Revisiting the USA, part 1

I lived in the USA for two decades, between 1981 and 2000, visited frequently (while working in Berlin and Prague) in the decade after, and infrequently since 2009 when I cancelled my permanent residency in the USA — “Are you sure?”, the Munich consulate officer asked me somewhat incredulously — and moved from Prague to Sydney. (I have been a permenant resident of AU since then.)

My last visit in the USA was in 2014 or 2015 if memory serves me well. My present visit is occasioned by a conference in Santa Barbara and the need to sort out social-security and pension-fund issues on location since they turned out to be difficult to sort out from the distance. Nothing like waiting in telephone queues …

I have many good memories of the two decades I lived in the USA; it was the pre-Trump, pre-January 6 USA. In the eighties Athens, GA, where I lived parts of the decade was arguably the country’s music capital, and though there were plenty of problematic developments such as fractious race relations (Cath and I were one of only two mixed couples during my time in Athens) and gerrymandering during those 3–4 decades in the USA, the democratic institutions seemed to hold up reasonably well, elections seemed mostly fair, and election results were rarely contested, with the notable exception of the 2000 election which might have been the point in history where the US public started losing faith in the judicial system. The 5–4 decision on 24 June 2022 by a Supreme Court stacked by Trump with decisively right-of-center judges to overturn Roe v. Wade, the landmark ruling that established the constitutional right to abortion, seems to have put a few more nails in that particular coffin.

My flight from Sydney brought me back to the USA the morning of 10 November, one day after the mid-term elections took place and as the first — somewhat surprising — results came in. My friend (former student, successful businesses owner, and all-around fabulous person) Jessica picked me up at the Los Angeles airport and helped me to get a US phone number set up. That took a couple of hours. Retail services in the USA are not much different from those in Oz. Mostly bad (I’m looking at you, Best Buy!), that is, although the Verizon folks really went out of their work to make it work. (That I am transitioning to a new Samsung mobile did not make things easier.)

All the while (last but not least over an opulent Greek dinner in which we were joined by her partner) lots of interesting conversations were had. Being the successful owner of two transportation businesses, and a real-estate development company located in Inglewood, Jess has witnessed the demographic transformation of her neighborhood, the consequences of the pandemic disruption that is now starkly visible in large numbers of home-less people in the streets of Inglewood, and increasing layers of bureaucracy and regulation. The compliance costs, and uncertainty surrounding them, have led J and her partner to stop developing LA real estate and to run that part of their business in Arizona. Not a good development for LA, I’d say.

“I think this is going to be, not just a red wave, but a red tsunami.” (TC)

Meanwhile, the red wave so many anticipated did not happen. As of the writing of this piece, the Democrats have maintained control of the Senate and are still in contention to control the House. Even if they lose it (which seems possible), the outcome of the mid-term elections is by all measures a damning verdict on Trump and his candidates— Murdoch’s Wall Street Journal called Trump the Republican Party’s biggest loser. Even the New York Post commented scathingly. Had the Republicans disavowed Trump and his candidates (like Mehmet (“Dr.”) Oz in Pennsylvania, Adam Laxalt in Nevada, and Herschel Walker in Georgia), they almost certainly would have done better.

That is not to belittle Biden’s success. A recent commentator on CNN called him the most under-estimated president in recent history and the commentator has some pretty good arguments to support the case he makes.

The midterms mark the culmination of two difficult years, during which Biden has repeatedly defied expectations. At each stage of his tenure, Biden has achieved what many fellow party members thought impossible.

After defeating a huge slate of younger and more exciting candidates in the 2020 Democratic primaries, Biden went on to defeat the incumbent president, Donald Trump. This was not a trivial accomplishment. Since World War II, most presidents have successfully won reelection. Despite Trump having increased his total votes and expanded his base, he was unable to stave off Biden, who campaigned on a combination of protecting American values, relying on science in the response to the Covid-19 pandemic, and promising to returning government to normalcy –issues that worked like a charm after the chaos of the Trump administration.

But things didn’t get easier for Biden once he entered the White House. Covid continued to wreak havoc on the country and the economy. Despite a 50–50 split in the Senate and Democratic Sens. Joe Manchin and Kyrsten Sinema pitting themselves against the administration at various points, Biden was still able to move a formidable legislative agenda through Congress, overcoming fierce Republican opposition and even winning a few GOP votes along the way. The American Rescue Plan, the Bipartisan Infrastructure Law and the Inflation Reduction Act stand up as a historic trifecta — a legislative track record arguably more significant than any that we have seen since President Lyndon Johnson’s Great Society. Besides the three major pieces of legislation, Biden also appointed more federal judges by August than any president at that point in the term since John F. Kennedy, according to the Pew Research Center. Biden has also used his executive power to make progress on issues like fighting climate change, bolstering the US’ economic competitiveness, and forgiving student debt.

I recommend you read the whole thing.

There are certain parallels here to what happened earlier in the year in Australia where an out-of-control thug that also tried to run roughshod over institutions and procedures got canned last but not least because enough people did care about exactly these, and related, issues. Whether, like Trump, Morrison will ultimately be held responsible for some of the rorting and absurd and dangerous undermining of institutions, remains to be seen. A key difference is that so far Morrison’s successor, Anthony (“Albo”) Albanese, has governored by all relevant accounts reasonably well, as currently reflected in polls. Of course, Albo is not even close to halfway in his term, so I won’t jinx it.

The relative success of the Democrats has many sources though, the Supreme Court decision on Wade v. Roe being surely one of them, as are young voters and a slew of young candidates. It will be very interesting to see how forward-going this new Senate-House configuration will play out. Schumer (the current and likely future Senate Majority Leader), for one, seems hopeful that more cooperation between Democrats and non-MAGA Republicans might be possible. Hope springs eternal, don’t it?

The last couple days I spent in Santa Barbara at a conference, presenting a cool paper (trust me!), listening to some cool talks, and having many catch-up conversations with people I had not seen in person in years. A sense of normal-cy is returning to the conference circuit and that is a good thing. There is a difference between ZOOM-ing and having in-person conversations over coffee, lunch, dinner, or what not.

I was concerned that the recent #metoo moment in economics, complicated as it is, and brought to you by a couple of pathetic and self-aggrandizing characters that also seem to have little appreciation of the importance of proper procedures, might have affected the meeting in Santa Barbara but it seemed not much of an issue. The moment is far from over though and it will be interesting to see how it will play out in the long-run. While the various related threads on EJMR (intentionally not linked here) seem to peter out — they currently show up only when you check the Most Popular threads for the last month — , I am sure the issue will be on the agenda for a long time to come. There are interesting issues here of institutions failing women, and how to react to it, manipulations of the public discourse (e.g., by publishing accusations from confidential reports without mentioning that the investigators could not verify them) as a questionable means to address those failings, allegedly taking revenge for unfavourable promotion decisions, spreading public accusations designed to undermine the presumption of innocence and smearing people, agency of those involved (last but not least women), etc. Quite an unsavory circus it is. It is hard to see how it will not have negative consequences for the profession.

Now back in Los Angeles. Forgot some things in the safe of the Santa Barbara Hilton hotel where the conference took place and had to spend some time yesterday (local time) to get them to get these things to me. (Note to self: Always check whether you left anything in the safe of your hotel room, stupid!) Had another excellent dinner with J and her partner and more interesting conversations, before later today I am off to the East Coast to sort out the social security and pension fund issues and catch up with more friends and colleagues from way back when …

Still have to learn how to transfer pix from my new Samsung mobile to my new laptop. Be patient.

And stay tuned. Travelogue 2 to follow in due course. From the East Coast.

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Andreas Ortmann

EconProf: I post occasionally on whatever tickles my fancy: Science, evidence production, the Econ tribe, Oz politics, etc. Y’all r entitled to my opinions …