I see that Donald Trump has reaffirmed his plan to abolish the Department of Education, so I'll remind everyone yet again that this meaningless. The question is what programs you're going to abolish, and on that score the Department of Education is pretty simple:¹
You've got Pell Grants for working and middle-class college students. You've got Title I grants for elementary and high schools in low-income areas. And you've got money for special ed kids.
Aside from that you've got a hodgepodge of tiny programs: deaf and blind students, historically Black colleges, kids with disabilities, Indian schools, vocational rehabilitation, etc. etc. But the Big Three are all that really matter. Does anyone really want to kill those off? And if not, who cares what the name of the agency that oversees them is?
¹These figures are approximate and don't include government guaranteed student loans. FY24 was a weird year with lots of continuing resolutions and no federal budget until halfway through the year, so it's hard to figure out spending in detail.
If you voted against Kamala Harris—or just stayed home—because you were pissed off about Gaza, I have bad news for you:
Israel’s Finance Minister Bezalel Smotrich welcomed President Donald Trump’s electoral victory Monday, saying that “the time has come” to extend full Israeli sovereignty over the occupied West Bank.
....During Trump’s first term, he said, “we were on the verge of applying sovereignty over the settlements” in the West Bank, “and now the time has come to make it a reality.”
....“Moving forward, I intend to lead a government decision stating that the Israeli government will work with President Trump’s new administration and the international community to apply sovereignty and seek American recognition,” Smotrich said.
Smotrich is one of those religious lunatics who make Netanyahu look moderate, and he's been agitating for annexation of the West Bank forever. So until we hear this from Netanyahu himself, take it with a grain of salt.
Still. It's certainly a sign that Israelis expect Trump to green-light anything they do, without even the annoying bleating they get from Biden about "starvation" and "human rights" and other nonsense. As always, be careful what you wish for.
I ate a bag of potato chips with lunch and they were.......not bad! My salt taste is definitely coming back. Sweet never went completely away, but sour is still nowhere. I tried a pickle and tasted nothing. I'm not sure how to test bitter since I don't really eat any bitter foods.
Jack Herrera has a piece in Politico today about why Democrats lost the Latino vote this year. This is already a tedious genre, but if it's Jack Herrera it's worth a read
First off, it's worth acknowledging that the blowout wasn't as bad as it seems. The biggest losses were in places like Florida and Texas, states so red that Harris never bothered campaigning there. In swing states, where she did campaign, Latino losses were a few percentage points.
That said, no one questions that the shift is real. Herrera says that part of the answer lies with both Biden and Harris adopting tougher border positions this year, but mostly it's the economy:
There’s one powerful variable that explains Latinos’ embrace of Trump more than any other: class. Over 80 percent of Latinos are working class, and an enormous number of them are strivers working manual labor.
OK, let's listen in:
I spoke with Ismael Cardenas, a soft-spoken Mexican immigrant from Michoacán who worked at one of the plants.... Over the last three years, his family had been crushed by inflation and gas prices. Though they had once voted Democrat, they’d stopped believing that the party actually cared about working people like them, no matter how the politicians talked. “What Trump says is what Trump does. If he promises something, he is going to do it,” Cardenas told me.
“That’s it, exactly,” Lira said, jumping in. “Democrats talk so eloquently, but their actions are not good. The way Trump talks may not be nice. I think, at times, he has said racist things. But his actions, his policies are good. And he keeps his promises.”
....Other Trump voters I met in town, however, were much less ideological. Their message, instead, was something like this: Under Biden, there were days I couldn’t afford to fill up my truck with gas; the price of eggs doubled; my rent went up. Entonces, Biden is fired. It’s time for change.
....The morning after the election, I got lunch with Chuck Rocha, a Democratic campaign strategist.... Almost all the men in his family worked at the Goodyear tire factory.... That eventually led him to the Democratic Party, which Rocha joined in 1990, hoping to, as he recently put it, “fight NAFTA, drain the swamp of over-educated rich people in power, stop investing my money in foreign wars and prioritize making things in America again.” Over our table, Rocha raised his eyebrows and asked me, “Who does that sound like today?”
After a Democrat — Bill Clinton — signed NAFTA, thousands of factory jobs moved to Mexico. Rocha and the men in his family all lost their jobs when the Goodyear plant shut down. There’s a similar story in Reading — during Obama’s presidency, a litany of factories, including Hershey and Pepsi, closed their doors for the last time. The hard truth for Democrats is that their problems with Latinos, and their problems with all working class voters, go beyond Trump — these are people who feel they’ve been materially failed by Democrats for a generation.
I think a lot of this shows the power of rhetoric as much as it does reality. There was nothing Joe Biden could do about inflation, for example, so he decided his best bet was to stay quiet about it. But that's not what people want to hear. They want to hear that you're mad as hell and by God you're going to fight it.
Or take NAFTA. Trump has no intention of repealing it. Hell, it was passed by Republicans in 1993 and Trump signed an expansion of NAFTA when he was in office. But that never stopped him from yelling loudly about how unfair it was and promising to do something about it.
Here's how the power of rhetoric works:
What Trump Says
What They Hear
NAFTA is the worst deal ever.
I'll protect American workers from Mexicans.
We'll deport 20 million illegal immigrants.
I'll get rid of the cheap labor that's stealing your jobs.
We'll cut taxes.
I'll cut your taxes.
Inflation is killing us.
I'll never let inflation happen again.
Tariffs as far as the eye can see.
I'll punish China for taking away our manufacturing jobs.
Now, the truth is that (a) although a modest number of factory workers lost their jobs under NAFTA, it was responsible for almost no net job losses, (b) illegal immigrants don't compete for the same jobs as native workers, (c) Republican tax cuts focus almost exclusively on corporations and the rich, and (d) Trump has no influence over inflation. As for (e), China really did take away a lot of manufacturing jobs in the aughts. But tariffs won't bring them back.
But who cares about the truth? I don't even mean that sarcastically, either. People mostly want to know which side are you on? Democrats are keenly aware of this when it comes to gay issues, trans issues, race issues, union issues, and so forth. Did Biden walking a picket line actually help UAW workers get a better contract? Of course not. Did it get a lot of UAW votes anyway? You bet.
For some reason, though, Democrats have long been unable to understand this when it comes to the working class. I don't mean that they disparage working class voters. They don't. But they don't loudly promote their interests either—not economic interests and not cultural interests. A $25,000 tax credit for first-time home buyers? Come on. Nobody understands that. Sex change surgery for trans prisoners? Please.¹
I believe pretty strongly that, in reality, neither party is able to do much for the working class. Biden did a little bit for them by increasing subsidies for Obamacare, but that's probably about as much as any president has done this century. Harris actually came close with her long-term care proposal, and might have made a splash if she had flat-out endorsed Medicare covering all long-term care. But she didn't.
Still, for a variety of reasons, I remain skeptical of the argument that Trump won because of the economy. One reason that gets too little attention is the comparison between Biden and Ronald Reagan. Both faced high inflation, high unemployment, and slack wages, and both presided over an improving economy by the end of their first term. But Biden and Harris presided over a way better economy: inflation at 2.4% compared to 4.2%; unemployment at 4.1% compared to 7.2%; and blue collar wages up 5% over five years compared to down 10%. And yet Reagan won a landslide while Kamala Harris got badly beaten.
Now, that was 40 years ago and times have changed. And you can certainly argue that Biden also presided over the inevitable end of the pandemic goody bag. Still, it strikes me that the evidence suggests economic discontent was more media driven than real. Nothing else really adds up.
All that said, it's still the case that if you want the working class to vote for you, you have to take their side. Even if you're faking it, you still have to do it. Democrats haven't for a long time.
¹You think this is unfair? It's not. Kamala Harris "strongly" supported it of her own free will in 2019 because she thought it would appeal to the college educated lefties that made up her base. And it was official policy under both Obama and Biden.
The Energy Information Administration dropped its latest monthly estimate of solar module shipments a few days ago, so this seems like a good time take to take stock. Here's an extrapolation of where we'll be by 2030 if solar keeps rising at its current rate:
At the current rate of growth, solar capacity will reach about a thousand gigawatts by 2030, which would probably be about half of total demand. Raw cost will drop from 30¢ per watt to 15¢ per watt, producing a levelized cost per kWh less than any other source.
This, of course, assumes that both shipments and cost of solar modules can stay on their exponential paths for the rest of the decade. Fingers crossed.
A single Bitcoin is now worth an astonishing $85,000:
In case you're curious, yes, the recent surge started on Election Day.
Why? Since it's Bitcoin I suppose there not much point in asking. But there are two competing explanations. First, Donald Trump is going to be very crypto friendly, building a Strategic Bitcoin Reserve and appointing lax true believers to loosen regulations on crypto trading.
But this involves believing what Trump said on the campaign trail, which is an iffy proposition indeed.
The other explanation is that crypto fans believe Bitcoin is a hedge against recessions. That makes it a good investment since Trump is likely to tank the economy.
Take your pick. They both make about as much sense.
"The economic consequences of major tax cuts for the rich" is a research study that came out a few years ago. But I missed it then and it's never too late to catch up. The authors set out to examine all instances of major tax reductions on the rich in 18 OECD countries between 1965 and 2015 and identify the results.
I don't want to keep you in suspense, so here's the impact of the tax cuts on economic growth:
There was no noticeable affect on growth. Or on unemployment. So what did the tax cuts accomplish?
Surprise! Lower taxes on the rich make the rich richer. And that's about it. Here it is in more detail:
We find that major tax cuts for the rich push up income inequality, as measured by the top 1% share of pre-tax national income. The size of the effect is substantial: on average, each major tax cut results in a rise of over 0.7 percentage points in top 1% share of pre-tax national income.
On the income inequality side, the results do not closely align with the theory that the rich have greater incentives to work and invest when their taxes are cut, given that we do not find any statistically significant effects on growth, unemployment or investment from cutting taxes on the rich. Given our measure of income inequality includes both realized capital gains and labor income, it is also unlikely the results are being driven by tax avoidance, because a significant part of avoidance takes the form of shifting income into capital (Piketty et al., 2014). Rather, our results are most consistent with Piketty et al.’s argument that lower taxes on top incomes induce the rich to bargain more aggressively to increase their own rewards, to the direct detriment of those lower down the income distribution.
There you have it. Tax cuts on the rich just make them even greedier and more predatory. And we've got another one coming thanks to Donald Trump's huge success with working class voters. As H.L. Mencken put it, "Democracy is the theory that the common people know what they want, and deserve to get it good and hard." America's common people are about to learn that lesson anew.
Israel's starvation campaign against northern Gaza—intended to enforce its declaration that everyone leave—is continuing apace:
The amount of aid reaching Gaza has dropped to the lowest level since December, official Israeli figures show, despite the US having issued a 30-day ultimatum last month threatening sanctions if there was no increase in humanitarian supplies reaching the territory. The ultimatum was delivered on 13 October, so will expire on Tuesday or Wednesday.
What follows is just a fantasy. But in my fantasy world Joe Biden would give this speech about Gaza tonight:
The United States will always protect Israel. That promise is ironclad.
But enough, at long last, is enough. The war in Gaza ends now. I have ordered the USS Eisenhower strike group to take up station off the shore of Gaza. It will be joined by helicopter carriers, Seabee battalions, supply ships, and the Marine I Expeditionary Force.
Ike will enforce a no-fly zone over Gaza. Any aircraft, of any nationality, that violates it will be shot down. MEF I will land and take control of Gaza. Piers will be built, food and medicine will be delivered, and reconstruction will begin. Marines will treat any interference, from either Palestinians or Israelis, as hostile. All IDF forces will be ordered to evacuate. Reinforcements will be added as necessary.
We welcome assistance from UNRWA and private charities, as well as NATO allies if they choose to join us.
Earlier today I informed Prime Minister Netanyahu of our intentions. He knows precisely what to expect, and we will be in regular communication with Israeli leaders.
This will not be bloodless. Hamas fighters still remain in Gaza and they continue to hold Israeli hostages. We assume they won't accept a ceasefire and a release of their hostages. If that turns out to be their decision, they will regret it.
I can't predict how long we'll stay or what the final status of Gaza will be. It's not the time for that, and those negotiations will be carried out by my successor in any case. Right now it's just time for the fighting to cease and care for its victims to begin.
Even if I had a magic wand I probably wouldn't do this. Do I really want the US to be responsible for governing and rebuilding Gaza over the next decade? That hasn't worked out well for us recently. But I can still dream.
You've got Pell Grants for working and middle-class college students. You've got Title I grants for elementary and high schools in low-income areas. And you've got money for special ed kids.
