Technology and Work part II: Economic Possibilities for our Grandchildren

Continued from Part I

What if this time is different? What if technology and automation create a world where human labor is uneconomical? What if we become so productive that there are too few jobs to go around? I’m pretty skeptical, but what if?

I’ll return to Keynes, in his 1930 essay:

“We are suffering just now from a bad attack of economic pessimism. It is common to hear people say that the epoch of enormous economic progress which characterised the nineteenth century is over[1]; that the rapid improvement in the standard of life is now going to slow down…I believe that this is a wildly mistaken interpretation…We forget that in 1929 the physical output was greater than ever before.

…the very rapidity of these changes is…bringing difficult problems to solve…namely…unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses…But this is only a temporary phase of maladjustment. All this means in the long run that mankind is solving its economic problem.”

Basically, too little work to go around due to efficient production? Great! Problem solved. This seems to be a fairly radical viewpoint; look at popular writings on automation and work, you would think it is a bad thing that robots could do our work for us. In reality, it would be a historic accomplishment. However, this long run outcome would raise its own, new problems.

As David Autor states in his recent paper: 

“if human labor is indeed rendered superfluous by automation, then our chief economic problem will be one of distribution, not of scarcity…we would have vast aggregate wealth but a serious challenge in determining who owns it and how to share it.”

I still can’t imagine a world where no human labor is needed at all. However, if human labor becomes uneconomical in production, we would have to rely on capital income (the return on ownership of robots for example). But capital ownership is highly concentrated. If we do not change our system in response to the effective elimination of wage income, our society would be split between rich capital owners, and an impoverished class with no ability to earn income beyond working for their own subsistence[2].

In short, in this what-if future, capitalism will cease to be the aggregate utility maximizing system and therefore must be discarded by economists (for the whole point of the science is to find the utility maximizing way to use our resources). Instead we would need to distribute ownership of capital (aka the means of production) among everyone, so that, in our future without scarcity, no one goes wanting.

Inequality would become unjustifiable as well. In 1944, the socialist economist Abba Lerner developed a simple equation of aggregate utility maximization, based on the concept of marginal utility. A poor person gains a greater marginal increase in utility from an additional dollar than a rich person. If you take that dollar from a rich person and give it to a poor person aggregate utility is therefore increased; this will go on until everyone has an equal amount of wealth. 

The equation is true in and of itself, but it ignores human behavior and incentives. Nearly all economists regard some level of inequality as necessary to incentive economical behavior. For example, a sector that is producing too little given the demand for its output will have higher profits, enriching its capital owners relative to the rest of the economy but also incentivizing increased production.

But robots do not require such incentives; they can simply be programmed. Ownership of capital could be spread among all humans to do with what they want over their lives. And we could provide a basic income for those who still fuck up. This means humans can take greater risks in life, potentially incentivizing entrepreneurship rather than dependency. The consumption and savings choices of humans will still guide production to respond to human wants in a utility maximizing manner.

In a sense, we would all be rich, but even better. As Keynes put it (back in 1930 again):

“To judge from the behaviour and the achievements of the wealthy classes to-day in any quarter of the world, the outlook is very depressing! For these are, so to speak, our advance guard…they have most of them failed disastrously…to solve the problem which has been set them…

When the accumulation of wealth is no longer of high social importance…We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession…will be recognised for what it is, a somewhat disgusting morbidity…

All kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting the accumulation of capital, we shall then be free, at last, to discard…

But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.”

Technology and Work part I: “The Bogeyman of Automation”

Technology in general, and advances in robotics and computing in particular, have created a lot of buzz and worries about what will happen to those whom[1] depend on wage income. “Maybe this time really is different” is the bare bones summary. Economists who air such views are sure to get a spot-light in our current political environment. But it is a view older than the Luddites. “This time is different” is a great way to get attention now, and look like an idiot in a decade or so, or at least it always has been[2]. Here’s an example of the popular worry about automation:

“The number of jobs lost to more efficient machines is only part of the problem…automation may prevent the economy from creating enough new jobs… But automation is beginning to move in and eliminate office jobs too… In the past, new industries hired far more people than those they put out of business. But this is not true of many of today’s new industries… Today’s new industries have comparatively few jobs.”

This is a pretty standard example of today’s worries, particularly the part about today’s new industries being different than in the past (think of the tech sector). Problem is that quote is from Time Magazine in 1961. It’s the same exact “this time is different” argument, except that we have the hindsight to know it was wrong. I vaguely remembered that Keynes wrote on this same subject so I went back and looked. Sure enough, in 1930 Keynes wrote (in an essay titled The Economic Possibilities for our Grandchildren):

“[I]n our own lifetimes…we may be able to perform all the operations of agriculture, mining, and manufacture with a quarter of the human effort to which we have been accustomed… the very rapidity of these changes is…bringing difficult problems to solve…namely…unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses.”

It’s the same argument! Only by 1961 we had the hindsight to know it was wrong. Keynes correctly identified it as “only a temporary phase of maladjustment.” Since the 1960s (or 1930s for that matter), against the backdrop of higher productivity and women entering the labor force, employment has continued to grow. The employment-population ratio rose over the rest of the 20th century (it is now back to where it was in the mid-1980s due the recessions of this century and demographic change).

To address such concerns, the Johnson Administration formed a Commission on Technology, Automation, and Economic Progress. They hit the nail on the head:

“Thus technological change…is an important determinant of the precise places, industries, and people affected by unemployment. But the general level of demand for goods and services is by far the most important factor determining how many are affected…and how hard it is…to find jobs. The basic fact is that technology eliminates jobs, not work”.

Technology eliminates some jobs, but compliments others, increasing demand for such labor. And the typical job contains a mix of tasks, some of which are easily automated and others not. More generally, technology increases productivity, which means lower labor cost per unit of output. This will translate into a combination of increased production (because of lower costs), higher real incomes (because of lower real prices), and higher consumption (because of higher real incomes). All of which increase demand for labor. This is why the decline in agricultural employment in the US, from 41% of the labor force in 1900 to 2% by 2000 didn’t result in mass unemployment[3].

A frequent response to this simple, comforting story is that the costs and gains do not accrue evenly. Indeed technological innovation does cause inequality, particularly because cutting edge technologies are most expensive when new. In a recent paper, David Autor presents evidence that such worries are at least over-simplifications. While automation eliminates some low skilled jobs, robots cannot do everything a human can even at the bottom end of the skill distribution. As a result, automation increases the productivity of jobs at all skill levels. The rising incomes that result will cause people to consume more low skilled services.

Autor finds that over time employment increases across the skill spectrum typically have a U shape, though not always. That is, gains have been disproportionately at the ends of the spectrum[4]. However, because lower skilled jobs have lower barriers to entry (such as educational or licensing requirements), an increase in wages due to higher demand causes an increase in the quantity of labor supplied, subduing wage gains vs jobs with higher barriers to entry. Autor theorizes that middle skilled jobs have not seen as rapid growth because technological improvements are allowing automation to creep further up the skill ladder.

So the inevitable march of technology will not hit everyone equally, but it isn’t eliminating low skilled jobs opportunities generally. Some will lose while a majority benefit on net. The Luddites advocated destroying and banning technologies that threatened their livelihoods. Or, put another way, reducing the economy’s productive capacity, thus impoverishing wider society, in order to protect one class of labor from adjustment and competition. Surely there are better ways of helping the minority who lose out due to automation.

As Herbert Simon, a great economist and Nobel laureate, put it in the 1960s, “the world’s problems in this generation and the next are problems of scarcity, not of intolerable abundance. The bogeyman of automation consumes worrying capacity that should be saved for real problems.”

Part II

This week in “Duh” / Airing Grievances about the Occupy Movement

Micah White is some guy who was involved in getting the Occupy Wall Street fad up and running in 2011; other activists say the movement had no such founders. Anyway, in a shocking turn of events (six years later) White stated that the movement failed because it got caught up in the spectacle of its protests and didn’t get any closer to power or change much of anything.

Duh. 

This is a news story?

Sorry I’m not sorry, but even as someone with sympathy for and common ground with the movement, that was painfully obvious in real time. You mean camping in a park didn’t change our system? The whole movement got bogged down in an argument over whether people should be allowed to squat in a city park if they have a grievance. Basically they lost sight of the objective in an argument over tactics and eschewed “the system” in favor of ideological purity too much to have that wider impact. Maybe it just took this long for someone to interview White about this but I wish I could have met him six years ago and saved him the trouble.

Now White advocates running for office, which is laudable[1]. There needs to be some basic level of participation in our constitutional system in order to effectively advance any cause. But now he’s over large protest movements, saying he’s learned they are ineffective. So, because Occupy failed, all mass protest must be ineffective? This is a great way to dodge any responsibility for Occupy’s failure: the movement failed because it was impossible to succeed, not because of its own choices. History is full of examples of mass protest initiating significant, sometimes massive, change. Shit, just look at the Tea Party.

White, speaking for himself of course, had a lot of nice things to say about Trump in the same interview (also bad things, he’s no Trump supporter, just to be fair[2]). He’s an excerpt:

“Donald Trump proves that it's possible for an outsider to win elections in America. So I celebrate him for that. I love his spirit. I love things that he said during the debates. I love his anti-establishmentism. I love that he says things like, before the election he said, ‘If I don't win the primary there's going to be riots in the streets.’ I love that. And I love Steve Bannon's Leninist spirit. I love all that stuff.”

I don’t want to put words in the guy’s mouth[3] but it sounds like his disagreements with Trump are based on different political goals and not over the means Trump advocates to achieve them. If so, what an asshole. And he loves when Trump threatened violence if he didn't get his way? What an asshole. Anyway, White has a new book out called The End Of Protest: A New Playbook For Revolution. Based on what I’ve heard from him so far I’d say read it and do the opposite. Actually, just don’t read it.

The Coal Jobs Aren't Coming Back

In light of Trump's recent photo ops about bringing coal jobs back, I thought I'd take the time to mention that no, they aren't. Certainly not unless the price of natural gas and oil rise significantly enough to offset their cost advantage. Given how successful fracking and other extraction innovations have been, such as horizontal drilling, that is highly unlikely. But even if those prices did rise, that still doesn't mean the jobs are coming back: most of them were lost to automation. 

One of my fav economists, Scott Sumner has a great post laying out why the jobs aren't coming back (particularly in West Virginia, sorry). You should read that because when I read it I was like great, now I don't have to look up the data. But here are the two main take aways:

• Coal mining employment reached an all-time high in the early 1920s and has declined by over 85% since
• Coal production reached an all-time high in the late 2000s and has declined about 15% since

So from the 1920s to the 2000s coal production was growing while employment was shrinking, that was because automation made workers more productive (leading to wage gains), not because of regulations or foreign trade.

I don't mean to sound cavalier about an industry shedding jobs, but at least I'm not selling people false hope and lies. This is how the economy has always worked, old industries fade and new ones take their place. It's disingenuous for people to argue that the present difficulties (caused by inevitable change over time) are somehow new or different from the past, or that we need to take drastic actions to cope. This is especially true for coal where the vast majority of job loss had occurred by the 1960s. Prior generations were able to successfully deal with the same issues without electing a fascist demagogue, so that's a shit excuse. 

Also when you add in the social cost of coal mining, from the contribution to climate change and detrimental effects on human health of mining and burning coal, the decline in coal production is not a net detriment to the economy overall (though local communities can be negatively impacted on net from this process).

Happy St. Patrick's Day

Happy holiday celebrating the Irish part of our country’s collective immigrant heritage. The Irish diaspora in the United States is over 30 million people, around seven times the population of Ireland itself. When Irish / Catholic immigrants first began arriving in significant numbers ignorant xenophobes said everything they now say about Middle Eastern / Muslim immigrants now. According to these privileged children of immigrants, the Irish were pre-disposed to violence and criminality, they lacked the skills needed to contribute, their religion was incompatible with religious liberty and the separation of church and state (as if that's what really bothers xenophobes), and they would not and could not be assimilated into the nation as previous waves of immigrants had.

But looking back we know it was just irrational bullshit. Now the Irish are considered White by society and we don’t notice the differences anymore. And the Irish didn’t go back where they came from. The nation assimilated to the Irish as much as the other way around; absorbing new immigrants doesn’t displace our culture, it expands it. 

The modern wave of immigrants aren’t going anywhere either and they will inevitably and irreversibly change our country for the better. So to all the dumbass xenophobes out there, your world is dying and the spray-tanned asshole you elected won’t be able to stop it. And as an Irish American, let me say to Trump supporting Irish Americans, on behalf of those of us who know our history in this country: shame on you, you sold out the principles that let us escape tyranny and thrive in this country despite people much like yourselves. And we're supposed to think that today’s immigrants, the most recent arrivals in a centuries-long flow, are the threats to our system and values?

In the 80s

Jeff Sessions was too racist to be a judge and Black Flag wrote this:

We're gonna be a white minority
We won't listen to the majority
We're gonna feel inferiority
We're gonna be a white minority

The Apology Tour Finally Arrives

As has gotten a bit of media attention recently, Bill O'Reilly, one of the grumpy old white men on Fox News, asked Trump why he respects Putin despite Putin being "a killer."

Trumps (abridged) response: "What you think our country is so innocent?"

Looks like the apology tour that Republicans promised us Obama was on has finally gotten started. I predict that Republicans will be at least as outraged due to the fact that they threw a fit even though Obama never went on the apology tour (he did go on a bombing tour though, maybe the bombs said "sorry" on them). Oh wait, the president's party and skin color are different this time. Republicans will keep quite like a child that doesn't want to attract a bully's attention by standing up for others.

Natural Monetary Experiments

In early November, the Prime Minister of India, Narendra Modi, declared that all 500 and 1,000 rupee notes would cease to be legal tender by the end of 2016 ($1 is worth about 68 rupees). Those two notes made up 86% of all cash by value, in an economy where more than 90% of transactions occur in cash. Those holding 500 and 1,000 rupee notes had exchange them for other, or new, denominations of cash, or deposit them in a bank. But anyone who exchanged a large amount was audited. The intent was to devalue illicit wealth held in cash, increase the state’s tax take, and “modernize” the economy by transferring activity away from cash transactions and into the formal financial sector.

In the short run, the effect will be a significant decrease in the money supply and a reduction in aggregate demand, ceteris paribus. In the long run, money is neutral: an increase or decrease in its supply will lead to inflation or deflation, respectively, with no change to the real value of anything. But in the short run money is non-neutral, owning to phenomenon such as sticky prices and imperfect information. Therefore a contraction in the money supply reduces growth in the short run, and vice versa. The size and duration depends on how quickly the government can replace the old denominations, which began to lose value after the announcement as businesses did not want accept payments in soon-to-be-worthless money. This led to a seizing up of economic activity, as businesses across supply chains struggle to make acceptable payments to their suppliers. Large lines formed at banks and withdraw limits were put in place.

The mal-effects of monetary contraction will hurt the poor, who rely most heavily on cash, the most. While switching to a bank account is a practical solution for some, fewer than 35% of Indians over 15 use a bank account. Unsurprisingly the poor have the least access to banking and non-cash payment methods.

And it is unlikely the rich hiding wealth from tax authorities hold much of it in cash; more likely it is held in assets such as overseas properties and investments that will be unaffected. By the end of the year nearly all the currency in question had been deposited in a bank and validated as legitimately earned (that or well-laundered). The government replaced many of the old notes with new 500 and 2000 rupee notes; holding illicit wealth in cash will be at least as easy once the transition is complete.

Further out, the increase in bank deposits will lead to an increase in bank lending, thus expanding the money supply and the proportion of economic activity that is within the reach of the tax authorities. Maybe the risky gambit will pay off, my guess is not really. But there are many regulatory impediments to expanding banking to the poor and/or rural residents, which is why so few people use banks in the first place. Reducing such barriers would have the same benefits with less risk.

So far the reaction has been as those economists who believe money is non-neutral in the short run would have predicted. And it is a blow to those economists who rely on mathematical identities (in this case MV=PY [1], which it does in long run equilibrium) over real world observation. The non-neutrality of money means that monetary policy does have the ability to increase or decrease real aggregate demand in the short run, rather than just affect nominal prices. To what degree real economic activity is affected depends on the slope of the aggregate demand curve.

As if to one-up India’s actions, Venezuela’s incompetent president, Nicolás Maduro, announced on December 11th, 2016 that the 100 bolivar note (worth about three cents and falling fast), which accounts for 77% of the country’s cash by value, would become worthless in 72 hours. Businesses refused to accept them almost immediately. The notes are to be replaced with higher denominations (inflation will soon surpass 200%), which weren’t readily available. As of the following weekend, ATMs still spit out worthless 100 bolivar notes. The reason given by the government is somewhat similar to India’s justification: to devalue the illicit wealth held by “mafias” that supposedly hoard bolivars, which the government says is leading to shortages in Venezuela. This is ludicrous. Nobody who has any options would hold their wealth in a currency whose value is plummeting, and if mafias were really hoarding vast amounts of bolivars the effect would be deflationary. The shortages are instead caused by the government’s horrible economic policies, including price controls.

Then on December 18th, after widespread protest, Maduro backed down. Venezuelans were given until January 2nd to exchange their 100 bolivar notes. Then, towards the end of December the deadline was delayed to late January. The fact that the government didn’t have replacement notes ready before announcing the decision played a part in the reversal. But the government can’t un-ring the bell. The 100 bolivar note is still slated to be worthless soon, so its real value, and confidence in the monetary system, will still be reduced. Given the massive monetary expansion in years past (the actual source of inflation) Venezuela needs to reduce the growth of the money supply, which would tame inflation at the cost of short run pain. A less extreme but similar example is the US in the late 1970s, when Fed Chair Paul Volker reduced the rate of money supply growth (which led to higher interest rates in the short run and lower rates in the long run), causing a recession but taming inflation.

The US, Euro Zone, and Singapore, to name a few, have all taken high denominations of cash out of circulation in the past, often citing similar reasons. But there are more or less right ways to do such things, while Venezuela is plumbing the depths of mismanagement.

Corporate Welfare: A Better Way?

Nearly all governments give in to the temptation to try to boost employment and/or economic growth. After all, if possible it’s a worthy aim; and I believe it is possible. But it seems clear that tax credits, such as I described previously, are worse than useless. However, Nigeria appears to have found a better way to expand employment by giving businesses money. The idea was a nation-wide contest: small businesses would submit business plans and the winners would receive the equivalent of about $50,000 each, not in off-budget tax credits but in a simple grant. Names were taken off of applications, and judges were selected from outside Nigeria. Some business plans were eliminated and some selected as winners in the judging stage. For the majority of remaining plans, winners were selected at random, which allowed World Bank economists to study the effects of this natural experiment. In the first year of the program (it is ongoing), around $36 million was given out.

Three years after the initial selection, there were significant benefits for those who randomly won compared to the control group (entrants who were randomly eliminated). Of those who submitted a plan to start a new business, winners were 37 percentage points more likely to have started a business and 23 percentage points more likely to have 10 or more employees. Of existing businesses, winners were 20 percentage points more likely to have survived and 21 percentage points more likely to have 10 or more employees. On average, winners purchased more capital for their businesses and earned higher sales and profits than the control group. Just the random winners from the first year of the program are estimated to have created 7,000 more jobs than the control group.

The researchers also found that “personal, business, and business plan characteristics have low predictive power for identifying which entrepreneurs will grow faster, and…respond best to treatment.” That finding argues against the idea that a group of experts, let alone politicians, have the ability to spot businesses that will turn investment into job growth, which is supposedly what governments that give out tax credits are trying to do (unless the goal really is to buy corporate favor). Basically, the government shouldn’t be trying to pick winners because they lack the ability to effectively do so. But nor should government do nothing. The only reason Nigeria’s program has been successful is that the private sector is failing to pair businesses in need of investment with savings. Nigeria’s government came up with an informed policy to address that market failure, with seeming success.

The question of whether this is in fact a better way for anyone else comes down to external validity. Nigeria is much different from a rich country for example. It would naturally cost more to create a job in the US owing to higher wages and other employment costs. Furthermore, rich countries have more developed financial infrastructure and the average person has greater access to the financial sector. As a result, I expect that any failure of financial markets to match savings with investment is much less significant in the US vs Nigeria. But it still exists: the poor (and small businesses more generally) in the US are largely excluded from the financial sector, have trouble accessing credit, etc. There’s room for improvement, and the government picking winners from among big businesses does not work.

Corporate Welfare in Maryland

Corporate welfare is having a bit of a moment in the sun, particularly after the very public tax credits and threatening that Carrier and its parent company received in order to keep about 800 jobs in Indiana. Incidentally, manufacturing employment in Indiana has decreased by 3,900 jobs year-over-year as of November 2016, or by about 0.8% [1]. Corporate welfare, however, is a bi-partisan endeavor. Even in “deep blue” Maryland, the Democratic controlled legislature and Republican governor can agree on giving hand-outs to large companies. And it’s nothing new; past governors supported such measures.

Most recently, Governor Larry Hogan and legislative leaders have agreed to give a $20 million forgivable loan to Northrop Grumman, on top of about $38 million in refundable tax credits over the next five years, approved last legislative session. They also agreed to pursue around $60-70 million in refundable credits and forgivable loans in order to keep Marriott’s headquarters in Maryland (including $22 million from Montgomery County, where Marriott is currently headquartered). 

Marriott was given about $43 million in 1999 (or $62 million in today’s dollars) for a promise to add 700 jobs (or about $88,600 per job in today’s dollars). Unsurprisingly, the jobs never came. The final value of the incentives was pared down, but Marriott kept a majority of the money despite not fulfilling its promise [2]. This time around Marriott does not need to create any jobs to be paid in full, but only to keep the ones that already exist. There are many other tax credits that reduce state revenues for dubious benefit, such as a film production credit. Altogether, corporate tax credits reduce revenue by over ten million of dollars a year.

In Maryland, a portion of corporate income tax revenue goes towards higher education and the Department of Transportation (MDOT). Tax credits therefore lower investment in higher education and transportation networks. The revenue that goes to MDOT for capital projects often includes matching dollars from the federal government, multiplying the opportunity cost. To the extent that we end up with lower quality education and transportation systems, the state will suffer [3]. Good education systems and transportation networks attract employers, without the choice of who benefits being left up to politicians. Only a portion of corporate income tax goes to those purposes, but the point is that against the dubious supposed benefits, there are real costs in reduced public investment.

In defending corporate welfare, Hogan stated: “In the past eight years, I believe Maryland lost 20 of its 24 Fortune 500 companies. I don’t want to see that happen. We have four left.” He repeatedly made this claim during his campaign, although the numbers cited tend to vary. Whichever quote you use, it's false. But even if it weren't, who gives a shit? What matters is not how large some of our employers are, but whether jobs are being created and how much they pay. Here’s the performance of employment and income over the past eight years, indexed to 2006 Q4:

Neo-Nazis Among Us or If Adolf Hitler Flew in Today, They’d Send a Limousine Anyway

The second part of that title is from a Clash song that is increasing in relevance. Anyway, everyone’s heard of the new iteration of the illiberal right (aka fascists) that recently burst onto the scene in US politics. I’m even avoiding using their name for themselves since they seem to have all damn day to search the internet and bother anyone who mentions them or the spray-tanned asshole president who, whatever his real - probably fascist - views, they support wholeheartedly. It seems like they already have gained some level of acceptance in the media / mainstream politics, at least in the sense that they have succeeded in framing their public image and are treated like a KKK-lite.

This is possible only if one refuses to think through how they could possibly achieve their goals. They want a nation built around and for white men and no one else, where whites remain the majority and white men hold all socio-economic power indefinitely[1]. There is no way such a future could come about with our Constitution intact. There is no way such a future could come about without the wholesale denial of our inalienable rights to vast quantities of US citizens. If they succeed, the best-case scenario may be that they make things so bad for non-whites that they leave, or it may be the unconstitutional revocation of citizenship and mass deportation. The worst-case is genocide. Otherwise, whites will become a minority in the US in about 30 years[2]. This is why they are neo-Nazis, pure and simple. It is not possible for their desired outcome for this nation to include the survival of our constitutional rights. Take them at the logical implications of their word; they mean it.

Rural Privilege

One of the explanations for Trump’s victory is that “Rural America” has been ignored and forgotten by our government, and so a majority of voters in rural areas picked the only outsider/change candidate that was available. In this telling it just so happens that the outsider they voted for is a racist, misogynist, xenophobe. Whatever voters’ reasons, that premise is false. First, it’s somewhat lazy to generalize about such people as a whole, as I’m now doing, because not everyone in any area votes the same way. Second, rural areas are over-represented in our congress and in their voting power for the president. They consistently receive more in federal spending than they pay in taxes. This wasn’t a protest vote to get the attention of our ruling class. Rather, it was a vote to preserve the privileges the (mostly white, male, and native born) ruling class gives them and to warn us off of challenging that status-quo.

Our rural areas are depopulating, but this is an inevitable consequence of economic and technological growth that is occurring the world over. And who is supposedly being pandered to at the expense of Rural America? Urban America? Our cities, excluding the largest few, have suffered from depopulation and job loss as well. Both urban and rural areas would be worse off if people weren't able to move away to find opportunities elsewhere, and better off if we were more accepting of immigrants. The residents of urban areas also feel that no one from outside cares how bad things get, but they lack an equal voice in our system.