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Lincoln, Labor, and Us

On March 6, 1860, Abraham Lincoln spoke at New Haven, Connecticut.  It was part of the same speaking tour that had taken him to Cooper Institute in New York City, but coming after that speech, in a smaller venue, it has attracted much less historical attention.

No doubt it also attracts less attention now is that much of the speech is a rehash of ideas first presented in the Cooper Institute speech.  One section, however, discusses a “shoe strike” then going on in New England, and it thus particularly appropriate for Labor Day.

Workers in shoe manufacturing plants had first struck in Massachusetts over wages.  Even though there was no formal union, the strike spread to other plants across New England.  Lincoln, in the manner of politicians everywhere, sought to address great national issues in the context of local ones., in this case, slavery.

I am merely going to speculate a little about some of its phases. And at the outset, I am glad to see that a system of labor prevails in New England under which laborers CAN strike when they want to where they are not obliged to work under all circumstances, and are not tied down and obliged to labor whether you pay them or not! I like the system which lets a man quit when he wants to, and wish it might prevail everywhere. One of the reasons why I am opposed to Slavery is just here.

So far, Lincoln is making a fairly pragmatic pro-free labor argument, one that will resonate with northern workers: that they have the right to quit and deprive the boss of their labor whenever they feel like it.  He goes on:

When one starts poor, as most do in the race of life, free society is such that he knows he can better his condition; he knows that there is no fixed condition of labor, for his whole life. I am not ashamed to confess that twenty five years ago I was a hired laborer, mauling rails, at work on a flat-boat—just what might happen to any poor man’s son! I want every man to have the chance—and I believe a black man is entitled to it—in which he can better his condition —when he may look forward and hope to be a hired laborer this year and the next, work for himself afterward, and finally to hire men to work for him!

Now, Lincoln moves subtly to a natural rights argument, one that goes straight after some Southerners’ argument that black men aren’t really human.  Not only are blacks human, but they are also entitled to the same human rights as everyone else when it comes to selling their labor and improving their condition.  Even to the point of being able to hire other men to work. 

The outcome of this freedom is a general prosperity where wealth is no longer directly tied to the soil, while hinting at the next direction he’s taking this argument:

That is the true system. Up here in New England, you have a soil that scarcely sprouts black-eyed beans, and yet where will you find wealthy men so wealthy, and poverty so rarely in extremity? There is not another such place on earth!  I desire that if you get too thick here, and find it hard to better your condition on this soil, you may have a chance to strike and go somewhere else, where you may not be degraded, nor have your family corrupted by forced rivalry with negro slaves.

Then comes the direct attack on Stephen Douglas, several paragraphs long, which require some unpacking.  They refer to other events and even to other arguments that Lincoln was making, which the audience at the time would have understood.  We might not grasp them at first, but once we do, the ominous similarities to today’s politics will be clear.

Now, to come back to this shoe strike,—if, as the Senator from Illinois asserts, this is caused by withdrawal of Southern votes, consider briefly how you will meet the difficulty. You have done nothing, and have protested that you have done nothing, to injure the South. And yet, to get back the shoe trade, you must leave off doing something that you are now doing. What is it? You must stop thinking slavery wrong! Let your institutions be wholly changed; let your State Constitutions be subverted, glorify slavery, and so you will get back the shoe trade—for what? You have brought owned labor with it to compete with your own labor, to under work you, and to degrade you! Are you ready to get back the trade on those terms?

But the statement is not correct. You have not lost that trade; orders were never better than now! Senator Mason, a Democrat, comes into the Senate in homespun, a proof that the dissolution of the Union has actually begun! but orders are the same. Your factories have not struck work, neither those where they make anything for coats, nor for pants, nor for shirts, nor for ladies’ dresses. Mr. Mason has not reached the manufacturers who ought to have made him a coat and pants! To make his proof good for anything he should have come into the Senate barefoot!

Recall that in the Cooper Institute address, Lincoln says that the South will never be mollified as long as the North continues to believe that slavery is wrong.  Only a change in Northern beliefs – to be signalled by censorship of anti-slavery speech and changes in northern laws – will persuade the South that the North means slavery no harm where it exists.

Lincoln here is showing what that would look like.  The Dred Scott decision has already brought the country close to the point where free soil laws might be illegal, that slaves brought by a southerner into a free state do not automatically become free.  The next logical step would be to force the free states to permit not merely personal servants but slave labor in commercial enterprises.

Lincoln is also contradicting a frequently-assumed argument for popular sovereignty, that slavery simply won’t work in certain places.  Part of the argument in favor of popular sovereignty was that if people didn’t want slavery, or if the climate of a place wouldn’t support it, then it wouldn’t take root no matter what the laws were.  Lincoln appears to be arguing contrary to this, saying that slavery could well exist in an industrial economy, and that therefore laws against it are necessary. 

This is an unsettled point among historians.  Harry Jaffa seems to agree that slavery wouldn’t have worked in California or the New Mexico territory in Crisis of The House Divided.  In his book The Impending Crisis, David Potter argues that Jaffa doesn’t quite prove the point, and re-opens the question about what would have happened had slavery not been banned in certain areas.  Lincoln appears to be taking Potter’s position here, that slavery might well be possible no matter what the economy.

There was also, at this time, a movement in the South to boycott northern goods over the north’s opposition to slavery.  So Lincoln is mocking that boycott as ineffective, and nothing to be afraid of.

Another bushwhacking contrivance; simply that, nothing else! I find a good many people who are very much concerned about the loss of Southern trade. Now either these people are sincere or they are not. I will speculate a little about that. If they are sincere, and are moved by any real danger of the loss of Southern trade, they will simply get their names on the white list, and then, instead of persuading Republicans to do likewise, they will be glad to keep you away! Don’t you see they thus shut off competition? They would not be whispering around to Republicans to come in and share the profits with them. But if they are not sincere, and are merely trying to fool Republicans out of their votes, they will grow very anxious about your pecuniary prospects; they are afraid you are going to get broken up and ruined; they did not care about Democratic votes—Oh no, no, no! You must judge which class those belong to whom you meet; I leave it to you to determine from the facts.

Here, Lincoln (to laughter) isn’t merely mocking the boycott – he’s pointing out its partisan nature.  Northern Democratic businessmen were trying to organize a “white list,” (not in the racial sense, but as the opposite of a “blacklist” from which Southerners would not buy).  Southern Democrats could then buy from Northern Democrats.

And your Democrat neighbors aren’t concerned about your profits because they’re not really worried about the boycott – if they were, they could just get themselves whitelisted and take your business.  No, they’re worried about your votes.

All of this sounds dismayingly familiar – partisan boycotts, pretend concern for political opponents’ well-being, and demands that the other side not merely behave a certain way, but believe a certain way.

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Republic vs. Democracy

Say, “our democracy,” and it shall follow as the night the day that a libertarian will pedantically correct you, “We’re a republic, not a democracy.”  This is usually said hearkening back to the Founders, and of course it’s technically correct.  We are, or at least were designed to be, a representative republic and not a direct Athenian democracy.

I can state with some confidence that the number of people it’s persuaded is in the low single-digits.  Neither those being corrected nor those listening in are likely to second-guess their opinions on whatever subject is at hand, and there’s a good reason for that: our elections are democratic, we frequently have ballot measures that are decided by majority democratic vote, and people use the word “democracy” in common parlance all the time without thinking, “What Would Pericles Do?”

Most of the time, it’s both annoying and irrelevant.

A recent Washington Post oped decried the practice of “gunsplaining,” or pointing out that gun control activists often don’t know very much about the items they’re trying to regulate or ban.  The author argued that the sole purpose of correcting factual mistakes is to bully gun-control advocates into silence.  In my experience, bringing up the fact that there’s no such thing as a “full semi-automatic mode,” or noting with some derision that a Congressman, who’s actually empowered to make laws on this subject, describes a non-existent, “shoulder thing that goes up,” serves a different purpose.

Most of the gun-control activists and legislators in this country are on the left, which has spent the last century or so quietly and not-so-quietly shifting control over our lives to a bureaucracy of experts.  We are expected not merely to defer but to actually give thanks for this growing rule-by-enlightened-bureaucrat.  But when the subject turns to firearms, these very same people turn ignorance into a virtue.  “Gunsplaining”, in its best form, is used to make sure that we’re all talking about the same thing, as with any technical subject, and to make sure that people who want to impose new laws or regulations don’t make them overly-broad.  It’s not contemptuous; it pays the other party the respect of assuming that they’re acting in good faith.

To shout, “We’re a Republic, not a democracy!” in the middle of a gun control discussion doesn’t do any of that, because it’s not really relevant to the subject at hand.

There are plenty of cases where it does matter.  If the discussion is about eliminating the Electoral College in favor of a mythical National Popular Vote, or Colorado’s recent Amendment 71, changin

 

g the way that Constitutional amendments are adopted, govsplaining is entirely appropriate.  Like gunsplaining, it assumes that the other side is discussing the issue in good faith, may simply not recognize the difference between the two or the difference it makes, and tries to reach some understanding of terms that matter.  Govsplaining should be confined to those instances, but usually isn’t.

Contrary to popular opinion, this confusion is not a recent development, nor does it represent a catastrophic failure of our educational system, although there are plenty of those.  Allow a lengthy quotation from Gordon S. Wood’s Empire of Liberty  towards the end (pp. 717-18), where he’s discussing the changes between 1789 and 1815 in our early Republic:

If indeed the Americans had become one homogeneous people and the people as a single estate were all there was, then many Americans now became much more willing than they had been in 1789 to label their government a “democracy.”  At the time of the Revolution, “democracy” had been a pejorative term that conservative leveled at those who wanted to give too much power to the people; indeed Federalists identified democracy with mobocracy, or as Gouverneur Morris said, “no government at all…”

But increasingly in the years following the Revolution the Republicans and other popular groups, especially in the North, began turning the once derogatory terms “democracy” and “democrat” into emblems of pride.  Even in the early 1790s some contended that “the words Republican and Democratic are synonymous” and claimed that anyone who “is not a Democrat is an aristocrat or a monocrat.”  …soon many of the Northern Republicans began labeling their party the Democratic-Republican party.  Early in the first decade of the nineteenth century even neutral observers were casually referring to the Republicans as the “Dems” or the “Democrats.”

With these Democrats regarding themselves as the nation, it was not long before people began to challenge the traditional culture’s aversion to the term “democracy.”  “The government adopted here is a DEMOCRACY,” boasted the populist Baptist Elias Smith (pictured) in 1809.  “It is well for us to understand this word, so much ridiculed by the international enemies of our beloved country.  The word DEMOCRACY is formed of two Greek words, one signifies the people, and the other the government which is in the people…. My Friends, let us never be ashamed of DEMOCRACY!”

We all know the difference between a representative republic and a direct democracy.  The Americans of 1790-1810 knew it, too.  I suspect when pressed, most Americans even now understand the difference.  It’s important not to let corruption of the language degrade our understanding of institutions, and eventually our institutions themselves.  But it’s most important when it’ll do some actual good.

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Civil Unrest, Not Civil War

Among many conservatives, Civil War is in the air.   For many, there’s a sense that things as they are now cannot go on.  The civil order as we have known it is broken, and that things will end either in organized violence or in a semi-violent divorce.

Conservatives should remember not to immanentize the eschaton.

Instead of looking to the decades leading up to 1861, we have a far closer parallel with another decade – the 1790s.

Read this, from a 1961 number of American Quarterly, “Republican Thought and the Political Violence of the 1790s,” by John R. Howe, Jr.:

By the middle of the decade, American political life had reached the point where no genuine debate, no real dialogue was possible for there no longer existed the toleration of differences which debate requires.  Instead there had developed an emotional and psychological climate in which stereotypes stood in the place of reality.  In the eyes of Jeffersonians, Federalists became monarchists or aristocrats bent upon destroying America’s republican experiment.  And Jeffersonians became in Federalist minds social levelers and anarchists, proponents of mob rule.  As Joseph Charles has observed, men believed that the primary danger during these years arose not from foreign invaders but from within, from “former comrades-in-arms or fellow legislators.”  Over the entire decade there hung an ominous sense of crisis, of continuing emergency, of life lived at a turning point when fateful decisions were being made and enemies were poised to do the ultimate evil….

In sum, American political life during much of the 1790s was gross and distorted, characterized by heated exaggeration and haunted by conspiratorial fantasy.  Events were viewed in apocalyptic terms with the very survival of republican liberty riding in the balance.

Sound familiar?

Gordon S. Wood, in his magisterial Empire of Liberty notes that friendships were broken, there was political violence on a local scale scattered throughout the country.  Everyday life and even religious affiliation became increasingly politicized.  While this happened at the beginning of parties, those parties were largely organized around the personalities of their respective leaders, Hamilton and Jefferson.

Jefferson’s Republicans didn’t necessarily expect to win in 1796, but the loss was clearly disappointing.  In response, they adopted tactics that can only be described as resistance.  They retreated to the state governments as bulwarks against what they saw as a too-powerful central government.  They openly talked about states nullifying federal laws they considered unconstitutional.  That picture accompanying this post?  That’s from a fistfight on the floor of the US House of Representatives.

The Federalists, whose real leader wasn’t President Adams (who saw himself above parties), but Alexander Hamilton, continued to govern as though the government were simply the government, and any organized opposition to it was akin to treason.  They reached out not to allies, but to the local or state elites to fill appointed posts and run for office.  Instead of organizing, they wrote opinion pieces for the newspapers, and letters to each other.

Ultimately, it was organizing that brought the Republicans to power nationally.  Aaron Burr’s efforts in New York tipped that state’s legislature, and thus its electoral votes, to the Republicans, and put Jefferson over the top.  The Republicans would win the next six consecutive presidential elections, even as the part fragmented into regional and ideological factions of its own.

The Federalists were down, but not really out until the elections of 1816 and 1820.  The conflict between the parties was resolved when the Federalists, by then almost exclusively concentrated in New England, ended up on the wrong side of the War of 1812.  They worked to break the embargo and trade with Britain.  They rediscovered their small-f federalist principles when their state militias frequently refused to cross the border into Canada.  Old line churches often actually prayed for British victory.

By the end of the war, the country had a renewed sense of nationhood, and had turned away from Britain in the east, and towards its own future in the west.  In 1789, almost all Americans had once been British subjects; by 1815, only those over 40 had, and even fewer could remember that time.

Neither the ideologies nor the tactics nor the self-identification with an “aristocracy” cut as cleanly today as they did in 1796.  That’s less important than the fact that the conflict was eventually resolved, peacefully among Americans, even if it did require a war.  Right now, the question of which issue will be the ultimate dividing line, which party is more in touch with the body politic, which one will emerge to create a durable, long-term majority, is still very much up in the air.

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Talking Down the Dollar

The dollar has been weakening over the last year.  I tend to like a strong dollar, so I don’t like to see the President or the Treasury Secretary talking the dollar down, as the expression goes. I understand the impetus – it makes exports easier, which should help employment. But of course, you’re also being paid in depreciated dollars.
 
Now, maybe that works out when the cycle swings back, and you’re holding all these more valuable dollars, and you can start buying up valuable properties overseas. I just tend to think that underlying economic competitiveness overshadows transient currency moves, and that those moves are unpredictable enough as it is.
 
That said, the reporting on this has been, as usual, atrocious. First, talking down the dollar is not ipso facto a threat to or an abandonment of the dollar’s status as a reserve currency.
 
Second, the ECB is furious about it, because it undermines their own strategy, and they’re already pissed about tax reform repatriating potentially hundreds of billions of dollars back here to invest. If it were clearly against our interests, the ECB wouldn’t be reacting this way.
 
Third, it’s not an abandonment of decades long US policy. That’s just the sort of historical amnesia that 23-year-old reporters with no interest in the “date range” feature on google have been exhibiting since before Ben Rhodes saw it as a way to sell them on the Iran Deal.
 
John Snow did it in 2003 under GW Bush. Prior to that, Jeffrey Frankel has documented similar short-lived statements and policies under Carter, during the second Reagan Administration, GHW Bush in 1991, and early, briefly, in the Clinton Administration.
 
Only when the dollar has been extremely strong has it worried policymakers enough to actually intervene in the markets; many of the above examples are just talk. And there’s no evidence that right now, Trump or Mnuchin are doing anything other than talking, or that even if they wanted to, they could successfully intervene in the exchange rate markets for very long, anyway.
 
Chill.

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Breaking News from 1800

 

In 1800, in the midst of a contentious presidential election, Alexander Hamilton decided that the future of the Federalist Party was too important to be left in the hands of John Adams.  In order to promote his own candidate for Federalist electoral votes, Hamilton issued an anti-Adams broadside cataloging the shortcomings of Adams as president.  Chernow assesses the screed as one of the worst of Hamilton’s political miscalculations.

That it was partly also driven by personal grievances, though, doesn’t change the truth of some of the charges, or that they echoed much of the popular sentiment around Adams’s performance in the job.  Many of the weaknesses of the Adams presidency may sound familiar to observers in 2017, even though the book was written in 2004.

Beyond the unenviable task of succeeding Washington, Adams had several handicaps to overcome.  Despite long years in politics, he had never exercised executive power at the state or federal level.  And he detested political parties at a time when America was being torn asunder by factions.  As president, Adams was the nominal head of the Federalists, but yet he dreamed of being a nonpartisan president….During his presidency, Adams was often stranded between the Federalists and the Republicans and accepted by neither.  It was to prove a rare case in American history of the president hesitating to function as the de facto party leader.  — p. 523

He had retained his cabinet from the second Washington Administration.  But even as he found himself frequently publicly at war with them, he refused to fire them until late in his term.  It was certainly true that Hamilton exercised some influence over the individual cabinet members, in some part because he bothered to engage them rather than dictate to them from afar during his frequent absences in Quincy.

Washington had always shown great care and humility in soliciting the views of his cabinet.  Adams, in contrast, often disregarded his cabinet and enlisted friends and family, especially Abigail, as trusted advisers.  His cabinet members found him aloof and capricious and prone to bark out orders instead of asking opinions. — p.524

Adams, having held over for too long subordinates with no personal loyalty to him, or ideological loyalty to his program, whatever than might have been, found himself stuck with no good defense of his leadership, and so found himself putting out several mutually inconsistent but self-serving versions, simultaneous arguing that people were working to undermine him, and that he was actually in control and playing a higher-level game the whole time:

John Adams told two stories of his presidency that never quite jibed.  In one, he claimed to be an innocent bystander, long oblivious of Hamilton’s influence over his cabinet members.  He had no idea until the end, he said, that they were receiving guidance from his foe; when he belatedly discovered the plot, he moved swiftly to purge the culprits.  In another version, Adams claimed that he had known all along that Hamilton controlled the cabinet, because he had already controlled it under Washington… — p. 524

And Hamilton’s pamphlet drew heavily on anonymous, inside sources – the cabinet members themselves – who were concerned about Adams’s temperament and suitability for the job.

[Treasury Secretary Oliver] Woolcott considered the president a powder keg.  Of Adams, he told Fisher Ames, “We know the temper of his mind to be revolutionary, violent and vinditive…. [H]is passions and selfishness would continually gain strength.”  …At moments, however, Woolcott grew ambivalent about the idea of Hamilton exposing Adams, arguing that, “the people [already] believe that their president is crazy.”

Thus, in his massive indictment of Adams, Hamilton drew on abundant information provided by McHenry, Pickering, and Woolcott about presidential behavior behind closed doors….Stories about Adams’s high-strung behavior, if legion in High Federalist circles, were little known outside of them.  Hamilton also wanted to stress the mistreatment of cabinet members, lest readers dismiss his critique of Adams as mere personal pique…

Yes, the Republic survived both the mutual enmity of protean political parties, and the chaotic behavior of the often-absentee Adams.  But that was at the beginning of our Constitutional framework, when we were still working out how the presidency and parties would work.  (And even then, one could argue that parties didn’t survive this first attempt.  The Federalists pretty much collapsed after the 1800 election, leaving no effective opposition to Jefferson’s Republicans.  Madison was widely blamed for a terribly destructive and unpopular War of 1812, but the mediocrity that was James Monroe won two terms virtually unopposed, anyway.)

The point is that by now, we’re a world power, still the wealthiest nation on earth, responsible for maintaining freedom of the seas and some level of global stability.  That we’ve reverted back to some of the inchoate quality of our early political development does not necessarily bode well for the coming decades, possibly the coming century.

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Jerusalem Day, 1967

Tonight marks the 50th anniversary of the liberation of the Old City and reunification of Jerusalem by Israeli forces in the Six Day War.  That event marked the first time that Jerusalem and its holy places had been under Jewish sovereignty in 1900 years.

And yet, when the war started, taking the Old City was on the minds of very few Israeli Jews.  Certainly not on the mind of Moshe Dayan, newly-installed Minister of Defense.  Certainly not on the minds of the troops.

Jordanian artillery had been shelling the western half, the Jewish half, of the city as well as part of the coastal plain farther north, since the start of the war, but the Israeli government felt that it could more or less overlook this.  Jordan’s British-trained Arab Legion was among the best-led and most disciplined of the Arab armies, and it had been supplemented by some crack Egyptian units.  For Israel, the main front was, as in 1956, the Sinai, and it simply didn’t have the resources for a two-front war.

Only when Jordan moved to take over Government House, a UN post guarding the road to the southern entrance to Jerusalem, did Israel feel that it might have to move.

Even then, the Old City was off limits.  The orders were to take the high ground surrounding the city, from where the Jordanian artillery was firing.

Dayan, while not religious, felt a deep, profound historical ownership of the land, and wanted the Old City back as much as anyone.  His worries were twofold.  First, the density of religious sites and population was such that a firefight could end up killing a lot of civilians, and damaging those sites.  Bullet holes in the Church of the Holy Sepulcher or mortar rounds ending up in the side of Al Aqsa would be objectively bad, and would also likely provoke a reaction on the part of the rest of the world.

That let to Dayan’s second concern.  He had seen how military victory in 1956 had been turned into political defeat, when Israel had been forced to surrender the Sinai in return for useless UN peacekeeping guarantees.  He feared to blow to Israeli morale should they take the Temple Mount and Western Wall only to be forced to give them back.

In the end, air power proved militarily decisive.  After a difficult night of confused fighting, Israeli planes pounded the Augusta Victoria Ridge for much of the morning before the troops slogged up the hill to take it.  When they reached the summit, the Jordanians had fled, and with no fire coming from inside the Old City, it was reasonable to believe those troops had fled as well.  This mitigated Dayan’s first fear, and he gave the order to take the Old City.

As for Dayan’s second fear, it wasn’t realized either, at least not immediately.  But one need only look at UNESCO and the Arabs and UN Resolution 2334 to know that they have not yet surrendered the idea of driving the Jews from their home.

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Pension Sabermatrics

We need new pension metrics.

In the 1980s, baseball writer and analyst Bill James recognized that the traditional baseball statistics, like Batting Average, RBI, and Runs Scored, were so severely limited as to be wildly misleading.  Batting average didn’t distinguish between home runs and singles, and didn’t count walks at all.  RBI depended heavily on batters in front of you getting on base.  Likewise Runs Scored depended heavily on batters behind you driving you in.  Park size influenced ERA.  Slow fielders got to fewer batted balls, so paradoxically recorded fewer errors.  And so on.

By writing and thinking and analyzing what data was available, James created entirely new stats, intended to isolate individual performance, or tease out surprising results about team performance.  So now we have the “Slash Line,” of Batting Average, On-Base Percentage, and Slugging.  We have Runs Created, Park-independent ERA, and Range Factor.   James created a whole new field of baseball analysis, and now there’s not a major league team without an analytics department using them to evaluate team and individual performance.

In the last few years, the country has had a growing realization that its public pensions are in trouble.  Communities, struggling to meet unrealistic commitments that by and large their members didn’t make, have undertaken a series of reforms to existing defined benefit programs, and have even been converting those plans to 401(k)-style defined contribution and cash balance plans.

But in doing so, policymakers are still guided by a small number of traditional metrics that give only a vague sense of a plan’s health, and little if any guidance on potential fixes.

Right now, policymakers focus primarily on Funded Status and Amortization Period.  The first tells you how much money a fund has on hand to cover promises made, in present-day dollars.  The second tells how long it would take to reach fully-funded status.  But each has severe limitations.  A plan’s funded status is a snapshot of where it is right now, but does nothing to capture the trend, or the risk that things will get worse.  The Amortization Period helps describe how far off-track a plan is, but quickly becomes extremely sensitive to small changes in plan dynamics.

Much like baseball in 1980, public pension analysis is ripe for new statistics.  Over the last few years, plans’ financial reports have become more detailed and include more historical information, so there’s much more information for analysts to work with.  This shouldn’t just be playing games with numbers; new statistics should be designed to help policymakers, plan managers, and citizens understand how bad the problem is, and where the risks to their plans lie.

Here are the criteria I propose:

  1. Each statistic should be a single number
    It shouldn’t have error bars, or only be understood in combination with other numbers.  A full analysis should require more than one number, but Slugging Average means something by itself, it doesn’t need other numbers to make sense.
  2. It should have a clear meaning and definition
    People should know what they’re looking at, and understand exactly what the number is meant to describe.
  3. We should be able to calculate it, or at least estimate it, from publicly available information
    Reproducibility is key.  We shouldn’t have to rely on pensions to make these calculations for us, or for legislatures to commissions studies, and we should be able to ding plans that start removing useful data from their reports

At the same time, it’s important to keep in mind what we’re not trying to do:

  1. There is no Holy Grail here
    We’re not looking for a single Public Pension Score that captures everything.  There will be numbers that are more desriptive, statistics that encapsulate more information, but there’s no reason to create some artificially-weighted “Pension Health Score” that tells you too much while telling you nothing at all
  2. Closed Definitions
    There can be debate on the best way to calculate these numbers.  There are very strong competing opinions about the proper discount rate to use, for instance, or the proper tax base, and so on.  Those are legitimate debates to have.  We’re striving for clarity, not absolutism
  3. Fairness Metrics
    Recent studies such as one by the Urban Institute have also looked at pension fairness, and how well a pension plan performs its functions.  That may help in making the political case, but it’s outside the scope of what I’m proposing here.

In 2014, the Colorado legislature mandated a sensitivity study of PERA.  As part of that study, the consulting firm developed a simpler, “Signal-light” structure, that included calculations of a plan’s risk of going broke over a period of time,  based on variations in investment returns.  That’s an example of a great, simple number that encapsulates a great deal of information and helps policy-makers decide the risk to their communities.

It’s a good start, but I’m pretty sure we can do better.  For one thing, while the methodology behind that calculation may be fairly simple, it’s almost impossible to recreate it without developing a complex actuarial model of the pension plan.  That might be an interesting and useful exercise, but it breaks requirement #3.

Just sitting down and brainstorming, I came up with a list of a few metrics that might be useful, as a starting point.

  1. Projected Inflow vs. Outflow using projected rates of return, based on historic rates of return
  2. Liability vs. State (or Jurisiction) GDP
  3. Unfunded Liability vs. Jurisdiction GDP
  4. Liability vs. Tax Rates
  5. Liability vs. Overall Jurisdictional Budget
  6. Required rate of return to lower the amortization period
  7. Effects of increased risk on likelihood of ruin

Real analysis would whittle down from a list a of 20 or so but the purpose here should be obvious.  How much flexibility is there in the jurisdiction’s finances to deal with its problem? Can it cover current costs?  Can it raise taxes to cover them?  How big a bite out of actual services is the pension contribution taking?

There’s enough good information out there now that we don’t need to keep flying blind.

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La-La Land

There’s a scene in the new musical La La Land where jazz pianist Sebastian, played by Ryan Gosling, is confronted by his old friend and band-leader, Keith (Jon Legend) about the nature of jazz.  It’s after Sebastian’s first practice session with Keith’s new band.  Sebastian is convinced jazz is dying because people won’t take it on its own terms.  Keith replies that Sebastian talks about saving jazz, but that to do that, you have to bring it up to date with synthesizers and backup singers, not be a slave to its history.  But Sebastian isn’t trying to put jazz in amber, he just wants it to be confident in its own authenticity.

Keith and Sebastian are talking about jazz.  And about the movie musical.

The central artistic tension of the film is between nostalgia and creativity.  Both writer-director Damien Chazelle and his on-screen avatar Sebastian struggle with how to draw on the goodwill and good feelings of a golden age, while not getting trapped in stagnant nostalgia.  This year saw a number of films set in Hollywood’s golden age that didn’t work well.  I had high hopes for the Coen Brothers’ Hail, Caesar!, but it failed precisely because it was post-modern nostalgia, and homage rather than a creation.

Chazelle solves the problem by not making a period piece.  It’s set in 2016, but follows the conventions of the traditional musical.

La La Land works because it’s confident in its own authenticity.  From the opening production number set in a traffic jam on an LA freeway, the characters simply slide into singing or dancing because that’s what characters in musicals do.  The musical numbers advance the plot or develop the characters because that’s what musical numbers do.

Gosling and Stone don’t wink at the audience.  Hip irony, or self-aware self-consciousness would kill the picture, because if a film doesn’t take its own form seriously, why should you?)

The musical is actually melodic and enjoyable, legitimate 21st Century show tunes, not rock or rap shoehorned into a mismatched genre.  You recognize Seb & Mia’s theme when it’s repeated; the recurring ballad, a rhythm song named “City of Lights,” works in any tempo or mood, and isn’t so overworked that you get sick of it.

And oh, do you take it seriously.  There’s plenty of humor, of course, but through the first 120 minutes, right up to the climactic “Epilogue,” you first believe in Seb and Mia, and then invest heavily in their relationship.  Each of them is charming in their own right, but the chemistry between them pops off the screen.  You desperately want them to succeed as individuals and as a couple.

Therein lies the central relationship tension of La La Land – can they have both their creative dreams and their dream of each other?

By setting a traditional music today, and by writing for a 2016 audience, Chazelle really does keep you guessing up until the very end.  Some will find the ending satisfying; to others, it will look like the easy way out.

But sorry, no spoilers here.  You’ll have to see it yourself.

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Sen. Gillibrand Does History

Sen. Kirsten Gillibrand (D-NY) has tweeted out that she won’t support a law allowing Gen. Mattis to serve as Secretary of Defense with 7 years of his military separation, because she believes in civilian control of the military. Nobody I know disagrees with the principle, and there’s plenty of civilian control built in, starting with the fact that Mattis himself is now a civilian, as is the incoming president, and most of the members of Congress.

Maybe Gillibrand needs a history lesson.

The only other time such a law was needed was when former Gen. George Marshall moved from the State Department to Defense under Pres. Truman. Marshall, for the benefit of Sen Gillibrand, was the author of something called “The Marshall Plan,” which saved much of Western Europe from Communism by helping it to rebuild after World War II.  Truman asked him to serve as Secretary of Defense during something called “The Korean War,” which saved South Korea from Communism by defending it against the Chinese and Russians.

Pres. Truman knew a thing or two about civilian control of the military.  For instance, during the Korean War, he found himself standing up to and relieving the popular Gen. Douglas MacArthur, who thought he knew enough to dictate the scope and terms of the war to the president.

Gillibrand’s about my age and got into Dartmouth at a time when the Ivies hadn’t descended into madness, so I assume she’s familiar with at least some of these facts.  (In case she’s not, she’s got a 50th birthday coming up in a week; maybe someone can buy her David McCullough’s biography of Truman for a present.)

More likely, she’s posturing as a leader of The Resistance, positioning herself for a 2020 White House run.  Rumor has it that she’s already been contacting Clinton donors with that possibility in mind.  She may also remember 1989, when Democrats torpedoed the nomination of fellow Senator John Tower for Defense Secretary, and believe that this is a road to weakening a President Trump at the outset.

It may play well with her base, and with the party, which is where she needs to start.  But Gen. Mattis is revered among his troops and admired by the public at large.  Starting with an attack on his nomination might not be the swiftest move in the long run.

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No on Proposition 106

Right now, Coloradans are voting on Proposition 106, which would legalize physician-assisted suicide in our state.  I plan on voting against.

Proponents often point to the truly heart-rending situations that terminal patients and their families find themselves in, without hope, and without quality of life.  There is no question that such situations exist, and that they can be terrible to behold for those involved and those close to them.

But for each emotional trauma avoided, others, as yet unseen, will be created.

Margaret Dore, a Washington State attorney active in the fight against euthanasia and assisted suicide, wrote in an article published in the ABA Voice of Experience, a news letter for the Senior Lawyer Division:

I have had two clients whose parents signed up for the lethal dose.  In the first case, one side of the family wanted the father to take the lethal dose, while the other did not.  He  spent the last months of his life caught in the middle and traumatized over whether or not he should kill himself.  My client, his adult daughter, was also traumatized.  The father did not take the lethal dose and died a natural death.

In the other case, it’s not clear that administration of the lethal dose was voluntary.  A man who was present told my client that the father refused to take the lethal dose when it was  delivered (“You’re not killing me.  I’m going to bed”), but then took it the next night when he was high on alcohol.  The man who told this to my client later recanted.  My client did not want to pursue the matter further.

In an effort to avoid visible emotional and physical pain, the state has instead created moral and emotional trauma (in the first case) and potential murder (in the second).  At a minimum, the second instance – a man getting drunk in order to kill himself, or killing himself while drunk – can’t be particularly comforting.

The law would also create perverse incentives for insurers and, in the case of Medicaid and the proposed state single-payer measure also on the ballot, the government, to cover suicide drugs but not expensive life-extending care.  Instead of giving hope for ending pain, the law may end up removing hope of cure, remission, or simply an extended life.

Indeed, California may already have seen at least one instance of this.

“For a while, five months or so, we’ve been trying to get me on a different chemotherapy drug for the infusions, because my doctor felt that it would be less toxic than some of the other drugs that we were going to be using,” Ms. Packer said in a video distributed by The Center for Bioethics and Culture Network on Monday.

 “And I was going back and forth, and finally I had heard back from them, and they said, ‘Yes, we’re going to get it covered, we just have to fix a couple of things,’” she continued.

But shortly after California’s End of Life Option Act, which authorizes physicians to diagnose a life-ending dose of medication to patients with a prognosis of six months or less to live, went into effect, Ms. Packer’s insurance company had a change of heart.

“And when the law was passed, it was a week later I received a letter in the mail saying they were going to deny coverage for the chemotherapy that we were asking for,” Ms. Packer said.

I say “may,” because that sort of back-and-forth Ms. Packer describes is the kind of thing that often happens when insurance companies are trying to find a reason not to cover a treatment.  It may be that the assisted suicide law gave them the out they were looking for.

As would be expected, the Libertarian Party is in favor, citing personal liberty concerns, and the ownership of one’s own life.  When insurers, hospitals, and the government see it as a cost-management issue, I’m sure they’ll be happy to give you all the liberty you want to end your life.

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