Lowrey: Defund the Police. Um…

Annie Lowrey, writing for The Atlantic:

America badly needs to rethink its priorities for the whole criminal-justice system, with Floyd’s death drawing urgent, national attention to the necessity for police reform. Activists, civil-rights organizations, academics, policy analysts, and politicians have drawn up a sprawling slate of policies that might help end police brutality, eliminate racist policing, improve trust between cops and the communities they work in, and lower crime levels.

A more radical option, one scrawled on cardboard signs and tagged on buildings and flooding social media, is to defund the cops.

Lowrey’s discussion of defunding police forces isn’t a call for dissolving them, but rather divesting them of the activities that lead to over-policing, over-incarceration, and the deaths of innocents. Defunding is not the way to go; the other options already on the table, also mentioned, are. We should do all of those things.

The rest of the article embodies an unflattering comparison of America’s priorities to those in our similarly-situated allies. Our culture, as exemplified by where we spend our money, is out of whack. The good news is that we can repair it.

#policing #criminalJustice #incarceration

The Market is Not Our Friend

In stock market news today:

Screen Shot 2020 05 18 at 11 50 29 AM

The market cares not about people. It is not our friend.

The market is an organic expression of investor sentiment about the future useful for growing wealth. People angered by its apparent disregard of the suffering underlying its gyrations misunderstand this essential fact.

#COVID19 #pandemic #unemployment

Fallows: Flying Will Never Be the Same

James Fallows, writing on what the future of air travel might look like for The Atlantic:

Check-in and security. Anyone who has traveled through China in the 15-plus years since the SARS outbreak is familiar with the large temperature-check gates that inbound and outbound passengers must walk through. Some of them look like bigger versions of the metal-detector gates that are standard-issue in many U.S. buildings. … The gates alert quarantine officers to the presence of anyone who seems to have a fever, enabling individual follow-up examination by thermometer. Virtually no U.S. airports ran passengers through such equipment a year ago, and virtually all of them are likely to do so a year from now.

Our awareness of one another and the germ dangers posed in public spaces has become more acute lately. We should expect public health safety efforts to reach beyond anti-terror measures after 9/11 as more people emerge from self-quarantine into public living.

Imagine, though, the don’t-tread-on-me crowd facing such a portal before a flight. They can’t be troubled or imposed upon to wear a mask for our common good today. Such masks are common in Asian countries where the SARS epidemic killed over 750 patients among 8,000 cases, paling in comparison to COVID-19’s numbers. A fringe of Americans have almost always put their individual liberties ahead of the greater good—contradictions such as world war and natural disaster are the exception for them, not the rule. The future will be a tough place for these folks’ sensibilities.

The Broader Perspective

Of greater concern is the long-term expansion of the underclass. While many small business owners—the largest employment segment—are clamoring to resume operations, my hunch is that we’ll see little increased demand for their products and services until there exists a vaccine. The longer we remain at home the more we learn to make-do without them. Large employers, such as the airlines, will be hard-pressed to employ anything like their current government-supported payrolls. In short, unemployment is going to be a major problem in the American economy throughout 2021 and into 2022, at least.

There will be an ugly recognition on Wall Street when institutional investors give in to this reality. A spike in COVID-19 cases in this areas “re-opening” should trigger it.

The COVID-19 pandemic has given wise business executives an opportunity to clean-sheet redesign their businesses from the ground up. Everything from who and how many they employ to how they operate should be re-considered.

Think on this: What will you, as a consumer, do without down the road now that you’ve successfully suffered it the last couple of months? How does it change our economy and culture if millions share your sentiments?

#COVID19 #publicHealth #airTravel #employment

NYT: Disinvestment and reinvestment

Emily Badger, Quoctrung Bui and Robert Gebeloff, The New York Times:

“Our black bodies literally have less economic value than the body of a white person,” she said. “As soon as a white body moves into the same space that I occupied, all of a sudden this place is more valuable.” 

White flight and white return are not opposite phenomena in American cities, generations apart. Here they are part of the same story. 

In the places where white households are moving, reinvestment is possible mainly because of the disinvestment that came before it. Many of these neighborhoods were once segregated by law and redlined by banks. Cities neglected their infrastructure. The federal government built highways that isolated them and housing projects that were concentrated in them. Then banks came peddling predatory loans.

An example of contemporary gentrification in Raleigh, North Carolina brings a handful of racial tropes together in a single story. Worth a read.

#gentrification #whiteFlight

Lucid explanation of an "inverted yield curve" and what it (might) mean

Josh Brown and Michael Batnick explain today’s big financial story and why it’s maybe time to panic (not really). Eight minutes of smart, simple discussion.

(These guys are principles at Ritholtz Wealth Management, and are both worth a follow on Twitter or at their blogs; they’re smart, straightforward, and honest. There’s a boy’s club vibe to some of their writing, but no shortage of irony, so it’s a wash. Josh is one of my longest follows on Twitter.)

#investing #finances #YieldCurve #economy

The hidden automation agenda of the Davos elite

Kevin Roose—The New York Times:

in private settings, including meetings with the leaders of the many consulting and technology firms whose pop-up storefronts line the Davos Promenade, these executives tell a different story: They are racing to automate their own work forces to stay ahead of the competition, with little regard for the impact on workers.

There-in lies the fatal flaw in conservative labor policy: its embrace of unfettered capitalism ignores the human cost of unimpeded operation of the engine of wealth creation. Capitalism converts to value-added commodity every resource it encounters, including human resources.

(It’s telling that the people most directly connected to labor recruitment and benefits within an organization, the personnel office, was rebranded human resources at around the time real wage growth flattened—the era of Ronald Reagan and the rise of contemporary movement conservatism.)

Capitalism bridled by an overwhelming respect for and nurturing of the people exchanging their labor for pay and benefits is the progressive way forward. The executives meeting at Davos reject that, seeking replacement of (most) workers by artificial intelligence and automation. They are not friends of humanity. They are, at best, an adversary.


Automating work is a choice, of course, one made harder by the demands of shareholders, but it is still a choice. And even if some degree of unemployment caused by automation is inevitable, these executives can choose how the gains from automation and A.I. are distributed, and whether to give the excess profits they reap as a result to workers, or hoard it for themselves and their shareholders.

The choices made by the Davos elite — and the pressure applied on them to act in workers’ interests rather than their own — will determine whether A.I. is used as a tool for increasing productivity or for inflicting pain.

A clearly defined line is drawn. People or profit. Lean too hard into profit, as the congregants at the capitalist church of Davos self-confessedly will, and there will be few left to exchange hard-won income for the goods and services rendered by advancing automation.

There’s little concern about leaning too far in the other direction. The plight of workers and their families over the last four decades is evidence that their well-being in the off-hours is irrelevant to business interests.

#automation #Davos #capitalism #labor

The R-Word

John Gruber, writing for the prominent Apple-centric blog Daring Fireballon the possibility that Apple’s recent revenue miss for the holiday 2018 quarter points to a much greater problem:

I think what has [Apple CEO Tim] Cook spooked is not the drop in iPhone sales, but the fact that the iPhone sales drop in China might be a symptom of a bigger problem. An effect, not the cause. Apple has gotten crazily good at predicting everything about their financials. It’s almost freaky how accurate they’ve been for years. But they got something very wrong last quarter. Again, it was a slight year-over-year decline, but it was the second-best quarter in history. iPhone sales were disappointing compared to expectations, but weren’t bad in the abstract. What was bad was Apple’s guidance. A $7 billion miss is bad, but Apple not foreseeing a $7 billion miss is a red flag. I think they’re evaluating deeper plans just in case it was more than just one thing in one quarter. No one wants to say the word, but I think it’s what has Cook spooked.


As Gruber wrote elsewhere in this article, we cannot trust the economic data coming out of China as we can that from politically open countries. We’re left to glean secondary indicators like iPhone (and other product) sales as proxies for deeper trends within that economy. A wide variety of companies are warning on sales in China.

It’s a long-held belief that when the American economy sneezes, the rest of the world catches cold. What, then, can we predict accompanies a Chinese economy tumbling into recession, if that is indeed happening?

Equities markets often provide an early hint that an economy is about to dive into recession. The US stock market hemorrhaged just prior to the last two economic downturns here—some would argue that it became a self-fulfilling prophecy, even—leaving those with intuition room to step out of the way. I’m not a market-timer with my investments, and I don’t advocate anyone try. Catching the falling knife that is the eventual end of a market downturn is fraught with peril; it’s so much easier to get that timing wrong than right. Knowing what came before, and knowing that it’s never “different this time” can be useful managing one’s own investments, though.

All of which is to say there may be a far more interesting story playing out in the Chinese economy right now that may have significant implications for the US economy and personal investment later this year and next. I don’t trust the political hands at the wheel here in the US—Steve Mnuchin has prior experience managing big money, but is beholden to what he can convince Donald Trump of, and Trump, in turn, has little successful* experience at economic stewardship—leaving only cooler heads at the Federal Reserve as a backstop.

Think carefully about your level of trust vis-a-vis your financial future.

#China #recession #economy #Apple #indicators #investing

* how successful is a businessman who loses money and files bankruptcy on New York City real estate, which never devalues, and casinos, where people pay to give away their money?

Mike Pence’s Spin About SNAP Work Requirements

Olivia Paschal—The Atlantic:

Pence’s support for “dignity in work” belies the reality of the work requirements: According to a new study from the Brookings Institution’s Hamilton Project, most SNAP recipients are either already working or physically can’t. The share of people who aren’t already subject to work requirements within the program, who aren’t currently working, and who have no interest in working? “Less than 1 percent,” said Laura Bauer, a Hamilton Project fellow and one of the study’s authors.

The motivation behind the Republicans’ inclusion of additional work requirements for food stamp recipients isn’t about moving people from assistance to employment. As the Hamilton Project revealed, deadbeats account for less than one percent of recipients. The GOP’s motivation is a reduction of the program with an eye toward eventual elimination.

‘America is great because America is good. When America is no longer good, it will no longer be great.’ I’ve read that somewhere.

A conservative favorite long ago put his finger on our current problem. A major political party has been overcome by people who know no good.

#GOP #SNAP #HamiltonProject

Friedman: Where American Politics Can Still Work: From the Bottom Up

Thomas Friedman — The New York Times:

We asked people: ‘What is the most important thing for a successful community?’

“The answers that came up over and over again,” Bressi said, “were a community that creates respect and unity, respect and unity. People want to be heard and want to be respected. And they want unity, no divides. They see the national trends, they feel the division and they don’t want it.”

A blueprint for civil and cultural renewal in communities spiraling downward; at its core this is about pragmatic politics, devoid of posturing and labeling. Well worth a read.

#AmericanRenewal #communityOrganization #grassRoots

∴ NYT: The Market Isn’t Bullish for Everyone

Steven Rattner — The New York Times:

To be sure, rising stock markets help many Americans in other ways. Perhaps most importantly, they secure pension benefits for those fortunate enough to participate in corporate or municipal plans.

However, the percentage of workers covered by these programs has been declining, from 62 percent in 1983 to 17 percent in 2016. Only about 22 percent of Americans below the median even have an individual retirement account.

These numbers will come back to haunt us not long into the future.

Corporate America did away with the defined benefit plan, aka a pension, years ago in favor of a market-based system including IRAs, 401(k)s, and the like. The effect transferred the financial, intellectual, and moral burden of securing retirement income to the employee. It was around this time that cooperate America relabeled their personnel departments “human resources,” marking their labor pool as akin to raw industrial materials and electricity to run their machinery. All became resources to use until expended. The last vestige of humanity fell away from capitalism.

These investment products require workers to become part-time money managers – a skill the eludes even some in the investment industry – to their detriment. Many don’t know where to begin, or simply don’t give it any thought. In times past these skills weren’t a worker’s concern. Payroll withholding into a pension plan happened without direct employee involvement. At the end of a career, retirement income was secured.

There were many, too, who were invested, but who walked away from their investments during the last recession. A lot of paper wealth evaporated between 2008 and 2013, as many amateur investors didn’t have the stomach to ride out the crash. They sold into the decline, or worse, near the bottom. Most of them haven’t returned to the markets.

We can’t blame these workers for turning their backs. It’s a rational short-term response to a problem they could not get a handle on. I do fear for their (and our) long-term financial future, though.

We all get to the point in our working years when it’d be nice to throttle back, leave the full-time rat race and go do something else, perhaps a labor of love that doesn’t pay much or a volunteer gig serving others. That’s not going to happen for workers who could have secured their retirement years, but who walked away from the markets. This problem will spread and worsen as more Americans reach what used to be considered “retirement age.” And with a live birth rate below the replacement rate there will be fewer young workers to fund increased need.

The plight of impoverished seniors who cannot work, and yet who cannot afford to stop working is going to have a ripple effect on the greater economy. There’s no safety net for them, no guaranteed income beyond Social Security, which will itself be strained. There’s no protection for the greater economy when their impoverishment raises the need for federal and state social benefit programs, and lowers our GDP. The markets will respond accordingly, lowering investment value here as money moves to foreign markets where labor and retiree stability is stronger. The greater financial benefit of the European-style social safety net will finally become evident to even the most fiscally conservative Americans.

And this doesn’t begin to address American workers whose income isn’t sufficient to cover their family living expenses, let alone make deposits to a retirement account they won’t be able to use for decades. Nor does it address the changed nature of employment itself, where a lifelong career has given way to the gig economy.

There will be a reckoning when uninvested workers are of a ripe age, health and age issues intervene, but they cannot afford to stop or slow working. That day isn’t so far off.

#economics #retirement #markets #equities #investing