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The WaPo has reported that an Israeli software firm, with the apparent approval of the government, sold a program called Pegasus to a number of foreign governments, whose characters range from the increasingly illiberal to the brutally thuggish. These regimes then used the program to spy on their opponents, including journalists viewed as being hostile. The company denies any wrongdoing.

My question is, do you find it difficult to believe that Netanyahu would license this kind of anti-democratic activity? And is it impossible to imagine that Trump would do the same thing, and even use the program on his own domestic opponents?

Of course not. That’s who they are.

If you’re a reactionary, the template is the Revolutionary War. You’re a red, white, and blue patriot doing battle with an oppressive, overreaching central government that taxes and spends too much and actively opposes your values. It has to be overthrown by any means necessary, including insurrection. If it includes a second Tea Party, so be it.

If you’re on the left, it’s the Civil War. A majority with history on its side is doing battle with a reactionary white cultural minority that unapologetically oppresses people of color and sexual minorities and threatens liberal democracy to keep its hands on power. What the country needs is a crushing victory over the bigots and a Second Reconstruction–this time, a successful one.

Which one is more accurate? You decide.

Last week, Thomas Edsall wrote a column in the NYT addressing the question of which side was the aggressor in the culture wars. As usual, the column was long, ponderous, full of quotes, and inconclusive. Let’s answer his question: who is at fault here?

It depends on the arena. In the cultural and legal fields, the left is clearly the aggressor. It is trying to push the envelope and redefine norms; the right is simply trying to hold the line. The problem, however, is that the right has given up trying to rebut the left’s claims in its preferred forum, and is fighting the battle purely in the political arena. In the days when the PBPs had control of the GOP, this was done primarily for the cynical purpose of generating votes for business tax cuts and deregulation. Today, however, the Reactionaries are behind the wheel, and winning the culture wars has turned into the GOP’s overriding objective; businessmen are being told to shut up and dribble.

Which party is more dangerous? The left’s claims on behalf of sexual minorities have little practical impact, and are just mildly annoying. The far right, on the other hand, is clearly willing to destroy liberal democracy in this country to protect its supposed right not to be offended by gay and trans people. That’s not a difficult choice.

On the 46th President Biden.

A small wave of approval he’s ridin’.

But Mitch bars the door

And the right’s culture war

Means the gulf in our nation will widen.

For the same reason that right-wingers dominate business and the clergy: self-selection.

If you believe intensely that everything valuable in our society is ultimately attributable to businessmen, as CLs and PBPs do, isn’t it likely that you will gravitate towards making a living in business? If you think America has turned away from God and is going to hell in a handbasket, aren’t you going to look seriously at a career in religion? Why in the world would these kinds of people want a job in a university, or in the media?

They wouldn’t, and they don’t. Conversely, if you are intellectually gifted, you don’t have a lot of money, you don’t believe in God, but you do believe in the possibility of social improvement, wouldn’t you lean towards a career in teaching, the professions, or the media? Of course you would! And you do, at least in societies in which intellectuals are not directly dependent on the goodwill of a few wealthy patrons.

Refuse to take the vaccine, get the virus, and die. That’ll show them! Stick it to the man!

The overwhelming success of American athletes during the 1984 Olympics was a big part of “Morning in America.” Could Biden benefit from the same phenomenon this year?

Probably not, for several reasons. First, the Olympics aren’t being held on American soil, and the empty stands will serve as a continuing reminder that the pandemic is still with us. Second, we aren’t going to win as many medals as we did in 1984. Third, Biden isn’t the type of person to use American athletes the way Reagan did, and Trump would have. Fourth, the timing is wrong; the election isn’t around the corner. Finally, Tucker Carlson will probably tell his viewers to root for Hungary.

The Covid relief bill was enormously important, but its effects will be temporary. The stimulus checks have been spent by now; the extra unemployment insurance, which effectively created a more generous minimum wage, has expired in some red states and will disappear everywhere in a few months; and the welfare state expansions have a short shelf life. In the long run, this bill won’t make much of a difference. Everything depends on the two other bills that are slowly making their way through Congress.

The bipartisan infrastructure legislation will boost productivity in the long run, but will not make a measurable difference in the short run, if it passes. That is far from assured. The GOP will have to decide whether it wants credit for being reasonable and promoting projects with considerable public support, or sees more political advantage in proving that the Democrats can’t get anything done. To me, that is a 50-50 proposition. If recent behavior is any guide, Mitch will take his default position and obstruct the bill, and most of his members will fall into line.

The most consequential bill is the partisan Democratic Christmas tree. If it makes it through the system, its impacts will be felt for many years to come, and the 2024 election will probably be a referendum on its success or failure. Will it pass? My guess is that the process will have many twists and turns, but that a watered-down bill will pass before the end of the year. This is based on my personal experience that it is much easier to make deals on money than principle, and the Christmas tree is, above all, a deal about money.

The predictably regressive Trump tax cut was sold to the public as a vehicle to increase investment and productivity, with higher wages and a smaller deficit to follow. In terms of what was promised, it was a miserable failure. The deficit soared, but investment remained stagnant, except in dollar stores, share buybacks, and government securities. However, the individual tax cuts, when sprinkled on an economy that was already lively, caused a Keynesian boom that drove up wages, even for unskilled workers. It was totally unintended–a perversion of Abenomics, if you like–but in some ways, it worked, particularly since the Fed agreed to play along and keep interest rates low.

Biden bought into the part about running deficits in order to get the economy running hot, but he has changed the focus of the federal action from regressive tax cuts to spending programs directed at working people. So far, for the most part, it has been a success, but it is early days. What is the longer term prognosis for his program? I will discuss that in my next post.

West Virginia, like Kentucky, is a red state based on nostalgia over coal. You would take your life in your hands if you talk about climate change there. And yet, the irony is that climate change may ultimately be the salvation of the state. Why?

Well, imagine that it is 2040, and you live in a red state. The heat has become unbearable, so you are looking for a refuge. You want to live in an area with plenty of natural beauty, cheap property, and no exposure to natural disasters, such as hurricanes. Obviously, you also want cooler temperatures.

How about . . . the mountains of West Virginia? It’s almost enough to make me want to buy property there.

On the issue of future inflation, every respectable economist agrees on the following two points:

1. A big part of the current problem is created by supply bottlenecks resulting from the pandemic which will be resolved in a short period of time; and
2. The real question, in the long run, revolves around the long term public expectations regarding the inflation rate.

The next questions, then, should focus on who will create the public expectations, and how it will be done.

Inertia, demographics, and globalization are on the side of those who predict low inflation rates. On the other hand, the people who stand to lose from inflation–creditors, employers, investors, and retirees–are disproportionately Republicans, and have plenty of access to popular media outlets. They have a powerful vested interest in screaming about inflation. You can count on them to do so.

Will the inflation chorus on Fox News and in the WSJ translate into ongoing worker demands for higher wages, and thus higher prices and interest rates? I’m guessing not, and the bond market currently agrees with me. It is early days, however.

In a cynical, opportunistic effort to win black voters in spite of his overt racism, Trump frequently talked about the criminal justice reform bill he signed during the campaign. This was a mixed message, however; his predominant narrative was that Black Lives Matter is an evil, racist organization, and that the police should be unleashed, not defunded, to put an end to the spike in crime that supposedly threatened virtuous white people in the suburbs.

It is very likely that we will be hearing plenty of the pro-police, anti-BLM part of the message in the next few years. That is unfortunate, because the police can’t operate effectively without community support, which will be lacking if they present themselves as a self-interested army of occupation, not public servants.

There is plenty of middle ground between “Defund the Police” and “Blue Lives Matter.” Reformers need to understand that the police have a difficult job that requires tough choices, and to show some empathy; the pro-police crowd, on the other hand, needs to grasp that gratuitous displays of violence, particularly against minorities, ultimately backfire. Beating heads versus budget cutting is a false choice.

George Packer, in a much-noted article in The Atlantic, divides America into four ideological groups: Free America; Smart America; Real America; and Just America. Does this scheme have merit?

Some, but not as much as he thinks. Here are my observations:

1. “Free America” roughly corresponds to my CL and PBP factions, and “Real America” is an appropriate description of Reactionaries, so his GOP categories are consistent with mine.
2. However, Packer doesn’t seem to realize that the supposedly freedom-loving January 6 rioters have little in common with regulation-hating businessmen; they are really Reactionaries who hate this government, but not governments they can control. Their libertarianism is purely opportunistic and situational.
3. Packer’s “Smart America” and “Just America” categories omit two large groups of Democratic voters. The first is Sanders supporters whose votes were motivated, not by identity, but by class considerations; the second is the large mass of moderate Biden voters–largely elderly and black–who just want as much positive incremental change as they think is reasonably possible without trying to overturn the system. The primaries show that these people represent a majority of the Democratic Party.
4. It is of no little importance that not a single Democratic presidential candidate ran as a pure and passionate “Just American,” because there aren’t many voters in that category–just Twitter activists.
5. Packer appears to buy into the notion that “Smart America” consists of a self-satisfied, self-perpetuating elite that has no interest in assisting struggling “Real Americans.” That is not only a caricature–it isn’t even true. “Smart America” consistently votes for politicians who support programs designed to help “Real America” even though the money for those programs will come out of their pockets. Part of the problem is that these programs haven’t worked consistently; the other part is that “Free America” has persuaded “Real America” to prefer nostalgia and culture wars over its economic self-interest.
6. The numbers don’t lie; the 10 percent of “Smart America” has only broken even in the knowledge-based economy. The real beneficiaries have been the one percent, who are mostly “Free Americans.”

You can make a strong case that Cuba is the only remaining genuine communist state in the world today. North Korea is a monarchy, obsessed with nuclear weapons and self-sufficiency, not world revolution and the plight of workers; China and Vietnam are run by the Communist Party, but have largely capitalist economies. Who else is there?

This obviously suggests that the tide of history is running strongly against communism in Cuba. It does not, however, indicate that the Communist Party will lose its grip on the island any time soon. Without the charisma of Fidel Castro as a backstop, the party will gravitate towards the Chinese model in order to survive. It will have no choice.

The case is sometimes made, including in today’s NYT, that the Fed is largely responsible for increasing inequality in this country. Is that accurate?

Not really. It is true that low interest rates result in higher asset values, which primarily benefits the wealthy. It is also true, however, that low interest rates are an essential part of the Biden/Powell plan to run the economy hot and so to increase wages. If the Fed jacks up interest rates in a quixotic effort to fight inflation, the plan will run aground, and everyone will lose, including workers.

In short, the idea is not to create a desert and call it equality; it is to provide benefits for everyone. If the wealthy also profit from a system which substantially increases wages, so be it. The best way to deal with inequality is through taxing and spending, not interest rates.