Donald Trump’s Trade Team Has Based Their Analysis on a Remarkably Silly Mistake

Matthew Yglesias: “…Trump has stated his intention to make Commerce Secretary (and billionaire investor) Wilbur Ross the lead authority on trade negotiations. The other is that he is tapping University of California economist Peter Navarro for a brand new White House job, heading up something Trump is calling the National Trade Council.”

“This makes sense, since Ross and Navarro were the co-authors of an important policy paper the Trump campaign put out during the election season that mostly focused on trade issues.”

“Unfortunately, the paper’s discussion of trade was incredibly shoddy. George Mason University’s Scott Sumner describes as ‘a complete mess,’ which, if anything, is too kind. When Adam Davidson profiled Navarro for the New Yorker, he wrote that even when he asked Navarro to help him out, he couldn’t find a single other economist who fully agreed with him on trade and China. Which is about what you would expect, since the Ross/Navarro trade policy analysis is based on a mistake that would get you flunked out of an AP economics class.”

Are Google and Facebook the New Monopolies?

“Perhaps the biggest monopolies we should be worried about are two Silicon Valley giants: Google and Facebook,” Jeff Spross writes for The Week.

“Jonathan Taplin recently took this issue on in The New York Times, and his numbers are astonishing. Alphabet, Google’s parent company, has market shares in mobile search and operating systems that are two to three times as large as AT&T’s in its respective markets. Alphabet’s cash on hand dwarfs that of AT&T and Time Warner combined, and Alphabet’s level of debt is far lower. Both Alphabet and Facebook are among the top 10 largest companies in the world, and their respective market capitalizations outpace any AT&T-Time Warner combo by hundreds of billions. But most striking is this: ‘In the first quarter of 2016, 85 cents of every new dollar spent in online advertising will go to Google or Facebook.'”

“Google and Facebook are the new railroads. And producers of digital media are a bunch of turnip farmers hoping to ship their goods into town.”

If the U.S. Won’t Pay Its Teachers, China Will

Bloomberg Tech: “Mi is 33 and founder of a startup that aims to give Chinese kids the kind of education American children receive in top U.S. schools. Called VIPKid, the company matches Chinese students aged five to 12 with predominantly North American instructors to study English, math, science and other subjects. Classes take place online, typically for two or three 25-minute sessions each week.”

“In China, there are hundreds of millions of kids whose parents are willing to pay up if they can get high-quality education. In the U.S. and Canada, teachers are often underpaid—and many have quit the profession because they couldn’t make a decent living. Growth has been explosive. The three-year-old company started this year with 200 teachers and has grown to 5,000, now working with 50,000 children. Next year, Mi anticipates she’ll expand to 25,000 teachers and 200,000 children.”

How Inequality Leads to Obesity

Tom Jacobs: “Everyone who has ever turned to their friends Ben and Jerry for solace following a break-up is aware that painful emotions often lead to overeating. Yet when discussing the obesity epidemic among low-income families, policymakers tend to focus on more tangible factors, such as the cost and availability of healthy food.”

“Over the past few years, a number of researchers have begun pointing out this emotion blindness, suggesting the stress of poverty is an underappreciated underlying problem. Two new studies that confirm and refine this proposition have just been published.”

“So a more equal society, where most members feel respected and experience a sense of belonging, is a lower-stress society, and this reduces anxiety-based eating, which, in turn, combats obesity.”

The Stock Market Looks Awfully Expensive Since the Trump Rally

Neil Irwin: “A new president won’t take office for another month, but the financial markets’ early verdict on the Donald J. Trump era is in, and it is straightforward.”

“They are saying the Trump administration will be good for corporate profits, and hence the stock market is way up. (The Standard & Poor’s 500 is up 6 percent since Election Day). It will also mean higher interest rates and inflation over time. (The yield on 10-year Treasury bonds has risen to 2.6 percent from 1.85 percent in the same span.)”

“But the result of those two shifts should make anyone thinking of investing in the stock market nervous. You’d be counting on the profit-boosting elements of the Trump agenda being enacted and the profit-hampering possibilities not materializing. Another way to think about it: Putting money into the stock market right now means accepting less compensation for taking on risk than was available before Election Day.”

10 Charts for Tracking Whether Trump Is Delivering on His Economic Promises

Quartz: “Many of Trump’s promises appear implausible. But we don’t have to rely on guesswork or partisan punditry to evaluate his progress; we’ve got reliable data to gauge Trump’s success.”

“The charts below provide an at-a-glance dashboard for measuring the economy under president Trump. We have collected 10 indicators that reflect his main campaign promises, with data from the George W. Bush and Barack Obama administrations to provide context. We’ll update the data as Trump puts his plans into action.”

Healthcare in America Is Grossly Inefficient

“Certain large sectors of the economy are suffering from something like reverse-innovation: Costs are increasing much faster than any incremental improvement in quality. In Gallup’s new report with the U.S. Council on Competitiveness, I argue this is happening in healthcare, housing and education,” Jonathan Rothwell writes for Gallup.

“Take healthcare. From 1980 to 2015, healthcare expanded from 9% of the national GDP to 18%. Some of this is natural and good. The aging population requires more healthcare, and even modest economic growth has freed up spending power for healthcare. The problem is that the per-unit costs of healthcare — actual procedures, visits with doctors, pharmaceuticals — have all soared. So the question must be asked: Has it been worth it? I conclude not.”

“One reason for the decline in Americans’ self-reported health status is the extraordinary inefficiency of the U.S. healthcare system.”

5 Ways of Redrawing the U.S. Electoral Map That Actually Make Sense

Washington Post: “Following the election, an artist and urban planner named Neil Freeman created a fascinating tool he dubbed ‘Random States of America.’ The map randomly generated state boundaries and showed which candidate would win based on the population of those new areas.”

“At the request of Josh Wallaert, senior editor of Places Journal, Freeman then built on the idea to create a new series of five U.S. maps, organized around different systems than our currents states and districts. Part land-use planning and part science fiction, these fascinating maps show how reworkings of U.S. cartography would have resulted in different election outcomes.”

Price Transparency Is Nice. Just Don’t Expect It to Cut Health Costs. 

Austin Frakt: “How would you find the best deal on an M.R.I. or a knee replacement? No idea, right? This lack of price transparency in health care has been cited as one of the reasons we spend too much on it. It’s easy to overpay. Health care prices vary tremendously. And there is no established relationship with quality.”

“But improved transparency isn’t working as well as hoped. Health care pricing apps and websites don’t always help patients spend less.”

Why It Could Be Good for Trump to Skip Some Intelligence Briefings

“The problem with intelligence briefings is not so much that they cause boredom in the recipient as that they routinely induce terror,” John Mueller writes in a CNN Op-Ed.

“Central to the briefing is the ‘threat matrix,’ a compendium assembled by the CIA and the FBI that includes all the ‘threats’ — or more accurately ‘leads’ — needing to be followed up. Garrett Graff reports that it is ‘filled to the brim with whispers, rumors, and vacuous, unconfirmed information’ and that it can come off as ‘a catalogue of horrors’ and as the ‘daily looming prognoses of Armageddon.’ Philip Mudd notes the ‘voluminous and dominating’ threat information, much of which he points out is raw and ‘below threshold’ for top leaders, and notes that it contributes ‘to a pervasive sense that every day might bring a new attack.'”

“Part of the problem emerges from what Marc Sageman, after years of experience in the intelligence community, calls ‘a bias for alarming interpretations.’ Often, he says, ‘the worst interpretation’ is given full attention while potentially disconfirming evidence ‘is neglected.’ Robert Jervis agrees: probing for ‘alternative explanations of what was happening’ is, he finds, ‘very rare.'”

Manufacturing Jobs Are Returning to Some Places. But These Jobs Are Different.

Washington Post: “The nation shed manufacturing jobs at a steady pace over most of the last quarter century. A combination of trade deals, automation and economic recessions sent the number of manufacturing jobs plummeting, with 6 million jobs being lost by 2011.”

“But since then, about half a million jobs have been regained.”

“They’re not the same jobs that left. They’re not coming back everywhere, or even in the same places where jobs were lost. The map of where products are made in this country is being redrawn.”

Taiwan Deserves Better Than Trump’s Drive-By

Rob Cox: “Sure, Taiwan gained a flicker of national pride from Trump’s shout-out. For Tsai, it may have helped shore up her sagging popularity for a moment. But it’s hard to see how this $500 billion-plus economy will benefit from its brief dalliance with America’s Tweeter-in-chief.”

“Taiwan deserves better. The island is a model for the region – and its far larger rival 110 miles across the water. And though its economy has slowed in recent years, its people enjoy an enviable quality of life. Its GDP per capita on a purchasing power parity basis is some $47,000, higher even than in the United Kingdom, France or Canada. It’s an example of what’s possible when democracy and free markets flourish in Asia… Though it was not perfect, the One China status quo allowed Taiwan to manage its business and security while Beijing could pretend it didn’t matter.”

“But the longer-term negative effects of the call will become apparent in coming months. China can further restrict tourism. It can pry away some of the few remaining countries that still formally recognize Taiwan, such as Panama. As Moody’s recently warned, it can also exert pressure on other nations in the region to restrict trade or commerce with Taipei. Most painful, and not without a cost to its own interests, China can hit Taiwanese capital on the mainland.”