American voters don’t care about the economy
By The Economist

Polling on behalf of The Economist by YouGov shows that Republicans are four times as optimistic as Democrats about the state of the stockmarket, which Mr Trump often cheers on. Liberals complain about high housing costs and low wage growth—never mind that wages are growing more strongly now than towards the end of Mr Obama’s term.

Mr Trump’s election in 2016 was followed by a rapid switch in attitudes. From the six months before the election to the six months after, YouGov measured a 45 percentage-point increase in the share of Republican-aligned Americans who believed the economy was getting better. Democrats became sharply more pessimistic. So it’s not any longer the economy, stupid. It’s the partisanship.

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Wealth concentration near ‘levels last seen during the Roaring Twenties,’ study finds
By Christopher Ingraham

The 400 richest Americans – the top 0.00025 percent of the population – have tripled their share of the nation’s wealth since the early 1980s, according to a new working paper on wealth inequality by University of California at Berkeley economist Gabriel Zucman.

Those 400 Americans own more of the country’s riches than the 150 million adults in the bottom 60 percent of the wealth distribution, who saw their share of the nation’s wealth fall from 5.7 percent in 1987 to 2.1 percent in 2014, according to the World Inequality Database maintained by Zucman and others.

Overall, Zucman finds that “U.S. wealth concentration seems to have returned to levels last seen during the Roaring Twenties.” That shift is eroding security from families in the lower and middle classes, who rely on their small stores of wealth to finance their retirement and to smooth over economic shocks like the loss of a job. And it’s consolidating power in the hands of the nation’s billionaires, who are increasingly using their riches to purchase political influence.

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But “for the rich, wealth begets power,” according to Zucman. Our electoral system is highly dependent on outside financing, creating numerous opportunities for the wealthy to convert their money into influence and tip the political scales in their favor. As a result, politicians have become accustomed to playing close attention to the interests of the wealthy and passing policies that reflect them, even in cases where public opinion is strongly trending in the opposite direction.

“Wealth concentration may help explain the lack of redistributive responses to the rise of inequality observed since the 1980s,” Zucman writes. The interplay between money and power, in other words, may be self-reinforcing: The wealthy use their money to buy political power, and they use some of that power to protect their money.

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The World Is Getting Quietly, Relentlessly Better
By Greg Ip

For most of recorded history humanity lived on the brink of starvation. As recently as 1980 nearly half the world lived in “extreme poverty,” that is, consuming less than the basic necessities, which the World Bank values at $1.90 a day in 2011 dollars, adjusted for the differing costs of goods and services between countries. The proportion of people in extreme poverty was projected to fall to an estimated 8.6% last year and, given the correlation between growth and poverty, is almost certain to drop further this year.

Rising incomes alone cannot capture how much better life has gotten. “Nathan Rothschild was surely the richest man in the world when he died in 1836,” economists Max Roser and Esteban Ortiz-Ospina wrote in 2017. “But the cause of his death was an infection—a condition that can now be treated with antibiotics sold for less than a couple of cents. Today, only the very poorest people in the world would die in the way that the richest man of the 19th century died.”

Mr. Roser is the founder of Our World in Data, a website that tracks the evolution of human welfare over the last few centuries. Scroll through the charts, articles and data sets, and you will be stunned by how much better life has become in just the last few decades: Child mortality, illiteracy and deaths from violence have all plummeted, and life expectancy has gone up.

The world first eradicated a disease, smallpox, in 1980. It could soon eradicate a few more: 2016 saw just 46 new cases of paralytic polio recorded; in 2017, there were just 25 new infections of Guinea worm, a painful and disabling parasitic infection. These victories come not through laboratory breakthroughs but the meticulous application of tried-and-true tools, such as vaccination and improved sanitation.

Much of the decline in poverty happened in China, where per-person income has risen 25-fold since China’s then-leader Deng Xiaoping inaugurated its economic reforms in 1978. India‘s economy, though, is now growing faster than China’s. If India can maintain its pace, the impact on global well-being will be just as momentous, given that India’s population should soon pass China’s.

As with disease, poverty is being eradicated not through technological miracles but basic rules of growth: Invest more in your human and physical capital, open yourself to markets and trade—that’s right, globalization is good—and incomes will rise.

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From Trump to Trade, the Financial Crisis Still Resonates 10 Years Later
By Andrew Ross Sorkin

The depth of financial despair during the Great Recession and the invariably slow recovery have unleashed a sense of bitterness that dominates the political landscape, culminating in Mr. Trump’s electoral victory.

“We are almost at each other’s throats when times are good,” said Ray Dalio, the founder of Bridgewater Associates, the largest hedge fund in the world with some $150 billion in assets, and the author of a new book, “A Template for Understanding Big Debt Crises,” an exhaustive study of financial panics and the policies that both created and rescued them.

The deepest crises, he said, always lead to populism. And it should be no surprise that a crisis leads to conflict and, in some extreme cases, war. “I would be worried about the emergence of populism,” he said, “because populists tend to want to fight with the other side rather than try to find ways of getting through it.” Populists on every side of the political spectrum “have in common that they’re confrontational,” he said.

When I wrote “Too Big to Fail” nearly a decade ago, I knew that the crisis would redefine Wall Street and the economy, but I didn’t appreciate how fundamentally it would redefine the political environment.

Amir Sufi, a professor of economics and public policy at University of Chicago’s Booth School of Business and the co-author of “House of Debt,” pointed to the financial crisis as the source of reduced civility a few months after Mr. Trump’s victory. He conducted an analysis of 60 countries with his “House of Debt” co-author, Atif Mian of Princeton University, and Francesco Trebbi of the University of British Columbia. They found that such a response was “common and predictable,” he wrote.

“Our conclusion: Financial crises tend to radicalize electorates,” Mr. Sufi wrote. “After a banking, currency, or debt crisis, our data indicate, the share of centrists or moderates in a country went down, while the share of left- or right-wing radicals went up in most cases.”

In the United States, the crisis exposed an economy that had been a charade — one that most Americans didn’t understand or appreciate. The use of debt had masked the real problems underneath the surface: a significant decrease in worker participation, automation that would take jobs and stagnant wage growth.

These issues long predated the crisis. But as Warren Buffett famously said, “You only find out who is swimming naked when the tide goes out.”

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Social Media and Censorship
By Francis Fukuyama

Traditional media companies curate the material they publish. They do this by setting certain standards for fact-checking and journalistic quality. But some of the most important decisions they make regard what information they deem fit to publish in the first place. They can decide to place stories about desperate Syrian refugees, transgender discrimination, or the travails of Central American mothers above the fold, or alternatively they can emphasize crimes committed by undocumented immigrants, Hillary Clinton’s email server, or political correctness on university campuses. Indeed, conservative complaints about bias in the mainstream media are less about deliberately faked news than about selective reporting that reflects the ideological preferences of media companies like the New York Times.

This is the most important sense in which the big internet platforms like Facebook, Twitter, and YouTube have become media companies: They craft algorithms that determine what their users’ limited attention will focus on, driven (at least up to now) not by any broad vision of public responsibility but rather by profit maximization, which leads them to privilege virality. This has produced a huge backlash that came to a head this spring after the revelations of the role that Facebook played in allowing Cambridge Analytica to access its data to help the Trump campaign. By the time Mark Zuckerberg testified to Congress in April, there had been a dramatic shift in public approval of his company and of the broader industry. The most visible consequence of this shift in political climate has been this week’s banning of Alex Jones.

Jones and his supporters have immediately responded to the ban by charging the platforms with censorship. In one sense this charge is misplaced: We worry most about censorship when it is done by powerful, centralized states. Private actors can and do censor material all the time, and the platforms in question are not acting on behalf of the U.S. government.

But Jones has a point with regard to scale. Facebook is not just another social media company; it has become a worldwide behemoth that in many countries (including the United States) has become something like a monopoly supplier of social media services. There are many countries in which Facebook has displaced email as the central channel of communication, and where it functions much like a public utility. Jones will not be able to reach nearly as wide an audience moving to different platforms as he can on YouTube and Facebook.

This then points directly to the other big problem with today’s social media universe, which is the size of the dominant platforms. Facebook today exercises government-like powers of censorship despite the fact that it is a private company. The New York Times or the Wall Street Journal can in effect censor Alex Jones by refusing to carry his content. But because there is a pluralistic and competitive market in traditional print media, this doesn’t matter; Jones’s followers can simply choose different media outlets. The same is not true in today’s social media space. I personally find Alex Jones completely toxic and am not unhappy to see his visibility reduced; that will be good for our democracy. But I am also very uncomfortable with a private quasi-monopoly like Facebook making this kind of decision.

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