Author: mkbhhw

By Mike Koetting February 4, 2019

What does China have to do with the shutdown?  Not much. But it helps put the shutdown in perspective.

The day before the partial government shutdown, the Dow Jones average stood at 22,445. The day before the shutdown unexpectedly ended, it closed at 24,576, a gain of about 9.5% in a little over a month. How could the Market gain that much when most of the American government was shut-down with who knows what damage to the American economy?

I certainly don’t know the whole answer, but to the extent the people who write on the financial news pages know the answer, there seems to be one over-riding issue:  How are tariff negotiations going with China? When there was good news about the discussions, the Market jumped; when bad rumors were in the ascendency, the Market tanked. (If you don’t believe me, simply Google “China negotiations and stock market”  For a tiny sample of up, see Fox Business news on January 18; for down, see a January 2 Reuters story.)

By Mike Koetting January 17, 2019

A few months back, while reading the book Fly Girls, about early women aviators, I was struck by how insanely dangerous early airplanes were. They fell out of the sky quite regularly and a remarkable percentage of the early aviators died in crashes. It got me wondering, anachronistically, how the development of airplanes would happen in today’s more risk-averse world. I found that same sentiment in a complaint voiced by a Silicon Valley developer that achieving self-driving cars was being impeded by the unwillingness of society to tolerate the trial and error necessary to make autonomous vehicles a functioning reality. This is a fair comment, although it doesn’t address that the early fliers almost exclusively killed themselves; when autonomous vehicles run amok, it is unsuspecting bystanders who bear the brunt. Nevertheless, this raises the broader issue of how much risk (and for whom) is society willing to incur for technological progress.

The downside of setting out my criteria for a Blue Wave ahead of time is that, given the results, I look like a curmudgeon if I stick to those, which show the Democrats just a hair short of my reasonable, but arbitrary, standards. In any event, the measure is not unambiguous and by any standard, the Democrats had a strong election. To recap:

U.S House   I said a wave would be a pick-up of 40 or more. As I write this, Democrats have won 37 and may pick up one or two more.

U.S. Senate   I said a wave would be a net loss of 1 or fewer. Assuming Mississippi turns out Republican, the net loss will be 2—but only by the barest of eye-lashes. And, as FiveThirtyEight points out, even in states they lost, Democrats overperformed in terms of the state’s historic “lean”.

Governorships   I said a net pick-up of 5 or more would constitute a wave. The pick-up was 7, including a number of states Trump carried—Michigan and Wisconsin among them.

Legislatures    I said a net pick-up of 5 or more legislative chambers would constitute a wave and the net pick-up was exactly 5.

In other words, as close to hitting my criteria as possible without actually making it. Continue reading “Certainly Blue Wave-ish”

By Mike Koetting       October 30, 2018

I really want a blue wave. Really.

But I have no intention of predicting whether it will or will not happen. There are people out there who follow it more closely and have access to a lot more data. And, as Nate Silver reminds us, the degree of uncertainty is much more than anyone wants to believe, certainly more than the media acknowledges.

Moreover, perhaps more than some other elections, this one is going to be decided by turnout. It is indisputable that the country is deeply divided and votes will be cast accordingly. But a blue wave will require a lot of turnout by people who don’t usually vote their weight—young people and minorities, particularly Latinos. I don’t know if there are good ways of predicting that, but I certainly don’t have access to any of it.

Accordingly, the goals of this post are very much more modest. I am going to set down my idea of what a blue wave would like before the election. Afterward, we can look at what happened and see how we want to score it. Continue reading “Blue Wave….Or Not?”

By Mike Koetting        October 11, 2018

Like the vast majority of Americans who have been paying attention, the events of the last week have been profoundly discouraging. For me, the ascension of Brett Kavanaugh to the Supreme Court is awful. But it isn’t just that.

It is also that the process was so ugly. It certainly tarnished both the Senate and the Supreme Court, two institutions that are key to democracy. It even managed to get the #Me Too movement entangled in a very partisan way, something that may not be helpful to the movement in the long run. As a consequence of the hearings, the two sides hate each other more and the vast majority of the population leaves the hearings even more pessimistic, and more cynical, about the future of American political society. Continue reading “How Do We Remediate Toxic Waste?”

By Mike Koetting        September 25, 2018

I am still no expert on trade policy, but I have found the spinning out of the recent NAFTA discussions fascinating. You may have already forgotten about them because issues with China have taken center-stage in anything about trade that could be heard over the Kavanaugh furor. But, as will be discussed below, expect NAFTA to return.

First, repeating a mantra from earlier posts on the topic, there is simply no such thing as completely free trade. All trade happens under some rules. So simply incanting “free trade” doesn’t really shed much light on the full range of discussion. This is important because the stickiest points in the current NAFTA discussion are not around tariffs per se, but around the rules under which tariffs stay low—not that you could tell that from most of the media coverage, which continues to portray this as a cartoon contest between free trade and protectionism, with little coverage of the actual issues at stake. Continue reading “What Could We Get From Trade Policy”