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The uber-loneliness of the sharing economy driver – The Guardian | “UberPeople.net is a rudimentary and extremely popular message board for Uber drivers that serves as a sort of public water cooler. … [The founder of UberPeople.net] continued, ‘Uber is neither ‘rideshare’ nor the ‘sharing economy’. It’s the modern face of capitalism.'”
Unleashing the Global Competitiveness of the US – RCM | “We now lag behind all countries except the U.K. in gross fixed capital formation as a percentage of GDP for the period 2007-2014.”
The Gender Wage Gap: Extent, Trends, and Explanations – NBER | “By 2010, conventional human capital variables taken together explained little of the gender wage gap, while gender differences in occupation and industry continued to be important. Moreover, the gender pay gap declined much more slowly at the top of the wage distribution that at the middle or the bottom and by 2010 was noticeably higher at the top.”
Use of Crispr gene editing on human embryos approved in UK – CW |
What Does It Mean to Be a ‘Real Progressive’? – The Atlantic |
A Pope and a Russian Orthodox Patriarch Will Meet for First Time Since They Schismed in 1054 – Slate |
Should biologists stop grouping us by race? – Stat News |
Yudell and his colleagues, including an anthropologist and a sociologist, are asking the National Academy of Sciences to convene a panel to recommend ways to categorize people more precisely than by race. Research journals, they say, should discourage use of racial categories in studies that analyze genetic and other biological or medical data, substituting more precise groupings such as ancestry or population — Kurdish or Basque, for example, or Filipino, or Japanese, or Ito. …
A fair-size contingent of biologists disagree. They agree that race is imperfect, but say it is a useful way to group people.
Entitled Millennial Workers of the World, Unite! – NY Mag |
A frustrated sense of entitlement is the soil from which all political action grows. … From the standpoint of a manager tasked with enforcing the prevailing norms of the American workplace, entitled millennials are indeed a scourge. But from the perspective of society as a whole, Generation Y’s unparalleled entitlement may actually be desirable. Few would deny that the entitlement felt by the Freedom Riders or suffragettes ultimately redounded to their nation’s benefit. The question, then, is whether the realization of millennials’ workplace demands — via organized political struggle — would improve or degrade American life.
Wealthy rentiers and salaried corporate executives may be vaguely unsympathetic groups, but they do not constitute the bulk of rich Americans. In particular, Piketty underestimates the importance of entrepreneurs and business owners. … In 2010, self-employed business owners account for an astonishing 70 percent of the wealth of the top 0.1 percent. If we look at top earnings rather than top wealth, self-employed business owners accounted for around 50 percent of the total earnings of the top 0.1 percent.
And this from economist Larry Summers:
His is a theory of accumulation by the fortunate, but what is striking — and you certainly see it out here [in Silicon Valley] in particularly dramatic form — is how dynamic the process of wealth accumulation is. Forbes looked in 2012 at its 1982 Forbes 400 and found that less than 10 percent of those who were on the 1982 Forbes 400 were still part of the 2012 Forbes 400.
My preference is for the inequality debate to focus a) on high-end cronyist looters and b) on raising incomes and mobility for those at or toward the bottom. Or are entrepreneur billionaires, which America is really great at generating, a big problem?
Update: One more chart, this from Forbes showing the changes in how the Forbes 400 fortunes were made over the past three decades, especially at the extremes. The magazine gives each member a score on a scale from 1 (blue) to 10 (red) — “a 1 indicating the fortune was completely inherited, while a 10 was for a Horatio Alger-esque journey.” And this chart shows the 1s and 10s switching places. It amplifies the Summers quote from above:
Not bad at all. The January jobs report — 115,000 net new payrolls, 4.9% unemployment rate — contained lots of good news: the lowest jobless rate since February 2008, a higher labor force participation rate, a higher employment rate, and average hourly earnings up 2.5% from a year earlier with the monthly jump the best since July 2009.
It’s also worth nothing that using the new jobs data, the Atlanta Fed upgraded its first-quarter GDPNow model forecast to 2.2% from 1.2% — a good sign that the US economy is not about to sink into recession after that zero-handle fourth quarter. And this from John Silvia of Wells Fargo: ” … growth in the residential and nonresidential construction sectors remains evident in the 18,000 gain in construction jobs last month. These gains represent solid trends supporting continued economic growth and certainly do not signal recession.”
Not everything was great: job gains far short of 185,000 expectations (though averaging 231,000 the past three months), U-6 unemployment-underemployment rate unchanged at 9.9%, long-term unemployment worsened, labor force participation and employment rate still way below pre-recession levels, wages gains short of what you would expect to see in a full-throttle economy. Particularly vexing for Barclays was job weakness in the service sector.
So where is the US labor market right now, a month into 2016? How far from full employment, if we are not there already? Do we “still have a very long way to go,” as Bernie Sanders said in last night’s Democratic presidential debate?
A recent Goldman Sachs report made some good points on this. The bank’s economic team noted, for instance, how population aging and prolonged unemployment after a recession can affect the “unemployment gap”– the difference between the actual unemployment rate and the estimated structural rate. You can’t just look at what employment and participation rates were in 2007 — almost a decade ago! — and wait for a reversion. GS’s estimate of remaining slack:
Our 4.7% structural rate estimate implies that the headline unemployment rate—currently at 5%—indicates 0.3pp of slack. Based on our method for estimating the additional slack represented by the participation gap and the elevated number of involuntary part-time workers, we estimate that total labor market slack currently amounts to about 1.3% of the labor force. This represents a decline of 1.3pp from our estimate of 2.6% total slack one year ago. (Alternatively, our 4.7% structural rate estimate for U3 implies a structural rate of roughly 8.7% for the more familiar U6 indicator, implying a current U6 gap of 1.2pp.)
Our findings suggest that it is misleading to think of the labor market as having already reached full employment and make the current below-target rate of inflation less puzzling than it might at first appear. If inflation remains below the target for an extended period of time and the unemployment rate continues to decline, we suspect that the FOMC might reduce its estimate of the structural rate somewhat further. Such a change would increase the committee’s implicit estimate of the unemployment gap and would naturally have dovish implications. Even so, the impressive momentum of recent employment growth suggests that we will likely return to roughly full employment even as measured by broader measures of slack by year-end, supporting the case for continued gradual policy normalization this year.
Gettin’ there, America. But no reason for Washington to continue to ignore the need for pro-growth policy on taxes, regulation, public investment, and targeted job market interventions by government. Would like the Fed to pause as well.
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Influenza tackles fans whose teams make it to the Super Bowl – Cornell University |
A Cornell economist and his colleagues have found the geographical areas that have an NFL team advance to the Super Bowl had an 18 percent spike in flu-related deaths among people above the age of 65. “The mechanism that’s driving this is the increased socialization that happens as a result of the team being successful,” says Nicholas Sanders, a newly hired assistant professor of economics in the Department of Policy Analysis and Management at Cornell. …
But the researchers found no change in influenza mortality in cities that hosted the Super Bowl. That could be for several reasons, Sanders said, including because the influx of travelers may prompt locals to avoid going out on the town. Another factor could be the host city’s location; the Super Bowl is frequently held in southern cities, where flu transmission rates are generally lower.
Twitter Nerd-Fight Reveals a Long, Bizarre Scientific Feud – Wired |
On Chips and Microchips: What digital technology can teach us about our food problems – PS | ” Not surprisingly, fast food and digital applications speak persuasively to a primal urge, promising as they do to ease us through the day with miraculous short cuts and life hacks that never cease to wow us with their novelty.”
What if Twitter Died? – Techpinions |
Will AI-Powered Hedge Funds Outsmart the Market? – MIT Tech Review |
Key And Peele To Livestream ‘Sports Commentary’ During An ‘Upcoming Sports Game’ That They Can’t Name – Techdirt |
The Rise of Wealth Therapy – Bloomberg | “The discomfort of peering over the wealth gap—as well as insecurities about how money can change people and affect relationships, especially in the wake of the financial crisis—helps explain why affluent people are turning to therapy to discuss their First World problems in private and why banks are incorporating wealth therapy into services for high-net-worth families.”
Is Pope Francis Anti-Modern? – Nautilus |
Descriptions of Laudato Si’ as “anti-science” or “anti-progress” are particularly striking, since so many self-described progressives, representatives of the scientific community, and environmentalists have warmly welcomed the recent encyclical in the hope that it would motivate action on climate change. …
However, what the pontiff truly rejects in this encyclical is not modernity (much less science) but a particular modern philosophy about the relationship between modernity, science, and technology — what Pope Francis calls the “technocratic paradigm.” Indeed, the import of the papal encyclical is not to cast Christianity as anti-modern but to provide new — though, in fact, ancient — moral guidance for addressing our modern challenges.
Look, this isn’t me talking, it’s economic consultancy IHS Global Insight: “The current expansion, the 12th expansion since 1945, is the weakest of the 12. One reason: abysmal productivity growth. Over 1947-2007, labor productivity growth averaged 2.3%. Since 2010, it has averaged just under 0.5%. The difference between 2.5% and 0.5% growth matters a lot. … If growth is 2.3%, the pie doubles every 31 years. If growth is 0.5%, the pie doubles every 144 years.”
Get used to it, say some techo-pessimists like economist Robert Gordon. The iPhone ain’t bean bag, but it ain’t electrification, either. The really great inventions, Gordon concludes, have already been invented. Then again, perhaps IHS is correct when it notes the view that government statisticians are “not measuring output accurately … [and are] are understating the value of new products.”
So maybe the economy is doing better than we think. And maybe the future is brighter than Gordon guesses. Tyler Cowen in his review of Gordon’s new book, “The Rise and Fall of American Growth”:
Ultimately, Gordon’s argument for why productivity won’t grow quickly in the future is simply that he can’t think of what might create those gains. Yet it seems obvious that no single individual, not even the most talented entrepreneur, can predict much of the future in this way.
Consider just a few technological breakthroughs we could witness in the coming years, only a small number of which Gordon even mentions: significant new ways to treat mental health, such as better antidepressants; strong and effective but nonaddictive painkillers; artificial intelligence and smart software that could eliminate many of the most boring, repetitive jobs; genetic engineering; and the use of modified smartphones for medical monitoring and diagnosis. I can’t predict when such breakthroughs will actually happen. .. It’s also worth remembering that many past advances came as complete surprises. Although the advents of automobiles, spaceships, and robots were widely anticipated, few foretold the arrival of x-rays, radio, lasers, superconductors, nuclear energy, quantum mechanics, or transistors. No one knows what the transistor of the future will be, but we should be careful not to infer too much from our own limited imaginations.
Even during Gordon’s special century of 1870–1970, progress was not evenly distributed. There were pauses, such as much of the 1920s and 1930s, between some especially fruitful periods. Some pauses in advancement today should therefore not be alarming. Gordon himself admits that information technology was producing some truly significant advances as recently as the late 1990s and the very early years of this century. Given that economic growth and technological progress are uneven, there may well be bumps on the road when it comes to using computers to significantly improve human well-being. Surveying the array of human talent in Silicon Valley, the advances that have taken place to date, and the possible potential uses for new items such as smartphones, it is difficult to accept Gordon’s assertion that information technology has run its course. It seems much more likely that significant growth still lies ahead.
For me, perhaps the most persuasive techno-optimist counter is that we are placing access to all accumulated human knowledge in an increasing number of human hands. All those billions of brains coming online. And if we can do a better job making sure the maximum number of those brains are operating in the political-economic systems — pro-innovation policy isn’t even optimal in the US — that allow human potential to be maximized, then we ain’t seen nothing yet. Again, we should assume the worst about US productivity and treat it like a crisis. Public policy should be view through the innovation lens, and its merits judged accordingly.
A few related writings:
Not much talk about the national debt during this GOP primary season. Oh, there’s the obligatory — passing — reference to it during speeches and debates, but little more. Indeed, GOP tax plans would make the debt much worse by trillions over the next decade and beyond.
Now maybe one reason there’s less debt talk is that budget deficits are way down, and the long-term fiscal outlook improved. On the latter front, the WSJ’s Grep Ip highlights a new study — co-authored by former CBO boss Doug Elmendorf — that forecasts the US debt-GDP ratio won’t hit 100% until 2032 vs. the CBO’s 2009 forecast of 2023. (Thank low interest rates and slower healthcare inflation for that.)
But maybe another reason Republicans aren’t talking about the debt is that it’s hard to do so without also talking about deep Medicare and Social Security reform. And while entitlement reform was a pretty hot topic early in the Obama presidency, passion on the right has waned. Reforming entitlements is out, defending them is in. As Donald Trump has put it: “Every Republican wants to do a big number on Social Security, they want to do it on Medicare, they want to do it on Medicaid. And we can’t do that. And it’s not fair to the people that have been paying in for years and now all of the sudden they want [it] to be cut.” Here’s WSJ columnist Holman Jenkins:
Mr. Trump is a political harbinger here of a new strand of populist Republicanism, largely empowered by ObamaCare, in which the “conservative” position is to defend the existing entitlement programs from a perceived threat posed by a new-style Obama coalition of handout seekers that includes the chronically unemployed, students, immigrants, minorities and women.
This political rationale was emerging in the 2012 Obama- Mitt Romney race, though not yet fully formed. It surfaced again in the 2013 tea party fight over the debt limit, a Kabuki play that allegedly threatened national default. The Kabuki was driven, recall, by the demand of Mr. Cruz and other tea party types that ObamaCare be “defunded.” … The tea party animus toward ObamaCare is something different: Implicitly, such means-tested new entitlements that benefit working-age folks and people (read minorities) who typically vote Democrat are viewed as a threat to the traditional, universal, “earned,” middle-class retirement programs of Social Security and Medicare. … The unspoken tea party stance of defending the good old-fashioned entitlements of “real” Americans is increasingly, in dog-whistle terms, what differentiates one Republican from another.
Chris Christie, who went nowhere in Iowa, did himself no favor by dragging Social Security and Medicare into every debate, however much those programs need to be addressed. Marco Rubio was just as quick to modify any implication that Republicans therefore are entitlement reformers: “We are talking about reforms for future generations. Nothing has to change for current beneficiaries. My mother is on Medicare and Social Security. I’m against anything that’s bad for my mother.” Welcome to an important new fault line in our slow-growth, resource-constrained America. Though many of us believe the entitlement programs need to be reformed, success will come increasingly to Republicans who pose as “conservative” defenders of Social Security and Medicare.
In other words, government checks going to more likely GOP voters are “earned benefits,” those to Democratic voters, “welfare.” Medicare and Social Security good, Medicaid, Obamacare and income supports bad. Or as Jenkins phrased it in an earlier column: “The new ‘conservative’ position will be to defend Social Security and Medicare, those middle-class rewards for a life of hard work and tax-paying, against Mr. Obama’s vast expansion of the means-tested welfare state for working-age Americans.” Certainly not every Republican is totally buying into this. Rubio, for instance, does support sweeping Med-SocSec reform — though I don’t know how much he talks about it on the presidential campaign trail.
A few economic policy notes: First, the future projected cost growth of middle-class entitlements will need to be reduced.
Second, a GOP Obamacare replacement plan may not spend as much as Obamacare is projected to, but it will spend more than than a return to the pre-Obamacare status quo. The 2017 Project has devised an ObamaCare alternative that would include refundable tax credits for individuals and the uninsured to buy private health insurance. The proposal would cost about a trillion bucks over ten years.
Third, the globalized, technologically advanced US economy might require a broader array of income supports than many GOPers now consider wise. AEI’s Charles Murray, a supporter of a government-guaranteed basic income — has argued thusly: “Massive government redistribution is an inevitable feature of advanced postindustrial societies.”
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Why Fiscal Stimulus Fails – Richard Epstein |
Janet Yellin and Mario Draghi should say something like this:
Sorry folks, you think that we are magicians, but we are only trained in monetary economics. And we are here to tell you that we have shot our wad with a set of stimulus programs that were broken from the outset. Only now the situation is worse. The law of diminishing returns to additional efforts has set in so any measures we take will make our economies worse. The burden is squarely on the political branches to do their part. Deregulation and lower taxation reduces administrative costs and economic burdens. It will allow private firms to increase output. Either your elected officials make structural reforms today, or we shall have another fruitless set of stimulus programs tomorrow.
Apple’s Shrinking Impact in the Smartphone Industry – HBR |
Now that Apple has begun to compete on the same terms as Samsung and the other smartphone providers, there is no smartphone company that is a market-creating innovator. Apple, Samsung, and the others are stuck in a battle of sustaining innovations, which is about classic competition on who makes a better phone. It does not benefit customers in the same way.
Think You Stink at Math? Amazon Wants to Change That – Re/code |
Elon Musk cancels blogger’s Tesla order after critical post – FastCo |
Long-term marijuana use tied to worse verbal memory in middle age – Reuters “Researchers found that as past years of marijuana use increased, verbal memory scores decreased. In practical terms, the results meant that for every additional five years of exposure, 50 percent of marijuana users would remember one less word from a list of 15 tested words.”
North Dakota Has Highest Gallup Good Jobs Rate – Gallup | “For the third year in a row, North Dakota had the highest Gallup Good Jobs (GGJ) employment rate among the 50 U.S. states, at 51.5%.”
Voter App Offers Tinder-Like Political Hookups – Re/code | “The app requires little introduction: Swipe right to vote “yes” and left to vote “no” in response to eight policy questions: Abolish the death penalty? Keep abortion legal? Decrease military spending? Repeal Obamacare? The answers lead to suggested party affiliations.”
The Science Of Hillary Clinton’s Coin Toss Victories – Forbes | “In some Iowa counties, there were an odd number of County Delegates to be awarded (or in one case, an orphan delegate), and the Clinton/Sanders races were literally a dead heat. And in the case of a dead heat, Iowa has a rule on which candidate receives the odd delegate: a coin toss.”
Thanks to Google Fiber, this is America’s best-connected public housing development – FastCo |
Again, if you want government to spend like a Nordic nation, it also needs to tax the middle class like one
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The WaPo’s Max Ehrenfreund has a great Q&A with sociologist Lane Kenworthy, author of “Social Democratic America” — a book I have written about a few times. The following bit gets at the idea that it wouldn’t be just the rich paying for the progressive dream of greatly expanded government, Scandinavian style:
One difference between these two candidates’ [Hillary Clinton and Bernie Sanders] platforms and the social-democratic agenda in your book is that both are talking a lot about raising taxes on the rich, while in the Nordic countries, the middle and working classes pay more in taxes, too.
The tax strategy that these countries have tended to pursue is to spread the tax burden around, and in fact, their overall tax systems are pretty much flat. Almost everybody pays roughly the same share of their pre-tax income in taxes. You have a progressive income tax, but that’s offset by regressive payroll taxes, and especially regressive consumption taxes, which are very large in these countries.
Everybody feels like they’re paying in and getting something out of the system, so the system becomes more legitimate. You’re less likely to get this kind of us-against-them argument from conservatives. Even high income households don’t tend to hate this kind of system.
If you’re going to have a really big government, as these countries do — government spending is the neighborhood of 45 to 50 percent of GDP — if you’re going to do that, you just have to go where the money is. There’s obviously no way you could do that just by tapping money from the rich. Sanders has said that and is acknowledging that.
If we’re talking about a big expansion of public insurance, you have to tax the middle class as well as the rich. In the short turn, for a smaller expansion, I don’t necessarily think it’s a terrible idea to say you’re going to get most of that revenue from the rich. It is possible.
I don’t like Hillary Clinton’s promise, “I’m not going to raise any taxes on anybody in the bottom 95 percent.” I don’t think that’s a smart or productive thing to do, but the general orientation — to raise as much of the additional revenue as you can from those at the top — I don’t necessarily oppose.
Indeed, Kenworthy favors roughly $1.5 trillion in increased annual spending — or 10% of GDP — for a variety of programs, half of which would be paid for by a VAT. Oh, he does briefly explore getting all that dough from the rich. But the “rich” wouldn’t just be millionaires and billionaires. He defines the rich as the top 5% — hundred-thousandaires — not the top 1% or 0.01% or 0.01%. Their average tax rate would need to more than double to nearly 70%. And this static analysis assumes no negative economic impact. When the Tax Foundation looked at the Bernie Sanders tax plan — similar in annual cost to the Kenworthy plan — with a dynamic analysis, it found “after-tax incomes of all taxpayers would fall by at least 12.84 percent.”
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Feds consider helping fund Elon Musk’s Hyperloop – Ars Technica |
As if to underscore the notion that the Hyperloop is not just some tech mogul’s science fiction fantasy, Anthony Foxx bounded onto the stage Friday night in College Station. By attending the competition Foxx, who has been the US Secretary of Transportation since 2013, said he was signaling his interest in the Hyperloop. “It’s one thing to have a really cool new idea,” he said. “It’s another thing for that idea to go through the traps required to have that actually used by the mass public. That’s not to say this isn’t an idea that has merit. I’m here. It has merit.”
There are four primary modes of transportation that move people around the world today: trains, automobiles, boats, and airplanes. The last of those, the airplane, was invented more than a century ago. Foxx said his department must be open to new ideas in a world with a growing population and aging infrastructure.
So, Dutch Cops Are Teaching Majestic Eagles to Hunt Drones – Wired | “The Dutch Police will continue tests for several months before deciding whether to implement the eagles full-time. Which means that no matter what they decide, we’ll hopefully be getting a few more videos like this one.”
Same-Day Hip Replacement – WSJ “Hip replacement surgery is now an outpatient procedure due to an increasingly popular surgical technique; surgeons promise less pain and faster recovery.”
Snuffed out – the kids’ classics that would be censored by a smoking ban – The Guardian |
The World Health Organisation would like films that feature smoking to automatically be given adult ratings. Bad news for Pinocchio and Cruella de Vil … In its survey of films released in the US between 2002 and 2014, smoking was present in 60% of films rated PG-13 (parental guidance, particularly for children under 13) and in 25% of films rated PG or for all ages. Some films popular with older children and teenagers, such as Lord of the Rings (Gandalf and his pipe) or X-Men (Wolverine and his cigar) would be affected if they were released now, as would dozens of children’s classics familiar to generations.
Deciphering the Language of the Brain: A new initiative gets us closer to understanding how our brain cells communicate – SciAm |
French Politicians Pushing To Ban Linking To Any Website Without Permission – TechDirt |
Now, it’s fairly obvious that you’re dealing with two politicians who think they’re somehow proposing a solution to “piracy” on the internet. But it’s really yet another attempt at punishing Google. Similar to efforts in Germany, Spain and even the European Parliament, very, very shortsighted Google haters think that a way to “punish” Google is to make it pay money to sites that it links to (mainly when it comes to news aggregation). The two French politicians admit flat out that they’re trying to help copyright maximalists.
Why Harry Potter Doesn’t Have Free Will –RCS
Backing bands: which musicians endorse which US presidential candidates? – The Guardian |
Both Ted Cruz and Marco Rubio beat Iowa caucus expectations — set by polls and betting markets — while Donald Trump underperformed. Let’s focus on Trump for a moment. Caucus entrance polls described his core support last night as “caucusgoers who didn’t attend college, were more moderate and, first and foremost, listed immigration as their top issue,” according to the Wall Street Journal. So the secular working class.
Now none of the other candidates are going to out-extreme Trump on immigration policy. Moreover, his sharp rhetoric and willingness to tolerate heat for being “politically incorrect” signals to supporters his seriousness on the issue. Mr. Trump won’t be pushed around! There is also evidence Trump has talked for sometime about the need for a wall on the southern US border, again suggesting his views are more than just ones of convenience.
Yet given Trump’s self-promoted image and branding as a “winner,” his Iowa loss would seem to provide a window of opportunity for rivals to grab his voters. Bad news is poisonous for momentum stocks. Of course if Trump wins NH and wins it big, perhaps that moment is gone and his momentum returns. He regains his balance and resets. It’s like that moment in “Terminator 2: Judgement Day” when the frozen T-1000 is frozen by liquid nitrogen and shatters. But then the various bits and pieces begin to melt and flow back into each other, slowly reforming the shapeshifting android. Time is of the essence, Cruz and Rubio.
Taking advantage requires a policy-infused message delivered — with both consistency and genuine empathy — to working class voters (and the broader middle for that matter) and that addresses their struggles and anxieties, both for their own lives and those of their kids. Among these ideas: a) tax relief by cutting payrolls taxes and/or expanding various tax credits; b) education reform that boosts high-ed access and value while providing non-college pathways to good careers, c) detailed Obamacare replacement/reform; and d) Social Security modernization that boosts benefits for low-income Americans. And when candidates talk about the miracle of capitalism, better differentiate between competitive capitalism and the cronyist type — and what that means in practice.
But they better hurry. The shafting T(rump)-1000 may be reforming even now.