The Democratic field in 2020

Who will the Democratic nominee be in 2020?  That was the chatter at Nate Silver’s 538, in a sort of Round Table discussion that they call a snake draft.  As a libertarian-ish Independent in a swing state, I just wanted to mention my thoughts about some of their top possibilities.

  1. Elizabeth Warren.  Ugh.  About the only things she really has going for her (not with me, with the electorate) are that she’s fairly well-known nationally, she’s a woman and she has a portfolio, as it were, akin to Bernie Sanders’s– superficial egalitarianism.  She could probably win the Democratic primary, but not the general election.  The policy superficiality aside, her flaws are the long, public history of her whoring after minority status as a Leftist status symbol, and the fact that she’s condescending and schoolmarmish in an intensely irritating way.
  2. Kamala Harris.  Who?  Yeah, I know, a senator from California.  As though that were a swing state.  Yes, she’d get lotsa donations from the Golden State, but 2016 proved yet again that money has a limited impact on political victories.  Apart from that, she’s just another generic Democrat chasing after “historic!”
  3. Kirsten Gillbrand.  Known to me chiefly for having been handed Hillary Clinton’s Senate seat in deep-blue New York.  This was after Hillary was handed it, served without much distinction, lost her one competitive race before 2016, and was handed the Secretaryship of State.  That particular office is not exactly one that tempers a politician in the white-hot flame of competitiveness.  (True, fewer are these days.)  Basically a nobody, as far as I’m concerned.
  4. Joe Biden.  A long-experienced politician, originally from purple Pennsylvania, nationally known with Executive branch experience.  That he’s not at the top of everyone’s list speaks volumes about the Democratic Party’s poisonous addiction to identity politics and party identity narrative.  He’d be the one candidate who could actually get the Presidency by winning it, rather than by the Republican candidate losing it.
  5. Eric Holder.  In baseball terms, near as I can tell, Holder would be the equivalent of a .240 hitter in AA ball.  What does he have apart from being black and anyone at all having heard his name?  (Another generic Democrat chasing after “historic!”– but Obama has picked most of the low-hanging fruit.)
  6. Beto O’Rourke.  Why on earth are so many candidates with tiny resumes at the top of the Democratic list?  On the list at all, sure, but he’s like the 50-1 shot at the Kentucky Derby, and should be way down the list.  His inclusion here is likely an example of recency bias.  Unless he wins, which isn’t likely, a year or two from now people will barely remember him.
  7. Cory Booker.  Probably one of the stronger candidates, not because he’s black (see above about the low-hanging fruit) but because he actually has something resembling a struggle, as mayor of Newark, and executive experience, and some history of bipartisanship.
  8. Bernie Sanders.  Not a likely event, due to his age.  Yes, Trump’s almost as old, but seems one hell of a lot more vigorous.
  9. Michael Avenatti.  He brings to mind O Brother, Where Art Thou?  In that movie, the challenger in the Mississippi gubernatorial election is winning in the polls with a shtick about being for the “little man”, with a midget on the platform to agree with him, and the governor’s son says, “We could hire our own midget, even shorter than his.”  Avenatti would be the Democrats hiring their own midget.
  10. Oprah Winfrey.  She might actually be formidable against Trump– nationally known and admired, being at least somewhat self-made through fighting her way upward, having been successful in business.  But on the other hand, maybe not; being on a TV show where she gets to pick the guests and topics probably doesn’t prepare you that well for politics.  And in any case, she’s not running, which is probably why she’s at the bottom of the 538 discussion.

There were other candidates on the list, but the 538 people were really scraping the bottom of the barrel at that point, and my remark about most of them would amount to “who?”.

Perpetual motion

My friend Jane the Actuary drew my attention to Sen. Elizabeth Warren’s latest fantasy.

  •  any companies with more than a billion dollars in revenue must have a Federal charter, which can be revoked by bureaucrats at the request of state attorneys general;
  • have 40% of their directors be elected by the employees, and
  • basically must act like nonprofits, with a board that must “manage or direct the business and affairs of the United States corporation in a manner that seeks to create a general public benefit; and balances the pecuniary interests of the shareholders of the United States corporation with the best interests of persons that are materially affected by the conduct of the United States corporation”, yada yada yada.

The reasoning proffered is typical of the shallow thinking endemic among socialists.  (Matt Yglesias, for example, wearing about fifteen pairs of rose-colored glasses, says that it will “redistribute trillions of dollars from rich executives and shareholders to the middle class — without costing a dime”)  It goes:

  • people will be able to vote themselves more money from companies, or sue them about it; and
  • this kind of thing already exists in Germany and the Scandinavian countries and works fine.

As is usual in these days of autohagiography and rationalization, the interesting reactions are in opposition.  Megan McArdle ripostes that 40% isn’t a majority, and that Scandinavia is poor evidence as to what’s possible in other countries, because the basis for all of its societal solutions is extremely high levels of social trust that most countries, including the United States, don’t have and can’t easily get.   Kevin D. Williamson’s piece is about the cynical political-science aspect.  “Progressive neo-feudalism” is the theme of Robert Tracinski’s piece in National Review, because the companies’ Federal charters could be revoked upon the request of state attorneys-general, turning the companies into their vassals.

The reason I see why it can’t work is a bit more basic.

First, the artificially inflated portion of wages come out of economic surplus.  There is a limited amount of economic surplus, based on a finite amount of economic activity and a finite quantity of goods and services sold, all of varying profitability.  “It is not the employer who pays wages,” wrote Henry Ford, in his classic book My Life and Work.  “He only handles the money. It is the product that pays the wages and it is the management that arranges the production so that the product may pay the wages.”  Most products are commodities, which means that there’s a race to the bottom on prices and that the businesses making them have very low profit margins to begin with.  (See, for example, this post by CoyoteBlog, whose small business runs campgrounds.)

So, who gets that surplus?  The best illustration of that situation comes from a very different Warren: Buffett.  In one of Fortune magazine’s most famous articles, he talks about the percentage of earnings taken by government taxation as if Federal, state and local taxation powers were superior classes of stock that get paid before the real shareholders, which is an excellent way of thinking about it:

 
“Investors in American corporations already own what might be thought of as a Class D stock. The Class A, B, and C stocks are represented by the income-tax claims of the federal, state, and municipal governments. It is true that these “investors” have no claim on the corporation’s assets; however, they get a major share of the earnings, including earnings generated by the equity buildup resulting from retention of part of the earnings owned by the Class D shareholders.  …  Whenever the Class A, B, or C “stockholders” vote themselves a larger share of the business, the portion remaining for Class D — that’s the one held by the ordinary investor — declines.

The “wages” of unionized employees (or employee “owners”) are essentially yet another class of stock, one which comes before any of the above “classes”, amounting to yet another “share of the business” which under Elizabeth Warren’s proposal they would have a significant ability to vote to increase.

Yglesias agrees that doing this– creating political owners, reducing the take for economic owners– would cause stock prices to decline.  That’s what happens when “owner earnings” go down.  Where he’s crazy here is in thinking they’d decline only 25%.  He is surely aware of the “tragedy of the commons” but appears to have turned off his brain.  Most people are greedy, stupid and shortsighted, and if this proposal were enacted and worked as intended, they would swiftly vote themselves, and consume, the seed corn.  Then they would whine.   I can only suppose that Yglesias thinks that Leftist Mandarins would have the backbone to stand in their way.  No one with a brain would own shares of a company whose remaining profits depend on the self-control and forbearance of policymakers like either group.  Vitally, neither would they lend to it, except under exorbitant conditions.

Old-time Yankee inventors were famous, in American myth, for trying to invent a perpetual-motion machine.  Their intellectual heirs are today’s Left.

The socialist mackerel

Yes, it’s yet another blogger’s post about Alexandra Ocasio-Cortez, the 20-something socialist who defeated a powerful New York City Congressman in the Democratic primary, who will therefore surely win the general election.

The strange thing is that when she won, everyone lost their minds and acted as though it’s 1.) new, though Bernie Sanders has been representing the idea of socialism in the Federal government at a much higher electoral level– the statewide office of U.S. Senator– for many years, and 2.) a recipe for a popular mandate for a national platform along those lines, though it was decided by 4,000-and-some votes out of 27,744 cast, in a safe-blue NYC district with 214,750 registered Democrats.  It would be narcissism to the nth degree to imagine that that can be assumed to be a cross-section of Democrats in that district, much less of America.

The Democrats have been floundering, policy-wise, for something like a couple decades, if not more.  What do they stand for?  More of the same.  More government, more wealth redistribution, more identity politics, more support for the cheap-moral-outrage component of their base that gets off on cracking the whip of ism-accusation.

This has actually been the case for a while.  The Democrats won the 1992 election due to Ross Perot, who got something like 20% of the vote, mostly from the Republican side, they won the 1996 election as incumbents, they won the 2008 and 2012 Presidential elections not due to a general belief in their platform, but largely due to a combination of anger at the Republicans for Iraq and the Great Recession, plus black people turning out to vote in racial self-interest (if not flat-out racism) for the first black President of the United States.  It’s true that to be young, idealistic, eloquent and black, as Obama was, was an appealing set of characteristics for a candidate right then– but again, they had nothing to do with the freshness of the ideas.  The Democrats would surely have won some of those Presidential elections even without those factors, simply because people get fed up and it’s rare, historically, for one party to hold the White House for three or more successive terms.  Irritation and boredom are not ideas, though.  Perhaps the lesson is that elections rarely turn on fresh ideas, or that in national politics, the low-hanging new-idea fruit gets picked quickly.

So they seem to be returning to “heirloom varieties” of ideas.  In a way, it’s not surprising that on the Left socialism has surged in popularity.  As has been pointed out by others, Ocasio-Cortez and most of her cohort were born around or after the fall of the Soviet Union; they barely have a memory of the 20th century and none of its awful socialist failures.  They were also born, I might add, after the “state capitalist” overlay was put in place in various ostensibly socialist countries, like Vietnam and China, which led them to prosperity while retaining the name of socialism and “prove” that socialism can work.  They came of age, too, after the rise of the technocrats at Google, Amazon, Tesla and the like made the precedents of the past seem distinguishable– if they’d just had social media they could have made it work!– and therefore no barrier any more.  And finally, their party, the Democrats, are out of power and searching for hope and renewal.  The rise to attention of base-pleasing ideas is what happens when a party parts its intellectual and policy mooring by thinking it has no need of the moderates that anchor it.

Yes, those annoying buzz-kill, anchoring moderates prevent the party from going anywhere, but they also prevent it from being blown onto the rocks in a high wind.  So let’s continue with a maritime metaphor shift and think of socialism not as a sort of ideological cultivar, but as a mackerel in the moonlight.  It glitters attractively from a distance.  But it stinks.   The Heisenberg Uncertainty Principle– the popular part, anyway– is that shining light on electrons to discover where they are makes them move, ruining the inquiry.  Socialism is like an economic version of that.  Socialism seeks to seize economic value and redistribute it to poor people– but the problem is that economic value created by free enterprise requires freedom to exist.  Seizing it usually ruins it.  Socialism today would be particularly nasty because so little of Western economies is based on natural resources.  When the economy is more like Venezuela’s, based on something that exists irrespective of human effort, or with only a relatively small effort, like oil, socialism can, like spending an inheritance, seem temporarily workable until the price of oil collapses.

As noted, Ocasio-Cortez is not even new in having parted moorings from reality (assuming she was ever so tethered).  What she is that Bernie Sanders is not, is physically attractive, young, female and Latina.  The Democrats are hoping for a renewal not of Leftist economic ideas, but of a renewal of identity-politics turnout that will hopefully translate to the national level.  That won’t work.  Identity politics has never yet emerged in generations, very weakly in gender, and even if it did among Latinos in America, which seems questionable, the places where they are concentrated include only one swing state, Florida…where Fidel Castro’s socialism is still hated.

Beware the legislative-educational complex

Instapundit links to an article about a large, long-term study showing that the effects of free pre-kindergarten for low-income children are mildly negative for educational accomplishment over time.  It sounds as though the study was thoroughly and properly done, which makes it of even greater-than-usual concern that the study’s authors had a terrible time getting their findings published.  They wrote,

“It is, of course, understandable that people are skeptical of results that do not confirm the prevailing wisdom, but the vitriol with which our work has been greeted is beyond mere scientific concern.  Social science research can only be helpful to policy makers if it presents findings openly and objectively, even when unwelcome.”

In other words, in a world of limited resources, it is vital for policymakers to avoid what does not work, lest the result be no time, money, energy or political capital left for what might.  Seems like a perfectly reasonable point, right?

But there’s no talking to the academics who freak out about this sort of thing.  Getting away from the inconvenience of practicality in their job results was why they fled into their ivory towers to begin with.  Permitting this sort of thing threatens their ability to preen themselves on their morality, and it threatens the real value of their service to the educational-legislative complex: to provide full employment for teachers, whose unions will then send the extra money they get from the public to the Democratic Party.