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 merge, their market positions become so powerful they don’t need to bother. After all, why spend money if you don’t have to?

To investigate this, Germán Gutiérrez and Thomas Philippon took advantage of a natural experiment: 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 competition 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From Patrick Murphy, owner of Bagel Barrel in Doylestown, Pennsylvania, on why he doesn’t want Obamacare repealed: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.

Cheriss May/NurPhoto via ZUMA

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.

For some reason, this is what I got when I typed "self driving car" into our photo service. As you can see, it is neither self driving nor a car. However, there really is a bear in the sidecar, so I decided to use it anyway.Visual via ZUMA

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?

Pete Marovich via ZUMA

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.

Yoshio Tsunoda/AFLO via ZUMA

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.