The Magic Asterisk * Minnesota State Budget

 

       What if the State of Minnesota spent money when it did not have a plan for how to pay for it?  This is essentially what Minnesota is doing now–budgeting with a promise or a floating asterisk that spending today will pay for itself in the future.  This is the DFL version of Reaganomics from the 1980s all over again.

 

Asterisk One:  The Smoke and Mirrors of Reagan Supply Side Economics

            The Reagan tax cuts were based on a fiction.  The fiction was supply side economics and the famous Laffer Curve.

            Arthur Laffer at a restaurant drew a curve on a napkin.   He argued that cutting taxes would eventually spur more investment and therefore the increased economic growth would pay for itself and therefore no cuts to social-welfare programs would be needed.

            In reality, this was a facade.  It a 1980 president debate when then candidate John Anderson was asked how Reagan could cut taxes and increase military spending while balancing the budget, he responded it was possible only with smoke and mirrors.  He was correct.

            Eventually Reagan, with Democratic Party complicity, did cut the top rate on taxes in America, with the affluent and corporations benefitting the most. David Stockman, his budget director, recognizing that the cuts would not pay for themselves, indicated in his proposed budget that there would be $44 billion is future cuts, marked by a “magic asterisk” in the budget.

            What eventually happened is that the US recession and tax cuts hemorrhaged the US budget, thereby becoming the cudgel to force additional cuts to social welfare programs.

            In effect supply side economics forced economic choices upon a future Congress and president, the implications of which we still face more than 40 years later.

 

Asterisk Two: The Minnesota Budget

            Minnesota has a $17.5 billion surplus.  The source of the revenue is both one-time federal money tied into Covid relief, the other is taxes. 

            Covid funding is ending and is not returning, especially with a divided Congress unlikely to expend more money and a Republican House looking to cut.  

            Future tax revenues are not guaranteed.   Fears of recession are about as the Federal Reserve raises interest rates to slow inflation and fears of future bank failures are chilling consumer confidence.   Moreover, Minnesota’s economy is performing more slowly than many other states.  Altogether, continued tax revenue along the path Minnesota has recently experienced is not guaranteed.

            Yet despite this the Minnesota DFL, who hold a trifecta in the state government, are prepared to spend all the surplus, and then some.  It is spending for many worthy causes, but the sustainability  of the spending is a problem.

            The spending of one-time money is not for one-time projects.  It is for structural commitments to education, housing, and many other needs.  By structural one means that these are not one time spending commitments coming from onetime money.  They are the down payment on multi-year spending and priorities.  After the surplus is spent in the next biennium budget and beyond there will be a need to fund these commitments.  And the current and proposed taxes may not be sufficient to cover the expenditures.

            I have taught economic development and budgeting. I am well versed in Keynesian demand side economics and how government spending can encourage economic growth.  But overused, over stimulus by government spending can be inflationary and lead to budget deficits.  Government spending does not always pay for itself, at least not in the short run.  And in the long run, as John Maynard Keynes once said, “We are all dead.”

            Perhaps the idea is that spending all this money now on popular programs will ensure a DFL re-election. Or perhaps the popularity of the spending will create a powerful constituency for these programs and therefore they cannot be cut.

Or perhaps this spending is the new floating asterisk.  We do not know where the money to pay for these commitments will come from, but we will mark the savings or benefits with a floating asterisk as a placeholder until we do figure it out.

Guns, Statistics, and Social Science

 

Another day, another mass killing at a school.  This time Nashville. 

But unfortunately and predictably there will be another mass shooting. Predictably there will be the same polarized political debate that results in a policy stalemate. And predictably the debate around guns will center on the usual stereotypes and myths that continue to confront mass killings in America.

 

The NRA will trot out  that the problem is not too many guns or the type of guns but that there are not enough in the right hands.  It will join a US Supreme Court in contending that the Constitution protects our right to possess guns (especially handguns) in our homes and perhaps on the streets for self-defense. Progressives will demand new gun control legislation, calling for bans on assault weapons, purchase delays, and background checks.  Across these debates facts take a backseat to myths.

 

Social science research can both inform and muddle the debate on  guns in America and reinforce and dispel the myths or pop culture views informing what our policy responses and options should be.  Let’s use good research here.  What do we know?

 

The Problem of Mass Killings

            Mass millings such as what happened in Louisville are tragic.  But mass shootings pale in comparison to other forms of gun violence.

            Mother Jones maintains a database on mass killings, defined as four or more individuals killed in a public place. They began assembling the database in 1982 and updated to Louisville.  During that 41-year period there have been 1101 killed, another 1885 wounded.  Of the 141 incidents, 22 are school-related.  Sixty-six of the assailants had some history of mental  illness.  Finally 99 of the incidents involved weapons labeled as semiautomatic and seven as assault.

 

Gun Deaths in America

            Let’s do  some comparisons.

            According the Center for Disease Control, in 2020, there were 24,292 suicides that involved guns.  In one year there were 22 times more suicides with guns compared to mass killings in America in 41 years.

            Alternatively, the  Gun Violence Archive focus on four or more shootings, even if no one dies.  Since 2013 they calculate 144 mass shootings with total dead and wounded as 7,740.    One year of gun-related suicides is still  more than 3.1 times the number of mass shooting injuries in ten-year period. 

            Handguns are the gun of choice for 69% for males and 88% of time for females when committing suicide.   In crimes, among the approximately 19,400 homicides in America in 2020, about 57% were probably with handguns.  Simply put, of the 45,222 gun deaths in America in 2020, less than one-percent were mass shootings that took place with assault-type or semi-automatic weapons.

            Finally, there is little evidence that guns are used for self-defense and instead are more likely to be  used  against another member of a household or for suicide that to thwart an intruder.

            All gun violence is bad, but mass shootings with  assault guns pale in comparison to  hand gun suicides and other forms of homicide. If we really wanted to affect gun violence in America we would be better served targeting resources on handguns and addressing the issues of suicide and the reasons why people kill in general. 

 

 

The Myth of the Mentally Ill

            The Mother Jones database alone should dispel the mentally-ill bias.  Sixty-six  of the approximately 141 shooters had a history of mental illness, 17 did not, the remainder is indeterminate.  Given these statistics, there is nonetheless a belief that mental illness is connected to mass shootings.  Yes, that is partially true, but this does not provide a complete picture of the connection between mental illness and gun violence.

 

Based on mass shooter research, there is a profile that such individuals are mentally ill and therefore we need to screen for this when it comes to access to guns.  Additionally,  in seeking to craft a profile of a mass shooter, studies seek to look at other variables, such as perhaps childhood trauma, unstable family structure, stress, or neighborhood characteristics.  There are problems in making these claims.

 

The first is a problem of reverse engineering.  By that, we do case studies of mass shooters and create a profile of who they are.  The goal here is to develop a screen and identify possible future shooters.

 

Reverse engineering here is dangerous.  What counts as trauma or unstable family structure, for example, is not well defined.  With that, moving from saying all mass shooters had X traits runs the same risks of stereotyping as do other forms of profiling. Profiling originated in efforts to predict who would hijack airplanes in the 1970s to eventually racially profiling and auto stops in the 1990s and then Muslim profiling after  9/11.

 

Not everyone who has a mental illness is violent or dangerous.  The National Institute of Health estimates that in 2021 57.8 million adults in the US have some form of a mental illness.  At most, only a small fraction are violent.   The American Psychological Association notes that if a person has a mental illness there may be other risk factors that are associated with violence, but mental illness alone is a poor predictor of violence.  Of those with a severe mental illness, 2.9% had committed a previous act of violence within the past four years compared to 0.8% for the general population.  Note the emphasis on severe mental illness, not all forms of mental illness.  For all individuals with all forms of mental health issues, barely one-percent are violent—about the same rate as the general population.

 

Moreover,  a better risk factor tied into violence, according to the APA, is substance abuse.   The Center for Disease Control lists many factors that lead to violent behavior, including substance abuse, emotional problems, family, and neighborhood factors. But here is the problem, not everyone who had childhood trauma, grew up in bad neighborhoods, or faces stress is violent and becomes a mass shooter.    In fact, the vast majority  of these individuals do  not exhibit this behavior.

 

Using case studies with small samples to determine the profile of mass shooters and then making that a predictive tool to inform public policy is highly problematic.  It is not the  problem of the ecological fallacy—extrapolating general population characteristics to make claims about individuals—but instead the atomistic fallacy of making incorrect assumptions about a population based on the traits of some individuals.  This is an inductive problem of rendering false generalizations.  It is also the classic mistake of confusing correlation with causation.  Mental illness may appear to correlate with mass shooters, but bad sampling and faulty  assumptions  render bad social science and predictions. It is using anecdotal and low number case studies to render broader conclusions.

 

Conclusion

            There are several conclusions.  Mass shootings are a problem but relatively insignificant in terms of gun violence.  Handguns are a far bigger problem than assault weapons.  Using mental illness as a predictor of  gun violence or mass shooter profiles is under and over-inclusive of who commits such violence, and the same may be said of other forms of profiling.  At best we may have some factors that are associated with gun violence, but using them as a predictive screen is at best porous.

 

Contrary to Second Amendment defenders, we probably need to address the issue of handgun availability because simply relying on profiles will not address overall gun violence in America.  And contrary to those who focus on assault weapons in mass killings, this fails to capture the broader and more significant problem of gun violence in America  and who commits it.

Improving Minnesota education: What does the evidence say really works?

 This blog originally appeared in the Minnesota Reformer.

Minnesota  has a racial disparities problem. This includes education.

Minnesota Department of Education statistics point to Black and other students of color scoring 30 points or more lower on achievement tests compared to whites.  In 2019 the U.S. Department of Education ranked Minnesota the worst in the nation for racial disparities.  In 2022 WalletHub placed the state second worst in terms of racial equality in education.

Even beyond race, the quality of Minnesota schools is slipping as measured by national standards.

But with the DFL having trifecta control of the House, Senate and the governor’s office, and a $17.5 billion surplus, they vow to “fully fund” education.  This funding aims to pay for special education, free food for students, smaller class sizes and better pay for teachers.

While these proposals are laudable, they raise two questions:

1. What impact will all this new spending have on the quality of schools and educating students?
2.  How will this spending address the racial disparities gap?

So far little has been said in terms of how these issues will be addressed by new spending. Assume for the sake of argument Minnesota is serious and wants to improve student performance and mitigate the disparities gap. What actually works?  What does the evidence show in terms of what can be done to improve education?

There are a wealth of micro factors that impact student learning — such as good curriculum and classroom management — but what types of macro or structural factors impact student learning?  If one has a finite amount of dollars, what is the best way to spend it?  What impacts learning the best?

More money spent on education does improve outcomes. But the money has to be spent correctly. View spending as an opportunity cost or cost-benefit issue. In other words, what type of spending yields the best results in comparison to other expenditures.

First,  teachers probably deserve to be paid more. There are only modest increases in student performances that are associated with increased pay for teachers. Beyond a bachelor's degree, there is also only modest evidence that increasing teachers' credentials improves learning outcomes. Good teaching that excites or stimulates students promotes learning.

Smaller class sizes have some impact on learning, but only in some cases — perhaps grade school — but again the impact is modest compared to other reforms.

Apple has spent a fortune convincing people that spending on technology improves learning, but the evidence fails to show it. Technology, if it makes learning fun, might foster performance, but in itself it does not improve student achievement. For eight years I was editor-in-chief of a teaching and learning journal and never was there a credible article submitted to me that proved more tech toys improved learning.

Beyond ensuring that children are well-fed and not hungry, providing free meals to  students facilitates leaning. For a generation of us who grew up hearing that it is hard to learn when your stomach is empty, the evidence supports that. Additionally, gun violence, especially at schools, impacts student achievement.

But the biggest impacts on student performance have little to do with what happens in the classroom.

First, contrary to claims by many Republicans (though not only Republicans), there is little evidence that school vouchers or charter schools are cost effective ways to improve student performance. In fact, charter schools may also exacerbate segregation, which leads to greater racial learning disparities.

There is little evidence that single-parent households are associated with student achievement.  However, parental involvement, especially in terms of supporting teachers and encouraging their child to learn, positively impacts student achievement.

Increasing learning time is correlated with student learning.  The same is true for year-round schooling, which especially benefits those from low-income families.

What really impacts learning and racial disparities, however, is poverty, especially segregated schools and housing.

Minnesota has a long history of residential segregation which impacts schooling and learning. Overwhelmingly student achievement is correlated with poverty. Children who live in high or concentrated poverty neighborhoods generally do worse in school than those who do not live in them.

Students who come from segregated neighborhoods generally also do worse. Targeting funding to low-income school districts and addressing the disparities in funding between them and better funded districts overall improves student outcomes and addresses education racial disparities perhaps better than any other policy.

What do we learn from all these studies?  If Minnesota really wishes to improve educational quality, it first needs to address the way we fund and structure our schools. We should not fund them based on local property taxes but instead equalize funding across the state.

We should  also consider longer school days, year-round school, and remediating residential segregation. Providing free meals and  addressing school violence can help. We also  need to do more to facilitate family support for their children.

When I took my first teacher’s education class, the professor drew a triangle on the board and labeled the three corners family, community, and education.  The professor said that it takes all three to educate. He was correct. The factors that impact student achievement go well beyond what happens in schools.

Merely spending more money does not improve student achievement. We need to directly address poverty as well as how economic and racial segregation impact student performance.

Unfortunately, none of the proposals that I know of being offered by the DFL or the Republicans do that. In fact, many of the things we are doing, such as charter schools, only make matters worse. To really reform education in Minnesota means going after the way we fund  and organize schools and how money is spent.

Neither party, it seems, is willing to risk alienating suburban voters to do that.

Should the Minnesota DFL fear the electoral reaper? Probably not

 My latest blog is from Minnpost Community Voices, March 2, 2023.

Should the Minnesota DFL fear the electoral reaper? Probably not

Trends suggest that unless the Republicans change their policy positions they are unlikely to be an electoral recipient of voter backlash of DFL policies in 2024 or in the near future.

By David Schultz

The Minnesota DFL has a state government trifecta with control of both legislative chambers and the governorship for the first time in a decade. They are moving one of the most progressive agendas in the nation. Some contend they are overreaching and will pay the political price come 2024. Is that true? The numbers suggest no.

Minnesota is one of 39 states with a one-party legislative trifecta. Of those, 22 are Republican and 17 are Democrat. Across these 39 states, single party control means winner-take-all politics where because of pronounced political polarization, the governing party moves its agenda without real support from the other party.

Minnesota is one of those states. In just a few weeks the DFL has codified abortion rights, adopted anti-discrimination legislation, adopted renewable energy legislation, granted ex-felons voting rights and permitted undocumented individuals to secure driver’s licenses. And we have not even gotten to how they plan on spending the $18 billion surplus on not simply one time programs (of which much of the money represents), but on structural items such as education and rent subsidies that have long term fiscal commitments. “Go big and then go home” seems to be the motto.

Yet some argue the DFL is overreaching.

Their abortion bill goes beyond what Minnesota public opinion seems to support according to critics. Licenses for the undocumented goes too far, and perhaps legalization of recreational marijuana is not a high priority for  suburbanites who want the DFL to address crime and public safety  issues. These bills along with others portend overreach with voter pushback in 2024.

But don’t count on the backlash. It may never happen.

Whether the DFL agenda makes good public policy is not the subject of this commentary. What is the subject is whether the Minnesota Republicans pose a viable challenge to the DFL in 2024 in the nine or so suburban House seats that will determine control of that chamber.

Consider first that the DFL may simply say that moving and securing their agenda while they have the chance is a once in a generation opportunity.  What they are moving in many cases is structural legislation that will be hard to undo in the future. Once many of these laws are in place there is no real viable way to unwind them. Moreover, the DFL is responding to their constituents and if elections mean anything it is translating voter preferences into public policy.

Additionally, only the House is up for election in 2024. Barring unforeseen circumstances, the DFL will still hold the Senate and governorship until 2026 even if they lose the House. There is no serious chance of repeal in the near future. Moreover it will be a presidential election year where turnout will favor Democrats. If Trump were to get the party nomination again – a real possibility – he will hurt the Republican chances to pick up crucial suburban seats where he is very unpopular.

Plus, the Republicans have a problem longer term. They have failed to win statewide office since 2006 and have not won the presidency in Minnesota since 1972. The state GOP party is in disarray and seems to have financial difficulties. The Republican poor showing in the state is reducing the probability that national money will flow to Minnesota, which is looking less and less like a swing state and more like California.

And while a lot can change, the Republicans neither have a farm team from which to recruit a viable statewide candidate in the near future (which Republican has any hope of beating Sen. Amy Klobuchar in 2024?) nor do they have policy positions that seem to resonate with majorities of the Minnesotans. For example, part of the reason the DFL moved its abortion legislation is that Republicans, including  Scott Jensen and Rep. Michelle Fischbach, 7^th District, wanted to ban it. They and Republicans were never willing to compromise on the issue and paid the price. The same can be said on guns and perhaps other items.

But perhaps the most important reason why the DFL don’t fear the electoral reaper is demographics. Demographics are not destiny and the DFL will be sadly mistaken if they think it is. Candidates, messages, and strategy still matter.

While in 2022, 2020, 2018 (excluding Klobuchar), and 2016 the DFL won only 12, 13, 20, and nine counties, it is winning the counties that matter. Five counties in 2022, Dakota, Hennepin, Olmsted, Ramsey and Washington account for nearly 46% of the registered votes and 46.5% of the actual voters. While nearly 70% of those registered to vote cast ballots in the big five counties and in the rest of the state, Democrats are winning these five by an average margin of more than 25%.

Moreover, nationally and in Minnesota rural or non-metro voters cast their ballots for Republicans, with white working class being the core base for that party. While short term Minnesota’s rural counties are growing because of the pandemic and perhaps urban crime, longer term they face a severe population decline. Nationally, white working class are in decline as the nation diversifies, and the same is true in Minnesota. With reapportionment over time, fewer and fewer seats will go to Republican-leaning areas, reducing even the GOP’s regional voice and influence.

The Republican base is literally dying off.  It is gradually being replaced with voters more likely to support the agenda and issues the DFL is supporting. Perhaps they do not endorse it as far reaching as the DFL is pushing the policy agenda right now. But trends suggest that unless the Republicans change their policy positions they are unlikely to be an electoral recipient of voter backlash in 2024 or in the near future.

 

Hamline University and the Lessons of Crisis Management: Ten Rules to Follow

 

Universities are businesses.  Like any business they occasionally have to engage in crisis management,

responding to threats, including those to their brand if not their very existence.

               Hamline University is at that point now.  Locally and nationally its reputation is severely damaged. It is at the center of cultural wars.  I receive reports from colleagues overseas in Eastern Europe where I have taught that  my school is now used as a tool of political propaganda in terms of how in America free speech is squashed. Hamline faculty voted to demand its  president to resign.  The University is in a full-blown crisis. The question is what to do?

               I taught in a business school for fourteen years and did corporate, non-profit, and government consulting.  Like others, I often used case studies as teaching tools, seeking to distill lessons regarding what works or not in terms of crisis management.  What can Hamline learn as it wrestles with its crisis?

               Business crises come in all shapes and sizes.  They can be self-inflicted, such as when Volkswagen was caught fabricating emissions testing, or in 1985 when Coca Cola rolled out New Coke in what is arguably the worst market blunder of all time.  The self-infliction can be the result of bad leadership, governance, or hubris such as when  Bernie Ebbers and WorldCom or Kenneth Lay and Enron began cooking their financial books to inflate corporate earnings and  preserve executive bonuses.  Both the 2005 documentary The Smartest Guys in the Room and Cynthia Cooper’s Extraordinary Circumstances—arguably the best book ever on corporate misbehavior , greed, and arrogance—chronicle these stories.

               But business crises can be external.  Nokia’s failure to adapt to changing cellphone market conditions took a business at the top of its game to  one destroyed by Apple and Samsung.  The same is true of Blackberry, which at one point controlled more than 40% of the cellular market.  The 1982 post-market tampering with Tylenol was an unforeseen threat to the Johnson & Johnson brand, but it was and remains a perfect case study in how to navigate a crisis and recover from it. .  Conversely,  Ford’s  1970s coverup of the exploding Pinto and cost-benefit decision on its refusal to change product design to save lives in order to make money is a case study in failure.            

               One can only hope universities and  their leadership can learn from business case studies.  Repeated sports and recruiting scandals at schools pose problems, but often not to the degree of threatening the brand.  In the 1990s the University of Minnesota had a major basketball cheating scandal but it did not challenge or threaten the school’s brand.  The recent decision by its Board of Regents to allow its president Joan Gabel to serve on the Securian Board of Directors is another major misstep, but not an existential brand threat.

               But Hamline faces the greatest brand and existential crisis it has ever faced.  I assess no blame and offer no specific policy recommendations on what to do. But nonetheless based on what business case studies teach us, there are several things that need to be done in charting a path forward.  Here are ten rules it needs to consider.

               First, recognize the problem.  Don’t equivocate  deny the problem.  It will not go away over time but instead fester and produce a long-term corrosive impact on the brand.

Two, be honest and transparent.  J&J was fully transparent and open in terms of what it knew about the  adulterated Tylenol.  Its public engagement and willingness to talk built trust with the public and its consumers.  When faced with a crisis many businesses hunker down and go silent.  This only furthers distrust, encourages rumors, and leads many wondering where is the leadership?

               Three, admit mistakes.  Don’t try to cover   up and don’t try to pretty up a mistake.  We all want to hear genuine apologies and recognition that mistakes were made.

               Four, don't speak in doubletalk.  Businesses like to hire public relations consultants and draft press releases written in corporate prose that say a lot without saying anything.  The public sees through this in a second and it does nothing to build credibility.

               Five, act.  Do something.  Yes, gather appropriate information but do not engage in paralysis by analysis.  Too many businesses face a crisis by  being afraid to act for fear of making the wrong choice. If there is a house on fire don’t stand around and debate what is the best way to extinguish it. At some point pour water on it and work from there.

               Six,  address the short-term crisis first.  Solve it first and then worry about a longer-term solution.  A short-term threat to a brand needs to be immediately addressed, allowing for a longer-term  solution when more information can be obtained, and the emotion of the immediate crisis is past.

Seven, identify the core mission and values of your organization.  What are they, don they make sense, do they need to be changed. These values provide the guideposts for how you will resolve short and long term your  crisis and reposition  your business for the future.

Eight, identity, consult, and listen to stakeholders.  For businesses they are workers, customers , and potential customers.  For universities, they are faculty, students, alumni, and donors.  But remember—students are not customers—they are learners, and their relationship is very different from that of a customer who theoretically is always right.

Nine, separate the interests of the organization from its leadership.  So many crises and mistakes occur when leaders are unable to separate out what is in the best interests of the organization versus what is in their best interests.  Organizational interests come  first, not self-interest.

Ten.  Learn from mistakes.  The best businesses and corporations seek to identify the processes and structures that produced bad decisions.  Continuous learning and changes to organizational decision-making structures are central to improving business.  This was the core of General Electric’s use of Six Sigma to improve its business.

               As Hamline looks forward to solving its current problems, I hope it learns the lessons of what other entities faced and  follows these ten rules here.

George Santos opens a window to the ethics of political lying

 My latest in the Hill.

New York Congressman George Santos (R-N.Y.), who faces several investigations, is not the first candidate for office accused of lying, yet many seem to act as if he is. The question is whether such lying is ethically, if not legally, wrong and why, and whether there should be laws that make such behavior illegal. For the good of democracy, political lying should not be protected by the First Amendment; there should be sanctions for it.

Lying is supposed to be wrong. We were all taught that. But where is the line between lying and hyping? Nearly half of job resumes have at least one falsehood because people pad their work history and accomplishments to impress potential employers. Advertisers stretch the truth to convince us to buy products. Despite indignation, our society seems to condone some lying.

Unfortunately, American history is rife with candidates for office lying. The lies take different forms. First, they have lied about political or policy facts such as the state of the economy, crime rates, or foreign policy threats. Or they lie about the records or positions of opponents. Sometimes they lie about themselves or their own resumes.

Not all political lies seem to be of the same type. Lies about oneself are arguably the worst.  They speak to the character and fitness of a candidate for office. They are the basis for how most people judge candidates. We assume that honest people will run for office and that, if they are elected, we can trust their judgment to make decisions on a range of issues about which most of us have limited information.

Nonetheless, all lies pose a problem for politics and, ultimately, democracy.

American politics, including campaigns and elections, presupposes or depends upon truth-telling in order for it to operate appropriately. Elections are competitive contests where candidates put themselves and positions forth for voters to decide. Based on what candidates do and say, the public evaluates the merits of resumes and policy positions of those seeking office. Elections are marketplaces of ideas competing for voter approval.

This marketplace fails to work when candidates lie, especially about themselves. There are parallels to other institutions in society where truth-telling is assumed and enforced. 

The adversarial process in court, for example, works only because attorneys are required to act truthfully in presenting evidence. Juries can reach a fair verdict if they are presented with evidence and information they assume is true. Jurors may have to assess witness credibility and sort out the facts, but in the end they do not have to ask whether the facts they were presented are true.

The economic marketplace works only because of a belief in truthful economic activity. Yes, some might ascribe to the laissez-faire attitude of “let the buyer” decide. But most think that  outright consumer fraud or deception is wrong and that it distorts the marketplace. We presuppose all buyers and sellers will tell the truth and not benefit from lies or deception. This is why, in part, insider stock trading is wrong. Fair play and truth-telling is also behind the rules on intellectual  property.

In school, grades work as a fair measure of merit only if one presupposes that students are not cheating. Teachers suppose students are submitting their own work and assign grades based on it.  Thus, there are rules against plagiarism.

Connecting these three examples is the concept of character. Courts, markets and schools rely on trust and reciprocity, and both are related to honesty.

Elections are something like the adversarial process in court, business marketplaces, and grades in school. Candidates for office are like facts presented in court, products or goods for sale, or papers or exams submitted for grades. Political campaigns both cannot ask voters to decide which policies and candidates they like and ask at the same time what is truthful. At some point, there must be a baseline on what is considered true or false.  

Democracy rests on truth and knowledge. The classic First Amendment-defense of a free press and free speech is that the public is entitled to truthful information in order to be able to vote, make informed decisions, and hold the government accountable. Take away the presumption of truth-telling and, simply put, voters and democracy cannot do the job.

On the anniversary of Jan. 6, misinformation poses a greater danger than ever.

What George Santos allegedly did is an extreme version of what other candidates have done. He appears to have lied about who he was and what he represented. He gave voters, perhaps, a false picture of himself. If that’s true, it was resume fraud at its worst, false advertising, and arguably plagiarism all rolled into one. In an era when America has witnessed repeated lies about stolen elections and other matters, perhaps the public is finally disgusted. We need to rethink the outer boundaries of political lying.

Unfortunately, the Supreme Court seems to think that the First Amendment protects lying and has enabled such behavior. The court struck down laws aimed at prosecuting stolen or false military valor and state laws prosecuting political lies. It is incredulous that the constitutional Framers ever would have endorsed the idea of a “constitutional right to lie.” Instead of focusing on the speaker, the law should focus on the rights of the public and democracy to receive truthful information. Until we do that, there will be more candidates and officeholders who lie.

Maybe Nixon Should have Skipped China

 My latest in the International Policy Digest.

More than fifty years ago President Nixon visited China. At the time, the visit was heralded as a major and smart breakthrough in U.S. foreign policy, realpolitik, and international politics. But perhaps in hindsight the visit and what transpired subsequently condemn the decision as perhaps not so good. It laid the roots for contemporary politics that features an ascendant China perhaps on the verge of invading Taiwan and an emboldened Russia invading Ukraine, and both countries challenging the global order rules in place since the Second World War.

Richard Nixon was a classic anti-communist cold warrior. He cut his teeth on the House Un-American Activities Committee persecuting communists both real and imagined. He was also a conservative. In 1972 Nixon was president. The Vietnam War was on, and the USSR and the U.S. were engaged in a costly Cold War rivalry. America officially did not diplomatically recognize the People’s Republic of China. It viewed the then-corrupt and anti-democratic Republic of China (Taiwan) and the Kuomintang as the legitimate Chinese government. This was true even though in 1971, Taiwan was expelled from the UN and its seat was given to the People’s Republic. The U.S. had mutual defense treaties with Taiwan. And Nixon was up for re-election.

Secret negotiations involving Henry Kissinger and Chinese officials produced the February 1972 Nixon visit. For many, especially conservatives and Nixon supporters, their mantra was “Only Nixon could have visited China.” For them, his impeccable conservative and anti-communist credentials made him uniquely capable of this visit.

Nixon’s visit to China and his meeting with Mao Zedong and Zhou Enlai was seen as a major coup. Fostering better relations with China served U.S. interests in countering Soviet influence, and for China, it allowed it to play the U.S. off of the Russians. The opening to China also may have facilitated the end of the Vietnam War, opened its markets to U.S. goods, and fostered significant cultural exchanges between the two countries.

Yet during his visit, Mao and Chinese officials insisted on what would become the “one China” policy. The People’s Republic viewed Taiwan as within its sovereign control, desiring eventual reunification. The U.S. and China agreed to put aside this question about Taiwan’s status during the visit. In the Shanghai Communiqué, the U.S. acknowledged that “all Chinese on either side of the Taiwan Strait [but] maintain there is but one China.” In effect, to forge relations with the People’s Republic, the U.S. was unwilling to unequivocally affirm the sovereignty of Taiwan despite the fact it was an ally and international law spoke to the importance of state borders.

Eventually, though, China had its way with the U.S. and the world. In 1980, the U.S. canceled its defense treaty with Taiwan, and with that formally recognized the People’s Republic as the sole China. With this, the fall of the Berlin Wall in 1989, and the breakup of the USSR, China became the major alternative to the U.S.

Yet even at this point, China was not a global superpower. Its economy was still far smaller than the U.S. but put into motion in the 1970s by Deng Xiaoping were the market reforms that would transform China. The U.S., hoping that trade with China and its expanded role in a global economy would eventually democratize it, pushed under Bill Clinton for its membership in the World Trade Organization and other international organizations. For the U.S., market reforms and global trade held the key to containing and transforming China into a stable partner if not a democracy.

But none of this worked out as planned. As recently pointed out in Mao and Markets, the West underestimated the cultural influence of communism and Mao’s teachings upon the Chinese brand of business. The U.S. also yet again overlooked the importance of political culture and national interests in another country. China prospered with business enterprises having a distinct Mao accent.

Fast forward to the present. China now approaches the U.S. in its GDP. It also aims to build an alternative world order premised not on democracy and human rights, but on its vision of the world. The Belt and Road Initiative is its way to expand its economic influence. And now China is amassing a nuclear and military might to support its foreign policy initiatives. It bullies its neighbors, it has not democratized, and it threatens the sovereignty of an isolated Taiwan.

Now with Russia ostracized by much of the world over its invasion of Ukraine, it and China grow ever closer.

What might have looked like a good move by Kissinger and Nixon in 1972 now looks less promising. Hope for rapprochement with China, its democratization, and the triangulation to check Russia are fantasies. China stands as the rival superpower to the U.S. Nixon’s visit to China, especially with the agreements that took place then, set in place the seeds of a current world order threatening U.S. interests and global democracy.

There is an apocryphal story that when Nixon visited China either he or Kissinger tried to act smart, and they asked Mao or Zhou Enlai: “What impact do you think the French Revolution has had on the world?” The response came back: “It is too soon to tell.” Perhaps now enough time has passed to ask whether the Nixon visit, what they agreed to, and the forces unleashed, as a result, were beneficial to the U.S. and the world order.