Category: US business

Don’t ruin an election with a recovery!

Over the past year there have been predictive election models based on economic numbers that predicted a Donald Trump win in November.

Then came the coronavirus, and with unemployment now at double digits models are predicting a Joe Biden win.

(Which makes you wonder (1) what Biden and the feds would be doing differently if president now and (2) how the economy would be better if Biden were president and all the liberal wish list things like higher taxes, eliminated student debt, higher taxes, more government spending, higher taxes, the climate freakout, higher taxes, single-payer health care and higher taxes were reality.)

So Politico reports:

In early April, Jason Furman, a top economist in the Obama administration and now a professor at Harvard, was speaking via Zoom to a large bipartisan group of top officials from both parties. The economy had just been shut down, unemployment was spiking and some policymakers were predicting an era worse than the Great Depression. The economic carnage seemed likely to doom President Donald Trump’s chances at reelection.

Furman, tapped to give the opening presentation, looked into his screen of poorly lit boxes of frightened wonks and made a startling claim.

“We are about to see the best economic data we’ve seen in the history of this country,” he said.

The former Cabinet secretaries and Federal Reserve chairs in the Zoom boxes were confused, though some of the Republicans may have been newly relieved and some of the Democrats suddenly concerned.

“Everyone looked puzzled and thought I had misspoken,” Furman said in an interview. Instead of forecasting a prolonged Depression-level economic catastrophe, Furman laid out a detailed case for why the months preceding the November election could offer Trump the chance to brag — truthfully — about the most explosive monthly employment numbers and gross domestic product growth ever.

Since the Zoom call, Furman has been making the same case to anyone who will listen, especially the close-knit network of Democratic wonks who have traversed the Clinton and Obama administrations together, including top members of the Biden campaign.

Furman’s counterintuitive pitch has caused some Democrats, especially Obama alumni, around Washington to panic. “This is my big worry,” said a former Obama White House official who is still close to the former president. Asked about the level of concern among top party officials, he said, “It’s high — high, high, high, high.”

Furman’s case begins with the premise that the 2020 pandemic-triggered economic collapse is categorically different than the Great Depression or the Great Recession, which both had slow, grinding recoveries.

Instead, he believes, the way to think about the current economic drop-off, at least in the first two phases, is more like what happens to a thriving economy during and after a natural disaster: a quick and steep decline in economic activity followed by a quick and steep rebound.

The Covid-19 recession started with a sudden shuttering of many businesses, a nationwide decline in consumption and massive increase in unemployment. But starting around April 15, when economic reopening started to spread but the overall numbers still looked grim, Furman noticed some data that pointed to the kind of recovery that economists often see after a hurricane or industrywide catastrophe like the Gulf of Mexico oil spill.

Furman’s argument is not that different from the one made by White House economic advisers and Trump, who have predicted an explosive third quarter, and senior adviser Jared Kushner, who said in late April that “the hope is that by July the country’s really rocking again.” White House officials were thrilled to hear that some of their views have been endorsed by prominent Democrats.

“I totally agree,” Larry Kudlow, head of the White House National Economic Council, replied in a text message when asked about Furman’s analysis. “Q3 may be the single best GDP quarter since regular data. 2nd half super big growth, transitioning to 4% or more in 2021.” He called Furman, whom he said he knows well, “usually a straight shooter. Hats off to him.”

“I have been saying that on TV as well,” said Kevin Hassett, a top Trump economic adviser, who pointed to a Congressional Budget Office analysis predicting a 21.5 percent annualized growth rate in the third quarter. “If CBO is correct we will see the strongest quarter in history after the weakest in Q2.”

Peter Navarro, a Trump trade and manufacturing adviser who’s a Harvard-educated economist, called the high unemployment America is currently facing “manufactured unemployment, which is to say that Americans are out of work not because of any underlying economic weaknesses but to save American lives. It is this observation that gives us the best chance and hope for a relatively rapid recovery as the economy reopens.”

(Asked about his new fans in the White House, Furman responded, “They get the rebound part, but they don’t get the partial part.”)

A rebound won’t mean that Trump has solved many underlying problems. Since the crisis started, many employers have gone bankrupt. Others have used the pandemic to downsize. Consumption and travel will likely remain lower. Millions of people in industries like hospitality and tourism will need to find new jobs in new industries.

The scenario would be a major long-term problem for any president. But before that reality sets in, Trump could be poised to benefit from the dramatic numbers produced during the partial rebound phase that is likely to coincide with the four months before November.

That realization has many Democrats spooked.

“In absolute terms, the economy will look historically terrible come November,” said Kenneth Baer, a Democratic strategist who worked in a senior role at the Office of Management and Budget under Obama. “But relative to the depths of April, it will be on an upswing — 12 percent unemployment, for example, is better than 20, but historically terrible. On Election Day, we Democrats need voters to ask themselves, ‘Are you better off than you were four years ago?’ Republicans need voters to ask themselves, ‘Are you better off than you were four months ago?’”

One progressive Democratic operative pointed out that recent polling, taken during the nadir of the crisis, shows Joe Biden is struggling to best Trump on who is more trusted to handle the economy. “Trump beats Biden on the economy even right now!” he said. “This is going to be extremely difficult no matter what. It’s existential that we figure it out. In any of these economic scenarios Democrats are going to have to win the argument that our public health and economy are much worse off because of Donald Trump’s failure of leadership.”

The former Obama White House official said, “Even today when we are at over 20 million unemployed Trump gets high marks on the economy, so I can’t imagine what it looks like when things go in the other direction. I don’t think this is a challenge for the Biden campaign. This is the challenge for the Biden campaign. If they can’t figure this out they should all just go home.”

The Biden campaign seems to recognize the challenge. “The way that Biden talks about the economy is not just tied to the Covid crisis, it’s also about the things that Donald Trump has done to undermine working people since the day he took office,” said Kate Bedingfield, Biden’s deputy campaign manager. “But secondly, it’s also highly likely that under any economic circumstances in the fall, Trump is likely going to be the first modern president to preside over net job loss.”

Between now and Election Day, there will be five monthly jobs reports, which are released on the first Friday of every month. The June report, covering May, is likely to show another increase in unemployment. But after that, Furman predicts, if reopening continues apace, the next four reports could be blockbusters. “You could easily have 1 to 2 million jobs created a month in those four reports before November,” he said.

He added, “And then toward the end of October, we will get GDP growth for the third quarter, at an annualized rate, and it could be double-digit positive economic growth. So these will be the best jobs and growth numbers ever.”

Furman noted that there is one major obvious caveat: “If there’s a second wave of the virus and a really serious set of lockdowns, I wouldn’t expect to see this. But I think the most likely case is the one I just laid out.”

When Obama ran for reelection in 2012, during the recovery from the Great Recession, he was able to point out that the unemployment rate was dropping about 1 point every year. But in a V-shaped recovery it would be much faster. “The Trump argument will be he’s producing the fastest job growth and fastest economic growth in history. If he has any ability to do nuance he would say, ‘We are not there yet, reelect me to finish the job,’” Furman said. “The Biden argument will be the unemployment rate is still 12 percent and even with those millions of jobs we are still down 15 million jobs and the only way for this to be fixed is new economic policies.”

Austan Goolsbee, a predecessor to Furman as chairman of the Council of Economic Advisers in the Obama White House, said the recovery would be more like a reverse check mark, rather than a V, and that Biden and Democrats would need to point out that the explosive numbers predicted for the late summer and fall will not erase all of the damage.

“I view it as Trump left the door open and five rats came into the kitchen and you’re going to brag, ‘Look I got two of the rats out?’” Goolsbee said. “There’s a high risk you look completely out of touch if you still have double-digit unemployment rates.”

Sen. Chris Coons (D-Del.), who is close to Biden, said he’s been studying numerous economic forecasts and isn’t convinced a V-shaped rebound is certain. “It seems pretty unlikely to me that we’re going to have a really robust recovery in the next few months,” he said. “Of course, we all hope there will be. Frankly, no matter what the recovery looks like, I expect President Trump to either take credit for things he had nothing to do with or to avoid blame for things he helped cause.”

Furman is an economist, but he had some strategic advice for the Biden campaign. “Don’t make predictions that could be falsified. There are enough terrible things to say you don’t need to make exaggerated predictions,” he said. “The argument that we are in another Great Depression will look like it was overstated. Trump can say, ‘Two million deaths didn’t happen, Great Depression didn’t happen, we are making a lot of progress.’”

A quid pro quo, or burying the lead

Daniel Greenfield starts with the perspective of skepticism about the media (which is a reasonable attitude) but then …

Even while the media is blaring stories about the abuse of the Payroll Protection Plan loans from the Small Business Administration, its own industry took millions in loans and wants billions more.

Unlike many small businesses which were forced to shut down because of the lockdown, the media has been wrongly listed as ‘essential’ and exempted from the shutdowns, but that hasn’t stopped it from taking money that should have been used to compensate small business owners who can’t stay open.

It should be noted that “the media has been wrongly listed as ‘essential’ and exempted from the shutdowns” is, in order, an opinion and a statement that varies depending on where you are.

Even when the media operations cashing in on the SBA loans aren’t anyone’s idea of a small business.

The Seattle Times maxed out its PPP loan with a $10 million payout. The Seattle Times is not only Washington State’s largest daily, but its parent company, the Seattle Times Company, owns two other papers, and had, as recently as 3 years ago, put out 7 papers. It also owned multiple newspapers in Maine which it sold off for over $200 million. It had two printing plants, one of which it sold. The Rotary Offset Press, which it still owns, continues to print a variety of magazines and newspapers.

But while the Seattle Times is, like the New York Times, a multi-generational family property, the McClatchy Company owns 49.5% of voting stock and 70.6% of voting stock in the Seattle Times Company. McClatchy has dozens of papers and had revenues of over $800 million in 2018.

While McClatchy has operated at a loss and filed for Chapter 11, it’s not a small business. Neither is the hedge fund likely to run it which is partially backed by, among others, CalPERS, the California Public Employees’ Retirement System, the largest and most politically correct pension fund in the country.

Is this really a small business?

Despite the façade of family ownership, national chains have owned much of the Seattle paper business since the Great Depression with McClatchy taking over from Knight Ridder. Even if you ignore all the wizards behind the Emerald City paper’s curtain, the Seattle Times Company has 849 employees.
How was the Seattle Times able to max out the SBA’s PPP loan? Double and triple standards.

If you deal in fresh fruit and have over 100 employees, according to the SBA, you’re not a small business. If you supply toys, you’re limited to 150 employees. But if you’re a newspaper publisher, you can have up to 1,000 employees and still be considered a small business.

That’s how a company that owns 3 papers, a printing plant, and its silent partner is one of the largest news publishers in America, was eligible to grab loans intended to keep small businesses afloat.

The Seattle Times wasn’t unique among the media in seizing loans meant for shuttered small businesses.

The Tampa Bay Times got an $8.5 million loan, close to the max. The Times Publishing Company also puts out 10 papers, a few magazines, and Politifact, a site which claims to ‘fact check’ politicians, but frequently makes false claims, puts out spam, and smears conservatives.

The Company is owned by the Poynter Institute for Media Studies, which is funded by leftist billionaires like George Soros and Pierre Omidyar.

And just to make matters worse, the Poynter Institute, which is officially a non-profit, also got a stimulus loan of $737,400 to cover its coronavirus “business losses”.

Poynter notes that as, “a nonprofit with under 60 employees, Poynter qualified for the loan.” But Poynter’s documents suggest that its newspaper business had $123 million in revenues with assets of $43 million.

That’s not a small business.

The Tampa Bay Times and its shady operations, the intermingling of non-profits and for-profits, is already suspect on its own. It should not have been taking money meant for small businesses.

But the media has been eager to pig out on small business loans even as it attacks public companies that took PPP loans.  Axios, a media venture by Politico bigwigs, with around 200 employees, funded by venture capital and investment firms, including Jeffrey Katzenberg, the Hollywood tycoon with a net worth of $750 million, and NBCUniversal, scored a $5 million PPP loan.

But this obscene piggery isn’t enough for the media which wants a much bigger exemption.

Senator Maria Cantwell, Senator Amy Klobuchar, and Senator John Kennedy dispatched a letter urging a waiver on the affiliation rule “which restricts assistance to companies owned or controlled by larger entities.” This would potentially allow huge multi-billion-dollar conglomerates like Gannett to raid money intended for small businesses even as they lobby politicians to shut those businesses down.

The senators falsely claimed that keeping the media going was “essential to public health”.

Affiliation waivers would lift the 1,000-employee limit and allow newspapers owned by national chains to apply for loans as if they were small businesses. It’s the equivalent of having every Starbucks outlet claim that it’s just a small business serving the local community and won’t pass the money upward.

The media has been shaming other corporations that took PPP loans, yet it is entirely without shame.

There ought to be no more sanctimonious lectures about corporate bailouts from Democrats who want to bail out billion-dollar corporations while small business owners can’t get inside the front door. If affiliation rules are waived for the media, Gannett’s thousand plus newspapers would be ready to raid the SBA for loans that would likely never be repaid, while justifying the looting by arguing that the media is suffering because small businesses can’t afford to take out as many ads in local papers as before.

The media has already managed to loot at least $23.5 million meant for small businesses. Affiliation waivers would turn PPP loans into a bailout for media conglomerates that would be worth billions.

The media has already been allowed to operate while actual small businesses were shut down, even though there’s been a coronavirus infection spike in the media which, as far as we know, killed several people.

Evidence?

It’s used its megaphone to push for more shutdowns of local businesses as non-essential even as it demands the right to raid the money intended for those businesses to fund its massive operations.

Enough.

National media chains on the verge of bankruptcy want to exploit small business loans intended for coronavirus relief to keep their broken business model going for another few years before they fold.

The PPP loan program was not designed as a bailout for media giants and their pension fraud.

The Seattle Times, the Tampa Bay Times, Poynter, and Axios ought to be pressured into returning the money they took. And while that may never happen, any effort by politicians to apply affiliation waivers to the media ought to be fought as an obscene cash grab from small businesses to lefty corporations.

It is a good question to ask why businesses of five to 10 employees haven’t been able to give PPP loans while much larger “small” businesses have.

To say, though, that every media outlet is the same is false. To assert that no one needs reporters delving into what their local governments are doing with their tax dollars is ignorant and foolish.

On Giving Tuesday yesterday the Poynter Institute posted:

Today on #GivingTuesdayNow we humbly urge you to consider a gift to support the journalists in your community working tirelessly and at personal risk to help you navigate the COVID-19 health and economic crisis. We are grateful for their skill in providing useful, reliable information about all aspects of the pandemic in these times of confusion and social stress. We need them to continue to tell the stories of the sick, the dying, the health care heroes and those working to move us forward. The value of this journalism is immense.

Your dollars, if you can swing it, are deeply appreciated, particularly given the economic pressures faced by local news companies.

But how about something even better? Don’t just give. Engage.

Buy a subscription to your local news website or newspaper. Become a sustaining member of the local public radio or television station, or your favorite nonprofit news website. If you have the option to patronize an advertiser who spends money with a local news source, please consider. You know what’s better than journalism supporters? Customers.

When the audience has skin in the game, there is an implicit compact with the journalists that together we can help improve a community. Such engagement runs deeper than just the money. We’ve long said journalism helps us participate in democracy.

When the coronavirus hit, local news organizations were already at-risk with “underlying health conditions.” The fragmentation and even evaporation of advertising revenue long before the pandemic forced significant retrenchment and left the local news industry with an uncertain future.

With revenue in freefall, publishers were forced to significantly cut costs, including news coverage, while asking the audience to pay more for the product. That’s a hard balancing act, for sure.

A byproduct of the tension has been an unhealthy indifference. According to a study by the John S. and James L. Knight Foundation, 86% of Americans believe in the value of local news, yet only 20%paid for a subscription or membership to a local news organization. Even those who say they value journalism are becoming bystanders, and in the process settling for a weak sauce of coverage, at times, from their preferred local news source.

The Knight study found more than 60% of Americans believe their community news sources aren’t doing enough to keep an eye on local officials. They want more coverage of education, drug addiction and housing.

A report last year by the nonprofit education news site Chalkbeat said there were no full-time education beat writers in locales as big and complicated as Newark or throughout the communities of Silicon Valley. Might not more paying customers demand better?

Today’s newsroom leaders have a deeply difficult task in covering their communities with substantially fewer journalists than before. But how the remaining resources do get deployed is a choice.

Combine your patronage with engagement — write letters, leave comments, attend events, call in story tips — and you become part of the equation in making the choices mean the most for your community.

The coverage of coronavirus by local journalists has struck a blow against indifference. Today we recognize the exceptional energy, relevance and sophistication that journalists have brought to the crisis and its consequences. Every member of a local news company is serving their community. …

An enduring theme of American journalism is that it helps move us off the sidelines, get involved, demand action. In these confusing times of crisis, it’s useful to remember that journalism is part of the democracy toolkit, and we need not feel powerless.

I wish I could endorse 100 percent of that statement. But too many in the media refuse to admit that their previous work might not have been connecting with their readers. (Recall my list of reporter engagement, or lack thereof, where they work.) The problems of the media are not merely due to shrinking advertising base or corporate ownership, even though advertising has been shrinking thanks to the Internet, and the managers of big media companies don’t always make the right decisions.

There has, for one thing, been too much commentary (in print or online, particularly on Twitter) from reporters whose commentary brings into question their objectivity. The corollary is the arrogance of some reporters who bristle whenever they are questioned by their readers. (That may be more a personality flaw than a flaw in the profession. Everyone needs thicker skins, including reporters, who you’d think would be immune to the slings and arrows of contrary comment.)

 

Coronacounterreaction, or what might get better

Jeffrey A. Tucker:

Two months ago, it had been mandatory in my local grocery to use only shopping bags brought from home. Plastic bags were illegal by local ordinance. Then the virus hit. Suddenly the opposite was true. It was illegal to bring bags from home because they could spread disease. Plastic bags were mandatory. As a huge fan of plastic bags, I experienced profound Schadenfreude.

It’s amazing how the prospect of death clarifies priorities.

Before the virus, we indulged in all sorts of luxuries such as dabbling in dirtiness and imagining a world purified by bucolic naturalness. But when the virus hit, we suddenly realized that a healthy life really matters and that natural things can be very wicked. And then when government put everyone under house arrest and criminalized freedom itself, we realized many other things too. And we did it fast.

Lots of people are predicting how life will fundamentally change in light of our collective experience this last month. I agree but I don’t think it will turn out quite as people think. This whole period has been an unconscionable trauma for billions of people, wrecking lives far beyond what even the worst virus could achieve. I’m detecting enormous, unfathomable levels of public fury barely beneath the surface. It won’t stay beneath the surface for long.

Our lives in the coming years will be defined by forms of blowback in the wake of both the disease and the egregious policy response, as a much needed corrective. The thing is that you can’t take away everyone’s rights, put a whole people under house arrest, and abolish the rule of law without generating a response to that in the future.

1. Blowback Against Media

I’m a long-time fan of the New York Times. Jeer if you want but I’ve long admired their reporting, their professionalism, their steady hand, their first draft of history, even if I don’t share the paper’s center-left political bent.

Something about this virus caused the paper to go completely off the rails. In early March, they began to report on it as if it were the Black Death, suggesting not just closing schools and businesses but actually calling for a complete totalitarian policy. It was shocking and utterly preposterous. The guy who wrote that article has a degree in rhetoric from Berkeley and yet he was calling the shots on the paper’s entire response to disease on a national level. They’ve gone so far as to falsify dates in their reporting in order to manipulate the timeline (I called them outon a case in point; the paper made the change but never admitted the error.)

I’m sure that in the coming days and weeks, the paper will dial back all this blather just as they did their certainty that Hillary Clinton would win the 2016 election. In fact, they have already started with an admission that the virus was already widespread in the months before the lockdown (which suggests that most everything else the paper has written since March has been wrong). But it will be too late. They bear some moral culpability for what has happened to our country.

Anyway, I don’t want to pick on the Times alone; the media has been nearly in lockstep on the need for lockdown forever and on the claim that this virus is universally lethal for everyone. You can read in various spots alternative opinions from experts (here here here here here here hereplus a thousand others plus videos with serious voices).

But notice that all these links point to sites that do not enjoy viral traffic. AIER has been a leading voice, obviously.

Once you get up to speed on the real story here, with authoritative voices, you turn on Fox, CNN, NYT, CNBC, and all of the rest (the WSJ has been slightly better), and you hear nothing about any of this. They merely spin tales. People glued to the tube have almost no clue about any basics, such as how long the virus has been here, how gigantic is the denominator that makes up the fatality ratio, how many people have zero symptoms so that it’s not even an annoyance, the true demographic makeup of the victim population, and the unlikelihood that many of these deaths would have been preventable through any policy.

Watching this disgusting parade of media-driven ignorance, genuine experts or even people  passingly curious about data, have become demoralized. Surely many people have already stopped listening to the news completely because it is nothing but a distraction from the reality on the ground.

Why and how did this happen? An obvious answer seems almost too simple: the media wants people at home staring at the television. Maybe that’s the whole thing. But it almost seems too cynical to be the full explanation. In any case, I’m not the only one noticing this. I seriously doubt that the credibility of the mainstream media will survive this. There will be blowback. Much needed!

2. Blowback Against Politicians

You do recall, don’t you, that the governors and mayors who imposed the lockdowns never asked their citizens about their views about instantly getting rid of all rights and freedoms. They didn’t consult legislatures. They didn’t consult a range of expert opinion or pay attention to any serious demographic data that showed how utterly preposterous it was to force non-vulnerable populations into house arrest while trapping vulnerable populations in nursing homes that became Covid-soaked killing fields.

They thought nothing of shattering business confidence, violating contractual rights, wrecking tens of millions of lives, prohibiting freedom in association, tanking the stock market, blowing all budgets, shutting down international travel, and even closing the churches. Amazing. Every government executive except a few became a tin-pot dictator.

The first hint of the possible blowback came from Henry Kissinger who warned in the Wall Street Journal on April 8: “Nations cohere and flourish on the belief that their institutions can foresee calamity, arrest its impact and restore stability. When the Covid-19 pandemic is over, many countries’ institutions will be perceived as having failed.”

Yes, that’s quite an understatement.

From testing failures to policy failures to profligate fiscal and monetary policies to straight up brutalism in its shutdown antics, the reputation of government in general will not fare well. When the dust settles on this, a whole generation of leaders could be wiped out, provided we return to democratic forms of government, which surely we will. Left or right, Republican or Democrat, there will be a serious price to pay. Politicians acted rashly for fear of their political futures. They will find that they made the wrong choice.

3. Blowback Against Environmentalism

Wash your hands, they kept telling us. But we turn on the faucet and hardly anything comes out. They ruined them some years ago with flow stoppers. The water isn’t hot because the hot-water heaters don’t work as well due to regulations. Keep your clothing and dishes clean but our washing machines and dishwashers hardly work. And let us not forget that our toilets are also non-functional.

Government has wrecked sanitation by ruining our appliances in the name of conservation. And now we suddenly discover that we care about cleanliness and getting rid of germs: nice discovery! Implementing this is going to require that we upend the restrictions, pull out the flow stoppers, permission new and functioning toilets, turn up our water heaters, fix the detergents and so on. We played fast and loose with germs and now we regret it.

So yes, plastic bags are back, and the disease-carrying reusables are gone, but that’s just the beginning. Recycling mandates will go away. Hand dryers in bathrooms will be rethought. Bring back single-use items and universalize them! We will care again about the quality of life as a first priority. As for nature and nature’s germs, be gone!

4. Blowback Against Social Distance

Staying away from direct contact with sick people is a good idea; we’ve known since the ancient world. Vulnerable populations need to be especially careful, such as elderly people have always known. But government took this sensible idea and went crazy with it, separating everyone from everyone else, all in the name of “flattening the curve” to preserve hospital capacity. But then this principle became a general one, to the point that people were encouraged to believe silly things like that standing too close to anyone will magically cause COVID-19 to appear. Going to the grocery today, it’s pretty clear that people think you can get it by talking or looking at people.

Several friends have pointed out to me that they already detect a blowback against all this. And why? There is a dubious merit to the overly generalized principle, and that will become more than obvious in the coming months. Then the blowback hits. I expect a widespread social closening movement to develop here pretty quickly. You will see the bars and dance floors packed, and probably a new baby boom will emerge in a post-COVID19 world.

And the handshake will again become what it began as, a sign of mutual trust.

5. Blowback Against Regulation

In the midst of panic, we discovered that many rules that govern our lives don’t make sense. The regulations on disease testing clogged the system and gave us an epistemic crisis that kicked off this insanity in the first place. Fortunately many politicians did the right thing and repealed many of them. The Americans for Tax Reform has assembled a list of 350 regulations that have been waived. This is hugely encouraging. Let’s keep them waived and never go back.

6. Blowback Against Digital Everything

We keep hearing how this trauma is going to cause everyone to communicate more with video. I don’t believe it. Everyone is experiencing tremendous burnout of these sterile digital environments. Hey, it’s great that they can happen but they are far from ideal.

“Can you hear me?”

“I can’t hear you.”

“Is my picture blurry?”

“Why am I looking up your nose?”

“Change your settings.”

“Silence your mic!”

And so on. At first we thought this was merely a period of adjustment. Now we know that we just don’t like all this nonsense. It’s no way to live.

There is nothing like real people in a real room.

7. Blowback Against Anti-Work

I suppose many workers weren’t entirely unhappy when the boss said work from home. But millions of people have now discovered that this comes at a cost. There is loneliness. The dog. The kids. The spouse. The depressing failure to dress up like a civilized human being. Everyone I know misses the office. They want to be back, be on a schedule, see friends again, experience the joy of collaboration, share jokes, munch on the office donuts.

It was only recently that everyone seemed to be complaining about the workplace. There were endless squabbles about pay, pay equity, race, metoo, executive compensation, family leave policies, and you name it. No one seemed happy.

We didn’t know how good we had it.

8. Blowback Against Experts

The media from the beginning trumpeted some experts over others. We went credential crazy. How many letters you have after your name determines your credibility (unless you have the wrong opinion). But soon we discovered some interesting realities. The experts that everyone wanted to cite were wrong or so loose with their predictions that their predictions were uselessin practice. Dr. Fauci himself wrote on February 28 that this would be a normal flu. Merely a week later, everything changed from calm to panic, and with that change came the wild government response, long after people on their own realized that being careful would be a good idea. Under expert guidance, we swung from one end to the other with very little evidence, exactly against the strong and compelling advice of one of the few experts with credibility remaining.

9. Blowback Against Academia

Just like that, we went from enormously expensive campuses and a huge administrative apparatus to a series of Zoom calls between professor and students, leaving many to wonder what the rest is really worth. Surely many colleges and universities will not survive this. The other problem concerns the marketability of degrees in a world in which whole industries can be shut down in an instant. The college degree was supposed to give us security; the lockdowns took it all away. Also there is the problem of the curriculum itself. Of what value are these soft degrees in social justice in a world in which you are struggling to pay next month’s rent regardless?

As for elementary and secondary education, homeschooling anyone? Its existed under a cloud for decades, before suddenly it became mandatory.

10. Blowback Against Unhealthy Lifestyles

There has been no small effort to suppress the demographics of COVID-19 fatalities but the word is still getting out. This BBC headline sums it up: Nine in 10 dying have existing illness. And here’s another: Obesity is the number one factor in COVID deaths. This should not be lost on people considering improving their overall health and reducing disease vulnerability. Maybe you already feel it and are using your quarantine time to reduce and get fit or at least stop advancing too quickly toward your final demise. There are things we can do, people!

This would be an enormous change in American culture, to say the least.

11. Blowback Against Spending

You are likely saving lots of money from cutting entertainment. Feels good, doesn’t it? Regret not having saved more to prepare for these days? This will change dramatically. Those mattresses are going to get stuffed with cash in the coming year or two. It’s all fine: savings leads to investment, provided people have an ironclad promise that nothing like the monstrous destruction of the last month will ever occur again.

Working from home: The four-legged views

If you spend much time on social media you may have recently seen this:

Image may contain: text

For those who wonder what the rest said, both views are written by a cat and a dog each named Jason Gay:

America Needs To Get Back to Work

By A Cat

Enough is enough. American business has taken a historic plunge over the past month. It’s time to consider a practical plan for protecting public health—while also allowing for a return to work and, hopefully, a revival of the economy.

Oh, who am I kidding?

On behalf of cats everywhere, I’ll just say it: We want everyone out of the house.

It was cute for a while, but the party is over. We’re sick of this quarantine, shelter-in-place directive.

Sheltering in place? That’s a cat’s job. Cats invented sheltering in place—sleeping in the windowsill, the corner of the couch, the sock drawer in the closet and, if it gets a little too noisy, under the bed, eyes open, annoyed. Cats know what it takes to stay home all the time. We’re just tired of sharing our home with everybody else.

Have we liked getting snacks at unexpected hours? Sure. Is it nice to roll around on that warm laptop keyboard during Zoom calls? Sure is. Warm keyboards are heaven.

But it’s gotten to be too much. The other day I walked into the kitchen and saw someone standing in my 9 a.m. sun spot. So rude. That sun spot is only there for 15 minutes a day!

We (sort of) love you, and appreciate the occasional pats on the head, but cats are not the most social creatures. Sure, there are some exceptions. You might have one of those cats who actually enjoys human company. Congratulations.

But the vast majority of us—

BIRD OUTSIDE THE WINDOW! MUST! GET! BIRD!

Sorry. Where was I? Right. The vast majority of cats are ready for you to get back to work. Or just leave the house for longer than 15 minutes.

Please consider it. Not for America. For cats.

Why Not Work at Home Forever?

By A Dog

As America debates a return to work, it’s important not to rush. We need to balance the economy against the extremely valid concerns about public health and protecting lives.

And walks. We need to think about all of the walks.

And ball. We need to also chase the ball. Lots and lots.

Look: I’m a dog. I’m not some public intellectual. I’m a good, good dog, most of the time, but I just ate half of a baseball glove in the garage. I also knocked over a potted plant in the living room. I’m sorry. I’m a dog. What do you want?

The important thing is: Dogs want you to stay. These past four weeks, they have been some of the greatest weeks of our lives. You’re there in the morning. You’re there in the evening. You’re there at lunch. It’s the best.

And the walks…we’ve never been so fit in our lives! There’s the 8:30 a.m. walk, the 11:15 a.m. walk, the 1 p.m. walk, the 3 p.m. walk, the 7 p.m. walk, and, if we’re lucky, a 9:30 p.m. walk.

Sometimes you throw the ball. And then I get the ball and bring it back to you. And then you throw the ball again, and I bring it back again. And again. And again. And again. Bliss.

I’m sure the cats are telling you they’ve had it. Never trust a cat. They’re rude animals. They don’t appreciate you.

But dogs understand what you bring to the table. We love having you at home. Stay. Stay forever. We promise to be a good dog. Or at least a pretty good dog.

 

What could possibly go wrong, First Amendment edition

CNN Business:

Lawmakers on Capitol Hill are getting louder in their call for the federal government to provide financial support for local news as the already struggling industry suffers another blow from the coronavirus pandemic’s impact.

On Monday, more than 240 House members signed a letter to President Trump, urging him to direct federal spending to ads in local media and to encourage businesses that receive stimulus funds to spend a portion of that money on the same.

This move is just the latest in a string of efforts by US lawmakers over the last month to address the pandemic’s effects on local news. Even as local news outlets see a surge in readership and viewership, their revenue sources have been decimated. Many local news outlets rely on ad dollars from local businesses and events that have been forced to shut down amid the pandemic.

Since March, thousands of people in the media industry have been laid off, furloughed, or have taken pay cuts as newspaper companies, alt-weeklies, local networks and digital outlets cut costs to make up for shrinking revenue.

Over the weekend, four lawmakers — Sens. Maria Cantwell (D-WA), John Kennedy (R-LA), Amy Klobuchar (D-MN), and John Boozman (R-AR) — urged Senate leaders in a letter to revise the rules to make local newspapers, and radio and television broadcasters eligible for small business assistance under the Paycheck Protection Program.

“Up to several thousand newspapers and hundreds of local radio and television stations across the country were cut out of existing programs by the U.S. Small Business Administration’s affiliation rule, which restricts assistance to companies owned or controlled by larger entities,” the letter said. “Even though these news outlets may be owned by larger groups, they operate independently.”

In order to qualify as a small business, a newspaper or digital outlet must employ 1,000 staffers or fewer. David Chavern, CEO and president of News Media Alliance, told CNN Business that his trade association, which represents about 2,000 news publishers in the US and Canada, has been lobbying for exemptions. His group is advocating for local news outlets that are part of a larger company to qualify.

Earlier this month, 18 Democratic senators and independent Sen. Angus King wrote a letter to Senate leaders that called for any economic stimulus package to include money for local journalism.

“In a pandemic, information is one of the absolute key resources, and we need to be sure it’s still going. I mean, I don’t view this as long-term support for local journalism, but we’re talking about getting through a crisis here,” King told CNN’s Brian Stelter on “Reliable Sources” on April 12.

Chavern said the News Media Alliance is working with the National Association of Broadcasters to push for a federal funded advertising program to support local news.

Governments in other countries have enacted similar plans to support the media industry. In March, the Canadian government announced its intention to spend $30 million on an ad campaign for coronavirus awareness.

“To get America moving again and strengthen our communities in the midst of this evolving crisis, we must be creative and use all available tools,” Monday’s letter reads. “Advertising plays an incredible role in local economies, and its importance to the sustainability of local broadcast stations and newspapers cannot be overstated.”

The latest effort was led by a bipartisan group of lawmakers, including Reps. Debbie Dingell (D-MI), Bill Flores (R-TX), Marc Veasey (D-TX), and Fred Upton (R-MI). In total, 244 lawmakers signed Monday’s letter to the President. The show of support from across the political spectrum shows that the White House’s animus toward the press is not always shared by lawmakers who rely on the local media for coverage.

As these proposals are debated in DC, Chavern said the public can support local news now by buying subscriptions.

“The value of reliable local news has never been clearer,” Chavern said. “If you want that to continue in the future, then consumers need to subscribe and pay to get that content so that it’s there not only through this crisis but for the next one.”

Back in my (brief) newspaper ownership days, media companies were prohibited from getting government-backed loans — for instance, from the U.S. Small Business Administration, even though nearly every non-daily newspaper qualifies by itself as a small business — because of the inherent conflict of interest of a media outlet being given government money. (Other than publishing legal ads, which is simply a purchase of newspaper space, with the government setting the rate.)

It is remarkable that the proponents of this seem to see no conflict of interest at all with having the government lend money to media outlets that are supposed to be covering government. (Conservatives have very little trust in National Public Radio or PBS or their state-level versions for that reason.) Unless, of course, that’s a feature, not a bug — to have media outlets financially beholden to the government they’re supposed to be covering.

I have no good answer for the problems afflicting the news media as a business. But I don’t think government funding is a very good answer.

 

Playboy magazine, 1953–2020

You may wonder why I chose to write about Playboy magazine today.

I have written about Playboy twice in this blog in the past. The first was when Christine Hefner, daughter of founder Hugh Hefner (Bill Clinton’s role model), made a typically stupid political statement. The other was a reference to a Playboy article about the new cars of 1983 that were underwhelming in power,  like most 1980s cars.

Back in my business magazine days our company did work for Playboy, specifically developing and retouching photos for the magazine, which I believe was printed by Quad Graphics, in the days before digital photography and photo software were very prevalent. (Hint: No body is perfect.)

There is, of course, the cultural question of whether pornography objectifies women. One side observes that visual images with the goal of titillation have been around far, far, far longer than Playboy. The other side might be the only point on which religious and cultural conservatives and far-left feminists agree. Talk to people like Dr. Drew Pinsky and they can tell you more than you want to know about the seedy side and corrosive effects of pornography.

Other than the photos, Playboy became known for the Playboy Interview feature, which ran for several pages and was sometimes thought-provoking. The Playboy Interview might have first become famous in 1976, when Democratic presidential candidate Jimmy Carter, then a Southern Baptist, not only sat down with a Playboy writer, but admitted he had lust in his heart for women to whom he was not married. That might have become the point when people started reading Playboy for the articles, or so the joke went.

Then, in 1990, Playboy interviewed New York developer Donald Trump. You can imagine how interested people became in that interview a decade and a half later (while widely misquoting Trump about his opinion of Republicans). Hefner, one of the U.S.’ greatest self-promoters, credited himself for Trump’s election.

The thing all along was that Playboy offered really one thing that other men’s lifestyle magazines such as GQ (which, along with occasional nudity that didn’t show off the sexy bits, teaches readers how to spend far too much on clothing) and other highbrow magazines like Vanity Fair — photos of nude women. Other magazines went, shall we say, down-market from Playboy (as you are about to read), and then the genre called “lad magazines” (think Playboy but they’re wearing bikinis) further eroded Playboy’s market share.

Kayla Kibbe writes about Playboy’s approach as of last year.:

“People have been upset about nude women for years.”

That’s what Mike Edison, who has a knack for stating the obvious, has to say. The author of Dirty! Dirty! Dirty! Of Playboys, Pigs, and Penthouse Paupers, Edison literally wrote the book on nude women and the exact ways people have been upset about them ever since a naked Marilyn Monroe first graced the pages of Playboy back in 1953.

Flash-forward several decades and a few waves of feminism, and people are still upset about naked women, but often in new and increasingly nuanced ways. These days, the moral outrage publications like Playboy and its racier ilk have long weathered has been augmented by a more liberal-minded brand of criticism: What place, if any, do fading empires built on the backs of nude women and their male gazers deserve in the Me Too era?

That verbiage — “in the Me Too era” — has become a convenient if ill-defined and ultimately lazy way of referring to today’s fraught sexual climate, which has left people across political and ideological spectrums struggling to find their footing in a society in which unprecedented opportunities for sexual liberation, positivity and representation are increasingly plagued by very negative and violent sexual realities.

As Playboy’s executive editor, Shane Michael Singh, tells InsideHook, “It’s an era of simultaneous sexual freedom and panic.” When people question what we can and can’t do, or what can and can’t survive “in the Me Too era,” what they’re really asking is whether we can continue to celebrate sex and sexuality in a world that has so long exploited it for patriarchal benefit.

In keeping with the magazine’s sometimes overlooked history of progressivism — which began but certainly didn’t end with sexual liberation — Playboy has an answer. That answer comes in the form of a revised and relaunched structure and editorial strategy, which the New York Times, with only a hint of skepticism, has called “a newer, woke-er, more inclusive Playboy.” The new revision, one of many but perhaps the most significant the magazine has seen in recent years, reflects a complete editorial and artistic overhaul helmed — for the first time in the magazine’s history — by a young, Hefnerless, and largely female creative team.

The result is a quarterly ad-free magazine in which interviews with democratic candidates and editorials examining the importance of due process in Title IX cases are printed on thick-stock pages alongside nude pictorials of a more artistic and perhaps more thoughtful nature than the leering centerfold gazers of yore might expect.

“We pay close attention to conversations about nudity in today’s culture and consider those dialogues as we think through how nudity can be a medium for exploring protest, free expression, individuality, sexual freedom, rebellion and equality,” Singh says. The cover of the magazine’s summer issue was created by fine art photographer Ed Freeman, whose underwater shoot features three female activists who have lent their support to causes like HIV awareness and ocean conservation.

While the magazine’s newest iteration doesn’t bear much resemblance to Hugh Hefner’s nearly 70-year-old creation at first blush, so-called “woke Playboy” is in many ways a modern-day revision of the ideological tenets that, according to Playboy supporters, have always underscored the ethos Hefner once dubbed “the Playboy Philosophy.”

Playboy has always intrigued a wide range of readers — gay or straight, male or female, conservative or liberal, black, brown or white,” Singh points out. “That’s because our core values — an appreciation of equality, freedom of speech, gender and sexuality, and pleasure — are universal values.”

“We live in a time where people are afraid to talk about sex. That’s heartbreaking,” says Edison. “One good thing about Playboy,” he tells InsideHook, “obviously it comes with some baggage — but it did open the conversation.”

That’s a conversation Playboy seems determined to continue, not in spite of, but rather because of the fraught sexual climate in the wake of the Me Too era.

“While the sexual landscape may be fraught and tense, consumers are hungry for answers — and answers they can trust,” Singh tells InsideHook. “We address our current climate’s sexual tensions not by ignoring the uncomfortable realities, but by confronting them head-on.”

While Playboy critics often question the brand’s relevance and/or appropriateness in a post-Me Too world, such as those who called the 2018 reopening of the Manhattan Playboy Clubtone deaf,” Edison points out that such criticism relies on an ultimately tenuous link between print erotica and sexual violence.

“I don’t believe that talking about sex or looking at a naked model contributes to non-consensual behavior,” he says. “That connection just doesn’t exist for me.” Fortunately, it doesn’t exist for the creative team behind the latest iteration of Playboy, either.

“At Playboy, we recognize that being sex-positive means an individual has the right to explore their sexuality however they’d like, without judgment or regulation, as long as it is consensual,” says Singh.

That culture of consent extends to the magazine’s pictorials as well. In the Times’ August feature, Singh described Playboy’s approach to what he called consensual objectification. “I think objectification removes the agency of the subject. Consensual objectification is the idea of someone feeling good about themselves and wanting someone to look at them,” he explained.

“That’s the key,” he tells InsideHook. “The women (and men) we photograph — and who take the photographs — have agency over the art they’re creating.”

What Playboy’s consensual objectification proves is that sex can still be celebrated not just despite, but as a crucial reaction against the ways in which it has been exploited.

“Awful creeps like the Harvey Weinsteins of the world — he didn’t do that because he read Playboy, or Hustler, or Penthouse,” says Edison. “Eliminating the ugliness of this awful, patriarchal, misogynist bullshit doesn’t mean throw the baby out with the bathwater.”

While Playboy, true to form, has taken an evolutionary lead in the new era of adult mags, it’s not the only publication of its kind to address and adapt to today’s shifting sexual attitudes.

In fact, the magazine’s recent push toward more artistic photography resembles the nude photoshoots that have always graced the thick, glossy pages of Treats!, a fine arts quarterly that was already being hailed as a “modern gentlemen’s magazine” before Playboy even set out on the reinvention project that began with the short-lived decision to drop nudity before reintroducing it in 2017.

“I always try to portray my models artistically,” Treats! founder Steve Shaw said in a 2015 interview with HighSnobiety. “I’m not looking at them physically or sexually — it’s more creatively.”

Today, Shaw maintains that the key to artistic nudity is context. “It all depends on how the nudity is presented,” he tells InsideHook. “I don’t consider Treats! sexual. It is sensual,” he adds. “If you do sexual right, it becomes sensual. It involves a creative and trusting relationship between the photographer and model.”

According to Shaw, however, Playboy and Treats! don’t have much in common. “The only reference is there is nudity, we just do it in a more sophisticated and artistic way,” he says, adding that raunchier flesh mags like Penthouse and Hustler “have far outlived their usefulness.”

Even those racier Playboy successors, however, have made some moves toward a more progressive image in recent years. Under newly-tapped executive editor and White Lung frontwoman Mish Barber-Way, Penthouse is making its own shift to appeal to a younger, more socially conscious audience.

“The goal is smart, high/low content that confronts the culture war while also being able to laugh at the world and, more importantly, ourselves,” Barber-Way told Riot Fest this past March after the launch of Penthouse’s new digital platform.

Like Singh, Barber-Way also feels moved to defend sexual representation and free speech against a growing culture of conservatism. “We’re in a really interesting time right now, because I feel like there’s this really puritanical, Victorian way of looking at sex and sexual interaction that’s coming in,” she told Culture Creator in 2018. “But it’s also in conjunction with this overexposed ‘sex sex sex’ in our face all the time. There’s this clash there.”

While Barber-Way may be less interested in navigating the ideological implications of that clash than the creative team at Playboy — “I think when people try and over-analyze it and dig too deep in it, then it starts to get so complicated and then it isn’t what it was supposed to be anymore,” Barber-Way added on the Culture Creator podcast — she certainly isn’t afraid of getting in the middle of it. “I’m not worried about offending anyone,” she said in the same interview. “That was the whole premise behind Penthouse and Hustler: you’re already offending someone who’s uptight with the fact that there’s sex in this magazine, so why worry about everything else, you know?”

Even Hustler, by far the most unapologetically low-brow of Playboy‘s disciples, can’t help but speak out against the conservative powers that be. Back in 2017, Hustler founder Larry Flynt took to Twitter to offer a dubious $10 million bounty on information leading to the impeachment of Donald Trump. More recently, the magazine has sprinkled progressive editorials asking if “socialism will save us” and if “the war on drugs is finally over” in between the traditional hardcore pictorials Edison calls “borderline gynecological.”

Meanwhile, the industry isn’t just blowing the dust off mid-century titles and refashioning them for a millennial audience. Cooper Hefner, who exited Playboy earlier this year, has announced plans to launch a brand new media platform, which, as he told CNN, will provide thoughtful lifestyle content and journalistic integrity alongside “healthy adult content.” Originally announced as “Hefpost,” the as-yet-unreleased platform appears to have rebranded as “Stag Daily,” based on a link to what seems to be a largely inactive Twitter account in Hefner’s own Twitter bio.

What these relaunches, revisions and new endeavors suggest is that even faced with the exposed underside of dark sexuality in America, a brave new generation of thoughtful, conscientious and consensual sexual celebration is on the horizon. We can toss aside the sordid residue from a bygone era of overt sexuality, yes — but that doesn’t mean we have to throw Playboy out with the bathwater.

Unless you do. Kibbe’s story was written last September. London’s Independent reported yesterday:

Playboy has announced it is ceasing printing its magazine for the remainder of the year amid the coronavirus outbreak.

In an open letter shared on publishing platform Medium, Playboy’s CEO explained that the Covid-19 pandemic has forced the company to “accelerate a conversation” they had been having internally.

Mr Kohn wrote that “as the disruption of the coronavirus pandemic to content production and the supply chain became clearer and clearer” the firm spoke about how they could “transform” its quarterly magazine “to better suit what consumers want today/ And look at how they could “engage in a cultural conversation each and every day, rather than just every three months”.

The Spring 2020 Issue will be the final printed publication for the year.

Mr Kohn explained that Playboy will “move to a digital-first publishing schedule” for all of its content, which includes interviews and pictorials.

He indicated that the magazine would not return to a regular publishing schedule in 2021 and instead would only issue “innovative printed offerings” in the form of “special editions, partnerships with the most provocative creators, timely collections and much more”.

“Print is how we began and print will always be a part of who we are,” Mr Kohn stated.

The Playboy magazine was first launched in 1953 and became widely known for publishing semi-nude and nude images of female models.

In 2015, it was announced that from March 2016 the publication would no longer publish nude pictures.

However, a year later the company backtracked on this decision.

This month, Playboy magazine released its Spring 2020 “Speech Issue”, which the publication said “boasts a remarkable collection of essential voices”.

Following the announcement of the new issue, it was revealed that Jamil had taken on the role of guest editor for the quarterly magazine, in partnership with her I Weigh movement.

As part of her involvement in the issue, The Good Place actor took part in an interview and photo shoot for the issue, for which she was photographed wearing oversized suit outfits.

Jamil stated on Twitter that she specifically wanted to be photographed as a man would be for the shoot, with measures including ensuring none of the images were retouched and she wore comfortable clothing.

This  might be the least surprising business news of the day. Sports Illustrated cut its publishing schedule to more or less monthly, to the point where subscribers don’t know when it’s coming. I fully expect within a year (or maybe much faster given the oncoming coronavirus recession) that SI won’t print anymore. It is practically impossible to cover sports in a monthly, as Sport and Inside Sports discovered. People Magazine can get away with whatever publication schedule it wants, since People prints nothing important. It’s different when your publication is tied to events, including sports.

Playboy Magazine was probably killed by the Internet, where what Playboy offers can be found for free. (Or so I’m told.) But the decision to try to appeal to a woke audience was obviously not the right answer. They’re too, for lack of a better term, sex-negative to pay several dollars for a printed magazine.

To be honest about it, Playboy was only worth reading for the photos. As with every time Rolling Stone or GQ or some other non-political magazine writes about politics, Playboy probably should have stuck to what it could actually do. (Though recall Frank Zappa’s observation that music journalism is writers who can’t write interviewing people who can’t talk for readers who can’t read.)

The coronavirus economic recovery

Tom Del Beccaro:

The U.S. economy was motoring along as 2020 got underway, but has taken a sizable hit because of the coronavirus. Getting it back on track requires sound economic policy, not tax and regulatory hikes – and that means advantage Trump.

No one should forget that the eight years of Obama/Biden produced the weakest economic growth of any modern presidency. Not one year did the policies of increased taxes and a much higher regulatory burden produce growth of 3 percent – an all-time record of poor performance.

While those on the Left blame the George W. Bush administration for handing off a poor economy, simple economics tells you that the Obama/Biden response made things worse. By dramatically increasing the costs of doing business in the United States, the Obama/Biden administration reduced growth from what it could have been.

President Reagan, on the other hand, who faced double-digit unemployment and inflation and interest rates above 20 percent – a condition far worse than Obama faced – achieved stellar growth through tax and regulatory reform.  In other words, policy matters.

Remember, the economic Law of Demand tells us that the more something costs, the less of it we get. The Obama/Biden administration raised taxes (costs), including those in ObamaCare, on the economy overall.

The Obama/Biden administration also undertook a war on energy in the form of regulatory costs. Beyond just the energy sector, overall, Obama/Biden regulations added billions annually in costs to the U.S. economy – and the higher the cost of something, including the economy overall, the less of it you get.

Faced with poor economic numbers at the end of the Obama/Biden years, the Left said 3 percent growth was no longer possible. In a sense they were right: under the burdens of ever-growing government – spending, regulations and taxes – economic growth is reduced.

That is why our average growth from the 1950s to today has fallen from 4 percent to 2 percent. In Europe, which has an even higher government burden, growth has fallen from 2 percent to zero.

Candidate Donald Trump, who understands such things as the Law of Demand, promised tax and regulatory reductions. Obama suggested that Trump would need a magic wand to reach 3 percent growth.

Instead of a magic wand, President Trump and his Republican allies paid heed to the Law of Demand.  By significantly cutting the costs of doing business in the United States, American entrepreneurs, businesses and workers responded as predicted, and the economy indeed reached 3 percent growth and beyond.

No one should be surprised by that outcome. Before 2017, we’d had four major tax reforms (1920s, 1960s, 1980s and 2000s). Prior to each the economy was weak or falling and tax revenues were weak or failing. Each time doubters said a tax reduction would make things worse. Each time, however, the economy improved and tax revenues rose because of the wider economic base and activity that tax reform created.

That is why I predicted that, in the second quarter of 2018, four to six months after December 2017 tax reform passed, economic growth would top 4 percent. Historically, there is a time lag after reform.  Also, historically, there is a burst of energy that is let loose after reform. Until the coronavirus, the reforms were producing stellar economic growth – even in the face of our still oversized government burdens.

Now, there can be little doubt that the coronavirus is reducing economic activity. The hospitality and travel industries are being especially hard hit. The stock market drops hurt everyone given that virtually every pension, public and private, in this country is invested in the market.

All of which brings us back to the 2020 election. If Joe Biden is indeed the Democrat nominee, he will do for economic growth exactly what the Obama/Biden administration did for eight years.

How could anyone predict otherwise?

Biden is promising to raise taxes dramatically by undoing the Trump tax reform. Biden has also said: “I guarantee you, we’re going to end fossil fuel.” In other words, Biden is going to reignite the war on business that his prior administration prosecuted. In the face of a weakened economy, the Law of Demand tells us such cost increasing policies would pull the economy under – just as increased taxes on you reduces your ability to spend and save.

Simply put, why anyone would again hire the same people who delivered the worst economic performance ever?

On the other hand, the Trump administration is already moving to further reduce the costs of doing business in America. A reduction in any tax, including the payroll tax and personal taxes as Trump has suggested, is in keeping with the Law of Demand, and is the right prescription to boost the private sector.

We face uncertain economic times. The response should not be to drain the private sector, as Biden would love to do.  We should leave money in the private sector, which Trump advocates.

Trump and trade

Dan Mitchell:

Early last year, I shared a video explaining that trade deficits generally don’t matter. I even suggested trade deficits might be a sign of economic strength because foreigners who earned dollars were anxious to invest them in the American economy.

I’m recycling this video to make a point about trade and the economy for both Trump supporters and Trump critics.

For Trump supporters, I want them to understand that the trade deficit has increased under his policies. The data from the latest Commerce Department report show that the yearly trade deficit has increased from about $500 billion at the end of the Obama years to a bit over $600 billion during the Trump years.

And the reason I’m making this point is that I want Trump supporters to realize that they shouldn’t be upset about trade balances. Indeed, they should be happy because there’s a strong argument that the trade deficit is increasing in large part because Trump’s pro-growth tax reform and regulatory reform and making America more attractive for foreign investors.

For Trump critics, I want them to understand the same point, though from a different perspective. Many of them have been (correctly) critical of Trump’s protectionism. And they’ve been happy to point out that his taxes on foreign goods haven’t reduced the trade deficit.

But I would like them to contemplate why the economy has continued to grow. Hopefully, they will realize that pro-market policies in other areas are offsetting the damage of protectionism and therefore be more supportive of capitalism.

The Wall Street Journal opined on this topic last year.

President Trump can take a bow that his tax reform and deregulation are working as intended. …The trade deficit grew… This is not bad economic news. Imports grew faster than exports as the U.S. economy accelerated and much of the world slowed. The dollar grew stronger as capital flowed into the U.S., and the trade deficit grew to offset the larger capital inflows as it must by definition under the national income accounts. …a larger trade deficit is a benign byproduct of a healthier American economy. Supply-side policies revived animal spirits and gave the economy a second wind. …The best way to respond to a trade deficit is to ignore it.

From a left-of-center perspective, Fareed Zakaria made the same point in a recent column for the Washington Post.

Trump campaigned relentlessly on the notion that America’s economy was being ruined by large trade deficits. …He promised on the campaign trail in June 2016, “You will see a drop like you’ve never seen before.”In reality, the trade deficit has risen substantially under Trump. …when the United States has grown robustly, its trade deficit has tended to rise. If you want to achieve a sharp decline in the trade deficit, it’s easy — just trigger a recession. …while the United States has a deficit in manufactured goods with the rest of the world, it runs a huge surplus in services (banking, insurance, consulting, etc.). …The United States is also the world’s favorite destination to invest capital, by a large margin. As Martin points out, when you look at this entire picture, “the trade deficit should be something to brag about rather than denounce.” …Trump’s trade policy has been an enormously costly exercise, forcing Americans to pay tens of billions in taxes on imported goods, then using tens of billions of dollars in taxpayer funds to compensate farmers for lost income (because of retaliatory tariffs)… All to solve a problem that isn’t really a problem.

Veronique de Rugy of the Mercatus Center, writing for Reason, summarizes the issue.

President Donald Trump hates the trade deficit. …If elected, he promised, he would “end our chronic trade deficits.” …free traders…explained, a country’s trade balance is determined overwhelmingly by factors such as the U.S dollar serving as a reserve currency, the ratio of savings to investment opportunities at home and abroad, and the relative attractiveness of that country’s investment climate. As long as the United States is growing and remains an attractive place to invest, we Americans will continue to run trade deficits with the rest of the world. …They want these dollars, in part, to buy American exports. …More important, and often overlooked: Foreigners want dollars also to invest in America’s powerful economy. …the current-account deficit is a mirror image of the capital-account surplus. This is why Mark Perry of the American Enterprise Institute describes imports as “job-generating foreign investment surpluses for a better America.” It is thus no surprise that as the American economy grew, the trade deficit also grew.

I’ll close with a chart that’s in the video because it reinforces the three columns cited above.

As you can see, the link between the trade deficit and an investment surplus isn’t just a theoretical construct. It’s an accounting identity.

The bottom line is that people on both sides of the political debate should ignore the trade deficit and instead focus on the the tried-and-true recipe for generating prosperity.

Another Trump number

This must have just killed Bloomberg to report this:

The U.S. economy reached an important milestone in October that ought to put it on a more sustainable footing going forward: wage growth eclipsed mortgage rates for the first time since 1972.

Average hourly earnings for production and nonsupervisory employees — who comprise more than 80% of the U.S. private-sector workforce — rose 3.8% from a year earlier in October, according to Labor Department data published Friday. The average 30-year fixed mortgage rate in the U.S. in October was about 3.7%, according to Freddie Mac data. A year ago, before the Fed began easing, mortgage rates were closer to 4.9%.

If those trends continue, the combination will limit the debt burden for American households by keeping the share of would-be homebuyers’ wages being spent on interest payments under control. The Federal Reserve’s three rate cuts this year — undertaken for other reasons — have allowed wage growth to finally catch up as the job market continues to improve.

U.S. household leverage rose from about 75% in 1983 to 160% in 2008, a trend that was finally arrested by the collapse of the housing bubble and ensuing financial crisis, according to calculations by economists J.W. Mason and Arjun Jayadev. The primary cause of the increase in household debt relative to income over that 25-year period was Fed policy, which throughout kept interest rates well above the rate at which wages were growing, Mason and Jayadev said in a 2015 paper.

“The nominal interest rate has been higher than wage growth for a long time,” said Srinivas Thiruvadanthai, director of research at the Jerome Levy Forecasting Center. “If this is to be sustained it would be a positive development in setting the bottom 50 or 60% of the population on a sustainable footing.”

Corvettes aren’t supposed to be this kind of red

Motor Trend:

The all-new mid-engine C8 Corvette’s impressive $59,995 starting price is only good for the first year, as we reported back in August, and unless it goes up by $20,000, Chevrolet will continue to lose money on low-trim cars, a senior GM source tells MotorTrend.

We had a feeling the $59,995 starting price was too good to be true, and a GM source confirmed as much to us explaining the price would rise for the 2021 model year. This isn’t much of a surprise, as the base price of a C7 rose nearly $2,000 in its second year and by another $2,000 the following year. While we still don’t know how much the C8’s price will rise in 2021, a more senior GM official tells us it would have to go through the roof in order to cover GM’s cost.

According to our source, the original budget for the C8 project assumed a starting price of $79,995. This is certainly reasonable considering the enormous amount of work needed to redesign the car into a mid-engine configuration, but it’s a huge jump from the C7. In order to keep customers from revolting, Chevy is taking it on the chin and willingly losing money on every C8 it sells for less than $80,000. No doubt a factor in the C8’s laundry list of options and dress-up parts is the hope buyers will load up their cars with extras and turn their $60,000 Stingrays into $80,000-plus Stingrays. The C8 Stingray Z71 3LT we tested rang up at $88,305.

More critical are the base prices of upcoming performance variants including Z06 and ZR1. According to our source, the sweet spot for profit and volume is between $80,000 and $100,000. Once the car crests six figures, our source says, sales volume drops off precipitously. This will be a trick for Chevrolet, because the C7 Z06 starts at $82,990, which doesn’t leave the company much room for an increase without upsetting customers and breaking out of the sweet spot in price and volume. The C7 ZR1, meanwhile, already starts at $135,090, so Chevrolet has more discretion to price the C8 ZR1 knowing full well it will be a low-volume car.

Apparently GM has learned absolutely nothing from its bailout. (Which should never have happened; GM should have been allowed to go through the bankruptcy courts, as many companies have. A GM bankruptcy would not necessarily have meant the end of GM; the GM bailout ended up costing U.S. taxpayers $11.2 billion.)

Companies go under when they lose money on what they sell. Previous Corvettes made money for GM. This one won’t.