Corporate Tax Cuts Don’t Mean More Jobs

This NYT article is right, but I think the explanation is simpler. Companies don’t hire because they have extra cash. They hire because there is unmet market demand such that hiring in the short term makes them more profit in the longer term. If the demand is there, most businesses would borrow to hire. At present, and for the last many years, consumer demand is low while corporate cash reserves are high. Do the math. Jobs aren’t there because demand isn’t there. Period.

The standard trickle-down argument says that once companies start hiring, they will put cash in workers pockets, who will then drive up demand. And sure, that would work… if lots of companies hired. But this scenario leaves out some crucial detail about how this has to work. To restate the process:

Companies have to hire workers they don’t need.
Enough companies have to do this that the collective new workers’ paychecks stimulate demand across the economy.
Then (and only then) does the demand materialize that justifies having hired the workers in the first place.
And even after all this, each company is risking that demand will materialize in their particular market. Some of them will be wrong.

Having spent the last 3 decades working in management for and with many companies, I can assure you that very few businesses would take this risk absent some significant exogenous incentive. It’s just not going to happen.

Does Voting Third-Party Send a Message?

One of the discussions started by my previous post was on the value of third-party Presidential votes as a means to send a message to the major parties and influence their future platforms. The thinking being that if Gary Johnson gets 20% of the vote, that the Republicans would recognize that Libertarian ideals were more popular than they thought and realign to capture more of those voters in the next cycle. Presumably a similar showing by Jill Stein might heavily influence Democrats.

While I can see the logic in this, it’s unclear to me there’s a lot of evidence for this strategy working in the past. But then rarely do third-party tickets attract more than noise, so there’s not much data here. Still, I think the evidence for the efficacy of Berners or the Tea Party influencing their party’s platforms from within is far stronger than the case for exogenous forces. So even if the third-party approach works, it’s unclear it’s the most effective strategy to achieve change.

Regardless, the unique structure of this year’s election cycle makes the likelihood of either party being influenced by a third-party’s performance negligible. Specifically, both parties are aware they are running very unique candidates. Clinton is toting a ridiculous amount of baggage and is vying to be both the first woman and first Presidential spouse ever elected. Trump is a generational anomaly almost defying description. He is reviled by many in his own party and most of the GOP establishment would jettison him in a heartbeat if they could do it without sending the party into a death spiral.

In this environment, if either or even both major candidates have their ass handed to them in November by Johnson or Stein, it won’t be attributed to the strength of the Libertarian or Green party platforms. It will be attributed to the weakness and uniqueness of the party’s own nominee. Even Johnson’s own campaign is trying to exploit this by emphasizing that voting for him is a vote against both Trump and Clinton (as opposed to a vote for the Libertarian platform). Regardless of the outcome, I think both parties are already trying to figure out how they can never have anything like this election cycle happen again. The third-parties are irrelevant (at least in 2016).

I stand by my initial assertion. Third-party votes are functionally equivalent to abstentions. Still, I suppose if they get you to the booth to vote the down-ticket races, then that’s a good thing. But before abstaining, you should be damned sure you’re prepared to live with either outcome, because you will live with one of them.

Remember the Brexit. Don’t wake up on November 9th with regrets because what you assumed was going to happen despite your (in)actions did not.

Should You Vote Third-Party?

In short, no. That is, unless you’re truly fine with either a Trump or a Clinton Presidency. Here’s why.

The appeal of a third-party vote is understandable. Neither Trump or Clinton are particularly compelling candidates. But it’s important to recognize that while voting for Gary Johnson or Jill Stein may feel good, and may be dutifully registering your protest, at the end of the day, either Trump or Clinton will still be President. This is not just a matter of resignation, but a matter of the structure of American government. Our winner-take-all approach to elections assures there will never be more than two major parties. Who those parties are may change. After all, before Republicans we had Whigs. What those parties represent may change. I’m pretty sure Lincoln’s GOP wouldn’t recognize today’s platform as the same party in anything but name. But in a twist on The Highlander, “There can be only two.” It’s fundamental to the design laid out in the Constitution. Short of changing that document, we are not, and will not be, a multi-party system like the Parliamentary forms of government found in Canada, Australia, and most of Europe.

Further, bear in mind that the best possible outcome of having a popular third-party candidate is that no one gets 270 electoral votes in November. But this means that the House now gets to elect the President from among the top three finishers. The House is presently controlled by the GOP. You do the math.

So if you believe neither party represents you, work to change one of them, or even to supplant one. But supplanting a party doesn’t start at the top. Electing a Green Party or Libertarian President provides no support for that party’s platform in the other branches of government. The Congress, the courts, the states are still all controlled by Democrats or Republicans. So even if they were to win, for Stein or Johnson to actually accomplish anything, they’d need to align with one party or other and settle for nudging that party’s platform a wee bit in their direction. Otherwise, they’d just sit out their term tilting at windmills. Until we start seeing Libertarian, Green, or other party controlled states electing that party’s people to Congress, a third-party Presidential candidate is just a show pony. It’s a target for your protest vote and nothing more.

The reality, like it or not, is there will be a President Clinton or a President Trump in January, 2017. You may have very well-founded reasons why you can’t stand either of them, but it boarders on inconceivable that you would be equally content with either outcome. There couldn’t be more daylight between the positions these two and their parties are taking in this election. If you’re truly ambivalent, then you are either too ill-informed or too apathetic to bother voting at all.

It may well be that you only care who doesn’t become President. But you care. Post your protests on Facebook and Twitter, but when you walk into that voting booth in November, make a useful decision. Suck it up. You don’t need to admit it to anyone else. It’s a secret you can take to your grave. But make a difference. Make your vote count. The stakes have never been higher.

My Very Long Week at Church

I have a confession. I get it. I watched most all of the GOP Convention this week, and I think I understand the appeal of the message. These people don’t want to elect a President, they are voting for their savior.

I’ve come to understand there’s an almost religious theme to Trump. And this may be behind his somewhat inexplicable appeal to Evangelicals. On the Christian fringe, the religion is not so much about lifestyle, conduct, or even community. It’s about a man. Have you found Jesus and accepted him as your savior? He will make everything okay. You don’t need to know His plan. In fact, you can’t know His plan–it’s beyond you. Just rest in His arms and have faith that He will save you from the evils of the world.

This is essentially Trump’s message. He will save you. You don’t need to know how, just have faith. Know that Trump is powerful and will set everything right. Trump will smite your enemies. In his kingdom your family will prosper under his protection, but only if you are one of the flock.

In many ways the #RNCinCLE had far more of the trappings of a religious revival than a political convention. There was little to no policy discussion. Instead, the evils and sins of the mortal world we live in were enumerated and cataloged. Satan was trotted out frequently. We were warned against believing her lies, and there were frequent calls to cast her out. The future was painted in unspecific themes of freedom, prosperity, self-determination, justice, and safety. The broad themes inherently invited everyone to impress some level of personal desire onto them. But the path to them, the path to realize your desires, was through one man. Do you have faith in him? Do you believe? The Trump welcomes everyone, and wants us to be one, but only if we are believers. Heretics and dissidents will be punished.

I rather doubt most Trumpians have made this connection. I don’t think they are aware of the religious subtexts to Trump’s rise and their support for it. Rather, the campaign is plucking the same religious strings their pastors do, and it is resonating with the faithful in a compelling, albeit unconscious, way. But make no mistake, Trump would be more than happy to be elected God.

Donald Trump Is What’s Wrong With America

In fairness, headlines like the one above are also what’s wrong with America. It would be far more accurate to say that Trump’s popularity as a Presidential candidate is indicative of a larger scale cultural failing in the US. But that’s not a pithy click-baitable headline. It needs to be simplified.

Trump’s core resonance with people is that he has a simple solution for everything and projects the confidence that he can get it done. China? Beat ’em. ISIS? Crush ’em. Immigration? Build a wall. Jobs? Take ’em back from overseas. Infrastructure? Build and rebuild.

It couldn’t be more simple, and we Americans do love it simple, which is really the core point. As a society, we don’t acknowledge that the world is a terribly complicated place, and that big hairy problems don’t usually have neat and tidy solutions. The entertainment industry has taught us that all manner of crime, political crisis, or family shenanigans can be resolved in 47 minutes. Large intractable problems like epic natural disasters and alien invasions may take upwards of 2 hours to get sorted. But that’s the top end. If your predicament requires more time that that, then you’re just milking the press opportunity.

Trump is the political equivalent of your 5-year old’s exasperated reaction to why you’re not buying them an iPad. “What do you mean we can’t afford it? Just stop at the ATM and get more money from the machine!” It’s all pretty simple when you don’t comprehend the details. Only in this scenario, voters are Trump’s Kindergarten classmates who want to make him king of the universe because he’s promising that everybody gets a new tablet… blissfully unaware that ATMs don’t print currency or why it would be a bad idea if they did.