Big Beer finally sobers up

If I were the chief marketing officer of one of the bigger domestic brews in 2017, it seems to me I would have two choices.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171031/OPINION/171039963/big-beer-finally-sobers-up?utm_source=OPINION&utm_medium=rss&utm_campaign=chicagobusiness

4 things to know about George Papadopoulos' Chicago lawyer

Criminal defense attorney Thomas Breen helped exonerate the wrongly convicted Rolando Cruz of a notorious murder. He's also represented Cook County judges and a reputed mob boss.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171031/NEWS04/171039969/4-things-to-know-about-george-papadopoulos-chicago-lawyer?utm_source=NEWS04&utm_medium=rss&utm_campaign=chicagobusiness

Four things to know about George Papadopoulos' Chicago lawyer

Criminal defense attorney Thomas Breen helped exonerate the wrongly convicted Rolando Cruz of a notorious murder. He's also represented Cook County judges and a reputed mob boss.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171031/NEWS04/171039969/four-things-to-know-about-george-papadopoulos-chicago-lawyer?utm_source=NEWS04&utm_medium=rss&utm_campaign=chicagobusiness

Hearing on anti-harassment rules in Springfield turns graphic—and personal

A woman publicly accuses Sen. Ira Silverstein of unwanted midnight phone calls and more. He denies it, but others testify to similar episodes as the Illinois House mulls corrective steps.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171031/BLOGS02/171039971/hearing-on-anti-harassment-rules-in-springfield-turns-graphic-and?utm_source=BLOGS02&utm_medium=rss&utm_campaign=chicagobusiness

Waterton dealmaker forms new real estate venture with private-equity execs

After 15 years at Waterton, Mark Stern is teaming up with Avy Stein and Eric Becker on the new investment business, which will focus initially on apartment deals.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171031/CRED03/171039972/waterton-dealmaker-forms-new-real-estate-venture-with-private-equity?utm_source=CRED03&utm_medium=rss&utm_campaign=chicagobusiness

Developer refinances 150 N. Riverside

The investors behind the West Loop skyscraper that helped transform a portion of the Chicago River recently borrowed $470 million against the 53-story tower, just months after it opened.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171031/CRED03/171039973/developer-refinances-150-n-riverside?utm_source=CRED03&utm_medium=rss&utm_campaign=chicagobusiness

With CME deal, bitcoin dips a toe into the financial mainstream

The status of bitcoin as a legitimate financial asset may be rising even faster than its price.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171031/NEWS01/171039975/with-cme-deal-bitcoin-dips-a-toe-into-the-financial-mainstream?utm_source=NEWS01&utm_medium=rss&utm_campaign=chicagobusiness

Robert Morris gets its biggest scholarship gift ever

A donation from real estate developer Michael Alter kicks off a $6 million fundraising campaign at the South Loop college.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171031/NEWS13/171039978/robert-morris-gets-its-biggest-scholarship-gift-ever?utm_source=NEWS13&utm_medium=rss&utm_campaign=chicagobusiness

5 Chicago nursing homes named best in the nation

U.S. News' annual report looks at health inspections, nurse staffing and quality of medical care to find the top facilities.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171031/NEWS03/171039976/5-chicago-nursing-homes-named-best-in-the-nation?utm_source=NEWS03&utm_medium=rss&utm_campaign=chicagobusiness

Chicago home prices getting stronger

Even as the market here still lags the nation.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171031/CRED0701/171039977/chicago-home-prices-getting-stronger?utm_source=CRED0701&utm_medium=rss&utm_campaign=chicagobusiness

Ex-Chicago employee hits Facebook with lawsuit

A former sales rep at Facebook's Chicago office says the social-media giant broke federal and state employment laws by failing to pay overtime to her and other workers.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171031/BLOGS11/171039979/ex-chicago-employee-hits-facebook-with-lawsuit?utm_source=BLOGS11&utm_medium=rss&utm_campaign=chicagobusiness

How safe is your hospital?

The must-read stories to get your day started.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171031/MORNING10/310319999/how-safe-is-your-hospital?utm_source=MORNING10&utm_medium=rss&utm_campaign=chicagobusiness

Illinois hospitals fall in national safety rankings

Thirty-three facilities received top marks nationwide in terms of safety and quality, down from 45 last year, according to a report from Leapfrog.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171031/NEWS03/171039982/illinois-hospitals-fall-in-national-safety-rankings?utm_source=NEWS03&utm_medium=rss&utm_campaign=chicagobusiness

Illinois hospitals fall in national safety rankings, survey finds

Thirty-three Illinois hospitals received top marks nationwide in terms of safety and quality, down from 45 last year, according to a report from Leapfrog.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171031/NEWS03/171039982/illinois-hospitals-fall-in-national-safety-rankings-survey-finds?utm_source=NEWS03&utm_medium=rss&utm_campaign=chicagobusiness

Who took home the Chicago Innovation Awards

Startups and stalwarts are recognized for finding creative ways to tackle old and new challenges.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171030/BLOGS11/171039980/who-took-home-the-chicago-innovation-awards?utm_source=BLOGS11&utm_medium=rss&utm_campaign=chicagobusiness

Constellation breaks pot taboo, opens door for major brands

The Corona maker—whose beer division is headquartered in Chicago—is buying a minority stake in a Canadian pot company.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171030/NEWS07/171039981/constellation-breaks-pot-taboo-opens-door-for-major-brands?utm_source=NEWS07&utm_medium=rss&utm_campaign=chicagobusiness

Why rats aren't as bad as you think they are

Try your own "abatement" by picking up garbage, dog poop and other menu items on the rat buffet. Second, try to see rats for the intelligent, opportunistic creatures they are.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171030/NEWS07/171039983/why-rats-arent-as-bad-as-you-think-they-are?utm_source=NEWS07&utm_medium=rss&utm_campaign=chicagobusiness

Bezos is the rich king of a slippery hill

The world's richest person shouldn't get too comfortable on the throne just yet.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171030/OPINION/171039984/bezos-is-the-rich-king-of-a-slippery-hill?utm_source=OPINION&utm_medium=rss&utm_campaign=chicagobusiness

Now you can buy Obamacare plans in Illinois

Illinoisans can compare health insurance plans sold both on and off the Obamacare public exchange, a move designed to insulate shoppers from a series of blows to the Affordable Care Act.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171030/NEWS03/171039986/now-you-can-buy-obamacare-plans-in-illinois?utm_source=NEWS03&utm_medium=rss&utm_campaign=chicagobusiness

Mueller's moves 'just the beginning,' Chicago congressman says

Mike Quigley of the U.S. House Intelligence Committee today endorsed J.B. Pritzker for Illinois governor—and predicted there is lots more to come in the Russia probe.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171030/BLOGS02/171039987/muellers-moves-just-the-beginning-chicago-congressman-says?utm_source=BLOGS02&utm_medium=rss&utm_campaign=chicagobusiness

Op-ed: The Conservative Inequality Paradox

*This piece originally ran in National Review.

Conservatives have two intellectual commitments that are increasingly incompatible. They believe that the American economy is clogged up with crony-capitalist corruption that hands out special favors and protections to organized interests. They also hold that economic inequality — in particular, the surging share of total income earned by those at the very top — is morally justified by the rights of property and the tendency of free markets to raise living standards overall.

These two commitments can no longer be squared. If our economy really is riddled with cronyism, then the beneficiaries must have pocketed large amounts of ill-gotten loot. The existing distribution of income and wealth, therefore, does not deserve the deference it would be due if all gains were derived from spontaneous, unregulated market transactions. Call it the conservative inequality paradox: Either conservatives have overstated the amount of crony capitalism, or their dismissal of the concept of inequality as envy is misplaced.

In our new book The Captured Economy, we argue that conservatives are not mistaken about the extent of what we call “regressive regulation” — government-created distortions of markets that have the effect of funneling income and wealth up the socioeconomic scale. Such schemes of upward redistribution have proliferated in the past few decades, an era that is often misunderstood as one of unceasing deregulation. And because these reverse–Robin Hood policies work by squelching and misdirecting competition, they exert a powerful downward drag on output and growth as well.

Accordingly, conservatives should redouble their willingness to attack these forms of regulation that — unlike health, safety, and environmental rules, which impose (sometimes necessary, sometimes excessive) costs on business — actually boost corporate profits by creating market distortions, including barriers to entry for new competitors. In addition, conservatives need to examine their instinctive defense of business interests and their hostility to redistribution. But that doesn’t mean conservatives need to become Bernie bros. There is a distinctly conservative way of addressing inequality in a world of crony capitalism — one that seeks to attack the inequality resulting from anti-market, growth-killing policies.

Progressives may rant about “neoliberal” markets run amok, but many conservatives understand clearly that the U.S. economy is far from a textbook model of free competition and voluntary exchange. Senator Mike Lee, for example, has argued that “cronyist policies come in many shapes and sizes — from subsidies and loan guarantees to tax loopholes and protective regulation — but they all work the same way: The elite leaders of big government, big business, and big special interests collude to help each other climb to the highest rungs of success, and then pull up the ladder behind them.” And in the 2015 debate over the Export-Import Bank, which primarily subsidizes big-business exports, soon-to-be House speaker Paul Ryan rejected claims that the existence of similar subsidies abroad justified providing them here. “We should be leading by example,” he said. “We should be exporting democratic capitalism, not crony capitalism.”

If anything, conservatives have been too modest in their assessment of the breadth and scope of crony capitalism. In our book, we focus on four big case studies: financial regulation, patent and copyright law, occupational licensing, and zoning. In all of them, government-caused market distortions have been growing rapidly over recent decades. Between 1980 and 2006, the financial sector as a percentage of GDP grew by almost 70 percent, fed by regulatory subsidies for securitized mortgages and a string of “too big to fail” bailouts. Copyright terms have lengthened from a maximum of 56 years to the current life of the author plus 70 years, while laxer standards for patentability have caused a nearly 400 percent increase in the number of patents awarded annually. This excessive expansion has created a field day for lawyers and inflated profits for Hollywood, big pharma, and Silicon Valley with higher prices and licensing fees. But new innovators faced with traversing this legal minefield are not so fortunate.

In 1970, only one in ten Americans worked in a job subject to mandatory government licensing; now it’s closer to one in three. Most of that growth has occurred because of a huge expansion in the number of licensed occupations, now over 1,100 and counting. And in the nation’s big coastal cities, increasingly restrictive zoning has levied an ever more burdensome tax on new-housing construction — equal to 50 percent of the total price of housing in Manhattan, San Francisco, and San Jose. While boosting real-estate values for lucky legacy homeowners, zoning has imposed a serious drag on national economic output — as much as 10 percent, according to recent estimates. The loss is due to geographic misallocation of the labor force: The country’s most productive places can’t accommodate all the people who want to live and work there.

But do these market distortions really have anything to do with inequality? After all, the pursuit of profit through the political system (what economists call “rent-seeking”) is nothing new: James Madison was writing about the problem of “faction,” or special-interest corruption, in The Federalist Papers 230 years ago.

Conservatives as a rule have failed to see a connection between government policies and changes in the income distribution. Harvard economist Greg Mankiw, who served as President George W. Bush’s top economic adviser, displayed this blind spot in a 2013 article in the Journal of Economic Perspectives entitled “Defending the One Percent.” “There is no good reason to believe,” he wrote, “that rent-seeking by the rich is more pervasive today than it was in the 1970s, when the income share of the top 1 percent was much lower than it is today.”

The problems with this analysis are apparent once you scrutinize who exactly occupies the apex of America’s economic pyramid. Financial professionals and managers made up 14 percent of the top 1 percent in 2005, up from 8 percent in 1979. And while top financial executives earned the same as their peers in other industries in 1980, they were making a 250 percent premium by 2006. Doctors accounted for 16 percent of the top 1 percent in 2005, while lawyers accounted for 8 percent. The representation of doctors and lawyers in the top-earners’ club has been quite stable for decades; this means that their incomes have been growing much faster than the incomes of most other Americans, since the threshold for entering the top 1 percent has been moving up rapidly over time as incomes get more unequal. Doctors and lawyers both use occupational licensing to raise their incomes by restricting the supply of practitioners and use the state to inflate demand for their services — in the case of doctors, primarily through their influence over Medicare-reimbursement schedules; in the case of lawyers, by larding up every law and regulation with dysfunctional but highly litigable complexity.

So nearly 40 percent of earners at the top of the income distribution are finance professionals, doctors, or lawyers — all major beneficiaries of government largesse at our expense. Corporate executives make up another 31 percent of the top 1 percent, and a healthy chunk of them are in industries (such as movies, recorded music, or pharmaceuticals) whose profit margins are fattened by government policy.

Even if it were true, as Mankiw contends, that rent-seeking by the rich is no more prevalent now than in the past, incomes at the top are nonetheless swollen with government-created rents. Top-end inequality — the percentage of total income that goes to earners in the top centile — could therefore be reduced significantly if those benefits were eliminated or reduced through policy reforms.

Meanwhile, a review of America’s changing political economy makes clear that, while rent-seeking has been a constant, its distributional consequences have clearly changed over time. Beginning with the New Deal, the initial decades of activist government featured a great deal of downward redistribution: The National Labor Relations Act encouraged unions; the Davis-Bacon Act raised wages on government contracts; the minimum wage was relatively high; the federal government set universal service requirements for telephones and utilities; municipalities inaugurated rent control and tenant-protection laws. Such policies feature much less prominently today.

Of course, there was plenty of New Deal–era government intervention in behalf of business as well, including high trade barriers and price and entry controls for airlines and trucking. But because the affected industries typically employed large numbers of semi-skilled, unionized workers, a substantial portion of the rents to business ended up shared with workers earning modest incomes. Today, by contrast, the technologically leading industries that occupy the “commanding heights” of the economy (and that thus tend to be the focus of industry-specific regulation) mostly employ highly skilled workers. Government favoritism for those industries thus mostly benefits the well-off. Accordingly, the evidence strongly supports our contention that rent-seeking has moved upmarket — and, therefore, that a good chunk of the rich’s income is indefensible.

Conservative attitudes on inequality have long been shaped by Robert Nozick’s famous metaphor of the basketball player Wilt Chamberlain. Nozick argued that Chamberlain’s high income was derived from mutually beneficial exchange and was therefore justifiable. Who could say that there was anything unfair about a basketball player trading his skills for the money of fans? And how could a distribution of income produced by that sort of mutual exchange be unfair?

But the Wilt Chamberlain metaphor does not apply to an economy characterized by extensive high-end rent-seeking. Even if you believe that market returns are inherently just and therefore worthy of being defended on ethical grounds, how do you justify windfalls that are a function of distorted rules of the game? The answer is you can’t.

In the best of all worlds, conservatives would respond to this state of affairs by attacking rent-derived inequality at its source. Their economic agenda would focus on curtailing subsidies for finance, excessive protection of intellectual property, the licensing of high-end professionals, and overly restrictive land-use regulation. Doing so wouldn’t require conservatives to become crusading egalitarians, as these reforms would also unleash economic dynamism, innovation, and growth — familiar conservative priorities.

Nevertheless, making regressive regulation a conservative priority would be a distinct change in approach. Too often, conservatives’ idea of a pro-growth policy agenda starts and ends with tax cuts, despite the overwhelming evidence that moderate increases or decreases in the top rate have little effect on growth. When conservatives do turn their attention to regulation, they usually think about providing “regulatory relief” for business by lightening health, safety, environmental, and labor regulations. In our view, though, the regulations with the most pernicious economic effects are the ones that subsidize business by blocking competition or by otherwise distorting markets.

In some cases, conservatives would be able to build on existing strengths when conducting such a campaign. Much of the mischief caused by regressive regulation occurs at the state and local levels: occupational-licensing rules, land-use regulations, and a host of other industry-specific protectionist policies such as those that limit competition for auto dealers, undertakers, and hospitals. A network of free-market think tanks and activist groups is already up and running to push back against this rent-seeking — but these organizations could be doing a lot more. There is no way to fight regulatory capture by the well-off unless other wealthy people make countervailing efforts to even the political playing field, creating the institutional infrastructure needed to ensure that rent-seekers face determined opposition. Conservatives can provide that countervailing power by deepening their investments in state and local policy reform.

In one important respect, conservatives would need to execute a complete change of direction. For decades now, conservatives have favored slashing congressional staff and eliminating congressional support agencies such as the Office of Technology Assessment. These are false economies, as all they do is make Congress’s shrunken army of under-resourced patronage staff ever more deeply dependent on industry lobbyists for the information legislators need to govern. To insulate our politics more effectively against insider takeover, legislators need to be able to draw on deep internal expertise. As Lee Drutman and one of us (Teles) argued in a 2015 Washington Monthly piece, “A New Agenda for Political Reform,” a major upgrade of legislative staff with a larger, better-paid, and more professional cadre of civil servants would arm Congress with the knowledge needed to counter the rent-seeking lobbies that seek to twist rules to their own advantage.

Even if conservatives were to take our advice, a sustained campaign against regressive regulation would not meet with quick, easy victories. What awaits is, in the words of Max Weber, “the slow boring of hard boards.” The disproportionate influence of the wealthy over the basic rules of the economy is deeply embedded, and the best we can do is chip away at it, a little at a time.

That leaves a hard question, namely, how conservatives should think about inequality in a fallen, second-best world in which so many of these rents survive. At a minimum, there’s a strong case for reconsidering the conservative obsession with reducing top marginal income-tax rates. For too long, conservatives have overhyped the growth effects of tax cuts, as well as the dubious “starve the beast” theory according to which members of Congress would respond to tax cuts by restraining government spending. Many conservatives did not look carefully at the evidence behind these dodgy empirical claims because they believed that they held the moral trump card: By cutting taxes, they were returning wealth to its rightful owners. But in the “captured economy” we’re currently living in, this belief is due for reexamination. Not only is a significant fraction of the rich’s income morally tainted by government favoritism, but it is also used to fund yet more rounds of regressive rent-seeking.

One way to begin solving this problem would be to build a veritable bonfire of the deductions that the wealthy use to shield their income from taxation. The exclusion from taxes of employer-paid health insurance, retirement savings through 401(k)s and IRAs, and education savings accounts could either be scrapped or converted into refundable tax credits. We could also consider a financial-transaction tax, which could raise a lot of revenue while also reducing the incentives for excessive trading of assets. Changes such as these would allow us to claw back some of the rents at the top of the economy without increasing the marginal income-tax rates that conservatives are so concerned with. If conservatives took seriously the presence of ill-gotten gains at the top of the income spectrum, they might also look at immigration policy in a new light.

Over the past few decades, the United States has exposed those at the bottom of the economic pile to intense global competition, whether in the form of products from China or workers from Mexico. As Dean Baker has argued, it is high time to expose the wealthy to those same bracing forces of competition by opening up the economy to more high-skilled immigrants, especially in protected professions such as medicine and dentistry. Conservatives need to face and resolve their inequality paradox. They must double down on their principled advocacy of free, competitive markets — while taking a few giant steps back from the assumption that large incomes reflect large contributions to the general welfare.

–Mr. Lindsey is the vice president and director of the Open Society Project at the Niskanen Center. Mr. Teles is an associate professor of political science at the Johns Hopkins University and a senior fellow at the Niskanen Center. They are the co-authors of The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality.

 

The post Op-ed: The Conservative Inequality Paradox appeared first on Niskanen Center.

from nicholemhearn digest https://niskanencenter.org/blog/op-ed-conservative-inequality-paradox/

Rent is eating up a record share of Americans' disposable income

If it feels like the rent keeps going up, you’re not alone.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171030/CRED03/171039992/rent-is-eating-up-a-record-share-of-americans-disposable-income?utm_source=CRED03&utm_medium=rss&utm_campaign=chicagobusiness

Sterling Bay nets big return on Lower West Side property

Fulton Market isn't the only place the fast-growing developer is amassing a fortune.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171030/CRED03/171039993/sterling-bay-nets-big-return-on-lower-west-side-property?utm_source=CRED03&utm_medium=rss&utm_campaign=chicagobusiness

For airlines, the fat years are over

United joins a number of other airlines facing higher bills from a variety of factors: labor contracts, significant airport renovation projects, technology spending and fleet upgrades.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171030/NEWS10/171039995/for-airlines-the-fat-years-are-over?utm_source=NEWS10&utm_medium=rss&utm_campaign=chicagobusiness

Read the indictment against Trump's former campaign chief

President Trump's former campaign chairman, Paul Manafort, and a former business associate face charges of conspiracy against the U.S., money laundering and several other financial charges.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171030/NEWS02/171039996/read-the-indictment-against-trumps-former-campaign-chief?utm_source=NEWS02&utm_medium=rss&utm_campaign=chicagobusiness

Retired federal Judge Posner launching pro bono project

The prominent former judge aims to help people who face court battles but don't want or can't afford lawyers.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171030/NEWS04/171039997/retired-federal-judge-posner-launching-pro-bono-project?utm_source=NEWS04&utm_medium=rss&utm_campaign=chicagobusiness

Our most-viewed real estate stories in the past week

Plans for a proposed 76-story residential skyscraper in River North and a new downtown headquarters for Peapod make the list.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171030/CRED03/310309998/our-most-viewed-real-estate-stories-in-the-past-week?utm_source=CRED03&utm_medium=rss&utm_campaign=chicagobusiness

Sinclair's Washington winning streak has Democrats crying foul

"It has reached a point where all of our media policy decisions seem to be custom-built for this one company," says one Democratic FCC member. "It's something that merits investigation."

from nicholemhearn digest http://www.chicagobusiness.com/article/20171030/NEWS06/171039998/sinclairs-washington-winning-streak-has-democrats-crying-foul?utm_source=NEWS06&utm_medium=rss&utm_campaign=chicagobusiness

Surgeons group lists two LSD mansions

Two years after unsuccessfully listing one of its century-old mansions for sale, the International College of Surgeons now hopes to sell both. They are listed at $22 million.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171030/CRED0701/171039999/surgeons-group-lists-two-lsd-mansions?utm_source=CRED0701&utm_medium=rss&utm_campaign=chicagobusiness

How to Identify (and Avoid) Wetlands

One of the least-pleasant surprises I've encountered in my career as a land investor is the occasional discovery of wetlands on the properties I've purchased. When you're buying vacant land with the hope of developing it in the future, wetlands can present some pretty significant challenges. Wetlands are protected by the federal government (and often […]

The post How to Identify (and Avoid) Wetlands appeared first on REtipster.com.

from nicholemhearn digest https://retipster.com/wetlands/

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Before it gets personal, House speaker scrambles on sexual harassment

"I don't think I've ever seen House Speaker Michael Madigan move faster to get in front of a legislative issue than he did last when he vowed action to address the climate of sexual harassment at the Illinois Statehouse," Rich Miller writes.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171027/NEWS02/171029861/before-it-gets-personal-house-speaker-scrambles-on-sexual-harassment?utm_source=NEWS02&utm_medium=rss&utm_campaign=chicagobusiness

Former federal prosecutor jumps into Illinois AG race

Renato Mariotti gained a national following the past year by using Twitter to explain Trump-Russia developments. He now joins five other Democratic candidates vying to replace Lisa Madigan.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171027/NEWS02/171029862/former-federal-prosecutor-jumps-into-illinois-ag-race?utm_source=NEWS02&utm_medium=rss&utm_campaign=chicagobusiness

Downers Grove food company to buy energy bar maker

Hearthside Food Solutions plans to acquire Standard Functional Foods Group.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171027/NEWS07/171029863/downers-grove-food-company-to-buy-energy-bar-maker?utm_source=NEWS07&utm_medium=rss&utm_campaign=chicagobusiness

The fault in Morningstar's stars

It's time for Morningstar to scrap its fund ratings, a Bloomberg Gadfly columnist writes.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171027/NEWS01/171029865/the-fault-in-morningstars-stars?utm_source=NEWS01&utm_medium=rss&utm_campaign=chicagobusiness

LKQ buys Dover unit for $250 million

Dover, a diversified manufacturer, tries to streamline, while parts distributor LKQ picks up yet another business.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171027/NEWS05/171029871/lkq-buys-dover-unit-for-250-million?utm_source=NEWS05&utm_medium=rss&utm_campaign=chicagobusiness

Pabst mansion sells at a loss—again

Each of the past three times it has sold, the mansion in Glencoe on Sheridan Road went for a lower price than the previous sale. Today it sold for $3.57 million, or about three-quarters what the seller paid for it in 2014.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171027/CRED0701/171029874/pabst-mansion-sells-at-a-loss-again?utm_source=CRED0701&utm_medium=rss&utm_campaign=chicagobusiness

Luxury apartment plan in Skokie clears first hurdle

The 153-unit project was designed by Lucien Lagrange Studio.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171027/CRED0701/171029875/luxury-apartment-plan-in-skokie-clears-first-hurdle?utm_source=CRED0701&utm_medium=rss&utm_campaign=chicagobusiness

Kevin Warsh Should Not Be Federal Reserve Chairman

Late in the fall of 2010—with the unemployment rate near 10 percent and the inflation rate at one percent—Kevin Warsh stood before the annual meeting of the Securities Industry and Financial Market’s Association to critique the Federal Reserve’s bold and controversial steps for  boosting the economy. The economy’s true ills were structural, Warsh argued. In his view, the Federal Reserve’s actions could paper over these deep problems, but do little to change the trajectory of the economy, aside from increasing the level of inflation. Contrary to Warsh’s warning, the Federal Reserve went ahead with its plan. Today the unemployment rate is at 4.3 percent, and inflation is still below the Federal Reserve’s target of 2 percent.

This misjudgement goes beyond a simple policy error. Even the best policy makers make mistakes. Warsh’s error, however, was indicative of a broader mindset, one that has had devastating macroeconomic implications. As it turns out, both the Eurozone and the United States had unemployment rates near 10 percent in November of 2010. Citing concerns very similar to Warsh’s, the European Central Bank decided not pursue quantitative easing type measures, and instead used its influence to push through fiscal austerity and structural reforms. The result was disastrous. By 2013, the Eurozone unemployment rate had climbed to 12 percent, while the U.S. was at 8 percent and slowly but steadily on the path to recovery.

When the Japanese stock market and real estate bubble crashed in 1991, the economy entered a long recession and weak recovery reminiscent to the U.S. and European experiences after 2008. The Bank of Japan likewise cited structural impediments to growth. Ben Bernanke, then a professor at Princeton, criticized the Bank of Japan for a “self-induced paralysis” and “the unwillingness of monetary authorities to experiment, to try anything that isn’t absolutely guaranteed to work.”

As fortune would have it, when the global financial crisis struck in 2008, Bernanke was Chairman of the U.S. Federal Reserve. Despite criticism both inside and outside of the Fed, most notably from Wall Street,  Bernanke was not content to blame the crisis on structural factors. Instead, he adopted an extraordinary range of atypical monetary policy devices to battle the crisis.

Warsh was a critic of these measures, according to the Fed transcript:

The path that you’re leading us to, Mr. Chairman, is not my preferred path forward….I can think, Mr. Chairman, of a tough weekend that the Europeans had, particularly your counterpart at the ECB,…But [your counterpart] did not take action until very late that Sunday night, until the fiscal authorities did their part. ….He chose to wait. I think we would be far better off waiting.

Since he has left the Fed, Warsh has continued this line of criticism in the face of the overwhelming success of Bernanke and his successor Janet Yellen. Unemployment is near record lows, the economy completed a record string of job gains, and has avoided the lost decade that both the Eurozone and Japan experienced during the same and a previous crises, respectively.

The U.S. economy has steadily improved, but it is not out of the woods completely. While the economy has had an impressive run of jobs gains, the combination of low interest rates and low inflation leave it vulnerable to the same type of trap that it faced after the global financial crisis.

Should we face a major shock — a banking crash or sustained spike in oil prices — we may be forced to return to the type of creative measures that Bernanke used to guide the economy out of the last downturn. We will need a Federal Reserve Chair who has the judgment to know which levers to pull, and a commitment to aggressively pursue the Fed’s legal mandates. Given his record during the last crisis and his unwillingness to recognize his mistakes, Warsh’s nomination would leave us more exposed to a lost decade. That is a risk the U.S. economy cannot afford.

The post Kevin Warsh Should Not Be Federal Reserve Chairman appeared first on Niskanen Center.

from nicholemhearn digest https://niskanencenter.org/blog/kevin-warsh-not-federal-reserve-chairman/

Announcing the Niskanen Center Spring 2018 Internship Program

The Niskanen Center is searching for qualified interns to support our policy, outreach, and operations staff next spring. Internship opportunities are available in these policy departments: climate, immigration, defense, technology, and poverty. Opportunities are also available in the traditional media / social media department, the federal affairs department, and the operations department. These are paid internships, based in our Washington, D.C. office.

Policy interns will be responsible for assisting in the generation of opinion content on a regular basis, in both blog post and op-ed form. They will assist Niskanen Center scholars in researching and writing policy papers. Candidates must be well-versed in their issue area, and prepared to participate in meetings with congressional staffers and coalition partners. Strong research and writing skills are a plus.

Media interns will help identify opportunities to promote Niskanen’s work to the appropriate journalists, and track the Niskanen Center in the news. Candidates should have a strong understanding of social media best practices, and will assist in developing and implementing social media strategy. Strong research and writing skills are required, and a degree in English, Public Relations, Journalism, Communications, and/or Marketing is a plus.

Federal affairs interns will assist in promoting Niskanen Center’s work in the halls of Congress. Interns will conduct research on members of Congress and upcoming legislation, in addition to attending and monitoring congressional hearings. Previous experience on Capitol Hill is required.

Operations interns will assist Niskanen’s Director of Operations on a variety of daily and weekly projects to ensure the organization is running smoothly. Candidates that are studying or have graduated with a business-related degree are preferred.

To Apply:

Please send the following (and any questions) in one PDF and one email to intern@niskanencenter.org:

1. Resume
2. Which department(s) you are applying for
3. Two short writing samples (less than 1,000 words each)
4. 300-word explanation of why you are applying to the Niskanen Center and the department(s) you chose

Due to high volume of applications, we are unable to notify unsuccessful applicants. Incomplete applications will not be considered. The deadline for applications is Friday December 1st.

About the Niskanen Center:

Established in 2014, the Niskanen Center is a libertarian think tank that works to change public policy through direct engagement with the policymaking process. The Center looks to develop and promote pragmatic proposals for policymakers, build coalitions to facilitate action, and marshal the most convincing arguments in support of our agenda.

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from nicholemhearn digest https://niskanencenter.org/blog/announcing-niskanen-center-spring-2018-internship-program/

Rauner departs on Israeli trade mission

The governor and the president of the University of Illinois head to Israel this weekend in search of investments, research ties and more.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171027/BLOGS02/171029880/rauner-departs-on-israeli-trade-mission?utm_source=BLOGS02&utm_medium=rss&utm_campaign=chicagobusiness

1920s splendor in Wilmette

Jazz Age elegance on display: fountains, curved staircase and leaded-glass windows. Set on two-thirds of an acre, the house has six bedrooms and a coach house. It will soon be listed for just under $2.8 million.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171027/CRED0703/171029877/1920s-splendor-in-wilmette?utm_source=CRED0703&utm_medium=rss&utm_campaign=chicagobusiness

Seven questions for new Chicago Community Trust CEO Helene Gayle

Gayle, a pediatrician by training and a nonprofit exec by practice, talks economic equity, Amazon, and her four weeks as a new Chicagoan.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171027/NEWS03/171029879/seven-questions-for-new-chicago-community-trust-ceo-helene-gayle?utm_source=NEWS03&utm_medium=rss&utm_campaign=chicagobusiness

McDonald's rebound is grade-school simple

Low prices still are the key to fast-food success, a lesson CEO Steve Easterbrook luckily has remembered.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171027/ISSUE10/171029881/mcdonalds-rebound-is-grade-school-simple?utm_source=ISSUE10&utm_medium=rss&utm_campaign=chicagobusiness

Cheezborger... and now our beer at Jewel

Billy Goat Tavern, immortalized by John Belushi and Dan Akroyd in an early "Saturday Night Live" sketch, is now selling cans of IPA and pilsner at Jewel-Osco.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171027/BLOGS09/171029878/cheezborger-and-now-our-beer-at-jewel?utm_source=BLOGS09&utm_medium=rss&utm_campaign=chicagobusiness

Looking to pitch a tent or rent an Airstream? Hipcamp can help.

Chicago native Alyssa Ravasio founded the website, which works like Airnbnb, to help prospective campers find places to pitch tents or rent cabins.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171027/NEWS07/171029883/looking-to-pitch-a-tent-or-rent-an-airstream-hipcamp-can-help?utm_source=NEWS07&utm_medium=rss&utm_campaign=chicagobusiness

Crain's Hospital CEO Breakfast

Four leading chief executives examine the pitfalls and triumphs of wading through an industry going through sweeping change.

from nicholemhearn digest http://www.cvent.com/events/crain-s-hospital-ceo-breakfast/event-summary-acaa1c2a5dec4b708185625eeeb36ae5.aspx?utm_source=NEWS03&utm_medium=rss&utm_campaign=chicagobusiness

Aetna rallies after WSJ reports CVS in talks to acquire insurer

The news comes during a year when CVS rival Walgreens ended its agreement to buy all of Rite Aid for $9.4 billion amid antitrust resistance, scrapping it in favor of a smaller deal.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171026/NEWS03/171029885/aetna-rallies-after-wsj-reports-cvs-in-talks-to-acquire-insurer?utm_source=NEWS03&utm_medium=rss&utm_campaign=chicagobusiness

Thinking about Tax Cuts (Part 1): Growth and Prosperity

Tax reform season is upon us. The White House and Congressional Republicans promise that their unified framework for tax reform will “fuel unprecedented economic growth.” The President has touted numbers as high as 6 percent. His more cautious advisers suggest 3 percent, a full percentage point or more above recent long-run forecasts. But even if faster growth were a sure thing, we need to ask whether that would bring real prosperity. Just what is real prosperity, and what would it take to achieve it?

Growth and prosperity are not the same thing

Economists use GDP as a measure of a country’s total output of goods and services that compresses output of steel, radishes, and flu shots into a single number. Although they are less widely known, is is also possible to measure the broader concept of prosperity by aggregating the many dimensions of human flourishing, including health, education, personal freedom, and living conditions, into one indicator. We expect the GDP and prosperity to be positively related, but how closely?

Let’s look at some numbers. For this post, I will use the Social Progress Index (SPI) as a measure of prosperity. According to Michael Porter, Professor at the Harvard Business School and a member of the Advisory Board of the Social Progress Initiative, the SPI is “a practical tool for government and business leaders to benchmark country performance and prioritize those areas where social improvement is most needed,” and “a systematic, empirical foundation to guide strategy for inclusive growth.” (The Legatum Prosperity Index, an alternative that I have used elsewhere, would yield similar conclusions.)

The SPI is constructed from some 50 individual indicators, covering things like longevity, school enrollment, homicide rates, environmental quality, protection of property rights, freedom of religion, and many more. Despite the “progress” in its name, there is nothing especially “progressive” about it in the political sense. The great majority of its components measure aspects of human wellbeing that are equally valued by progressives, libertarians, and conservatives.

Here is a scatter plot of the SPI against GDP per capita. [1] The solid black trendline shows a reasonably close fit between the two variables, with an R2 of 0.82. The fit is best for a logarithmic trendline, indicating that for any given starting point, a 1 percent gain in income yields a roughly the same gain in SPI score, although a $1 gain in income has a much stronger effect for low-income countries.

The United States ranks fifth in terms of GDP per capita among the 128 countries covered by the SPI and eighteenth in terms of its social progress score. It lies exactly on the black trendline, which is plotted from data for all countries. However, that trend is pulled down by the poor SPI scores of countries like Saudi Arabia and Kuwait (conspicuous outliers in the lower right of the scatter), which suffer from the curse of riches. Compared to its real peers, the wealthy democratic countries of the OECD, the United States is an underperformer.

There does not appear to be any one group of indicators that pulls down U.S. performance down relative to global or OECD trends. We can see that by looking at some sub-groupings of the SPI indicators.

The creators of the SPI organize their indicators into three groups. Basic Human Needs includes survival-related indicators like nutrition, clean water, child mortality, and violent crime. Foundations of Wellbeing includes education, access to information, life expectancy, and environmental quality. Opportunity includes political rights, property rights, tolerance, and higher education. Compared with all countries, the United States is below the trend for basic human needs and opportunity, and close to the trend for foundations of wellbeing. Within the OECD, the U.S. is below trend in all three categories.

Instead of the SPI’s own groupings of indicators, which I find a bit quirky, we can instead reorganize them into more straightforward categories of health, education, living conditions, and personal freedoms. Among all countries, U.S. indicators are above the GDP-adjusted trend for education, on the trend for personal freedoms, and below the trend for health and living conditions. Within the OECD, U.S. performance is above trend for education and below trend for all of the other three. (Note that the education indicators in the SPI are mostly quantitative measures, such as primary, secondary, and college enrollments, rather than qualitative measures, like test scores.)

Where do we go from here?

By a variety of measures, then, the United States does not go a good job of converting raw GDP into the elements of true prosperity. Where do we go from here?

One option to prioritize more rapid GDP growth, as does the GOP’s unified framework for tax reform. If everything worked out for the best, growth would pick up to about three percent per year. After five years of growth at that rate, assuming no change in the position of the United States relative to the GDP-SPI trend, we would catch up with the point that Ireland occupies today. The next chart, which zooms in on the upper-right-hand corner of the preceding one, shows that outcome as Arrow A, which points to the right, parallel to the OECD trendline.

There is a possible catch, though. Backers insist the unified framework will produce enough growth to pay for promised rate reductions without increasing the deficit, but critics dispute that. The liberal-leaning Tax Policy Center estimates that the plan would reduce federal revenues by $2.4 trillion over ten years. The more conservative Committee for a Responsible Federal Budget estimates the revenue loss at $2.2 trillion.

Suppose the critics are right, and deficits widen. Suppose Congress gives in to pressures to cut support for education, public health, clean water, and environmental quality. If those programs were slashed, then, even if the promised 3 percent growth materialized, Arrow A would swing to a more south-easterly direction, significantly undershooting Ireland.

A second option would be to increase spending on social and environmental programs without fundamental structural reforms. Conservative critics would, no doubt, warn that doing so would put the brakes on growth. For the sake of discussion, suppose they were right, and GDP growth slowed to 1 percent per year. Under such a policy, the U.S. economy would travel along a path like Arrow B, with slower growth but larger gains in social prosperity. After five years, we might end up somewhere near the point representing today’s Switzerland.

Could we do even better?

If the only choices were Ireland or Switzerland, I would be tempted to aim for Switzerland. To choose otherwise, one would have to value GDP itself more highly than the better education, health, environmental quality, and personal freedom that go into the Social Progress Index. But could we do better still?

We could, if we pursued reforms that enhanced the inherent dynamism of the U.S. economy while also strengthening social and environmental protections. That combination could send our economy forward along Arrow C in the chart, aiming to the right of Switzerland and higher than Ireland. In bare outline, such a policy package might usefully include the following elements:

First, it would include genuine tax reform, as opposed to the simple tax cuts that are the likely outcome as the proposed unified framework works its way through Congress. Real tax reform would be revenue neutral. It would fully fund any cuts to top corporate and personal rates with elimination of loopholes, and without pie-in-the-sky dynamic scoring. Adding carbon taxes or consumption taxes to the mix could allow a sharp reduction in payroll tax rates, which, according to the Tax Policy Center, is a bigger burden than the income tax for three-quarters of American households.

Second, the package would include reforms of the social safety net to minimize the egregious disincentives to work that are built into today’s welfare system. I have sometimes suggested a Universal Basic Income as one way to increase work incentives, but there are many other ideas. A universal child benefit, an enhanced Earned Income Tax Credit, or an old-fashioned negative income tax also hold promise.

Third, the package would lift barriers to labor mobility that are built into our healthcare system. One critical step would be to end “job lock” by decoupling health insurance from employment. Reforms that made healthcare more portable from state to state would also help. Such reforms would simultaneously boost GDP and SPI scores.

Fourth, a comprehensive reform package would include a strong free trade policy combined with reforms that enhanced economic resilience in the face of trade and technology shocks. Healthcare and safety net reforms would contribute to shock-proofing the economy, but other measures would help too, including a rollback of excessive occupational licensing, measures like “Ban the Box” that aim to improve the job market success of ex-offenders, and measures to combat the opioid epidemic.

Tax cuts alone are not enough

The lesson here is that the even if the tax cuts in the GOP’s unified framework performed as promised, growth of GDP alone is not enough to guarantee prosperity. Instead of using growth as the be-all and end-all metric for tax policy, or any other area of policy, our primary goal should be to improve the ability of the U.S. economy to transform raw GDP into real social prosperity as measured by indicators of health, education, environmental quality, and personal freedoms. Rather than forcing economic growth for its own sake, we should focus on structural reforms that would enhance economic dynamism through improved labor mobility, reduction of work disincentives in the social safety net, and creation free markets for jobs, goods, and services both within the country and among nations.

This is not, after all, asking the impossible. Just moving up to an average level of performance, as represented by the social prosperity trendline for other wealthy, democratic countries, would be a great step forward. In fact, why be content to shoot for an Ireland or a Switzerland, which themselves are underperformers? Why not aim for the above-trend standards of a Denmark, a Finland, or a New Zealand? Why not try, at least?

[1] The SPI data are from the 2017 release of the index, which contains the most recent available value of each variable for each country. The average data year for the 2017 release is 2015. Accordingly, I have used 2015 values of GDP per capita, measured at purchasing power parity, downloaded from the IMF data base. Return

The post Thinking about Tax Cuts (Part 1): Growth and Prosperity appeared first on Niskanen Center.

from nicholemhearn digest https://niskanencenter.org/blog/thinking-tax-cuts-part-1-growth-prosperity/

PRESS RELEASE: COALITION OF BUSINESSES, TRADE GROUPS, AND ADVOCACY ORGANIZATIONS JOIN FORCE TO PROTECT DREAMERS

WASHINGTON, D.C., October 26, 2017—Today, more than 60 companies, businesses, trade organizations, and advocacy groups launched a coordinated effort to push for “bipartisan legislation that gives Dreamers a permanent solution this year.”

The Coalition for the American Dream was launched in response to the Trump administration ending the Deferred Action for Childhood Arrivals (DACA) program last September. It is comprised of influential companies and organizations like Facebook, Google, IBM, the U.S. Chamber of Commerce, and Microsoft, among many others.

The Niskanen Center is one of just six advocacy organizations participating in the coalition, and we are honored to join forces with such a dynamic group of partners to continue to urge lawmakers to support legislation that provides a permanent pathway to citizenship for Dreamers.

“Both basic human decency and an enlightened interest in our own national well being demands that we act to keep Dreamers from deportation and a continued life in the shadows of our society,” said Jerry Taylor, President of the Niskanen Center. That sentiment was echoed by CEOs, Presidents, and leaders in the Coalition.

The Niskanen Center looks forward to working with lawmakers to continue promoting sensible, legal reforms to protect this valuable group of individuals.

The Niskanen Center is a 501(c)(3) advocacy organization established in 2014 that works to change public policy through direct engagement in the policymaking process.

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3 suburban GOP reps provide crucial votes on tax plan

Peter Roskam, Randy Hultgren and Adam Kinzinger advance a party plan despite the potential tax hit to residents in their districts.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171026/BLOGS02/171029890/3-suburban-gop-reps-provide-crucial-votes-on-tax-plan?utm_source=BLOGS02&utm_medium=rss&utm_campaign=chicagobusiness

PRESS RELEASE: The Niskanen Center applauds the American Family Act of 2017

Washington D.C., October 26, 2017 — The Niskanen Center applauds Senators Michael Bennet (D-CO) and Sherrod Brown (D-OH) for their new proposal, the American Family Act of 2017, which would create a fully refundable Child Tax Credit, delivered monthly to match the needs of families, and with additional resources provided for young children.

The United States has among the highest child poverty rates in the developed world, a fact which is largely explained by differences in policies like these. Indeed, evidence has mounted from more than twenty countries with per-child benefits, including countries with child allowances like Canada, Australia and the U.K., that periodic cash transfers to households with children is the single most effective policy for reducing child poverty, improving family stability, and creating lasting improvements in child health and educational outcomes.

“The power of a child allowance lies in the flexibility and fairness provided by cash, which empowers parents to allocate resources to the diverse and often unpredictable needs of their children in ways other kinds of benefits simply cannot,” says Samuel Hammond, Niskanen’s poverty and welfare analyst.

“Expanding parental choice, and reducing child poverty — particularly when done in a way guided by the best available evidence — are goals we are proud to stand behind,” Hammond adds.

The Niskanen Center is a Washington, D.C.-based libertarian think tank that works to change public policy through direct engagement in the policymaking process.

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from nicholemhearn digest https://niskanencenter.org/blog/press-release-niskanen-center-applauds-american-family-act-2017/

Convicted landlord loses five properties in bankruptcy sale

A bankruptcy judge approved the $41 million sale of the properties downtown and in Lakeview owned by Arthur Holmer, who pleaded guilty to bank fraud in 2015.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171026/CRED03/171029891/convicted-landlord-loses-five-properties-in-bankruptcy-sale?utm_source=CRED03&utm_medium=rss&utm_campaign=chicagobusiness

How BMO Harris' new real estate lending chief plans to attack the next downturn

Kim Liautaud aims to expand the bank's $10 billion commercial portfolio at a time when property sales and new developments are ripe for decline.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171026/CRED03/171029893/how-bmo-harris-new-real-estate-lending-chief-plans-to-attack-the?utm_source=CRED03&utm_medium=rss&utm_campaign=chicagobusiness

Four Strategies to Thrive under Pressure

Our work lives are full of stressful situations, from job interviews to high-stakes presentations. Cognitive scientist Sian L. Beilock shares science-backed techniques proven to help you shake off the jitters.

Cook County house prices cool down at the top

Lincoln Park and Winnetka saw declines in the second quarter.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171026/CRED0701/171029896/cook-county-house-prices-cool-down-at-the-top?utm_source=CRED0701&utm_medium=rss&utm_campaign=chicagobusiness

Cook County house prices cooling at top, report says

High-priced areas Lincoln Park and Winnetka saw declines in the second quarter.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171026/CRED0701/171029896/cook-county-house-prices-cooling-at-top-report-says?utm_source=CRED0701&utm_medium=rss&utm_campaign=chicagobusiness

University of Illinois receives its biggest gift ever—$150 million

The huge donation to the university's Urbana-Champaign biz school was made by Madison Industries founder and CEO Larry Gies and his wife, Beth Gies.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171026/NEWS13/171029897/university-of-illinois-receives-its-biggest-gift-ever-x2014-150?utm_source=NEWS13&utm_medium=rss&utm_campaign=chicagobusiness

Want a beer? You can pour one yourself here.

The combination of technology and DIY-ism has eliminated plenty of jobs. If Josh Goodman has anything to say about it, your neighborhood bartender could be next to go.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171026/ISSUE01/171029970/want-a-beer-you-can-pour-one-yourself-here?utm_source=ISSUE01&utm_medium=rss&utm_campaign=chicagobusiness

Fall's hottest restaurant openings

The eight most highly anticipated fall openings, along with a couple spots that have recently started welcoming diners.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171026/BLOGS09/171029898/falls-hottest-restaurant-openings?utm_source=BLOGS09&utm_medium=rss&utm_campaign=chicagobusiness

What's in your wallet? Discover investors more jumpy than Capital One's

Discover's stock took a pounding on third-quarter earnings news even as executives sought to reassure investors that rising loan losses aren't a concern.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171025/NEWS01/171029900/whats-in-your-wallet-discover-investors-more-jumpy-than-capital-ones?utm_source=NEWS01&utm_medium=rss&utm_campaign=chicagobusiness

What's Krishnamoorthi up to with that cash hoard?

After less than a year in Congress, is Rep. Raja Krishnamoorthi, D-Schaumburg, already planning his next move?

The northwest suburban freshman set political tongues wagging in recent months when he pulled in a whopping $2.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171025/BLOGS02/171029902/whats-krishnamoorthi-up-to-with-that-cash-hoard?utm_source=BLOGS02&utm_medium=rss&utm_campaign=chicagobusiness

Let the shopping begin: Trump reveals 2018 Obamacare prices

Illinois consumers have been bracing for double-digit price hikes that federal officials revealed this summer.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171025/NEWS03/171029903/let-the-shopping-begin-trump-reveals-2018-obamacare-prices?utm_source=NEWS03&utm_medium=rss&utm_campaign=chicagobusiness

Where could Paul Ryan's tax move hit hard? Lake Geneva.

Residents of the upscale enclave could suffer if the House speaker is successful in his efforts to kill a deduction as part of the GOP tax overhaul.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171025/NEWS02/171029908/where-could-paul-ryans-tax-move-hit-hard-lake-geneva?utm_source=NEWS02&utm_medium=rss&utm_campaign=chicagobusiness

U.S. lawmakers will not tackle healthcare this year, Ryan says

Republican lawmakers will not take up a bipartisan plan to stabilize Obamacare insurance markets, Paul Ryan said on Wednesday, signaling his party was shelving the matter until the 2018 congressional election year.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171025/NEWS03/171029911/u-s-lawmakers-will-not-tackle-healthcare-this-year-ryan-says?utm_source=NEWS03&utm_medium=rss&utm_campaign=chicagobusiness

Bond market dip didn't dent Illinois' $4.5 billion offering

Today marks the start of the state's biggest debt sale in more than a decade, and investors said the yields are alluring.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171025/NEWS02/171029915/bond-market-dip-didnt-dent-illinois-4-5-billion-offering?utm_source=NEWS02&utm_medium=rss&utm_campaign=chicagobusiness

Oh My God, Scott; Watch Out!

In the aftermath of Hurricane Irma’s devastation in Florida, EPA Administrator Scott Pruitt said it was not the time to discuss the cause and effect of the storm.

Now it is time. We are at the same point with respect to climate change as I was, in the early afternoon on December 6, 2014, when my wife Mary exclaimed “Oh My God, Bob; Watch Out!”

It was the tone of her voice, and the cadence, that said to me – stop whatever it is you are thinking about, and pay attention. I did, and it saved our lives.

I focused on a large truck about a quarter of a mile down the road coming toward us. It was an 18-wheeler, and it was bouncing in a way that clearly indicated it was in serious trouble. Moreover, I saw flame coming out of the wheel-well of the passenger side.

Mary, who had noticed the truck a moment earlier, realized something that I had not yet become aware of, that although the truck was pointed straight down the highway, it was also moving sideways toward us.

The emotionally charged next five seconds are burned into my memory as if it were a video that I’ve watched over and over. I remember immediately slamming on the brakes.   

As I braked I also looked back to see if there were any cars to my right. I had already pictured a debris field that, despite the concrete barrier between us, spilled over onto our side of the divided freeway.  That picture implied to me that I needed to slow down and begin moving to the right.

But I had no idea what was coming.

What I didn’t know was that there had already been a fatal accident.  An out of control Audi had been crushed, moments earlier, by this truck, which was hauling a tanker filled with 9000 gallons of gasoline.  The truck had already bounced off the Audi, crossed from the local into the express lanes, and was now a second or two from hitting the concrete barrier. I hadn’t realized it yet, but that truck was now literally a bomb with a lit fuse, hurtling straight at us.   

As I slowed down and moved to the right we watched in horror as the truck rolled right up and over the concrete barrier. The tanker remained on the far side, but the cab slammed down right in front of us, immediately burst into flames, and sent debris scattering in front of us.   

Luckily I had just enough time to slow down. I couldn’t have stopped, but was able, even in pouring rain, to move in a controlled path to the right and to pass by safely despite the debris.

What I remember most vividly was the intense heat through the rain and the glass as we passed by within inches of the front of the cab.  We slowly came to a stop and realized that we were the only car to pass by. We looked back and saw the truck already engulfed in flames hundreds of feet high.   

There was nothing we could do.  Those behind us in all 8 lanes got stopped by the inferno and were held up for the next seven hours as equipment from Newark airport was eventually brought in to put out the flame.

Although for us the danger was over in a few seconds, it took hours to calm down. We both knew we had come within a fraction of a second of an unimaginable death.

Of course not everyone would draw the same lessons from this experience as I have, but given my background as the head of risk management for Goldman Sachs the message is very clear: the reason we survived was because of Mary’s vigilance and my quick response to her warning.

And today science is similarly warning all of us that the global economy, led by the United States, is dangerously filling the earth’s atmosphere, a reservoir with limited capacity, with greenhouse gases.

Frighteningly, science can only guess with great uncertainty about what the safe capacity is, and yet society continues to waste whatever capacity is left.  No one knows how much time is left to act in order to avoid a catastrophe.

Meanwhile, there is an effective brake, a carbon tax.

Just as I was obliviously driving along before Mary exclaimed, “Watch Out!” the global economy is pushing forward with its foot squarely on the accelerator:  government incentives to produce and consume fossil fuels globally dwarf the meager incentives that some venues have created to reduce emissions.

This insane set of incentives is a bug in the global economy’s governance system.   The tax codes created by governments don’t create appropriate incentives to reduce emissions. But like any bug, this one can be fixed immediately by changing the code.

Slamming on the brake, in this context, means changing the tax code to add an incentive to reduce emissions, i.e. implementing a carbon tax.

So when Scott Pruitt ignores one monster hurricane after another and says now is not the time to talk about climate change, I say, “Oh My God, Scott; Watch Out!”  And please pay attention to the tone of my voice!

The post Oh My God, Scott; Watch Out! appeared first on Niskanen Center.

from nicholemhearn digest https://niskanencenter.org/blog/oh-god-scott-watch/

HighTower sells stake to Thomas H. Lee Partners

The Chicago investment advisory firm is letting some investors cash out and securing at least $100 million for growth.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171025/NEWS01/171029916/hightower-sells-stake-to-thomas-h-lee-partners?utm_source=NEWS01&utm_medium=rss&utm_campaign=chicagobusiness

Groupon to offer frequent-flyer miles

The online-deal company aims to move users from paper to plastic, and get them to spend.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171025/BLOGS11/171029917/groupon-to-offer-frequent-flyer-miles?utm_source=BLOGS11&utm_medium=rss&utm_campaign=chicagobusiness

Neighbors fear unholy traffic mess at proposed Holy Name towers

The primary objection, if any, that bubbled up at a community meeting on the two-tower project is that already unbearable traffic will only get worse.

from nicholemhearn digest http://www.chicagobusiness.com/realestate/20171025/CRED0701/171029918/neighbors-fear-unholy-traffic-mess-at-proposed-holy-name-towers?utm_source=CRED0701&utm_medium=rss&utm_campaign=chicagobusiness

Episode 2: Why Republican Women Don’t Run for Office and Why It Matters for the Gender Gap in Voting

Democratic women make up three times the share of their congressional caucus as Republican women. Matt Grossmann talks to Danielle Thomsen about her new research on how the donor networks in each party help produce this divide. He also talks to Heather Ondercin about her new research showing that the gap among officeholders may be producing the big gender gap among voters, with women increasingly seeing the Democrats as their party and men exiting the party for the same reason.

The Niskanen Center’s Political Research Digest features up-and-coming researchers delivering fresh insights on the big trends driving American politics today. Get beyond punditry to data-driven understanding of today’s Washington with host and political scientist Matt Grossmann. Each 15-minute episode covers two new cutting-edge studies and interviews two researchers.

The post Episode 2: Why Republican Women Don’t Run for Office and Why It Matters for the Gender Gap in Voting appeared first on Niskanen Center.

from nicholemhearn digest https://niskanencenter.org/blog/episode-2-republican-women-dont-run-office-matters-gender-gap-voting/

Notre Dame getting $100 million from alum

It's the largest unrestricted philanthropic gift the school has ever received.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171025/NEWS13/171029920/notre-dame-getting-100-million-from-alum?utm_source=NEWS13&utm_medium=rss&utm_campaign=chicagobusiness

The Problem of Inconvenient Expertise I. Facts, Truth, and Populism

Consensus perceptions of truth rely on trust—in expertise and in the institutions that create knowledge (such as universities). But these forms of trust are diminishing. So are the perceived realities that we share.  

Donald Trump did not create the problem of polarized fact perceptions, which preceded his campaign and no doubt will be with us long after he is gone. But he made the problem worse by speeding up the decline in trust and the fracturing of consensus over facts. A populism that rejects expertise as elitist and distrusts conventional sources of authority can reject inconvenient expertise across the board.

Paradoxically, though, the problem of inconvenient expertise—the testimony of experts, scientists, or professors whom we would like to dismiss—is even more of a problem for anti-populists than for Trump supporters. In principle, anti-populists could embrace all epistemic authorities uncritically, and that’s a nightmare fully the equal of the populist’s blanket rejection of expertise.

Between these two poles are most of us, who walk through the cafeteria of expertise and select only what is appealing. The desire to uphold authoritative knowledge some but not all of the time, picking and choosing in the contemporary way, poses the challenge of dealing with the corrosive interconnections of truth, trust, and Trump.

“Truth” vs. “Fact”

We often use these two words interchangeably, but they’re dramatically distinct.

Truth refers to what really exists, the actual state of things. We’d all like to know the truth, but philosophy and science both start from the recognition that misperception and error are rampant. Philosophers and scientists use logic and evidence to try to correct illusions, but the task is never ending.

In the meantime we have facts: fallible, socially determined approximations of truth. Facts are usually accepted as such because of their endorsement by institutions that are seen as authoritative: governments, universities, scientific societies, professional associations, respected media outlets. Sometimes those institutions are in accord and sometimes—as is often the case in our polarized polity—they endorse competing facts.

Facts are as close as we can get to the truth, but they may not be that close. Accepted “facts” may be somewhat incomplete or fully wrong. They may some day be shown to be false and replaced by other facts. So no reasonable person believes that all of the “known facts” of the current moment are truths and that none will be withdrawn (like the “fact” that eggs are bad for you).

Trusting the Experts

One can pretend that this difficult problem is easily solved: just trust the experts. As Jimmy Kimmel said to Sean Spicer in disbelief: “Can we though disagree with the facts?” By which he might have meant, Can we dispute the truth? The answer is that we can if we aren’t sure what the truth is.

I believe that Kimmel was really asking, “Can we dispute the experts?” The answer of course is Yes, if we don’t trust those experts. Trust is the foundation of our confidence in what we know. (Ironically, Kimmel has recently become a vehicle for “facts” about health-care proposals, although he is in no sense an expert on them.)

In a fascinating book on the origins of contemporary claims to expertise (A Social History of Truth: Civility and Science in Seventeenth-Century England), Steven Shapin argues that trust is at the heart of science. The goal of the book is “to draw attention to how much of our empirical knowledge is held solely on the basis of what trustworthy sources tell us” (21). “What we know of comets, icebergs, and neutrinos irreducibly contains what we know of those people who speak for and about these things” (xxvi). Our search for “a world-known-in-common” (36) reduces, in effect, to the search for “a reliable spokesman for reality” (xxvii).  

Who can be trusted to tell the truth about reality? Children (as in the Emperor’s New Clothes)? Political leaders (of our party)? Religious leaders? Shapin’s argument is that in the early modern period, the answer was the gentleman, who was thought to be so independent, both financially and morally, that he had no incentive to lie. His statements—absent proof that the public could understand—would be believed. This made gentlemen the perfect scientists. Eventually trust was transferred to scientists in general, who are the modern-day gentlemen who do not lie.

However, the era of trust seems to be coming to an end.

The question of the tree falling in a lonely forest applies here, but in reverse. The usual framing of the question assumes that we know a tree has fallen. But if I don’t know one way or the other, and someone tells me she heard it fall while another insists that the noise was caused by something else entirely, whom do I believe? Should I believe a tree fell if the ear-witnesses in favor outnumber those opposed by a small margin? What if there is an overwhelming consensus, but a seemingly trustworthy dissenter? What if the dissenter is a friend of mine? 

Consider the infamous journalism scandal revolving around George W. Bush’s National Guard service, which ended Dan Rather’s long career in journalism. The truth of the situation—whether Bush did or did not use family influence to gain a National Guard spot to keep him out of Vietnam; and whether he did or did not complete his flight training—will always be the same. While the truth is stable, however, the “known facts” have changed. Until 60 Minutes aired the accusations, the known facts were that Bush served honorably, if not in combat. But then a trusted institution, CBS News, reported a different set of known facts. Soon after, CBS retracted the accusations and fired several influential reporters and editors, changing the known facts again.

A 2015 film about the saga, entitled “Truth,” insists that the 60 Minutes story really was true, even if its sources were false. Rather agrees. His position is that even though the story cannot be documented, and even though the evidence may have been falsified, the story painted an essentially true picture of what happened. So to summarize, CBS initially said that its sources provided facts that delivered a new truth; CBS later said the sources are not facts, so the story cannot be said to be the truth; Rather says the story may not have reported facts, but the story is nonetheless true.

In such cases, which seem to be increasingly common, trust loses its purchase. Rather recently told Variety magazine: “Don’t take my word for what it is; don’t take CBS’s word for what it is; go see it”—that is, “Truth,” the documentary—“and make up your own mind.” How, though, can we do that with any hope of accuracy when the only basis for making up their own minds is the match between what the documentary says and our prior beliefs? At that point we have reached the post-truth era.  

Truth and Populism

Trust in media “expertise” as a means to solve the post-truth dilemma is at a low ebb. Here are data from Gallup:

Source: “Americans’ Trust in Mass Media Sinks to New Low”

If the news media are no longer considered trustworthy sources of knowledge, what replaces them?

American populism has always been difficult to define. My own definition, at least of the current manifestation of populism, is epistemological: it’s the view that the beliefs and perceptions of normal citizens tend to be correct. What non-“elite” Americans think is good and true is what is really good and true.

Populism equates the facts perceived by ordinary people with the truth. It disparages as “fake” facts those that are perceived by extraordinary people. Populism, then, blocks the flow of trust from the bottom up. When the top is no longer trusted, the bottom is left to its own epistemic devices.

In electoral terms, the epistemic us-versus-them turns into more recognizable demographic categories. If Republicans have catered in the past to Americans who perceive themselves as wealthy (or aspire to be so), and Democrats to Americans who perceive themselves as downtrodden, populism caters to Americans who perceive themselves as normal people who can no longer trust either party. It’s not money that American populists dislike (Trump’s wealth makes that clear). It’s elitism.

Elitism comes in many flavors. The more familiar variety is perceived snottiness, putting on airs, looking down on the practices of ordinary people. Trump certainly doesn’t do that. He eats fast food often and publicly. But his ingeniously post-modern variant of anti-elitism relates to his presentation of facts as ordinary (popular) perceptions rather than as perceptions vetted by elites.

The Death of Expertise

If the perceptions of normal folk are correct, then those of the hyper-educated are suspect.

Highly credentialed scholars and journalists both claim to be arbiters of the truth. Both strongly believe that normal Americans should respect this authority. Trumpist populism openly disparages it. Do populists distrust epistemic elites because of their leafy academic pedigrees, or have these pedigrees lost their luster because their bearers no longer seem to be speaking the truth?

Trump’s answer comes to us in a Wall Street Journal op-ed under his byline: “On every major issue affecting this country, the people are right and the elites are wrong. The elites are wrong on taxes, on the size of government, on trade, on immigration, on foreign policy. Why should we trust the people who have made every wrong decision?”

In The Death of Expertise, Tom Nichols presents what seems, at first glance, to be a protest against the notion that experts deserve the loss of people’s trust. “We live in a society that works because of a division of labor,” he writes, “a system designed to relieve each of us from having to know about everything. Pilots fly airplanes, lawyers file lawsuits, doctors prescribe medication,” and scholars of national security (of which Nichols is one) write books about it. Why, then, are ordinary citizens losing faith in experts?

At first, Nichols seems to be chiding the citizenry for disrespecting the division of epistemic labor, but then he reveals that the true culprits are higher education, the Internet, and journalists. In two out of the three cases, the death of trust in expertise is due to the failings of these experts: those in the universities and those in the media. Bad universities are dumbing down their training and bad journalists are claiming expertise they do not have. Only in the case of the Internet is the cause an outside force (really a replacement for expertise, one that’s embraced because of experts’ failings).  

In the final chapter, Nichols says what he really thinks: that experts have brought this on themselves. He describes some of the prominent cases of failed expertise, such as the consensus misprediction by foreign policy experts of the collapse of the Soviet Union, the consensus misprediction by pollsters of the 2016 election outcome, and the consensus non-prediction of the financial crisis. He also describes some of the recent events that have brought social science into disrepute, including:

• A falsified study of vaccines and autism, which deeply influenced the anti-vaccination movement after being published in The Lancet.
•  A falsified study on attitudes toward gay rights, published in the prestigious journal Science and later withdrawn.
•  A falsified study of gun ownership in the colonial era, awarded the Bancroft Prize in history before being withdrawn.

Yet it doesn’t seem probable that generally low-information populist voters were aware of such missteps. So my next post will discuss a different view of the origins of the decline of faith in experts.

The post The Problem of Inconvenient Expertise I. Facts, Truth, and Populism appeared first on Niskanen Center.

from nicholemhearn digest https://niskanencenter.org/blog/problem-inconvenient-expertise-facts-truth-populism/

The best events for the week

➊ Probably the connection jumps out only to etymology enthusiasts, but the holo- in “holography” and “holocaust” is the same combining form, meaning “whole.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171025/NEWS0701/171029941/the-best-events-for-the-week?utm_source=NEWS0701&utm_medium=rss&utm_campaign=chicagobusiness

Penny Pritzker, Laura Ricketts raise money for Ruiz

Former Chicago Public Schools chief Jesse Ruiz

NAACP warns blacks against travel on American Airlines

The group said that for several months it has watched a pattern of disturbing incidents reported by African-American passengers.

from nicholemhearn digest http://www.chicagobusiness.com/article/20171025/NEWS10/171029924/naacp-warns-blacks-against-travel-on-american-airlines?utm_source=NEWS10&utm_medium=rss&utm_campaign=chicagobusiness