More Counterproductive Progressivism: CFPB

A recurring theme here is the paradox that progressive policies supposedly designed to help the disadvantaged somehow end up making the intended beneficiaries worse off.  Thus, for example, we find that the jurisdictions that try hardest to decrease income inequality by collections of government handouts and welfare programs then end up with the highest measured income inequality in the country; that Obamacare, supposedly intended to make health insurance "affordable" for all, ends up with huge price increases, pricing lower-middle-income people out of the health insurance market; that dramatically increased minimum wages render many minority youth unemployable; and so forth.

This past week, I attended the Federalist Society conference in Washington, and was introduced to another dramatic instance of the same phenomenon that I had not previously appreciated.  This is the extent to which so-called "consumer protection" regulations, supposedly designed to protect lower-income and disadvantaged people against being taken advantage of by banks and other large financial institutions, instead actually harm the intended beneficiaries.  The harm takes the form of making bank accounts and credit (including credit cards) less available to such people.  Much of the harm has been done in very recent years by the Consumer Financial Protection Bureau, an entity newly-established in 2011 under the 2010 "Dodd-Frank" financial regulation law.

You will recognize the CFPB as being the personal baby of crusading progressive Massachusetts Senator Elizabeth Warren.  Here is a bio on her from Wikipedia.  Prior to her election as Senator in 2012, Warren used her perches as a professor at Harvard Law and as a top Congressional staffer to advocate for the creation of what became the CFPB, and she was influential in creating the highly unusual structure of the agency.  (That structure includes funding independent from Congressional appropriations via the Federal Reserve, and a sole administrator supposedly immune from firing by the President.  That last provision was declared unconstitutional by the D.C. Circuit in October.)  Immediately after passage of Dodd-Frank, Warren was appointed by President Obama as "Special Advisor" in setting up the agency.  Upon its creation, she then aggressively angled to get the non-firable position that she had designed; but it went to Richard Cordray instead.  So she ran for the Senatorship from Massachusetts, and the rest is history.  (Although Cordray's position was supposedly protected under the statute, now that that protection has been declared unconstitutional, it is widely expected that new President Trump will promptly demand his resignation after the inauguration.) 

So how have recent financial regulations supposedly designed to protect the disadvantaged fared in achieving their intended goal?  At the Federalist Society convention, a professor from George Mason University, Todd Zywicki, presented some extensive research on the subject.  The most important part of his presentation was derived from Senate testimony that he gave in April 2016, and that is available here in pdf form.  The takeaway:

The tragedy of Dodd-Frank and the CFPB is that it squandered this unprecedented opportunity to modernize the consumer credit system to promote competition, consumer choice, and innovation. Instead, the post-crisis regulatory framework has resulted in higher prices and reduced choice for consumers and little improvement in consumer financial protection. Indeed, by stifling competition and driving millions of Americans out of the mainstream financial system, it may actually result in more consumer protection problems. 

What about Dodd-Frank generally and CFPB in particular led to such results?  Zywicki's testimony contains a long list of statutory provisions and regulatory actions that in the aggregate have limited fees that institutions could charge, and raised their costs of compliance and dispute resolution, leaving them unable or unwilling to deal with low income or low credit score consumers.  Such actions and provisions have included: limiting "interchange fees" on debit card transactions (the so-called "Durbin amendment" of Dodd-Frank); limiting fees for things like overdrafts and credit lines; prohibiting arbitration and restrictions on class actions in dispute resolution; and aggressive discretionary enforcement by the CFPB, leading to many high-cost settlements by banks of dubious claims, without adjudication.  

Zywicki's research documents dramatic adverse effects of these actions and provisions on low-income consumers, on multiple fronts: decrease in availability of free checking accounts (which occurred almost immediately after the enactment of Dodd-Frank); decrease in the availability of credit cards to people with low credit scores; and decrease in the availability of mortgages to people of low income and/or low credit score.  For example, as to credit cards:

Consumers have also suffered a loss of access to credit cards in the post-crisis era, not only because of Dodd-Frank but also the impact of the Credit Card Accountability Responsibility and Disclosure Act—and once again, low-income consumers have suffered the most. According to the CFPB’s own estimates, the period between July 2008 and December 2012 saw the closure of 275 million credit card accounts and elimination of $1.7 trillion in credit card line of credit. Overall, the CFPB found a significant decline in the percentage of households that had cards, from 76 percent to 71 percent. But even this figure understates the disproportionate impact on low-income consumers. According to Federal Reserve Board economists Glenn Canner and Gregory Elliehausen, the percentage of households in the lowest quintile of credit scores with credit cards fell from 65 percent in 2008 to 54 percent in 2010.  Loss of access to credit cards has forced those consumers into great reliance on higher-cost products such as payday loans and overdraft protection. 

The bottom line in each instance that Zywicki analyzes is the same: when banks withdraw from a given market due to regulatory burden and hostility, the breach gets filled by much higher-cost and shadier operators like check cashing services, pay-day loan providers, pawnshops, and the like.  For the poor and low-income consumers, it all means less availability of bank accounts and credit, and at much higher cost.  Congratulations, Senator Warren!  You might think that Elizabeth Warren must be "smart," because, after all, she was a professor at Harvard Law School.  In fact, the entire great depth of her thinking consists of the idea that if the federal government orders something, then it will be so, without any adverse or unintended consequences.  And, when the adverse and unintended consequences inevitably emerge, she blames the evil bankers.  Is this the best that the Democratic Party can do?      

What Is With This Infrastructure Fetish?

Donald Trump and Hillary Clinton didn't agree on much during the recent campaign, but one thing they agreed on mightily was the need for massive new federal infrastructure spending.  Trump's proposal was a $1 trillion spending program (love those huge round numbers!) over ten years.  He was as usual light on specifics, but mentioned things like "airports, highways, bridges and pipelines."  (Is it now going to be a taxpayer responsibility to pay for building pipelines?)  Hillary's proposal, while more complex and mind-numbing, came to essentially the same thing:  $500 billion, but over five years, broken into $275 billion of direct spending and another $225 billion that she was supposedly going to "leverage" by creating an "infrastructure bank" and giving it access to federally-backed credit.  (How has that kind of scheme worked out with, for example, Fannie and Freddie?)

Elsewhere, it's hard to find anyone to say a bad word for increased infrastructure spending.  Hey, our infrastructure is "crumbling"!  Infrastructure spending was the supposed linchpin of the Obama "stimulus" of 2009 - 10.  (Do you remember "shovel-ready projects"?).  Keynesian economists like Paul Krugman have been advocating for greatly increased infrastructure spending for years.  (For example, February 27, 2016: "[E]conomics makes a powerful case for (much) more infrastructure spending.")  The document containing Hillary's proposal advises that "every $1 billion in infrastructure investment creates 13,000 jobs."  Does that mean that $1 trillion in such "investment" will "create" 13 million jobs.  Wow, that's almost double the number of people reported by the Labor Department as unemployed!  Sounds great!

So let the Manhattan Contrarian be the first to pour a little cold water on the excitement.  The chance that a massive federal infrastructure spending initiative can be a net wealth creator rather than a wealth destroyer is just about zero.  Paul Krugman is not smart enough to ever figure that out, but you are.  Just think about it for a minute.  The key to enhancing wealth is using all resources as effectively and efficiently as possible.  A huge pile of seemingly free federal infrastructure money will immediately bring forth thousands of projects whose costs cannot be justified ("bridges to nowhere") looking to get in on a cut of the loot.  Many of them will then be built -- thereby diverting resources from making millions of the things that the people could have spent their own money on if it had been left up to them.  When people spend their own money, they spend it cost-effectively.  That's why capitalism works.  When the government spends vast sums without cost-effectiveness criteria, the people become poorer, not richer.

Now, I am not at all saying that all federally-funded infrastructure spending is always a net negative.  Far from it -- much federally-supported infrastructure has greatly enhanced the wealth of this country.  But the key is maintaining the criteria that the idea is to fund only the most necessary and useful projects, and at the lowest possible cost.  When those criteria are discarded in favor of "we want to spend as much money as we can and as fast as possible," the outcome cannot be good.  

Examples are legion of federal infrastructure money incentivizing the construction of unjustifiable boondoggles.  Let's consider a notable example here in my own neck of the woods.  

Fifteen years ago, in the emotional aftermath of the 9/11 attacks, the federal government was in a poor position to resist demands from New York for a pile of "rebuilding" money much bigger than the World Trade Center had ever cost to construct in the first place.  The next thing you know, the feds had put up $20 billion.  Where should we spend all that free money?  One thing that had been destroyed in the attacks was the station for the subway trains that come into lower Manhattan from New Jersey.  Time to build a new station.  The old station at the surface was little more than a big bank of escalators leading down.  The ridership at this station has long averaged about 50,000 per weekday (and only about 10,000 on weekend days) -- substantial numbers, but plenty of the other major subway stations in New York have higher ridership.  At those other stations -- like Times Square, Grand Central, and Union Square -- the above-ground manifestation of the subway station also consists of nothing more than some stairways or escalators leading down.

Here is what the Union Square subway station looks like at the surface:

14th Street/Union Square subway station at the surface

But with all that free money lying around, the Port Authority went out and commissioned over-the-top Spanish architect Santiago Calatrava to design the subway station to beat all subway stations.  In the early 2000s, Calatrava came up with a design for a huge building, sometimes called the "stegasaurus," that has been under construction literally ever since.  It finally opened in August 2016, although small amounts of work continue on finishes.  Here are pictures outside and in:

World Trade Center Transportation Hub exterior view

World Trade Center Transportation Hub interior view

Annual ridership at this station is well less than half that at Union Square.  You can see how lonely those few passengers look in the midst of the vast space of the new station.  The cost of this station was originally projected to be about $2.3 billion, but of course soared during the near-decade-long process of construction.  The curbed website here puts the final cost of this station at about $4.4 billion.  Not a penny of it can or will be covered by the fares paid by the passengers.  No problem -- it all came from the vast pile of free federal "infrastructure" loot.

Now, if you are coming to New York from points south (like Philadelphia or Washington), and your destination is somewhere in lower Manhattan, I highly recommend this new station as an entry point to the city.  Get off the Amtrak train in Newark, walk across the platform, and take the PATH train to the World Trade Center station.  You will get an appropriate sense of the significance of entering our nation's business capital.  It's quite magnificent.  And, since the opening a few months ago, ridership does seem to have ticked up a little, to close to 60,000 per weekday, rather than the previous 50,000.

But really, $4.4 billion?  An expenditure like this could only happen when the decision process becomes completely unmoored from any concept of cost-effectiveness.  Unfortunately, that's where the "infrastructure" fetish seems to be leading us.        

Will President Trump End The War Against The Economy?

It's far and away the biggest unknown facing the country now that Donald Trump has won the presidency:  Will he end the war against the economy?

First, we should acknowledge that the economy is not what it should be.  Certainly, that is the perception of many if not most Trump voters.  But, you say, the unemployment rate has steadily declined under President Obama, from a peak around 10% in 2009, to where it is now down under 5% (actually, it's 4.9%) in the most recent report.  Isn't that a good measure of full employment?  Not really.  As many have noted, even though what the BLS reports as the unemployment rate is in what should be "full employment" territory, something else called the "labor force participation rate" (LFPR) is telling a different story.  The LFPR (number of employed plus those seeking work divided by all population age 16 and up) was over 66% prior to the recession, and today remains below 63%, a decline of about 3.5%.  Total population 16 and up is around 240 million, so that 3.5% represents around 8 million people, a number which actually exceeds the number reported as "unemployed."  If you were to add that additional 8 million working-age people into the labor force, suddenly the unemployment rate would be right back at 10%.  So there is every reason to think that there is serious sluggishness remaining in the economy, even after what is now over seven years of the Obama "recovery."  Those 8 million people, although reported as not seeking work, are still an overhang on the labor market, and probably are the big reason why we still don't see labor force tightness forcing wages up.  (Has the Obama Labor Department been reporting the unemployment rate honestly?  I seriously doubt it, but I have no way to check.)

So why is there this significant sluggishness after seven years of a recovery?  Many progressive commentators say they have discovered a so-called "new normal" in how the economy works.  Things are just so much more complex today than they were in the innocent past!  Automation! The internet!  Or, you could buy into the Trumpian narrative:  The Chinese and Mexicans have been stealing our jobs.  It's free trade and immigration that have undermined our economy!

The problem with both of those narratives is that increasing complexity, automation, free trade and immigration have all occurred in the past and never been inconsistent with a robust economy and full employment.  Nothing about any of those things should prevent a free economy from reaching full capacity at most times.  But there is something else that can keep an economy permanently sluggish, namely the active hindering of economic activity by a predatory government.  Which we have had in spades under Obama.

I have written several posts in the past about what I have called Obama's "War Against the Economy."  For example, here is a long post from 2013.  Any one of Obama's individual initiatives might be something that you actually support.  But if you look broadly at the full range of Obama's policies that have made doing business more difficult and more costly, it kind of takes your breath away.  No wonder the economy is sluggish!

• Energy.  They have stopped pipeline construction.  The EPA has attacked the coal industry on all fronts.  Development of fossil fuel resources on federal lands is obstructed with every device they can think of.  They hand out wealth-destroying subsidies to uneconomic "renewable energy" companies.  Multiple regulations seek to intentionally drive up the price of electricity.
• Obamacare.  Obama promised that his signature act would cut the cost of health insurance, while his critics said that economics can't work that way and the cost would shoot up.  The critics have been proved right.  The Act has vastly increased federal spending, while creating powerful incentives for small companies to stay under 50 full time employees to avoid cost-prohibitive mandates.
• Regulation.  An explosion of complex and expensive regulations has made "compliance" the biggest growth industry in the U.S. -- an industry that adds exactly zero to the wealth of the people.  As the most notable example, the multi-thousand-page Dodd-Frank law to regulate the financial industry has made it next to impossible for small banks that cannot afford hundred-lawyer compliance staffs to continue to exist.  For the first time in the history of the country, banks are not lending to their full lending capacity, and sit on massive "excess reserves."
• Labor Department.  Huge numbers of employees have been added to the ranks of those covered by inflexible strictures like wage, hour and overtime rules.  The NLRB has purported to outlaw the franchise business model and make franchisors the employers of all who work for the franchisees.
• Government spending and debt accumulation.  Spending went up by about $1 trillion per year in the early years of the Obama administration, as a supposed "stimulus," and then never went back down.  Was any of the added spending productive?  Not that I noticed.  Bonded debt about doubled, from about $9 trillion to $18 trillion.  There was no effort whatsoever to reform entitlements.
• Increasing handouts.  While traditional welfare (now going by the acronym TANF) has remained fairly steady under Obama, other handouts like food stamps (SNAP) and Social Security disability have exploded.  These things come with powerful incentives to the recipients to induce them to not work, or work less, or at least not report their income to the government.

This could go on, but you get the picture.  In the aggregate, these initiatives and many others like them constitute a very major drag on economic performance.  Getting rid of all these drags on the economy is what could get the extra 8 million people employed.  Starting a trade war won't accomplish the job, and indeed would almost certainly make things worse.

Professor Richard Epstein last week published an "Open Letter to President Trump" at the Hoover Institution web site.  After recommending in the strongest terms to avoid a trade war, here are the guts of Epstein's advice:

[T]he campaign to deregulation domestically has to take place through all the government agencies, whether they deal with environmental, securities, communications, trade, or any other issue. We do not need the clean power plan in its current form, or for that matter, the clean water plan; we do not have to get detailed information, world-wide, of the wages of the median worker; we do not need programs of net neutrality; we do not have to have the Consumer Financial Protection Bureau (whose head, Richard Cordray, you are now entitled to sack) to run roughshod over various credit markets. There is here a relatively simple prescription: whatever the Obama administration has done by regulation, undo.

There are, of course, many issues that cannot be done by executive order, and you should not try to imitate the worst Obama abuses in unlawfully expanding your authority. But it should be painfully obvious that the two major legislative mistakes of the Obama administration have to be [un]done by ending the various mandates under the Affordable Care Act—a horrible misnomer—for the individual and employer markets. There will clearly have to be something to put in the void, for which the Healthy Indiana Plan is a good place to start. And clearly something has to be done to remove most of the key provisions of the Dodd-Frank legislation that causes far more mischief than it prevents. And we must move to follow the world-wide practice of allowing the repatriation of profits earned abroad by American firms without a new round of corporate taxes.

Anyway, with Hillary as President, none of this would have been a possibility.  With Trump as President, at least we can have some hope.

Let 421-a Die! -- Part II

Here in New York, the epicenter of serious progressivism, after a century or so of government-supported housing programs (rent control, public housing, and "affordable" housing initiatives of every stripe) we still seem to have the most expensive housing in the country.  The most recent concept for getting so-called "affordable" housing built is to offer developers tax incentives in the form of reduced real estate taxes on their development, in return for construction of the units.  The particular program goes by the name "421-a," after a section number of the applicable statute.  Somehow, the right to hand out the tax abatements belongs to the State of New York, even though the lost real estate taxes are a cost to the City of New York.  The idea that such a tax incentive program could make the people better off is highly analogous to the idea that you can raise yourself up off the ground if only you pull hard enough on your bootstraps.  But, of course, the difference is that the right tax incentive program can conceal vast opportunities for graft.

This 421-a program has been around for well over 40 years, since the early 70s.  It has been designed to expire regularly -- resulting in a perfect opportunity every few years for the pols to hit up the developers for a new round of contributions to keep the gravy train running.  Remarkably, late last year, the program actually did expire without being renewed.  Then it got an interim extension until June, but again was not renewed.  It has now been out of business for about four months.

Back in June, when the program had just expired without any immediate prospect of renewal, I had a post strongly advocating that this was a perfect opportunity to let this corrupt program expire.  My back-of-the-envelope calculations suggested that this program cost a ridiculous $1 million or so for each so-called "affordable" housing unit created.  My post in addition pointed out that New York's Community Service Society had also done a study of how much 421-a cost the taxpayers per affordable housing unit created, and they also came up with a figure of around $1 million per apartment.  With average per unit housing costs in this country running well less than one-third of that, there is no way that this program can be justified.

But of course, this is New York; so the latest news is that 421-a is back!  The New York Times gives a rundown in Thursday's edition, headlined "Cuomo Strikes Deal to Revive Affordable Housing Program."   A fair summary is that the reason for the stall has been that a new special interest group has wanted to get in on the graft, and was in a position to block any deal until it got its payoff.  The new graft recipient is New York's construction unions.

The Times describes a supposed negotiation that has been taking place as to the renewal of the program between and among Governor Cuomo, representatives of the developers, and the unions:

Gov. Andrew M. Cuomo has forged a deal with developers and union construction officials to revive a program designed to create apartments for poor and working-class New Yorkers. . . .  Details of the new deal were hashed out by state officials; members of the Real Estate Board of New York, the industry’s powerful lobbying arm; and union officials. 

But wait -- in this "deal" the developers and unions are to get handouts in the form of abatements of New York City real estate taxes for the developers and minimum wage levels for the unions.  Those on the paying end of the deal are the rest of the New York City real estate taxpayers who don't get any abatements.  Who represented them in the negotiations?  You guessed it -- nobody.  So in effect this is three hangers-on dividing up a pile of someone else's money.  

And what is the "deal" that has been "negotiated"?  In summary, developers get greatly increased property tax abatements over previous levels, and the unions get an agreement from developers that there will be minimum wages on these construction sites of $60 per hour for large projects in Manhattan, and $45 per hour for projects in Brooklyn and Queens within a mile of the waterfront:  

Under the new deal, builders would get the special tax benefits for a longer period — a 100 percent tax abatement for 35 years. . . .   The deal sets a pay schedule for developers who get the tax breaks in prime areas. In Manhattan below 96th Street, they would have to pay an average $60 an hour in wages and benefits for workers on buildings of 300 or more units.  On the fast-growing waterfront in Brooklyn and Queens, the average would have to be $45 an hour on buildings of 300 or more units.

The newly-proposed 35 year tax abatement will be up from a range of about 15-20 years under the prior version of the program.  In short, they are proposing to roughly double the taxpayer cost per subsidized "affordable" apartment.  If the old cost was around $1 million per apartment, the new cost will be more like $2 million per apartment.  Some of the extra money will end up in the pockets of developers, but much will be siphoned off by the construction unions, who will now be guaranteed wages of up to $60 per hour.

This so-called "deal" is now subject to approval by the state legislature (although, remarkably, not by any City body).  We will see who among New York progressives is capable of doing the simple math that establishes that this program is a gigantic waste of taxpayer funds.  In the past, even the usually-sensible Howard Husock of the Manhattan Institute has been lured into supporting 421-a (albeit with modifications, and not the newly-proposed super-ripoff that has just come out).

As an interesting aside, a very unexpected person came out last week against 421-a renewal.  It was Eliot Spitzer!  Spitzer spoke on Tuesday, November 8, at the annual lunch of the Young Men's and Women's Real Estate Association.  As reported in The Real Deal, he spoke out strongly against renewal of the program:

“I’m here to tell you that 421a doesn’t work,” Spitzer  told the members of the Young Men’s and Women’s Real Estate Association at their monthly luncheon. “421a, in its current incarnation, is not going to solve the problem.”  Spitzer said his real estate firm did a back-of-the-envelope calculation on the program, and found it costs taxpayers $375,000 for each affordable unit. When the city’s mandatory inclusionary housing (MIH) program is factored in, he said, the number jumps to more than $1 million.

Looks like he came up with about the same figure per apartment as yours truly and the Community Service Society.  Except that two days later, our genius governor gave away the store and upped the cost to more like $2 million per apartment.

And now that Hillary has failed to win the presidency, they are saying that Cuomo is one of the leading candidates for the Democratic presidential nomination in 2020.  Lord help us. 

UPDATE, November 14:  To prove that the progressive tooth-fairy-economics bug sooner or later infects nearly everyone in New York, the normally sensible New York Post this morning has an editorial endorsing Governor Cuomo's new 421-a deal.  Headline is "Hope for City Housing":

The city needs this done, and Cuomo has a duty to finish cleaning up the mess. . . .  Inaction is unacceptable. . . .  

The Post praises Cuomo for negotiating the unions down from their prior even-more-outrageous average wage demands (the number $65 per hour had been reported).  OK, but the idea that nobody will ever build less-than-luxury housing in New York City without subsidies is just false.  The problem is that, once you have subsidies, they get baked into the price of land, and then nobody can build without subsidies.  Let the subsidies go away for a couple of years, and the price of land will decline, and construction will resume.  The Post should have listened to their own columnist Kyle Smith, who wrote an op-ed on this subject back in August, headlined "Why Cuomo wants you to pay unions to build luxury housing":

New York state taxpayers have just become an unlikely participant in Gov. Cuomo’s gonzo scheme to solve a dispute between billionaire real-estate developers on the one hand and $65-an-hour construction workers on the other. The two sides couldn’t come to an agreement, so Cuomo is making you fork over the difference.  That’s right: If Cuomo’s harebrained scheme passes, you’ll be paying to help construct mostly luxury New York City apartments for other, rich people to live in.  I use colorful language because New York state, like every other government on earth, goes out of its way to use boring bureaucratic terminology to lull you to sleep so it can cheat you.

Why No One Pays Any Attention To The New York Times Any More

I will be far from the first to note that the biggest loser of the recent election has to be the liberal media, led by its flagship outlet the New York Times.  The Times went all in for Hillary, sometimes running as many as four anti-Trump front page stories in a single issue.  

Before this election the term "bias" was commonly used to describe the political coverage of the Times and other liberal media, and some even continued to use that term this cycle; but this time, the word "bias" was not an accurate description of what was occurring at the Times.  The word "bias" would connote coverage that is somewhat slanted despite an effort at balance.  For the Times and many others in this cycle, it was not a question of mere slant, and there was no effort at balance.  The Times explicitly functioned as an arm of the Clinton campaign.  By the way, in my view they are completely entitled to do that if they want.  The problem was that their idea of how to maximize their help for Hillary was to combine smug and supercilious contempt for their opponent and his supporters with a completely fake pretense of objectivity.  Was anybody fooled?  Very few, I would think.  The overall effect of the Times's efforts was almost certainly to help Trump rather than hurt him.

Anyway, now that the election is over, don't expect them to have learned anything from the disaster.  (Isn't the fundamental characteristic of the progressive the complete inability to learn from experience?)  Almost certainly, the ham-handed one-sidedness of their coverage will only get worse as they struggle to deal with the reality of a Trump presidency.  Indeed, I already have my first good example.

In Friday's edition, the lead editorial has the headline "Denounce the Hate, Mr. Trump."   Supposedly the reason for the editorial is the outpouring of "bigotry and hatred" that the Times perceives as coming from Trump's supporters in the aftermath of the election:

[Y]ou [should] immediately and unequivocally repudiate the outpouring of racist, sexist, xenophobic, anti-Semitic and homophobic insults, threats and attacks being associated with your name.   

Funny, but I've been reading and viewing lots about riots and violence from Trump opponents, but I hadn't seen anything at all about this so-called "outpouring" of offensive conduct from Trump supporters.  So, New York Times, can you kindly provide us with at least an example or two of these post-election "racist, sexist, xenophobic, anti-Semitic and homophobic insults, threats and attacks" for which you claim Trump supporters bear responsibility?  They give two.  Here they are:

Explicit expressions of bigotry and hatred by Trump supporters . . .  have become even more intense since his election. On a department-store window in Philadelphia, vandals spray-painted “Sieg Heil 2016” and Mr. Trump’s name written with a swastika. In a Minnesota high-school bathroom, vandals scrawled the Trump campaign slogan, “Make America Great Again,” and next to it, “Go back to Africa.”

But wait -- what is the evidence that either of these acts was committed by a Trump supporter?  The Times gives no evidence whatsoever.  Moreover, these are exactly the kind of acts that Trump's opponents have been engaging in throughout the campaign in the effort to discredit him.  The famous Project Veritas videos that came out during the campaign caught Democratic Party and Clinton campaign operatives at the highest levels planning and coordinating dirty tricks to make it appear falsely that Trumps supporters were racists and bigots.  I can't say I know who did either of the particular acts mentioned in the Times editorial; nor would I say that Trump had no racists or other bad people among his supporters.  But really, given what we know, what is the chance that these acts cited by the Times were done by a Trump opponent as opposed to a Trump supporter?  Anybody who has been following this would put those odds at somewhere around 98 or 99% that Trump opponents were responsible.  But in the total absence of any evidence, the Times would pin these acts on Trump supporters -- and in sneering terms that would seek to make being a Trump supporter morally unacceptable ("expressions of bigotry and hatred by Trump supporters").  Is it any wonder that Trump supporters of good faith look on the New York Times with revulsion?  

Meanwhile, several days after the election, while one guy seems to have put an offensive allegedly-pro-Trump message on a Philadelphia store window, and another guy the same in a Minnesota bathroom, tens of thousands of Trump opponents continue their violent riots in cities including Los Angeles, Oakland, Portland, and even in New York City outside Trump's home.  As the riots have continued for days, there have been numerous reports of injuries, arrests, and extensive property damage, not to mention racist statements.  What does this editorial have to say about that?  It doesn't mention the subject.  Well, how about in the rest of this edition of the paper -- surely they have a news article or two about these widespread riots and the conduct of the rioters?  Actually, in this entire November 11 issue of the Times, there is not one single mention of these ongoing riots, whether in news, editorial, or even letters to the editor.  And how about the call to Hillary Clinton to denounce those rioting on her behalf?  Can't find that either.

Wow.  It's not just that we're getting fake and baseless accusations of racism, sexism, homophobia, etc., etc., from these guys.  It's that they systematically suppress any information that doesn't support their narrative of the moment.  You can't even find out from them what's going on out there in the world.  Is it any wonder that no one is paying attention any more?

Are Republicans Facing A Coming Demographic Disaster?

A recurring theme of progressive writers is that Republicans are facing a coming demographic disaster because whites are an inevitably shrinking part of the American electorate.  Sure Trump just eked out a victory by winning the white vote by a 21% margin.  But, according to numbers here from Pew, he lost Hispanics by 36 points and blacks by 80 points.  Those groups, particularly Hispanics, are growing as a percent of the electorate, while whites are shrinking.  Thus, it's only a matter of time until the demographic tide swamps the Republicans and brings the Democrats into permanent control.

For an example of a piece advancing this narrative, here is an article from the Washington Post by Chris Cillizza from this past April, title "The Coming Republican Demographic Disaster."  Cillizza quotes from David Wasserman of the Cook Political Report as follows:

In 1980, Ronald Reagan won 56 percent of all white voters and won election in a 44-state landslide. In 2012, GOP nominee Mitt Romney carried 59 percent of all white voters yet lost decisively. What happened? African Americans, Latinos, Asians and other non-whites — all overwhelmingly Democratic-leaning groups — rose from 12 percent of voters in 1980 to 28 percent in 2012.

Sounds bad for the Republicans, right?  Not so fast.  For a guy my age (65), what seems odd about this narrative is the lumping of all "whites" into one ethnic group for purposes of analyzing voting results.  When I was younger, Hispanics were a much smaller percentage of the electorate, and blacks somewhat smaller.  And yet somehow Democrats controlled both houses of Congress solidly from the time of my birth until the Republicans finally took the Senate for a few years while Reagan was President; and then the Democrats went back into full control of both houses until the 1994 election.  In those days, Democrats also controlled way more state legislatures and governorships than Republicans; today it's the reverse.

What are we missing?  What we're missing is that back in the 50s through 80s "whites" were not thought to be one monolithic voting bloc.  In ethnic terms, some whites were the descendants of those who had come earlier, sometimes known as the WASPs.  And then separately you had the recent immigrants and their immediate descendants -- the Irish, Italians, Eastern Europeans (Poles, Slavs), Greeks, Jews.  The latter groups were largely working class, and were the base of the Democratic Party at the time, before there were such large numbers of Hispanics.  

With Trump's election, what we have seen is the completion of the overwhelming movement of the "ethnic" whites over to the Republicans.  As many have noted over the past few weeks, such whites as are left in the Democratic Party are not the working class, but the elites.  Among these "elite" whites, there are plenty of Irish, Italians, etc., who have moved up over time; but definitely those groups are proportionally under-represented, while WASPs and, especially, Jews, are over-represented.  

My point is only that that there is no reason to believe that ethnic groups are fixed in their political loyalties.  The Republicans have in fact continually grown as a percent of the electorate in my lifetime, even as their previous ethnic base has shrunk, precisely by appealing to new ethnic groups that previously aligned with the Democrats.  There is no reason that this process cannot continue with new ethnic groups.  All of Hispanics, African Americans, and Asian Americans are likely to move up economically over time, and to gradually see their interest as more aligned with small government and entrepreneurial opportunity than with big government and handouts.

I see the coming race for political ascendancy between the major parties not in terms of relative sizes of ethnic groups with pre-determined voting patterns, but rather as a race between the growth of the state-dependent sector of society and the private sector.  Democrat elites want to grow the state-dependent sector because those who are dependent on the state tend to vote for the continuation of state handouts and growth of state programs, which means they vote for the Democratic Party.  Thus we see things like Obamacare, the huge Medicaid expansion, the takeover of the energy sector, and so forth.  Democrats seek to keep Hispanics, African Americans and Asian Americans, or as many of them as possible, in the state-dependent sector.  If they can do it, maybe the current ethnic voting patterns will continue and be perpetuated.  But if large numbers of these ethnic groups start to escape the state-dependent sector, and start to view themselves as the suckers who pay for everything and get nothing in return, then you will see the same thing happen with them as has just happened with the white working class.

Do you doubt that people in the state-dependent sector vote overwhelmingly for Democrats?  Take a look at the margin by which Hillary won the District of Columbia:  93/4, or an 89% margin.  That's whites, blacks, and all other ethnic groups.  Look at county-by-county maps of Maryland and Virginia, and you will find that both are solidly Republican states except for the DC suburbs (and, in the case of Maryland, Baltimore) where everybody or close to everybody lives off the government.  That is far the more important factor than ethnicity.