• Today Marked Yet Another Stock Market “Record” You Should Ignore

    You might be as weary of this stuff as I am, but here is the Dow Jones Industrial Average over the past five years:

    Basically nothing new has happened recently even if, technically, the Dow set yet another “record” today. If you draw a trendline through the end of 2019 and then extend it (dashed black line), the Dow is well below the trendline. Right now it’s still growing more slowly than it did during the 2016-2019 period.

    But let’s be fair! Donald Trump may think the Dow topping 30,000 is “sacred,” but the truth is that nobody with a room temperature IQ follows it. The most basic guide to the stock market is the S&P 500, so let’s take a look at that:

    Things look a little better now, but still nothing new has happened. The S&P is growing at the same rate as always. There are small ups and downs, as always, and during the past four weeks there’s been a small upward spike, but this is pretty meaningless. It tells us (maybe) that investors think the underlying economy will return to its old self once the pandemic is over, but that’s about it.

    It’s worth noting that there’s a genuine difficulty with economic data of all kinds right now: it’s almost all artificial because the state of the economy is dictated less by fundamentals and more by deliberate government lockdowns in response to the coronavirus. This means that the stock market, for example, doesn’t really tell us what investors think about the underlying strength of the economy. Rather, it tells us what investors think about how quickly the pandemic will be over and things will get back to normal. (They’re fairly optimistic about this.)

    In the same vein, things like high unemployment numbers don’t tell us much either on a macro economic level. After all, we’ve deliberately put millions of people out of work, so of course the unemployment level is high. In a normal situation, high unemployment means the economy is in bad shape and needs general stimulus. In the situation we face today, it means only that the pandemic is still roaring along. This calls for targeted, temporary aid to the unemployed, especially for working-class folks who have been the hardest hit.

    In any case, the stock market has never been a very good guide to the strength of the economy. Today, it’s even less helpful. The bottom line is that you should ignore stock market news unless it shows some kind of sustained change from its five-year trend. So far it hasn’t.

  • Lunchtime Photo

    It didn’t come fast, and it didn’t come without a fight, but finally there is light at the end of the tunnel.

    November 21, 2020 — Newport Beach, California
  • Election Law Ended Up In a Pretty Good Place in 2020

    Election law guru Rick Hasen says it’s good news that Donald Trump has lost virtually every court challenge in his doomed effort to overturn the 2020 election results. But there’s also bad news:

    Even as Mr. Trump has lost most of his postelection lawsuits, he and his allies had a good bit of success before the election in cases that will stymie voting rights going forward. Following the lead of the U.S. Supreme Court, federal appeals courts now routinely say that federal courts should be deferential when states engage in balancing voting rights — even during a pandemic — against a state’s interests in election administration and avoiding fraud, even when states come forward with no evidence of fraud.

    ….The worst appears yet to come. In one of the lawsuits that remains technically alive at the Supreme Court out of Pennsylvania, Mr. Trump and his allies have advanced a muscular version of something that’s become known as the “independent state legislature” doctrine. Taken to its extreme, the doctrine says that state legislatures have complete authority to set election rules absent congressional override, and that their power to set election rules cannot be overcome even by state supreme courts applying right-to-vote provisions in state constitutions.

    It’s foolish to argue about election stuff with Rick, but I’m going to do it anyway. Here’s the thing: there are two different kinds of judicial review that can happen in election cases. The first is the typical kind: the law is a little vague and a court has to decide how it applies in a particular case. That’s no problem. But this year there’s been a second type that strikes me as entirely different: in these cases the law is clear, but a court simply decides on its own that the pandemic justifies an exception. In October, for example, the Supreme Court overturned a lower court ruling that had extended Wisconsin’s deadline for receiving absentee ballots to six days after the election.

    In the current environment, this was considered a victory for conservatives, but there’s really no larger reason to view it that way. The Supreme Court’s view, sensibly in my opinion, is that (a) Wisconsin law was clear, and (b) it was up to the Wisconsin legislature to change it in response to the pandemic if it so desired. There was no gray area of interpretation here, just a court arbitrarily adding several days to the absentee ballot deadline based on (in my opinion) a fairly strained reading of other clauses of state law.

    Barring courts from making decisions like this isn’t inherently conservative or liberal, and the next time it happens it might very well benefit a liberal cause. Also, I happen to believe that we’re best off when courts practice strong legislative deference, so this fits in with my more general view of judicial restraint.

    As for state courts increasingly strangling early voting, I’ll once again put up this chart:

    If courts have been trying to restrict early voting, they’ve done a damn poor job of it. Why? Because legislatures have increasingly written laws that extend it, and judicial restraint limits what they can do about it.

    POSTSCRIPT: Note that this has nothing to do with restriction of voting rights due to the Supreme Court’s decision seven years ago striking down parts of the Voting Rights Act. That was, and remains, an egregiously bad decision and a nearly perfect example of what can happen when the Supreme Court aggressively ignores legislative deference.

  • David Dinkins Was a Political Victim of New York City Crime

    The death of former New York City mayor David Dinkins prompts me to show you a couple of charts. First off, here is violent crime in New York City:

    In hindsight, this chart makes it obvious that crime was dropping during Dinkins’ entire term as mayor, well before Giuliani won the 1993 mayoral election. Violent crime was already down by more than 20 percent from its peak by the time Giuliani took office, and the subsequent decline merely continued that trend.

    But that’s hindsight. At the time, it was the murder rate that everyone was focused on, and the most recent data available during the 1993 election was from 1991. Here’s what that looks like:

    There was a slight drop in 1991, but it was just one year and there was no reason to think it was the beginning of a trend. Giuliani won the election by slamming Dinkins for his record on crime, and he won.

    The truth, of course, is that neither Dinkins nor Giuliani was responsible for either the rise or fall in New York City crime. New York was part of a national and global trend toward lower crime rates as a result of reducing the use of leaded gasoline. But no one knew that at the time, and the crime data available in 1993 looked pretty horrific. Giuliani was the right man at the right time, and David Dinkins was the victim because the election happened when it did. If he had managed to eke out a victory and then take credit for the next four years of crime declines, the recent history of New York City might be very, very different.

  • Health Update

    This is just a minor thing, but I figured I’d let you know how things are going since so many of you emailed to wish me good luck. So here it is: My stomach ailments have disappeared and I’m now fine. The stomach problems started on October 19, the first day of my October round of Pomalyst. They ended two days after the end of the October round. Then I had a week off, and a week ago I started the November round. I’ve had no problems since.

    My current theory, then, is that I just got a bad batch of Pomalyst. Or something.

  • How Progressive Will Joe Biden’s Administration Be?

    Biden Transition Via Cnp/CNP via ZUMA

    Caution! Navel gazing ahead.

    So Joe Biden has decided on Tony Blinken as his secretary of state. What should we think of this?

    On the one hand, I think we all have a pretty low bar these days. Blinken is a fairly ordinary human being. He’s experienced and knowledgable. He doesn’t have any desire to destroy the State Department. Foreign leaders will get along with him just fine. Based on this, hooray! Good choice.

    On the other hand, Blinken is fairly hawkish, having supported both the Libya incursion and some kind of military intervention in Syria. Barack Obama, who had finally started to understand the national security blob a little better by then, vetoed any action in Syria, so we dodged that bullet. Unfortunately, it’s not clear if Blinken has learned any of the same lessons. Based on this, meh. We could do better. Why not someone like Sen. Chris Murphy instead?

    Joe Biden is not a hard lefty, so it’s hardly surprising to see him choosing pretty mainstream aides so far. That’s what we collectively voted for, and that’s what we’re going to get, especially in the highest profile appointments. What’s more, I’m willing to cut him substantial slack with national security appointments. There is, literally, no progressive wing of the national security establishment with any real influence. Behind all the yelling and screaming, Democrats and Republicans are pretty much the same on NatSec issues, with smallish differences on the margin and not much else. This means that even if Biden did appoint someone more progressive, they’d just run into a brick wall of opposition: in the White House, in Congress, in the intelligence agencies, in the military, and in think tanks. It’s all but impossible to buck this, and Biden probably doesn’t really want to in the first place. He’s got bigger fish to fry.

    This is a dangerous way of thinking—whew, at least it’s not a Trumpie!—and it will apply less and less once we get past the top three or four cabinet positions. In other areas, there are big differences between Democrats and Republicans and there are plenty of progressives with real clout. We should expect to see some riskier appointments at Labor, HHS, Energy, EPA, and so forth. If we don’t, it would mean Biden is basically kissing off the progressive wing of the party.

    We’ll start to hear more about those appointments in early December, and that’s when we’ll truly be able to get a concrete idea of just what Biden’s administration will look like. Until then, I’d resist jumping to any conclusions.

  • Lunchtime Photo

    Surf City, baby!

    I went over to Huntington Beach on Saturday just to mill around and take some pictures, and it turned out to be MAGA central. “Stop the Steal” was the slogan of the day, with cars honking their support as they passed by. By the time I left around 5 pm the protesters were all gone, which I thought demonstrated a real lack of commitment to the cause. But no! They were just taking a break. Apparently they all came back later in order to boldly defy Gov. Newsom’s 10 pm curfew.

    To make up for this, I’ll post a pretty picture from Huntington Beach later in the week. You know, surfers, piers, sunsets, that kind of thing. Which would you like to see first?

    November 21, 2020 — Huntington Beach, California
  • Two Cheers For the Return of Earmarks?

    Starmax/Newscom via ZUMA

    Just when you thought it was safe to go back to Washington DC, earmarks are b-a-a-a-a-ck:

    House Democratic leaders are proceeding with plans to bring back earmarks for the 117th Congress, according to Majority Leader Steny H. Hoyer….“There are three candidates for chair of the Appropriations Committee. All have indicated they are for congressional initiatives, congressional add-ons with the structure I’ve just talked about — transparency when you ask, when it’s given, when it’s on the floor,” Hoyer said.

    So how do I feel about this? In the past, I’ve defended earmarks as a fairly harmless bit of horse-trading that helps Congress run more smoothly and produces a little more bipartisan cooperation. They don’t cost anything, since they redirect spending rather than increasing it, and the total amount of redirected spending is never more than a percent or two of the total discretionary budget. As long as it’s transparent, what’s the harm?

    Today, though, I’m a little less sure about this. In the end, I suppose I still favor allowing earmarks, but I’m pretty skeptical about my original reasoning for them: namely that the ability to bestow earmarks helps party leaders build bipartisan majorities for tricky legislation. This was certainly the case back in the days of Tip O’Neill, and as recently as a few years ago I could convince myself that it was still true. But today? We now live in the era of QAnon and Donald Trump, which makes the hardliners of the tea party look like a bunch of creampuffs. At this point, it’s not clear that anything will produce bipartisan cooperation. Mitch McConnell’s singular goal is to produce enough misery to make Joe Biden a one-term president, and that’s it. The rest of his party is behind him on this, earmarks be damned.

    But I might be wrong about this. Perhaps members of Congress are more mercenary than I think. Bringing back earmarks is worth a try, but I have to say that I’m more skeptical of their utility than I was even a few years ago.