WaPo Columnist Thomas Heath Would Have Recommended Buying Into Nasdaq at 4,000 in 2000 →

If you're thinking about investing in stocks, don't forget the truism, that it's not enough to "buy low", you also have to be able to "sell high."

Dean Baker:

Thomas Heath used his column to give readers some incredibly bad investment advice. The piece titled, "a first lesson on the stock market: don't run from a good sale," told readers that the recent dip in the market makes this a good time to buy stock. This makes no sense.
Whether or not it is a good time to buy stocks depends on the price of stock relative to the fundamentals of the market. This means current price to earnings ratios and the prospect for future earnings growth. Current price to earnings ratios, at well over 20 to 1 by most measures, are high by historic standards. Most economists are not projecting especially good profit growth in the years ahead, but a big tax cut may allow shareholders to keep a larger portion of their gains, which would make stock more valuable.
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The moral of this story is that if the price of an over-valued asset falls, it is less over-valued, but a drop in price does not mean that the asset is under-valued. An investment advice column should show a little clearer thinking on this issue.

The Fight for Health Care Has Always Been About Civil Rights →

Echoes of the past:

Even as members of the MCHR listened to King’s speech in Chicago, the AMA was digging their heels in against the prospect of integrating the expanding Medicare and Medicaid programs. Using the successful, red-baiting cudgel of “socialized medicine,” and armed with the first major political advertising firm, the AMA, health-care industry organizations, and their conservative allies had already defeated a 1947 proposal from President Truman to create a true national health-care plan. Although they could not stop the remnants of that plan from eventually becoming Medicare and Medicaid, that coalition was able to obstruct further progress towards coverage for “able-bodied” adults and the creation of a coherent universal guarantee to care. They might not have known it at the time, but for those activists in 1966, health care had already become a dead end.
After King’s death in 1968, and the disintegration of the civil-rights movement, opposition from the AMA-led coalition would stymy the last organized effort from the MCHR to create and pass a single-payer bill. That failure also cemented the basic composition of American health-care: a patchwork dominated by private employer-based insurance, where non-elderly people who couldn’t afford or didn’t have such offers, and didn’t fall into narrow special Medicaid eligibility groups were largely left out. And it’s no coincidence or secret that those left out were more likely than not to be people of color.

It’s time to save the internet — again →

FCC chairman Ajit Pai is fond of saying that “the internet was not broken in 2015” when he argues for repeal of our nation’s net neutrality rules. This is particularly funny to me, because in 2014 I literally wrote an article called “The internet is fucked.”
Why was it fucked? Because the free and open internet was in danger of becoming tightly controlled by giant telecom corporations that were already doing things like blocking apps and services from phones and excusing their own services from data caps. Because the lack of competition in the internet access market let these companies act like predatory monopolies. And because our government lacked the will or clarity to just say what everyone already knows: internet access is a utility.
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If Ajit Pai and the other critics of net neutrality were out there promising that rolling back Title II would somehow result in every American having 20 choices of ISPs all engaged in vigorous competition, I’d be cheering them on. We’ve already seen what a tiny amount of competition can do in the wireless market: T-Mobile wandered up to the line of violating net neutrality by zero-rating various services, Verizon and AT&T responded in kind, and eventually the arms race ended up in all four major wireless providers offering unlimited data plans — effectively zero-rating everything and offering consumers something that looks an awful lot like net neutrality. It turns out the American people want net neutrality, and when they speak through the market, they get it.
That’s with just four major competitors in the wireless market, and Pai refuses to say whether he thinks that number should remain at four or get smaller by some combination of T-Mobile and Sprint. Of course. Because his north star isn’t healthy consumer outcomes, it’s healthy corporate outcomes. Rolling back Title II is a massive corporate handout that will line the pockets of Comcast and AT&T, while doing nothing for the average American.
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This is just a fact: the United States has a stunningly uncompetitive market for wired internet access. Fifty-one percent of Americans only have one choice of broadband provider, according to the FCC’s own 2016 data. Thirty-eight percent of Americans only have two choices. Add it up, and 89 percent of Americans have but one or two options for broadband, and one of them is often much slower than the other. This is not a situation ripe for fierce competition and lower prices.
In fact, the lack of broadband competition means that Americans pay more for slower internet access than in most other developed nations. We are not in the top 10 when it comes to average speeds. We are not in the top 10 when it comes to lowest prices. You can argue that the geography of the United States is such that covering the entire country with fiber is difficult, or that Europeans actually pay more because of VAT. At the end of the day, however, the question is simple: why don’t people in New York, San Francisco, and Chicago have more options for faster, cheaper internet than Seoul or London?
Outside big cities, the situation is dire: The Wall Street Journal just ran a lengthy, excellent piece about the many rural Americans who still only have dial-up internet access, locking them out of the modern economy. “Rural broadband, we need that quite honestly more than we need roads and bridges in many of the counties I represent,” said Austin Scott, a Republican congressman from Georgia...

The Supreme Court will decide if cops need a warrant for cellphone location data →

The case centers around a practice that allows police to gather historical cellphone location information without a warrant, by instead invoking a controversial statute called the Stored Communications Act...
Much of the debate focuses on how previous court rulings should be applied in the digital age. A legal theory known as third-party doctrine, which argues there is no reasonable expectation of privacy when a citizen gives their data to a third party, is often cited in similar cases, and has been used to decide the cell site issue. But whether the theory still holds in an age where so much personal information is digitally stored by third parties, or whether a new theory is needed, is now the question in front of the court.

These legal theories are based on assumptions about privacy which were made before the Internet, and before data was cheap and easy to store. Now, more and more of our most personal, sensitive data is held by corporations whose services we have little option of refusing. (Can any of us just *not* use email? Or a cell phone?) I'm pretty sure just about everyone assumes a high level of privacy for texts, emails, location data, etc. But this law says otherwise. We are quickly moving toward a world where privacy doesn't exist, including (and especially) from centers of power.

The U.S. Has Forgotten How to Do Infrastructure →

...For some mysterious reason, the same mile of road or train track costs a lot more to build in the U.S. than in other rich countries like France or Japan. When it comes to trains, the disparity is particularly egregious. During the past few years, people who pay attention to this problem have catalogued a list of potential culprits. But none of these is really satisfying.
...But unions probably don’t help explain the yawning gap between the U.S. and other rich countries. The reason is that places like France have some of the strongest unions in the world. Strikes by rail workers are commonplace. Yet France’s trains cost much less.
Japan is another counterexample...
Another bogeyman is land-acquisition costs...
But this is also probably a red herring. As transit blogger Alon Levy notes, land-acquisition costs are much higher in Japan, where eminent domain laws are weaker. So much for the U.S. being the land of property rights! And yet, somehow, Japan still lays train track much more cheaply.
Explanations based on geography -- the U.S. is too spread out, or New York City is too dense -- also fail to stand up to scrutiny...
There is reason to suspect that high U.S. costs are part of a deeper problem. For example, construction seems to take a lot longer in the U.S. than in other countries. In China, a 30-story building can be completed in only 15 days. In Japan, giant sinkholes get fully repaired in one week. Even in the U.S. of a century ago, construction was pretty fast -- the Empire State Building went up in 410 days.
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That suggests that U.S. costs are high due to general inefficiency -- inefficient project management, an inefficient government contracting process, and inefficient regulation...
...As Yglesias ruefully notes, a study by the Government Accountability Office looking into the problem of high train-construction costs was recently killed by Congress, with no explanation given.
Shenanigans like this can only delay the day of reckoning. The U.S. construction sector is sick, and the disease must be diagnosed. Otherwise, infrastructure debates will continue to seesaw between those who are willing to spend too much and those who are willing to let the system crumble because it costs too much to repair.

Police body camera footage is becoming a state secret →

For a while, the rules governing how this would work — how police departments would build policies to let the public view videos and feel comfortable about having a bunch of cops act as roving surveillance cameras — were written by local legislators governing cities. There were good policies and bad, with some cities making it easier than others for civilians to obtain police video. (The Leadership Conference on Civil and Human Rights and the tech policy group Upturn created a helpful policy scorecard to track which cities were doing what.) But as more police departments spent millions of dollars on body cameras and video storage, police unions, district attorney associations, and other law enforcement lobbying groups began to push for statewide laws restricting transparency. North Carolina, Louisiana, South Carolina, and Kansas, among others, have now instituted counter-transparency body camera laws. Even Missouri — home of Ferguson — classified body camera footage as a “closed record.” If another shooting like the one in Ferguson occurred, and the shooting officer was wearing a body camera, it’s almost certain the footage would be withheld from the public until after a trial.
Other states are now also looking to make body cam video extremely difficult to obtain.
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It’s nice that body cameras have given police the opportunity to show the public when officers act heroically, but that’s not their core function. Their core function is to monitor police activity, and to provide public documentation when it’s needed. If that documentation shows police in a positive light, that’s wonderful — let it be known. But police departments shouldn’t be able to push out positive footage while burying the negative. As much as police might like to think otherwise, there are plenty of “bad apples” working inside the nation’s 18,000-plus police departments. Body camera footage should help to remove some of them from the bunch.

Utilities fighting against rooftop solar are only hastening their own doom →

Instead of innovating in either service or product, many utility companies are trying to get cities and counties to make home solar panels illegal.

If utilities alter rate structures to reflect time of day and location (as they should!), batteries allow solar customers to arbitrage, storing power when it is cheap, selling it back to the grid when it’s worth more.
If utilities reduce the amount they pay for rooftop solar-generated power, batteries allow customers to increase their “self-consumption” — that is, to consume more of the solar power they generate, by storing it and spreading it out across the day. McKinsey calls this “partial grid defection, in which customers choose to stay connected to the grid in order to have access to 24/7 reliability, but generate 80 to 90 percent of their own energy and use storage to optimize their solar for their own consumption.”
That’s a nightmare for utilities: customers who use their grid but pay them nothing for it, forcing them to charge other customers more.
Utilities can charge fixed grid-connection fees to all customers, but if those get too high, they start to push customers toward full grid defection — ditching the utility entirely.
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What McKinsey does make clear is that for power utilities, unlike for so many other decrepit American institutions, simply clinging to the status quo is not an option. Rooftop solar can be staved off temporarily with fees and rate tweaks, but as batteries get cheaper, those strategies will stop working. More and customers are going to generate, store, and manage more and more of their own power.
Utilities have got to find other ways to make money, other services to provide, other roles to play in the power system of the future. They have no other choice.

How Democrats Killed Their Populist Soul →

A good (though not brief) history on how the Democratic Party--while it grew friendlier on issues related to race--lost its ability to recognize the corrupting influence of concentrated wealth, becoming the other party of Big Business.

When Bill Clinton took office as the 42nd president, the Watergate Babies would finally have their chance to govern. Clinton wasn’t in public office in 1975—he lost his first political election in 1974, a close race in Arkansas for a congressional seat—but he was in all other respects a Watergate Baby. Like the Watergate class, Clinton had worked for McGovern. He avoided service in Vietnam due to higher education. He was featured in Rothenberg’s The Neoliberals for his work on education reform. He read The Washington Monthly.
Clinton Democrats eventually came to reflect Dutton’s political formulation, more diverse and less reliant on the white working class. His administration looked like America—with women, African Americans, Latinos, and gays and lesbians represented—and most were educated at top universities. Thurow’s influence was also notable. Clinton stripped antitrust out of the Democratic platform; it was the first time a reference to monopoly power was not in the platform since 1880. Globalization, deregulation, and balanced budgets would animate Clinton’s political economy, with high-tech and finance leading the way.
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For most Americans, the institutions that touch their lives are unreachable. Americans get broadband through Comcast, their internet through Google, their seeds and chemicals through Monsanto. They sell their grain through Cargill and buy everything from books to lawnmowers through Amazon. Open markets are gone, replaced by a handful of corporate giants. Political groups associated with Koch Industries have a larger budget than either political party, and there is no faith in what was once the most democratically responsive part of government: Congress. Steeped in centralized power and mistrust, Americans must now confront Donald Trump, the loudest and most grotesque symbol of authoritarianism in politics today.
“This,” wrote Robert Kagan in The Washington Post, “is how fascism comes to America.” The nation is awash in commentary and fear over the current cultural moment. “America is a breeding ground for tyranny,” wrote Andrew Sullivan in New York magazine. Yet, Trump’s emergence would not be a surprise to someone like Patman, or to most New Dealers. They would note that the real-estate mogul’s authoritarianism is not new in American culture; it is ubiquitous. It is consistent with how the commercial sphere has developed since the 1970s. Americans feel a lack of control: They are at the mercy of distant forces, their livelihoods dependent on the arbitrary whims of power. Patman once attacked chain stores as un-American, saying, “We, the American people, want no part of monopolistic dictatorship in … American business.” Having yielded to monopolies in business, the nation must now face the un-American threat to democracy Patman warned they would sow.
Americans have forgotten about the centuries-old anti-monopoly tradition that was designed to promote self-governing communities and political independence. The Watergate Babies got rid of Patman’s populism for a lot of reasons. But there was wisdom there. In the 1930s, Patman said that restricting chain stores would prevent “Hitler’s methods of government and business in Europe” from coming to the United States. For decades after World War II, preventing economic concentration was understood as a bulwark against tyranny. But since the 1970s, this rhetoric has seemed ridiculous. Now, the destabilization of political institutions suggests that it may not have been. Financial crises are a regular feature of the U.S. banking system, and prices for essential goods and services reflect monopoly power rather than free citizens buying and selling to each other. Americans, sullen and unmoored from community structures, are turning to rage, apathy, protest, and tribalism, like white supremacy.
Ending the threat of authoritarianism is not a left-wing or right-wing problem, and the solution does not reside in building a bigger or a smaller government. Restoring political stability means structuring society’s public and corporate institutions so they can be governed by human beings and communities. It means protecting the property rights of citizens and not confusing property with arbitrary tollbooths erected by tech billionaires. And it means understanding that protecting competitive markets and preventing concentrations of power are essential components of democracy.
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Restoring America’s anti-monopoly traditions does not mean rejecting what the Watergate Babies accomplished. It means merging their understanding of a multicultural democratic society with Brandeis’s vision of an “industrial democracy.” The United States must place democracy at the heart of its commercial sphere once again. That means competition policy, in force, all the time, at every level. The prevailing culture must be re-geared, so that the republic may be born anew.