Saturday, July 11, 2020

Reparations are NOT the Answer

Black Americans have been treated terribly for centuries, but Reparations are NOT the answer.

1) We need to make life better for ALL disadvantaged Americans on a CONTINUING basis. A few of the many crucial steps are better schools for all kids, pre-school education for all kids, healthcare for everyone.

2) MANY groups have suffered grievously at the hands of our government or through the inaction of our government. Native Americans as a group have suffered even worse fates than Black Americans. Hispanic-Americans, Asian-Americans, LQBTQ Americans, Female Americans, Muslim Americans, and more have suffered grievous harm. If Black Americans deserve reparations, all these other groups do also.  

3) Where would you draw the line for which Blacks get reparations? Those who can prove slave ancestors? Those who claim slave ancestry? Everyone with African DNA? Everyone who "looks Black?" 

Let's raise up EVERYONE who has been discriminated against, and let's help each of them every year for all time.

Saturday, April 11, 2020

Brave New World - After the Pandemic of 2020

Someday the Great Pandemic of 2020 will be over, whether in 6 months or 12 or 18. But we will NOT return to what we considered "normal." It is a certainty that things will be different, but what will the NEW "normal" look like.  This is my opinion of what our post-pandemic "brave new world" will look like - some of my predictions are quite obvious, while others are purely speculative...

Cruise lines and airlines will never fully recover. There will be more government restrictions on international travel, and for decades individuals will not feel safe in international travel, plus the new level of xenophobia and racism will also put a drag on international travel.

Business travel, especially international, will never fully recover. In addition to airlines, this will also impact hotels, rental cars, convention facilities, high-end restaurants and more.

The use of video conferencing will continue to expand rapidly long after the pandemic is over. This will become part of the new "normal." (As an aside, Zoom Video Communications Inc ZM:NASDAQ stock has seen a huge rise during the pandemic, and has, I believe, become overvalued.)

The reduced air travel will impact companies like Boeing even more than it impacts airlines. I predict that it will be years before there is ANY demand for new airplanes. And of course this will impair all Boeing's subcontractors and vendors.

"Destination" entertainment centers will never fully recover. Las Vegas and DisneyLand/World will never regain their previous level of attendance, especially from international visitors.

In-person professional sports events will be quite slow to recover.

Movie theaters are unlikely to ever fully recover.

This pandemic will be the death blow to many shopping malls and their tenants. Macy's, JC Penney and such stores may never reopen. 

Fashion will never fully rebound. A lot of people are going to find that one of the things they like about staying at home is dressing very casually. They may also get used to more casual hairstyles, fingernails, etc.  This is of course further pressure on the likes of Macy's as well as many others.

Our relationship with doctors is going to be very different. We are going to find that we like telemedicine and getting prescriptions by mail. (As an aside, Teladoc Health Inc TDOC:NYSE stock has seen a huge rise during the pandemic, and has, I believe, become overvalued.)

The restaurant business will be unrecognizable. So many mom & pop restaurants will never reopen. I don't have a good guess for what the restaurant landscape will look like, but it will be littered with tombstones.

My guess is that grocery delivery will only see a modest increase after the pandemic ends. I don't see Instacart etc. keeping all the extra business they are getting now.

This pandemic will give a big boost to a cashless society. This is good news for the likes of Paypal and Stripe as well as the big players.

Americans are going to like the idea of getting a monthly check from the government, and aren't going to want it to end. There will be increased calls for something like Andrew Yang's "Freedom Dividend" on a permanent basis. 

The idea of a national identity card is going to get a boost. Whereas Americans used to worry about the government controlling them and taking away from them, the idea of being easily identifiable to the government is going to come to be associated with more easily receiving government money.  I can even see a national identity card doubling as a debit card for instantly accessing government benefit payments. [My recommendation is that the government NEVER REQUIRE a national identity card, but rather just say that if you want to receive government benefits, you need a national identity card.]

This pandemic will add greatly to the calls for free healthcare for all Americans. There will still be heated discussions about the details (personally, I'm a fan of government/private partnership rather than a government takeover), but there will be big changes soon.

US consumer confidence will not recover for decades. Overall, Americans will spend less and put more into their "rainy day" jar (as well as repaying debts incurred during the pandemic).  Among many other things, this means Americans owning their cars longer, buying smaller houses - in general less "discretionary" spending. [and of course I acknowledge the number of Americans who have never been able to make "discretionary" purchases like a new car.]


In addition to the above changes that I predict will happen, there are also some changes that we need to make (and may or may not)...

We need a MUCH better National Strategic Reserve. In addition to the obvious huge and continuously updated stock of masks and other personal protective equipment, we also need a large and continuously updated stock of drugs, especially including those that are typically manufactured overseas, like most antibiotics. In addition to future pandemics, our National Strategic Reserve must prepare us for all sorts of natural disasters and geopolitical disruptions.

Sunday, March 15, 2020

The Economic Crisis The Pandemic Will Cause Is NOT a "Recession," It Is Altogether Different

We need new terms to discuss the economic consequences of the current pandemic.  Terms like Recession (or even Depression), Economic Growth, Jobs Growth, Monetary Policy, and Fiscal Policy simply lose their usual meaning.

The usual goals for addressing a Recession are to create more jobs and more spending. However the economic problem caused by the pandemic is not too few jobs, but essentially too few workers, in the sense that the jobs are still there, but many workers are not able to perform those jobs - in some cases because that are actually sick, but in many more cases because a societal lockdown prevents them from leaving their homes to travel to a job. So the idea of creating more jobs to address the economic crisis of the pandemic is simply meaningless.

As to spending, it will generally decline greatly during the pandemic. Other than food and rent, most purchases will be put on hold for the duration. Why would anyone even think of buying a new home or car or fancy clothes when they are in lockdown at home? All restaurants and all retail stores other than food and medicine will likely be closed. Nothing, and certainly not lower interest rates, will (or should) cause people to spend beyond the basics of survival.

What the pandemic WILL REQUIRE is that the government provide sufficient immediate cash to everyone to make up for the lack of a regular paycheck. 

We need to simply forget about the usual metrics like "Recession," and just focus on surviving both medically and economically during the pandemic.

Sunday, March 1, 2020

The Federal Government Holds All The Cards For Addressing the Climate Crisis, Don't Scapegoat Private Enterprise

If you want to advocate for a Cuba-like system in which there is no stock market and all means of production and distribution are part of a massive government, go for it. (and note that China's miracle of lifting 98% of its people out of extreme poverty in 30 years came from moving toward private ownership - along with a stock market).

But as long as America continues to have it's great free market system, everyone need to understand how it works. Investors are driven by self interest - and it is essential to the operation of the system that they be driven by self interest. When Americans need more toilet paper, toilet paper manufacturers expand their factories out of self interest, and investors provide the money for that expansion out of self interest, and tree farms expand out of self interest, and investors provide the money for that expansion out of self interest.

BECAUSE investors operate out of self interest, they respond very quickly to the slightest government pressures, whether that pressure is beneficial or injurious. As long as our government continues to subsidize oil well drilling and provide public land for it, investors will like oil stocks. On the other side, the enthusiasm for Tesla shares is greatly boosted by the subsidies for electric cars.

Investors and companies will rapidly respond to whatever sticks and carrots our government chooses for the Climate Crisis. So far, our leaders have been worse than unhelpful, for example, BOTH Trump and Bernie Sanders are proposing to block the import of solar panels into the United States. Please assign the blame where it is deserved, on our government, and not on our efficient free enterprise system.

Sunday, February 23, 2020

What's So Bad About Global Warming?

The last time the average temperatures on our planet were 4 degrees warmer than they are now, palm trees grew in the Arctic.[1]  Would that be a bad thing? Let's look deeper...

Suppose that Earth were uninhabited, and a band of humans were just a arriving from somewhere else, AND that this uninhabited Earth was 4 degrees warmer than today's Earth and the average temperature was stable from year to year.

This bunch of newcomers would find Siberia and Greenland and Alaska and Northern Canada to be quite pleasant places, and would probably settle there happily. They would also find all of the Middle East and half of Africa, and half of eastern and southern Asia to be completely uninhabitable - crops could not grow there and humans could not survive long there outside of an air conditioned environment. That wouldn't be a problem for these newcomers in the same way that Antarctica's uninhabitability is not a problem today.

Our newcomers would also find dry land and oceans with shorelines as the demarcation between the two, so they would locate their settlements appropriately. They wouldn't care, or even be aware, that the shorelines were miles inland of 2020 shorelines.

They would also take advantage of the lakes and rivers, and the rainfall patterns they found. And they would take appropriate precautions against the prevailing pattern of hurricanes and other storms. Again, they wouldn't care, or even notice, that both the blessings and the hazards they found were vastly different from those in our 2020.

Could this newly found Earth support as large a population of humans as our current Earth does? Probably not, but that is NOT our BIG problem.

The Problem Is Rate Of Change

If Earth's average temperature were to climb by 4 degrees over the course of millenia, we humans could probably adapt fairly well. Coastal cities would very gradually decline and populations would move inland and further from the equator. Farms in warmer areas would very gradually decline while farms in Canada and Russia boomed. The entire population of the Middle East (and much of Africa and eastern/southern Asia) would very gradually migrate to more fertile and inhabitable parts of our planet. These migrations, undertaken over the course of millennia, would not be that different in kind from the population movements over the last several millennia.

But what if a 4 degree rise in average temperature takes place over the course of only a few decades? We will probably rescue the relatively few people living on low-lying island nations, but will we have the morality, or even the means, to rescue even the hundreds of millions of people of the Middle East, let alone the billions living in other hotter and drier parts of our world? Or will we condemn those people to near certain death by barricading them in lands with no means to grow food and incompatible with human life without mechanical air conditioning? Before they starve, those people would resort to ever more intense wars over what little fertile land and food remains.

And in our own country, what about the costs and logistics of relocating a third of our population away from the coasts? And what about our own farms becoming increasingly less productive? And the changes in rainfall and storm patterns? Consider the human costs and the economic costs.


Sunday, February 9, 2020

WHY I say "ANY Democrat BUT Sanders" for 2020

First the "ANY Democrat" part...  Never let our disagreements over the best choice for the optimum Democratic candidate get in the way of our shared commitment to rid our country of the most criminal, immoral, and incompetent POTUS in American history. Whoever we Democrats nominate as our candidate, we MUST ALL pull together to VOTE Democratic in the General Election on Tuesday, November 3, 2020 AND to enthusiastically encourage ALL of our like-minded friends and family to do so also.  I commit to campaigning for and voting for our Democratic nominee, whoever our nominee is, and I urge all Sanders supporters to make the same commitment! (Sadly, a recent poll shows only 53% of Sanders supporters are willing to make that commitment.

The reasons why I believe that Bernie Sanders is the worst choice among all our Democratic candidates...

1) Electability. Bernie fans certainly argue with some credibility that Americans are ready for the radical change that Sanders proposes and that he would bring out new voters. Certainly some of his most rabid enthusiasts will choose to boycott the General Election if the Democratic nominee is someone other than Sanders. However, I believe that the preponderance of evidence shows that we Democrats would fare far worse in the General Election if Sanders were our candidate...
   a) Independents would generally find even the hideous Trump less objectionable than a "Socialist," as all the Republican ads will certainly label Sanders.
  b) Mainstream Democrats would be much less enthusiastic about supporting Sanders, and turnout would be much lower.
  c) Hard-core Trumpites will vote for Trump no matter what, but having Sanders as our candidate would increase the GOP turnout among those Republicans who don't especially like Trump, but who would strongly vote for him to avoid a "Socialist."
Anyone who doubts the extent of the fear and loathing that the label "Socialist" conjures up in mainstream America is truly out of touch with the reality on the ground across our country. The sentiments of white intellectuals and of anyone who participates on Twitter are totally divorced from the rest of our country.

2) On most domestic issues, ANY President is more a cheerleader than a dictator. Congress, not the President, makes our laws. Whatever anyone thinks of Sanders proposed "policies," the reality is that...
  a) The majority of Congressional Democrats (let alone Republicans) do not support Sanders' proposals. That would make those proposals dead on arrival.
  b) Sanders' track record for working with his Senate colleagues is very poor. Senators do not appreciate Sanders' my-way-or-the-highway attitude. It is probably true that no Democratic President will get any support from any Congressional Republicans, but having a great relationship with Congressional Democrats is a prerequisite for success.

3) Sanders' proposed "policies" flout the principles of economics and the lessons of history. As one of the most egregious examples, I point to national "rent control," a policy which virtually all economists condemn because a few people can rent apartments at a bargain price, but then the supply runs out before everyone gets a place to live. And the situation rapidly gets far worse as landlords suffer from the price of rent being set below their cost of providing homes, stop building any more rental units, and (unless prevented from doing so by an even more disruptive law) convert existing rental units to other uses. We have a housing shortage, and need to provide incentives to build more housing units rather than fewer.
I also point to Sanders' very Trumpian isolationist opposition to international trade. International trade has a strongly positive net effect for Americans. Export-oriented jobs (including farming), hospitality and transportation jobs, lower consumer prices, etc. FAR outweigh any possible job gains from becoming isolationist. AND, encouraging international trade is a moral imperative to sharing our good fortune (on a win-win basis) with the developing world.