Among free-market fans, Chile's privatized pension plan has long been held up as a model for us to follow. The problem, as the Financial Times notes today, is that it's performed pretty dismally. Daniel Gross suggests that it was all well-intentioned, but for some reason just didn't work out:

There's one thing Gross and I agree about: net returns of 3 percent during the booming market of the past 35 years is indeed a disaster. It's the "just turned out" part that deserves closer scrutiny. Sadly, I can't read Spanish and therefore can't inspect the primary source for this debacle, but there's no way that management fees indistinguishable from highway robbery just happened to happen. This may not be corruption in the sense of fund managers embezzling trillions of pesos for hookers and blow, but it's certainly corruption in the more refined sense of deliberately allowing the financial sector to enrich itself at the expense of workers who are required to give them their money.

Why is this becoming a big issue now? Because for its first 35 years, when it was being hailed as a free-market miracle, not many people were actually retiring. Now they are, and it turns out their pensions are pretty paltry. If net returns had been closer to the 8 percent retirees deserved, their pensions would be three times higher. Fees like this are basically legalized theft.

This is not some obscure detail of pension investing, either. Management fees are one of the most crucial aspects of long-term fund management and everyone knows it. Normally, you'll hear arguments about whether fees of 1 percent are larcenous compared to, say, fees of half a percent. But fees big enough to reduce returns from 8 percent to 3 percent? That's no accident. It's the predictable result of an unregulated free market working on behalf of unsophisticated investors. Everyone involved in this knew exactly what they were doing.

The Clinton Foundation has raised billions of dollars for worthy causes, and after a year of tenacious investigation it appears that it never influenced anything at the State Department while Hillary Clinton was there. Doug Band asked for a few favors here and there, but apparently he never got anything more than a better seat at a luncheon—and it's not clear he even got that.

So let's talk instead about the Trump Foundation. It's a paltry operation that has spent only a few million dollars since the turn of the century. Donald Trump himself has contributed nothing to it over the past eight years. However, he has used Foundation money to buy himself items at charity auctions—including a six-foot painting of himself. And on the seamy side, Trump sure seems to have used Foundation money to try to bribe the attorney general of Florida.

So what is the Trump Foundation? That's hard to say, but it appears to be nothing except a way for Trump to appear philanthropic by giving away other people's money under his own name. As a way of hiding the fact that he's astonishingly miserly about his personal donations to charity, it seems to be a great idea. But why does anyone else play along with this? David Fahrenthold of the Washington Post asked:

[Trump's] biggest donors have not wanted to say why they gave their own money, when Trump was giving none of his.

“I don’t have time for this. Thank you,” said Richard Ebers, a ticket broker in New York City who has given the Trump Foundation $1.9 million since 2011.

“No. No. No. I’m not going to comment on anything. I’m not answering any of your questions,” said John Stark, the chief executive of a carpet company that has donated $64,000 over the years.

Vince and Linda McMahon declined to comment.

So did NBCUniversal, which donated $500,000 in 2012. Its gift more than covered the “personal” donations that Trump offered at dramatic moments on “The Celebrity Apprentice” — then paid for out of the Trump Foundation.

....The Trump Foundation said it had received a $100,000 donation from the Clancy Law Firm, whose offices are in a Trump-owned building on Wall Street. “That’s incorrect,” said Donna Clancy, the firm’s founder, when The Post called. “I’m not answering any questions.”

Jeez. What kind of hold does Trump have over these folks? They give him money but act like kids with their hands in the cookie jar when anyone asks them about it. Even the ones who didn't give him money act that way. What does it all mean? People are usually proud of donating money to a charitable foundation, aren't they?

And how is it that a billionaire can be so hellbent on never giving a cent of his own money to charity? Trump's behavior is so pathological that this year, even after promising a $1 million donation to vets on live TV, he did his best to quietly renege on it. He finally ponied up, but only after Fahrenthold basically badgered him into it by methodically proving that he hadn't given anyone a dime.

Of course, Trump could prove that all of us are just partisan shills by simply releasing his tax returns and demonstrating that he has too donated to charity. He doesn't even have to release the whole thing. All we need is Schedule A for the past few years.

But we'll never see it. I wonder why?

Donald Trump went on CNBC this morning and burbled some Trumpisms about the economy, among them his opinion that Fed chair Janet Yellen should be ashamed of herself for keeping interest rates low in an obviously partisan attempt to help Barack Obama. Matt Yglesias comments:

Versions of this kind of theory are pretty common in business circles, since business circles feature a lot of affluent white men who are generally ill-disposed toward the Democratic Party, but it doesn’t make any sense. After all, the way low interest rates are allegedly helping Obama is by improving economic conditions. But improving economic conditions is what the Fed is supposed to do. Why would they be ashamed?

More technically, the Fed has two mandates: keep employment high and price levels stable. If inflation were high, that might call for higher interest rates to cool down the economy, but in fact inflation is very low. Likewise, if the economy were at full employment, that might permit higher interest rates. But although employment has improved considerably over the past few years, no one thinks we're at full employment yet. In other words, the Fed simply has no reason to raise interest rates.

But when conservatives talk about this, they don't usually talk about the Fed's legal mandates. Rather, they think the Fed is keeping interest rates "artificially" low, which will have ominous effects any day now. But is that true? What is the market telling us about the natural rate of interest right now? Well, the real rate of interest on AAA corporate bonds bounces around a bit, but at the moment yields are running about 1 percent. In Europe, corporate bonds yields are now negative. John Williams of the San Francisco Fed estimates that the natural rate of interest in the US is currently running at about 0.5 percent. The market is telling us that the natural rate of interest at the moment is very, very low.

So pay no attention to the burbling. The market is telling us that interest rates should be low, and the Fed's legal mandates are also telling us that interest rates should be low. Janet Yellen is doing just fine.

Just a quick note for everyone disturbed by basically everything that's happened over the past month or so. It's true that the polls have tightened a bit, but that's not the real story. Here's the latest from Pollster:

The real story is that we've had a Republican convention, a Democratic convention, and tons of news about email, foundations, pneumonia, Russia, bribery attempts, and more—and we're pretty much at the same place we were three months ago. On June 1st, Clinton led by 5.5 points. Today she leads by 4.9 points.

Obviously this could change, and neither side can afford complacency. But the big picture is pretty simple: Trump has been stuck at a maximum of 40-42 percent for the entire past year. It appears that there's a limit to how much support you can gin up with nothing but bluster and appeals to white resentment.

If you want to understand the relationship between Hillary Clinton and the press, yesterday pretty much gave it to you in a nutshell. The basic facts are these:

  • On Friday Clinton was diagnosed with pneumonia.
  • On Sunday morning she left a 9/11 memorial early, with her staff claiming she was "overheated."
  • Later on Sunday Clinton's doctor released a note revealing the pneumonia.

The press is rightfully annoyed. She's a presidential candidate, and she should have disclosed the pneumonia diagnosis as soon as she got it. Those aren't the rules for ordinary people, but they are the rules for presidential candidates, and once again Clinton is trying to slide by them.

So why did Clinton's people try to hide her condition? That's pretty easy: After months of baseless health speculation by Donald Trump's rumor machine, she figured the press would go full National Enquirer over this. She didn't trust them to handle it in a normal, level-headed way.

So that's that. There's a gulf of distrust between Clinton and the media that appears unbridgeable. Clinton doesn't trust the press to treat her fairly, so she adopts a hyper-guarded attitude toward everything she does. The press doesn't trust her to honestly disclose anything, so they adopt a hyper-skeptical attitude toward everything she says. Rinse and repeat.

I guess this could change. But not anytime soon.

I have previously mocked the "tweetstorm" as a poor substitute for just writing a short blog post, but I have to admit that for some topics a tweetstorm is the perfect medium. David Fahrenthold demonstrates today:

Consider this my way of saying "Welcome to Monday!" Real blogging about real news will probably commence shortly.

Hillary Clinton Has Pneumonia

Hillary Clinton has contracted pneumonia and is taking antibiotics for it. I hope she gets better soon. In the meantime, though, the news is going to be grim. Expect all of the following:

  • Washington Post: This makes Clinton's health a genuine issue.
  • Charles Krauthammer: She should have told us hours earlier than she did. Is there nothing the Clintons won't lie about?
  • Vox: Here's a pneumonia explainer.
  • Wall Street Journal: Can Hillary keep up the pace on campaign trail?
  • Fox News All-Stars: William Henry Harrison died of pneumonia after 32 days in office.
  • Don Lemon: Is it possible Clinton actually has Ebola?
  • Time: New focus on Kaine as Clinton struggles with health.
  • @realDonaldTrump: Hillary tried to hide sickness. But I've been warning about her health for months. Need more transparency!
  • @KatrinaPierson: Doctors say it might actually be cystic fibrosis or lung cancer. Public deserves full medical workup.
  • @RogerJStoneJr: Hillary has Legionnaires' disease.
  • National Enquirer: Hillary Clinton given months to live by docs.
  • New York Times: Questions raised about Clinton diagnosis.
  • Facebook News: Trending topics: How long does Hillary have to live?
  • Politico: Will Clinton recover in time for debate?
  • Etc.

The real story, of course, is that she caught pneumonia. It's a common illness, and antibiotics should get rid of it pretty quickly. Even during a presidential campaign it's a fairly ordinary kind of story. But the talking heads need more than that to talk about. We need some kind of morality play. We need the "real questions this raises." We need analysis. We need daily updates, accompanied by slo-mo analysis of Clinton's latest walk to her car. So we'll get them. Sigh.

Here's How Donald Trump Remembers 9/11

How did you respond to 9/11? Did you mourn? Burn for revenge? Or were you like Donald Trump, musing about how the destruction of the World Trade Center might help your business?

Alan Marcus, who was working that day for WWOR as an on-air analyst, asked the real estate mogul to step into a role that seemed fanciful at the time....Trump didn’t talk about retribution or leap to conclusions about who was responsible. In fact, he avoided identifying potential enemies—any terrorist organization or Muslims in general.

....“40 Wall Street,” he said, referring to his 71-story building blocks away from the now-collapsed twin towers, “actually was the second-tallest building in downtown Manhattan, and it was actually, before the World Trade Center, was the tallest—and then, when they built the World Trade Center, it became known as the second-tallest. And now it’s the tallest.

Marcus chalked up the remark to “Donald being Donald....He is the brand manager of Trump, and he is going to tout that brand, and he does it reflexively,” he said. “Even on that day.”

Well, we all process grief in our own way. We shouldn't hold this against him. At least he used his wealth to help out 9/11 charities in the months after the attacks. Right?

In the aftermath of the 2001 terror attack on the World Trade Center, Donald Trump, a billionaire son of New York City, did not make a single charitable donation to any of the not-for-profit groups that provided aid to survivors, rescue workers, or the families of cops and firemen who died trying to save others, Internal Revenue Service records show.

....In a December 2003 report detailing the “unprecedented outpouring of charitable support” following the 9/11 attacks, The Foundation Center noted that nearly 1300 foundations, corporations, and other institutional donors gave a total of $1.1 billion for recovery and relief efforts....But Trump, whose family first became wealthy renting apartments to the working class in Brooklyn and Queens, chose not to take part.

Hmmm. Well, at least he didn't take money meant to help small businesses recover from 9/11 and use it to refurbish one of his...oh, of course he did:

Donald Trump’s tale about why he took $150,000 in 9/11 money is as tall as the Downtown skyscraper [Trump Tower] he says he used in recovery efforts, according to government records.

Though the billionaire presidential candidate has repeatedly suggested he got that money for helping others out after the attacks, documents obtained by the Daily News show that Trump’s account was just a huge lie.

Records from the Empire State Development Corp., which administered the recovery program, show that Trump’s company asked for those funds for “rent loss,” “cleanup” and “repair” — not to recuperate money lost in helping people.

Trump claims the money was "probably" meant as reimbursement "for the fact that I allowed people, for many months, to stay in the building, use the building and store things in the building." It wasn't. As the Daily News says, his application says it was for cleanup and repair, even though he had earlier said that his building wasn't damaged. "It was not part of the program to give money away for the other ancillary stuff," says David Catalfamo, who helped run the program. "The way the program worked was to help businesses cover for uninsured losses. Businesses came forward with their losses and we covered part of them."

And how did Trump qualify as a "small business" in the first place, even though the Trump Organization employs thousands? Well, the particular entity that owned the building had fewer than 500 employees, so voila. Instant payday.

Some mourn. Some burn for revenge. Some help bury the dead. And then there are the ones who just cash in. That's no surprise. We usually don't think of them as presidential material, though.

Liz Spayd, the New York Times public editor, writes today about charges of "false equivalence." She basically blows it off:

As we enter the final sprint of an extraordinary presidential campaign, the use of this term is accelerating, and it typically is used to attack news outlets accused of unfairly equating a minor failing of Hillary Clinton’s to a major failing of Donald Trump’s.

....The problem with false balance doctrine is that it masquerades as rational thinking. What the critics really want is for journalists to apply their own moral and ideological judgments to the candidates....I can’t help wondering about the ideological motives of those crying false balance, given that they are using the argument mostly in support of liberal causes and candidates.

Spayd is getting plenty of flak for this on social media, and I think it's partially deserved. There's no question that charges of false equivalence are often partisan, but her job should be to figure out if they're correct anyway. She doesn't even really try to do that.

At the same time, Spayd also makes a valuable point that gets too little attention. Some of the Times' reporting on the Clinton Foundation has been important, she says:

On the other hand, some foundation stories revealed relatively little bad behavior, yet were written as if they did. That’s not good journalism. But I suspect the explanation lies less with making matchy-matchy comparisons of the two candidates’ records than with journalists losing perspective on a line of reporting they’re heavily invested in.

Yep. I frequently read stories that should have been spiked because they don't really say much of anything. The problem is that after spending days or weeks reporting something, no reporter wants to leave empty-handed. So they write something, even if it's little more than narrative or innuendo. Editors should be more aggressive about killing stuff like this.

There's an additional point that Spayd doesn't make: some stories naturally lend themselves to continual coverage, while others don't. The Clinton email story is an obvious example of the former. Donald Trump's tax returns are an example of the latter. These are probably equally important stories, but the email story gets dozens of front-page hits simply because new information drips out steadily. Trump's tax returns get only one or two because there's nothing new to report once Trump has made it clear he has no plans to release them.

So editors need to ask themselves if a story is getting overcovered solely because of the nature of the information drip, rather than because of its intrinsic importance. I may be partisan, as Spayd says, but I'd say that both the email story and the Clinton Foundation story have been overcovered for this reason. I don't quite know what the answer is—the whole point of news is to report stuff that's new, after all—but at the very least political editors should probably retain more perspective about how much attention to give to individual drips in long-running stories.

The latest WaPo/ABC News poll shows Hillary Clinton leading Donald Trump 51-43 percent in a two-way race. That's good news for Clinton, but the rest of the poll is even better news. Asked who they believe will win, Clinton leads by a whopping 58-29 percent. Historically, this is a pretty predictive indicator. President Barack Obama's approval rating is up to 58 percent, which is good news for the candidate of the same party. Clinton also leads on all four questions about character and all five questions about issues.

But here's my favorite result. Although 43 percent of respondents say they support Trump, only 36 percent say he's qualified to serve. This means that 7 percent of the population plans to vote for him even though they think he's unqualified to be president. Boo yah!

Anyway, margin of error, question wording, blah blah blah. This probably doesn't really mean much. But it's amusing nonetheless.