Signs of the Times

The view from the bottom:

The Los Angeles Unified School District has set up a hotline and opened “extended support sites” to respond to a high level of student anxiety about the election of Donald Trump as president.

And the view from the top:

Over at Equitable Growth, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman provide a look at the latest numbers on income inequality in the United States:

The authors comment:

For the 117 million U.S. adults in the bottom half of the income distribution, growth has been non-existent for a generation while at the top of the ladder it has been extraordinarily strong....In the bottom half of the distribution, only the income of the elderly is rising....To understand how unequal the United States is today, consider the following fact. In 1980, adults in the top 1 percent earned on average 27 times more than bottom 50 percent of adults. Today they earn 81 times more.

Well, that's the modern world for you, right? It's all about skills and education and greater returns to rock stars. There's really not much we can do about—oh wait. Here's another chart:

Huh. Apparently you can run a thriving modern economy that benefits the working class as well as the rich. And note that this is pre-tax income. If social welfare benefits were included, the working class in France would be doing even better compared to the US:

The diverging trends in the distribution of pre-tax income across France and the United States—two advanced economies subject to the same forces of technological progress and globalization—show that working-class incomes are not bound to stagnate in Western countries. In the United States, the stagnation of bottom 50 percent of incomes and the upsurge in the top 1 percent coincided with drastically reduced progressive taxation, widespread deregulation of industries and services, particularly the financial services industry, weakened unions, and an eroding minimum wage.

We could do better for the working class and still maintain our economic dynamism if we wanted to. The only thing stopping us is that, apparently, we1 don't want to.

1For a certain definition of "we," that is.

I would like to bring your attention once again to the two stock charts below:

Last week, Trump took a baby step into the world of crony capitalism by bribing/threatening United Technologies to keep a Carrier plant in Indiana so that Trump would look good. Today, he took a big ol' dive into the crony capitalism pool, tanking one company's stock because they had displeased him, and boosting two others because an investor had agreed to say nice things about him.

Now, in both cases the effects were temporary. Still, is this going to be a regular thing? Are American equity markets now in thrall to the whims of Donald Trump? Do companies need to be fearful of what the president of the United States might do to them if he happens to take a dislike to something they do?

And while I know how annoying this question can be, can you even imagine how Republicans would react if Barack Obama pulled this kind of stunt? Fox News would practically explode and Jason Chaffetz would start gearing up for a year or two of hearings. But since it's Trump doing it, there's nothing but radio silence. Apparently government interference in the free market isn't quite so terrible after all.

I figure it's still worth periodically posting a reminder that far more people wanted Hillary Clinton as their president than Donald Trump. The latest numbers show Clinton ahead by 2.6 million votes, or 2 percent of the total. Aside from the obviously corrupt election of 1876, no winning candidate in the two-party era has ever done even remotely as dismally in the popular vote as Trump.

Masayoshi Son, the president of Softbank and owner of Sprint, met with Donald Trump this afternoon and then announced that he planned to invest $50 billion in the United States over the next five years. Trump tweeted that "Masa said he would never do this had we (Trump) not won the election!"

Maybe so. But is this because Trump has promised to supercharge the economy and get rid of pesky, growth-killing regulations? Or is it, perhaps, because Trump promised to get rid of one particular pesky regulation? Here's the Wall Street Journal:

When he acquired Sprint, Mr. Son’s initial plan was to merge the carrier with German-owned T-Mobile US Inc. to take on market leaders AT&T Inc. and Verizon Communications Inc., but he abandoned the effort after regulators signaled they would reject the plan. Some investors and analysts have said he could make another attempt after Mr. Trump’s election and when a new chairman is appointed to the Federal Communications Commission.

Mr. Son planned to tell Mr. Trump about what happened with T-Mobile, and how he had wanted to invest in the U.S. but the regulatory climate was too harsh so he invested outside the U.S. instead, the person familiar with the matter said.

It's true: Obama regulators killed Sprint's planned acquisition of T-Mobile on antitrust grounds. This is undoubtedly the "harsh" regulatory climate that bothered Son. So perhaps Trump agreed that if Son takes another run at T-Mobile, his administration would be happy to make sure the merger gets a big ol' green light. The stock market certainly seemed to think this was likely. Within a few minutes of Trump's tweet, Sprint stock shot up 6 percent and T-Mobile rose 2 percent.

In the same Journal article, we also get this:

AT&T Inc. Chief Executive Randall Stephenson also spoke positively of the economic benefits of a Trump presidency Tuesday....He expressed hope that “a more moderate approach to some of these regulations is in the making under a Trump administration.” Mr. Stephenson said the U.S. is the “highest tax country in the developed world” and that capital investment, as a percentage of gross domestic product, is at its lowest level since World War II.

The business community is certainly sucking up to Trump these days, aren't they? They're apparently also developing a taste for his casual relationship with the truth. Here are two parting charts, presented without comment.

Here's some cheery news:

President-elect Donald J. Trump on Tuesday fired one of his transition team’s staff members, Michael G. Flynn, the son of his designated national security adviser, for using Twitter to spread a fake news story about Hillary Clinton that this weekend led to an armed confrontation in a pizza restaurant in Washington.

As near as I can tell, Flynn Jr. is batshit crazy. It's good to see him gone. The only problem is that Flynn Sr. isn't much better, and he's going to be running our foreign policy before long. I guess the best we can hope for is that sometime soon he does something so mind-bogglingly barmy that even Donald Trump will feel obligated to fire him. Hopefully sometime before January 20.

I'm not sure whether to laugh or cry at this. The health insurance industry is outlining what it wants to keep when Republicans repeal Obamacare:

The insurers, some who have already started leaving the marketplaces because they are losing money there, say they need a clear commitment from the Trump administration and congressional leaders that the government will continue offsetting some costs for low-income people. They also want to keep in place rules that encourage young and healthy people to sign up, which the insurers say are crucial to a stable market for individual buyers.

....[Marilyn] Tavenner acknowledged that the current law “needed to be improved.” But she emphasized that there was widespread agreement among Republicans about the need for some the law’s provisions, including covering people with expensive medical conditions. President-elect Donald J. Trump has also signaled his support of this popular provision. “There are common starting platforms,” she said.

....Ms. Tavenner said the industry wanted to know more about what the Republicans were planning, including information on the fate of the Medicaid expansion under the law. “We still have more questions than answers,” she said. “We don’t want to disrupt individuals who are relying on our coverage,” she said.

Here's the case for laughing: the insurance industry says it's OK with repealing Obamacare, but we should maintain the pre-existing conditions ban, the individual mandate, the subsidies for low-income families, and the Medicaid expansion. Needless to say, that is Obamacare.

Here's the case for crying: "The market has already been a little wobbly this year," Tavenner said. If it looks like any of these four provisions are going to be repealed with nothing to replace them, insurers will simply pull out of the market at the "next logical opportunity." That would be about six months from now.

And as I've mentioned before, there's a good chance this doesn't just mean pulling out of the Obamacare exchanges. If the mandate and the subsidies go away, but the pre-existing conditions ban stays in place, insurers might very well pull out of the individual market entirely. Republicans are playing with fire here, and it's not clear if they even know it. Someone in the insurance biz really needs to have a come-to-Jesus meeting with them.

A couple of weeks ago I wrote about a paper which claimed that declining female labor force participation was a result of increasing childcare costs. I was skeptical because the paper clearly showed that participation rates for women with children declined less than rates for women without children.

Today, Chris Herbst of Arizona State University emails to say my skepticism is justified. The problem, he says, is that well-off families increasingly spend a lot for premium childcare, and this boosts the average. If, instead, you look at medians, childcare expenditures haven't really gone up that much. Instead of rising 32 percent between 1990 and 2011, the median increase is only 16 percent. What's more, virtually all of that increase happened during the 90s. Since childcare is labor intensive, he uses the earnings of childcare workers as a proxy for the cost of childcare. Here's what that looks like:

Long story short, if the cost of childcare hasn't gone up much for working-class and middle-class families, then it probably has little effect on the labor force participation rate of women. The full paper is here, and it has some other interesting tidbits. For example, Herbst finds that the modest increase in childcare expenditures masks a big split: expenditures have gone up a lot for children under five, but have actually gone down a bit for older children. Perhaps there's some further work to do comparing the labor force participation of women with toddlers vs. women with school-age children?

There's been an ongoing debate for the past few weeks over a weighty topic: should we pay attention to every damn thing Donald Trump tweets?

Argument for: He's president-elect. If he says something, it's news.

Argument against: His tweets are just shiny objects meant to distract us from the more boring but far more important ways he's destroying our great nation.

Today brings evidence for ignoring the tweets. Earlier this morning, for no particular reason, Trump decided that we should cancel the contract for a new pair of Air Force Ones. Why? Trump says they're too expensive. My guess is that he's just mad that they won't be ready until 2024, which means the president after him will get a better plane than the POS he has to fly around in.

Anyway. This is big news everywhere. It's on CNN, it's on the front pages of all the newspapers, and a Google search for "Air Force One" brings up a results page that's dominated by Trump's tweet.

If there were ever a shiny object, this is it. It came out of the blue. It's completely ridiculous. Trump obviously has no idea what goes into these planes. (Hint: surviving a nuclear war.) It will never get seriously followed up. It's just random crap designed to get him some attention. Why are we wasting our time with this?

UPDATE: Maybe there's more to this than I thought. Last year, after a century of producing planes in the US, Boeing began construction of a plant in China. It also gets a lot of its business from Chinese airlines, and perhaps privately told the Trump team that it was nervous about Trump's outreach to the president of Taiwan. Historically, after all, Boeing is one of the first to suffer when China gets mad. Plus it turns out that this wasn't just harmless guff: Boeing stock dropped about 1.5 percent after Trump's tweet.

I'm still not sure about how much attention we should give to Trump's tweets, but now you know both sides of the story. Except for one thing: what does Trump have against Boeing? That's still a bit of a mystery.

Wesley Smith is an absolute foe of assisted suicide in any form, for any reason, at any time. For that reason I don't usually read his stuff over at National Review. We disagree, and that's that.

But things are slow today, and I found his latest sort of interesting. He's furious over an interview of Timothy Quill, an advocate of assisted suicide, despite the fact that Quill is very deliberately taking a moderate view. The interviewer basically asks him if people should have access to assisted suicide drugs regardless of their reason, and Quill says no:

In my opinion, the more you have terminal illness with severe physical suffering as a major piece of the puzzle, the more you’re on solid ground....That envelope will get tested as we move along with this, so we are going to need to find edges to it. Severely terminal illness is a good edge. It’s not the firmest edge in the world, but it’s a good edge, and predominant physical suffering as a piece of the puzzle seems to me a good edge.

Obviously Smith disagrees with even this much, but at least Quill is setting limits. Yet Smith is still outraged. Why?

Baloney. Not one law in the United States allowing physician-assisted suicide requires proof of physical suffering to obtain a lethal prescription....Moreover, the statistics from Oregon and elsewhere show that very few people commit assisted suicide due to physical suffering. Rather, the issues are predominately existential, such as fears of being a burden or losing dignity.

....As I said, assisted suicide advocates are so full of crap.

But Quill isn't especially making the case that physical suffering is a major component of assisted suicide laws, he's using it to argue against broadening the justification for assisted suicide to include "psychological or spiritual suffering." You'd think Smith would appreciate at least that much, but apparently not.

In any case, I think Smith is missing something here. It's true that most people with terminal conditions don't name physical suffering as a primary reason for wanting to die. But it's a significant consideration anyway. First, there's fear of physical suffering as their disease progresses. Second, there's fear of losing control. That is, there's a fear that at some point they'll become physically unable to control their own destiny, including the option of assisted suicide if they want it. Would you call that "physical suffering"? I'd put it in that category. It's not related to depression or fear of being a burden. It's a clearheaded fear of almost certain future physical decline that will take away the ability to choose their treatment.

Now, Smith obviously disagrees that this should be the basis for assisted suicide, because he thinks nothing should be the basis for assisted suicide. But Quill is very clearly not full of crap. He's a proponent of a slow, moderate approach to assisted suicide; he thinks a physical suffering standard is a good way to restrict assisted suicide; and presumably he takes the view that loss of physical control is a very rational, very understandable fear.

However, on one thing Smith is unquestionably correct: the assisted suicide laws on the books today don't require a show of physical suffering. So the whole conversation is moot anyway. Nor do I see what good it would do if they did. It would just require patients to claim they were in a lot of physical pain. There's no way to prove this one way or the other, so why bother?