Brian Gongol Show on WHO Radio - April 14, 2018

Brian Gongol


Podcast: Updated weekly in the wee hours of Sunday night/Monday morning. Subscribe on Stitcher, Spreaker, Apple Podcasts, Google Podcasts, or iHeartRadio


Please note: These show notes may be in various stages of completion -- ranging from brainstormed notes through to well-polished monologues. Please excuse anything that may seem rough around the edges, as it may only be a first draft of a thought and not be fully representative of what was said on the air.

Segment 1: (11 min)

BUT FIRST: So we've launched missile strikes on Syria

The United States, France, and the UK launched airstrikes last night against chemical-weapons facilities in Syria, in retaliation for the use of those weapons against Syrian civilians.

A few bullet points on the good, the not-so-good, and the serious unanswered questions.

The good:

The not-so-good:

Serious unanswered questions:

Segment 2: (8 min)

Segment 3: (14 min)

Clean up after yourself

Thanks to a calendar quirk (or two), Federal income tax filings are due on April 17th this year. With that in mind, a few factoids:

The Federal government takes in a lot of the economy. Federal receipts as a share of GDP: 17.1% in 2017

But it spends much more than it takes in. Federal spending as a share of GDP: 20.5% in 2017

A gap that is smaller than the overall economic growth rate is probably fine -- that's basically just borrowing a year ahead.

But the economy doesn't grow at 3.4% [i.e., 20.5% - 17.1%] with any consistency at all. We're spending way, way, way beyond our means.

Plus we're in an extraordinary time of low interest rates that isn't guaranteed to last. The low interest rates have subsidized the borrowing and made it less painful than it would have been otherwise.

The accrued charges on the borrowing are going to be inescapable and painful. This is a problem much, much worse than any trade deficit.

We have to mind the gap:

No party is innocent. Everyone has been part of this, almost entirely without exception, since the 1950s. Both parties, independents, voters, and elected officials alike.

I am starting to come around to an idea I've always been reluctant to embrace: A balanced-budget amendment to the Constitution.

I'm still not fully on board, but I'm running out of alternative solutions.

I oppose the "convention of the states" some people want to use to push a balanced-budget amendment through. Far too high a risk of far too many unintended consequences.

It would have to include an emergency provision for cases of war -- and we would then need to resume the practice of actually declaring war.

It ought to include a provision for capitalizing long-term expenditures -- things like civil works projects (infrastructure) that last for 25 or 50 years or more. Borrowing long-term for things that pay off long-term isn't a bad idea.

I don't know how it would be enforceable without trying to impose some kind of oversight board empowered with super-checks-and-balances, and I don't like that idea.

And I truly don't mind a small deficit -- around maybe 1% of GDP. Something largely to be erased by economic growth, so the language wouldn't have to be absolutist.

But consider this: If we were in surplus as much as we are in debt right now, the public would be in open revolt. Right now, just in explicit debt, we're $21 trillion in the hole, which is $64,300 per person. That is an appalling figure for something we are quite capable of fixing.

Segment 4: (5 min)

Iowa news

Don't forget when the weather is bad to report it twice: Tell us, then tell the National Weather Service

Segment 5: (11 min)

Segment 6: (8 min)

The week in technology

Mark Zuckerberg certainly got his moment in the spotlight this week, spending two days testifying before Congress. Some of the questions directed at the Facebook CEO -- and even more, the manner in which they were asked -- really highlighted just why I have previously argued that we need more technologists of many sorts in lawmaking.

My enormous worry is that a lack of knowledge at the government level will lead to deference to Facebook when it comes time to set the rules and regulations that are long overdue. Naturally, the incumbent power players will seek to set the rules in ways that benefit them.

That's not really evil -- it's just self-interest. But there needs to be a countervailing self-interest. I trust the power of self-interest set in opposition to self-interest. Had rules been set in the past, they might have entrenched Netscape Navigator, Yahoo, and MySpace as the powerful incumbents.

Rules need to be set so that they do not turn Google, Facebook, Amazon, and others into the online equivalents of public utilities. But the rules also shouldn't be set just for the benefit of encouraging disruption.

The rules and regulations imposed on social-media firms and other tech giants need to be set so that they will work equally well in futures where:

The nature of any commercial venture changes with time. Of all things, Sears is closing its last store in the city of Chicago, the place where the company began. It's a sobering reminder that competition can displace even the giants in an industry -- as long as the giants aren't protected by laws that discourage innovation.

Rules and regulations are best set with the input of lots of groups, carefully and thoughtfully evaluated by curious, competent, and humble elected officials. But every time a Senator asked Mark Zuckerberg, "Will you help us write these regulations?", I thought: "Of course they will!" Nothing could please the market hegemon more than writing rules to further entrench its own interests. Should Facebook offer constructive opinions regarding the shape of tech regulations? Sure. But let's not assume alignment between the interests of Zuckerberg and those of Jane Citizen.

Google, Facebook, and firms in a similar market position have a perverse incentive to favor regulations that turn them into the equivalent of public utilities. Sears, MySpace, and Netscape all probably would have favored more regulations during their respective times in the sun.

Segment 7: (14 min)

Yay Capitalism Prize

Cousins of the family that once ran the Chicago Tribune just bought about a quarter of the parent company from a short-term owner who doesn't seem to have treated the property like a great asset in the time he controlled it

Such an interesting turn of events. Wonder whether prominent families who sold media assets to private equity or went public might repurchase those properties at fire sale prices.

Make money

Rumor has it that the President, upon meeting with representatives of Midwestern farm states (including Iowa Governor Kim Reynolds), abruptly changed his position on trade with Asian countries and told his new economic advisor, Larry Kudlow, to get to work immediately on getting the United States into the Trans-Pacific Partnership.

Spectactular news, if true.

And if he's totally committed. (This is the really crucial part.)

As we discussed just this past weekend with Clark Packard of the R Street Institute, the United States has legitimate reasons for distress over some aspects of our trade with China. Foremost among those concerns is the need for protection of a wide range of intellectual property rights -- from copyright and patents to trademarks and trade dress. (If you missed the live broadcast, listen to the podcast edition.) Copycat goods, knock-offs, and strong-arm tactics forcing outside companies to "share" their R&D with Chinese "partners" are all harmful to the conduct of authentic free trade.

But these are not problems that are easily solved with sweeping tariffs and trade wars. They are problems best resolved through engagement within the bounds of a rules-based order. Rules are promulgated through institutions -- institutions like the WTO and whatever governing institution emerges to coordinate the TPP.

The brewing trade war between the US and China doesn't just have the potential to wreck important parts of the US manufacturing economy, like the intermediate- and finished-goods sectors that add so much value to raw materials. A trade war (especially if it's targeted to create maximum political pain, as the Chinese appear willing to do at Iowa's expense) could be downright devastating regionally.

If the President really heard the Midwestern voices speaking to him this week, and if he's really going to stick to the course that will best serve our regional (and national) interests, he has to stick to a plan to get us deeper into every reasonable multilateral trade agreement we can find. The more parties bound together by the same set of rules, the more seriously those rules can be taken. We're not the only country that suffers from China's theft of intellectual property. We shouldn't try to combat the problem with a go-it-alone strategy of ham-handed taxes on trade that only serve to punish American producers and consumers as much as they hurt anyone on the other side of the Pacific Ocean.

It didn't look good for his level of commitment when on Thursday night he tweeted, "Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!"

A simple metaphor will do: Major League Baseball only works because 30 teams agree to a common set of rules. Even the DH rule is enough to keep the leagues divided. Separate rules make for less interaction (less "trade")!

Baseball wouldn't work if the Cubs had to negotiate terms separately with the Cards, the Brewers, the Yankees, the Pirates, and so on. Bilateral agreements are inferior solutions to broad, multiparty arrangements -- in trade or in baseball!

Iowa news

US News ranked Des Moines the #4 place to live in America

We only trailed Austin, Colorado Springs, and Denver

Segment 8: (5 min)

Curiosity, competence, and humility

Under-appreciated fact: A well-developed sense of humor is a good sign that a person appreciates the complexity and contradictions of life. It's actually a positive signal to look for when choosing leaders.

Unsorted and leftovers:

This week

By the numbers

Have fun

Mind your business

Quote of the Week

Your role in cyberwar

Contrary to popular opinion

Hyperbole is going to kill us all

Have a little empathy

Inbox zero

Tin Foil Hat Award

Capitalist solution of the week

Totally Unnecessary Debate of the Day

Kickers

One year ago

Five years ago

Ten years ago

Programming notes

Live reads

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Calendar events to highlight

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