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By Lambert Strether of Corrente.

Trade

“The Steel Industry Gets What It Wants on Tariffs” [Wall Street Journal]. “U.S. steel producers, who prevailed in their push for the Trump administration to impose tariffs on imported steel and aluminum, have also proven equally effective—and far more effective than many other industries—at avoiding tariffs they don’t want. Steel producers in September petitioned the U.S. Trade Representative for relief on 132 tariff lines, primarily for raw materials and chemicals used in the steelmaking process that members of the Steel Manufacturers Association import from China. They were able to get 66, or half, of them removed from the final list. Overall, the U.S. took nearly 300 tariff lines off the list, meaning about one out of every five removals was backed by the steel industry. A tariff line can refer to a single product but sometimes includes more than one. Most other major industry groups had a much lower success rate in petitioning for exemptions….”

Politics

2020

“20 Reasons Bernie Sanders Is The One To Beat Trump In 2020 (*Backed By Data)” [Medium]. Note especially this: “One of Sanders’ secret weapons is the digital media empire he’s built with the help of his Media Producer, Armand Aviram, formerly a politics producer at NowThis. Sanders uploads thousands of originally produced videos to his social media channels, in which he and other progressives champion major issues like Medicare for All.”

2018

14 days until Election Day. 14 days. That’s two weels, still is a long time in politics. And remember that October is the month of surprises, though apparently Mr. Market is in his happy space now.

“Opinion: Trump’s ‘major’ tax promise is a sign that even he recognizes the 2017 tax cuts didn’t resonate with voters” [MarketWatch]. “That was obvious from the outset to anyone paying attention. For a middle-class household, the typical change was $930 per year, per the Tax Policy Center. That extra $78 per month, assuming the proper withholding changes were made, gets easily lost amid other rising costs, including the roughly 35-cent increase in the price of gasoline prices since the tax-cut legislation was signed into law. That’s even the case if you factor in the flood of corporate announcements of one-time employee bonuses after the tax-cut bill was enacted that the Trump Commerce Department estimates was worth $30 billion in aggregate. And, remember, for the typical household, 2018 may be the peak of the tax law’s benefit, because the brackets are indexed to a measure of inflation that’s less than what most people experience. And that isn’t even getting into the issue of the 2025 sunset of the individual tax provisions.”

“Trump’s home tax changes costing votes in the suburbs” [Financial Times]. “[Trump’s tax reform] capped at $10,000 the amount of state and local property tax that households can deduct [the SALT deduction] from their federal income tax. The limit hit towns like Westfield, with expensive houses and a median household income of more than $150,000. ;What I’m noticing in Westfield is that there are a million houses on the market, and they’re not selling. And they’re on the market because people are worried about the tax reform,’ said Ms FitzPatrick, a speech pathologist and mother of two.” • Districts like NY-19, NJ-7, NJ-03, all toss-ups according to the FT. So, oopsie. Kinda like the foreclosure crisis in reverse, isn’t it? Nobbling the SALT deduction was meant to screw the Blue States and shrink big gummint, but it looks like it might boomerang. (It might not, because as I read it, the effect is mostly wealth effect stuff like home valuations; the tax itself, the check you write, has not yet begun to bite.) And then there’s this: “Democrats’ pledges to abolish the cap has put them in the awkward position of helping affluent Americans while campaigning in the name of the middle class. Ninety-six per cent of any tax cut resulting from repeal would go to the highest 20 per cent of US households by income, according to an analysis by the Urban-Brookings Tax Policy Center. More than half would accrue to the top-earning 1 per cent. The deduction is worth little to people who rent flats. ” • The Democrat position is “awkward” insofar as their existential position is awkward.

“Latino Voters Still Up for Grabs in Midterms” [RealClearPolitics]. “In places with large populations of Hispanic voters, such as Texas, Republican candidates seem to be faring well. A recent Quinnipiac University poll in the Senate race there showed incumbent Ted Cruz with 45 percent of Hispanic support — falling short of Democratic challenger Beto O’Rourke’s 54 percent, but still strong. Gov. Greg Abbott led his Democratic opponent, former Dallas County Sheriff Lupe Valdez, among Latinos in the state by a margin of 49 percent to 45 percent. The RealClearPolitics average in the Senate race shows Cruz up by seven percentage points while Abbott is up by 19 in the average for that race. In Florida, several polls taken earlier this year showed Gov. Rick Scott, who is running for the U.S. Senate, either leading or in a dead heat with incumbent Democrat Bill Nelson. Both the Cuban immigrant population, known for being more conservative, and the Puerto Rican population show high favorable numbers for Scott. One poll from Florida International University in June showed the two-term governor leading among voters of Puerto Rican heritage by a 21-point margin in the net favorable ratings – this despite 57 percent of them identifying as Democrats. RCP has the race as a tie in the average of the latest overall polls…. With over 29 million Hispanics eligible to vote this year — 4 million more than in 2014, according to Pew — candidates will have to find a way to engage this group. Young Latinos are a key component, but only 16 percent of this demographic turned out in 2014. Some analysts say that this year, due to Trump, young Latino voters are particularly angry — but that anger does not guarantee votes.”

“Dem Senate hopes shift from winning majority to limiting losses” [Politico]. “Democratic hopes of winning the Senate have faded in the final weeks of the 2018 election, with the party now needing to win every one of more than a half-dozen competitive races to capture control of the chamber…. Democrats would have to turn around [Nevada and Tennessee’, carry Arizona, and then sweep largely conservative battleground races featuring incumbent Democrats — Missouri, Florida, Indiana, Montana and West Virginia — to win the majority, a prospect several party strategists referred to as picking up an ‘inside straight’ — a low-odds poker hand.”

CA: “In California, Democrats Winning the Battle of the Bases” [National Journal]. “”[Democrats] winning in a district like California-45 means everything has to go right,” said Porter adviser Sean Clegg, a former Los Angeles deputy mayor and veteran California political strategist. “It’s the district that proves the hypothesis that Trump has problems with college-educated voters—that was true in 2016 and it’s driving a disalignment.” This is one of the 25 GOP-held seats that Clinton carried in 2016.” • Problems with the Latino vote here, too, however.

New Cold War

“Russia probe revival expected if Democrats win House” [Associated Press]. “[California Rep. Adam Schiff, the top Democrat on the House intelligence panel] and other lawmakers say they are closely watching special counsel Robert Mueller’s Russia investigation and the Senate’s Russia probe to look for gaps that they could fill. And if Mueller issues any findings, their investigative plans could change.” • “If”? If Mueller doesn’t issue any findings, how much credibility will House Democrat findings have, except among the faithful?

Realignment and Legitimacy

“Democrats try to rebuild their relationship with rural America” [The Economist]. Deck: “It will take a while.” • And since Democrats would have to change for this to happen, it’s unlikely.

“3 Things Democrats Need To Understand Now” [WGBH]. “Democrats are the last institution standing between democracy and a dystopian mash-up of auto-kleptocracy. Here are three things they need to do immediately. One: Stop Panicking… Two: Stop Rewriting History…. Three: Stop Acting Desperate.” • Never change, Democrats! Never change! Oh, and this: “If the Democratic Party rewrites history and ignores voting trends that have been underway for several cycles, it risks overcorrecting to the left. Those who remember the names McGovern and Mondale will tell you that this sort of thing never ends well.” • And those of us who remember the initials FDR will will you that good policy can cement Democrat power for generations. Obama had the chance, and he blew it. Today’s Democrats seem determined to do the same.

“Small-dollar donations explode in the Trump era” [The Hill]. “On the Democratic side, liberal fury with Trump and the Republican-controlled Congress has been reflected in the form of millions of low-dollar donations to Democratic candidates in House and Senate races…. But Trump is backed by an army of small-dollar donors of his own. His campaign committees reported raising more than $18 million between July and September, bringing the total raised this year for his 2020 reelection bid to $106 million — much of that from small donors.”

“Progressives have nothing to learn from “nationalist” backlash politics” [Matt Yglesias, Vox]. “[S]ome aspects of the post-Cold War neoliberal consensus have not worked out as promised.” • “The situation has developed not necessarily to our advantage.”

“The Next Threat to Redistricting Reform” [Harvard Law Review Blog]. “Now that Justice Anthony Kennedy has left the stage, it is unlikely that the Court will stop extreme partisan gerrymandering. But the Court may do more than simply fail to intervene. Within a few years, the Supreme Court may well hold unconstitutional state political processes that have produced measurably better redistricting reform for the drawing of congressional districts…. The North Carolina case, Rucho v. Common Cause, is back for a return engagement before the Supreme Court. There is every reason to believe that the Court will take the case up on mandatory appellate review and that new Justice Brett Kavanaugh will join the Court’s four other conservatives to hold that partisan gerrymandering claims are non-justiciable. Such a holding will embolden partisan legislators who control the redistricting process to push things about as far as they can without fear of federal court intervention.”

Stats Watch

Chicago Fed National Activity Index, September 2018: “September’s results make for a solid 3-month average” [Econoday]. “Though the negative pull from consumer & housing is a concern, today’s results do hint at what is expected strength for Friday’s GDP report.”

Real Estate: “Housing Inventory Tracking” [Calculated Risk]. “Inventory is a key for the housing market, and I am watching inventory for the impact of the new tax law and higher mortgage rates on housing. I expect national inventory will be up YoY at the end of 2018 (but still to be somewhat low)… Although I expect inventory to increase YoY in 2018, I expect inventory to follow the normal seasonal pattern (not keep increasing all year like in 2005). So the current increase in inventory is not comparable to late 2005 when inventory increased sharply signaling the end of the housing bubble. Also inventory is still very low. In cities like Las Vegas and Sacramento, inventory has finally moved above 2 months supply – but still historically low.”

Retail: “How Sears Kit Homes changed housing” [Curbed]. “The retail chain’s bankruptcy filing this week, after decades of slow decline, obscures just how disruptive Sears was in its early 20th century heyday. While the business page obituaries will continue to position Sears as the Amazon of its day—and there’s some truth to that—the physical footprint left by Sears, especially via its kit home program and Modern Homes catalog, is wholly different than anything Amazon has yet to achieve. Consider this: In an era before commercial aviation and long-haul trucking, Sears, Roebuck & Co. set up an operation that would package and ship more than 400 different types of homes and buildings to anybody who had the cash and access to a catalog. From 1908 to 1940, Chicago-based Sears sold between 70,000 to 75,000 homes—”from Craftsman to Cape Cods, they offered a custom home at budgets and sizes that could accommodate any size family,” according to Popular Mechanics—which were sent via train car and set up as far afield as Florida, California, and even Alaska.” • Bezos is a piker.

Shipping: “Yes Virginia, there will be a Santa Claus this year” [Freight Waves]. “Two of the indicators that are jumping off the screen right now are the Headhaul Index map and the HAUL.JOT Index. Both are clearly showing that the return to growth in inbound loaded container flow that we saw in the Long Beach/LA port is continuing and gathering momentum… This is exactly what we expect as both ‘brick and mortar’ and e-commerce retailers stock up their distribution centers in anticipation of a strong holiday shopping season.”

Shipping: “Boeing: Air cargo growth will double over 20 years” [Supply Chain Dive]. “Boeing projects the air cargo market will sustain a long term growth rate of 4.2%, with e-commerce as one of the main drivers. Global e-commerce sales are expected to reach $2.8 trillion this year. By 2021, the e-commerce market could reach almost $5 trillion. China in particular is booming, as the nation has become home to the world’s largest e-commerce market, with sales rapidly outpacing e-commerce sales in the U.S., which is the second largest e-commerce market.” • If business as usual continues in the stratosphere…

The Bezzle: “Funding Secured” [Epsilon Theory]. “Can you imagine if Tesla were actually moving forward today with the Saudi sovereign wealth fund in a take-private transaction? Can you imagine the uproar over Elon doing this sort of major deal with the Saudis after the Khashoggi regrettable altercation murder?… Softbank’s Vision Fund is the largest single private equity fund in the world, with about $100 billion in capital commitments, of which about half comes from Saudi Arabia. Over the past two years, the Vision Fund has transformed Silicon Valley, particularly in the relationship between capital markets and highly valued private tech companies – the so-called unicorns like Uber and Lyft and Palantir and Airbnb. Who needs an IPO for an exit when you’ve got the Vision Fund to write a multi-billion dollar check?” • Well, well.

The Bezzle: “Reports Find Bank Tax Fraud Cost Europe $63 Billion” [Courthouse News]. “It’s being called the biggest fraud investigation of Europe’s postwar period: a heist by banks and investors that allegedly plundered $63 billion from state treasuries across Europe. On Thursday, a consortium of European news outlets and journalists revealed that an investigation by European prosecutors into allegedly illegal short-term share-trading schemes is far greater than previously understood. Investigators are probing bankers at some of the world’s largest banks, and investors, accountants and tax experts. The reporting, coordinated by a German nonprofit newsroom called Correctiv, was based on leaked and confidential documents and an undercover operation by Correctiv journalists posing as billionaires keen to profit from the share-trading scheme.” • Posing as billionaires? How?

Transportation: “Drone missed Heathrow-bound 787’s engine by 10ft” [Flight Global]. “The aircraft had been operating at 3,200ft on approach to runway 27L on 25 June, according to the UK Airprox Board…. The board says the drone was being flown beyond visual line-of-sight limits, at an altitude and in a position which meant it was ‘endangering other aircraft’, adding that it posed the highest category of collision risk.” • I imagine the video will show up on YouTube…

Transportation: “Uber Is Accelerating Its Plans to Deliver You Burgers by Drone. Here’s When It Could Start” [Fortune]. “The Wall Street Journal reported late Sunday that Uber had ran a job ad for an operations executive who could get the drone delivery program up and running in 2019, and rolled out across multiple countries within three years. The paper reported that, after it asked Uber about the job ad, the ride-hailing firm pulled it and said the listing ‘does not fully reflect our program, which is still in very early days.’ When it was up, the listing apparently talked about enabling “safe, legal, efficient and scalable flight operations” for UberExpress, which refers to the UberEats drone delivery program….. In Uber’s case, a variety of ambitions may play well with investors looking to buy into the company’s looming IPO.” • Also flying cars.

Rapture Index: Closes unchanged [Rapture Ready]. Record High, October 10, 2016: 189. Current: 183. Seems indeed that 180 is a floor.

Black Injustice Tipping Point

“Dunkin’ employee calls police on student speaking Somali with her family” [NBC]. • This happens entirely too much. We should be grateful that the Somalis came to our aging and chilly state and bought land and started small businesses. (Also, from Somali oral traditions, a lot of them joined high school speech and debate teams, and did very well, so I am here for that.)

Water

“1,600 days on bottled water: Flint still swamped by water woes” [Post-Gazette].”On a recent Thursday morning along Saginaw Street, empty plastic water bottles once again littered the front lawn of City Hall near a bronze statue of an autoworker on an assembly line…. The almost daily tossing of empty water bottles along Flint’s main thoroughfare is another kind of protest, expressing anger and frustration that the lead water crisis that began in 2014 continues…. In March 2017, a federal judge approved a $97 million lawsuit settlement in which the state agreed to pay for the replacement of an estimated 18,000 lead and galvanized steel water service lines connecting main lines with household plumbing by 2020. Almost 7,400 lines have been done. Cost of the program is estimated at more than $100 million. Flint residents pay eight times the national average for our water, and water prices are only going to keep rising for the next 20 years,’ said Ms. Walters.” • Oddly, the article doesn’t mention Obama’s visit.

“Trump Orders Fast Track for Water Projects in California, the West” [Courthouse News]. “Doubling as a campaign gift for California Republicans locked in close congressional races in the state’s agricultural heartland, Trump’s presidential memorandum expedites biological reviews of California’s two largest water delivery systems as well as projects on the Columbia and Klamath rivers….

The mighty river:

On the left is a Rio Grande without human intervention, the right is the river as it actually is. Blythe and Schmidt, 2018 https://t.co/WFqerExFMi pic.twitter.com/oDkUz6Pgwa

— John Fleck (@jfleck) October 4, 2018

Class Warfare

“The Economy Is Growing. These Workers’ Paychecks Aren’t.” [MarketWatch]. “By many indicators, the U.S. economy is humming right along. Unemployment is at the lowest level in nearly two decades, and job growth hasn’t slowed. But workers mostly haven’t reaped the benefits of this growth in the form of higher paychecks. Following years of stagnant wages, real median earnings started climbing slowly in 2014. They peaked around mid-2017 and have since dipped slightly…. Some groups of workers over the past year have actually sustained notable wage declines when the numbers are adjusted for inflation. Governing identified several struggling demographic groups, using the latest quarterly median earnings estimates from the Labor Department’s Current Population Survey. These groups include women with low educational attainment, older black women, black men and those with bachelor’s degrees. But they also include the much broader category of employees in the prime of their working years.” • Oddly, neither party is talking about this.

“Teaching Criminal Law from an LPE Perspective” [Law and Political Economy]. “[W]here do crime and criminals come from? [William] Chambliss rejects the story of crime conventionally told by tough-on-crime politicians, authoritarian leaders, and many a citizen: Some people are ‘good’ people (i.e., ‘us’), others are ‘bad’ people (i.e. ‘criminals’), and the job of criminal law is to make sure ‘they’ are identified and punished for preying on ‘us.’ Instead, drawing on data from Nigeria and the United States, Chambliss argues that pretty much everybody in both societies violates criminal codes at some point or another. What distinguishes the people who go to jail for their crimes from the people who don’t is political and economic power. More broadly, Chambliss argues that in a capitalist society, crime policy is not intended to ‘prevent’ or ‘stop’ crime, but rather to manage it. Our book doesn’t disagree, but it tries to complicate the story. ” W-e-l-l-l…. Interesting piece.

News of the Wired

Haven’t seen this meme in awhile:

pic.twitter.com/q0ZzJomt61

— Amarnath Amarasingam (@AmarAmarasingam) October 21, 2018

“A neuroscientist who lost her mind says it can happen to anyone” [Quartz]. “In the US alone, one in every five adults, or more than 43 million people, experience mental illness in any given year, according to the National Alliance on Mental Illness. Worldwide, one in every four individuals will suffer from a mental health condition in their lives, according to an Oct. 9 report in The Lancet medical journal by 28 global experts. Yet few resources are devoted to this critical aspect of health, and the result is a global crisis—a “monumental loss in human capabilities” that will cost $16 trillion by 2030, according to the report. Because mental health services are “routinely worse than the quality of those for physical health…all countries can be thought of as developing countries” in this regard, write the global experts in The Lancet.”

“The brain may learn by building 11-dimensional “sandcastles”” [New Atlas]. “Ran Levi, co-author of the study[:] ‘It is as if the brain reacts to a stimulus by building then razing a tower of multi-dimensional blocks, starting with rods (1D), then planks (2D), then cubes (3D), and then more complex geometries with 4D, 5D, etc. The progression of activity through the brain resembles a multi-dimensional sandcastle that materializes out of the sand and then disintegrates.’” • From 2017; note that the study post-dates the “11-dimensional chess” mockery of Obama in the blogosphere. Fascinating stuff, although I don’t have time to dig out and study the original…

Eleven-Dimensional Thinking (1):

Dude just cruised past me riding a lawn chair taped to an electric skateboard while vaping and blasting Jack Johnson. Now I’m questioning all my life choices. pic.twitter.com/VfFlJZKil4

— Smashley Ghoulish (@AshleyJPL) October 18, 2018

The Dude would love this. He could strap his bowling ball on the back.

Eleven-Dimensional Thinking (2):

A brief history of philosophy on social media pic.twitter.com/mXMxpEhQfC

— Philosophy Matters (@PhilosophyMttrs) October 20, 2018

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Readers, feel free to contact me at lambert [UNDERSCORE] strether [DOT] corrente [AT] yahoo [DOT] com, with (a) links, and even better (b) sources I should curate regularly, (c) how to send me a check if you are allergic to PayPal, and (d) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! If you want your handle to appear as a credit, please place it at the start of your mail in parentheses: (thus). Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant (SD):

More fall pollinators. Wow!