Who is winning and losing in the post-Trump 2.0 economy?
Winning
New York City (tech)
San Francisco (finance and tech)
San Jose (tech)
Losing
Rural America (agriculture)
College towns (higher education)
Manufacturing towns in the South (trade hits to manufacturing)
Las Vegas (tourism)
Washington D.C. (federal government employment)
Disaster hit areas including parts of Florida and Appalachia
Experience tells us which economic theories are right and which are not, often with unexpected results.
* In theory, a higher minimum wage should greatly increase unemployment. In reality, the effect is almost immeasurable at U.S. levels.
* The evidence from Brexit and from Trump 2.0 and the Smoot-Hawley tariffs demonstrate that globalism is very important for a healthy economy and that departing from free trade does great harm, as does discouraging immigration.
* While a shallow microeconomic analysis would suggest that immigration hurts the job market for native born Americans, experience shows that immigration has the opposite effect, improve the job market and prosperity.
* The evidence from Eastern Europe in the post-Cold War era illustrates that securities laws to reduce the likelihood of things like Ponzi schemes are actually very important even when other protections of property laws and contract laws are in place.
* Economic development studies tend to show that economic development is quite localized and culture driven, rather than being primarily driven by national laws, although national laws do matter quite a bit as shown by comparing the economies of communities on either side of a national boundary where the laws are quite different.
* Notably, lots of the litmus tests for economic development: municipal water quality, roads in good repair, regular trash collection, effective legal enforcement of debts, unambiguous real estate ownership, good quality K-12 education, and the availability of trauma center hospitals, are mostly provided at the local government level, rather than at the regional or national level.
* During the Financial Crisis, two different methods of managing the risk of high loan to value residential loans were compared which have very different regulatory regimes.
One approach was to make a conventional mortgage at 80% loan to value, and then to have a second mortgage for the next 10-15% of loan to value that was subordinate to the conventional mortgage. This is subject to securities regulation of mortgage backed securities, with risks assessment mostly delegated to thinly regulated and thinly capitalized bond rating agencies (which are basically just credit reporting agencies for the bond market).
The other approach was to issue a single mortgage for the entire loan and to secure mortgage insurance, paid for by the borrower to protect the lender, which covered the lenders' losses if the value of a foreclosed home resulted in a deficiency judgment. This was subject to state insurance regulation.
In the financial crisis, insurance regulation was decisively proven to be superior, with no mortgage insurance firms going out of business, while essentially all of the subprime lenders, mortgage backed securities firms that packaged second mortgages for investors, and investment banks that organized this activity either ceased business entirely, underwent bankruptcy reorganization, or were saved only by bailouts with purchases of the failed firms by healthy large financial companies.
As interpreted the U.S. Constitution has various problems:
* The insurrection clause was gutted by making it not self-executing.
* Presidential immunity from crimes was a horrible mistake.
* No one has standing to pursue too many violations of the law, such as the emoluments clause, the bar on increasing Congressional compensation, some kinds of religious establishment (e.g. not enforcement the ban on political action by religious groups).
* The pardon power is too easily abused.
* Limiting campaign finance by corporations in a partisan neutral way is prohibited (although Citizens United is less of a problem than it is given credit for being IMHO).
* Term limits for Congress would be good.
* The filibusters has done more harm than good.
* Gerrymandering is an intractable problem and the first past the post system also leads to spoiler effects and a two party system instead of a multiparty system.
* Grounds for impeachment are too feeble and impeachment is too hard to accomplish for genuine crimes.
* The veto power is too strong, undermining Congress.
* The electoral college has proven to be a bad idea.
* The Senate is too distorting.
* The Second Amendment is a bad idea.
* Treaties are too often found to be not self-executing.
* Treaties are not subordinate to domestic laws.
* Given Congress control over election disputes in their own houses was a bad idea. Their roster should be out of their control.
* The unitary executive theory is incredibly harmful and should be actively overruled. The ban on legislative vetos is less of a big deal but also deeply problematic.
* The 25th Amendment on Presidential disability was a good idea, but was executed poorly.
* It should not be possible to be President as your first political position. Prior statewide office, a cabinet post, a top generalship, or service in Congress should be required first.
* The franchise should be affirmatively defined.
I've said it before, but it remains true that while there is not one right answer for the policies that democracies should adopt, there are many objectively wrong decisions that democracies can make.
Brexit harmed the British economy more than anticipated. Trade barriers hurt the countries erecting them.
This paper examines the impact of the UK’s decision to leave the European Union (Brexit) in 2016. Using almost a decade of data since the referendum, we combine simulations based on macro data with estimates derived from micro data collected through our Decision Maker Panel survey. These estimates suggest that by 2025, Brexit had reduced UK GDP by 6% to 8%, with the impact accumulating gradually over time. We estimate that investment was reduced by between 12% and 18%, employment by 3% to 4% and productivity by 3% to 4%. These large negative impacts reflect a combination of elevated uncertainty, reduced demand, diverted management time, and increased misallocation of resources from a protracted Brexit process.
Comparing these with contemporary forecasts – providing a rare macro example to complement the burgeoning micro-literature of social science predictions – shows that these forecasts were accurate over a 5-year horizon, but they underestimated the impact over a decade.
Ms Sheinbaum’s government says Mexico’s murder rate has come down by 32% in the year since she took office. Analysis by The Economist confirms that the rate has fallen, though by a significantly smaller margin, 14%.Counting homicides alone misses an important part of the picture, namely the thousands of people who disappear in Mexico every year, many of whom are killed and buried in unmarked graves. A broader view of deadly crime that includes manslaughter, femicide and two-thirds of disappearances (the data for disappearances is imperfect), shows a more modest decline of 6%.Still, Mexico is on track for about 24,300 murders this year, horribly high, but well below the recent annual average of slightly over 30,000. Ms Sheinbaum is the first Mexican leader in years to push violent crime in the right direction.
The UC San Diego Senate Report on Admissions documents a sharp decline in students’ math and reading skills . . .At our campus, the picture is truly troubling. Between 2020 and 2025, the number of freshmen whose math placement exam results indicate they do not meet middle school standards grew nearly thirtyfold, despite almost all of these students having taken beyond the minimum UCOP required math curriculum, and many with high grades. In the 2025 incoming class, this group constitutes roughly one-eighth of our entire entering cohort.
A similarly large share of students must take additional writing courses to reach the level expected of high school graduates, though this is a figure that has not varied much over the same time span.Moreover, weaknesses in math and language tend to be more related in recent years. In 2024, two out of five students with severe deficiencies in math also required remedial writing instruction. Conversely, one in four students with inadequate writing skills also needed additional math preparation. . . .
The math department created a remedial course, only to be so stunned by how little the students knew that the class had to be redesigned to cover material normally taught in grades 1 through 8. . . .The report attributes the decline to several factors: the pandemic, the elimination of standardized testing—which has forced UCSD to rely on increasingly inflated and therefore useless high school grades—and political pressure from state lawmakers to admit more “low-income students and students from underrepresented minority groups.”…This situation goes to the heart of the present conundrum: in order to holistically admit a diverse and representative class, we need to admit students who may be at a higher risk of not succeeding (e.g. with lower retention rates, higher DFW rates, and longer time-to-degree).
From Marginal Revolution.
The deemphasis on standardized tests in admissions, which provide a means to test these skills in a way not influenced by high school specific grade inflation is probably the primary factor.
Admitting students who aren't academically prepared to college isn't doing them any favors.
My wife and son ran the NYC marathon together (they were just one minute short of getting a mention in the New York Times for it).
It wasn't my first trip to NYC, but each visit stirs up no impressions.
It is amazing how much a tiny hotel room (there was barely room to walk - the bed was almost wall to wall), a suitcase full of clothes, and a credit card with enough money on it to buy food and subway fares makes. We had a kitchenette, so we could have lived there, and led a reasonably dignified life.
While some things in NYC are modern and cutting edge, it is also to a significant extent, an enclave of the past. The engineering behind the subway train operations is ancient, even though the fare system is very modern. The operations of the NYSE are at their core, ancient. Its residential co-ops are historical relicts from the pre-condo era. Its trash collection systems lack alleys or even dumpsters. Its street system doesn't handle car and truck travel well at all, although its bike lanes are modern and work rather well. It has been highly resistant to big grocery store chains found everywhere else. Its rent control system is its own thing found in only a couple of other places in the nation. It is home to the UN which, alas, isn't a modern, functional institution. It tries, but isn't very disability friendly.
We are in the longest government shutdown of all time in U.S. history. The second longest was also under Trump. There is still no end in sight.
The Dodgers won the World Series.
Two words that would seem useful:
* Dila = daughter-in-law (adjacent)
* Sila = son-in-law (adjacent)
These word would cover both engaged people and people who are in a serious long term relationship with a son or daughter to the point where they have met the family and might very well be more or less permanent family members. The need for a compact word to describe someone who has this relationship to you is real.
I haven't seen a full set of 2025 election results, but generally, Democrats did well.