Wednesday, January 31, 2018

Why Its Difficult To Prevent Misuse Of Social Media

The CEO of a large computer firm spent very little on advertising.  He understood that his products were purchased primarily by a relatively small number of technology professionals in large businesses.  He had to fight with his marketing people who wanted to purchase expensive TV ads that reached millions of households which do not buy his computers.  He saw no reason to spend millions to popularize the name of his firm.  He was right.  However, today he can target his ads to likely customers by using the social media to target his ads to potential customers at very low cost.  The data collected by Facebook and Google allow him to market to potential customers. That, of course, is how Facebook and Google earn billions of dollars.  The services they provide, without cost to users,  are paid for by advertisers and marketing firms who hope to sell things to highly targeted markets.

We have learned that the social media have also been used to focus political campaigns on narrowly selected market at a much lower cost than expensive TV advertising that is used to reach mass markets.  This article explains why it will be difficult for Facebook and Google, which also owns You Tube, to prevent the abuses that enable the distribution of propaganda at low cost to narrowly targeted prospects.  The services that they provide must be popular enough to attract millions of users, and they must enable advertisers and others, including propagandists, to reach targeted markets at low cost.  They also have a problem monitoring material that attracts a large audience but is also objectionable for a variety of reasons.  For example, fake conspiracies are very popular but they also can be dangerous to individuals and to society.  A false conspiracy about a pizza parlor that was used to sexually abuse children, caused a misinformed person to attack the pizza parlor. Unsavory videos on You Tube attract large audiences and the producers of the videos are rewarded by the size of the audience that they attract. The price of ads is based upon audience size as well.

Facebook and Google have taken steps to deal with some of the abuses of their products.  However, it will be difficult for them to do so without undermining their business model which is totally dependent on advertising revenues and the information that they provide about users to potential advertiser.

Tuesday, January 30, 2018

Amazon, JP Morgan and Berkshire Hathaway Team Up To Disrupt Healthcare Industry

Warren Buffet has argued that healthcare is a tapeworm on the US economy.  It accounts for 17% of GDP in the US and that share is likely to increase as our population ages.  Buffet has teamed up with Amazon and JP Morgan to provide insurance for 1.2 million employees.  They are innovative companies that will learn from their experience.  Hopefully, they will be as successful in the insurance business as they have been in the industries that they dominate. They have already had an impact on the stock prices of large health insurers that will face a new form of competition.

How Bitcoins Are Something Like $100 Bills

Paul Krugman argues that bitcoins are like $100 bills in one respect.  $100 bills account for 78% of US currency in circulation but we seldom see them.  They are used primarily by drug dealers and others who are engaged in illegal transactions.  It turns out the bitcoins serve a similar purpose.  They are useful to those who want to disguise transactions for one reason or another.  Krugman understands that early investors in bitcoins have made a lot of money.  On the other hand, so have the early investors in Ponzi schemes. The Federal Reserve is in business to maintain a relatively constant value of the  US dollar.  They are pretty good at this.  There is no similar organization in place to do the same thing for bitcoins.

Jennifer Rubin Wonders What Version Of Trumpism Will Show Up On State Of Union Address

Jennifer Rubin has been one of the conservative Republican reporters at the Washington Post for many years.  Her love affair with the Republican Party expired after it determined that it would pay any price to cut taxes for its campaign donors.  She expects that Trump may follow the advice of his advisors and act presidential this evening by reading from the teleprompter.  However, the real Donald Trump appears regularly on his Twitter account.  It will be a challenge for Trump to stay on script without reverting to self worship.  His advisors are probably holding their breath while he acts like a bipartisan president who claims that he wants to unite our nation.  There is always a chance that the fake Donald Trump will give way to the real Donald Trump.  If Trump stays on script the media will be pleased to welcome the fake Donald Trump to the presidency. On the other hand, Trump's base may be disappointed.  They voted for the Twitter Trump.

David Brooks Argues That Republicans Have Become The East Germany Of 21st Century

Trumpism is all about catering to rural Americans who are intolerant of immigration for a variety of specious reasons.  David Brooks has left his reservation within his favorite political party.  He claims that West Germany became prosperous while East Germany's economy stagnated. That proved that capitalism worked better than communism.  The most dynamic part of the US economy is centered in cities that have embraced immigration.  Rural Americans have rejected immigration and its economy has stagnated.  Rural America, and the Republican Party that depends on their votes, has stagnated. Rural America and the Republican Party are the East Germany of our century.  They have proved that the lack of diversity, that comes from immigration, is responsible for the lack of dynamism that is necessary for economic prosperity.  Communism didn't work and neither does restricting immigration.

It has taken David Brooks a long time to come to this conclusion.  He was never happy with Donald Trump as the leader of his political party.  He now realizes that he has infected his political party with a dread disease. It is as bad as communism.

Monday, January 29, 2018

Trump Is Winning At The Game He Cares Most About

Ezra Klein is one of the better informed and most insightful reporters in the US. He makes several interesting points in this article.  His first point is important.  Klein argues that Trump is more interested in gaining attention than he is in any other game that he plays.  He is winning that game by dominating the news cycle.  He gets a lot of criticism in the press along with praise from the usual suspects.  Trump benefits from any kind of coverage from the media.  It is all about him.  Moreover, it inflames the partisanship between our political parties that had been growing even before Trump's takeover of media coverage.  When every issue is a partisan issue, there is no room for the kind of compromise that is required to get things done in government.  To some extent Trump wins when Congress has to resort to the kind of games that enabled the passage of the tax bill with no support from any Democrat in the House of the Senate.  Trump claimed the victory and compliant Republicans in Congress attributed the victory to his leadership. 

Klein makes another point that is insightful and interesting.  The electorate cares less about policy discussion than it does about the cultural issues and personality issues that capture more of their attention.  For example, the tax bill was very unpopular but Trump's personality loomed large during the debates.  Only a powerful leader like Trump can get pass bills and deal with the threats than many Americans perceive from immigrants and potential terrorists.  Trump exploited every terrorist attack in Europe and elsewhere to alarm the public and create demand for a strong leader in the White House. 

My blog used to be about economic issues.  It seem pointless to me and to economists like Paul Krugman who has forced to focus his attention on Trumpism.  The risk to our democracy goes well beyond purely economic issues.  Moreover, it is almost impossible to discuss economic policy issues when it is impossible to determine what might happen in Washington under Trump.

How To Purchase Followers On The Social Media

Lots of people who use the social media like to boost their number of followers.  Some do it for pride and others do it to benefit financially.  Even worse, propagandists of all sorts have learned how to increase exposure to their ideas by increasing the number of their followers and their "likes".  The algorithms used by Facebook, Twitter etc. use that data to increase the exposure of messages and "news" stories based upon their popularity.  Not surprisingly, there are ways in which individuals and/or propagandists can boost their exposure on the social media by purchasing fake followers and by using bots.  Not surprisingly, wholesalers have figured out how to create "followers" and sell them on the market.  This article, describes the wholesale follower market.

Sunday, January 28, 2018

Koch Network Will Spend Another $20 Million Promoting GOP Tax Cuts

The GOP promoted its tax bill as a break for the middle class.  The billionaires in the Koch Network seems to like the middle class tax bill as well.  It is spending an additional $20 million selling the tax bill as a boon for the middle class.  Its great to see billionaires so concerned about the middle class.

A Picture of Economic Growth In Global Economy

Donald Trump brags about economic growth in US which he claims is the result of his policies.  Indeed economic growth has been good in the US but it has also been good across the globe with only a couple of exceptions.  This article provides a global map of economic growth rates.  It looks more like the consequence of global recovery from the Great Recession than it does to American exceptionalism.  Trump's tax cuts will add a bit to the US growth rate at the expense of future budget deficits. Trump and the Republican Congress is happily engaged in Keynesian economic policies which they criticize when Democrats are in office.  Budget deficits do pump money into the economy. The bad news is that nothing has been done to decrease the trend of rising income inequality.

Thursday, January 25, 2018

Kansas Governor Wins Senate Vote For Ambassadorship

Vice President Spence cast his vote to break a 49-49 split along party lines to approve an ambassadorship for Governor Brownback from Kansas.  He will be the US Ambassador For Religious Freedom (whatever that is).  The ambassadorship is timely because the GOP legislature in Kansas overturned his tax plan. He sold his tax cut plan as a way to increase jobs in Kansas. It did not create any new jobs, but it did sink the state into debt and it forced drastic cuts in state services such as education.  Fortunately, for Brownback there is no way of measuring global religious freedom. He can't easily be called to account like he was in Kansas for promoting freedom from state taxes. However, it may be disheartening for him to learn that there aren't many people in the world who are anxious to exercise their religious freedom by converting to his particular view of religion. It ain't like it is in Kansas.

Inside The Conspiracy To Destroy Trump's Presidency

This satire by Dana Milbank lists the members of the secret society that opposes Trump.  The media stars from Fox News, Breitbart and fearless Republican members of Congress have taken on the task of exposing the conspiracy.  They have even listed the negative things that the fake media are reporting about Trump in an effort to destroy his presidency.  Members of the "deep state" in the secret society include senior FBI officials, and perhaps everyone who lives in blue states or who graduated from college.  The billionaire George Soros is the treasurer of the secret society.

This article describes the efforts of Republicans to discredit the ongoing investigations of Trump and his campaign in the 2016 election. The Justice Department strongly criticized the release of classified information that was provided to congressional committees. The House intelligence committee chair has been leaking information selectively to raise questions about the FBI's integrity. Instead of investigating the interference in the US election, the Chairman is focused on protecting Trump and his campaign.

Friday, January 19, 2018

The Relationship Between Labor Market Demand, Robots and Globalization

This article describes relationship between jobs and the number of robots in use.  The rapid rise in the use of robots has had a negative relationship on jobs.  Globalization also has had a negative effect on jobs in many developed nations.  The quote below sums up the issue pretty well:

Their paper consists of the usual careful application of a model to data, in this case commuting zones, with a view to estimating the effect of robots on employment and wages.  They conclude that each additional robot reduces local employment by 6.2 workers, and that an additional robot per thousand employees reduces area wages by a little less than 1 percent (relative to other zones with no such exposure).  Aggregating cautiously, they calculate that each additional robot costs a loss of between 3 and 5.6 jobs nationally.

So far the number of jobs lost due to robots has been modest – between 360,000 and 670,000 in the US, out of a labor force of more than 160 million person. But robots are expected to be employed much more widely in the next twenty years, they say, with the world stock as much as quadrupling by 2025, in one study’s scenario of rapid diffusion.  The harm to employment and wages could accelerate once robots exceed a critical level, they say, as spillover effects dampen demand for housing, retail, and services.
 The spillover effects include a decline in marriage rates, out of wedlock births and premature death rates among low skilled men.  Each of these factors has important demographic effects which reduce the economic growth rate which further exasperates the impact of robots and globalization.  

How Trump's Lawyer Paid Off Porn Star Prior To Election

Trump had sex with a porn star prior to the 2016 election during a celebrity golf tournament in Nevada.  Trump and his lawyer deny that he had sex with the porn star while his wife was carrying their son Barron.  The Wall Street Journal reports that Trump's lawyer created an LLC in Delaware and issued a check for $130,000 to the porn star's lawyer in return for an agreement that she would not disclose her encounter with Trump.  Therefore, there is no connection between Trump and payment to the porn star for her silence. 

Why Has The Republican Congress Enabled Trumpocracy?

David Frum is a conservative intellectual who wrote a book about Trumpism that has just been released.  He discusses the major theme in his book during this interview.  I have posted a quote from the interview which goes to the heart of Frum's argument.  It explains why Trump is being supported by the Republican leadership:

I’m horrified, but I’m not shocked. The Republican Party has a platform that can’t prevail in democratic competition. This is one of the big themes of this book, and why I think this situation is so dangerous. When highly committed parties strongly believe [in] things that they cannot achieve democratically, they don’t give up on their beliefs — they give up on democracy.
The conclusion that follows from Frum's analysis of his political party is that the Republican Party must either adapt to changes that have taken place in our society or give up on democracy. It can't win elections if everyone votes in the US. In a sense, economic and social hierarchies are inconsistent with democracies.  Trumpocracy is the only way for the Republican Party to retain its power unless it finds a way to blend its traditional values with the changes that have taken place in our nation.

The Republican House just passed a short term budget resolution that will keep the government running for a few months.  That bill cannot pass in the Senate because it requires 60 votes for passage and Trump will not support a bipartisan bill that can get enough votes from Democrats to keep the government in business.  Trump must believe that a government shutdown, which demonstrates the inability of Congress to govern, is good for him.  He would prefer to operate the government without interference from Congress.  That is the essence of Trumpocracy. Trump should not be hampered by our democratic system. 

Wednesday, January 17, 2018

What Does Trump's Score On Cognitive Test Mean?

Donald Trump got a perfect score by answering 30 out of 30 questions correctly on the Montreal Cognitive test.  Donald Trump Jr. is now bragging about his score by equating the Montreal Cognitive test to an intelligence test. His father is making similar claims.  This article provides an example of the questions on the Montreal test as well as the real purpose of the test.  Trump's score on the test indicates that he does not have dementia, which is what the test is used to determine.  The test is typically used to screen for Alzheimer's disease and for Parkinson's disease.  The test does not demonstrate that Trump is fit for the presidency.  That is determined by how he has performed his duties since assuming the presidency.  He has failed miserably at that test.  Moreover, the Montreal test is not used to screen for personality disorders such as narcissism.  We really don't need to test Trump for narcissism.  There could not be a better textbook example of narcissism than Donald Trump. He has aced that test by his performance in office and by how he has conducted himself for most of his life.

Tuesday, January 16, 2018

Trump's Presidency Has Not Been Good For His Business

Trump is not much of real estate developer anymore.  He sells the Trump brand on assets owned by investors.  He also sell the management of Trump branded assets.  This article describes the problems that the Trump organization is having numerous with Trump branded assets. Some investors are removing the Trump name from assets, and some are also cancelling Trump management contracts. Reactions against the Trump brand are strongest in Latin America and in other locations where the Trump name is bad for business. 

How Trump is Making Elites Great Again

Trump's populism helped him to win the election.  He campaigned against the Republican elite establishment so that he could make America great again.  His only legislative victory was a tax plan that heavily favored the Republican elites who finance Republican campaigns.  It was clearly not a populist tax plan. Trump simply played his familiar role as a salesman to push threw a tax plan that Republicans had only dreamed about with Paul Ryan as its top salesman.  This article provides the finishing touch to the end of Trump's fake populism.  Trump will be in Davos to join other elites.  That may put him on the cover of Time magazine again.

Monday, January 15, 2018

Republican Senator's Speech Will Counter Trump's Fake News Awards

Donald Trump and his surrogates have led a war against the free press.  News reports that displease Trump are called "fake news"; facts that counter Trump's lies are dismissed in favor of "alternative facts". Trump understands that people have a tendency to believe what they want to believe.  His base prefers propaganda sources like Fox News and Breitbart News because they shape the news to fit comfortably into their belief system. They applaud Trump when he calls news reports in our most prestigious newspapers, magazines and on TV news shows "fake news".  Trump, is slipping into his role as TV entertainer this Wednesday to present "fake news" awards to real journalism outlets that report the facts as they see them.  His base will love the show.

Jeff Flake, a Republican senator from Arizona plans to give a speech this Wednesday which Trump's base will not like.  He compares Trump's attack on real journalism with comments made by despots like Stalin who also regarded the free press as "the enemy of the people"  Flake, or course, understands that the free press is fundamental to any democratic form of governance.  His speech places Trump's award show in its proper role.  It is part of his attack on our democracy.  The quote below from Flake's speech is worth repeating for everyone who prefers democracy to autocracy:

Despotism is the enemy of the people. The free press is the despot's enemy.

Friday, January 12, 2018

Why Did Trump Cancel His State Trip To London?

Trump tweeted that he cancelled his state visit to London because Obama sold the existing US Embassy in a great location to pay for the new embassy in a bad location.  As usual his tweets are often lies or misleading.  The decision to sell the US embassy and move to its new location was made by President Bush in 2008.  The sale was completed during the Obama administration.  Trump was also miffed that he was not invited to royal wedding.  President Obama has been invited to the royal wedding.  Trump is also very unpopular in London.  There would have been mass protests if he had appeared in London for a state visit.  Trump is smart about the optics of mass protests.  He is more comfortable visiting states where he will be welcomed without protests.  He also makes most of his domestic visits to red states where he has more fans and where protests are less likely.

Political Economy Prior To WW l Has Lessons For Today's Political Problems

Many of the top economic thinkers in the early 1900's had concerns that are very similar to those that we are dealing with today.  Trade between nations was growing along with immigration; inequality was growing over the objection of trade unions and many nations were not ready for cultural and racial diversity.  There were also concerns about monopoly and the capture of the state by business interests.  That paved the way for demagoguery and our first world war.  The similarity between the rise of demagogues prior to the first world war is very similar to what we see in many nations today.  Demagogues operate in the same way today as they did in the 1900's.  They win elections and gain political power by offering solutions for the common problems that arise for which they have no real solutions.  Democracy fails and the threat of warfare increases.  David Brooks, for example, has his own ideas about how to conserve our liberal democracy.

Thursday, January 11, 2018

How Trump Makes It Easy For Foreign Intelligence Collection

Donald Trump spends a lot of time watching a variety of Fox News shows.  He and many Republicans in Congress and the White House also watch Fox News.  That is because Fox News is the primary source of information to the Republican base.  Many of Trump's tweets are taken from policy positions developed by Fox News shows.  Fox News also provides many of the arguments that are used by Trump and Republican leaders to undermine the Mueller investigation and other sources of bad news for the Trump administration. 

Ordinarily, governments provide their propaganda arms with the information that they want the world to consume.  Fox News has achieved a position in which it creates the messaging that influences what government officials think.

Tuesday, January 9, 2018

Paul Krugman And David Brooks On Trumpism

Paul Krugman and David Brooks are not fans of Donald Trump.  Their responses to the recent book that offered an inside view of the operation of the White House differ however in an important way. Krugman was not at all surprised by the revelations in the Wolf book.  It just confirmed much of the reporting on Trump that most of us have already read.  Krugman turned his attention to Congress. Our system of checks and balances places a burden on Congress to protect us from presidents who prefer to ignore the Constitution so that they can do whatever they please.  Leaders in the Republican Party care more about protecting Trump than they do about constraining his abuse of the Constitution.  David Brooks joins the chorus of Trump's protectors by arguing that the Wolf book was a "low brow" attack on Trump that did not meet journalistic standards of reporting.  Brooks takes the position that Trump's behavior in office is not as bad as many believe. He is less concerned about the damage that might be done by Trump because his behavior will continue to be restrained by adults in his administration and by Congress.  Perhaps we should ignore his tweets and let him grow into the presidency.  Brooks is on friendly terms with members of the Republican leadership who he trusts.  Krugman has very different view of the Republican leadership.  He believes that Trump is being enabled by the Republican leadership that is perfectly willing to let Trump be Trump because it serves their interest to have him in the White House to cheer-lead their agenda.

For the good of our country, and much of the world, we should hope that Brooks is a better judge of our current political mess than Krugman.  I was not reassured by Trump's attendance at the college football championship game last night.  Most president's wave to the fans from their box after the fans have been informed of their attendance.  Trump took advantage of his position by walking out with members of the military for the playing of the national anthem.  For Trump it was just another opportunity for him to play his role as the Commander in Chief in front of a national audience. Trump continues to operate in campaign mode during his presidency.

Saturday, January 6, 2018

What Is Trump Trying To Protect HImself From?

Where there is smoke we often find fire.  This article describes all of the smoke coming from the White House and from Trump's Twitter account.  It's hard to believe that a completely innocent person would have taken all of the steps that Trump has employed to end the Russian investigation. Many of his actions support a narrative of person who is doing whatever he can to undermine an investigation that may uncover the fire.  Moreover, its difficult to construct a narrative of an innocent person who has nothing to hide.  Trump is losing the narrative battle.

Trump Is Not Stupid: He Is A Genuis

Following the release of a book which paints a chaotic picture of the Trump White House, and which quotes several of Trump's aides who complain about his lack of attention and his lack of intelligence, we learn that Trump is really a genius.  How do we know that he is a genius?  Trump used his Twitter account to proclaim his genius.  His critic wrote a book after a year of interviewing Trump aides.  Trump showed that he really is a genius.  It only took a couple of tweets to make his case.  Along the way he also dispensed with Steve Bannon who was a source of several quotes in the critical book.  Bannon is now the sloppy strategist who helped him to get elected by with his populist strategy and by inventing the idea of the "deep state" to justify Trump's attack on institutions which limit executive power.  According to Trump, Bannon begged for his job when he was fired by Trump, perhaps for being improperly dressed.  Trump, of course, had demonstrated his genius by using the proper uniform in the White House that always includes an extra long tie that goes well with all of his navy blue suits.

Wednesday, January 3, 2018

Trump Tells N.Korea That He Does Not Have Small Hands

During the GOP primaries Donald Trump referred to Senator Rubio as "little Marco".  Rubio fired back by pointing out that Trump had small hands.  Of course, Trump understood the reference to his small hands and he retorted by defending his manhood.  Trump is now conducting foreign policy with N.Korea via Twitter.  He tweeted about Kim's physical stature and his oversized tummy.  This morning Trump took his tweets to a new level.  He told Kim that his button on our nuclear bomb launcher was bigger than Kim's button.  It would be a mistake for Kim to mess with a president who has a bigger button than he has.  Trump's manhood should not be questioned.

We can laugh about Trump's use of Twitter to conduct foreign policy, and his hang up about his manhood, but this article describes how the Trump administration conducts foreign policy and it is not funny.  Our Ambassador to the UN feels free to make up her own foreign policy and our Secretary of State seems to have his own view of our foreign policy.  Trump seems to be out of the loop. He is too busy tweeting insults, and asserting his manhood, to consult with his foreign policy team,  Moreover, he seems to have no interest in reading intelligence briefings.  They have too many words; they do not provide good material for his Twitter account.  He prefers to continue running his presidential campaign.  His tweets are all about his power and authority.  He told his base that he was the only person strong enough to defend them from all of our enemies.  His Twitter account provides a full list of our mortal enemies.  It turns out that many of our enemies are presidents and elected officials who preceded him.  They were too weak to protect our nation.  Apparently, they did not make effective use of their Twitter accounts.