By Kent R. Kroeger (Source: NuQum.com, August 29, 2022)

[Note: The dataset used in this data essay is available on GITHUB.]

If we aren’t allowed to make mistakes, we will never make progress.

A number readers complained about my U.S. House 2022 midterm prediction — beyond that fact it predicts a GOP landslide win — saying that one of the independent variables in my linear model (average presidential approval from August to October in the election year) required information close to Election Day. As they rightfully point out, in previous essays I have argued that there is little value in a prediction model that requires information right up to the point of the event itself.

The farther out in time your model can predict an event, the more useful your model.

Accordingly, I replaced the presidential approval variable that needed data from late October with one that used the president’s approval at the end of August (Gallup Poll).

Unsurprisingly, the prediction model for the U.S. House 2022 midterms did not change significantly from the previous model (see Figure 1); but, equally without surprise, it does not fit the data as well (adjusted R-squared 0.78 vs. 0.69).

Figure 1: Linear model of House seat gains/losses by President’s Party in Midterm Elections (1950 to 2018)

Using August presidential approval data, my model predicts the Republicans will gain 53 seats in November (compared to my previous model’s prediction of a 55-seat gain).

Obviously, this prediction puts me far outside current predictions from mainstream polling and political pundits, some suggesting the Democrats will maintain control of the U.S. House after the 2022 midterms.

They may be right.

But I would remind everyone that Barack Obama had 46 percent presidential approval in August 2010 (and a fast-improving economy coming out of the 2008 world financial crisis) — three months prior to his party losing 63 House seats in the 2010 midterm elections.

I am not surprised that my prediction model — heavily weighted towards economic conditions and presidential approval — should predict a House loss of 53 seats for the Democrats in 2022.

But that doesn’t mean my model is accurate. How has it done in the past?

In 2018, my model predicted the GOP would lose 44 House seats — they lost 40.

In 2014, the model predicted the Democrats would lose 30 seats — they lost 13.

In 2010, it predicted the Democrats would lose 51 seats — they lost 63.

[I would note that the combined predictions for 2010 and 2014 weren’t too far off — I predicted the Democrats would lose 81 seats over those two midterm elections…in reality, they lost 76 seats.]

My model is far from perfect and every recent indicator is telling me it may not work well in 2022.

And why might it fail?

Figure 2, which shows the prediction over time of the largest political futures market in the world (PredictIt), offers a clue.

No, it’s not the U.S. Supreme Courts’ Dobbs decision overturning Roe v. Wade. That decision on June 24th, at best, increased the Democrats’ chance of keeping control of the U.S. House by eight percent. And Speaker of the House Nancy Pelosi’s trip to Taiwan in early August apparently increased the Democrats’ chances by another five percent.

Figure 2: PredictIt Forecast for Control of U.S. House over past 90 days

But another event has fundamentally changed the dynamics going into the 2022 midterms: the FBI’s raid on Donald Trump’s Mar-a-Lago home on August 8th.

Since that event, the Democrats’ chances of keeping control of the U.S. House, according to investors on PredictIt.com, has increased from 19 percent to 29 percent.

The Dobbs decision was big, but the Mar-a-Lago raid is bigger and the trend since the FBI raid in the Democrats’ chances of keeping control of the House remains favorable to the Democrats.

How could the Republicans have stumbled so badly in what should be a decisive electoral triumph?

My prediction model says they won’t stumble, but I defer to the podcast-terrifying-monster-to-liberals Ben Shapiro to explain why the GOP might:

Shapiro is right, though I’m not sure why he thinks the Republicans losing momentum is “a mystery wrapped in an enigma.”

It is rather clear in the data why the Republicans are losing momentum.

They’ve hitched their wagon to a man (Trump) who seems disconnected from his own party’s electoral success.

That is not a ticket to success.

I, personally, find the FBI-Mar-a-Lago raid more puzzling than indicative of a major threat to U.S. national security. Am I to believe the U.S. Department of Justice is going to indict of former U.S. president on a vaguely-written, antiquated law (The Espionage Act of 1917) designed expressly to silence dissent against U.S. involvement in World War I and rarely enforced successfully, except in one example where it was used to convict Socialist presidential candidate Eugene V. Debs, the Bernie Sanders of his day, on sedition charges?

Despite being called a “traitor to his country” by President Woodrow Wilson for his opposition to the World War I draft, Debs is today viewed by historians as an articulate, passionate defender of workers’ rights and underclass Americans — hardly a traitor.

Nonetheless, Debs effectively spent his last years of life in an Atlanta federal prison because he had political enemies at the highest echelons of government. Julian Assange knows the routine.

As for Trump, even the establishment leftists at The Atlantic recognize the president’s plenary powers over the classification process, though they assert this power does not extend to nuclear secrets:

“The 1988 Supreme Court case Navy v. Egan confirmed that classification authority flows from the president except in specific instances separated from his powers by law. And here is where things get theological: A president can make most documents classified or declassified simply by willing them so.”

But how can a president be separated from his constitutional powers via a congressional law? A president can’t hand away his or her constitutionally-defined rights any more than an individual citizen can wave off their similarly established rights.

Buzzard’s guts man, as Commander-in-Chief, the president is clothed in enormous power…cue one of my favorite movie scenes of all-time:

My point is not that Trump is legally immune to prosecution for exfiltrating critical national security documents from the White House. It is, however, my contention that partisan proclamations that Trump’s exposure to indictment (and conviction) is self-evident are not only premature, they are not clearly established in existing law and judicial interpretations of that law.

Given the U.S. government refused to prosecute two American Israel Public Affairs Committee (AIPAC) lobbyists on violations of the Espionage Act for passing top secret defense information to the Israeli government and the news media, it seems unlikely they will pursue a similar prosecution against a former president — even if that former president is Donald Trump.

Ultimately, the courts — probably the Supreme Court — will decide if Trump violated any criminal laws.

In the meantime, the American voter, with little interest in the nuances of Constitutional law but peppered day and night on how dangerous Trump is to national security, will decide in November if they’d rather have the Republicans instead of the Democrats in control of the Congress.

The Republicans would be smart to focus on an economy on the brink and a world security situation which, by the day, brings us closer to a hot war — perhaps even a limited nuclear war — with Russia and China.

Are the Republicans dependable enough to handle these critical problems?

If the Republicans want to regain control of Congress, that needs to be the question facing voters in November, not whether Trump violated secrecy laws.

• K.R.K.

Send comments to: kroeger98@yahoo.com

By Kent R. Kroeger (Source: NuQum.com, August 22, 2022)

With Donald Trump’s most recent FBI investigation drama that includes a set of allegations that, if true, should end his political career, it gets harder every day to muster a coherent defense of the man.

But I don’t have to defend Trump to justify criticisms of his sharpest critics.

Among his most pointed critics in recent has been philosopher and author Sam Harris.

Once one of the right-wing’s favorite “lefties” for his uncompromising criticism of Islam, in a recent interview on YouTube’s Triggernometry podcast, Harris shed his attractiveness to the right’s Trump-wing in a few short sentences:

“I don’t care what’s in Hunter Biden’s laptop. Hunter Biden, at that point (in the 2020 election), could have had the corpses of children in his basement and I would not have cared.

Even if we discovered Joe Biden was getting kickbacks from Hunter Biden’s deals in Ukraine or China, it is infinitesimal compared to the corruption we know (Donald) Trump is involved in.”

Harris then went on to say, out loud, what common people are not supposed to believe about the 2020 presidential election — that a tacit, widely-supported conspiracy existed in the news media and Washington, D.C.’s permanent political class to disallow fair news coverage of Trump’s re-election campaign. The clearest evidence of this conspiracy was as subtle as Trump’s comb over: It was the dishonest and untimely reporting on Hunter Biden’s laptop.

And Harris doubled-down in his defense of this implicit plot among elites to end Trump’s presidency:

“Now that’s doesn’t answer the people who say, ‘It’s still completely unfair to not have looked at the laptop in a timely way and to have shut down the New York Post’s twitter account — that’s a left-wing conspiracy to deny the presidency to Donald Trump.’ Absolutely! It was absolutely right but I think it was warranted.”

In Harris’ opinion, Trump was “an asteroid hurtling towards Earth” who had to be stopped by any means necessary, as dangerous as any fascist dictator from the past — a view still held by many Americans (including most of my family, friends and colleagues).

The New York Times, Washington Post, NPR and other mainstream news outlets would later acknowledge that the laptop-story was not Russian-sourced propaganda or ever discredited by the U.S. Intelligence Community (as reported in those outlets during the 2020 campaign), but coming six months after the actual election, their mea culpa only reinforced the already metastasized belief among the most passionate Trumpers that the 2020 election was “stolen.” The most durable falsehoods are often built on building blocks of truths.

If we broaden our definition of a “stolen election” to include the undeniable and potent media bias arrayed against the Trump candidacy, the term isn’t so conspiratorial sounding. The media’s failure in covering the laptop-story and Harris’ open apologia for the moral righteousness of that failure only hammers home that conclusion.

Contrary to a common retelling of the laptop-story’s timeline, it was not dropped on the American electorate days or weeks before Election Day by right-wing conspiracy theorists. In reality, the “rumor” first appeared on internet news sites in February 2020, according to a GDELT internet news analysis, was reported more substantively in a May 2020 New York Post op-ed article, and began entering the public’s mind in August 2020, according to Google Trends.

The story was there, the media simply refused to cover it. And the irony is, it is doubtful a full news investigation into the laptop-story would have changed the final election outcome, not when so many other media-fueled distortions peppered the American voter before the 2020 election (e.g., Russiagate, Trump-built cages for immigrant kids, Russian bounties on American soldiers, etc.). Trump was sucking swamp water long before Hunter’s lost laptop was found.

The mainstream media’s deliberate mishandling of the laptop-story has only furthered my belief that until we forge a diverse syndicate of news outlets that are unconnected to any political or economic interest, our democracy as idealized in our high school civics classes will never exist.

If we allow the media establishment — print, broadcast and digital — and their political allies to decide a popularly-nominated and legally-elected presidential candidate is unworthy of unbiased news coverage and can be blocked from access to prominent social media platforms, how far removed are we from the autocracies (like Russia and China) our government routinely decries on the international stage?

• K.R.K.

Send comments to: kroeger98@yahoo.com

Kent R. Kroeger (Source: NuQum.com, August 21, 2022)

[Note: The dataset used in this data essay is available on GITHUB.]

As energy prices start to fall from their early 2022 highs and President Joe Biden seems to be convincing Americans that the recently passed Inflation Reduction Act (IRA) is truly a landmark piece of legislation, more and more political pundits are calling into question previous predictions that the Republicans are poised to regain control of the U.S. House and Senate in the upcoming midterm elections.

“After months of ‘Democrats are doomed’ chatter, there’s been a definite shift in mood and momentum toward the party in power,” writes Cook Political Report analyst Amy Walter.

In all probability, regaining control of the Senate is a lost cause for the Republicans. When the GOP’s own Senate minority leader, Mitch McConnell, openly questions the quality of the party’s Senate 2022 challengers — Herschel Walker (Georgia) and Dr. Mehmet Oz (Pennsylvania) come to mind — you know things aren’t looking good.

[Note to both political parties: Amateur politicians can often be called by another name: losing candidates. U.S. House and Senate challengers are more successful when they’ve had elective experience at other levels of government.]

Presently, PredictIt, a political futures market, is giving the Democrats a 61 percent chance of keeping control of the Senate (see Figure 1), and expects the GOP to hold either 48 or 49 Senate seats in the end.

Figure 1: Current PredictIt Forecast for Control of U.S. Senate (as of Aug. 21, 2022)

The news is somewhat better for the GOP’s prospects in the House, where PredictIt still gives the party a 79 percent of regaining control (see Figure 2) — though that is down significantly after the U.S. Supreme Court overturned Roe v Wade in its Dobbs decision in mid-June (see Figure 3).

Figure 2: Current PredictIt Forecast for Control of U.S. House (as of Aug. 21, 2022)

Figure 3: PredictIt Forecast for Control of U.S. House over past 90 days

Fivethirtyeight.com gives the GOP a similar probability of regaining control of the House and, likewise, shows that this probability has declined significantly since the Supreme Court’s Dobbs decision.

Are these adjustments in favor of the Democrats warranted?

My Prediction for the 2022 U.S. House Midterm Elections

It is hard to argue that the Republicans haven’t lost significant electoral momentum since the Dobbs decision and the ongoing news that former president Donald Trump is under an FBI investigation for allegedly removing classified defense and security intelligence from the White House as he left office.

If I were a betting man, I would already have dumped my shares in ‘GOP regains Senate’ futures (at a considerable loss, I might add) and would seriously consider hedging my bets on my ‘GOP regains the House’ contracts.

But I am not a gambler. I’m too lazy.

Rather, I like to make my predictions early and stand by them, come hell or highwater.

So here is an econometric model using aggregate data for 18 U.S. House midterm elections (1950 to 2018). The model is based largely on the work of political scientists Michael Lewis-Beck and Charles Tien (2014 midterm model), who were themselves building off the pioneering election forecasting work of economist Ray C. Fair.

With some minor modifications (i.e., binary control variables for the post-Watergate period and the Clinton presidency), the econometric model I estimated to forecast the 2022 U.S. midterm elections is as follows:

Figure 4: Linear model of House seat gains/losses by President’s Party in Midterm Elections (1950 to 2018)

The key independent variables in this model are:

• The average presidential approval as measured by the Gallup Organization for the months of August, September and October in the election year,
• The percent change in real disposable income during the 1st two quarters of the election year, and
• The interaction between two variables: (1) The number of House seats gained (+) or lost (-) by the current president’s party in the previous presidential election, and (2) the number of seats needed by the current president’s party to gain (+) or keep (-) control of the House.

Given the current values (or estimates) for these variables heading into the 2022 midterms:

• Estimate of Average Aug.-Oct Presidential Approval: 41 (RCP’s current aggregated poll measure of Biden’s presidential approval)
• Percent change in real disposable personal income in 1st two quarters of 2022: -0.39 (Source: St. Louis Federal Reserve)
• The number of House seats gained (+) or lost (-) by the current president’s party in the previous presidential election: -13
• The number of seats needed by the current president’s party to gain or keep control of the House: -5,

…my model predicts that the Democrats will lose 55 House seats in the upcoming midterms.

That is definitely a prediction that puts me out of a analytic limb. And why does this model strongly lean towards a Republican landslide, at least in the House races?

This model is driven by the power of economic factors and presidential approval in explaining past midterm elections, along with the tendency that the president’s party usually loses a significant number of seats in midterm elections (an average of 27 in the 18 midterm elections from 1950 to 2018).

Still, a forecasted loss of 55 House seats (!) says a lot about how my forecast model sees the economy and Biden’s approval as too far gone to help the House Democrats in November.

So, as of now, regardless of the genuine anger generated by the Dobbs decision or what happens in the Trump investigation, my forecast model has no reason to believe the economy or Biden’s approval are going to help the House Democrats in the midterms.

• K.R.K.

Send comments to: kroeger98@yahoo.com

By Kent R. Kroeger (Source: NuQum.com, August 16, 2022)

The Constitution does not prohibit the citizens of each State from regulating or prohibiting abortion. Roe and Casey arrogated that authority. We now overrule those decisions and return that authority to the people and their elected representatives. (U.S. Supreme Court’s June 2022 ruling on Dobbs v. Jackson Women’s Health Organization)

When the U.S. Supreme Court (SCOTUS) ruled on Dobbs v. Jackson Women’s Health Organization that the Constitution of the United States does not confer a right to abortion, the court overruled both Roe v. Wade (1973) and Planned Parenthood v. Casey (1992). As a result, the decision gave individual states the full power to regulate abortion.

The fire and fury from the political left was instantaneous.

“The people who will lose access will be Black women, brown women, poor women, and young women,” said sociologist Kimberly Kelly just prior to the SCOTUS ruling. “If Roe is overturned, abortion is going to become a function of class privilege. Affluent women who can travel, will travel. Only women with certain levels of economic resources will be able to travel.”

“People will die because of this decision,” New York House member Alexandria Ocasio-Cortez said soon after the decision was handed down.

But was the predictable furor warranted?

What the ruling did not do was end legal abortion in the U.S.

To the contrary, the great irony of the Supreme Court’s Hobbs decision is that it will, at a minimum, reaffirm the status quo on abortion as established by Roe v. Wade, and could potentially move the ball further in the direction of unconstrained abortion rights.

States that already strongly affirm abortion rights (e.g., California, New Jersey, Washington, etc.) are poised to further codify those rights. States that used Roe v. Wade to limit abortion rights are likely to legislatively endorse those restrictions.

So how did the Dobbs ruling change the status quo on abortion rights?

It is still early, but most likely the SCOTUS ruling will reduce restrictions on abortion rights for the vast majority of American women.

A recent vote by Kansas voters on abortion rights lays out the problem pro-life advocates face across the U.S.:

An increase in turnout among Democrats and independents and a notable shift in Republican-leaning counties contributed to the overwhelming support of abortion rights last week in traditionally conservative Kansas, according to a detailed Associated Press analysis of the voting results.

A proposed state constitutional amendment would have allowed the Republican-controlled Legislature to tighten restrictions or ban abortions outright. But Kansas voters rejected the measure by nearly 20 percentage points, almost a mirror of Republican Donald Trump’s statewide margin over Democrat Joe Biden in the 2020 presidential election.

Does the Kansas vote on abortion rights expose the GOP’s vulnerability on abortion?

Of course it does.

The GOP refuses to accept that the U.S. social consensus on abortion is that it should be legal, with restrictions only on late-term abortions.

The GOP can argue the morality of abortion to the end of times, but their policy prescriptions are only impactful if they can get the majority of Americans to legislatively agree with their abortion policies.

Kansas is evidence that they face an uphill battle.

Through the Hobbs decision, SCOTUS gave the abortion decision to states, and, in practicality, is bringing U.S. abortion law into alignment with public opinion.

As someone who calls himself pro-life, I am wholly aware that my views on the issue are at odds with most Americans. I am pro-life in a country that has few qualms about exterminating the unwanted unborn.

“They are just a collection of cells.” “They aren’t sentient.” “They don’t feel pain.” “Human life begins after the baby exits the womb.”

I’ve heard all of those rationalizations and intellectual gymnastics in justifying a pro-choice position. I disagree with those arguments, but I also recognize that this is the public consensus on abortion in the today’s United States.

And the GOP may be reminded of that reality in the upcoming midterm elections.

U.S. state-level public opinion on abortion

The American National Election Studies (ANES) project, funded by the National Science Foundation and currently managed by the University of Michigan and Stanford University, conducted a national survey of 8,280 vote-eligible U.S. adults before the 2020 presidential election.

Among the questions asked in that survey was a question on how respondents placed themselves on a 5-level scale regarding abortion rights:

According to the 2020 ANES, 61 percent of U.S. adults believe, at a minimum, abortion should be allowed “after the need…has been clearly established.”

The results of this survey, unaffected by the SCOTUS’ Hobbs decision, indicates the national consensus on abortion is that it should be legal and only restricted when the need to abort the child is not clearly established.

I am pro-life, but I live in a pro-choice country. I can pretend otherwise, but that would make me delusional.

Among those states with enough ANES sample cases to be analyzable, public opinion in 74 percent of states support abortion rights when a need is established (see Figures 1a —1g).

Figure 1a: Abortion attitudes in the Northeast U.S.

Figure 1b: Abortion attitudes in the Southern U.S.

Figure 1c: Abortion attitudes in the Industrial Mideast U.S.

Figure 1d: Abortion attitudes in the Upper Midwest U.S.

Figure 1e: Abortion attitudes in the Lower Midwest U.S.

Figure 1f: Abortion attitudes in the Mountain U.S.

Figure 1g: Abortion attitudes in the Pacific West U.S.

In the U.S. today, public opinion leans decisively against the pro-life position.

I am resigned to that reality.

But what I cannot understand is the unwarranted hyperbole of people like Dr. Kelly and Rep. Ocasio-Cortez who suggest the Hobbs decision will rollback abortion rights in the U.S.

The exact is opposite is going to occur — and Kansas is the first example of this dynamic.

If one compares existing abortion policy in the 50 states (plus D.C.), as shown in the title graphic, with actual public opinion (see Figures 1a-g), it suggests that when the abortion issue is presented to voters, at least 20 out of the 50 states (plus D.C.) will reduce restrictions against abortion, not increase them (States likely to reduce abortion restrictions include: Alabama, Arkansas, Florida, Georgia, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Missouri, Nevada, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia and Wisconsin).

For example, post-Hobbs, Alabama has effectively banned abortion, according to the Guttmacher Institute. Yet, based on public opinion in Alabama as measured by the 2020 ANES (see Figure 1b), 80 percent of adult Alabamans believe abortion should be allowed at least in cases of rape, incest, or when the woman’s life is in danger.

And it is not just in the American South where state abortion policies are disconnected from public opinion. Wisconsin is a state with significant restrictions on when an abortion can occur (again, see a Guttmacher Institute analysis of state-level abortion policies); yet, public opinion in the state (see Figure 1d) indicates 59 percent of Wisconsin residents believe abortion should be allowed after a need is established, irrespective of how long the woman has been pregnant.

The strongest conclusion one can draw is that state’s like Alabama and Wisconsin are going to reduce abortion restrictions, not increase them post-Hobbs.

Only three states — Idaho, Montana, and (maybe) Rhode Island — will potentially rollback abortion rights once the issue is brought before voters. But they are the exception.

It is true that having a directly expressed constitutional right (e.g., freedom of speech, religion, privacy, and gun ownership) is a more irrevocable right than a right dependent on voter approval or implied-right arguments. But it is also true that public opinion drives election outcomes far more directly than sometimes abstract constitutional rights.

Current polling data says abortion is now one of the most important issues among voters heading into the 2022 midterm elections.

I suspect the Republicans have squandered their many advantages heading into the 2022 midterm elections. Sure, they may well regain control of the House of Representatives, but are they in any position to lead the country?

If I were a Democrat, I would be quietly cheering the Hobbs decision — it can only help the Democrats’ prospects in the midterm elections. If I were a Republican, I would spend the next four months focusing on inflation, economic stagnation, and the aching incompetence of the current administration.

• K.R.K.

Send comments to: kroeger98@yahoo.com

By Kent R. Kroeger (Source: NuQum.com, August 9, 2022)

From elementary to high school, I was a short and skinny kid who was frequently subjected to various forms of socially acceptable peer group torture, the most common of which was the noogie headlock.

A guy wraps his arms around your neck from behind, bends you over and starts grinding his index finger’s proximal interphalangeal joint (i.e., knuckle) into the boundary between your frontal and parietal skull bones.

It hurt, but it was a tolerable level of pain compared to some other bullying alternatives.

For example, a snuggies attack, the process in which someone reaches into your pants from behind and grabs your Fruit of the Looms (i.e., underwear) and attempts to pull them over your head.

While that attack hurt less than the noogie, it inflicted far more emotional pain, particularly when conducted in front of fellow students.

Luckily, God blessed me with a low center of gravity and exceptional twitch muscle speed that helped me avoid most snuggie attacks.

Noogies, however, were another matter. Once they had your neck in a grip, they owned you. And to fight back it required a different set of fighting skills to weather the demoralizing fury of an unforeseen noogie attack.

And while my younger self was never a master of hand-to-hand combat techniques, occasionally I could resist a noogie strike by using my free, outside arm to land a few solid, but usually ineffective punches at my attacker’s crotch.

Inevitably, the response to such a countermove was for my attacker to grind his knuckle into my skull even harder — to the point where it actually hurt — forcing me to withdraw my crotch-directed response and, instead, utter the internationally-accepted indication of unconditional defeat, “Uncle!”

I bring up these traumatic childhood memories because I believe they are a metaphor for policymaking in the U.S. today.

Most Americans live in a perpetual noogie-hold courtesy of corporate America, whether they know it or not. And no piece of national legislation better exemplifies that condition than the Inflation Reduction Act of 2022, recently passed by the U.S. Senate and certain to end up on President Joe Biden’s desk for signature sometime in the near future.

What is wrong with the Inflation Reduction Act of 2022?

The Inflation Reduction Act (IRA) is anything but a public policy designed to reduce inflation. Instead, it is the motherload of bad policy ideas, designed more to help the wealthiest Americans than to impact, in a positive way, the lives of regular Americans.

How do I know? Read the text.

If taming inflationary pressures is the primary bill’s goal, Part 1 of the bill (Corporate Tax Reform 5 Sec. 10101. Corporate Alternative Minimum Tax) is an inauspicious start.

Ostensibly, the bill’s intent to raise government revenues by initiating a 15-percent minimum tax on large corporations could easily be a Bernie Sanders idea. But, in reality, it is not.

Firstly, accelerated depreciation is exempted. That is, compared to straight-line depreciation, this provision allows more depreciation of an asset’s life in its earliest years (and less in later years). In practice, according to corporate tax experts, accelerated depreciation encourages wasteful tax shelters, drains revenue from the U.S. Treasury, is irrelevant to small businesses, and does little to help the economy.

But, more importantly, this provision potentially increases inflationary pressures, not decrease them.

Why? Because if you are a company facing a drain on your bottom line there are two primary options: lowering costs (such as laying off workers) or raising revenues through price increases on the goods and services you offer customers.

Neither is good for the economy.

In other words, corporate America has consumers in a perpetual noogie-hold and raising their costs of doing business through higher taxes (i.e, landing a figurative crotch shot) only backfires in the long run through higher unemployment or higher prices.

OK, so we are off to a bad start with the IRA. How about its other provisions?

Thanks to Arizona Senator Kyrsten Sinema, a Democrat, the IRA no longer includes a provision to close the carried interest tax loophole that benefits private equity and hedge fund managers (a loophole even uber-capitalist Donald Trump opposed). Instead, Sinema allowed a one-percent excise tax on stock buybacks that, in theory, brings in more revenue than eliminating the carried interest tax loophole as it will likely incentivize companies to issue dividends instead, which are taxed when issued.

As to its effect on stock prices or the macroeconomy, Wall Street expects little impact.

Very well, the tax provisions in the IRA are, at best, unlikely positively impact inflationary pressures, and could potentially have the opposite effect.

But fear not, the IRA applies the brakes on the primary cause of inflation — economic growth — by unleashing the Internal Revenue Service (IRS) on tax-paying Americans who are the least equipped to defend themselves from a federal tax audit.

According to the current IRA bill (which still has to go through the U.S House), the number of IRS agents and audits will double. And the target of these additional audits most likely will not be the wealthiest Americans, but instead, average U.S. households.

And if the Democrats achieve their stated aims with the IRA, the increased IRS audits will generate at least $124 billion in increased tax collections over the next 10 years.

In comparison to a $23 trillion dollar annual economy, that may not seem like a growth-crushing number, but it will be to the millions of Americans who find themselves in the crosshairs of an IRA bureaucracy that will become bigger and (dare I say) more powerful than the Pentagon.

Well, at least the IRA has one provision that will most certainly suppress economic growth and, in turn, curb inflationary pressures.

What other damage could the IRA do to this country?

If you are a fan of wealth inequality, the IRA is also likely to direct even more money to the wealthiest Americans through the more than $300 billion earmarked to fund “investments” in attacking climate change and boosting the growth of clean energy. The most visible financial handouts will be to those Americans able to purchase electronic vehicles (EVs) such as bargain-end Tesla’s currently selling for around $50,000, but farmers and ranchers will also get their share of the jackpot through cash incentives for reducing methane emissions (e.g., cow farts).

But that is not the most toxic element of the IRA that will increase wealth equity; instead, the bill will fund the launch of the National Climate Bank which will be tasked to make “investments” in clean energy technologies and energy efficiency — or, as I would put it, an additional bureaucracy authorized to print money that will be immediately transferred to corporate accounts through loans and the federal contract process.

Who will benefit most by this spending? Corporate executives.

Hey, it’s a free market. I don’t fault companies for exploiting the federal government’s ability to print money. However, I do fault the politicians — Democrats and Republicans — that confuse federal spending with actually solving a national problem (e.g., climate change). And, trust me, nobody will be held accountable if in 10 years the U.S. is emitting more greenhouse gases than ever and little has been done to actually address our warming planet.

My prediction is that the IRA’s $300 billion will be pissed away faster than you can say Solyndra.

Even though his companies have received billions in government subsidies — and why would anyone expect him to turn them down? — Tesla CEO Elon Musk has repeatedly said the U.S. government is not a good “steward of capital.”

Is there anything good in the IRA?

Despite the private-equity lobby winning again, the IRA does have provisions that are net positives according some progressive economists.

The most cited provision that will primarily help Americans 65 and older is the one that empowers Medicare to negotiate prices with drug companies. This a policy that has been pursued by progressives for years and now, finally, has a real chance of becoming a reality. Additionally, this potential savings in prescription medicines will help fund a three-year extension of government subsidies supporting the Affordable Care Act (ACA) that would have expired next year.

That is a big deal and should not be diminished.

The Bottom Line on the IRA

Progressives are having a hard time getting excited about the IRA.

Vermont Senator Bernie Sanders tries, but the constipated look on his face when he attempts to defend the bill says more than his measured words:

https://cdn.embedly.com/widgets/media.html?src=https%3A%2F%2Fwww.youtube.com%2Fembed%2FcudBaqbXsQE%3Ffeature%3Doembed&display_name=YouTube&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DcudBaqbXsQE&image=https%3A%2F%2Fi.ytimg.com%2Fvi%2FcudBaqbXsQE%2Fhqdefault.jpg&key=a19fcc184b9711e1b4764040d3dc5c07&type=text%2Fhtml&schema=youtube

In short, Sanders is saying everything he proposed to make the bill acceptable was rejected by his own party.

If anyone remains deluded that the leaders of the Democratic Party are good for progressive policy ideas, now is the time to end such conceits.

The IRA is a crappy bill, anti-progressive to its core, that will do little to reduce inflation, stop climate change, or lower the national debt; but, instead, could undue the electoral advantage the Democrats gained with the Supreme Court’s overturning Roe v. Wade. Its a bad bill openly designed to help the privileged few whose lobbyists crafted it.

The Democrats, not just progressives, may well regret passing it.

• K.R.K

Send comments to: kroeger98@yahoo.com

By Kent R. Kroeger (Source: NuQum.com; August 5, 2022)

I get this question all the time: If you don’t love the Democrats or the Republicans, do you consider yourself a centrist, undecided, independent or moderate?

Not only is the answer, no, but I couldn’t be further from the ‘centrist,’ ‘undecided,’ ‘independent’ or ‘moderate’ labels.

I respect bold ideas and policies: Medicare for All. The end of our forever wars. Cancelling student debt. Aggressive policies to end our reliance on fossil fuels. A pro-nuclear energy policy. Ending the carried interest loophole. Less government. Lower taxes. A simple, flat national consumption tax.

Those are hardly centrist, undecided, independent or moderate positions. I’m all over the ideological map.

And the survey data reinforces this understanding of centrists, undecideds, independents and moderates: Like me, they are ideologically diverse. Writes analyst Lee Drutman for fiverthirtyeight.com:

“Anybody who claims to have the winning formula for winning moderate, independent or undecided voters is making things up. Perhaps more centrist policies will appeal to some voters in each of these categories — but so will more extreme policies.

Moderate, independent and undecided voters are not the same, and none of these groups are reliably centrist. They are ideologically diverse, so there is no simple policy solution that will appeal to all of them.”

Do tell.

Drutman’s conclusions make me wonder why we are stuck with only two major political parties when, by his estimate, 44 percent of vote eligible Americans in 2020 fell into this ‘murky’ middle.

Do we not deserve at least one third party option? No, says our political elites.

The primary reason for our lack of multiple political parties is that our electoral system (i.e., ‘first-past-the-post’) forces us towards just two viable parties — and our media and political elites reinforce that pressure.

But, of course, nothing in our constitution says this has to be the way it is. Political and economic elites dictated to us that this is what we have to accept.

As I was forcefully told by Teresa Vilmain, a high-ranking campaign operative on Tom Harkin’s 1984 Iowa Senatorial campaign, during my paid stint as a door-to-door fundraiser on that campaign, “We are a two-party system. Don’t let people tell you they aren’t committed to the Democrats or Republicans. They are no other choices.”

That sums up our political system, but Vilmain’s dictum never represented my attachment to the two major parties. Iowans deserved choices other than Tom Harkin or Roger Jepsen (the GOP incumbent) in 1984’s Iowa Senate race.

Fast forward to the present, nothing has changed for the better in our political system since 1984— in fact, things have gotten worse — so forgive me if I could care less if the Republicans or Democrats control the Congress after the 2022 midterm elections. The average American is screwed no matter which party wins.

If only an ideologically transcendent political leader could arise in my lifetime. But, don’t worry, I’m not holding my breath.

• K.R.K.

Send comments to: kroeger98@yahoo.com

By Kent R. Kroeger (Source: NuQum.com; August 3, 2022)

International law consists of rules and principles governing the relations and dealings of nations with each other, as well as the relations between states and individuals, and relations between international organizations. (Cornell Law School)

The overarching goal of this blog is to highlight analytic tools and data that are available to everyone. Today, however, I am going off-script to address an issue that is close to my heart and represents an early part of my career.

I taught a survey class in International Politics and Law at the University of Iowa almost 30 years ago, and though I was an only marginally effective instructor, my students were exceptionally engaged on the question of international law.

Does international law actually exist?

One student in particular, who served in the Army reserve and who had been deployed on a United Nations (UN) peacekeeping mission, aggressively disagreed with the contention that the UN, or any other international organization, represents a ‘legal authority’ that can sanction or punish a rogue nation independent of the will of a major world power (i.e., the U.S.).

The student offered this observation: “If I steal a car, I broke the law and will be arrested by the police. What police force stops me from stealing a country?”

“The U.S.,” answered a student.

But the U.S. is not an international organization. It is a nation-state, a powerful one at that.

Current events have brought this issue to the forefront: Vladimir Putin claims Ukraine is historically part of a greater Russia (not true), and the Communist Party of China argues that Taiwan is a breakaway province (true) that is inseparablypart of the People’s Republic of China (not true).

What international laws validate Russia and China’s claims of sovereignty over Ukraine and Taiwan?

The answer is that there is no such international authority. Historical claims of sovereignty, like Russia’s and China’s, are feckless and impotent separate from their military and diplomatic ability to acquire those territories.

Only nation-state power determines national boundaries. There is no international body that governs these definitions. Only hard and soft power can decide what constitutes an independent nation-state.

The informal rules that govern the definition of a sovereign nation-state have not changed since the Peace of Westphalia in 1648, which recognized the inviolability of nation-state borders and endorsed non-interference from external sovereign states in the domestic affairs of individual sovereign states.

This latter aspect of Westphalia has been violated many times over. Today, powerful countries interfere directly in the internal affairs of weaker countries on a daily basis — and there is no international legal authority that can stop this.

As to the former impact of Westphalia, it remains true todaythat independent nation-states exist because their governing authority controls ‘lethal’ power within a definable national boundary, and most countries (particularly powerful ones) recognize that control.

That is what makes a ‘legal’ nation-state. Nothing more, nothing less.

Israel has understood this reality from its inception. And, today, the only barrier to Israel annexing the West Bank is their acknowledgement that the international community will not accept such a move.

Set aside your media-fueled belief that international law stands against Russia’s control of the Donbass region of Ukraine or China’s claim to Taiwan: The reality is that nation-state powers like the U.S. will decide those outcomes.

International law is a fiction.

• K.R.K.

Send comments to kroeger98@yahoo.com

Addendum: What about the Nuremburg trials?

Since posting this essay I’ve had a number people push back with valid questions: What about the Nuremburg trials after WWII? And what about the International Court of Justice (ICJ) or the International Criminal Court (ICC)?

Are these not concrete examples of international law in action?

No, they are not. They are fundamentally dependent upon the cooperation of nation-states for their legitimacy.

Let us start with the Nuremburg trials. The charter that created this tribunal limited the jurisdiction of the court to Germany’s actions in World War II, largely because the Allied nations (U.S., U.K., France and Russia) did not want to face legal challenges to their actions during the war.

The Nuremburg tribunal was a creation of the nation-states that won the war. It was in no way a legal tribunal independent of the nation-states that created it. It was law determined by the victors in WWII.

The ICJ is a more interesting example. Is it an international judicial authority that can make judgments against nation-states, or individuals within those nation-states, independent of the recognized sovereignty of those nation-states?

The answer, again, is an emphatic No!

The ICJ is the principal judicial organ of the UN. It was established in June 1945 by the Charter of the UN. It is, at its inception, a product of nation-states entering into a multilateral agreement. Its authority is solely dependent upon the nation-states that agree to its powers.

The ICC is similarly a product of nation-states. On 17 July 1998, the Rome Statute of the ICC was adopted by a vote of 120 to seven, with 21 countries abstaining. The seven countries that voted against the treaty were China, Iraq, Israel, Libya, Qatar, the United States, and Yemen.

The ICC’s authority is completely dependent on the nation-states that support it. Subsequently, the U.S. routinely denies the authority of the ICC.

In contrast, if the U.S. government wants to prosecute a U.S. billionaire for wrongdoing, the billionaire cannot unilaterally declare they are not subject to U.S. law. They must, instead, defend themselves in a U.S. court of law.

That is why international law remains a fiction compared to the actual legal authority of a nation-state.

By Kent R. Kroeger (Source: NuQum.com; August 2, 2022)

With the formal release of two studies offering strong evidence that the initial epicenter of large-scale COVID-19 transmission centered on the Huanan Seafood Market in Wuhan, China, many in the news media and scientific community declared the end of the lab-leak theory in explaining COVID-19’s origins.

Matthew Aliota, a researcher in the college of veterinary medicine at the University of Minnesota who did not work on either of the studies, told the Associated Press that this new research “kind of puts to rest, hopefully, the lab-leak hypothesis.”

I wrote about these two studies four months ago when their pre-print versions were released to the public, and, while citing some critics of those studies, I too found myself moving away from the lab-leak theory as the most probable cause of the COVID-19 pandemic and towards the belief that COVID-19 has a zoonotic source (i.e., animal-to-human transmission).

Despite this latest research pointing at the Huanan Seafood Market as the earliest focal point for the virus’ mass transmission between humans, there remains no ‘smoking gun’—that is, scientists have yet to find evidence of the original SARS-CoV-2 virus residing in an animal species prior to the outbreak within humans.

Without that crucial evidence, it remains possible (though not necessarily likely) that a virus created and/or housed within the Wuhan Institute of Virology (or some other Wuhan lab) was inadvertently leaked into the environment, leading to an infected human spreading the virus in the crowded, poorly-ventilated Huanan Seafood Market.

The Intercept’s Ryan Grim noted recently on The Hill’s Rising podcast that China’s version of the Centers for Disease Control and Prevention (CDC) has a virology lab a mere 500 yards from the Huanan Seafood Market (see Figure 1) — a lab which has, in the past, been cited for inadequate biological containment and control practices.

Figure 1: Map of Central Wuhan and location of the Huanan Seafood Market relative to known virology labs

As willing as most virologists are to declare that SARS-CoV-2 is natural in origin, it is hard to ignore these two facts:

• The patient-level data used by researchers to support the Huanan Seafood Market origin hypothesis was provided by the World Health Organization through Chinese authorities — a source with a strong motive to discredit the lab-leak hypothesis.
• Chinese authorities — who shutdown the Huanan Seafood Market in early January 2020 — either did not test a sample of the animals available in the Huanan Seafood Market for SARS-CoV-2 prior to shutting the market down, or did so but did not find SARS-CoV-2 in the animals sold in that market.

The incentive for the Chinese government to prove the natural origins of SARS-CoV-2 is too great to think they didn’t go to extraordinary lengths to find the animal source of this virus.

And, yet, they have never provided direct evidence that SARS-CoV-2 resided in any animal population before entering the human population.

I find that troubling.

But, to be fair, the history of forensic virology is chock full of examples where it took years for scientists to find the source cause of a viral pandemic (see Figure 2). For example, it took nearly two decades to establish that chimpanzees (or the monkeys they ate) were the original source of HIV (and even that conclusion is tentative). Similarly, establishing horseshoe bats as the source species for the 2002 SARS virus required 14 years of forensic viral research.

Figure 2: Years required to identify the source of zoonotic viral outbreaks

Since these two latest studies were initially released in February, very little new information has been released on COVID-19’s origin, with the notable exception of an article in the Proceedings of the National Academy of Sciences authored by economist Jeffrey Sachs and Neil Harrison, a Columbia University professor of molecular pharmacology and therapeutics, in which they report scientific evidence that “a sequence of eight amino acids on a critical part of the virus’s spike protein…is identical to an amino acid sequence found in cells that line human airways.”

If true, could adaptations and random mutations in nature have resulted in such a coincidence? According to Sachs and Harrison, this coincidence is improbable enough to justify a more thorough investigation into the lab-leak theory.

However, there appears to be no momentum in scientific or political circles for such an inquiry, in part, because it likely would require significant cooperation from the Chinese government that has — up to now — done more to hinder rather than support such a deep-probing, independent investigation.

Beware of the Causal Fallacy

I’ve made a career out of analytic mistakes. Declaring the COVID-19 pandemic as effectively over in January 2020 was not my best analytic moment — though, in my defense, I relied upon Chinese government data when making that forecast. Which is why no researcher should rely solely on biased data sources for their analyses.

And there is one logical fallacy almost every data analyst has fell victim too at least once over their career — it is the causal (or questionable cause) fallacy.

Causal fallacies can occur when researchers confuse an effect with a cause, especially when they mistake something as the cause simply because it came first.

The fact that the COVID-19 pandemic started in a crowded Wuhan, China food market is not proof of its zoonotic source, but it is evidence in the direction of that conclusion. Yet, it does not rule out the possibility that someone directly or indirectly infected by SARS-CoV-2 due to a lab leak made a routine visit to their favorite Wuhan food market.

Until irrefutable evidence that SARS-CoV-2 resided in an animal population prior to entering humans is offered, it is hard to categorically deny the plausibility that the virus originated and was leaked from a lab.

This does not mean that skeptics of the zoonotic cause of SARS-CoV-2 are vulnerable to conspiracy theories. Rather it is evidence that we will never accept ‘official’ data sources without independent verification of data completeness and accuracy — particularly when the source has a clear bias as to how the data should be interpreted.

The data independence requirements are not there yet with respect to the origins of COVID-19. And without the open and genuine cooperation of the Chinese government, we may never find the true cause of the COVID-19 pandemic.

• K.R.K.

Send comments to: kroeger98@yahoo.com