Hmmm. If you plant a cat in a pot, will you grow more cats? We’re going to find out! I’ll have the surprising answer next week.
Why are corporations sitting on such big piles of cash? Why aren’t they investing more? Max Ehrenfreund points to a new bit of research with an intriguing answer: as firms consolidate, their market positions become so powerful they don’t need to bother. After all, why spend money if you don’t have to?
Germán Gutiérrez and Thomas Philippon used a natural experiment to investigate this: the big rise in Chinese imports during the aughts. What they found was that in sectors that were highly affected by Chinese imports, firms increased their investment spending in order to compete. In sectors that were lightly affected, they didn’t bother:
(Note that this is a log scale, so the difference between the lines starting around 2005 is actually quite large.)
The authors suggest that the same thing has happened more generally. As sectors have become more consolidated, competition has dwindled and the need for heavy investment spending has dwindled too.
I don’t have the chops to evaluate this, but I’m sure others will chime in. However, it reinforces my belief that competiton is good for its own sake, and antitrust law needs to recognize this. We should move away from “consumer benefit” fables that corporations use to justify mergers, and instead insist on keeping sectors as competitive as possible.
From Patrick Murphy, owner of Bagel Barrel in Doylestown, Pennsylvania, on why he doesn’t want Obamacare repealed:
I can’t even remember why I opposed it. Everybody needs some sort of health insurance.
Answer: he opposed it because movement conservatives in the richest country in all of human history created a hysterical atmosphere of cultural doom and fiscal annihilation surrounding the idea of providing a minimal level of health coverage for everyone. Why did they do it? Why do they continue to do it? Even after seven years, I’m not sure I truly know.
The Sean Spicer story has come to an end:
Sean Spicer, the White House press secretary, resigned on Friday morning, telling President Trump he vehemently disagreed with the appointment of the New York financier Anthony Scaramucci as communications director.
Mr. Trump offered Mr. Scaramucci the job at 10 a.m. The president requested that Mr. Spicer stay on, but Mr. Spicer told Mr. Trump that he believed the appointment was a major mistake, according to a person with direct knowledge of the exchange.
On a purely personal level, I feel kind of sorry for Spicer, the same way I feel sorry for anyone who finally figures out just what kind of person Donald Trump really is.
On the other hand, it was pretty obvious all along what kind of person Trump was. Spicer knew, and he took the job anyway. I can excuse that for some of the national security folks, who might genuinely feel that they’re doing a public service preventing Trump from blowing up the world. But press secretary? No. If you want to wreck your reputation working for a clown like Trump, there’s no excuse. You went in with your eyes open.
POSTSCRIPT: Honestly, Spicer should have resigned after the Vatican snub. That was perhaps the pettiest thing I can ever remember a president doing to one of his staff. At a purely personal level, it shows what a horrible excuse for a human being Trump is.
Kevin Roose reports on efforts in Washington to regulate self-driving cars:
It’s rare to find an issue with true bipartisan consensus in Washington. But self-driving cars have been praised by members of both parties, who see the technology as a way to spur job creation while preventing many of the roughly 40,000 motor vehicle deaths that occur on American roads each year. According to the National Highway Traffic Safety Administration, 94 percent of traffic deaths involve human error, including distracted driving and driving while intoxicated.
The safety part I get. When they finally come, self-driving cars will almost certainly be safer than the 2-ton death machines that are currently piloted around our city streets by the texting/eating/singing/talking/shaving meat sacks that we laughingly refer to as sentient.
But job creation? How are self-driving cars going to spur job creation? Are we talking about the few thousand programmers and engineers who invent this stuff? Or what? Because when this technology becomes real, millions are going to lose their jobs as bus drivers, truck drivers, taxi drivers, and shuttle drivers.
What am I missing here?
Immigration from Mexico—both legal and illegal—has been declining for over a decade. In California, that means farmers are increasingly turning to automation instead of human pickers:
Driscoll’s is so secretive about its robotic strawberry picker it won’t let photographers within telephoto range of it. But if you do get a peek, you won’t see anything humanoid or space-aged. AgroBot is still more John Deere than C-3PO — a boxy contraption moving in fits and starts, with its computer-driven sensors, graspers and cutters missing 1 in 3 berries.
….Driscoll’s, which grows berries in nearly two dozen countries and is the world’s top berry grower, already is moving its berries to table-top troughs, where they are easier for both human and machines to pick, as it has done over the last decade in Australia and Europe. “We don’t see — no matter what happens — that the labor problem will be solved,” said Soren Bjorn, president of Driscoll’s of the Americas.
AgroBot is still a prototype, but it’s getting better. And lots of other crops have already been mechanized:
Vast areas of the Central Valley have switched from labor intensive crops such as grapes or vegetables to almonds, which are mechanically shaken from the tree. The high-value wine grape industry has re-engineered the bulk of its vineyards to allow machines to span the vines like a monorail and strip them of grape clusters or leaves.
….It may be too late to mechanize asparagus. The crop, among the most labor-intensive in the state, has gradually shifted to Mexico since trade barriers made it cheaper to grow there, casting a nostalgic pall over Stockton’s asparagus festival.
This is what happens when immigration slows: jobs are either mechanized or offshored. Perhaps that was inevitable anyway. But if Donald Trump does build a wall and cut down substantially on illegal immigration, it’s unlikely to have more than a marginal effect on low-wage native workers. It will just mean more robots in the fields.
On the other hand, it will also mean we have fewer people in the US speaking Spanish. And that’s really the whole point, isn’t it?
From a Washington Post story today about the Trump-Russia investigation:
Trump has asked his advisers about his power to pardon aides, family members and even himself in connection with the probe, according to one of those people….But one adviser said the president has simply expressed a curiosity in understanding the reach of his pardoning authority, as well as the limits of Mueller’s investigation.
He’s just curious! I mean, who wouldn’t be? Then there’s this:
Trump has been fuming about the probe in recent weeks as he has been informed about the legal questions that he and his family could face. His primary frustration centers on why allegations that his campaign coordinated with Russia should spread into scrutinizing many years of Trump dealmaking. He has told aides he was especially disturbed after learning Mueller would be able to access several years of his tax returns.
Those tax returns must really be toxic. I wonder what’s in them that Trump is so hellbent on keeping secret? It must be something pretty spectacular. Here’s the New York Times:
President Trump’s lawyers and aides are scouring the professional and political backgrounds of investigators hired by the special counsel Robert S. Mueller III, looking for conflicts of interest they could use to discredit the investigation — or even build a case to fire Mr. Mueller or get some members of his team recused, according to three people with knowledge of the research effort.
The search for potential conflicts is wide-ranging. It includes scrutinizing donations to Democratic candidates, investigators’ past clients and Mr. Mueller’s relationship with James B. Comey, whose firing as F.B.I. director is part of the special counsel’s investigation.
Trump seems to be treating this whole thing like a mob war. And maybe he’s right to do so. It just makes you wonder what he knows that we don’t.
China has an ambitious plan to lead the world in artificial intelligence by the end of the next decade:
The country laid out a development plan on Thursday to become the world leader in A.I. by 2030, aiming to surpass its rivals technologically and build a domestic industry worth almost $150 billion. Released by the State Council, the policy is a statement of intent from the top rungs of China’s government.
….The United States, meanwhile, has cut back on science funding. In budget proposals, the Trump administration has suggested slashing resources for a number of agencies that have traditionally backed research in A.I. Other cuts, to areas like high-performance computing, would affect the development of the tools that make A.I. work.
I’m hardly a Henny Penny nationalist. If China wants to catch up to us in aircraft carriers, it doesn’t bother me that much. But I won’t deny that I feel a lot more comfortable with an America that retains its lead in important technology, and AI is the most important technology in the world right now. It’s no exaggeration to say that the country with the best AI in 2030 might be the country that rules the world in 2050.
Then again, maybe not. But I’d just as soon not take that chance. America may have its faults, but we have a damn sight fewer of them than China.
It’s Thursday Dog Blogging!
I was telling my sister last night that I find dogs to be difficult subjects. Pictures of cats I find almost inherently adorable. But pictures of dogs always seem kind of meh. I love dogs in person, but photos never seem to capture much of their personality. Maybe that’s why cats took over the internet and dogs didn’t.
Anyway, this pooch was hanging out at the lake while his owner sat on the bench and did homework. He wandered around, stared at the ducks, stared at me, looked at the birds, looked at the lake, went over to get his head scratched, and then finally gave up and plonked sadly to the ground. When will she finish that homework and play with me? When?
UPDATE: After reading comments, I feel terrible. This was not a sad dog! He was just pretending to be bored in this particular shot. I’ve added another picture below showing him a few seconds later.
CBO has produced an analysis of the latest Senate health care bill, and it’s basically the same as the original version. Compared to Obamacare, it would leave 22 million more people uninsured, and the people who were insured would mostly be getting useless crap:
Under this legislation, for a single policyholder purchasing an illustrative benchmark plan (with an actuarial value of 58 percent) in 2026, the deductible for medical and drug expenses combined would be roughly $13,000, the agencies estimate….Because a deductible of $13,000 would be a large share of their income, many people with low income would not purchase any plan even if it had very low premiums….For people whose income was at 175 percent of the FPL ($26,500) and 375 percent of the FPL ($56,800), the deductible would constitute about a half and a quarter of their income, respectively.
Under current law in 2026, the deductible for a single policyholder purchasing an illustrative benchmark plan with an actuarial value of 70 percent would be much lower—roughly $5,000.
People have—rightly—complained about the big deductibles in many Obamacare plans. But this is ridiculous. A health care policy with a deductible of $13,000 is all but useless.
On another note, CBO has been criticized for overemphasizing the importance of the individual mandate. If you eliminated it, would 15 million people really decide not to buy insurance? I suspect that if you left everything else alone, that 15 million estimate might well be high. But if you combine the lack of a legal mandate with useless insurance, 15 million starts to seem a lot more reasonable, doesn’t it?
By the way, this report doesn’t include the Cruz Amendment. I assume that’s still in the works. Until the Republican health care plan is officially dead and buried, CBO is the real zombie here.
President Trump’s description of being seated next to Akie Abe at the G20 dinner is getting a lot of attention:
TRUMP: So, I was seated next to the wife of Prime Minister Abe [Shinzo Abe of Japan], who I think is a terrific guy, and she’s a terrific woman, but doesn’t speak English.
HABERMAN: Like, nothing, right? Like zero?
TRUMP: Like, not “hello.”
This immediately led to a video going viral that showed Akie giving a speech in English. So maybe she was just pretending she couldn’t speak English because she didn’t want to talk to Donald?
Two things about this. First, come on. There must be lots of people out there who know whether or not she speaks English. So does she or doesn’t she?
Second, after about two minutes perusing the internet, my conclusion is that Akie most likely speaks high school English. She can recite a speech in English if it’s necessary, though she plainly prefers not to, and can probably understand spoken English decently. But she doesn’t have enough confidence in her English to use it conversationally. So she relies on an interpreter in situations like the G20 dinner.
If anyone has any actual evidence about this, please let us all know.
Unsurprisingly, Bloomberg reports today that Robert Mueller’s investigation into Donald Trump has widened considerably from Russian campaign collusion:
FBI investigators and others are looking at Russian purchases of apartments in Trump buildings … SoHo development with Russian associates … 2013 Miss Universe pageant … sale of a Florida mansion to a Russian oligarch … dealings with the Bank of Cyprus … efforts of Jared Kushner, the President’s son-in-law and White House aide, to secure financing for some of his family’s real estate properties.
….The roots of Mueller’s follow-the-money investigation lie in a wide-ranging money laundering probe launched by then-Manhattan U.S. Attorney Preet Bharara last year, according to the person.
I’ll confess to some mixed feelings about this. On the one hand, this stuff is all semi-related to Russia, and might therefore be relevant to the campaign issue. On the other hand, we’ve all seen what happens when special prosecutors get out of control and start investigating everything under the sun. So far this looks like it’s still legitimately tied to Mueller’s original brief, but it’s a close call.
Donald Trump sure knows how to screw up, doesn’t he? He fired James Comey because the FBI was investigating Russia and he fired Preet Bharara because he was leading an investigation of money laundering. The end result was to bring more attention to both of these issues and put them in the hands of a guy with a big budget and nothing else to distract him. Nice work, Donald. Anybody else you want to fire?
I don’t have any special reason for posting this. I just happened to be looking at it. For full-time workers, women’s earnings have been steadily getting closer to men’s for the past four decades, but that seems to have leveled out since the end of the recession. It’s been stuck at around 81-82 percent ever since 2010:
This is hardly the most important part of Donald Trump’s interview with the New York Times today, but still:
So pre-existing conditions are a tough deal. Because you are basically saying from the moment the insurance, you’re 21 years old, you start working and you’re paying $12 a year for insurance, and by the time you’re 70, you get a nice plan. Here’s something where you walk up and say, “I want my insurance.” It’s a very tough deal, but it is something that we’re doing a good job of.
Trump still doesn’t know the difference between health insurance and life insurance. And yet, he says the senators he met with at lunch “couldn’t believe it, how much I know about it. I know a lot about health care.” Uh huh.
On a different note, this interview is just a long series of anodyne questions with no real attempt to pin down Trump on anything of substance. Aside from conversational stuff, here’s a fairly complete list of the questions they asked:
- How was your lunch [with Republican senators]?
- You are generally of the view that people should have health care, right?
- Did the senators want to try again [to pass health care]?
- Where does it go from here, do you think?
- How’s [Mitch] McConnell to work with?
- Will you go to Britain? Are you going to make a state visit to Britain?
- A lot of people are curious about your conversation with President [Vladimir V.] Putin at dinner. Not surprising. But what did you all talk about…?
- You asked them [Republican senators] about it [Don Jr.’s meeting with a Russian lawyer] at lunch?
- Sorry to interrupt. The email, though, said something I thought was really interesting, and I wonder what you thought of it. It said this “is part of Russia and its government’s support of Mr. Trump.” So whatever actually happened at the meeting—
- So, what do you interpret that to mean, now that you have seen it?
- I do want to come out, on the email, now that you have seen that email that said Russia’s government — I mean, how did you — did you interpret it that way?
- Given what’s happened since then, though, was it a political mistake to have fired him [James Comey], given what’s happened?
- But look at the headache it’s caused, you know?
- Do you wish you had done it on Day 1?
- What would be the line beyond which if Mueller went, you would say, “That’s too far, we would need to dismiss him”?
- Did you shoo other people out of the room when you talked to Comey?
- This is why I want to come back to that email, because, like — does it concern you? Let’s say that the election didn’t change because of anything Russia did, which has been your point, right? You point —
- But did that email concern you, that the Russian government was trying something to compromise—
- Last thing, if Mueller was looking at your finances and your family finances, unrelated to Russia — is that a red line?
There aren’t more than two or three probing questions in the whole bunch. And the only attempt at a follow-up of any kind was from Peter Baker on the Don Jr. email. I get that it’s entertaining to let Trump ramble and free associate—and I admit that it does produce news sometimes—but a high school reporter could have conducted this interview. What’s the point of bothering with it if you’re just going to lob a bunch of Fox & Friends nerf ball questions and then let Trump blather?
I can only assume that Donald Trump barely even knows what he’s saying anymore. Here he is during an interview with the New York Times, griping about Attorney General Jeff Sessions:
In a remarkable public break with one of his earliest political supporters, Mr. Trump complained that Mr. Sessions’s decision ultimately led to the appointment of a special counsel that should not have happened. “Sessions should have never recused himself, and if he was going to recuse himself, he should have told me before he took the job and I would have picked somebody else,” Mr. Trump said.
….Mr. Trump also faulted Mr. Sessions for his testimony during Senate confirmation hearings when Mr. Sessions said he had not met with any Russians even though he had met at least twice with Ambassador Sergey I. Kislyak. “Jeff Sessions gave some bad answers,” the president said. “He gave some answers that were simple questions and should have been simple answers, but they weren’t.”
And former FBI director James Comey too:
….The president added a new allegation against Mr. Comey….Mr. Trump recalled that a little more than two weeks before his inauguration, Mr. Comey and other intelligence officials briefed him at Trump Tower on Russian meddling. Mr. Comey afterward pulled Mr. Trump aside and told him about a dossier that had been assembled by a former British spy filled with salacious allegations against the incoming president, including supposed sexual escapades in Moscow. The F.B.I. has not corroborated the most sensational assertions in the dossier.
In the interview, Mr. Trump said he believes Mr. Comey told him about the dossier to implicitly make clear he had something to hold over the president. “In my opinion, he shared it so that I would think he had it out there,” Mr. Trump said. As leverage? “Yeah, I think so,’’ Mr. Trump said. “In retrospect.”
Trump apparently thinks that blocking embarrassing investigations is part of the attorney general’s job. If Sessions wasn’t willing to do that, “I would have picked somebody else.” Does Trump have any idea what he’s admitting here?
And, in restrospect, he now thinks Comey was trying to blackmail him. This despite the fact that Mother Jones had written about the dossier weeks before and it was common knowledge that it was out there.
I’m not even sure what to say about this stuff anymore. Nothing matters, does it? Trump really could gun someone down in the Oval Office and Fox News would report that Trump had stopped a terrorist attack.
From a Vox roundup of Republican reactions to the failure of their health care bill, here is senator John Thune:
Some Democrats have claimed Obamacare repeal collapsed because Republicans spent years falsely promising on the campaign trail that they had a better alternative waiting in the wings.
But Thune said he’d drawn just the opposite conclusion from the whole project. “I think Democrats will say Republicans had all this time and they didn’t have any ideas [to fix Obamacare]. But the problem is we have too many ideas,” Thune said. “It’s a challenge on how to take all these different policies and knit them together in a way that gets you an actual health bill.”
Poor Republicans. They’re bursting with so many great ideas that they just can’t seem to whittle them down to manageable size. A meeting of the Republican caucus must be practically electric with intellectual fervor.
Alternatively, what Thune meant by “too many ideas” is that some Republicans want to hurt the poor a lot in order to fund a big tax cut for the rich, while some want to hurt the poor a little less in order to fund a slightly smaller tax cut for the rich. The devil is in the details, amirite?
From the president of the United States, asked about the unemployment rate:
When we got those great reports, I kept saying—you know, those numbers were 4.2, 4.3—I said, for a long time, they don’t matter. But now I accept those numbers very proudly. I say they do matter.
This is laughable, but here’s the thing: I suspect that his supporters love this kind of attitude. After all, that’s how most of us treat information.¹ If it supports our opinion, we trumpet it. If it doesn’t, we dismiss it. That’s how normal people who want to win arguments deploy facts and figures, and Trump’s fans view him as a normal guy who wants to win, not some academic egghead.
Bottom line: Donald Trump may be an asshole, but he’s our asshole.
¹Not you, of course. I mean other people.
I like this picture a lot, and it was a stroke of luck. The swells at Huntington Beach were tiny the day I was there, but one of them hit just right to produce a splash about eight feet high. I was in the right place at the right time, and happened to have my camera set to a high shutter speed (1/800th of a second). That was enough to freeze the water and produce a great shot. A very minor bit of photoshopping lightened the shadow covering the boy and brightened up the color of his trunks a bit. Welcome to Southern California.
According to a new NBC/Wall Street Journal poll, voters in Trump-friendly places are getting a little more frustrated with the president they elected. Here are the top things they dislike:
A couple of days ago, I asked a conservative friend what he thought of Trump after six months. The first thing he said was, “I wish he’d quit tweeting.” Even Trump fans seem to realize that his tweets make him look like an idiot, and this reflects badly on them too.
Remember the Cruz Amendment? It’s probably as dead as the rest of Trumpcare, but HHS has released an analysis anyway. Long story short, they project that enrollment will go up and average premiums will go down compared to Obamacare.
And that’s actually possible. The Cruz Amendment would allow insurers to offer both full-coverage plans (i.e., ACA compliant) and stripped-down plans. The full-coverage plans would be expensive and would appeal to the old and sick. The stripped-down plans would be cheap and would appeal to the young and healthy. It’s entirely possible that the gain of healthy people would be greater than the loss of sick people, and that a pool with more healthy people would indeed have lower average premiums.
Of course, this is all sleight of hand. Averages are meaningless here. What we want to know is how much premiums will skyrocket for sick people, who have no choice but to buy the full-coverage plans. Here is the HHS estimate:¹
These numbers are derived from a “proprietary elasticity estimate,” so I have no idea how they’re calculated. In any case, HHS estimates that both the young and the healthy will flee the full-coverage plans, meaning that nearly half the pool for those plans will be the old and the sick. Given this, it’s hard to believe that average premiums in this pool will rise from $360 to only $625. That seems…optimistic. The trick, it turns out, is that HHS is assuming a $12,000 deductible per person (!). That would certainly help to keep premiums down. As a public service, then, I’ve added the green bars, which is my estimate of what these premiums would be if we ratcheted that back down to Obamacare’s more defensible $7,000 deductible. Comparing apples to apples, premiums actually triple. At least.
Additionally, HHS projects that by 2024 about half of all customers will still choose to enroll in a full-coverage plan, which also strikes me as a wee bit optimistic. But who knows? Since most people would still be protected by Obamacare’s subsidies, which go up as premiums go up, maybe lots of people really would stay in full-coverage plans, even with the sky-high deductibles. Of course, that would cost the government a lot of money, and sure enough, HHS projects that by 2024 the Cruz Amendment would cost the feds an extra $10 billion per year.
If Republicans allow CBO to finish its score of the Cruz Amendment, I guess we’ll find out if they agree. In the meantime, take this with a big grain of salt. HHS is not exactly a neutral party in this.
BY THE WAY: If you decide to look at the HHS analysis, you’ll notice that the first half is all estimates of the Cruz Amendment assuming a single risk pool. You should ignore this and move straight to the second half, which assumes two risk pools. This is practically the whole point of the Cruz Amendment, so I have no idea why they even bothered with estimates for a single risk pool.
¹HHS actually provides both low and high estimates. I averaged them to produce a single number.