‘The Economist’ Feb. 4th – 10th 2017

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I’ve given myself a mean homework assignment. I bought a 12 week subscription to ‘The Economist’ for $12 and am annotating every issue. I have a feeling that for all of these the main topic will be Donald Trump and if there’s one thing our new president has taught me it’s to always get your money’s worth!

This week was especially easy because I was on vacation all week. Still, no WAY did I have time to delve into all that’s covered. 1 of 12.

 

Donald Trump being elected president must be one of the most all-consuming news story since Kurt Cobain committed suicide. There’s no doubt that 9/11 was more consequential, but I say that because I remember reading a yellowed old issue of TIME from 1994 as a teen in the early 2000’s and was amazed that every other article throughout the magazine seemed to reference Cobain’s death, regardless of what the article was ostensibly about. Reading on a decade removed from the events being written about I was amazed that one person could saturate headlines so thoroughly. The Economist is just as preoccupied with our 45th president. Uneasiness with the red tide of nationalism blowing through the western world permeates this issue.

“The problem with certain populist politicians is not that they mislabel an x-axis here or fail to specify a control group there. Rather they deliberately promulgate blatant lies which play to voters’ irrationalities and insecurities.”

—Book review for A Field Guide to Lies and Statistics by Daniel Levitin

I love the nod to Banksy in the cover. Where is that man? We need him now more than ever.

Inside, my favorite articles had to do with youth voting, and the proposition of lowering the voting age to 16 as a relatively harmless way to instill good voting habits in increasingly disenfranchised youth. The biggest surprise I learned was that Mars candy is investing heavily in the dog food and veterinary-care business because while chocolate sales stagnate they are second only to Nestle in pet food manufacturing. And this op-ed about Silicon Valley’s negligent and ruinous social irresponsibility got me plenty fired up.

There is a fascinating online history exhibit: Project 1917, which documents the daily goings-on of the Russian Revolution:

“To watch this all transpire in real time is to experience people’s inability to grasp the history they are living. The tsar records banal details of his daily routine—breakfasts, meetings, walks—like a 17th century monarch trying to inhabit the modernist age. Lenin plots revolution from Zurich, while doubting he will live to see it. Many can sense that change is coming, and want to hasten it along. But none imagines the enormity of what actually unfolded.”

 

My favorite random facts:

“People take in five times as much information each day as they did in the mid-1980s.”

“For every dollar of cash the tech industry makes, it reinvests 24 cents; that compares with 50 cents for other non-financial firms.

“The 12 deadly acts of terrorism committed on American soil since September 11th 2001 have been by American citizens or legal residents, according to New America, a think-tank. The September 11th murderers were from Saudi Arabia, the United Arab Emirates, Egypt and Lebanon, none of which were subject to the ban.”

Highlights

  • Vote Early, Vote Often (Why the voting age should be lowered to 16)

Young people’s disenchantment with the ballot box matters because voting is a habit: those who do not take to it young may never start. That could lead to ever-lower participation rates in decades to come, draining the legitimacy of governments in a vicious spiral in which poor turnout feeds skepticism towards democracy, and vice versa.

Politicians increasingly woo older voters—not only because they are more likely to vote but also because they make up a growing share of the electorate. Many young people see elections stacked against them. It is no surprise, then, that many of them turn away from voting.

This would be no arbitrary change. The usual threshold of 18 means that young people’s first chance to vote often coincides with finishing compulsory education and leaving home. Away from their parents, they have no established voters to emulate and little connection to their new communities. As they move around, they may remain off the electoral roll. Sixteen-year-olds, by contrast, can easily be added to it and introduced to civic life at home and school. They can pick up the voting habit by accompanying their parents to polling stations. In Scotland, where 16- and 17-year-olds were eligible to vote in the independence referendum in 2014, an impressive three-quarters of those who registered turned out on the day, compared with 54% of 18 to 24-year-olds. In 2007 Austria became the only rich country where 16-year-olds could vote in all elections. Encouragingly, turnout rates for under-18s are markedly higher than for 19- to 25-year-olds.

A lower voting age would strengthen the voice of the young and signal that their opinions matter. It is they, after all, who will bear the brunt of climate change and service the debt that paid for benefits, such as pensions and healthcare, of today’s elderly. Voting at 16 would make it easier to initiate new citizens in civic life. Above all, it would help guarantee the supply of young voters needed to preserve the vitality of democracy. Catch them early, and they will grow into better citizens.

  • America First And Last (In honoring promises to his nationalist base, Donald Trump and his advisors seek a divided nation and a divided world)

Even cases like that of Hameed Khalid Darweesh, an interpreter for the American government in Iraq, detained for nearly 19 hours at JFK airport in New York seemed to make no matter. Mr. Darweesh cried as he told reporters he had been handcuffed, asking: “You know how many soldiers I touch by this hand?”

The reason for this bullish insouciance is both straightforward and alarming. The president’s currently most influential advisors believe that he has a mandate to blow up norms of good governance. When he fires bureaucrats who stand in his way, bullies business bosses into keeping jobs in America, browbeats members of Congress and—most deliciously—provokes swooning dismay among journalists, many of the voters who gave him that mandate applaud. With no interest in converting those who oppose him, such support is the best sort of strength.

Mr. Bannon talks of Mr. Trump’s election as part of a ‘global revolt’ by nationalists which will sweep away all governments that do not adapt to it. This dramatic historical narrative appeals to Mr. Trump, who lauded the British decision to leave the European Union as a populist precursor to his own victory. But for all that the president enjoys humbling elites, he also craves their respect and admiration. He appointed high-flying former generals and titans of commerce to his cabinet because he wished to surround himself with “the best” and impress the world. If such grandees tire of the conflicts and chaos model of some around Mr. Trump, their departures would hurt him politically.

Chaos alarms Republican grandees and their business supporters. But if chaos is what Mr. Trump’s most ferocious insurgents seek, and if it serves as a signifier of authenticity to the base upon which the legislators’ electoral fortunes stand, then chaos is a price they will accept, for now.

  • Beware the Indirect Effects (Closing its doors to refugees is unlikely to make America much safer)

It looks unlikely to make America markedly safer, and by stoking resentment it could indirectly do the reverse.

The 12 deadly acts of terrorism committed on American soil since September 11th 2001 have been by American citizens or legal residents, according to New America, a think-tank. The September 11th murderers were from Saudi Arabia, the United Arab Emirates, Egypt and Lebanon, none of which were subject to the ban.

Refugees are particularly unlikely to be a threat. Of the nearly 3.3 million refugees admitted to America between 1975 and 2015, only 20 have attempted a terrorist attack. In those attack three Americans were killed, according to the Cato Institute, a think-tank.

Though its protective effects may be minimal, the executive order seems likely to stoke resentment among radicalized young Muslims in America and countries as yet unbanned. It may also put at risk American troops in the Middle Easy, including the thousands deployed in Iraq and Syria to fight the Islamic State.

  • A Crumbling Fortress (America’s democratic system might struggle to contain a despot)

The reasons for the growth of tribalism in American politics over the pas half century—which include the culture wars, introduction of primaries and success of Newt Gingrich, a former Speaker of the House and now Trump henchmen—in transforming what had been a consensus-prizing assembly into a parliamentary bear-pit, are so familiar that its easy to lose sight of how dynamic a process this is. Partisanship does not simply imply deadlock, the kind that bedeviled Mr. Obama. It is steadily eroding the norms that enshrine the cautiously collaborative spirit of the American system, in which much of its defense against authoritarianism resides.

Mr. Bush and Mr. Obama’s agendas were in some ways more similar to each other than Mr. Trump’s is to either. Moreover both former presidents honored the constitutional system; when their edicts were checked, they retreated. This is not an attitude Mr. Trump’s rhetoric suggests he shares.

  • Spiking (Our calculations suggest murder is rising at its fastest pace since the 1970s)

Today’s violence needs to be set in context. Despite the recent uptick, the murder rate in our 50 cities was lower in 2016 than it was in 2007, and for the 26 years before that. Criminologists disagree about why murder became less common. What they do agree on is that the improvement has been uneven. Newark, just ten miles from New York City, has a murder rate that is nine times higher than its neighbor’s. And unlike New York, where murder is at just 15% of its 1990 peak, in Newark the rate has barely budged.

People are more likely to kill if they think they will not get caught, and unsolved killings can set off a cycle of revenge.

Largely thanks to DNA evidence, police are increasingly capable of solving murders when the victim is attacked with hands, bats or knives. In these cases, clearance rates have increased from 70% to 78% in the past dozen years. Against this trend, when the victim is killed by a gunshot, a suspect is arrested just half the time. In the 1980s, the arrest rate for gun-related murders was higher, at 65%.

  • Not Turning Out (Across the rich world, millennials are ever less likely to vote)

According to Martin Wattenberg of the University of California, Irvine, the gap in turnout between young and old in many places resembles the racial gap in the American South in the early 1960s, when state governments routinely suppressed the black vote.

Demographic trends further weaken the political voice of the young. In America’s election in 1972, the first in which 18-year-olds could vote, around a fifth of adults were under 25. By 2010 that share was one in eight. Under-25s are on track to make up just a tenth of American adults by mid-century. The young will have dwindled from a pivotal voting bloc into a peripheral one.

People who have children and own a home feel more attached to their communities and more concerned about how they are run. But youngsters are settling down later than their parents did.

The biggest shift, however, is not in circumstances but in attitudes. Millennials do not see voting as a duty, and therefore do not feel morally obliged to do it, says Rob Ford of Manchester University. Rather, they regard it as the duty of politicians to woo them. They see parties not as movements deserving of loyalty, but as brands they can choose between or ignore. Millennials are accustomed to tailoring their world to their preferences, customizing the music they listen to and the news they consume. A system that demands they vote for an all-or-nothing bundle of election promises looks uninviting by comparison.

Many disillusioned youngsters regard refusing to vote as a way to express dissatisfaction with the choices on offer. But abstention traps them in a cycle of neglect and alienation. Politicians know that the elderly are more likely to cote, and tailor their policies accordingly. Young people, seeing a system that offers them little, are even more likely to tune out, which gives parties more reason to ignore them.

The young across western Europe are more likely to hold a favorable opinion of the European Union, but it’s their elders who look upon it with greater skepticism, who hold sway with governments. Britain’s recent vote to leave the EU depended heavily on retired people’s votes; youngsters voted overwhelmingly to stay.

The priority, he says, should be to inspire a feeling among young people “that the system listens to you and reacts to you,” which in turn would strengthen political commitment.

Civic education curriculums which involve open discussions and debates are better at fostering political engagement in later life than classes dedicated to imparting facts about government institutions.

  • Furry Profitable (Mars’s expansion in animal health is likely to bring rewards)

Spending on animal clinic visits in America has increased from a total of $13.7 billion in  to almost $16 billion last year.

The deal is not as out of character for Mars as it may appear. Sales of chocolate are declining. The company is second only to Nestle in the market for pet food in America, but competition from sellers on Amazon has sent the firm towards animal health. It was in 2007 that Mars bought Banfield Pet Hospital, then VCA’s largest rival. Since then it has steadily expanded in the field. With the VCA deal, it will own 1,900 veterinary clinics in America and Canada, more than four times as many as National Veterinary Associates, the nearest competitor.

The average vet used to be a generalist, offering everything from a bottle of pills to a quick death. The modern graduate is a specialist, whether in oncology or any other of the 40 fields listed by the American Veterinary Medical Association.

Technically, it remains illegal in many states for corporations to own veterinary practices, to prevent pets being overtreated for the sake of profits. But there is a way to structure ownership to deal with that. And although treatment options for pets now mirror those in human hospitals, the risks of getting things wrong do not. In law pets count as property, and usually have a small market value. Medical malpractice suits are hardly worth the bother, and are rare—another reason why Mars’s strategy promises healthy returns.

 

  • Plant and Two Veg (Alternatives to animal products are slowly moving towards the table)

And there is one more novel source of meaty protein that does not involve farm animals—at least, farm animals of the conventional sort. This is insects. Grasshoppers, for example, are around 70% protein. Insects do not have to be fed. But, being cold-blooded, they convert more food into body mass than warm-blooded mammals do and, being boneless, more of that bodymass is edible. Per edible gram, they need only a twelfth of the food that cattle require—and even only half as much as pigs.

Here, the problem is marketing. Around two billion people eat insects already, but few of them are westerners.

 

  • Schumpeter (Technology firms’ stand on immigration will draw attention to their hypocrisies)

For decades tech bosses have pushed a convenient double-speak to explain their firms’ size. Their dazzling products are the creations of their leaders. The resulting fortunes are these visionaries’ just reward. But the economic and social consequences of the industry’s output, not all of them good, are no one’s responsibility. Instead, the industry argues, they are the result of unavoidable shifts in technology, in turn responding to society’s broad demands. This logic has allowed tech firms to avoid responsibility for the stolen or bilious content that they publish and for the jobs that their algorithms help eliminate—to say nothing of their own oligopolistic market shares. Silicon Valley boasts of its own might and shrugs at its own impotence both at once.

And tech firms are prominent actors in the economic debate that drives populism. The job losses in manufacturing that infuriate Americans have resulted far more from decades of technological advance than from globalization. The piles of uninvested cash stashed unpatriotically abroad, which Mr. Trump now wants to bring home, belong chiefly to technology firms.

For every dollar of cash the tech industry makes, it reinvests 24 cents; that compares with 50 cents for other non-financial firms.

Yet tech firms still have an awfully long way to go. Often they define virtue as what they judge to be in their business interests. Last year, Mr. Cook dismissed a demand by the European Union to pay more tax as “political crap.” In December Apple agreed to a state request to ban the New York Times app in China, where the firm makes just over a fifth of its sales. Mr. Zuckerberg fits the same pattern: he says he wants to give away 99% of his fortune and that he believes in the ideal of free expression, but his firm paid a tax rate of just 6% over the past half-decade, and he has toadied up to China’s censors, too. Oligopolistic, hubristic, and ruthless to its core, Silicon Valley is no beacon of moral leadership.

 

  • Ctrl alt-beta (Funds mimicking simple hedge-fund strategies gain in popularity)

According to estimates from JPMorgan Chase, assets managed by alt-beta funds have increased from $2 billion in 2010 to around $700 billion at the end of 2016 (still nugatory compared with the 3 trillion in hedge funds).

Hedge funds tend to like esoteric, niche investments which are by definition in short supply. But they also invest in mainstream, liquid assets. Those taking positions, repackaging them as alt-beta finds, and selling them on to investors offers them another source of business.

  • Whose Rules, Whose Law (A book on law professors illuminates the bitterly contested ideas behind the fight for the Supreme Court and the founding principles of America) Law Professors: Three Centuries of Shaping American Law

Given the timing of the book, though, its greatest value may lie in the way it explains why potential candidates are so often described, by different interested parties, as being ignorant, bigots, or temperamentally unsuited to the task at hand.

“Our two major political parties now understand the rule of law very differently,” Mr. Presser writes. Should it be based on precedent and written statutes (basically the Republican approach) or should it be discretionary and allowed to incorporate values and external information (the Democrats’ view). Within this schism is a struggle over whether the judiciary’s role is to enforce laws as they were written or to see law as a flexible instrument to achieve objectives, many of which are passionately supported—and passionately opposed.

These three sentiments: that the study of the law is the preserve of lawyers, who are the intellectual elite; that they serve as a deterrent against the failures of democracy; and that they may be compromised, if not flawed, in their approach, are dominant themes throughout Mr. Presser’s book.

 

 

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