What are Democrats doing to increase political market share?

The past six months of negative press for President Trump should provide Democrats with an opportunity to reduce Mr Trump’s electoral base, but if that opportunity exists, I don’t see Democrats taking advantage of it, not just yet anyway.

A recent Newsweek article reports that Mr Trump is floundering in the polls, with 58% of Americans disapproving of Mr Trump’s job performance. Mr Trump’s approval rating fell to 35% last March, according to the article, a result of the Republicans’ failed attempts at passing a promised repeal and replace of the Affordable Care Act also known as Obamacare. And with August recess around the corner for the full Congress, negative blow back from that failure should continue through the rest of the summer.

Mr Trump, the constant marketer, would argue it is not all that bad. The Hill reports that Mr Trump has polled at 50% in 17 states, although in some of those states his numbers have hovered around 40%.

And Democrats are not exactly providing any effective ammunition against Mr Trump or the Republicans. It is not enough to oppose the President. According to a CNN report this morning, only 37% of Americans think that Democrats stand for anything, while 52% of Americans believe that the only “policy” position that Democrats are taking is simply to oppose Mr Trump.

It may be time for the Democratic Party to pursue the Democrats that supported Barack Obama but turned their noses up on Hillary Clinton, gravitating toward a Republican candidate whose rhetoric spoke to their plight versus the perceived disinterest of the Clinton camp.

Specifically, the Democrats can regain some political market share in 2018 or 2020 by emphasizing the benefits of the Affordable Care Act and moving away from the moniker, Obamacare; a clear, cogent, and plausible economic plan; and a populist message that creates enough of a distance from the perceived elitism of the Clinton regime.

The primary question on this page is whether there will be any benefits from the changing political marketplace that flows to the commercial market place. Right now, I see none. Republicans have produced no success on infrastructure, tax, or health insurance reform. Democrats seemed concerned only with Russia. We’ll just keep watching.

Posted in American society, commerce, Congress, Democrats, Donald Trump, Economy, GOP, government, Political Economy, Republicans, trade | Tagged , , , , , , | Leave a comment

The Federal Reserve should do Congress’ net neutrality work

Next Wednesday the Board of Governors of the Federal Reserve will meet in Washington to announce whether the central bank has raised its target for interest rates that its member banks charge each other for overnight loans. Rate changes can have a ripple effect throughout the economy where rates paid on mortgages or savings accounts may start to inch up or down depending on the Federal Reserve’s decision.

For example, rates on three-year certificates of deposit inched up .05 percentage points over the past month. Mortgage rates on a 30-year fixed loan also moved up .04 percentage points. Some analysts expect the Federal Reserve to raise rates as it starts ridding its holdings of mortgage and asset backed securities that it purchased in order to release more cash into the monetary system leading to a reduction in interest rates. This policy, referred to as quantitative easing, was put in place by the Federal Reserve to reverse the ravages of the 2007-2008 disruption in the credit markets.

What I’ve overlooked is that in the aftermath of the crisis, the U.S. economy saw the emergence of the “sharing economy”, where firms started using mobile software applications to disrupt long-standing industries such as cab services and hotels. We have seen the emergence of Airbnb, Lyft, and Uber disrupt common carrier services, while Netflix destroyed Blockbuster with an old, mail-based delivery system for videos, it has, post financial crisis, leveraged the internet and streaming video technology to disrupt the cable television business.

All of these services took advantage of the open network architecture of the internet and their subscribers use wire-line and wireless broadband to reach them. They also, as I pointed out earlier, emerged in a low interest environment. Uber, for example, has reportedly gone through 15 rounds of financing since its inception in March 2009, raising $12 billion in financing. With a valuation of $70 billion and revenues of $6.5 billion in 2016, the company is still not yet profitable.

I am wary of how Uber and other post-crisis business models that leverage other people’s capital will do in a rising interest rate environment. Uber’s investors may decide to withdraw their capital and move it to higher yielding activity. Attracting new capital may become increasingly difficult for this reason.

These relatively new companies that deliver information via the internet and broadband have spearheaded efforts to have broadband companies follow a set of principles known as net neutrality. These companies want broadband access providers like AT&T, Comcast, and Verizon to allow their subscribers to view all legally available content; to allow content providers access to subscribers without interference; and to provide consumers and content providers alike with information on how broadband access providers are managing their traffic.

But as rates go up, net neutrality might be the last thing on the minds of those in e-commerce, especially companies that own very little if any hard assets. If Uber or Netflix can’t find cheap capital to grow, they won’t be able to compete with firms that have hard assets that can be used as collateral for financing. Uber and Netflix may find themselves paying a premium on increased rates in order to settle the nerves of investors who are already queasy about their business models. If they can’t borrow, they are out of business, and net neutrality would be a moot point.

Posted in apps, broadband access provider, capital, commerce, e-commerce, Economy, Federal Reserve, media, net neutrality | Tagged , , , , | Leave a comment

The Trump Administration takes government back to the basics on energy.

Sitting back and nibbling on the popcorn and tea while researching an op-ed, I am noticing first hand how ass-backwards the current American presidential administration is. The Administration is so far behind that some of its cabinet’s websites are still using public policy language from the Obama era.

Take for example language on the U.S. Department of Energy’s energy efficiency office website.  The office’s mission “is to create and sustain American leadership in the transition to a global clean energy economy. Its vision is a strong and prosperous America powered by clean, affordable, and secure energy.” The problem with this verbiage is that it falls out of line with President Trump’s rhetoric on America’s dominance in global energy.

In his America First Energy Plan, Mr Trump promises to embrace the shale oil and gas revolution; that the United States must take advantage of the $50 trillion in untapped shale, oil, and natural gas reserves. Mr Trump also emphasizes his support for clean coal technology, and that revenues generated by energy production will be reinvested into America’s infrastructure.

And while Mr Trump gives a shout-out to environmental stewardship and the necessity to keep America’s air clean, he makes no mention of the role renewable energy i.e. solar, wind, geothermal could play in America’s energy mix.

Adding insult to the energy left, Mr Trump is proposing a 69% cut in the funding for the Energy Department’s energy efficiency office, an office that dedicates a significant portion of its work to promoting the development and use of energy efficient technology.

But while some analysts see the Administration’s initiatives as a poo-poo on scientific inquiry, Mr Trump’s initiatives redirects the government to its core mission: the exploitation of an area’s natural resources for the benefit of its investors. You can’t harness the wind or corral the Sun, but you can establish and exploit property rights that are built around coal, oil, and natural gas. The reinvestment of the revenues from the production won’t just be reinvested into infrastructure for the good of the people. They will be reinvested so as to transform one form of capital into a higher value form of capital with the costs of extraction and production spread among the masses of citizens in the form of prices and taxes.

This the crucial point that progressives miss about this aspect of environmentalism. They can’t make a property and investment argument for solar or wind such that bondholders (investors) can sufficiently get behind it.

Six months, one hour and forty-five minutes old, this Administration still can’t fill positions or update websites, but has been lightning fast about taking government back to its core function; resource exploitation.

Posted in bondholders, Budget, Donald Trump, Economy, energy, government, Political Economy, renewable energy, Rick Perry, solar, technology | Tagged , , , , | Leave a comment

Of Oligarchs, Buffers, and Democracy

The only benefit that democracy and government provide is that in combination they serve as a buffer between the warring factions of oligarchs with voters playing the pawns in a war for political influence.

Most of the abuses suffered by the pawns are self-inflicted, manifested in continued vacuous opining on matters over which they have no control or that have no linkage to real economic empowerment. These discussions amount to children rolling around in a sandbox, easily distracted from reality, and answering the oligarchs’ calls to vote like a mother calls to her kids to come in the house, eat a grilled cheese sandwich, and guzzle down the red flavor Kool-Aid. This, in essence, is the buffer.

Without this buffer, usually referred to as “democracy”, oligarchs would tear each other apart, having to actually face each other in a battle for political supremacy. I’d rather see the buffer disappear and watch the oligarchs rip each other apart in a transparent, honest, and wondrously bloody and horrific way. It wouldn’t be a bad thing ….

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Are Democrats and Republicans distracted from keeping America an investment haven?

It appears, at least from the commentary in more centrist media, that the Republican Party has allowed an amateur to take over the White House. Trump appears to have blown the first two years worth of political capital in six months. Is the United States still a market that can be invested in? Probably, especially with the Democrats and Republicans apparently distracted.

Posted in Democrats, Donald Trump, Economy, foreign policy, GOP, government, trade, Uncategorized | Tagged , , , | Leave a comment

The meek will not inherit the Earth. They are too weak ….

In the end, it will be the foragers who survive and inherit the Earth. They understand that the limit to their ability to consume is directly related to what the Earth naturally provides. Immediately after the apocalypse, there may not be enough, but as those who rely on technology quickly enter permanent sleep, and the Earth heals from the abuse the departed placed on the planet, the foragers will enjoy the increased bounty.

Hopefully the survivors will have learned the lessons of the past, but we are talking about humans…

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I don’t see how net neutrality increases access to online global data. It may do the opposite

A few minutes ago I was listening to Corey Johnson and Caroline Hyde of Bloomberg Television discussing Netflix’s desire to increase its international markets, hopefully getting U.S. and international subscribership on par with each other. Potential subscribers overseas, particularly on the African continent may not have the income to buy the data services necessary for accommodating the amount of capacity necessary for delivering “House of Cards” or “Orange is the New Black”, so if they are to try these Netflix offerings, strategic partnerships like zero-rated mobile services may be the answer.

The irony with the zero-rated approach is that internet portals such as Facebook have tried unsuccessfully to offer zero-rating services in India. India regulators told Facebook hell no because such free services, where Facebook and mobile providers would agree that data from Facebook  would go to a subscriber’s phone at no charge to data caps, violated net neutrality rules. An irony given that Facebook and Netflix spearheaded a charge for net neutrality rules that would keep Comcast, AT&T, and Verizon in check for throttling, transparency, and other discriminatory practices.

Investors are giving Netflix permission to bleed cash in order to make available the original content necessary for getting into global markets. Although Netflix has signed up more subscribers than expected in the second quarter of 2017, twelve months of burning $2.1 billion in negative cash flow with an expectation of continued negative cash flow in the near future is something Netflix investors may pay attention to more closely. Did Netflix miss an opportunity to signal to regulators around the globe that net neutrality was probably what it was not cut out to be? Maybe at least a “no stance” on the concept would have provided an opportunity to alleviate fears in India and elsewhere that zero-rating was a bad thing, giving Netflix at least another marketing tool for entry into global markets that are making faster use of mobile.

 

Posted in broadband, globalization, Internet, media, net neutrality, regulation, Title II, wireless | Tagged , , , | Leave a comment

From Slave to Colonist

The ideal way for Africans in America to engage America is to think of themselves as colonists. You are not here to be a part of anything. You are here to extract and exploit everything.

Posted in Political Economy, society | Tagged , , | 1 Comment

Net Neutrality: The Market for Messaging

We are bombarded with messaging. Political messaging. Commercial messaging. All designed to get us to illicit a certain response, namely to buy a product or support a package. Net neutrality is no different. Large internet portals like Google and Facebook need to ward off a weak but present challenge to their advertisement empires. Broadband operators like AT&T, Comcast, and Verizon, given their own mines of data, want to acquire the appropriate advertisement platforms to leverage their consumer data into additional profit for their investors. By proposing net neutrality as public policy, Google and Facebook want to dampen this threat.

And how would net neutrality prevent AT&T, Charter, Cox, Comcast, and Verizon from using their consumer data to create commercial messaging? By using arcane rules based on Title II of the Communications Act of 1934. Reclassifying broadband access providers as telecommunications carriers would mean that customer information obtained in the delivery of broadband services could only be used in the delivery of other broadband services.

Also, Title II would permit broadband providers to use aggregate consumer information but only on the condition that aggregated data be made available to other telecommunications carriers or to other “persons” on reasonable or nondiscriminatory basis. I can see Google and Facebook saving a few hundred million dollars in search costs by making the Citizens United argument that they are persons, too.

Broadband providers would, under Title II, have a much harder time using customer information to create advertisement geared toward their subscribers, an advantage that internet portal companies such as Google and Facebook have.

In exchange for providing search capabilities that you could find in any good map, Rolodex, or phone book, Google and Facebook receive consumer information that they in turn use to create and target advertisements. As internet portal companies or search engines, they would not have to follow the strict consumer protection derived from Title II of the Communications Act that was designed for common carriers.

You have to wonder if, in addition to expense, Google decided that creating a broadband network was too risky because of the threat of being dragged into the regulatory badlands of net neutrality.

I think the messaging is simple: use public policy to create a barrier for broadband companies, keeping them out of the content delivery and advertising markets for as long as possible. While I don’t see Verizon or AT&T challenging Google or Facebook for dominance of the advertising markets, I guess Google and Facebook choose not to take any chances protecting their moats.

 

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Artificial barriers and government are the sources of poor trade

The New York Times’ Eduardo Porter wrote a scathing review of Donald Trump’s trade policy as it relates to steel production, arguing that the President’s policy could lead to retaliation and higher prices for steel imports. Mr. Porter would like to see the United States follow a post-world order on trade that takes into account the participation and coordination of multiple state actors.

Mr. Porter, like most Americans, looks at trade like a football game. Team USA has to avoid trade protections in order to maximize economic output. In standard, public economics parlance, this means increasing income, production, and sales. And if a wage increase and worker productivity occurs as well, all the better for increased wages provides politicians with a win. They can be seen as “job creators” worthy of re-election.

Mr. Porter assumes that a win in global trade for the United States is a win for all Americans. How he comes to such a conclusion without describing for the reader what trade actually is is dumbfounding but not unexpected. Most journalists are not “deep” thinkers on economics, particularly a nation-state’s economic policy. They regurgitate the standard economic fare, that nation’s should produce what they are best at at trade for what they are not that good at producing. The world overall would benefit from specialization because each nation is dedicating scare resources to their best use.

The b.s. is so standard I spat out the above spiel from memory. It’s the same nonsense that Mr. Porter was probably fed while in undergrad or while taking a crash course in economics for his first writing gig. Trade is not about job creation or market share. Trade is about controlling as many world resources as possible. Apple produces smartphones in China, paying Chinese workers in Chinese currency; taking advantage of natural and human resources in China in order to produce a product at lowest feasible cost and sell it at a profit.  Trade is war and corporations are the tip of the spear for nations that wish to extract another nation’s resources on behalf of the mother nation.

Take the American layman’s view. Why does the United States, as technology and resource rich as it is, need to trade with any other nation? The United States can efficiently feed and clothe itself. It has enough access to petroleum, coal, and natural gas in order to generate electricity. It has an advanced communications system and global powerhouse internet companies that attract consumers to those advanced networks while making advertisement revenues. It’s no wonder the average American wonders about the brouhaha Mr. Porter and other so called free traders create over global trade.

As an individual, trade policy on global steel is not doing anything for my sovereign economic environment. I have no demand for steel and if I do need a few $100 sheets, I can contact a trader or broker and get what I need domestically.

Could I benefit from a foreign market for steel? Sure, if the price, after transport and other costs, is lower than that I can negotiate with domestic suppliers. The State creates a roadblock to those possibilities, however. Tariffs and other retaliatory acts by the U.S. against foreign producers threaten lower prices and make access to foreign steel difficult. For the individual, State trade policy does not create benefits.

 

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