Libertarian Critiques of the Gender Gap

In response to yesterday's post, a reader put to me that the gender pay gap "is for the most part a myth and has been debunked by many economists," citing an article by Steven Horwitz.  I try to keep an open mind, so let's take a look at Horwitz's article.

First, in analyzing the oft-discussed ballpark figure that women earn 80% of what men do to perform the same work, Horwitz has this to say (emphasis added mine):

First, if the critics are claiming that the 80% number means that when men and women with the exact same skills and experience and preferences do the exact same work that women get paid 80 cents for every dollar men do, they are wrong. That is not what the 80% figure shows. 

 

Rather, that number is the ratio of female to male wages among full-time workers, across all kinds of jobs and regardless of the skills and preferences of the workers. That 80% is an aggregate – it is not an apples-to-apples comparison of men and women doing the same work. Thus, the claim that women get paid 80% of what men do for the same work is a myth.  (Foundation for Economic Education)

As our reader also says, "You can’t compare janitors to maids and management positions in different industries as if they were the same."  And that's true.  It would be wrong to compare the earnings of a Chief Executive Officer and a Chief Operating Officer, or a heart surgeon and an ophthalmologist, for instance.  So Horwitz is likely right in that the 80% aggregate misses the mark somewhat.

But what about janitors and maids?  According to the Bureau of Labor Statistics, in 2016 (source here), janitors earned about 22% more than maids on the average, and janitors are were likely to be men than women (and vice versa for maids).  Is their work substantially different, or are they market substitutes? 

This New York Times article cites numerous studies which found that as women entered certain occupations, average pay decreased, whereas when men entered certain occupations, the opposite occurred - "even after controlling for education, work experience, skills, race and geography."  This seems to have occurred even when an "apples-to-apples" comparison is done, in this case with regard to the specific occupation of ticket agent (emphasis added mine):

A striking example is to be found in the field of recreation — working in parks or leading camps — which went from predominantly male to female from 1950 to 2000. Median hourly wages in this field declined 57 percentage points, accounting for the change in the value of the dollar, according to a complex formula used by Professor Levanon. The job of ticket agent also went from mainly male to female during this period, and wages dropped 43 percentage points.

The same thing happened when women in large numbers became designers (wages fell 34 percentage points), housekeepers (wages fell 21 percentage points) and biologists (wages fell 18 percentage points). The reverse was true when a job attracted more men. Computer programming, for instance, used to be a relatively menial role done by women. But when male programmers began to outnumber female ones, the job began paying more and gained prestige.  

... even when women join men in the same fields, the pay gap remains. Men and women are paid differently not just when they do different jobs but also when they do the same work. Research by Claudia Goldin, a Harvard economist, has found that a pay gap persists within occupations. Female physicians, for instance, earn 71 percent of what male physicians earn, and lawyers earn 82 percent. (New York Times)

Now, maybe those lawyers are engaged in different types of law work - some are real estate attorneys, some are litigators, etc.  But ticket agent... how many different types of ticket agent are there, really?

To be fair to Horwitz, he doesn't dispute that discrimination effects the gender pay gap - just that it doesn't account for most of it:

The consensus of the economic studies is that there is still about 3 to 5 percentage points of the 20 percent, or roughly 15 to 25% of the gap, that cannot be accounted for by economic differences and that might well be due to discrimination. (Foundation for Economic Education)

(By contrast, one study cited in the NYT piece comes to the conclusion that "pure discrimination may account for 38 percent of the gender pay gap.")

It's worth noting that Horwitz cites "economic studies" but doesn't actually provide links to, or even the names of, any actual economic studies.  I'm not denying he is referring to actual studies, but it would have been nice to know what they were.

Horwitz notes several times that is a fan of markets, and states in his conclusion that insufficiently "free" markets might be causing distortions that allow discrimination to flourish.  "The less rivalrous the market, the more you find forms of power, including that stemming from bias, can express themselves."  Maybe.  It's also possible that markets are often not rational, no matter how badly the Austrian school / libertarians generally might wish otherwise.  

That said, it's also possible that the studies cited in the New York Times article above are also tarnished by bias - that those studies were constructed with the belief that discrimination does in fact explain most of the pay gap.  That gender discrimination is persistent and looms large in peoples decision-making seems like a less crazy premise to me than that markets are efficient and rational.

Horwitz and Claire Cain Miller, the author of the NYT article discussed above, agree on much.  Both seem to concur that socialization may be largely responsible for the gender pay gap, in that women are often deterred from childhood for pursuing higher-paying work that is typically performed by men, and that the prospect of raising a child puts many women off from undertaking careers which obligate long hours - stereotypically "men's work", which tends to pay much more.

Horwitz clearly has, in the end, good intentions, and his piece is well worth reading in its entirety.  His lack on specificity on the studies he cites, and the fact that other studies directly contradict his "apples-to-apples" claims calls into question who has the better studies.  But mostly, I must say I disagree with Howitz here (emphases added mine):

Working through voluntary processes and the institutions of civil society to reduce sexism seems a far more congenial option than using policy. I also think that the long-standing liberal concern with the dignity and growth of all individuals should make us want to address the sexism that remains in our culture. This is a set of issues on which we can agree with progressive feminists – working together to change the culture is a better solution than trying to regulate labor markets in ways that are not necessary. (Foundation for Economic Education)

Au contraire - I suggest that if, as just a beginning, paid parental leave was not also offered, in equal amounts, to men and women, but that both men and women were obligated to take that leave, and furthermore, if working longer hours was actually deterred or even disallowed by law, you might see regulated labor markets come to change culture, rather than vice versa.  I also suggest that congeniality should be at the least of our concerns where labor rights are concerned, and that attempts to "change culture" absent law are often doomed to failure - the perennial back and forth of the modern day culture war.

But whether culture is the determinant of, or the byproduct of, the social economy is a vast topic for another day.  For now, I simply suggest you read Horwitz's piece and Miller's piece as well.

The Gender Pay Gap, the EEOC, and Parental Leave

In light of the uproar over Harvey Weinstein, and the subsequent #MeToo campaign, I thought it would be appropriate to look again at the gender wage gap and what, if anything, the Trump administration is doing to narrow that gap, as well as the treatment of sexual harassment under the Trump administration.

The Equal Employment Opportunity Commission (EEOC) received 90,000 complaints in 2015, of which 30% dealt with sexual harassment, and it was estimated that 75% of sexual harassment incidents in the workplace went unreported.  This informative Vox article breaks down a 2016 EEOC study that makes clear that the little Powerpoints we're all subjected to once a year (if that) do next-to-nothing to deter harassment.

(The Vox article also makes an important point that in unionized industries, the pay gap is significantly reduced.)

That a Republican President would seek to undermine the EEOC with appointees and rules designed to make employment less equal is not really a surprise, and Donald Trump has sadly not proven an exception to the rule in this regard.  His most recent EEOC nominee, Donald Gade, is "an outspoken critic of disability pay for wounded veterans" (source: Inside Counsel) which strikes me as totally flipping insane, politically, but in this day and age positions once considered insane are increasingly entering the political norm, aren't they?

As you can guess, if the President is going to nominate a man who thinks that even those who fought for their country in the armed forces and sustained injuries shouldn't get "handouts," he's certainly not going to do anything to fight the chronic gender pay gap.  And in fact, Trump's EEOC has moved to stop reporting from large companies - reporting that would have assisted efforts to close this gap:

The Trump administration has halted a rule that would have required large companies to report to the government what they pay employees by race and gender — an Obama-era policy that aimed to close what economists call the wage gap. ... Starting next year, companies with more than 100 employees and federal contractors with at least 50 would have had to report more detailed salary data to the EEOC on a form they already annually submit to the agency. ... If, for example, the numbers revealed that a business paid male sales employees far more than their female counterparts, the EEOC could choose to look into the matter and perhaps launch a discrimination lawsuit.  (Washington Post)

Gotta keep those pesky lawyers at bay!

Business Insider, a publication I find increasing indispensable, has a wonderful, graph-filled breakdown of the pay discrepancy between men and women.  It will come as no surprise that women of color fare even worse than white women (oddly, Asian women suffer slightly less than white women).

It is also a cruel irony that new mothers suffer salary-wise when their children are born, but then men tend to enjoy a salary increase.  

Of course, some of that discrepancy might be obviated by a national paternal leave policy, which is a concept that enjoys bipartisan support and had been loudly trumpeted by Ivanka Trump.  A great, concise look at paid family leave can be found here.  Certainly, the polling on the issue is good:

A Pew Research Center survey of 2,029 adults released in March found that 82 percent support paid maternity leave, 69 percent support paid paternity leave, 67 percent support paid family leave, and 85 percent support paid-leave to deal with one’s own serious health condition. (HealthAffairs.org)

Still, counting on Ivanka Trump to spearhead a national parental leave policy might not be the best idea.  If you read the Washington Post article above, you'll see she stood by her father's decision to halt the reporting from larger companies.  Still, who knows, maybe she really will step up to the plate, somehow.

Barring that, logic would suggest the pay gap for women, and low levels of reporting on sexual harassment, are here to stay, at least if Donald Trump's EEOC has anything to say about it.

On a side note, and unrelated to the issues discussed above, I don't want any of you to miss this horrifying expose of elder law abuse.  Why this isn't a hot button issue politically is beyond me.  Read it and weep, and, sadly, maybe don't trust your parents' doctors.

NAFTA Update

Donald Trump continues to be alarmingly right on the issue of "free trade" agreements, as you can tell by the character of his enemies.

I personally wish this were not so, given that he is a race-baiter, a man fundamentally without dignity, and by all accounts, an illiterate.

Still, it appears that Trump might in fact be sincere about withdrawing from NAFTA, and if so, he'd be on the right side of history and economics.

A potential withdrawal is lauded by the AFL-CIO and denounced by the U.S. Chamber of Commerce.  The U.S. Chamber of Commerce is not exactly a small-town affair, despite the fact that most of the municipalities we grew up in have their own local, and fairly benign, Chambers of Commerce.  The U.S. Chamber of Commerce is much more akin to today's NRA; a fairly extremist ur-organization standing for Big Business, all other considerations be damned.  If the U.S. Chamber of Commerce is against it, and the AFL-CIO is for it, odds are it might actually be good for the average American worker.  Just consider this:

Last fall, Nike, Apple, and three major utilities quit the Chamber or its board of directors over what one company called its “extreme rhetoric and obstructionist tactics.” Companies such as Dow and General Electric distanced themselves from the group as environmental and labor groups piled on with criticism of the Chamber’s cozy relationship with special interests.  (Mother Jones)

That is from a 2010 article, but times haven't changed under U.S. Chamber of Commerce head Thomas Donohue.

As Orwellian as it gets: the U.S. Chamber of Commerce building touting "jobs"

The NY Times, in its alarmist article about possible NAFTA repeal, appears to be taking the side of agribusiness, in a fairly manipulative way:

If the deal does fall apart, the United States, Canada and Mexico would revert to average tariffs that are relatively low — just a few percent in most cases. But several agricultural products would face much higher duties. American farmers would see a 25 percent tariff on shipments of beef, 45 percent on turkey and some dairy products, and 75 percent on chicken, potatoes and high fructose corn syrup sent to Mexico.  (NY Times)

I hate the use of "American farmers" here.  It conjures the image of the little man and woman workin' hard on their small-to-mid-sized farm.  The truth is, modern agribusiness is dominated by a tiny number of producers with gigantic proportions.  Should we, the average American consumer, worker, and taxpayer, be all that worried about these firms having to pay a few tariffs when they sell goods in Mexico?  I suggest no.

Astoundingly, given how much the Trump administration to date has doubled down on being friends of the wealthy, and enemies, rhetoric aside, of the little guy, the Trump administration appears to be serious about overturning the most egregious part of the NAFTA: the clauses that obviate national sovereignty (emphases added mine):

Business groups say they are firmly opposed to an American push to curtail a provision called investor-state dispute settlement, which allows companies to sue Canada, Mexico and the United States for unfair treatment under Nafta. Meanwhile, Canada has said that it will not consider dispensing with another provision, Nafta’s Chapter 19, which allows countries to challenge each other’s anti-dumping and countervailing duty decisions before an independent panel.  (NY Times)

This fellow is not enthralled with recent news.

Let's be very clear about this paragraph.  "Business groups" (the U.S. Chamber of Commerce and others) are opposed to the overturning of treaty elements that allow companies to sue the nations in which they do business and overturn the laws of those nations.  Last time I checked, Mexico, the United States, and Canada were all ostensible democracies, whereas companies were beholden only to a tiny number of people: their shareholders.  Why should "investor-state dispute settlement provisions" even exist?  That puts the concerns of companies ahead of all other concerns.  I suppose that's fine if you're a hardcore libertarian, but if you're not, I assume you're on Team Nation-State.  I know I am.

If you'd like to see Dean Baker put the NY Times on blast for their NAFTA-death alarmism, here's the link.  And of course, here he points out how "free trade" isn't actually free trade at all.

Now: would a transition out of NAFTA be smooth?  Most likely not.  Just look at poor Britain - having undergone Brexit, they're now considering... drum roll please.. joining NAFTA!

So it's a tricky issue.  But there's no denying that, in this one instance, Donald Trump might actually be standing up for the American worker, whether he realizes it or not.  This is an issue that Democrats should do their best not to be on the wrong side of, unless they want to continue to see their clocks cleaned:

Mainstream centrist Democrats have a highly specific reason to evade criticism of our trade deals: a guilty conscience. After all, it was the 1993 fight over the North American Free Trade Agreement that saw the Clinton wing of the Democratic Party stick the knife deep into the back of its longtime ally, organized labor. Among labor types, the NAFTA betrayal, plus the many Democratic trade deals that followed, has rankled for years; whenever I talk to union members, bitterness over trade almost always comes welling to the surface.  (Politico.com)

If you'd like a lengthy read, here's a reminder of why NAFTA is garbage.  There are many, many, many, many, many, many good reasons to be opposed to Donald Trump, but perhaps "free trade" is not one of them.

The Trump Administration and the EPA

In the Trump presidency to date, there has been a tremendous amount of strum und drang, a lot to either get upset about (or cheer, if you're a fan of making a scene for its own sake) in terms of talking points, but not all of it has been substantive.  Starting today I'm going to try to tackle, one topic at a time, what exactly the Trump administration has done to date, and whether or not it's been substantive.

We'll start with the environment, where the Trump administration has, in fact, done quite a bit: it's done a lot of damage in a brief period of time.

Before we begin, let's take a look at this chart, which comes to us courtesy of NOAA:

Look, you either read this chart and believe your eyes, or you read this chart and refuse to believe your eyes.  If you fall into the latter camp, don't even bother reading the rest of this blog entry.  You must surely be thrilled with President Trump and Scott Pruitt, his EPA Administrator.

For those who are still reading, let me ask you a question: would you save the life of one child with terminal cancer if it meant that 1,000 additional children would develop chronic emphysema?  Of course you would if it was your child, but what if you knew none of the children involved?

It might be a difficult question for some.  For me, it is not.  As horrible as it is, I would sacrifice the one child with cancer to spare the 1,000 other children.  Trump and Pruitt seem to answer that question differently.  They are willing to sacrifice our collective future for the good of about 160,000 people total, or about one month of total employment growth in the current era (which began under Obama and continues under Trump).

(Image from MSNBC)

Scott Pruitt is a liar who has claimed notable employment growth in coal already to date.  As of June 2017, according to the BLS, coal employment was up about 1,300 jobs in the first half of the year.  That's nothing to write home about.

(Scott Pruitt also lets lobbyists write his letters for him.  Next time someone tells you Donald Trump is "draining the swamp," bring up Scott Pruitt.)

Anyways, for the sake of this extremely small portion of the American work force, Donald Trump seems determined to put an end to historic trend of the death of the coal industry.  (This slow death is well-documented by Visual Capitalist - please take a gander.)

I'm not wholly unsympathetic to that cause.  After all, there's no denying - as ugly as it is - that modern America wouldn't be possible without the credit markets created by the slave-driven cotton industry.  (And here is an excellent book on that very topic, briskly written and informative, that I encourage you all to read.)  Still, if I proposed to you that the cotton industry should be resuscitated, at the expense of newer industries, would you not think I was a bit crazy?

And yet Donald Trump is prepared to deal very serious blows to the nascent renewable energy sector, which employs more than double the amount of people the coal industry does, on the very basis that once upon a time, coal Made America Great.  It's backwards-looking and doomed to failure.

(Image from The Solar Foundation)

Politico.com is often quite skippable, but Politico has done excellent reporting on the EPA under Trump and Pruitt.  Here's the latest.  Let me go through the five major points quickly:

1. The Death of the Clean Power Plan.  I must criticize President Barack Obama for putting the Clean Power Plan into effect at the end of his administration.  He was roundly criticized for being a "socialist" almost the entire time he was in office, but he waited until the tail end to actually roll out substantive environmental regulations.  Imagine if he had enacted the Clean Power Plan in, say, 2009?  He would have had eight years to demonstrate that it is not in fact a job-killer, but an eminently reasonable plan for the future.  As it is, the Clean Power Plan - which would have reduced emissions 32% below 2005 levels by 2030 - is now dead.  This death comes at the hands of the coal industry, an industry which has provided a whopping 1,300 or so jobs to Americans in the year to date.

To be fair: these jobs generally pay well, in areas of the country where good jobs can be hard to come by! It's just that there are very, very few of them, and with the rise of mountaintop removing, there will be fewer still.  See this article on an alliance between coal miners and environmental activists on this very subject.

2. The Department of Energy Moves to Favor Power Plants that Keep Large Fuel Supplies On-Site.  Famous idiot Rick Perry is moving to keep coal on life-support despite the fact that demand for coal is down, and supply of coal's market substitutes, natural gas and renewables, are way up.  Whoa, imagine that, a Republican who gives lip service to capitalism but isn't willing to let an inefficient industry die due to competition! Imagine that!!!  Sigh.  The bottom line is:

Critics say the rule could heap billions of dollars in additional energy costs on homes and businesses without a guarantee that they wouldn’t lose power when the next hurricane rips out their power lines or a polar vortex freezes the pile of coal at a power plant.  (Politico.com)

3. The Trump Administration May Take Trade Action Against Foreign Producers of Solar Panels.  Well, here I'm actually rather sympathetic.  We should be doing our manufacturing here in the United States to the extent that we can.  American manufacturing jobs tend to provide good middle-class livings.  The problem is, however, that the solar industry is a growing industry that might not be able to survive the cheapness cost of coal once American labor prices are factored in.

If the solar industry remains subsidized, to absorb growing labor costs, perhaps it could survive the challenge from cheap coal.  But to keep coal king, Trump is moving to kill subsidies to the solar and wind industries as well.  So any sort of trade restriction against Chinese- and other foreign-made solar panels could, in fact, deal a perilous blow to the growth of solar power in this country.  (Whether Trump is sincere about trade barriers is another subject.)

4. Abandoning Fuel Economy Standards.  There's essentially no evidence that I am aware of - feel free to email me if you have some - that improving fuel economy standards have ever seriously hindered economic growth.  In fact, many suggest the opposite is true.  I am open to having my mind changed on this topic, but it seems as though here Trump is more interested in red-meat political posturing than actually Making America Great. Sad!

Valley of the Gods, Utah.  Open for drilling?

5. Opening Federal Lands to Fossil Fuel Development.  And here, again, we get to basically a moral issue.  Given that we know the fuels of the future are ultimately wind, solar, and possibly fusion, with natural gas and perhaps nuclear acting essentially as "bridge" fuels, and that coal will be first to go, with petroleum to follow (hey, don't take it from me, take it from industry guru Daniel Yergin) why would we sacrifice the amber waives of grain and the purple mountains' majesty for the fuels of the past?  I like a good stiff drink, but I still set aside money for my 6-month old daughter's future college education, and I won't be dipping into those funds next time I want to pick up some beer.  (Not even if it's from Evil Twin Brewing, although holy moly, what good beer.  Evil Twin are not sponsors, I'm just giving you a free beer-drinking pro-tip here). 

I've gone a bit long on this blog post so far, so even though there is much more to say, I will wrap up with this:

• Environmental issues are the one area where the Trump administration has had the most impact to date, and it's been a really nasty impact.
• There is some hope that the rest of the civilized world will keep its eye on the ball while Trump fiddles and America burns.  To quote Foreign Affairs: 

This improbable progress has upended the once dominant assumption that economic growth and rising greenhouse gas emissions must go hand in hand. Between 2008 and 2016, the U.S. economy grew by 12 percent while carbon emissions from energy generation fell by about 11 percent—the first time the link between the two had been broken for more than a year at a time. This decoupling of emissions and economic growth has begun to occur in at least 35 countries, including China, where many believe that emissions will peak and begin to decline in the next few years, more than a decade earlier than the 2030 target China has set for itself. In fact, 2016 was the third year in a row when global emissions did not rise even as the global economy grew. Before this streak, only recessions had ever brought emissions down. This quiet shift represents a seismic change in the political economy of clean energy. Once, countries had to trade faster economic growth for reducing emissions. Now, they are racing against one another to claim the economic benefits of clean energy. (Foreign Affairs)

• Also, Politico.com's ongoing 5 Things Trump Did This Week When You Weren't Looking is a MUST-READ.   Right up there with your Dean Baker.

The Rising Stock Market and Low Wage Growth

The stock market has risen 22% since Donald Trump's inauguration.  That's a flashy number!  And it's sure to leave died-in-the-wool Republicans impressed.

However, it doesn't mean squat in terms of normal folks getting a raise.  The stock market is driven by corporate profits, which are not predicated on investment.  Take it away, Dean Baker (emphasis added mine):

Note that this has nothing to do with investment and growth. The relationship between corporate profits and investment has always been weak. In fact, the strongest period for investment (measured as a share of GDP), was the worst period for profits (the late 1970s and early 1980s). So there is little reason to believe that the Trump tax cuts will spur investment and growth. (Dean Baker)

Please, I beg you, read Dean Baker's short article on the subject.  There is little correlation between stock market growth and "real" economic growth -- i.e., businesses expanding, new hires, salaries going up, increased amounts of investment in new machinery, facilities and the like.  

This Politico article makes essentially the same point, and also points out that the economy just hasn't changed much from the Obama years.  The economic recovery began under Obama and has trudged onward without change into the early Trump years.  It's sort of astounding, when you consider all the political strum-und-drang, that this would be so.  But it is so!

The characteristics of the Obama-Trump economic recovery are: a steady number of jobs added every month (and corresponding low unemployment rate), but a stubbornly high rate of people who are still sitting out the job market entirely, eight plus years after the huge recession, and corresponding minimal wage growth:

Even as the unemployment rate has fallen, and other economic indicators, like home prices and the stock market, have been healthy, wages have barely budged. Yes, they’ve gone up, as Mr. Trump tweeted, but average hourly earnings were up 2.5 percent over the last 12 months as of July. That’s actually lower than the 2.9 percent pace in December 2016, just before he took office.  (NY Times)

You don't even need to read this New York times article -- just look at the pretty charts.  It's worth your skim.

If the economy is basically the same, why has the stock market risen so rapidly since Trump was elected?  Simple!  People who rely on stock ownership rather than salary as their predominant source of income -- i.e., the wealthiest people in the country -- expect a huge tax cut under the Trump regime.  That expectation, coupled with the belief that the market is sort of immune to the chaos in Washington, is what keeps the stock market afloat.

Meanwhile, the rest of us wait for big raises, some ability to send our children to college, and some sort of relief with our medical expenses.  We're gonna have to keep waiting quite a while on those.

Qatar Update

How could I overlook this?

In today's post I touched briefly on Qatar and it's history vis-a-vis Saudi Arabia (via the NY Times).  I had previously summed up another NYT article on Qatar here.  To wit: Qatar and Saudi Arabia have beef; Qatar has long tried to walk a fine line between being Saudi Arabia's pal and the pal of Saudi Arabia's sworn enemy, Iran; the US has 11,000 troops stationed in Qatar and thus has prudently respected this balance; the Saudis recently tried to completely isolate Qatar and end this balancing act entirely; and Donald Trump has astoundingly done his best to blow up the balancing act by using Twitter to put Qatar on blast (you read that correctly! not a fever dream on your part!) for supporting "terrorism," while simultaneously dealing $110 billion worth of arms to Saudi Arabia, which is completely hilarious in its sheer hypocrisy (Cato Institute).

But you might think, "Well, at least the Trump administration has decided what side they're on and is acting accordingly."  Well, NOPE.

Trump sells Qatar $12 billion of U.S. weapons days after accusing it of funding terrorism. (CBS News)

Seen on its own, you might think the Trump administration is engaged in some brilliant, seeing-many-steps-ahead geostrategy.  But given the other moves made by the Trump administration, both domestically and foreign-policy wise, I feel pretty confident in asserting that the Trump administration just doesn't understand what the ---- it's doing.  Emphasis added mine:

In the face of the escalating tensions Qataris came to D.C. with a large entourage -- expecting to break ground on the escalating regional standoff. But there is no sign of progress. The State Department has yet to extend an official request for a joint meeting between representatives that are in the nation's capitol from Qatar, the UAE and Saudi Arabia. Qatar says have still not received the list of demands that the countries have for them. The U.S. has not played a role in passing along request, either.  (CBS News)

Hahahahhahah come ON, people.

Maybe this will all work out Great for America Again, somehow, but I'll tell you, if I was Qatar right now, I'd be getting on the horn with Iran and saying, "Hello, Ayatollahs? It's me, Qatar"*.

America has demonstrated, through its vacillating, to a country in which its troops are based, that it cannot be relied upon.  Whether or not you're in favor of projecting strength overseas, I have to ask: how does this help us?

* this stupid pun cleared by several of my closest associates - blame them.

Lovely Qatar

Potpourri (TL;DR edition)

Are things Too Long for you?  So long you Don't Read them?  Don't worry, I'm on the case!

Today I provide a variety of links to valuable/interesting reading, along with brief summaries for those of you movers and shakers on the go who don't have the time to read them yourselves.  Graphically, I have provided no-usage-rights-required pictures of lovely flowers.  Soothing!

The "Skills Gap" is a Bunch of Malarkey (NY Times)

You'll often hear assorted Important People assert that high unemployment is due to a "skills gap"; workers formerly employed in manufacturing, for instance, lack the skills to move swiftly into new work, even though businesses are eager to hire.  The problem is there's very little evidence for this assertion at all.  Lost manufacturing jobs, which once provided a middle-class way of life, are being replaced by low-end, undesirable work -- working as a cashier, for instance -- or high-end work, requiring collegiate education and beyond.  I guess you could say that's evidence of a "skills gap," but it's a gap that can't be breached with simple job retraining, and besides, there's only so many of those high-end jobs to go around.  Apprenticeship programs can help mitigate "skills gap" problems somewhat, but the bottom line is: middle class jobs are disappearing, period, and "skills" don't have a lot to do with that.  (Low aggregate demand and "labor arbitrage" have more to do with it - see below).

"Public-Private Partnerships" Don't Work as Well as Plain Ol' Having the Government Do It  (NY Times)

I talked a week ago about infrastructure and how public-private partnerships are a bit of a scam.  Here's more writing to that effect.  China: doing it right, at least until recently.  India and much of the rest of the world: not so much.  Trump's infrastructure plan relies heavily on public-private partnerships.  Make America Stricken with Delays and Cost Overruns Again.

Oil Glut Ain't Going Nowhere (NY Times)

OPEC has no answer to North American shale producers and everyone involved has a short-term incentive to produce more, even if in the long-term that is bad for business.  As such oil is going to stay very cheap for a long time, which is good in the short term for consumers, and bad in the long term in terms of replacing oil with an environmentally less destructive energy source.

Class Conflict and the "Core Area" vs. "Gloalization" (American Affairs)

A fascinating but lengthy and verbose article, which I strongly encourage you to read if you have the patience for it, that looks at the history (from roughly the industrial era forward) of class development, immigration, "free trade" and the rise of "populism" in response thereto. 

In a nutshell: nation-states developed via mercantilism, capital and labor clashed constantly, eventually capital more or less pacified labor by improving their position in the social contract, and a new "class" emerged - the "managerial class," which is basically a less nasty, more soothing capitalist class.  As a side note, the higher labor standard under this regime essentially requiring limiting immigration, as the resources of the nation-state or "core area" are not limitless and, given that low-wage immigration or outsourcing can be used to diminish the earnings of labor, it is requisite that both be curtailed to keep the good times rollin'.

However, with the advent of the super-national, global corporation, the capitalist class has every incentive to dismantle mercantilism (an obstacle to the global logistics chain) and reduce labor to relative poverty again by pitting "native" workers against immigratns and workers overseas who earn far less and have far fewer rights ("labor arbitrage").  Labor, in response, has every reason to turn to populists - some of whom are legit, others of whom are con artists - to restore the old mercantilist order.

(It goes without saying that if labor could somehow achieve global solidarity, there would be no need to return to the mercantilist order, but then again, the Jets could win the Superbowl this year.  Most likely not gonna happen.)

If you have the time, read the article.  Long, but worth it.

Economic Populism Doesn't Need to Mean "More Government" (Dean Baker)

In a nutshell: Democrats worry that "populist" voters hate "big government".  Well, there's two conceptually easy (but politically difficult) ways to win over these voters without increasing the size of government: (1) negotiate the value of the dollar downstairs relative to our trading partners, notably China, thus driving exports and subsequently raising manufacturing employment; and (2) replace members of the Fed who are fixated on crushing inflation -- inflation which barely exists -- by raising interest rates, which slow down the economy and make hiring and salary increases less likely.  It seems to me that virtually everyone except Neel Kashkari of the Minnesota Fed should be on the potential chopping block.

Incidentally, here's a 5-paragraph piece on Neel Kashkari.  (Bloomberg)  He's a smart guy.  Read it!

A Nice Little Rundown of the Saudi Arabia-Qatar Rivalry (NY Times)

And let's wrap up with this nice, short and informative piece.  TL;DR version: Crown Prince Sheikh Hamad bin Khalifa al-Thani of Qatar grew up with a chip on his shoulder regarding his powerful neighbor, Saudi Arabia, and spent decades on end messing with the Saudis all over the globe.  Saudi Arabia is trying to put an end to that nonsense right now with a heavy hand, but the heavy hand can seriously backfire!  Not smooth, Saudis!  This approach might work out for Saudi Arabia, or we might be looking at a Qatar more closely allied with Iran (and Turkey, to an extent) than ever.  We'll see how it turns out!

Have a great weekend, everyone.

Not pictured: private contractors scamming taxpayers on overly-bloated P3 infrastructure projects.