Category: Equitablog

Should-Read: Sean Blanda: Medium, and The Reason You Can’t Stand the News Anymore: “We get sliced and sliced into smaller and smaller groups, each with its own group of pundits, publications, and Facebook memes…

…And as advertising mixes with propaganda mixes with actual reporting we can’t tell the difference anymore. It’s a never-ending scorched earth campaign, made possible because harming trust and encouraging tribalism is economically rewarded. In other words, the economic incentives of news directly contribute to the divisiveness of our country…. Facebook, Twitter, Google, and Medium ALSO have no economic incentive to solve these problems….

I know I’ll sound like some kind of pollyanna to suggest that if the American people demand more of their media outlets, advertisers, and social networks everything will work itself out. But I’d guess, regardless of your politics, you and everyone you know is tired of the current climate…. Tired of charlatans playing to the worse instincts of their tribe and getting rewarded…. Any solution is complicated and I have no illusions that it would happen in the next few years, if ever. But the first step is admitting we have a problem. Not one just one “side” or one outlet. But all players, news outlets, readers, advertisers, social media companies need to admit what we all know deep inside: Nobody is happy with this, and it’s time to try something new.

Should-Read: Pedro da Costa: Why the Trump Economic Boom Will Never Come: “Equity markets… [have] focused on Trump’s promises while ignoring his threats…

…But Trump has also shown he’s not likely to back away from his anti-trade agenda, which carries a high risk of retaliation from major trading partners like China and Mexico, and could devolve into a damaging all-out trade war…. Wall Street’s excitement over tax cuts is not tough to grasp—the rich stand to benefit overwhelmingly…. However, salivation over the prospect of a broader fiscal stimulus impact from Trump’s policy measures is likely misguided. If anything, the last two decades of economic policy have reaffirmed the failure of the sort of trickle-down economics that Trump and his advisors are espousing….

So far, Trump’s outlined proposals sound more like private sector giveaways of the sort that underpinned his deal with air-conditioner manufacturer Carrier in Indiana than any deeper program able to address the steep job losses experienced in many parts of the country that helped Trump win the election…. Then there’s the less tangible but potentially more important social impact of an ideology that contains strong elements of anti-immigrant, anti-Muslim, and anti-Semitic racism… not only anathema to American history but also widely seen as detrimental to economic growth….

Rich people will get tax cuts, and they own a lot of stock. So that’s good for the Dow, for now. But good luck to the investor trying to time the jump from that runaway train.

Should-Read: Business leaders are, in general, not the people to look to to take the lead in the public good operations of civil society at the nation state or the global level. They are enmeshed in networks of obligations. They thus respond to pressure that threatens the interests of those to whom they are obligated. But they do not take the lead that their take-charge within-the-firm personas would lead one to expect.

They can be–and very often are–powerfully influential and effective. But as a rule they are so only when their views and ideas are channeled through intermediary institutions with both funding and voice: the Republican Party, the Rubin wing of the Democratic Party, the Conference Board, the Business Roundtable, etc. It is the effective collapse of the first of these intermediary institutions as anything more than a lobby for tax cuts for the rich that is, I think, at the root of this Summers discontent. But while other forms of civil society mobilization produce crowds and argument in the streets, I think Summers will wait in vain for crowds and argument in the suites. That’s not how they do:

Larry Summers: A Telling Moment for Business Leaders: “I got a chance to spell out my views on the role of business leaders in influencing public policy…

…It is a complex issue given chief executives’ obligations to their shareholders, desire to be effective, fears of retaliation and much else. Just before the inauguration I expressed strongly the fear that American business leaders in Davos were legitimising the excessively problematic policy approaches of the new president, Donald Trump. Events since the inauguration have confirmed my fears. Policy has gone further than I expected in threatening an open global system and provoking key partners. It has undercut Statue of Liberty values and the rule of law more than I anticipated. Especially in foreign policy, words are deeds. It takes decades for a nation to build credibility and trust that can be sacrificed in a matter of hours. There are signs that quite a few business leaders are waking up to the dangers to their companies inherent in current trends. So maybe the business community, whose approval the administration craves, will start to pressure the administration rather than simply cheering on tax cuts and deregulation.

The Friday meeting of corporate leaders and the president will be very revealing. Will the group let themselves be used to legitimise policy trends? Will they focus on near-term parochial regulatory and tax issues? Or, as I hope, will they express real concern about the long-term impact if the US continues to embrace protectionism, undercut European integration, challenge China over Taiwan and prevent Muslims from entering the country? For those who argue that business should focus on the long-term and stress how closely American economic and business success are related, this will be a telling moment.

Should-Read: That this mistake could have been made is already a huge problem:

Joe Coscarelli: The ‘Bowling Green Massacre’: “Kellyanne Conway, the adviser to President Trump who coined the phrase ‘alternative facts’…

…falsely spoke of a “Bowling Green massacre” by Iraqi refugees… during an appearance on MSNBC’s “Hardball” on Thursday night as she discussed with the host, Chris Matthews, the executive order by Mr. Trump that suspended immigration from seven Muslim-majority countries: “I bet it’s brand new information to people that President Obama had a six-month ban on the Iraqi refugee program after two Iraqis came here to this country, were radicalized and were the masterminds behind the Bowling Green massacre. Most people don’t know that because it didn’t get covered.” In fact, no “Bowling Green massacre” ever happened…. Not long after Ms. Conway’s comments were debunked Thursday night, a clip of her interview went viral online, leading to ridicule and some humorous suggestions as to what she could have been referring to (namely, sports)….

On Friday morning, Ms. Conway admitted she had made an error: “Honest mistakes abound,” she wrote…. As for her overshadowed assertion that President Obama had instituted a six-month ban on the Iraqi refugee program after the Bowling Green arrests, that’s not quite true either: While the Obama administration slowed the visa process, some Iraqi refugees were admitted to the United States in every month of 2011. Ms. Conway did clarify that, yes, she had been referring to the case of Mr. Hammadi and Mr. Alwan. Yet, by pointing to an ABC News article from November 2013, she undermined her claim that the story “didn’t get covered.” It did.

Should-Read: Unhealthy food is at least tasty and fun to eat. Financial vehicles that would not be recommended to you by an advisor with a fiduciary duty to look after your interests are neither tasty nor fun to buy, as a rule. Gary Cohn’s analogy is false:

FT Alphaville: Thought for the Weekend: “President Donald Trump has begun killing off an Obama-era retirement-savings rule…

…unpopular with Republicans and some financial-industry executives who say it would harm consumers more than help… “We think it is a bad rule. It is a bad rule for consumers,” said White House National Economic Council Director Gary Cohn in an interview with The Wall Street Journal on Thursday. “This is like putting only healthy food on the menu, because unhealthy food tastes good but you still shouldn’t eat it because you might die younger.”

Should-Read: This. Judges who think their mission is to get out of the way and so ensure safe seats for their party–or for incumbents of both parties–are the root cause of a huge problem:

Steve Randy Waldman: Party Polarization Is Endogenous: “Centrist wonks lament party polarization…

…but rarely point out that it’s not something that just happened. In the context of heterogeneous political geography and malleable district boundaries, a two-party system doesn’t yield the centrism it is often credited with, but a superficial and artificial polarization that demands an eventual populist response. Party polarization is the endogenous and predictable result of incentives created by a first-past-the-post voting system susceptible to gerrymandering…