Here's why Trump will likely win reelection in 2020

Most Americans don’t like Trump. The Conversation

Trump will most likely be reelected in 2020.

How can both of these statements be true? Here’s how:

Even when people are unhappy with a state of affairs, they are usually disinclined to change it. In my area of research, the cognitive and behavioral sciences, this is known as the “default effect.”

Software and entertainment companies exploit this tendency to empower programs to collect as much data as possible from consumers, or to keep us glued to our seats for “one more episode” of a streaming show. Overall, only 5 percent of users ever change these settings, despite widespread concerns about how companies might be using collected information or manipulating people’s choices.

The default effect also powerfully shapes U.S. politics.

Four more years

Franklin D. Roosevelt was elected to four consecutive terms as president of the United States, serving from the Great Depression to World War II. To prevent future leaders from possibly holding and consolidating power indefinitely, the 22nd Amendment was passed, limiting subsequent officeholders to a maximum of two terms.

Eleven presidents have been elected since then.

Eight of these administrations won a renewed mandate: Harry Truman, Dwight Eisenhower, John F. Kennedy/Lyndon Johnson, Richard Nixon, Ronald Reagan, Bill Clinton, George W. Bush and Barack Obama.

Even the three single-term aberrations largely underscore the incumbency norm.

Had Ford won in 1976, it would have marked three consecutive terms for the GOP. If George H.W. Bush had won in 1992, it would have meant four consecutive Republican terms.

Since 1932, only once has a party held the White House for less than eight years: the administration of Democrat Jimmy Carter from 1976 to 1980.

Therefore, it’s a big deal that Trump is now the default in American politics. Simply by virtue of this, he is likely to be reelected.

Popularity is overrated

Trump won his first term despite record low approval ratings, triumphing over the marginally less unpopular Hillary Clinton. He will probably be able to repeat this feat if necessary.

The president continues to enjoy staunch support from the voters who put him in the White House. He has raised millions of dollars in small donations for reelection, pulling in twice as much money as Barack Obama in his first 100 days. And he’s already putting that money to use running ads in key states that trumpet his achievements and criticize political rivals.

Although most don’t like or trust Trump, polls show he seems to be meeting or exceeding Americans’ expectations so far. In fact, an ABC News/ Washington Post survey suggests that if the election had been held again in late April, Trump would have not only won the Electoral College, but the popular vote as well – despite his declining approval rating.

To further underscore this point, consider congressional reelection patterns.

Since World War II, the incumbency rate has been about 80 percent for the House of Representatives and 73 percent for the Senate. Going into the 2016 election, Congress’ approval rating was at an abysmal 15 percent. Yet their incumbency rate was actually higher than usual: 97 percent in the House and 98 percent in the Senate.

As a function of the default effect, the particular seats which happen to be open this cycle, and Republican dominance of state governments which has allowed them to draw key congressional districts in their favor – it will be extremely difficult for Democrats to gain even a simple majority in the Senate in 2018. The House? Even less likely.

Trump … or who?

Due to the default effect, what matters most is not how the public feels about the incumbent, but how they feel about the most likely alternative.

Carter didn’t just have low approval ratings, he also had to square off against Ronald Reagan. “The Gipper” was well-known, relatable and media-savvy. Although the Washington establishment largely wrote off his platform with derisive terms like “voodoo economics,” the American public found him to be a visionary and inspirational leader – awarding him two consecutive landslide victories.

Trump’s opposition is in much worse shape. The Democratic Party has been hemorrhaging voters for the better part of a decade. Democrats are viewed as being more “out of touch” with average Americans than Trump or the Republicans. Yet key players in the DNC still resist making substantive changes to the party’s platform and strategy. Hence it remains unclear how Democrats will broaden their coalition, or even prevent its continued erosion.

Trump is not likely to follow in Carter’s footsteps. Other modern precedents seem more plausible.

For instance, Truman had an approval rating of around 39 percent going into the 1948 election, yet managed to beat challenger Thomas Dewey by more than two million in the popular vote, and 114 in the Electoral College. The president had been holding raucous rallies in key states and districts, growing ever-larger as the race neared its end. However, the media disregarded these displays of support because his base was not well-captured in polls. As a result, his victory came as a total surprise to virtually everyone. Sound familiar?

One could also look to Trump’s harbinger, Richard Nixon. Throughout Nixon’s tenure as president, he was loathed by the media. Temperamentally, he was paranoid, narcissistic and often petty. Nonetheless, Nixon was reelected in 1972 by one of the largest margins in U.S. history – winning the popular vote by more than 22 percentage points and the Electoral College by a spread of over 500.

Of course, Nixon ultimately resigned under threat of impeachment. But not before he radically reshaped the Supreme Court, pushing it dramatically rightward for more than a generation. Trump is already well on his way in this regard.

And like Nixon, Trump is unlikely to be impeached until his second term, if at all.

Impeachment would require a majority in the House. Removing Trump from office would require at least a two-thirds vote in the Senate as well.

Nixon faced impeachment because, even after his landslide reelection, Democrats controlled both chambers of Congress. Clinton was impeached in 1998 by a Republican-controlled House, but was acquitted in the Senate because the GOP controlled only 55 seats.

Without massive Republican defections, Democrats will not be in a position to impeach Trump, let alone achieve the two-thirds majority required in the Senate to actually remove him from the Oval Office. The 2018 elections will not change this reality.

In other words, we can count on Trump surviving his first term – and likely winning a second.

Consider the example of George W. Bush, who, like Trump, assumed the presidency after losing the popular vote but taking the Electoral College. His tenure in office diverged wildly from his campaign commitments. He was prone to embarrassing gaffes. He was widely panned as ignorant and unqualified. Forced to rely heavily upon his ill-chosen advisors, he presided over some of the biggest foreign policy blunders in recent American history. Many of his actions in office were legally dubious as well. Yet he won reelection in 2004 by a healthy 3.5 million votes – in part because the Democrats nominated John Kerry to replace him.

Without question, Kerry was well-informed and highly qualified. He was not, however, particularly charismatic. His cautious, pragmatic approach to politics made him seem weak and indecisive compared to Bush. His long tenure in Washington exacerbated this problem, providing his opponents with plenty of “flip-flops” to highlight – suggesting he lacked firm convictions, resolve or vision.

If Democrats think they will sweep the 2020 general election simply by nominating another “grownup,” then they’re almost certainly going to have another losing ticket.

For Trump to be the next Jimmy Carter, it won’t be enough to count on his administration to fail. Democrats will also have to produce their own Ronald Reagan to depose him. So far, the prospects don’t look great.

Editor’s note: This article has been corrected. The original version had the wrong year for George H.W. Bush’s reelection bid.

Musa al-Gharbi, Paul F. Lazarsfeld Fellow in Sociology, Columbia University

This article was originally published on The Conversation. Read the original article.

Your Team Would Win More in a Low-Tax State

The tax system is bad news for professional sports, with plenty of anecdotal evidence showing that athletes (and even fans) get pillaged by government.

Now we have some comprehensive academic research to augment the anecdotes.

Playing Field Impact

The Wall Street Journal opined today on a new study about the impact of marginal tax rates on professional sports teams.
Erik Hembre, an economist at the University of Illinois-Chicago, looked at the question: Do tax rates affect a team’s performance? He analyzed data in professional football, basketball, baseball and hockey between 1977 and 2014. Since the mid-1990s, he writes, “a ten percentage point increase in income tax rates is associated with between a 1.9-3.0 percentage point decrease in winning percentage.”

Here’s why: Professional athletes are taxed at the highest marginal rate. The average NBA player earned more than $4.8 million in 2013 and the average was $2.3 in the NFL, so athletes who play for the Minnesota Vikings earn less after taxes than do Dallas Cowboys.

…The effect appears strongest in the NBA, “where moving from a high-tax state to a low-tax state has a similar effect on winning as upgrading a bench player to an All-Star.” An NBA team that fled Minnesota (top rate: 9.85%) for Florida (0%) could expect to win an additional 4.5 games a season, Mr. Hembre found.”
This makes sense.

Indeed, there’s evidence from Monaco, which plays in the French soccer league, that low taxes produce better results on the playing field.

The editorial concludes with a caveat…and a political lesson.
Players make free-agent decisions for many reasons, and New York or Los Angeles can offer attractions and endorsement deals that offset their horrendous tax rates. But no one should be surprised that professional athletes respond to incentives like individuals in any industry. Perhaps this evidence will tempt governors and state lawmakers to cut rates now that they know that, along with a growing economy, they might end up with better sports teams and happier fans, also known as voters.”
None of this should be a surprise. We know taxes impact the decisions of high-income, high-productivity people, everyone from entrepreneurs to inventors.

Impact on the Economy

Now that we’ve looked at the impact of taxes on an industry, let’s now consider the impact of taxes on the overall economy. Professor Ed Lazear, in an article for the University of Chicago’s Becker-Friedman Institute, makes some critical observations on the American tax code.

Starting with the system’s complexity.
In the first 20 years after the 1986 Tax Reform Act was passed, there were already about 15,000 changes to the basic law. The lack of transparency is costly: resources devoted to tax preparation and avoidance alone amount to more than 1% of GDP.”
Continuing with distortions in the internal revenue code.
The tax system is full of inconsistencies, preferences, complex rules, and contradictory definitions that encourage distortionary behavior by Americans in their legitimate attempts to minimize their tax liabilities.

…Additionally, there are parallel systems that are not fully integrated into one coherent tax structure. Within the income tax category, the Alternative Minimum Tax has rules that are layered on top of the basic tax rate structure, which override the tax calculation for a sizeable fraction of taxpayers. Beyond that, the payroll tax, both employer and employee contributions, are distinct from the income tax rules, but for most Americans, act as a basic income tax that is an add-on to the income taxes that they pay.”
And there’s a big section on the economic harm caused by over-taxing business investment.
…growth is most affected by taxes on capital. Notorious is the high US corporate tax rate of 35% that the US imposes, which results in obvious evasive action like locating business overseas. More important, but less visible, is the actual reduction in investment that occurs because capital is taxed so heavily in the United States. The marginal dollar of investment is one that can find its home in another country as easily as in the US. When we raise taxes on capital, a German investor who might have preferred to invest in an American company simply chooses to keep that money in Germany. The easy flow of capital across borders means that lowering tax rates will encourage more capital to flow to American businesses.

…if investment were untaxed altogether, the economy would grow by an additional 5% to 9%. In the short run, the easiest way to accomplish this is to allow full expensing of investment with indefinite carry-forwards. This simply means that firms can deduct the cost of investments from their tax liabilities immediately and fully. Allowing full and immediate deductibility of investment expenses removes the distortions that impede capital investment and, as a consequence, raises productivity, incomes, and GDP.”
Augmented by the economic damage caused by over-taxing human capital.
Economists have estimated the human capital portion of the total capital stock in the United States as between 70% and 90%. …increasing tax rates is likely to have profound effects on occupational choice and investment in the skills that are required to be productive in high-value occupations.

…The personal income tax, and especially extreme progressivity, which places high burdens on professionals, discourages entry into professional occupations. Since human capital is such an important component of all capital, it is important to avoid over-taxing individuals directly.”
The Rich, the Poor, And Everyone Else

He concludes by explaining why the class-warfare crowd is misguided.
Lowering capital taxation and paying close attention to the progressivity of the tax structure both benefit the rich directly. The middle- and lower-income parts of the income distribution also benefit, however.

…there is a close relation between average income wage growth and productivity. Furthermore, there is a close link between GDP growth and productivity growth…unless we ensure that the economy grows, which means that productivity grows, we will not have wage growth.

…the poor and rich alike did best when economic growth was robust.”
This last excerpt is critical. Some of my leftist friends think the economy is fixed pie, and this leads them to think the rest of us lose money any time a rich person earns more money.

Or they are motivated by envy. In some cases, this even leads them to support policies that hurt poor people so long as rich people suffer even more.



Both these views are wrong. President John F. Kennedy was right about a rising tide lifting all boats.

And we see that in the incredible data that’s been shared by scholars such as Deirdre McCloskey and Don Boudreaux.

And since we just quoted Kennedy, let’s close with an equally appropriate quote from Winston Churchill, 

who famously observed that “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”

And the best example of that is in the data comparing the US with Denmark and Sweden. Or the words of Margaret Thatcher.

The moral of the story is that Slovakia has the right approach on taxes while Sweden has the wrong approach. That’s true, whether you want a winning sports team or a winning economy.
Reprinted from International Liberty.
Daniel J. Mitchell

Daniel J. Mitchell
Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.
This article was originally published on FEE.org. Read the original article.

Increasingly intolerant Democrats now look to terminate pro-life members

It’s not looking good right now. The Democratic Party elected a new, younger, more ideologically extreme chairman than the older guard of liberal political veterans. Then this happened.
Democratic National Committee Chairman Tom Perez is now demanding conformity from his party members on the issue of abortion, claiming that “every Democrat” must support a woman’s right to terminate her unborn child and promising to only support Democratic candidates who line up on his side of this ideological aisle.

“Every Democrat, like every American, should support a woman’s right to make her own choices about her body and her health,” Perez said in a statement. “That is not negotiable and should not change city by city or state by state.”
There goes federalism. This vision for a party trying to regroup and regain leadership is one of big government on steroids. Even liberal party stalwarts were forced to speak out as moderating voices when Perez lurched left of them, and essentially threw down the gauntlet.

Like Bernie Sanders, who dared to support a mayoral candidate in Omaha, Nebraska who had a “mixed record on abortion, highlighting divisions within the party even as the DNC seeks to mend fences with its high-profile unity tour.” Progressives started peeling away and withdrawing support for candidate Heath Mello after learning that eight years ago, he supported an ultrasound bill that would actually give women considering abortion the ability the make a better informed choice.
That bill, according to the Nebraska Legislature, required that a woman seeking an abortion "be told of her right to request a list of places she can get a free ultrasound," but did not require her to actually get the procedure, as critics initially claimed.
Note that it was an option for real choice. Full stop. And that’s what stopped the Democratic party leadership from backing their party candidate.

He lost the race as a result, but exposed the party’s deep divide over abortion, an inevitability in these extreme times. Which also casts more light on media reporting, since almost all major media changed their style books years ago and refer to pro-life positions as ‘anti-abortion’ or ‘anti-choice’. Some choice, Mello’s candidacy, and new party leadership, revealed.

His run was a promising sign, he said, for a candidate "with a proven record of working bipartisan and tackling some big issues and, yes, to some extent, is a pro-life Catholic Democrat." It’s hard to be either a pro-life or a Catholic Democrat.

Nancy Pelosi has long, and very publicly, been the latter. But even she has felt the urgency of speaking out about these distinctions, and whether and how they fit in her fractured party.
Democratic House Minority Leader Nancy Pelosi says that it's absolutely possible for someone to be a member of the Democratic Party and also be against abortion..."I have served many years in Congress with members who have not shared my very positive — my family would say aggressive — position on promoting a woman's right to choose."
She went further, in a Washington Post interview last week.
The Democratic Party should not impose support for abortion rights as a litmus test on its candidates, House Minority Leader Nancy Pelosi (D-Calif.) said Tuesday, because it needs a broad and inclusive agenda to win back the socially conservative voters who helped elect President Trump.

“This is the Democratic Party. This is not a rubber-stamp party,” Pelosi said in an interview with Washington Post reporters.

“I grew up Nancy D’Alesandro, in Baltimore, Maryland; in Little Italy; in a very devout Catholic family; fiercely patriotic; proud of our town and heritage, and staunchly Democratic,” she added, referring to the fact that she is the daughter and sister of former mayors of that city. “Most of those people — my family, extended family — are not pro-choice. You think I’m kicking them out of the Democratic Party?”
Meanwhile, this past Tuesday evening, Democratic Chicago Congressman Dan Lipinski, longtime champion of the working class, a Catholic, pro-life stalwart and one of the only remaining ones of his kind, held a town hall meeting in his district. And he was targeted yet again by abortion activists, as he has been for months.

It’s a time of clarification. Elected officials and citizens alike need to step up, get engaged, take part in public debates, learn the facts and speak out, prepared to make a defense for what they believe. And - as long as it is true - stand by it and encourage others. Come what may.

This article by Sheila Liaugminas was originally published on MercatorNet.com under a Creative Commons Licence. If you enjoyed this article, visit MercatorNet.com for more. Sheila Liaugminas writes from Chicago. She is a journalist, author and host of A Closer Look on Relevant Radio. See more at: https://www.mercatornet.com/sheila_liaugminas/view/abortion-litmus-test-forces-democrats-to-choose/19783#sthash.hpn9hHqH.dpuf

Liberal colleges declare war on reality

Duke theology professor Paul Griffiths created a firestorm recently by criticizing time-consuming racial equity meetings that, in his view, detracted from research, teaching, and study:
It’ll be, I predict with confidence, intellectually flaccid: there’ll be bromides, clich├ęs, and amen-corner rah-rahs in plenty. When (if) it gets beyond that, its illiberal roots and totalitarian tendencies will show.
He was promptly accused, in response, of “racism, sexism, and other forms of bigotry.” Yet in the entire correspondence, which he recently published, he says nothing that could reasonably be construed that way. It also came out that he had been subject to a kangaroo court for months over his objections to the meetings. Dr Griffiths resigned yesterday. A recent graduate wrote in response to the news:
In a discussion about the racist incidents with some other Div School students, I said that perhaps the way we were responding to the incidents was hurting rather than helping, because after every incident the black students would make public announcements about how hurt and afraid and rejected they felt, and then everyone would hatch plans to re-educate the whole university on issues of racism. I suggested that instead perhaps we should respond to the perpetrators like we would a bully, with strength and confidence and even defiance, to show them they didn’t have power over anyone. You would have thought I had suggested we start a chapter of the KKK. They made it clear I was a horrible person in denial of the harsh realities of racism for suggesting such a thing, and I learned to keep my mouth shut.
This is a clear example but not the only one. Rule by authoritarian mobs with a vested interest in promoting intergroup conflict is morphing into our future as a society.

Meanwhile, academics are popping up everywhere to advance ideas like those of Australian philosopher Robert Simpson: “However, once we extrapolate beyond the clear-cut cases, the question of what counts as free speech gets rather tricky,” so “I’d propose a third way: put free ‘speech’ as such to one side, and replace it with a series of more narrowly targeted expressive liberties.” He cites Canada as a good example but Canada has just enacted a law against Islamophobia, a law whose implications are engendering increasing alarm.  Dr Simpson's article is a sound reason to believe that we should stick to opting for free speech in all but the most “clear-cut cases.”

Last week, we looked at some ways in which the war on freedom is rotting our intellectual life: In a world governed by naturalism, power is its own justification and it need not be exercised in a rational way. Many of the controversies and contentions that surround us are easier to sort out if we keep that in mind. For example, let's revisit some earlier themes, to see the shape of what’s to come in more detail:

Facts have no privileged position in the world that struggles to be born. And the results can harm the most vulnerable people. Heather Mac Donald, author of The War on Cops, was recently subjected to abuse at Claremont College (“fleeing the university under the protection of campus security”), on the false grounds that she is a racist.

As public affairs analyst Douglas Murray puts it, the students quite freely “make claims about people that are lies, yet state them as though they are categorical truths. And then they declare that ‘truth’ is a ‘construct’ -- and one that they do not believe in.”  Mac Donald's crime was to trace the spike in homicide in the United States in recent years to lack of enforcement due to concerns about appearing racist. As it happens, facts still matter off-campus. In the real world, poor and otherwise disadvantaged people of all races are more likely to be victims of violent crime than better off ones are.  Meanwhile, students can comfortably insulate themselves in the ivory tower from the consequences of their unquestioned beliefs.

It makes little difference if useful beliefs are based on obvious untruths. For example, college women fear rape, based on a 2015 Association of American Universities study which estimated that about one in four had experienced sexual assault or misconduct. But that study grouped social offences with criminal offences. The US Department of Justice offered a figure (2014) of one in 53 college women. That's a much more realistic figure and, in any event, less advantaged women are significantly more likely to be victims of sexual assault. The myth of omnipresent danger creates anxiety and learned helplessness in college women and distracts attention from those truly at risk.

There are no fixed standards of justice to appeal to so hypocrisy is no longer the tribute that vice pays to virtue; it is just the new normal. Take the case of gay provocateur Milo Yiannopoulos, whose scheduled appearance at Berkeley touched off anti-free speech riots. Yiannopoulos suffered a major career setback for appearing soft on gay sex with minors (he denies it and has supported a Twitter crackdown).

But some ideological opponents seek to normalize pedophilia themselves. For example, a key article disappeared from Salon but (was saved on a web archive). In world where pedophilia is gradually being normalized even by British police, the question of whether anyone will suffer much for it is coming to depend on one’s standing with campus mobs and their supporters.

Similarly, feminist journal Hypatia attracted a meltdown of criticism for publishing an article on “transracialism.” The editors assumed that it was legitimate to change one’s race if it was legitimate to change one’s sex. But in the Orwellian world of today’s academia, everything is suspect unless it is explicitly encouraged—in which case, anything is possible.

When the only standard is approved sensitivity, as in the tranracialism controversy above, even moral outrages must be accommodated and accepted. At Jewish World Review, John Kass quotes Ayaan Hirsi Ali, herself a victim, on the silence of feminists about female genital mutilation:
"The left can easily and comfortably condemn the misogyny of white men, but not of men of color, not of Muslims," Hirsi Ali said. "They are afraid of being shunned. They're afraid of being put into a basket of deplorables. So they're silent.
And sometimes it goes beyond silence. A former UNICEF health specialist calls FGM gender egalitarian surgery, with little risk of social shame. Unlike Hirsi Ali, she is not seen as an apostate from moral relativism.

Phyllis Chesler was disinvited from speaking at the University of Arkansas on honour killings because, so the argument runs, opposition is a form of racism. You will need to read the explanation of that for yourself. Racism has become a very broad brush indeed.

The sciences are especially hard hit. This year’s March for Science offered some sobering revelations for the future of science as identity politics.

One was figurehead Bill Nye. During the aftermath of the March, videos surfaced that won’t likely help his reputation: My Sex Junk and another one in which ice cream cones discover sex. Detractors wondered if he wasn’t now the ”Pee Wee Herman of popular science.” Meanwhile, Nye was also quoted as wanting to shrink science classrooms: “Should we have policies that penalize people for having extra kids in the developed world?” and also as being open to jailing skeptics of climate change.

But the key complaint about Nye that made news during the pre-March publicity invoked none of this. It was that he is too white. That makes sense if one assumes that, in terms of influence, identity matters far more than behaviour.

Preeminent science journal Nature endorsed the March, suggesting that scientists who object to the antics should shout louder “about what you think matters more.” It’s a strange world in which the bar for a scientist is set at shouting louder than a motivated identity group. And Harvard sociologist Andrew Jowett explained in the Atlantic that explaining science to the public doesn’t really work anyway:  “Scientized” political issues generate “particularly sharp controversies precisely because the participants can focus exclusively on questions of scientific validity while obscuring the values and interests that shape their positions.” As if both sides in any controversy do not have discernible values and interests that shape their positions.

His subtext is yet another riff on “The public can’t make good decisions.” We should expect to hear that often now. It would be more helpful to the rest of us if Dr. Jowett would comment on recent trends in which post-normal, “post-truth,” and post-fact science have come to seem normal, and objectivity is seen as sexist or worse.

These protest movements are not 1960s retro; they are a flat-out war on reality, conducted by seasoned veterans with a lot at stake.

This article by Denyse O'Leary was originally published on MercatorNet.com under a Creative Commons Licence. If you enjoyed this article, visit MercatorNet.com for more.

- See more at: https://www.mercatornet.com/features/view/when-professors-stifle-freedom-of-thought/19778#sthash.LJyCNIJX.dpuf

Millionaire to Millennials: If You Want to Own a House, Stop Buying $19 Avocado Toast and $4 Coffee

An Australian millionaire and real estate mogul has advice for millennials struggling to purchase a home: stop buying avocado toast.

Tim Gurner, a luxury property developer in Melbourne responsible for over $3.8bn in projects, is facing heat for comments he made on 60 Minutes in Australia, implying that young people can’t afford to buy property because they’re wasting money on fancy toast and overpriced coffee.

“When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each,” he said. “We’re at a point now where the expectations of younger people are very, very high.”

He added: “We are coming into a new reality where … a lot of people won’t own a house in their lifetime. That is just the reality.”

It’s no secret that we’ve become an instant-gratification culture. Surveys show that even Baby Boomers have saved very little; a recent NIRS (National Institute on Retirement Security) study showed that “two-thirds of households age 55-64 have savings equal to less than their annual income. A third have no savings at all.”

For millennials, the consumer appetite stands to have sharper consequences.

First, they simply have less money to spend than their grandparents; this is the result of both declining incomes and, for many, crushing debt. Second, as author Simon Sinek has pointed out, delayed gratification is a concept unknown to many millennials.
You want to buy something, you go on Amazon, it arrives the next day. You want to watch a movie, log on to watch a movie—you don’t check movie times. You want to watch a TV show, binge…

You don’t have to learn the social coping mechanisms… Everything you want, instant gratification, EXCEPT job satisfaction and strength of relationships. There ain’t no app for that.

And so I keep meeting these wonderful, fantastic, idealistic, hard-working, smart kids that just graduated school, they’re in their entry-level job, and I sit down with them and I go “How’s it going?” And they go, “I think I’m going to quit.” And I’m like “Why?” They’re like, “I’m not making an impact.” I’m like, “You’ve been here 8 months.”
I believe that Gurner is correct that many millennials have high expectations. Many of them, I fear, will never realize those expectations because they never were taught an age-old virtue: prudence.

--

[Image Credit: Pexels]
This post Millionaire to Millennials: If You Want to Own a House, Stop Buying $19 Avocado Toast and $4 Coffee was originally published on Intellectual Takeout by Jon Miltimore.

Why Environmentalism Flunks Basic Economics

One of the trickiest set of issues for defenders of free enterprise is environmental concerns, especially large-scale ones like climate change. What makes more sophisticated environmentalist arguments so challenging and so interesting is that they often use ideas and terms that are frequently used to describe economic systems.

For example, both natural and social systems are evolutionary. Nature, like society, is an emergent (or what Hayek called “spontaneous”) order. I have described markets as “epistemological ecosystems.”And both ecology and economics share the same prefix. More interestingly, environmentalists often use words like “resources,” “scarcity,” and “efficiency” which we also hear in discussions of markets and economics more generally.

Because of those similarities, defenders of free markets and those concerned about human interference in the natural world should listen to each other more carefully than they often do. I recently had the chance to engage in just this sort of conversation and it got me thinking about some of the sources of miscommunication, and about what economics can add to the way environmentalists often see these issues. What follows are some related thoughts on that theme.

Economists and Environmentalists 

One idea is that defenders of markets should draw more upon the analogies to natural ecosystems when talking to environmentalists. Markets work much like Darwinian evolution, at least by analogy. Entrepreneurship and innovation are the economic equivalents of “mutations,” and profit and loss are the economic equivalents of “natural selection.”

Just as the biological process leads to species adapting to their environments because those mutations that enhance survival will get passed on to future generations, so do economic processes lead to humans better “adapting to their social environment” by rearranging the physical world in ways that create more value.

Environmentalists recognize how these sorts of complex adaptive systems create order without a designer in the natural world and noting how the same description applies to markets can be a way to generate more interesting and productive conversations, not to mention an enhanced appreciation for markets.

Like economists, environmentalists are concerned about scarce resources and efficiency. What often divides us is how we understand those terms. For example, environmentalists tend to think about resources being physical objects that are products of nature, as in “natural resources.” They sometimes overlook the man-made resource of capital and the combination of nature and humanity that is the resource we call labor.

As an example of this confusion, consider the argument I encountered recently that green forms of energy like solar power are desirable because they use fewer scarce natural resources and because they create millions of jobs.

My response as an economist is to applaud any way of producing something that uses fewer natural resources all other things equal. If I can make the same amount of energy by using less coal and no more of anything else, that’s good. But notice the rest of the claim: green energy also requires more of the scarce resource of human labor. That’s what it means to “create jobs” in this context. There’s a great deal of evidence that green energy is much more labor intensive than fossil fuels or other carbon-based forms.

Environmentalists rightly understand that it’s good to use less of a scarce natural resource, but seem to forget that idea when it comes to human labor.

Is It Worth It?

Husbanding scarce resources means we have to consider how much labor it will take to produce a particular amount of energy. Just as using more natural resources than we might have to means we give up alternative things those resources could so, so does creating jobs that might be unnecessary to produce the energy we need mean that we are giving up other things we could have had.

Part of this confusion comes from different meanings of “efficiency.” Environmentalists are often concerned with “energy efficiency” or “resource efficiency.” An example here might be gas mileage. Cars are more efficient if they get more miles to the gallon.

To an economist, however, the relevant efficiency is “economic efficiency,” or “is it worth it?”

We have the technology to create much more fuel efficient cars, but if they can’t be built for less than, say, $100,000, most people will say it’s not worth it. Such cars might be more technologically efficient, but they are less economically efficient.

Put differently, such cars would be using valuable resources to produce something that we think is less valuable than the alternatives those resources could produce.

Understanding Scarcity

This point is also where the word “scarcity” comes into play. It seems as though environmentalists treat “scarcity” as a synonym for “rarity.” A thing is scarce if it is few in number. But for economists, scarcity is not a matter of a physical stock, but a relationship between the physical stock and the human desire for the good.

For example, to my knowledge, there exists only one Steve Horwitz autographed baseball in the world. There are, by contrast, many Derek Jeter autographed baseballs. Despite being greater in number, the Jeter baseballs are much more scarce (as is reflected in their much higher value) because no one wants a Horwitz autographed ball, but many people want a Jeter ball.

What markets enable us to do is to have an indicator of that scarcity – prices. The fact that people will pay much more for the Jeter ball than the Horwitz ball tells us that the Jeter ball is more scarce and more valuable. Prices provide knowledge and incentives about the scarcity of goods, including natural resources, and enable us to use them only for those things whose value to people is high enough to justify it.

Markets enable us to make such comparisons of value, and thereby get beyond just technological efficiency to economic efficiency. That is, markets force us to think about cost.

The most sophisticated environmentalists get this at some level, which is why the best proposals for dealing with climate change are those that try, to some degree, to enlist the price system in the process.

Government Fines Won’t Solve the Problem

Carbon taxes/fees, for example, try to include the external costs of carbon-based energy in the decisions made by energy producers. Those proposals then often try to return to consumers the revenue collected so as to help them afford the higher prices of energy caused by the tax.

These proposals are better than the old command-and-control regulatory approach, but they suffer from two problems that economists are uniquely positioned to note.

First, finding the right tax/fee/price is not a simple thing. We know that market prices are the emergent outcome of what Mises called the “higgling of the market.” Mises also noted that the changes in prices we observe are the visible end of a chain of causation that begins deep in the human mind. What makes market prices work is that they are the outcome of the decision-making processes of the people in those markets, risking their own resources and deploying their own knowledge.

Bureaucratically set prices or fees do not have the same powerful incentives for careful behavior, nor will they ever capture as much knowledge, as do real market prices. Given that, political battles over those taxes and fees are inevitable, and with such battles out goes any semblance of economic rationality.

And that brings the second point economists can make to environmentalists: market failure is not a sufficient condition for government intervention. Carbon tax proposals, like any other policy, can look great on paper but we must always ask whether politicians can do and will do what those proposing the policy have designed.

For example, suppose a carbon tax collected billions in revenue that was to be set aside for redistribution to US households. Given the history of Social Security, would we really expect politicians to not try to use that revenue to satisfy powerful special interests or for other purposes that would deliver more votes per dollar than a dividend check to US households?

Economists can remind environmentalists that as messy as markets are (much like nature is), government intervention is often worse. We have to compare the reality of two imperfect processes and the fact that markets are less than perfect is not, by itself, a justification for government intervention.

It is said that the most interesting things happen on borders where cultures clash. That’s true of the borders between the spontaneous orders of markets and ecosystems.

Though I’ve focused on what environmentalists can learn from economists, the learning runs both ways. Figuring out how to draw the lines when two emergent orders interact in the ways nature and economies do requires careful thought and patient dialogue. I hope both groups are up to the challenge.

Steven Horwitz

Steven Horwitz
Steven Horwitz is the Schnatter Distinguished Professor of Free Enterprise in the Department of Economics at Ball State University, where he also is a Fellow at the John H. Schnatter Institute for Entrepreneurship and Free Enterprise. He is the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions. and is a Distinguished Fellow at FEE and a member of the FEE Faculty Network.


This article was originally published on FEE.org. Read the original article.

The Left's war on free speech is just beginning

Will the war on freedom just peter out? No. Let’s look at four reasons why not.

People are fed up with political correctness. No guff. Bill Maher is. Clint Eastwood is. We are told that Canadians are fed up too.

But so?

Two Canadian literary magazine editors were forced to resign from their national publications this month because they do not believe that writing about persons other than those of one’s own gender or ethnic group constitutes cultural appropriation. In other words, those editors believe in a fundamental standard of literature, the ability to imagine another person’s life as opposed to writing endlessly about oneself.

It's not just a local story. The war on freedom has left the campus behind and is now taking dead aim at the life of the mind generally.

In the cause of remaking society according to a far left utopian vision, universities have become, after decades of propagandakey enemies of intellectual freedom. The spreading miasma is rotting our intellectual life. That “bored and amused” pose we so often adopt is, in the face of the increasing resort to violence, cowardice.

Here are four reasons why the war against freedom will not just somehow lose itself, without our taking any action:

1. The war is irrational but the universe remains rational. Therefore, the warriors cannot win; they must go on taking more prisoners and trampling more freedoms in the pursuit of an unattainable goal. Historian Michael Ledeen puts it like this:
It’s in the nature of campus revolts that the leaders aren’t going to be satisfied with limited reforms to the school; they are inspired by inflated rhetoric, and they see themselves at the center of a great moment in world history.
A moment in which the rest of us are, incidentally, roadkill. As the story from Canada above shows, a current target is art and literature. Comedy that people find funny is becoming rarer all the time because only a few targets are permitted and—it is just human nature—they may not be the ones people would enjoy seeing skewered. Humourist Mark Steyn’s travails in Canada give us some sense of this.

2. Progressive academics are training “child soldiers” to carry out their revolution against intellectual freedom. Put simply, they are teaching their rioting students attitudes, values, and beliefs that guarantee failure in work and healthy relationships.

Reader, would you want, as a colleague, someone who put a middle-aged woman professor at Middlebury College in the hospital ? No? Then think what your answer means. In an age when most graduates face job shortages, students who have been encouraged in transgressive behaviour must simply continue their “revolution” off campus. That may be all they know how to do. Hardest hit, incidentally will be the disadvantaged students who lacked social confidence and firm guidance early in life. As so often, social justice gurus do the most harm to the people who are least able to evade them.

3. The current university system is genuinely corrupt. It is sustained on the backs of unjust labour conditions for most teachers and on unsustainable debt for many students. As classicist Victor Davis Hanson explains, “ Part-time faculty with PhDs are paid far less than tenured full professors for often teaching the same classes -- and thus subsidize top-heavy administrations.” And students, who owe more than $1 trillion in non-forgivable loans, perform poorly on tests due to poor teaching as far back as grade school. These people have good reason to be angry. But they are routinely manipulated into choosing the wrong target: People of whom their teachers disapprove, as opposed to the system that is causing their problems.

4. Traditional media are desperate. Despite their historic reputation for promoting free speech, now that their gatekeeper function is eroded, they have little to lose from joining a crackdown on intellectual freedom. Such a crackdown would mainly harm their smaller, more independent competitors. And they are highly concentrated: Six corporations control 90 percent of US media, down from 50 in 1983. A few companies channel news to hundreds of millions of people. Such media may be magnets for social justice warriors seeking a broader sphere of influence without interference from alternative media.

How long will the war on freedom last? As long as we tolerate it. We make that decision every day. And the choice grows starker very day.


Denyse O’Leary
 is an Ottawa-based author, blogger, and journalist.  This article by Denyse O'Leargy was originally published on MercatorNet.com under a Creative Commons Licence. If you enjoyed this article, visit MercatorNet.com for more.


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