Clashing Tribes

June 21, 2018

I am constantly in search of explanations for why after 18 months of his presidency 30-40% of the American electorate continues to support Trump. The following authors have provided me with some understanding, Hillbilly Elegy A Memoir of a Family and Culture in Crisis by J.D.Vance, Strangers in their Own Land by Arlie Hochschild, White Trash: The 400 Year History of Class in America, and Amy Chua,  Political Tribes, Group Instinct and the Fate of Nations. All provide important insights into the American political scene. Chua was Vance’s mentor for his book.

 

Amy Chua describes how societies take shape by individuals forming and joining a series of groups or tribes. These represent a wide variety of interests some of which are political groups promoting certain viewpoints. Think of all the groups to which people belong for religion, sports, charities, education as well as politics. Each pursues particular interests and may join groups made up of those with similar interests, thus the tribes. But tribes can be rivalrous as well as cohesive. Today it is the rivalry between groups which permeates US politics.

 

Chua’s focus is on the group of tribes that form or support political parties.  At present in the US there are two main political tribes, Democrats and Republicans. Each of these will differ depending on what part of the country they inhabit so of that there are tribes within tribes. Southern Democrats may have different interests from Democrats in the north, east and west coast of the US. Traditional Republicans may differ from |Tea Party Republicans.

 

Trump’s supporters are more closely associated with Republicans, but also with white working class voters who, while previously Democrats, feel that they have not enjoyed the prosperity of many and who are attracted to slogans like “draining the swamp” where the beneficiaries are said to reside. So there are tribes within tribes and the traditional distinction between Democrats and Republicans is now muddied.

 

Trump is also well received by white voters in areas where economic prosperity has lagged behind for certain occupations. On the Democratic side, at the same time, Bernie Sanders appealed to similar voters and at election time they may well have voted for Trump or abstained from voting at all which gave an advantage to the Republicans.

 

Amy Chua describes how other countries consist of a series of tribes, Sunni, Shia and Kurds in Iraq, Chinese and Vietnamese in Vietnam, white, black, Asian and Latino in the US, French and English in Canada for example. Countries tend to prosper if they manage to get these groups to live and work together peacefully, or live in a situation of constructive tension.

 

Within the US, Trump’s most loyal supporters come from the one percent very wealthy white citizens associated with the traditional Republican tribe like the Koch brothers, and the middle and low income white Americans who feel they have received a raw economic deal from previous Republican and Democrat administrations. To-date, Trump has managed to appeal to both groups and retain their support. (Treatment of illegal immigrants from Mexico, especially the separation of families may lose him support, but Trump is so adept at changing the channel when public opinion turns against him that the end of this story is unclear.)

 

The gist of Chua’s argument is that the friction between the various tribes in the US is associated with growing income inequality which is not being offset by opposing political forces. When this happened in other places and at other times there could be a popular revolt. As the Wizard of Id once said, “The peasants are revolting”. In the US the revolt is taking place at official election time. It could evolve into something nastier.

 

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The rise of orphaned assets

June 14, 2018

As a result of developments in the production of solar technology panels and batteries for generating and storing electricity, the cost of producing and delivering energy in this form is rapidly declining.

I pay 15 cents per kwh for electricity delivered to my home in Ottawa: the 15 cents are the cost of the electricity plus the delivery cost. In Tucson, Arizona, residents pay 4 cents (US) per kwh resulting from the use of solar power and battery technology. As solar energy is introduced into the grid, many of the fossil fuel driven power plants and pylons delivering the electricity will become orphaned assets having little more than scrap value. It makes no economic sense to build new traditional power plants.

Because solar energy is captured at different times and for different periods of the day it has to be stored, and may be supplemented by energy supplied from traditional power plants. The location and demand for energy will determine how fast and far the substitution of solar for other forms of energy takes place.

There is evidence that it is already happening. A large school in Copenhagen, which is three degrees south of Juneau Alaska and gets less sunshine than more southerly locations, has built a school with walls made of solar panels which provide half of the buildings energy costs. Australia has 25% of its homes supplied by solar energy.

To see how fast this change is coming and how it already is affecting different industries, see Tony Seba’s presentation at:

https://www.youtube.com/watch?v=2b3ttqYDwF0

Coping with Grade Inflation in Ontario

June 12, 2018
Ontario high school graduates often experience lower grades in first year university courses from those received in grade twelve. This can come as a shock to first year students…. and their parents. In the late 1960’s Ontario moved from province wide exams to each school grading its own students. The change resulted from proposals in the Hall-Dennis provincial report, which recommended the abolition of general exams for all students in the province. Grade inflation ensued.
In the 1960’s, less than 10% of Ontario high school students graduated with an 80% or higher average. Today over 60% have an average of 80%. Because university enrollment has expanded since the 1960s, the absolute number of those with an 80% average is today far higher. At the time teachers argued that there would be grade inflation if each school could grade its own students. They were correct. Now, if there are suggestions of returning to province wide exams, schools oppose the move because the results would reflect more directly on their ability to perform.
Today, almost all applicants can get accepted for Canadian university entrance but there will be limited enrollment for particular programs such as law, medicine, nursing, engineering and the need to maintain certain grades to remain registered in these programs. Universities have an interest in enhancing enrollment because they are in part funded by provincial governments on a per student basis and in part by fees. (Foreign students pay higher fees and do not receive provincial funding. Quebec offers lower fees to Quebec students than out of province students.)
Other jurisdictions use a common exam as a way of, amongst other things, avoiding grade inflation. The General Certificate of Education (GCE) is offered at three levels in the United Kingdom, and a number of other mainly Commonwealth countries; the Graduate Record Exam (GRE) in the US is an admission requirement for most graduate schools in the US; and the International Baccalaureate (IB) offers four educational programmes: the IB Diploma Programme and the IB Career-related Programme for students aged 16 to 19, the IB Middle Years Programme for students aged 11 to 16, and the IB Primary Years Programme. To teach these programmes, schools need to be authorized by the International Baccalaureate Organization. About 60 schools in Canada are listed as offering the IB program. Almost 11,000 Canadian students wrote IB exams in 2017.
While Canadian universities cannot say that they treat an IB grade different from a non-IB grade when accepting students from Canadian high schools, it does not take much imagination that this would be the case, especially when performance statistics are reviewed.
IB grades are reported to universities, most of which now understand what they mean.  The IB Schools of Ontario have devised a conversion scale for reporting to parents and for those universities that are not yet on board.  All IB schools in Ontario must agree to using this conversion scale just so that marks will not be inflated.  This customary (as opposed to mandatory) procedure allows universities to evaluate the IB grades relative to  the Ontario high school grades which have experienced massive inflation since the 1960s.
In a review of IB enrolment in the US, the following findings were published:
This analysis examines the postsecondary enrollment, persistence, and graduation rates of IB diploma seekers graduating from both public and private high schools in the US. Currently, the IB offers the Diploma Programme in 830 high schools in the US. Of these schools, 727 (88%) are public schools (state funded). Not surprisingly therefore, the data for this analysis included mostly public schools. When the results from this study are compared to national rates (as available) it is evident that diploma students, both earners and non-earners, enroll, persist, and graduate on time at notably higher rates. Diploma earners have generally slightly higher rates than non-earners. • Immediate enrollment for all diploma students was 78% compared to the national average of 69% • 2-year retention for all diploma students was 96% compared to the national rate of 77% • 2-year retention rates for diploma earners was 96% compared to the non-earners rate of 95% • 6-year graduation rates for all diploma students was 83% compared to the national rate of 56% • 6-year graduation rates for diploma earners was 87% compared to the non-earners rate of 72%

Back to Beer and Hockey

June 4, 2018

Back to Beer and Hockey, The Story of Eric Molson by Helen Antoniou is part history of Molson the company, part of Molson the family, and part of the hockey team that the Molson family has owned. The three are interwoven in a variety of ways that focus on the man and his career.

Hockey is a well-defined game with winners and losers overseen by officials. Corporations like teams operate in a competitive environment which creates winners and losers within a framework of rules. Families are groups of individuals, who too are competitive, but where there is no referee to call the plays. When families become involved in corporate decision-making outcomes are difficult to predict but can be important for the future of a company. (A useful understanding of family behaviour is found in Robin Skynner and John Cleese, Families and how to survive them (Methuen, 1983)).

Future researchers will find the book a valuable source for a study of how senior management of a company operates as the market for its product changes; how family members with different interests and ambitions interact in pursuing their corporate related ambitions; and how the game of hockey infiltrates and permeates this family and their behaviour. The book is written from the viewpoint of Eric Molson who, while in retirement, gave the author, his daughter-in-law, interview access and declined to read it until it was published.

The history starts with the founding of the company in 1786 and the arrival from Scotland of John Molson. Since then and up to its merger with Coors, making it the world’s third largest brewing company, control was exercised through a restricted distribution of voting shares among Molson family members. Today, control is exercised jointly with the Coors company. Along the way it tried to diversify without success into other product markets.

Any corporate historian will want to read this book to understand what motivates executives, especially the controlling shareholders. Family dynamics are unique to each situation and difficult to predict ex ante. The inclusion of a blue ribbon hockey franchise in the corporate-family mix makes it harder to predict what the future may bring for the business of beer. The growth of craft breweries is a factor affecting industry competition.

Follow The Money

May 17, 2018

After almost 18 months into his presidency, little is certain about the size of President Trump’s wealth. He says it is enormous, and obviously it is not insignificant, but some things are known about his backers and their wealth. These include the Koch brothers. How their wealth was acquired provides an interesting tale.

The Koch brothers, Charles (1935 – ) and David (1940 – ) have provided substantial financial backing  through a series of foundations for the Republican party and especially its Tea Party supporters. The Koch wealth originated with their father’s investment in the oil industry. Fred Koch (1900 – 1967) was an American chemical engineer and entrepreneur who built oil refineries and was a founding member of the John Birch Society.

Much of the family wealth stemmed from the assistance given by Fred Koch to the USSR and Nazi Germany in connection with the building of oil refineries in the two countries. Both needed high octane refined petroleum for the operation of their military vehicles, ships and planes. Bombing raids on allied troops and civilian targets including London and other European cities were undertaken by the Luftwaffe. According to Jane Mayer, “Fred Koch’s willingness to work with the Soviets and the Nazis was a major factor in creating the Koch family’s early fortune.” (J. Mayer, Dark Money, (Doubleday, 2016, p.31).

Other examples of US business benefiting from sales to the axis powers are contained in Nazi Nexus: America’s Corporate Connection to Hitler’s Holocaust, (Dialog Press, 2009). Included are the Carnegie and Rockefeller Foundations, IBM, General Motors and Ford. The two foundations also benefited Canada – Carnegie helped to finance the Ottawa Public Library while grants were made to Canadian academics and universities. The three firms had subsidiaries in Canada.

While the frequent eruptions of Trump spew forth the visible fire and fury captured by the media, it is what is taking place below the surface that will determine the future. By following news and public affairs programs on MSNBC and Breitbart News, opposing views of the American political scene are presented. Individuals at the ballot box will have to decide how best to bring about change. At the moment, Trump retains the support of those who elected him last time.

18 Months into his Presidency

May 14, 2018

A shrewd comment about US politics was uttered by comedienne Michelle Wolf at the 2018 annual dinner for White House Correspondents.

“You guys are obsessed by Trump…you pretend like you hate him, but I think you love him….He’s helped you sell your papers and your books and your TV. You helped create this monster, and now you’re profiting off him. If you’re going to profit off of Trump, you should at least give him some money, because he doesn’t have any.”

To-date, we have been inundated with commentary largely critical of the President, in part because we read and watch what we want to see and hear. My addiction is Morning Joe on MSNBC and PBS News. Seldom, if ever, do I tune into Fox or Breitbart News. This is a mistake because unless you scout the opposition you are likely to be blindsided. Any team coach will study the opponent’s game.

If you focus on the good news, as seen by the Trump camp, the economy continues to grow with low unemployment and low inflation. The stockmarket rises despite some sharp setbacks followed by recoveries. The President has scheduled a meeting with his North Korean counterpart in Singapore for June 2018, and has met with a number of heads of state not all of whom are traditional friends of the west.

Doubtless there will be unforeseen hiccups before the 2018 and 2020 elections, but at the moment things are looking good for the President and his supporters some of whom are traditional Republican voters and some alt-right supporters. Alt-right refers to tea party Republicans replicated on the Democrats side by Bernie Sanders’ supporters; there are now four parties, two Democrat and two Republican. What must be particularly welcomed by Trump is the failure of the Democrats to come forward with any inspiring leadership candidates. Schumer and Pelosi are not names to attract followers.

While it is about thirty months to the next Presidential ballot, as of today the President looks well placed with solid Republican support around 30-35% and no strong opposition. Lying and lambasting members of his own party does not seem to diminish their support. Opinion polls between elections seem to be highly unreliable. Michael Moore is a more accurate pollster; he actually attends meetings to gauge support and does not rely on more indirect ways of judging voter sentiment. Like the assassination of Archduke Ferdinand which started the first World War, expect the unexpected to occur.

Canada about to be sideswiped – trade, investment & asylum seekers

May 8, 2018

“Fasten your seatbelts, it’s going to be a bumpy ride”

(Bette Davis actually said night not ride)

This quote aptly describes what is about to, and probably already is happening as a result of events south of the border. With 64 percent of Canada’s merchandise trade with the US (2016 exports plus imports), the negotiations over NAFTA and threats of US tariffs on steel and aluminum create the uncertainty that leave investors in both countries sitting on their funds.

The extent of foreign direct investment in Canada by the US, and in the US by Canada results in a similar high degree of interdependence and uncertainty. Companies often organize their supply chains across provincial and state lines as though national borders did not exist. When the US suddenly threatens to impose tariffs, investors in both countries tend to look elsewhere or to sit on their cash. There are always other places to invest, buy back shares, or stay in a liquid position.

As long as I can remember, and certainly since the 1950s, Canada’s politicians supported by nationalists have argued to decrease dependency on the US market for exports and imports, as well as for inflows of direct investment. It just never happens except for a few percentage points each way. Proximity to the US market offers business opportunities and the strong interdependency prevails. When the US threatens to restrict imports Canada can be the first to feel the impact. Threats are enough to cause concern for investors and this is where things now stand.

Canada has another concern involving the US but this one is self- inflicted and relates to refugees and asylum seekers. It is one which is felt more intensely in Europe and accounts for the rise of populist political parties and their leaders. Hungary, France, Italy and the Brexit negotiations between the EU and the UK reveal pressures that arise from the influx of refugees and asylum seekers from the Middle East and parts of Africa.

Canada has a stated policy of receiving a set number of refugees and asylum seekers each year. These are screened before coming to Canada. However, others arrive at the Canadian-US border and request asylum. If the request is made at an official entry point, the applicant will typically be disallowed entry as the US is considered a safe country. If the applicant crosses at any other point along the border, according to Canadian law the person can claim asylum and have the claim assessed.

Canada’s only land border is with the US. In 2017, Canada’s Immigration and Refugee Board received 18,149 claims from irregular border crossers, that is those that claimed asylum after entering Canada illegally. This compares with 29,276 persons who applied for refugee status legally.

If a person approaches a Canadian official border entry point like an airport or a highway and asks for asylum, the official can accept or reject the claim. If the claimant comes from the US, the claim is likely rejected as the person comes from a safe country, the US. In order to avoid such rejection, the person crosses the border at a non-official point and claims asylum. There is an easy solution. Make any point of the US border with Canada an official point of entry and all claimants coming from the US can be turned back, although they will first have to be detained.

Why Trump Prevails

April 18, 2018

After eighteen months, Republican voters remain committed to Trump. David Brooks, writes in the NYT, (April 2018) that 89% of Republicans have a positive view of Trump, and 59% of Republicans support Trump more than the Republican party. (This is written before any of the contents of the files of Trump’s lawyer Michael Cohen have been made public.)

Based on past voting preferences, at present, the 2018 midterm elections will see a number of Congressional seats switch from Republican to Democrat. Whether this is enough to give the Democrats a majority in Congress is unclear. Their leadership is weak and has a track record of screwing up. Gaining a Senate majority is probably out of the Democrats’ reach at this time. Listening to Senate and House Republicans who will not run in the midterms, it sounds like there are strong differences within the party that they do not want to face. There are differences among Democrats too, with a strong wing supporting Bernie Sanders.

Two books help to explain Trump’s continuing support. The first is J.D. Vance’s Hillbilly Elegy, which describes life in the back woods of Kentucky. Job loss there has resulted from a combination of the fall in demand for and the mechanization of coal mining.

On a longer term basis, Nancy Isenberg’s White Trash: The 400-Year History of Class in America, describes the origins of the class system in America and its continuation to today. The origins in the 1500s and 1600s are associated with the early investors who needed cheap labour.

 

In grand fashion, promoters imagined America not as an Eden of opportunity, but as a giant rubbish heap that could be transformed into productive terrain. Expendable people – waste people – would be unloaded from England; their labour would germinate a distant wasteland. Harsh as it sounds, the idle poor, dregs of society, were to be sent thither simply to throw down manure and die in a vacuous muck.  (2-3).

America was conceived of in paradoxical terms: at once a land of fertility and possibility and a place of outstanding wastes…Here was England’s opportunity to thin out its prisons and siphon off thousands; here was an outlet for the unwanted, a way to remove vagrants and beggars, to be rid of London’s eyesore population.

 

The rest of Isenberg’s book describes how this part of the population evolved and persists to today. It does not deal with slavery and its impact, although that would be part of the story.

Traces of this past are found in TV shows like Ozzie and Harriet, The Beverly Hillbillies, The Honeymooners, and today Here Comes Honey Boo Boo. The film To Kill a Mockingbird provides a portrait of class in America.

In order to know how America might emerge from Trumpism it is useful to learn about how it got there, and to ponder whether Canada could follow a similar path. The volumes by Vance and Isenberg provide excellent background reading for the US.

 

Can the US be saved?

April 9, 2018

A wide range of questions arise with the arrival of Trump on the US political scene, and it will be some time before any explanation finds widespread acceptance. Consider the backdrop. For a long time, the twentieth century was described as a period of two world wars separated by two decades of peace, 1919 to 1939. Now some describe it as being thirty-one years of war from 1914 to 1945. It took two world wars and the period in between to reach some sort of world peace that has existed since 1945. But since 1945 there have been all sorts of regional and civil wars mixed up with terrorism, brands of which are practiced today and will occur in the future. The possibility of an apocalyptic outcome has existed since the 1945 explosion of atomic bombs over Hiroshima and Nagasaki. This technology is now in the hands of autocratic political leaders of several states, and more worryingly could get, and may already be, in the hands of terrorist groups who have no states to protect.

 

A more optimistic view is provided by Harvard Professor of Psychology, Canadian born Steven Pinker. In his 2018 book Enlightenment Now he notes aspects of global development, among these are: world life expectancy has risen from 29 years in 1700 to 71 years today; world literacy has risen from 10% in 1820 to 80% today; and access to safe drinking water has risen from 50% in 1981 to 90% of the world’s population today. Other supporting facts are presented and of course there is discussion of what story these facts tell. There is no single way, apart from description, to get a feel of whether we are better off overall, but Pinker provides evidence for a favourable judgement. A reasonable conclusion would be that things have been getting better in many ways, but the threat of nuclear disaster for some or for many is high.

 

Moving from the global picture to North America, what measures can elected politicians take to slow down or reverse the situation presented by the economic and political events associated with the Trump administration? I hesitate to call it a Republican administration because many traditional Republicans would like to be divorced from the President’s policy moves. In fact, Republican leaning voters are split between the Tea Party Republicans and the rest, and not all the Tea Party members agree with each other. On the Democratic side there are divisions, those that support Bernie Sanders and those who have more centre-left leanings. In the 2016 election, many of the Sanders supporters may have voted for Trump, attracted by his desire to shake up the Washington elite and to show their distaste for Clinton as their candidate.

 

No obvious Democratic candidate has emerged to lead the party in 2020, despite public support for Trump remaining in the 35% to 40% range after 15 months in office. Former President Obama left the Democratic party in bad shape, not helped by the fact that he took two $400,000 fees for speaking engagements within six months of leaving office. This helped to confirm voters’ opinions that the politicians of both parties were filling the swamp and their pockets.

 

It is never easy for a large ship to slow down and change course. The same is true for the US political-economy. It requires recognition that the ship of state is on the wrong course, then deciding on an alternative and getting general support for it. Examples do exist but required brutal action. Germany, Italy, Spain and Portugal have all thrown off dictatorships since WW2. The first postwar election in the UK, threw out the Conservatives lead by a politician who was widely praised for his wartime leadership, and elected a Labour government promising to bring about social change. In earlier times the French Revolution resulted in political change but it was accompanied by considerable bloodshed and violence.

 

The functioning of liberal democracies is supposed to bring about change peacefully, but this may not happen today if popular support gets behind autocratic leaders. The focus today is often on the leader, but should be on why a significant part of the electorate support what he is doing.

Next Scene in the Trumpian Saga

April 4, 2018

Switch the spotlight from the man to his audience and a different picture emerges, not one that claims headlines but perhaps should. Since the 2016 election, the news has been about Trump and the gang of players who huddle nervously around him in the White House. Trump views them as loyalists until they do something which irritates him, and then they are gone, to be replaced by other supposed loyalists.

The voters who support the Trump gang fluctuate between 30 and 40 percent of the electorate. One poll in early April 2018 had them at 42 percent. Despite what many consider disruptive and unstable behavior, the gang leader retains the solid support of his loyalists, or has done so to-date. The question is who are these supporters and why?

Two books help to provide answers, Hillbilly Elegy: A Memoir of a Family and Culture in Crisis by J.D. Vance, and Strangers in Their Own Land: Anger and Mourning on the American Right by Arlie Hochschild. Two others I intend to read are White Trash: The 400-Year History of Class in America by Nancy Isenberg, and Political Tribes: Group Instinct and the Fate of Nations by Amy Chua. The latter two deal with the same general topic providing clues to how the Trump experience may evolve.

Vance was born and schooled in Appalachia, enlisted in the US Marine Corps with time spent in Iraq. He graduated from Ohio State University and Yale Law School, where his mentor was Professor Amy Chua. He is now a venture capitalist, author and commentator, circumstances that allow him to explain the conditions and attitudes of poor white people in the US, and why, so far, they continue to support Trump.

Arlie Hochschild is a Professor of Sociology at the University of California, Berkeley. While researching her book, she spent time in Louisiana, the second poorest state in the US, living with and interviewing mostly poor whites. She is a west coast liberal who managed to mix with people in Louisiana from very different backgrounds to herself, and who were able to articulate why they felt disenfranchised, having little influence in Washington. For them Trump offered some hope, and may still do so today.

In a review of Hochschild, the circumstances of poor white southerners are described as follows:

“You are patiently standing in line for the American Dream. You are white, Christian, and of modest means and getting along in years. You are male. There are people of colour behind you and in principle you wish them well. But you’ve waited long, worked hard and the line is barely moving. Then you see people cutting in line ahead of you. Some of these are on the dole, taking money from low paid white workers.”

Resentment builds when enough people feel aggrieved, leading to opportunistic charlatans – dictionary definition, a boastful unscrupulous pretender – taking advantage of the situation. Defusing it takes time while social media quickly spreads the discontent.

I have no idea where this will all end but I wonder how far Trump is willing to go in playing the nuclear card, or causing someone else to play it. Either outcome would be catastrophic