Fox News shares the blame!

Throughout history, presidents have singled out particular reporters for special access …Donald Trump, however, has gone far beyond past practices to favor an entire news organization, Fox News. In return, Fox gives Trump fawning, obsequious coverage, according to a new book, Hoax: Donald Trump, Fox News, and the Dangerous Distortion of the Truth, by CNN’s media analyst Brian Stelter. In great detail, he shows how access to Trump can make or break careers at Fox, with millions upon millions of dollars in ratings-driven compensation at stake.

Special thanks to Barry Ritholtz for offering this article and link. I wouldn’t have seen it otherwise. Keeping ahead on economics and politics is his gig. He’s one of the best.

The Great Kansas Reaganomics Experiment Ends In Disaster


Yes, I’m responsible for that smell…Saul Loeb/AFP

❝ When a governor announces an economic theory as a solution to a state’s fiscal problems, while challenging all comers to observe the results, that’s something I want to pay attention to. And so for the past five years, I have been watching the public-policy experiment in Kansas with great fascination.

❝ With the state legislature now rejecting the governor’s experiment, we can move onto to the next phase: Not recrimination and blame, though there is lots of that going around. Instead, I want to look at how the experiment played out, and what lessons there are to be learned from it.

❝ A quick refresher: Kansas’s Republican Governor Sam Brownback pushed through a substantial change in the state tax code, centered around lowering rates. He promised it would lead to more growth, tax revenue and jobs. Instead, there have been persistent tax revenue shortfalls, huge spending cuts and disappointing job creation. As my Bloomberg View colleague Justin Fox wrote, Kansas is badly lagging its neighbors, all of which have similar economies. Even worse, people (especially young people) are fleeing the state. Kansas was one of the highest outbound migration states in 2014, 2015 and 2016. The vast majority of people who have moved out were either transferring when their companies left or were seeking employment elsewhere.

Before Brownback, this wasn’t the case. As recently as 2012 and 2011, Kansas didn’t make the lists of states with high migratory outflows.

❝ Incentives matter: There was a large behavioral incentive, but it was for financial engineering. Brownback eliminated taxes on limited liability companies and sole proprietorships. It isn’t surprising that lots of companies and individuals made these legal structural changes. But this was merely an alteration in form with no beneficial economic incentives.

Set reasonable benchmarks for success or failure: Brownback, despite making large promises, wasn’t specific in how success or failure should be measured…

❝ Have an exit strategy: Because Kansas didn’t focus on specific and measurable benchmarks, it had no way to know when to pull the plug. This is important, as the legislature was forced to wait until things were unequivocally bad and getting worse before taking steps to end the experiment. An exit strategy based on specific goals would have saved a lot of unnecessary austerity-induced pain for the people of Kansas.

❝ Share information freely: We knew the Kansas experiment was going badly when the executive branch decided to stop reporting economic news about it…

Win or lose, take responsibility: Broad proof of the failure of Brownback’s tax cuts led the legislature to begin unraveling them. Rather than admitting defeat, Brownback vetoed its actions. His refusal to accept a verdict reflects a failure to recognize and take responsibility for his own policies.

❝ By just about every measure, Kansas’ economic laboratory experiment is now over, and the results are in. Supply-side tax cuts as executed in Kansas don’t generate more economic growth or create more jobs. They reduce tax revenue and forced the government to cut spending on essential goods and services like roads and schools.

RTFA for more detail. Unless you’re a Republican True Believer the cause-and-effect relationships are clear. Evidence is a bear. That the mass of Kansas voters went along with Brownback’s incompetence for so long speaks only to their obedience, lack of independence, loyalty to ideology in the face of daily evidence of failure.

Barry Ritholtz is one of my favorite writers on matters financial in the United States. That he has a fey sense of humor, refers to himself as a Recovering Republican, allegiance to evidence and facts over ideology is icing on the fiscal cake.

All U.S. energy consumption in one giant diagram

This graphic is special type of flow chart, called a Sankey diagram…This particular one shows the total estimated energy consumption in the United States in 2015, and how energy flowed from source to the final destination. The graphic comes to us from the Lawrence Livermore National Laboratory and the Department of Energy.

The beauty of a Sankey is in its simplicity and and effectiveness. No information is left out, and we can really see the full energy picture from a 10,000 foot view.


Click to enlargeThe Visual Capitalist

❝ What’s a quad? It’s equal to a quadrillion BTUs, which is roughly comparable to any of these:

8,007,000,000 gallons (US) of gasoline
293,071,000,000 kilowatt-hours (kWh)
36,000,000 tonnes of coal
970,434,000,000 cubic feet of natural gas
25,200,000 tonnes of oil
252,000,000 tonnes of TNT
13.3 tonnes of uranium-235

It’s a lot of energy – and if you look at the diagram, you’ll see most of it is actually wasted.

Thanks, Barry Ritholtz

Agnotology — Huh? Wha?

Fascinating discussion via Wired‘s Clive Thompson, and Stanford historian of science Robert Proctor, on Agnotology:

“When it comes to many contentious subjects, our usual relationship to information is reversed: Ignorance increases.

[Proctor] has developed a word inspired by this trend: agnotology. Derived from the Greek root agnosis, it is “the study of culturally constructed ignorance.”

As Proctor argues, when society doesn’t know something, it’s often because special interests work hard to create confusion. Anti-Obama groups likely spent millions insisting he’s a Muslim; church groups have shelled out even more pushing creationism. The oil and auto industries carefully seed doubt about the causes of global warming. And when the dust settles, society knows less than it did before.

“People always assume that if someone doesn’t know something, it’s because they haven’t paid attention or haven’t yet figured it out,” Proctor says. “But ignorance also comes from people literally suppressing truth—or drowning it out—or trying to make it so confusing that people stop caring about what’s true and what’s not.” (emphasis added)

Fairly amazing, and when it comes to certain issues, it’s dead on.

What an awesome definition:

Agnotology: Culturally constructed ignorance, purposefully created by special interest groups working hard to create confusion and suppress the truth.

Most often I’d go straight to the source[s]; but, give credit where due. Though I often comb through WIRED, I check in with Barry Ritholtz’s TWITTER feed a few times every day. Which is where I found these links.

Thanks, Barry Ritholtz

How wealthy are the rest of us?

We seem to really enjoy contemplating the money and lifestyles of the top 0.01 percent. The wealthiest Americans garner immense mind-share in the imaginations of the rest of the populace. We incessantly track the incomes of hedge-fund managers and other finance stars, the heirs to the Wal-Mart fortune and other $100 billion families. Don’t forget the Bloomberg Billionaires Index and the Forbes 400 and the wealthiest New Yorkers.

We are in short fascinated with other people’s wealth.

What about the rest of the income strata? As it turns out, there is a fascinating story there as well. It may not be as glitzy and luxe as the Billionaires Index, but it is a tale of gradual improvement. So says a recent data analysis on the global middle class by the Pew Research Center.

The good news is that during the first decade of the 21st century, about 700 million people were lifted out of poverty. That is a 14 percent reduction in poverty. The bad news is that moving into, and staying within, the global middle class is a significant challenge.

The study found that 71 percent of the global population is either poor (15 percent) or low-income (56 percent). The middle class is only 13 percent of the total population. To put some hard numbers on those percentages, with a world population of 7.2 billion humans, about 936 million are middle-class. A little more than a billion (1.08) are impoverished, and more than half the world’s population, a giant 4.03 billion people, are low-income.

PG-2015-07-08_globalClass-03

The Pew report contains some astonishing data points: 84 percent of the world’s population, including those defined as middle-class, live on less than $20 a day. Surviving on the maximum in the U.S. or Europe would be difficult for an individual — about $7,300 a year…

Think of it another way. More than fourth-fifths of world’s population live on less than $20 a day. In other words, how well this vast swath of humanity is doing will have important implications for industry, from health care and finance to agriculture and energy.

Income growth in these groups in both the developing and developed world will alter the economic and political landscape.

Not to be too optimistic, but the economic state of world is getting better. As more people move into the global middle class, they are able to buy more consumer goods, save and invest. That creates a long-term self-interest in political stability and, one can hope, democratic institutions.

Barry Ritholtz is justified in his positive outlook for the global population – even if the “we” in the industrial western civilization aren’t doing as well. The United States, Canada and Western Europe – with conservative governments very often – have a declining middle class. So, we feel the squeeze of Republican-style economics.

It’s your choice, folks. In my view as someone who’s a citizen of the planet Earth, I’m pleased the struggles of so many people around this globe are moving forward towards better opportunities for themselves, their children. The ennui of ignorant North Americans, of Europeans who have stepped into the bipolar trap of two-party politics continues to drag down what always has been the most dynamic and creative segment of our economy.

You can keep on with the obvious foolishness of believing you alone can make it – while the fat cats at the top stack the deck – or you can fight for independent thought and action and try for change that starts with education, healthcare, social security – and, did I say, education.

The Death Tax deception – and other lies

It’s an estate tax and almost no one pays it.

In 2013, 2,596,993 Americans died, according to the Centers for Disease Control and Prevention.

About 5,000 of them paid a tax after that mortal event. To be more accurate, their estates paid whatever tax was owed. That means 2,591,993 Americans died that year without paying any tax.

In other words, just 0.19 percent of all deaths in 2013 resulted in a tax. When 99.81 percent of all deaths don’t create a taxable event, calling it a death tax is mathematically nonsensical…

Why would someone use the phrase “death tax” when more than 99 percent of deaths don’t result in a tax? Because he is either a) innumerate, b) ignorant or c) trying to deceive you. There are no other possibilities.

Then, Barry trudges through a range of definitions for other taxes – and jogs into conversation-mode for an explanation of why he’s an ex-Republican:

Because the modern GOP has tacked so hard and far to the right, and it has gotten into bed with religious zealots who have no use for science. I simply have no reason to want to be associated with that sort of ideology. Even though I am socially progressive, I am still fiscally conservative.

When I lived in Nassau County on Long Island, then controlled by a Republican political machine, I was a registered Republican. When I lived in New York City under a Democratic machine, I was a registered Democrat. In both instances, the primary functioned as the general election. Today, I am a registered independent. I voted Libertarian last election.

And I still want my roads paved.

RTFA to thoroughly understand that last sentence.

Thanks to my favorite Recovering Republican