Republicans Divided by Trump Are Toast

Astoundingly, the triumph of Donald Trump is accentuating rather than healing the rifts in the Republican Party.

Instead of millions of Republicans setting aside their differences to unite behind a standard-bearer who they believe represents a healthy alternative to a despised Democrat, the party’s various tribes are increasingly saying that if this is what it means to be a Republican, they don’t want it.

For the past 40 years, the Party has been an awkward amalgamation of anti-abortion, socially conservative evangelicals, low-tax, limited-regulation businessmen and patriotic, pro-gun, tough-on-crime white men. Trump highlighted the concerns of middle and low-income men who blame immigration, international trade and big business for 30 years of job insecurity and dwindling wages.  Some of them are traditionally Republican, patriotic, men who liked the way Trump gave voice to politically incorrect feelings they had about Muslims and Hispanics. Others are converted blue-collar Democrats and independents.

Some of those Trump voters may be evangelicals, but social issues don’t drive them the way economic angst does. Their issues are primarily economic and they want to go to war with the businessmen who have bankrolled the party and tolerated social conservatism and closet racism in return for support for the low-tax, low regulation agenda.

They blame Wall Street for the economic troubles they have and they think Trump has a solution. Indeed, his solutions address their concerns. It is plausible that throwing illegal immigrants out of the country would cause massive disruption in many industries and force businesses that wanted to survive to raise wages to hire and train unskilled Americans. It is plausible that a tariff wall would lead some industries to bring work back to the U.S. (although it would probably be performed largely by robots).

The problem is that Trump has very little chance of appealing to the rest of the Republican coalition. As a thrice-married, sometimes bankrupt casino mogul who barely acknowledges the pro-Life movement, he seems unlikely to draw the sometimes insular religious right out to the polls on voting day. He certainly isn’t going to lead a crusade against gay rights or same sex bathrooms. Social-issue voters are likely to stay home in droves.

Except for lower taxes, Trump’s economic nostrums hold little appeal for businessmen. They may prefer his low-key acceptance of gender differences to the position of most other Republican candidates. But they want more international trade so they have cheap products to sell.  They want to be able to bring in lots of low-cost programmers from India, because it’s a lot cheaper than retraining American workers whose skills have become outmoded. They want low-skilled immigrants to stay here because they keep a lid on demand for higher wages. And they want predictable economic policies.

Trump has probably gotten some of the tough-on-crime electorate with his tough-on-terror rhetoric. But those who reflexively associate the Republican Party nominee with patriotism will have to recalibrate their beliefs. The draft-dodging Trump has disparaged heroes like John McCain. He has, with justification, pilloried George W. Bush’s Iraq policy. He has pandered to Putin while disparaging traditional allies. He appears to be trying to appeal to those voters by promising to improve the shabby treatment of veterans while pulling back from overseas engagement.

Among elected officials, Republicans have many pragmatic politicians who manage to paper over the differences among  the three legs of the Republican electoral triad -- evangelicals, businessmen and patriots. But Trump has managed to accentuate the points of division. .

Forget gun control -- control bullets

The very thought of gun control makes liberals salivate and conservatives hyperventilate.
But bullet control might attract broader support.
It's pretty clear that implementing gun control is impossible in the U.S.  There are already an estimated 150 million guns in civilian hands in America. Even a generous buyback program like Australia's would leave tens of millions of guns in public hands. Arguing about gun control  makes dealing with America's terrorist-gun-death problem difficult.
But bullet control could provide gun lovers the benefits they want and prevent the most terrifying aspects of gun terrorism. If terrorists can't arm themselves with hundreds of bullets, they can't kill hundreds of people.
The first question is: what do we want to stop by regulating guns?
Many liberals would like to lower any gun deaths.  Conservatives might argue that gun deaths can be beneficial in some cases: self defense or preventing home invasions or protecting others from violence. Those gun deaths are good things, they would say.  Some libertarians might argue that allowing people to use guns to commit suicide (about half of U.S. gun deaths) is a valuable freedom.
But almost no one outside of ISIS would argue that mass killings of uninvolved civilians are a good thing. And mass killings are becoming the terrorists' weapons of choice. Civilians are  justifiably terrified by the idea of people with automatic rifles coming into a school or a concert hall or a workplace Christmas party and shooting the people gathered there. There are anti-government survivalists who want thousands of rounds of ammunition  to protect themselves from potential attacks by the federal government. But that's not a Constitutionally sanctioned purpose or one that many regular citizens would support.
Many of the standard gun control proposals don't really address mass killings. Handguns are not used to kill large numbers of people. Shotguns don't kill large numbers. Many rifles can be altered to fire a series of rounds.
But it's very difficult to use guns to commit mass murder if the owners can't get bullets.
Gun buyers have a variety of ways to get guns -- retail stores, gun shows, private sales, theft, black market.
But buying ammunition is a traditional retail activity, in stores or over the Internet. Ammunition is made by a handful of companies compared to several thousand who make gun.  That makes it much more amenable to regulation.
People don't need much ammunition in  their homes. A magazine with six or eight shots is ample to prevent any home invasion -- more than enough for suicide or threatening a neighbor. Even a hunting trip rarely involves pulling the trigger more than four or five times. So the government could simply prohibit sales of more than 10 bullets at a time by any retailer.
Target shooters use a lot more ammunition at shooting ranges. But it would be possible to license ranges to sell bullets and keep track of their usage so shooters couldn't walk off with large stockpiles.
Controlling bullets would be a way to greatly reduce the risk of a few terrorists killing masses of people with firearms. It could be done at the federal level, eliminating the problem of patchwork laws and guns moving across state lines. And it wouldn't need to impinge on the legitimate self-defense and hunting needs of gun owners.

When a President wastes a decade

Attended a dinner at Winsor School with old friend David Sanger, now NYT chief national correspondent (I met him 30 years ago when he was an intern in WSJ Boston Bureau). Have to buy his book, "The Inheritance." He says that it argues that whether Iraq was the right or wrong war, we need to understand how significant it was in consuming national time and treasure. He estimates cost at $3.3 trillion and the establishment of a national strategy that distracts us from both domestic planning and other international interests.
New anecdote: he recently met with a Chinese general who said that ten years ago the Chinese despaired of ever catching up to U.S. power, but "we never dreamed you'd spend a decade in Iraq and Afghanistan."
It's a reminder that the most powerful weapons are those you don't use. Saber rattling can often have much more impact than actually using the saber. The Cold War, the most successful U.S. war since WWII, was all about unused weapons.
It's also a reminder that when a president picks one big battle it will prevent him from waging other battles. They have to spend some of their political capital as they go along, but it's not an infinite resource. Obama has won most of the political battles he fought -- health care, financial rescue, financial regulation, Supreme Court picks -- but he doesn't have any political capital left. Because the fight for economic recovery turned out to be the most important battle, and he can't wage it any more, most voters think he's been a failure.

Perry's job "creationism" like religious creationism

The Wall Street Journal has a very interesting front-page piece on Texas Gov. Rick Perry's job "creation" programs today. http://on.wsj.com/o2vjUd It makes it clear that Perry's "job creationism" is as scientifically rigorous as religious creationism.
Written by my former colleague and Pulitzer Prize winner, Mark Maremont, the story notes that Texas committed $440 million to new jobs programs starting in 2005 and says they claim to have created 59,000 jobs. It notes that at least 12,000 of those jobs were claimed as a result of a Texas A&M genomics project that actually hired only 12 people. The rest come from adding up a plethora of unrelated jobs, most of which would have happened anyway.
Sadly, it is predictable that when a politician starts counting "jobs created" the number claimed will greatly exceed the reality. It was especially interesting that the best example of jobs created -- Citgo's new U.S. HQ with 820 jobs -- didn't really "create" jobs. It caused the jobs to be placed in Texas rather than some other state. Venezuela created the jobs because it needed a U.S. base for Citgo. Texas just offered a larger bribe to get them there than any other state was willing to provide.
To be sure, these state bribes to business are an important part of plant location decisions. But they aren't job creation in the sense of a venture capitalist providing money that creates a new industry. And it isn't a useful precedent for a U.S. president.
I am familiar with the recent plant placement efforts of a large food manufacturer. It ran rigorous analytical models to try and decide what state should get a new manufacturing and distribution facility it planned. It concluded that the only measurable financial criterion that mattered was the size of the state subsidy. So states are basically in a position of having to tax their existing businesses to bring in a new business. It's an unfortunate game of beggar-thy-neighbor, and governors have to play it. But it isn't job creation.
Perry, of course, criticizes Obama for his job creation efforts. So it's rich seeing him caught playing the same games.

Jobs place in business history? No. 3

Steve Jobs' death is a tragic instance of genius interrupted. I only met and interviewed him once, but my life repeatedly has been changed by his vision and the products it created. I live on my Mac and iPhone and I probably have a more intimate relationship with them than with any other devices I've ever owned except my sea kayak, which periodically saves my life.
After 40 years of following American businesses, I've developed an interest in business journalism and business history. I believe that business and economic history probably plays a bigger role in the way the world works than most historians recognize.
It's too early to tell, but I'm a journalist, so I have to ask: How significant was Steve Jobs in business history?
After some consideration, I think he was probably one of the three most significant business people in American history. I'd rank him with Thomas Edison and Cornelius Vanderbilt -- probably in third place. Jobs (with Steve Wozniak who created the cheap disk drive) invented the personal computer. The second Apple (with VisiCalc from Dan Bricklin and Bob Frankston) was the PC that made Ben Rosen start proselytizing PCs as tools rather than toys. Bill Gates was a better business person at that point, but Jobs created the hardware. The one time I interviewed them both involved an argument over whether hardware or software should be free. That argument continues.
So what did Steve create? It's somewhat tough to say, because in corporate America, success is a team effort. But repeatedly, companies headed by Jobs created revolutionary products. That's really rare.
Giving him credit for team efforts, he created the usable PC; he created the graphical user interface, which is the way all people deal with machines today; he stole and popularized the mouse; he made desktop publishing possible; and that's just in PCs.
Then he changed movies with Pixar, demonstrating that creativity was a successful business strategy in high tech.
When he came back to Apple, his genius was really astounding. He used his vision to create products and services that remade the music industry, the PC industry, the newspaper, magazine and book publishing businesses.
And he created the smart phone -- the most important product in the world today. Nokia had led the way into smart phones but Apple took advantage of increased bandwidth, and it completely changed people's expectations. Remember reading the early reviews of iPhone? The raves were so over the top that you wondered how the Mossbergs and Pogues had been drugged. But when you got your own iPhone you wondered how any company had managed to create a product that so perfectly fit your needs. Screen gestures that did what you expected were an incredible example of a company understanding people.
The iPhone was the perfect expression of merging technology with imagination. It may never be equalled.
Still, I think there are other business people who have had a huge role in changing America. First, I would list Thomas Edison. Electricity generation was a big deal, and he invented technology to make it work and a corporate model to sell it. And inventing a market for electricity by inventing light bulbs was definitely world-changing. Edison also invented moving pictures and he created musical recordings. Think of the leap he made from a world where the impact of the spoken world was limited to shouting distance,
Last year I read a biography of Cornelius Vanderbilt that makes me think he should be in the small Pantheon of business leaders as well. He controlled sea transportation around New York, through great service (he pioneered ferries that left on a schedule rather than when they had a full load of passengers) and steely will. Then he moved on to control rail transporation. He was the first to demonstrate how to use the stock company, with many investors, to accrete the capital needed to build railroads.
There aren't many other business leaders in that league. The Wright Bros. invented the airplane, but they didn't create airlines. Bell started the phone company, but it was just one business. Saenoff didn't really invent radio the way Jobs invented the PC. JPO Morgan saved the financial system, but he didn't innovate anything.
I think Henry Ford might be in Jobs' league, mostly because the car remains the most important life changer of any technology. And Ford, unintentionally, created the middle class industrial worker. So I think I'd rank Ford and Jobs together, just behind Edison and Vanderbilt.
These kinds of rankings are completely bogus, of course.
But doing them provides some context for the events of our times.
Thoughts?

US Studying Google for Antitrust? Really?

The Wall Street Journal broke the news that the FTC is ready to subpoena Google for information on its trade practices.
This is likely to help Google's competitors. But it's hard to see how it's going to help consumers. And antitrust law in America is fundamentally designed to give consumers a fair shake.
(I'm an enthusiastic user of many Google services, but I don't own any stock in the company).
It's hard to imagine a company that treats consumers more fairly than Google does. It figured out a way to let people find almost any information free. It did it by giving them ads for products and services that they were likely to want rather than bombarding them with irrelevant ads. That has worked so well for businesses that they have halved their advertising in newspapers and generally reduced ad budgets because they get more effective returns for less money online.
Google has used its incredible profitability to expand its footprint on the Internet through more free services, most of which have only indirect financial returns, if any. It stores much of the world's video information free on YouTube. It runs a great free e-mail service that prevents spam better than any costly corporate e-mail services I'm aware of. It runs free Google office apps in the cloud, so you can access them from any computer. It introduced a really good, credible alternative to the iPhone at a time when Blackberry couldn't figure out how and Microsoft was fiddling and diddling with shrinking a bloated operating system into a pocket-sized package.
Google even stood up to the Chinese and moved out of that country -- an incredible example of corporate morality. Much of the criticism of Google comes from competitors and advertisers who want to game its system and bother innocent consumers with unwanted sales pitches rather than the products they actually want.
The FTC better not mess up the Google system to the point that consumers get less.
As Dan Lyons points out at Daily Beast this is certainly bad for Google. Even though the Feds may not succeed in getting the courts to find Google's actions illegal or force many operating changes, Google will have to think about something besides the customer benefit of any new service it provides. Everything it does from now on will be constrained by the need to consider what the government thinks.
The government's unsuccessful antitrust prosecution of IBM marked the beginning of the end for Big Blue's long run of dominance. Similarly for Microsoft. Those cases hinged on the giants' abilities to bundle software with existing mainframes or operating systems in a way that prevented competition from getting a toehold. Locking out competition is bad for consumers, and those actions arguably led to a better marketplace.
From a competitor's point of view Google undoubtedly looks like a voracious monopoly. But there are serious, cash rich competitors in the same space that can take care of themselves. Apple has a market cap substantially higher than Google's, a lock on the most lucrative smart phone and tablet users and control of the music industry. Microsoft has revenue and cash flow that would make most national treasuries weep, and a lock on the CIOs of the world. Facebook gets a lot more time everyday with Internet users than Google does and it knows a lot more about them.

Google provides a greater consumer service, for less money, than any other company in high tech (although Facebook is coming close). It will be tragic if that is lost due to antitrust action.

Brain-free law-making

The NY Times has an interesting story on state legislators proposing bans on listening to music players or texting while bicycling or walking. http://www.nytimes.com/2011/01/26/us/26runners.html?_r=1&src=fbmain
It seems to be a classic example of legislation by anecdote, unimpeded by actual knowledge.
In fact, pedestrian fatalities declined 16% over the time that Americans presumably increased their walking while distracted. Fatalities dropped to 4,091 in 2009 from 4,892 in 2005. The story says there was a slight upturn in 2010, but that doesn't seem to have been the reason legislators decided to act.
Among the states, Arizona and Florida had the largest increases in pedestrian fatalities, followed by North Carolina, Oregon and Oklahoma. The study doesn't say whether those states had the largest increase in sales of iPods or Blackberrys -- facts that might have provided a rationale for the proposed laws.
New York State Sen. Carl Kruger of Brooklyn, proposed a bill that would apply to pedestrians in cities of one million or more. “This is not government interference,” he said. “This is more like saying, ‘You’re doing something that could be detrimental to yourself and others around you.’ ”
Kruger has a funny way of defining "not government interference."
Examples like this of legislating for the sake of legislating are enough to turn me into a full-fledged libertarian.