• The Stock Market Depends on Consumer Spending, Not Just Tech

    Yesterday the Wall Street Journal said the stock market would be sucking if not for the tech sector:

    Three technology titans have powered nearly half of the S&P 500’s advance this year, a worrying sign for investors expecting a strengthening economy to lift shares of manufacturers, oil companies and other firms whose fortunes typically improve with growth.

    The S&P 500 technology sector has driven more than three quarters of the index’s gains, according to S&P Dow Jones Indices. The next biggest contributor is the consumer-discretionary sector—which includes tech-focused Amazon and Netflix—with more than a third of the advance.

    If you look at a few weeks of performance, you’ll always find something to worry about. Here’s what a few S&P sectors look like for the past six months:

    Tech is doing great, but so are financials and the consumer discretionary sector—which does include Amazon, but is overwhelmingly standard consumer stuff like Disney and Comcast and McDonalds. And consumer durables have been kicking ass for the entire past year.

    I don’t know how long this will keep up, but the market isn’t about to crater as soon as tech stocks come back down to earth. It’s going to crater if the Fed doesn’t allow middle-class earnings to rise and consumers stop spending. This is one sense in which the stock market really is a proxy for the entire economy.

  • Stop It: We Are Not Going to Arm Teachers

    Students training for a license to carry a concealed weapon in Chino, California.Jebb Harris via ZUMA

    The ability of Donald Trump to drive the news media is spectacular. Every newspaper is leading with Trump’s call to arm teachers, and in the Washington Post Philip Bump even goes so far as to figure out how much that would cost (about $1 billion). I don’t blame Bump for doing this—it’s the kind of thing I’d do, after all—but it’s insane nevertheless. We’re not going to hand out Glocks to third-grade teachers. Most teachers don’t want to be armed. And having lots of guns around schools is pretty much begging for trouble anyway.

    Mostly, though, it’s insane. We’re not going to arm teachers. Trump knows it. The NRA knows it. It’s just a random tarball tossed out to distract attention from the obvious problem. And it works.

  • Staff to Trump: Say “I Hear You” Occasionally

    Behold the president of the United States, at an Oval Office meeting with students and parents from Parkland, Florida. His staff had to remind him that every once in a while he should pretend to be paying attention to the grieving families he was meeting with.

    Associated Press
  • Don’t Worry, Social Media Will Get Better

    Entertainment Pictures/ZUMAPRESS

    This is from Chris Hayes last night:

    It’s funny. Generally speaking, I’m not a cheerful, optimistic guy. And yet, I feel much more sanguine about social media than most of the folks I read on—well, on social media.

    There are several reasons for this. For one thing, I’m not convinced that social media has changed people or that it “says something” about contemporary society. I think there have always been lots of assholes out there, and all social media does is congregate them in a single place. Second, the media wildly overcovers Twitter and Facebook because reporters (and famous people in general) tend to be on Twitter and Facebook themselves. Reddit is far more of a cesspool than Twitter will ever be, but you only rarely hear of it. Why? Because most reporters never read it. Third, as I’ve mentioned before, we humans are bad at arithmetic. The emotional impact of a thousand trolls haranguing you is way out of proportion to how much you should care about 0.0001 percent of the population hating on you.

    I figure we’ll all adapt to this stuff eventually. The media will get bored with social media and the rest of us will figure out that tidal waves of assholes aren’t really all that meaningful.

    But there’s one other thing that keeps me hopeful. I think of social media in its current incarnation as similar to war: a war between trolls and the rest of us. The trolls are on offense, and right now they have the upper hand. But military technology usually follows cycles like this. Offensive capabilities improve, and defenses only catch up later. Likewise, we’re only now starting to get serious about defending ourselves against trolls. But we’ll figure it out, and social media will be safe again. Then we’ll go through the same cycle again with something else.

    I think we’re at the nadir of social media right now. A decade ago it was new enough that usage was low and trolls weren’t a big problem. A decade in the future we’ll figure out how to bottle up the trolls. Right now, though, we’re kind of screwed. But it won’t last.

  • Lunchtime Photo

    A dandelion growing by the Sneem River in County Kerry.

  • Sorry, But Here’s Yet Another Nutball Right-Wing Conspiracy Theory

    Just in case you don’t know, the latest right-wing nutball conspiracy theory is that David Hogg, a student at Marjory Stoneman Douglas High School, is not what he seems:

    In certain right-wing corners of the web — and, increasingly, from more mainstream voices like Rush Limbaugh and a commentator on CNN — the students are being portrayed not as grief-ridden survivors but as pawns and conspiracists intent on exploiting a tragedy to undermine the nation’s laws. In these baseless accounts, which by Tuesday had spread rapidly on social media, the students are described as “crisis actors,” who travel to the sites of shootings to instigate fury against guns. Or they are called F.B.I. plants, defending the bureau for its failure to catch the shooter. They have been portrayed as puppets being coached and manipulated by the Democratic Party, gun control activists, the so-called antifa movement and the left-wing billionaire George Soros.

    The theories are far-fetched.

    Indeed they are, but let’s be honest: not as far-fetched as the idea that Hillary Clinton ran a pedophile ring out of the basement of a pizza parlor.

    I know, I know: Just yesterday I announced a new right-wing nutball conspiracy theory, and today I have a brand new one. What can I say? Back in the good old days when Bill Clinton was accused of running drugs out of Mena airport and murdering Vince Foster, the conspiracy theories were weeks or even months apart. Today that seems quaint. Like any addict, modern right-wing nutballs demand higher highs and more frequent highs. Also like any other addict, they become ever more willing to sink to any depths to feed their habit. At least Bill Clinton was president of the United States, after all. Presidents are used to being attacked. Now they’re going after 17-year-olds who have just watched a gunman massacre their friends. I’m almost afraid to ask what’s next.

  • An Old Man Reflects on the Era of Fire Drills, Not Lockdown Drills

    As an old man tottering into the sunset of his life, I would like to verify from my own experience that, yes, there was a time when kids went to high school without giving a moment’s thought to being gunned down by a mass murderer. Hard to believe, I know.

    As we all know, kids today are better behaved, on average, than kids in the 70s and 80s. So that’s obviously not the reason. But what else could it be? It’s a mystery.

  • What’s the Real Takeaway From Yesterday’s Big Low-Carb vs. Low-Fat Showdown?

    A number of people have pointed out to me that the New York Times has a very different take on yesterday’s big diet study:

    The Key to Weight Loss Is Diet Quality, Not Quantity, a New Study Finds

    A new study, published Tuesday in JAMA…found that people who cut back on added sugar, refined grains and highly processed foods while concentrating on eating plenty of vegetables and whole foods — without worrying about counting calories or limiting portion sizes — lost significant amounts of weight over the course of a year….The research lends strong support to the notion that diet quality, not quantity, is what helps people lose and manage their weight most easily in the long run. It also suggests that health authorities should shift away from telling the public to obsess over calories and instead encourage Americans to avoid processed foods that are made with refined starches and added sugar.

    This was not my emphasis. I led with the comparison of low-fat and low-carb diets. Why the difference?

    First things first. I didn’t have access to the study itself, which is often reason enough for me not to comment on something. On the other hand, here’s the abstract:

    Conclusions and Relevance In this 12-month weight loss diet study, there was no significant difference in weight change between a healthy low-fat diet vs a healthy low-carbohydrate diet, and neither genotype pattern nor baseline insulin secretion was associated with the dietary effects on weight loss. In the context of these 2 common weight loss diet approaches, neither of the 2 hypothesized predisposing factors was helpful in identifying which diet was better for whom.

    It sure seems like the main point of the study was to compare low-fat vs. low-carb diets, and to test the insulin secretion theory underlying low-carb diets. In any case, the reason I went ahead and commented even without reading the paper was because Examine.com had a long, detailed, and seemingly fair-minded description of the study. Here’s one of their charts:

    It’s true that the researchers didn’t emphasize calorie counting. They recommended generally healthy eating combined with an emphasis on either low-carb or low-fat diets. The result, however, was that participants ended up consuming about 500 fewer calories per day. That’s a huge amount, and is almost certainly the reason for the weight loss. In fact, I’m surprised the average weight loss wasn’t more. But what underlies this large reduction in calorie consumption? Here’s what the lead author, Christopher Gardner, told Examine.com:

    We did not “prescribe” a specific caloric restriction. We focused on reducing foods high in fats or foods high in carbs, and we advised the participants that they needed to find the lowest level of fat or carb intake they could achieve while not feeling hungry….We wanted for them to find a new eating pattern they could maintain without even thinking of it as a “diet”….Table 2 in the paper shows that the participants reported “achieving” a ≈500 calorie deficit, without us prescribing one … and it was fairly consistent through the 12 months. Now, I honestly think they likely exaggerated the caloric restriction. But in fact they did lose >6,500 lbs collectively…So they must have eaten less. I think this is an important area to explore.

    That highlighted section has been the advice of nutritionists forever. If you think of something as a “diet,” you’ll eventually fall off the wagon. But if you think of it as making a permanent, sustainable lifestyle change, you’ll…

    …well, as near as I can tell, you’ll probably still fall off the wagon eventually. But it will take longer. In any case, there’s exactly zero that’s new here. And the general advice to eat more vegetables and cut back on processed foods, added sugar, and refined grains is likewise of longstanding. My take is that there’s just nothing new in this part of the study. What’s new is comparing low-fat to low-carb diets in a fairly rigorous way, and then checking the insulin secretion theory of the low-carb diet. So that’s what I emphasized.

    POSTSCRIPT: There’s still the question of why a low-carb or low-fat diet leads to lower calorie consumption. One theory is that as you get used to it, your hunger decreases and you just naturally eat less. Another theory is that these diets are pretty boring and make eating less attractive. Yet another theory is that carbs and fats are the main sources of calories in American diets, so if you significantly cut back on one or the other you’re almost certain to cut back on calories too. It takes a helluva lot of vegetables to make up for not eating meat or bread, and few people are that crazy for vegetables.

    In any case, if you cut back on something with lots of calories, you’re cutting back on calories. As I said yesterday, “As near as I can tell, the bottom line is that if you want to lose weight, eat less.” The big difference between me and the New York Times is that they made this the lead, while I made it my last paragraph.

  • Republicans Are Having Second Thoughts About Abandoning TPP

    Yesterday I read that a couple of Republican senators thought Donald Trump should rethink his decision to pull out of the Trans Pacific Partnership, a trade treaty with 11 other nations. But the Washington Post reports today that support for TPP has expanded:

    The latest: Half of the Senate GOP is urging Trump to reconsider his year-old decision to yank the United States from the Trans Pacific Partnership. In a Friday letter, 25 of them encouraged him to “work aggressively” to renegotiate terms and rejoin the sweeping pact with 11 other Pacific Rim nations that the Obama administration originally organized. The push comes as the final version of the deal was released Wednesday.

    Trump himself cracked the door open for this particular appeal when he dangled the possibility of reviving U.S. participation in the agreement during a CNBC interview at the World Economic Forum in Davos. “I would do TPP if we were able to make a substantially better deal,” the president said. “The deal was terrible, the way it was structured was terrible. If we did a substantially better deal, I would be open to TPP.”

    Huh. I wonder what finally prompted so many of them to do this? Pressure from the pharmaceutical and entertainment industries, who benefit quite a bit from TPP? Fear of being left out, as the other 11 countries sign a treaty of their own? Concern that China will fill the vacuum left by the lack of American leadership in the Pacific?

    At this point, though, I wonder if the other 11 countries are even interested in talking? The whole point of TPP was the American presence, so they’d probably welcome a second chance at getting that. At the same time, would they be willing to waste time negotiating with Trump? His antics over NAFTA don’t make it seem like a worthwhile use of time. We’ll see.

  • No, Trump Hasn’t Been Harder on Russia Than Obama

    Jonah Goldberg says Donald Trump is right to say he’s been tougher on Russia than President Obama:

    Barack Obama sold out our Eastern European allies on missile defense. He slow-walked aid to Ukraine and did little more than shrug when Crimea was annexed. He said “never mind” on his own “red line” in Syria and turned a blind eye to Putin’s intervention there, in large part because of his obsessions with getting the Iran deal. The Russian meddling in our elections started on Obama’s watch — and not just our elections but those of many of our allies. When Mitt Romney famously said Russia was our No. 1 geopolitical foe, Obama mocked him for it as did countless liberal journalists who are now converts to anti-Russia hawkery.

    Meanwhile, the Trump administration has made life harder for Russia diplomatically and economically thanks to revving up our oil and gas production. It hasn’t been as tough as some — including me — would like, but it’s been tougher than the Obama administration. Or at least it’s not unreasonable.

    Well now. Obama did cancel George Bush’s missile defense plan, but he did it on the advice of the same guy who created the plan in the first place: Defense Secretary Robert Gates. It was designed as a shield against Iranian missiles, and it wouldn’t have worked very well. In 2016 Obama approved a new missile defense plan based in Romania—also part of Eastern Europe and also blasted by the Russians as “an attempt to destroy the strategic balance.”

    When Russia annexed Crimea, Obama put in place deep and painful sanctions against Russia. This was no easy task, since our European allies were reluctant to go along. As for who’s our No. 1 geopolitical foe, I think Obama was right not to choose Russia, though I suppose your mileage might vary on that. Ditto for Syria. I think Obama did the right thing to stay out, but those more hawkish than me probably disagree.

    Now let’s move on to Trump. He has, according to Goldberg himself

    …literally done nothing except to “rev up” our oil and gas production. Really?

    Production of oil and gas rose a bit in September, but it rose for the same reason as always: because fracking operations increased output in response to a rise in prices (partly due to Hurricane Harvey). Fracking operations always respond to price spikes. It had nothing to do with Trump and nothing to do with Russia, which has been producing crude at the same rate all year:

    Russia benefited from the increase in crude oil prices just like everyone else. In terms of oil revenue, at least, their life has gotten easier over the past year, not harder.¹

    This is American conservatism in a nutshell. Goldberg despises Trump, but he despises Obama even more. The end result is pretzel-bending arguments about things like this that ignore every scrap of evidence about Trump and Russia. It’s fair to say that Vladimir Putin hasn’t gotten the breather he hoped for when Trump beat Hillary Clinton, but that’s only because Congress and public opinion have forced Trump to back off. And in any case, surely the fact that Putin was so hellbent on defeating Hillary in the first place is evidence enough of how difficult the Obama administration made his life?

    ¹Although this has nothing to do with Trump either.