Friday, January 19, 2018

Friday music: If you don't love jazz, you hate America

Not pure jazz, but here's Trombone Shorty, "On Your Way Down," from Backatown.

Shutdown threats and non-germane policy demands

As I wrote the other day, government shutdown showdowns are blame games.  Whichever side takes the public relations hit has to back down.  Historically, the GOP doesn't have a good record with this.  Both Bill Clinton and Barack Obama "won" their shutdown fights in 1995/6 and 2013.  Clinton won, essentially, because Gingrich was demanding cuts to Medicare as part of the budget in 1995, and that was unpopular.  Clinton just had the more popular position in terms of public policy.  The 2013 shutdown fight was more complicated, and was based around the general negotiating tactic that the Republican Party adopted after the 2010 election.

In 2010, the Republican Party won control of the House of Representatives, but not the Senate (and obviously, not the White House).  They decided that their method of winning policy fights would be to take hostages.  Mitch McConnell even admitted as much, referring to the debt ceiling as, "a hostage that's worth ransoming."  This was nuts.  The Treasury needed the authority to issue bonds in order to cover the spending that Congress had already ordered, and without the authority to do so, we risked worldwide financial calamity.  Republicans were demanding policy concessions in order to not tank the economy of every country on the planet.  At least both things related to the spending, though...  Obama caved in 2011 and gave the GOP the 2011 Budget Control Act, but eventually he wised up on the debt ceiling and stopped paying ransom.

In 2013, though, Senate pied piper Ted Cruz led a bunch of House rats (the Freedom Caucus, mostly) to their demise.  He told them that they should demand a government shutdown in exchange for a delay in implementation of Obamacare, or possibly defunding, or possibly, something, 'cuz... OBAMACARE!!!!  Yeah, that didn't work out so well.  The GOP had to cave.  Boehner and McConnell knew that would be the result.  They always hated Ted Cruz.  The point, for Cruz, was always that Boehner and McConnell would cave, and that Cruz would be able to call them cuckservatives for doing so.  He really is a shitbag.  This is kind of the critical story, though, because the 2013 shutdown failed spectacularly.  The GOP was demanding completely unrelated concessions in exchange for the continued operation of government.  It made them look like assholes.  The way you win a shutdown is by making the other side look like assholes.  That's hard to do when Ted Cruz is leading your side's charge...  That's also hard to do when your demand is unrelated to the primary issue at hand-- the continued operation of government.

So, here we are.  The House passed a continuing resolution.  Why a continuing resolution?  Because actual appropriations bills are soooo 20th century!  Whether or not we get a shutdown now depends on the Senate, and specifically, Senate Democrats.  PredictIt right now puts the odds at just below a coin toss.  The problem is that right now, their demand is DACA, and DACA is dead.  More than that, it is not germane to the shutdown itself.

If the Senate Democrats shut down the government over DACA, they are pulling a Ted Cruz.  Will they?  Odds right now are slightly against it, but at this point, things are uncertain.  If they do go for a shutdown, what happens?  Part of Ted Cruz's problem was that he is Ted Cruz.  It is hard to look like the bad guy when your adversary is Ted Cruz.

But you know who managed that task?  Trump.  By calling Cruz's wife ugly and accusing his father of participating in the Kennedy assassination.  Of course, Ted Cruz managed to undercut any sympathy anyone might have for him by allowing himself to be brought to heel, but this sort of makes an important point about the dynamic here and the underlying question.

Yes, if the Senate Democrats shut down the government over DACA, they are doing what Republicans used to do.  Same fuckin' thing.  Hostage-taking.  The thing that puts them in a somewhat better position is that their adversary is... Donald Trump.

Remember, though, that in 1995, when Newt Gingrich shut down the government, Bill Clinton was considered politically inept.  His first two years consisted of nothing but bumbling.  A lot of people look back on Clinton as a political operator of rare gift, but in 1995, that wasn't what people thought of him.

Will Trump show some heretofore unseen stable-genius-ness?  Ummm... not likely.  That isn't what the Montreal Cognitive Assessment assessed.  However, don't assume you know how this plays out.  If the Senate Democrats shut down the government here, they are the Ted Cruz of this situation, regardless of what you think of the policies they are pursuing, and Gingrich wrote off Clinton's ability to beat him.

Right now, I have no idea how this plays out.

Thursday, January 18, 2018

Bitcoin is bullshit, Part XIII: Ideology and asset pricing

Screw it.  We have no idea what is happening with the potential shutdown, and bitcoin just had another massive price plunge, so I'm doing another bitcoin rant.

When I left off with Part XII, I commented on the relationship between currency preferences and ideology, arguing that bitcoin-bugs are basically just goldbugs, updated for the computer era, and that we should be aware of the ideological history of currency preferences.  When conducting transactions, though, most consumers just want to conduct transactions smoothly and easily, so while bitcoin-bugs will pay transaction costs for the ideological satisfaction of using their favorite currency, most consumers won't.

As has been clear for a long time, the market fluctuations in the price of bitcoin are driven, not by currency traders converging toward the proper exchange rate between dollars and bitcoin, but by market speculators buying bitcoin at an inflated price hoping to turn around and sell it to a bigger sucker at an even higher price because for a while, that strategy was successful.

You just can't keep that going forever.  That plan, for the housing market, is what crashed the entire world economy back in 2007 and 2008, in case anyone forgot.  Fortunately, not many people actually own bitcoin or get involved in this scheme, so bitcoin can't crash much of anything, but... remember 2007-8.  This is a stupid plan.  House flipping made some people money.  Until the housing market crashed and took the world economy with it.

There came a point at which the speculators and flippers got out of the market.  For a while, anyway.  Real estate is a tempting market for scammers and con artists, and it always will be.  Just sayin'...  Sometimes, when an asset bubble bursts, there are longer term consequences.  Consider the tech bubble from the 1990s and early 2000s.  There were a bunch of companies that pretty much did jack fucking shit.  But, venture capitalists and market speculators threw money at any company that put a ".com" in their names because... well, because.  People were dropping out of college to earn six-figure salaries to build web pages.  Yes, really.

That couldn't last.  The companies that had no business plans just went belly-up and their stock collapsed.  Since then, the tech sector has done quite well, market-wise, and investors haven't been willing to invest in tech companies that didn't have business plans.  I guess they learned that lesson.

Once the speculators got out of the market, assets wound up being priced appropriately.  For a lot of those companies, that meant... well, they couldn't give stock away.

The point is that markets need to kick the damned speculators out in order for assets to be priced appropriately.  The speculators are still driving things in the bitcoin market, but once they're gone, it won't be quite like the tech bubble bursting with bitcoin.  Why?  Ideology.  That, and criminals.

Remember that there are a couple of types of people drawn to bitcoin:  techno-libertarians who are just making an ideological statement, hipsters who just want to be different (fuck you, I'm not that kind of hipster), and crooks-- people who are either moving illegal goods, or just avoiding taxes.  They'll still use cryptocurrencies.  Maybe not bitcoin.  Hell, the hipsters will probably prefer Dogecoin because it's even more ironic.  Still, that's a market.

What you may see now in the analysis is a bunch of people doing conventional stock analysis of whether or not bitcoin's price has hit important "technical" levels that indicate either stabilization or further decline.  That completely misses the point because bitcoin is not an asset backed by anything.  They can't even use the kind of analysis that would usually be done for currencies.  Bitcoin is way too volatile, which as I keep reminding you, makes it useless as currency anyway.  Speculators are freaking out because of rapid price drops.  They should.  Bitcoin could climb again.  Or drop more.  There isn't history for anything quite like bitcoin, and the people involved in this particular market speculation have no clue what they are doing.  Obviously.  So, a lot of them are losing a lot of money, unnecessarily.

At some point, though, they will get sick of losing money on that volatility, and leave the bitcoin market.  When they do, there won't be the highs anymore, because the market highs are driven by speculators.  Where will it settle?  Wherever the hipsters, techno-libertarians and crooks want it to settle.  We have no clue where that is, but if I had to guess based on empirical data, some point around where it was before all of the stupid market speculators jumped on board.  Pick a point representing that, and there's your price.

Remember, though, a currency doesn't work as currency unless it is a stable store of value.  Any movement, up or down, and it is useless as currency to one party in any exchange, and since bitcoin has no value as anything other than currency, its movement itself makes bitcoin a joke.

Bitcoin is bullshit.

I think I have probably covered most of what I want to cover here.  At some point soon, I'll wrap this up, do a summary and compile the links.  Besides, with the shutdown possibility, and politics ramping up again, I don't need to keep stalling.  Perhaps I'll come back to this, but look for a wrap-up post on this soon.

Wednesday, January 17, 2018

The chances of a government shutdown

And heeeere we go again...

While we have been focused on shithole-gate,* there is something of more substantive importance going on, but it is actually related to the whole-shithole/house thing.  Appropriations are about to run out again.  When federal agencies run out of money, they can't pay their employees, who get furloughed, starting with the least-essential employees.  The longer it goes on, the worse it gets.  And we've got through the week to see how another one of these stupid fights shakes out.

No, this isn't normal for unified government.  It is semi-normal for divided government, which tells you something.  Specifically, the Republican Party is a mess.  Paul Ryan can't manage the Freedom Caucus, just as John Boehner couldn't, so the GOP is often dependent on Nancy Pelosi to provide Democratic votes for must-pass legislation.  In the Senate, the GOP isn't using budget reconciliation, so their bills can be filibustered, which means they need to peel off at least nine Democrats, presuming they keep all GOPers in line, but that includes "the Drama Club" (Rand Paul, Ted Cruz, Mike Lee and Ron Johnson).  Frankly, they'll probably have an easier time winning Doug Jones's vote than they would have with Roy Moore, although I suppose they could have offered him a Senate page to seal the deal...

Shutdown fights in divided government have historically been "won" by the president.  Bill Clinton forced Newt Gingrich to cave in 1995 and 1996, and Barack Obama forced John Boehner and Mitch McConnell to cave in 2013, although Boehner and McConnell both knew it would happen, and neither wanted to fight that fight.  After that shutdown, McConnell said, "there is no education in the second kick of the mule.  The first kick was in 1995."  Why did they do it?  They felt their hands were forced by assholes like Ted Cruz, as part of a stunt building towards his presidential campaign.  See what that got him...

Anyway, though, we don't have any data on extended shutdown fights during unified government.  'Cuz they don't fucking happen.  Shutdown fights are blame games.  Whoever takes the blame publicly, by looking more unreasonable, caves.  In 1995, Gingrich looked like an asshole, because he is an asshole, and the position of the GOP came across as more unreasonable, so they had to cave.  That was the main dynamic in 2013 too.  It is all about public perception.  Whichever side takes the public relations hit caves.

So, in unified government, what happens?  First, it is really hard to avoid the perception that the GOP isn't "responsible."  Not impossible, just hard.  After all, if a shutdown happens, which chamber of Congress fails to pass appropriations?  If the problem is that the House can't pass anything, blaming Nancy Pelosi is pretty fucking ludicrous.  When Pelosi was Speaker, she never needed Boehner for must-pass legislation.  If the Freedom Caucus and the Opposable Thumb caucus can't agree, and that's what causes a shutdown, the Democrats don't get blamed.

What about the Senate?  There it gets trickier.  It is highly unlikely that a bipartisan bill passes the House, but fails in the Senate.  But, what if the GOP holds together in the House, and passes something with no Democratic support there, and the bill can't get through a Democratic filibuster in the Senate?  Does a shutdown get blamed on the GOP just 'cuz they're the majority, or on the Democrats for filibustering?  Now we're in public relations territory.

You win this public relations fight by looking reasonable.  The problem for the GOP is that their most visible figure is... Donald Trump, who goes out of his way to be Donald Trump.  The Senate was negotiating DACA, and after first telling the group that he would sign anything, Trump shut down the bipartisan compromise framework, then opened his shithole, and finally told his flunkies to lie on his behalf, and claim that he never said, "shithole."  Personally, I don't give a flying fuck whether it was "shithole" or "shithouse," and neither do any of the Democrats.  Trump's behavior had two effects.  First, it undercut anything like good faith negotiation.  Second, it undercut his party's attempt to look like the reasonable party.

The Democrats' original plan was to demand a DACA deal in exchange for avoiding a shutdown.  As I keep writing, there won't be a DACA deal.  That was never in the cards.  What happens, though, if Democrats force a shutdown over it?

They can, because Republicans aren't using reconciliation in the Senate.  I don't know what happens then.  There is no obvious connection between DACA and the continued operation of government, so it winds up looking a lot like hostage-taking.  The GOP did that a lot during Obama's administration, and it didn't go over well for them.  They lost the 2013 shutdown.  Badly.

Of course, Trump isn't Obama.  Obama was calm and composed.  Not much of a tactical or strategic brain in his head, but he was calm.  Trump is...

Well, let's remember what the Montreal Cognitive Assessment does and does not assess.  If a shutdown happens, he'll open his shithole, and even if his party has a structural advantage, he'll undercut it by being Trump.

That said, Democrats don't have much of a hand to play here, and they don't have a history of playing their hand aggressively.  At PredictIt right now, they're putting the odds of a shutdown at right around 1 in 4.  Sounds about right to me, but hey...  with Trump, who knows?  Shit happens.  In houses and holes, whatever Tom Cotton and David Perdue say...


*While I obviously detest Trump, as a George Carlin fan, I revel in the fact that he forces the political world to confront some of its more stupid linguistic rules.  Some of my "profanity" might be considered gratuitous by small-minded people, but when I write, "shithole,"... nope!  I actually need to write, "shithole!"  Or possibly, "shithouse," but same difference...

Tuesday, January 16, 2018

Jeff Flake and Republican congressional support for Trump

Retiring Senator Jeff Flake (R-AZ) is no fan of Trump.  He has drawn a connection between Trump's constant attacks on the press for their criticism of him and Stalin's opposition to a free press.

Let's get the facts straight here.  Donald Trump does not believe in the concept of a free press.  He wants to prevent the press from criticizing him.  If he could imprison and execute anyone who criticizes him, he would.  I don't think anyone can seriously challenge that, given what we have observed from Trump.  He idolizes Vladimir Putin, Kim Jong Un, Saddam Hussein... And he does so precisely because of their authoritarianism.  This is on record, and not a debatable point.

What he has done, though, is talk endless shit.  His lawyer has filed a suit about Fire and Fury, but that ain't goin' nowhere.  We can ask about the blocking of AT&T's acquisition of Time Warner, but at the end of the day, what Trump has done is talk shit.  And holes.  Shitholes!  Tom Cotton and David Perdue are fuckin' liars, is what I guess I'm trying to say here.  At least Lindsey Graham isn't going along with the lie.

Anyway, there is a great deal of damage that can be done by trash-talking because there are a lot of people stupid enough to believe Trump.  Information is necessary.  The more Trump undercuts people's willingness to accept information, the more democracy is undercut.  Let's throw in that Woodrow Wilson quote here.  Yeah, Wilson was as racist, or maybe even more racist than Trump, but the quote is relevant.

America is the place where you cannot kill your government by killing the men who conduct it.  The only way you can kill government in America is by making the men and women of America forget how to govern, and nobody can do that.

Um... beg to differ, there, Woody.  Donny-boy is doing a pretty good job making the men and women of America forget how to govern.  If people decide that there are no sources of information, then they have no information with which to make decisions.  And we're all fucked.  Yes, you can make the men and women of America forget how to govern.  To borrow a phrase from Upton Sinclair, it can happen here.

It hasn't, but it can.  Without information.

But Trump hasn't done to the press what Stalin did.  This is not the the crushing of democracy.  This is the slow erosion of democracy.

Yay?

Jeff Flake is an anomaly within the GOP, though, for saying anything at all negative about Trump.  The obvious point is the right one.  He is retiring.

There is scholarly research on the role of sincerity in legislative behavior.  How much of what legislators do is because they are being pressured by electoral or other considerations, and how much is because it is what they really think is right?  Look at retiring legislators.  Once legislators decide to retire, they can do whatever the fuck they want.  So, they will reveal their sincere preferences.  This line of research began with John R. Lott, and has been picked up by several co-authers with Lott, as well as Lawrence Rothenberg & Mitchell Sanders, and a bunch of others, but point being, there's a... lot.  Get it?  Anyway, elections actually kind of suck.  They make legislators... insincere.

The retiring legislators are the ones who have been going after Trump.  Mostly.  Sort-of.  Flake talks a lot of shit about Trump.  Corker, in the past, talked a lot of shit about Trump, but in case you haven't noticed, he backed off of that right around the passage of the tax bill, when he caved on his bullshit anti-deficit rhetoric (which, hey, I called it and should never have questioned my original judgment).  In fact, Flake made noises about not liking deficits too, and he also caved.  What did Flake get?  A "seat at the table" for DACA negotiations.  You know-- the ones that just got flushed down Trump's shithole!  Translation:





Corker and Flake caved because they are cowardly, weak and foolish.  And they occasionally lash out in ways that are empty, feckless and laughable.

Do they like Trump?  No.  Very few congressional Republicans actually like him.  But even in retirement, they are mostly cowed by him.

The analogy that I have regularly made about Trump and the GOP is that Trump has an electoral bomb strapped to him with a dead-man trigger, and the entire Republican Party is chained to him.  If he goes down, he takes the entire party with him, so the party feels compelled to support him no matter what.  If they don't, the party relives the sequence of the 1974 and 1976 elections, in which the party suffered a series of backlashes after the Watergate scandal, resulting in a massive Democratic landslide (a real one...) in Congress, and the election of "history's greatest monster."

The interesting question is how much this matters to retiring legislators like Flake and Corker?  Are they concerned about the party after they go?  Maybe!  Or, maybe there's something else.  The other analogy I have made to the relationship between Trump and his party is "learned helplessness."  Donald Trump is an abuser.  This isn't an analogy.  He brags about sexual assault.  He does so many horrible things that we, as a political culture, tend to move on to the next outrage, and we are currently focused on shitholegate, but really, we shouldn't have moved on from the fact that he brags about getting away with rape.  He is an abuser.  He enjoys bullying people, and when people have been bullied for too long within a relationship, the psychological effect is often to decide that there is nothing they can do about it.  So, they give up.

A lot of congressional Republicans have simply given up and decided that they must accept fealty to Donald Trump.  They simply don't think they can fight him, so they submit to him, the way that abuse victims submit to abusers.  Paul Ryan, Mitch McConnell... they are truly afraid of Donald Trump.  And they should be!  Within the Republican Party, if Trump decided to go to war with any one of them, he would destroy them.

This brings back the concept of the collective action problem, which I have addressed multiple times in this context, but the point is that Trump has brought the GOP to heel.  Note that even Lindsey Graham is being round-about in backing Dick Durbin.  He isn't just flat-out saying, "Durbin is right, Trump said it, and now Trump, Cotton and Perdue are lying."

If he were retiring, he might.  Then again, maybe not.  Even in retirement, Corker and Flake were malleable.

Tuesday music: If you only listen to American music, you just suck

Ok, so I bashed Norwegian music in Friday's music post.  I believe I have one Norwegian musician in my collection:  this guy.  Bjørn Berge.  Why?  Because he doesn't play Norwegian music.  He's a blues musician.  You know, that African-American music style?  Here's "Look On Yonder Wall," from Stringmachine.


Monday, January 15, 2018

Presidential bargaining for dummies, I mean, stable geniuses

Last week, I predicted that nothing would happen on DACA.  However, my original prediction was that the House Freedom Caucus would kill any legislative deal to restore it.  Then... Trump did his Trump thing, and yesterday, he essentially killed any further negotiations by tweeting (of course) that he didn't think there would be a deal because Democrats didn't want one.

Scholarly reference time.  Tim Groseclose and Nolan McCarty, "The Politics of Blame: Bargaining Before an Audience," American Journal of Political Science Vol. 45 No. 1, January 2001, pp. 100-119.  Sorry, I can't give you an ungated link, but if you are on an academic terminal, this will work.

Short version:  Legislative failure can happen if you have an uninformed audience, where the president is trying to appear moderate, but Congress traps the president into a veto, making the president look more extreme by writing a bill, intentionally, that they know the president can't sign.

Within the model, though, Congress doesn't want a policy to pass.  Their goal is to make the president look like an extremist.  And the president doesn't reject deals needlessly.

Enter the Stable Genius!

First, Trump says he'll sign any deal.  Then, he rejects a bipartisan deal framework put together by the Senate's "gang of six."  Why?  'Cuz...  Was that deal veto-bait?  No.  Would the deal have passed the House?  No.  The Freedom Caucus would have killed it there.  What did he have to gain by rejecting it, then?  ...

Trump currently wants to blame Democrats for this falling apart, which... 

That's not how this works.  DACA was a Democratic policy, enacted through executive action by Obama.  Republicans challenged it as "executive overreach," going so far as to call it unconstitutional.  Trump reversed DACA personally, then personally rejected the bipartisan compromise worked out by the Senate's gang of six.  He can't avoid the blame for killing DACA.

The funny thing is, if Trump wanted to do that, he could have!  He could have let the House Freedom Caucus kill the gang of six plan!  But... that's not how our Stable Genius does things.  When Trump is the guy who walks away from negotiations after a compromise is worked out (sort of, anyway), on a policy that he already personally killed, it is hard to shift blame.  What's going on?

Groseclose & McCarty's model is about the drive to appear moderate.  Remember that dust-up during the recorded meeting when Trump said he'd sign anything, even a clean DACA bill?  His party freaked the fuck out.  Trump's goal is not to appear moderate.

Really, this has all been a sham.  DACA never had a chance.  As I said last week, I expected the Freedom Caucus to kill it in the House.  Then, Trump opened his shithole...

Monday morning blues: If you don't love blues, you hate America

Big Joe Williams, "The Death of Dr. Martin Luther King," from Shake Your Boogie.


Sunday, January 14, 2018

Bitcoin is bullshit, Part XII: Currency and ideology

When I left off with Part XI, I noted that the bitcoin bubble is distinct from other kinds of asset bubbles because a significant portion of those who either hold bitcoin or may later buy it do so, not merely out of true belief in its potential to rise in value, but as an ideological statement.  Ideological commitment may drive a belief that bitcoin will either hold its value, or rise in value, but while plenty of people bought worthless tech stocks in the mid-to-late 90s just thinking they could turn around and sell them to bigger suckers later, those speculators had no ideological commitment to the tech stocks they were buying.  That makes regular, old-fashioned market speculators different from bitcoin true believers.  And the existence of bitcoin true believers makes the bitcoin bubble different from the tech bubble.

This is an odd thing.  Do you really care what currency you use?  I... don't.  I have traveled to other countries, and in so doing, used other currencies.  I didn't enjoy paying fees to convert dollars to euros, for example, but the fact of paying for things in euros didn't feel better or worse to me.  I could not possibly have cared less about the units of currency themselves.

Economists have studied money as a concept.  The discipline isn't just about intersections of supply and demand curves, or whatever else you got in that shitty high school class through which you slept.  (Or am I just projecting?)  One of the interesting aspects of techie types is that they sort of want economic policy, and policy more generally, to be made in a technocratic way.  It doesn't work that way.  Too many disputes are unclear, and dependent on value judgments, even within economics.  Consider the Phillips Curve, proposing an inverse relationship between unemployment and inflation.  You can have low unemployment or low inflation, but not both.  Which would you prefer?  Make your choice.  Question the first:  Do you believe the Phillips curve?  Question the second:  If you have to make a choice, which choice do you make?

The data are somewhat unclear on the first question.  We had a period of stagflation in the 1970s, with high unemployment and high inflation, which the Phillips Curve suggested couldn't happen.  To followers of Milton Friedman, this meant the Phillips Curve was bullshit.  To his detractors, it was a weird anomaly that hasn't repeated.  But, even if you throw out that weird period of stagflation, do you prefer low unemployment or low inflation, if you accept that that is the tradeoff?  That's a value judgment.  Technocratic assessments can't answer that question.  This is where the fantasies of techies who want "ideology" out of economics fall by the wayside.  Ideology will always be a part of economics.  Would you rather a few people suffer a lot under high unemployment, or everyone suffer somewhat with high inflation?  That's an ideological question, and your answer will depend on the extend to which you blame the unemployed for their own situations, etc.  Ideology.

The thing is, ideology pops up in weird places where it shouldn't.  Fiat currency.  This is a solved problem.  I have addressed this throughout the series, but this isn't something that is really debatable anymore in economics.  The meaning of 70s stagflation?  Sure.  That's hard.  Fiat currency and monetary policy?  No, that's a good thing.  Period.  Yes, governments can screw it up, but the idea of fiat currency... this is a good thing.  Economists across the ideological spectrum rejected idiotic bullshit like the gold standard long ago.

There is a contingent who will never give up the dream of the gold standard, though.  Those fucking Austrians.  Many bad things throughout history have come from Austria...  Worse things than have come from Africa and Haiti...  Just sayin'...  Anyway, there is a long history of ideological dispute regarding choice of currency, for those who haven't studied history.

Remember William Jennings Bryan?  He was the dipshit anti-scientist in the Scopes trial.  He also gave one of the most famous speeches in any party convention in US history.  "You shall not crucify mankind upon a cross of gold."  He held out his arms like he was being crucified himself, and really hammed it up.  Fucking drama queen.

What has he blathering about?  Gold standard versus silver.  This was seriously a thing in 1896.  Like, a big thing.  A central ideological issue.  People really can, and have, attached ideological principles to their currency preferences.

Then, we get to the depression, WWII, and the process of the world realizing how totally fucking stupid the gold standard was, and the value of fiat currency.  This really was technocracy winning.  There was simply no way for economic problems on the scale with which we were dealing to be handled with a strict gold standard.  Fiat currency gave government the financial tools to address the depression, and fund WWII.  By that point, you get everyone from John Maynard Keynes to Milton Friedman acknowledging that the gold standard is the dumbest fucking thing ever.

Except for those idiotic, fucking Austrians.  Like I said, the extent of horribleness that has come from Austria cannot be overstated.  If I had my choice, in history, between what has come from Africa and what has come from Austria... hint, hint, hint...   Come on, people, read some fucking history.  Some of my references are obscure and coded, but this one is not that obscure, is it?

And yet, there are still a bunch of people who are ideologically attached to gold.  If you follow business news, what you will read is the notion that gold is a "hedge against inflation."  What?!  OK, translation.  That means that if the value of the dollar goes down, the price of gold goes up such that gold retains its purchasing power.

Why would that be?

Um...

'Cuz...

Look, gold is a fucking scam.  Gold has value.  Why?  People want it.  It is used in jewelry, primarily, but also in electronics.  Still, it is scarce, and people want it.  Therefore, it has value.  How much?  Whatever people want to pay.  Does it follow from that that gold retains purchasing power amid inflation?

No.  No it does not.  That's just ideology.  Here's the price of gold, since the "great recession," from Federal Reserve Economic Data.




The price of gold went way, way up as people freaked the fuck out about inflation, which never materialized, and the price of gold has fluctuated a lot.  Remember that "stable store of value" thing I keep mentioning?  Does this look like a stable store of value to you?  No?  That's 'cuz it ain't.  Gold is not a stable store of value.  It isn't a hedge against inflation.  It is a commodity subject to market speculation and ideological bullshit.

And that's why there are ads for paranoid nutjobs to buy gold based on the premise that everything is going to go to shit, and gold will be the real currency because gold is and has always been the true currency.  The idea that gold is a hedge against inflation is predicated on the notion that it maintains purchasing power because it is the true currency.  Bull-fucking-shit.  Just look at that graph!

So, um, what does this have to do with bitcoin?  Well, I've been writing regularly about the similarities between arguments for bitcoin and arguments for gold because they are basically the same thing.  They are driven by the same ideological impulse, that being the impulse to take currency away from the control of government.  If you listen to any bitcoin bug for any significant length of time, this is the centerpiece of what motivates them.  Fiat currency is bad, government control of currency is bad, so bitcoin is the bestest thing evAAAAR!

And really, that's no different from the impulse towards the gold standard.  We don't use the gold standard.  People still buy gold.  Its price just fluctuates.

What about bitcoin, then?  The problem for bitcoin is that it has no actual use.  For anything, really.  Gold is used in jewelry, electronics, and a few other things.  Beyond that, people have been convinced to trade it, 'cuz... um...

... uh...

... 'cuz people are trading it.  There are endpoint uses, though, and it can be exchanged as a unit of currency.  It generally isn't because it is a pain in the fuckin' ass to use as currency, but you can trade it for stuff.  A lot of what it has going for it is goldbuggery, which is a bizarre ideology committed to the notion that gold just has intrinsic value and will always have intrinsic value.

But, as along as someone will pay for it, it has value.  That's how markets work.  If someone will pay for the shit that comes from my cats' litter box, then catshit has value.

Anyone wanna buy some catshit?  I'll give you a great deal.

Bitcoin?  It has no use in and of itself, unlike gold.  You can't use it for jewelry, electronics, or anything else, and as I keep writing, you have big problems trying to use it as currency.  Right now, there aren't many vendors that accept bitcoin, and even if there were, it's stupid currency.  A currency needs to be a stable store of value.  If it is going up in price, I'm stupid to buy stuff in bitcoin because I could get more for the same price later.  If it is going down, you're stupid to sell stuff to me in bitcoin because what you get will be worth less tomorrow.  And even that aside, since the government won't take tax payments in bitcoin, there are transaction costs to conducting transactions in bitcoin anyway, so... bitcoin is worthless as anything other than currency, and fucking stupid as currency.

What does bitcoin have?  It has people ideologically committed to it.  As long as bitcoin has that, people will buy it.  At what price?  I have no clue.  But as long as bitcoin has that, it will circulate.  Not widely, and not as a prominent consumer currency, but as a curiosity because a group of people who care more about an ideological statement than economic efficiency want it.

And therein lies the irony.  The very people who advocate bitcoin-- techno-libertarian types-- tend to be the ones who think that everything has a technocratic solution, and miss the fact that they are pushing against every technocratic economic solution we have found in the last century.

Of course, the actual ideological impulse is not towards bitcoin itself, but the concept of an electronic cryptocurrency.  Hell, for all I know, that joke currency, Dogecoin might overtake bitcoin, but the fact that people actually buy Dogecoin demonstrates exactly how fucking stupid the cryptocurrency craze is.

At the end of the day, most people just want the easiest way to pay for stuff.  That will always be the currency issued by the government in any country with a functioning government.  There is no actual utility that anyone gets by using a cryptocurrency.  Advocates of bitcoin, and other cryptocurrencies, just like it because it makes an ideological statement.  There is a history to attaching ideological value to currencies, but whatever ideological value bitcoin bugs attach to their cryptocurrency, that won't make it become a big thing.  That's not how economic transactions work.  Because bitcoin is bullshit.

Where does that push the price of bitcoin, and how does that affect the cryptocurrency market?  Coming soon...

Sunday music: If you don't love bluegrass, you hate America

So, when you think of bluegrass, what instruments come to mind?  Mandolin, probably.  That was Bill Monroe's instrument.  Banjo, though.  Earl Scruggs.  I doubt the Bluegrass Boys would have become a thing without Earl, and, well, Flatt & Scruggs really did overtake Bill as a force in the genre.  Let's be real about that.

Anyway, the banjo is also the instrument most closely associated with pre-bluegrass Appalachian music.  The origin of the banjo?  Africa.  It is descended from African gourd-based instruments, like the ngoni.  A few years ago, banjoist Jayme Stone did a project with kora player, Mansa Sissoko called Africa to Appalachia.  Here's the first cut, "Bibi."

Remind me again, how did all those Africans from shithole countries get here in the first place?

Oooooh, right.  Oops!  We're not supposed to talk about that, are we?

Saturday, January 13, 2018

Parties are defined by their presidents

I could make a comment here about the GOP being defined by Trump paying hush money a porn star named "Stormy Daniels," but the irony is that there is so much going on that Trump's hush payments are minor news.  Let that sink in.  Anyway...

Party structures in the US are relatively amorphous, compared to those in other countries.  What makes you a Democrat or a Republican?  In survey research, we simply ask about how people think of themselves, but what peoples' responses mean is something of an open debate.  Is it a matter of personal identity, a retrospective summary of past voting behavior, a running tally of the parties' governing records, or... I'm just going to stop now because if I keep going, this becomes a totally different post.  "Party-in-electorate," as good, ole' Valdimir called it.  That's V.O. Key, by the way.  What's next?  There's the "party as organization."  We have the DNC and the RNC, and affiliated groups at the state and local levels.  These days, though, if we want to understand the party organizations, we need to look beyond the official party structures.  Can you really hope to understand the Republican Party without paying attention to Fox News?  No, because Fox News is a part of the Republican Party informal structure.  Can you hope to understand the Democratic Party without paying attention to the AFL-CIO and other labor unions?  No.  Same deal.

And finally, there's what Key called the party-in-government.  If your party holds the presidency, your top person is the president.  In fact, the official head of your party-- formally the head of your party organizationally-- is the president.  And there is good reason for the party-in-electorate to focus on the president.  He is the most visible figure.

He defines the party in a way that nothing else can.  Platforms are basically bullshit in the US political system.  The Democratic and Republican Parties each have platforms, and there are stupid, little fights at the conventions each year about the drafting of the platforms, but they are not, in any way, binding for anyone.  In stronger party systems (like the proportional representation systems that most other democracies use), those platforms are more meaningful and informative, but here?  You can largely ignore them, particularly if you have the option of paying attention, instead to a party's president.  Nothing binds a president to his party's platform.

Where is the locus of power?  That changes over time.  In a period when Congress does not defer to the president, it would be inappropriate for people to treat the president as a stand-in for the party.  When Congress defers fully to the president, yeah, go ahead and treat the president as the party.  It isn't just a nice heuristic-- it's correct.

Right now, the Republican Party defers fully and completely to Donald Trump.  In the lead-up to his presidency, I compared him to Jimmy Carter, based on his lack of experience in national politics and poor relations with his own party, based on the process by which he won the nomination.  National Democrats didn't defer to Carter, and I expected a lot of problems between Trump and his own party.  I'm going to return to this in more detail soon, but it's time for me to say that I was kind of wrong on this.  The Republican Party, party-in-government using Key's terminology, has subjugated itself completely to Donald Trump.  As such, he defines the party.

Right now, the "scandal" is Trump once again demonstrating his bald-faced racism.  This time, it was by saying that we should stop letting people into the US if they come from Africa or Haiti, and let them in if they come from countries like Norway.  Gee....  Hmmm... Lemme think about that....  What do Africans and Haitians have in common, and what is different about Norwegians?  Hmmmm....  Nope.  Can't figure it out!  I guess I'm not a very stable genius!  Note how indifferent I am to the use of the word, "shithole."

Anyway, last summer, Trump... oh, fuck it.  If I told you, you wouldn't remember.  He says so much despicable shit that any one incident just fades into the din.  Trump made a misogynistic comment about Mika Brzezinski.  It doesn't matter what.  He was just being Trump.  He's a loathsome thing, and everyone with a conscience knows it.  A couple of Republicans decided to criticize him.  I criticized those Republicans for their feckless, empty gestures.  I pointed out that Trump enjoyed the fact that he was dominating his own party by getting away with everything, and that he was enjoying the fact that the criticism amounted to nothing.

Where are we now?  Most Republicans don't even bother with criticizing him anymore when he says vile, racist stuff.  Trump denies saying what we know he said, but Trump is the most shameless liar in political history.  And several Republican Senators in the "shithole" meeting are saying they don't even remember Trump said it!

One such Senator is Tom Cotton.  Does that name ring a bell?  Remember when James Comey testified before the Senate?  Cotton was the man to whom I gave the "Trump Shill Award."  Should you be surprised that Trump Shill-extraordinaire, Tom Cotton is covering for Trump?  Nope.

My point is that the Republican Party, party-in-government, doesn't even bother with the feckless criticism that it used to muster when Trump says vile, racist things now.  Cotton is just the most extreme case, but the entire party has been brought to heel.  It is therefore appropriately defined by Trump.

And Donald Trump is as racist as any public figure in modern American history.

The Republican Party has a problem with racism.  It is a problem that has been building for a long time.  If you ask a Republican official or a loyal Republican about the topic of race, you will probably get the following line:  Lincoln!

Yeah, that was a century and a half ago.  How about this?  I'll let you define your party with a 19th century figure if you agree to use only 19th century medicine.  What?  No?!  Are you saying that things can change in 150 years?  Really?  Well, OK then.  Moving on.

Next, you'll get a discussion of southern Democrats and segregation.

You know, southern Democrats!  Like... oh, what's his name?  Strom... somethingorother.  Thurmond!  That guy!  What ever happened to him?  Oh, riiiiight.  He switched to the Republican Party in 1964 because Lyndon Johnson was running on a pro-civil rights platform and Barry Goldwater, the icon of pure conservatism and proto-Reagan, opposed the Civil Rights Act of 1964.

Yeah.  Strom Thurmond.  Total indictment of the Democratic Party on racism.

Maybe Trent Lott could give us some history lessons on that guy... (Obscure zing!)

Right now, though, the Republican Party is defined by Trump, and Trump is defined by racism.  In order to not have that racism define the party for a long time, a lot of other actors in the GOP need to start working very hard.  Against someone they have been too cowardly to oppose.

Note that I haven't even bothered to describe how Trump's dishonesty, corruption, misogyny, stupidity, psychological instability, or anything else might define the Republican Party.  The racism here has been building for 50 years, since Goldwater opposed the Civil Rights Act of 1964 and Dixiecrats like Strom Thurmond started switching parties.

Now for the warning, though.  This is the point at which over-exuberant Democrats talk about the increasingly diverse population of the US, and how the Republican Party will have trouble winning elections if they are exclusively the party of white people.

Yeah, we've been hearing this one for a long time.  The GOP keeps winning, though.  Why?  The short answer is to think about how racial polarization works.  If the proportion of the population that is non-white increases over time, the GOP can keep winning as the party of white people if white people are increasingly Republican.  I'll come back to this one too.

Saturday music: If you don't love country, you hate 'mer'ca

Malcolm Holcombe, title track from Another Black Hole

Friday, January 12, 2018

Friday music: If you don't love jazz (and African music), you hate America

Marcus Miller, "Hylife," from Afrodeezia.  Miller's music isn't always to my taste, but following some of my comments on Jaco Pastorius a few days back, Miller is about as impressive a bassist as you can find working today, and Afrodeezia was an interesting album combining modern jazz and African music.

Funny, but I have a Tuesday series on music from other countries.  I feature a lot of music from Africa.  Not much from Norway, though.  Why?  African music is great, and Norwegian music sucks.

I like the arts.  I'd like more immigrants from Africa.  Please, bring your art with you.  Norway can go fuck itself until their music stops sucking.


On immigration, shitholes and presidential stupidity

Well...

A couple of days ago, I wrote that I didn't expect much to happen with immigration, but that the issue would be Congress.  We could ignore President Stable-Genius.

Then again, maybe this is just what happens when you have a president who can't find his shithole with both hands and a flashlight, as the old saying goes, modified for the Trump era.  I'll make a couple of quick comments on diction here.  First, there is a benefit to Trump's Trumpiness.  I enjoy watching the press trip all over themselves trying to deal with their standards-and-practices departments because they have a responsibility to report the fact that Trump called countries populated by people with dark skin, "shitholes," while asking for immigrants from what he considers aryan countries (and let's not mince words about what's going on here).  The fact that he actually said, "shithole," is important.  What is offensive is not the germanic-rooted word, "shit," but the nazi-esque sentiment behind what he said.  I have written about Germanic vs. Latin before (see, for example, here), but thank you, Donny-boy.  Your stupidity and vileness have given us another object lesson in the absurdity of arbitrary linguistic taboos and the mindless obsession that certain people have with banning words rather than focusing on the sentiments behind those words.  The word, "shit," is not offensive at all.  Anyone offended by the word, "shithole," on its own, is not a thinking person.  I have no respect for any such person.  Calling African countries plus Haiti, "shithole countries," contrasted with Norway... that's some KKK/nazi shit right there.  Racism is offensive.  Any press outlet tripping over its own standards-and-practices to avoid the word, "shithole,"  ...  you're a fucking joke.  But hey, we can thank Donny-boy for helping to reveal this, once again!

OK.  I just had to get that out there, because I'm me.  Now, immigration policy.  A "gang of six" Senators tried to put together a bipartisan immigration deal.  Note:  Senators.  Without buy-in from the House Freedom Caucus, this wasn't going anywhere anyway.  Any bill that includes any path to citizenship for anyone who crossed the border illegally will be called "amnesty" by the hardliners, and once that word gets attached to a bill, it's toast.  Remember Eric Cantor.  Remember how Marco Rubio went from tea party darling to cuckservative.

Remember George W. Bush's immigration ambitions from 2005.

The House Freedom Caucus and the rest of the hardliners in the House aren't going to accept any bill that provides any path to citizenship for anyone who crossed the border illegally.  Once you strip that out of the bill, all Democratic support goes away.  At that point, you no longer have bipartisan support.  The bill is filibuster-able in the Senate.  That's it.  The thing that brings in Democratic support is the very thing that makes the bill a no-go in the House.

One day, Trump says he'll sign anything.  The next, he says no deal, and fuck all those people from shithole countries.  Trump is just... a very stable genius.  But even without that... what's the difference?

Look, think of it this way.  What does the GOP want?  The wall?  No, that's just Trump's idiotic delusion.  The party?  They want a) more money for border security, b) restricted rules on new immigrants, and c) more deportations, including the "dreamers."  Democrats would accept a, oppose b but could agree to certain rules, and oppose c.  Without bipartisanship, nothing happens.  After all, you can't even try reconciliation since immigration rules aren't budgetary.  So, where's "the deal?"  It doesn't exist.  The basic problem is that, for all their bullshit, a big bloc of Republicans oppose DACA, not because it was an executive action that circumvented the legislature, but in principle.  Whether it is because of their own personal beliefs, or fear of getting Cantored... it doesn't matter.  It means they won't give on c.  If they won't give on c, there's no deal because there's nothing in it for the Democrats.

Remember why Obama issued an executive action on DACA in the first place.  Congress wouldn't do jack shit.  Why does anyone think they will now?  Because Trump is such a brilliant negotiator?

Or is it because the GOP thinks they need to move on immigration for their electoral future?  We've been hearing that for over a decade.

So, why am I supposed to expect any action now?

Any deal with Democrats going along would need a "path to citizenship" for some groups who crossed the border illegally.  That policy will be called "amnesty" within the GOP.  Once that word gets used, Republicans run screaming from the bill, the Freedom Caucus tells Paul Ryan he can't let that bill get a floor vote, and the whole thing comes crashing down.

And that's if Trump doesn't kill everything first with his idiotic, racist antics.

By the way, why do we let people from shithole states, like Mississippi and Alabama, pick our presidents?

I know I use the Drive-By Truckers a lot for the Saturday music series, but here's one of their less-twangy tracks, appropriate for today.  Not-incidentally, they are from Alabama, and have written some of the most insightful things I have heard about southern culture, politics and race.  Jazz will go up this afternoon, obviously.


Thursday, January 11, 2018

The future of partisan gerrymandering

Big things are afoot here, and I cannot confidently say what the results will be.  And... next week, I gotta lecture on this stuff!

Anyway, some definitions are in order.  First, Elbridge Gerry.  Hard-g, in "Gerry," so hard-g in "gerrymandering."  I'm a pretentious and pedantic asshole about everything.  To goo-goos, gerrymandering is gerrymandering, but... no.  Not all gerrymandering is alike.  Partisan gerrymandering is quite different from bipartisan gerrymandering.  Partisan gerrymandering is drawing district lines in order to spread one party's voters out more efficiently than the other party's voters, thereby allowing the advantaged party to win more seats than its proportion of the population.  It follows the pack-and-crack model.

Observe.  Suppose there are 33 voters, with 21 Democrats and 12 Republicans, to be spread over 3 districts.  If we draw two districts with 6 Republicans and 5 Democrats each, and then the remaining district with 11 Democrats, the first two districts are majority-Republican.  The GOP can win two out of three districts, even though they have only a third of the population.  They do this by "packing" the Democrats into that third district, and cracking the remaining Democrats in the first two.  There are 10 Democrats total in the first two districts-- enough to win at least one district, if they were distributed more efficiently-- but if they are cracked, that doesn't happen.  The pack-and-crack plan distributes one party's voters more efficiently than the other party's voters, and the advantaged party gets more seats than it should because of that.

If you want proportionality in representation, that's bad.  You know what kind of redistricting plan promotes proportionality?  Bipartisan gerrymanders!  That's when you draw a bunch of homogeneously Democratic districts and a bunch of homogeneously Republican districts with no competitive districts.  You also get representatives who are closer to their median voters.  That's why I like bipartisan gerrymanders.  Not all gerrymanders are the same.

Partisan gerrymanders are getting challenged in the courts, but finding a constitutional basis to oppose them is... tricky.  Why?  'Cuz the Constitution doesn't really say jack shit about this.  I don't like partisan gerrymanders, but... there's lots of shit I don't like.  That doesn't make such things unconstitutional.  There's a pending case at the US Supreme Court about this, and the courts have been chipping away at partisan gerrymanders because racial gerrymanders are kind of unconstitutional, and... race and party are kind of linked!

And a North Carolina plan was just struck down by a federal court for being a partisan gerrymander.  The courts are not consistent on this, and that means we need a federal ruling on partisan gerrymanders.  Right now, there is no clear federal standard on partisan gerrymandering.  The Court has said that, in principle, there might be such a thing as going too far, but they have never said how far that is, and a federal court just said North Carolina went too far.  So...  how far is too far?  What's the rule?

Look, this is tricky.  The basic problem here is that nobody likes partisan gerrymanders except the specific party benefiting from the specific partisan gerrymander in question.

But the Constitution just doesn't say jack shit about it!  It wasn't until Baker v. Carr 1962 that the Supreme Court said that districts had to have equal population.  The Constitution doesn't say it!  And, since each state gets two Senators regardless of population... yeah, it's unfair if one district has 1,000,000 people while another has 1,000, but you have to be willing to read something indirect into the 14th Amendment, and it took until 1962 for the Court to do that.

So, the 14th Amendment.  Partisan gerrymanders are unfair, yes.  But a 14th Amendment case against them is... weird.  One party is advantaged over another...  Frankly, if you take this argument seriously, you have to come back to the Senate again anyway.  With Baker v. Carr, the Court basically said that the Senate was written into the Constitution as an exception, and they have to keep doing that, but there is a basic mathematical problem with any district-based electoral system.  All we can ever do is approximate proportionality.

If anyone actually takes this shit seriously, they should advocate eliminating district-based elections and moving towards proportional representation.  Some do.  That's... not what's in the Constitution, and therein lies the core of the problem again.  The basic constitutional structure of the legislative system is one in which proportionality is mathematically thrown off by the electoral system used.

Part of that is that the Constitution was a compromise and a kludge.  Part of that is that they had no intention of thinking about things in terms of parties.  Part of that is that they had no clue about the mathematics of partisan aggregation, but that wouldn't have mattered if they didn't intend parties anyway.  Still, the idea of trying to graft some rule against partisan bias onto a mathematical system that necessarily imposes at least a small bias with a Constitution that doesn't mention any of this at all is...

Odd.

None of this is to say I advocate partisan gerrymandering.  I'm pretty clear on the record here.  I advocate bipartisan gerrymanders, not partisan gerrymanders.  How will the North Carolina decision play into the Supreme Court's upcoming case?  What will SCOTUS do?  Fuck if I know.  All of this is kind of silly, though.  Within a district-based system, the best we can do is a bipartisan gerrymander, and let's be clear on this:  that means making sure we don't have competitive elections.  Fuck those things.  Making a constitutional argument against partisan gerrymanders, though?  That's a weird and difficult thing to do.  Not every bad thing is unconstitutional, but if anyone really, seriously wants to push lack of bias, that leads either to bipartisan gerrymanders... or a total constitutional overhaul, and PR.  That latter thing... ain't happenin'. 

Wednesday, January 10, 2018

What the hell is happening with DACA negotiations?

Yesterday, the Very Stable Genius-in-Chief held a meeting with congressional leaders, with press invited, to discuss negotiations to reinstate protections for illegal immigrants who were brought over the border as children, and have otherwise committed no crimes.  What happens now?  I'm not certain, but best guess:  nothing.

First, Trump.  For the most part, Trump doesn't matter.  He's a useless idiot, and most people on both sides of the aisle in Congress know it.  He vacillates between two types of behavior:  mindless partisan attacks, and mindless fetishization of "the deal."  Yesterday, he went for the latter, leaving everyone, including Republicans, confused about what he wanted.  He seemed to indicate, at some points, that he would sign any bill that crossed his desk.  And... he might!  Part of his obsession with the abstract concept of "the deal" is that he doesn't actually know anything about politics or policy.  Talking about the concept of "the deal" in the abstract is a way for him to cover for that.  Then again, maybe he digs in on that idiotic wall...  You know, the one that Mexico is funding?  Oh, wait...

Basically, then, ignore Trump.

Instead, let's go through some history on why nothing is likely to happen.  In 2005, shortly after the 2004 election, George W. Bush decided that part of his second term agenda would be immigration reform.  His proposal was attacked from within his own party as "amnesty," and the GOP-controlled Congress never took up any action on his immigration agenda.  Even going back to 2005, one of the worst slurs you could use within the Republican Party was to accuse someone of supporting "amnesty" for illegal immigrants.  This is an interesting thing.  We all commit crimes.  What, you've never broken the speed limit and gotten away with it?  You've never j-walked and gotten away with it?  Amnesty happens.  The question is which crimes are so horrendous that they can never, under any circumstances, be forgiven?  Within the GOP, crossing the border illegally, even if you were simply brought over as a child, is such a crime, and the word, "amnesty," is equivalent to a declaration of war.  As soon as that word entered the immigration debate after the 2005 election, the policy debate was over, and nothing happened.

Remember Marco Rubio?  During the 2016 presidential election, he was an establishment guy.  It...  wasn't always so.  When he first ran for the Senate in 2010... he was a tea party hero.  Here's what Jim DeMint said about him at CPAC when Rubio was a tea party darling--  "Let me make myself even clearer:  I'd rather have 30 Marco Rubios in the Senate than 60 Arlen Specters."  What happened to turn Rubio from the apple in DeMint's eye to establishment whore?  He started talking immigration reform.

And then there's Eric Cantor.  In 2014, former-Rep. Eric Cantor (R-VA) was the House Majority Leader.  In that position, he tried really hard to cozy up to the hardliners, but he lost a primary in a shocking upset to David Brat.  Brat was a nobody.  He was less than a nobody.  He was a... college... professor.  Pathetic!  (Actually, he was an economics professor, so really, fuck him!)  What happened?  It is kind of hard to say, but Brat was a one-issue guy.  That issue?  Immigration.  Cantor had at least expressed a tiny bit of openness to some kinds of immigration reform proposals.  Brat?  Nope.  He's a teabaggin' immigration hardliner.

So let's talk about Paul Ryan.  Paul Ryan is a spineless little coward.  He's a Chamber of Commerce guy, in his heart, not a teabagger.  The Chamber of Commerce faction of the GOP wants more open immigration policies.  Why?  More and cheaper labor!  More consumers!  Business!  Take away any constraints and Paul Ryan would go along with them.  But, he doesn't act without constraints.  He has the House Freedom Caucus breathing down his neck.  Mostly out of jealousy, since they don't have necks, themselves.  If he lets any bill get to the floor of the House that they deem to be "amnesty," they'll Boehner him.  He knows that.  So, he'll exercise "negative agenda control."  That's our term in political science for preventing an item from getting a vote when you know it will pass if it gets a vote.  Why?  To prevent a anti-Boehner-style revolt.

The Senate?  The Senate doesn't do jack shit anyway.  The Senate is where legislation goes to die.  Frankly, though, opponents of DACA won't need the Senate's magical, legislation-killing powers to do their work for them.  The House Freedom Caucus is all they need.

Immigration reform has been stalled for over a decade, and in that time, the GOP has gotten more and more hardline on the issue.  Pressure on them has gotten more, not less intense.  Donald Trump, Stable Genius, is as irrelevant to this legislative negotiation as he has ever been, and everybody left that room laughing at him.

And I haven't even bothered talking about that stupid, fucking wall.  The Democrats' best response if he really keeps trying to push them on it?  Tell Trump:  "We'll authorize you to spend whatever money you get from Mexico on the construction of the wall, but we won't appropriate any US taxpayer funds.  Go get the money from Mexico, like you promised.  Put up or shut up."

Will it come to that?  Probably not.  The negotiations will likely fall apart long before that as soon as Republicans start accusing each other of supporting "amnesty," at which point they start drawing their guns on each other.  In GOP circles, that's like the n-word, because they have no sense of history, proportion, or true injustice.

Maybe they should start putting scarlet A's on each other's suits.

Tuesday, January 9, 2018

Bitcoin is bullshit, Part XI: When will the bitcoin bubble burst?

When I left off with Part X (damn, this thing just keeps going...), I pointed out the basic problem of pricing bitcoin.  How much of the economy is bitcoin supposed to cover, and given the value of those assets, what is the conversion rate between bitcoin and dollars?  I used this as a lead-in question for the future of bitcoin, and it is actually the perfect question for the issue of when the bubble bursts because the answer is... when people start seriously asking that question.

Look, bitcoin is in a bubble.  Period.  Do you know what "Dogecoin" is?  It's a fucking joke.  Literally, a joke.  Some creative prankster created it to make fun of bitcoin.  And people are fucking buying it!  Companies see their stock prices go up when they put the word, "blockchain," in their titles.  This is nuts.

Here's the thing about a bubble, though.  It is possible to make a shitload of money within a bubble.  Ponzi schemes work for everyone except that last level, where people get screwed, and yes, bitcoin is a Ponzi scheme.

Here's how a Ponzi scheme works.  You join my organization, and pay a fee to me.  Then you bring in a couple more people, who pay fees to you, some of which get kicked back up to me.  Those people find more people to pay fees to them, portions of which get kicked back up at each level.  That's a pyramid scheme.  There is usually some product theoretically being sold by whoever is at the bottom level, but that's not how you make any money because of the fee structure.  If you are at the bottom level, you are paying so much in fees and required purchases that whatever you sell can't compensate for the fees you are paying.  Instead, what you need to do is bring in more people to pay fees to you.  Of course, there is a limit to how many levels of people can be brought it.  Just do the math on that.  If everyone brings in three people, then if I'm at the top, the next level has three, then nine, then 27, then 81, then 243, then 729...  At six levels, you're over 1000 people.  I'm rich, and the bottom level is fucked.

The problem with the Ponzi scheme is that the product is pointless.  It's all about the membership fees that get kicked up to the top.  Bitcoin doesn't work as currency.  Why?  Like I keep saying, it is intrinsically inefficient.  Since you will never be able to pay your taxes with it, any legal transaction involving bitcoin involves unnecessary transaction costs because of pointless currency conversions.  People buying bitcoin aren't buying it to use as currency.  They are buying it to sell it to someone else, at a higher price.  That's how market speculation works.  That can't keep going forever any more than multi-level marketing schemes can keep bringing in more "marketers" forever.  In the pyramid scheme, whoever is caught at the bottom level goes broke paying fees to everyone at the higher levels.  That's how the people at the higher levels get rich.

In a bubble, the people who get rich are the ones who sell worthless assets to dupes who think they are going to be able to do the same, but find themselves the last ones to buy at the inflated prices.

How can you tell if you are the one who is going to get screwed?

You... can't.

That's why you shouldn't do it.  You should assume that you are going to get screwed.  Never participate in a "multi-level marketing" thing because you should assume you are going to be at the bottom.  Statistically, that is the level with the highest number of people, so ceteris paribus, you should assume you are most likely to find yourself there.

Also, it's a fucking scam.

Should you buy an asset that has no clear value, hoping to turn around and sell it?

What, are you stupid?

No.  You might get lucky.  You might also get royally fucked.  You should invest in a diversified portfolio, like an S&P index fund, which will grow at around 8-10% per year, long term average.

Yes, people make money in a pyramid scheme.  People also lose money in a pyramid scheme.  People make money in an asset bubble.  People also lose money in an asset bubble.

During the tech boom/tech bubble of the late 1990s/early 2000s, there were some tech companies that did absolutely jack fucking shit.  People bought their stock anyway.  The relatively-smarter ones sold that worthless stock as soon as possible, took the money and ran.  The thing is... those companies actually had some assets.  They had some, like, computers 'n shit.  Business plans?  Not so much.  But, at least they had something.  Then, people looked at what they did.  Stock prices eventually started to reflect valuation, and they collapsed.

This is a bubble.  Eventually, bitcoin prices will reflect whatever portion of the economy bitcoin transactions will cover.  At that point... Pop!

Predicting when bubbles burst?  Nobody knows how to do that.  The odd thing about bitcoin is that every time bitcoin drops rapidly in price, losing half of its value in a week or so, it comes back.

Why?  What separates bitcoin from the tech bubble or the housing bubble or any other stupid asset bubble, or any conventional Ponzi scheme?

Ideology.  I've written a lot about this so far, and I will keep writing about this.  There is a core of people ideologically committed to the concept of a cryptocurrency in a way that there wasn't for any specific tech company that just had no reason for existing back in the late 1990s/early 2000s.  Cryptocurrencies aren't going to die.  Whether bitcoin is replaced, or what... I won't hazard a guess, but the extent to which this asset bubble is attached to ideology makes it unique.  And that deserves more elaboration...

More to come, I guess...

Tuesday music: If you only listen to American music, you just suck

A bit of a cheat today.  Egberto Gismonti is technically Brazilian, and my favorite recording of "Salvador" is with Charlie Haden, recorded in Montreal, so I'm going with that one.  Here's "Salvador," from In Montreal.  Charlie Haden and Egberto Gismonti.


Monday, January 8, 2018

Journalistic interviews and the question of who gets a microphone

Yesterday, Jake Tapper "interviewed" Stephen Miller on one of those pointless Sunday shows.  I regularly advise you not to watch those shows.  The Miller "interview" has gotten some attention because Tapper cut Miller off and ended the interview when Miller... acted like himself.  So... yay for Tapper?

No.  Jake Tapper screwed up.  By putting Stephen Miller on the air in the first place.

News should, ideally, inform.  There are two types of information that can be conveyed with an interview.  An interviewee can reveal new information directly-- information that was not previously available.  The second type of information is information that comes, not from the content of the words, but from the performance itself.  By demonstrating ignorance, lying crassly, or otherwise giving a poor performance, an interviewee can reveal him or herself to be unfit for some position.  Alternatively, an interviewee might even acquit him or herself well, and surprise everyone with a good showing.  Hey, it could happen.  The performance revelation is only newsworthy, though, if it is news.

What, then, about someone who is a known pathological liar and craven toady for his boss, who is an even worse pathological liar?  In other words, what about a waste of carbon, like Stephen Miller?  Seriously, that guy would make awesome mulch!  On the other hand, the probability that a true statement will escape his Trump-taint-tainted lips?  Epsilon.*

There are a variety of people serving in the Trump White House.  Some are horrified by what he is, and try to do what they can to mitigate the damage of a man clearly unfit for the job.  Others are thrilled to take advantage of any opportunity they can.  Does Stephen Miller actually think Trump is a "genius?"  No.  Miller is just an opportunistic and obsequious little shit, but one who enthusiastically does whatever is required.

But we, and more importantly, Jake Tapper should have known that before Miller was booked on that show.  That means there was nothing to be gained by handing Miller a microphone.  It was irresponsible to give Miller a microphone in the first place because the probability that he would do anything other than what he did was epsilon.  In principle, he might have gotten drunk before the show, and had an in-vino-veritas moment, but... what happened was to be expected.

This is true for Donald Trump and all of his spokespeople.  White House press briefings serve no purpose anymore because Sarah Huckabee Sanders does nothing but lie on Trump's behalf, and we know, before any briefing starts, that every word out of her mouth will be a lie.  So... why hold these things?  Why cover them?

Kellyanne Conway.  She of the "alternative facts."  Why does anyone ever give that fuckin' liar a microphone?  Alternative facts.  Seriously.  Alternative facts.  She really fucking said that.  Why are we listening to these people?

As a basic journalistic rule, there is some probability, p, representing the probability that you will say something true and informative.  If p is below some fixed level, p*, you shouldn't be interviewed because you are a waste of everyone's fucking time.  How high should p* be in order for you to be interviewed?  .75?  .8?  I don't know.  What is p for Stephen Miller or Kellyanne Conway or any Trump spokesperson, though?

Epsilon.  And that means they don't get a fuckin' microphone anymore.  They don't deserve my attention.  Or yours.  Or anyone's.  Once you tell that many lies, you don't deserve to have anyone listen to you.  So shut the fuck up.

And Jake, stop giving these assholes microphones.  Don't preen about taking their microphones away.  Just don't give them microphones in the first place.



*The mathematical designation for a probability arbitrarily close to zero.

Monday morning blues: If you don't love blues, you hate America

Otis Taylor, "The Devil's Gonna Lie," from Contraband.

Sunday, January 7, 2018

On bragging: Trump, intelligence, and stability

So... Trump is a "very stable genius."  Yeah.

Bragging.  Trump's favorite activity.  Well, his favorite activity is having other people praise him, but him praising himself is a close second.  This...

Look, I work in academia.  Land of massive egos.  Let's separate this out, shall we?  Intelligence and stability.  Let's start with intelligence.

The average IQ in academia is higher than 100.  It just is.  I've met some not-particularly-impressive people in academia, but it is difficult to climb the ranks with a low IQ.  Academia also selects for big egos.  Part of that is the high failure rate, so people who make it think highly of themselves, even though a large component of success really is luck.  (Yes, a lot of my success has been luck too!)  The other ego factor is that academia beats you down.  People in academia are brutal to each other.  You don't get through that unless you have a very thick skin.  Thick skin is not too far from massive ego.

So, I know a lot of people with massive egos.  (Hi!)  I also know a lot of very smart people.  There is overlap.  The sets are not identical.

I have encountered some people whom I consider geniuses.  I won't name names for living people because... seriously.  My grad school advisor, Nelson Polsby.  He was a genius.  I never would have said that to his face because the last thing he needed was anyone saying that to his face, but it was true.  He also had an ego to match.  It was a strange ego, though.  One of the ways I used to describe him was that he loved to brag about how small his ego was.  That was Nelson.

I've known and encountered other geniuses.  I've read books that clearly demonstrated the authors to be geniuses.  Social Choice and Individual Values.  Read that one and tell me Kenneth Arrow wasn't a genius.  Once you can understand it.

I've also heard plenty of bragging in academia.  Some people in academia are classier than others.  You know what I have never heard, though?  I've never heard a professor self-identify as a "genius."

Sometimes people self-identify as geniuses.  I've seen people take those stupid on-line IQ tests and wave around their scores.  (Um... Richard Feynman, anyone?).  I've... just never heard a professor call him or herself a "genius."  I've heard bragging about who has published more, who has won which awards, who has accomplished what, but... self-identifying as a genius?  Nope.  I've never heard that within the hallowed halls of academia.

Why not?  'Cuz it kind of makes you sound like a moron.

It is possible to brag without making you sound like a twit.  As I said, I do hear bragging in academia, but just of a different form, and no, I'm not going to name names on that.  Usually, it takes the form of who published what first.  Yeah, I'm guilty of this.  Some are more guilty than others.

Musicians, though, have a wide range of bragging options.  Consider Jaco Pastorius.  Of course, I'm going with some jazz here.  Yes, it's Sunday, which makes it bluegrass day, but to make this particular point, Jaco is my guy here.

If you know jazz, or bass guitar, you know the name, "Jaco."  And you know him by his first name.  If not, here's just a taste of what Jaco could do with the fretless electric bass guitar.



Jaco.  Jaco proudly proclaimed himself the greatest in the history of the instrument.  And... yeah, he kind of was.  As of today, is there anyone that good?  I could make a case that Matthew Garrison is on that level.  Jonas Hellborg is fucking amazing.  There are some pretty damned great bassists around, but Jaco backed up his bragging.  He was also a great composer and bandleader.  He was a true musical genius.  Period.  Indisputably.  Fucking braggart...

Jaco was also batshit crazy.  Not, like, Trump-crazy.  More like, tragically-crazy.  His life story was a tragedy.  Homelessness, drugs, early death, all that.

And that brings me to the distinction between bragging about genius, and bragging about sanity.  Trump brags that he is a "very stable genius."  In this post, I have referred to Nelson Polsby as a "genius."  He was a brilliant scholar.  I have called Jaco Pastorius a "genius."  Within his field, he was such a towering figure that he is known simply as "Jaco."  You ask jazz people about electric bass, and the first name everyone will give is, "Jaco."  They might not even bother with a last name.  It's kind of like Jimi Hendrix.  You can just call him, "Jimi," and everyone knows who you mean.

When was the last time you ever praised anyone for their sanity?

Sanity is something you only notice by its absence.  Intelligence, of any variety (e.g. mathematical, musical, linguistic...), can range from very low to very high.  Whether we aggregate all forms into a single measure of "G," or break it down to its component parts, there is a range.  Mid-levels are unremarkable.  Average levels of intelligence deserve no comment whatsoever.  Low levels of intelligence deserve comment because people of low intelligence should not be given positions that require intelligence.  Yes, this is an elitist sentiment, but don't pretend you don't agree with me.  Do you want a doctor with a below-average intelligence?  No.  No, you don't.  You know you agree with me, so shut up.  Intelligence matters.

High intelligence is remarkable in the sense that we remark upon it.  I remark upon Nelson Polsby's intelligence.  I remark upon the musical genius of Jaco Pastorius.  We, collectively, remark upon the intelligence of people like Isaac Newton, Leonardo da Vinci, Archimedes...  High intelligence earns remark.

What doesn't earn remark?  An IQ of 100.  "Wow, that dude has an average IQ!"  Cue reference to Idiocracy...

Now, let's contrast that with sanity.  We don't measure sanity on a spectrum.  Certain things are put on a spectrum.  Autism is now put on a spectrum, for example, but rather than rating people on a scale from sane to crazy, as Trump seems to think in his little Trump-brain, there are a variety of disorders that a person can have, to varying degrees.  A person can have, for example, schizophrenia.

We don't remark, though, on the absence of schizophrenia.

A person can have antisocial personality disorder.  We don't remark, though, on the absence of antisocial personality disorder.

You cannot brag about your sanity without sounding crazy because sanity is not something upon which we ever comment, except to point out its absence.  That makes it fundamentally different from bragging about your intelligence.  It is difficult but not impossible to brag about your intelligence without sounding like a twit.  Trump can't pull it off because... he's a twit.  There is no way to brag about your sanity without sounding crazy because you are acknowledging the question.

For Trump, it's all just bragging.  He brags, and then brags about his ability to brag.  Bragging is so central to what he is that he never thinks about how he sounds.  Doing that would require thinking about things from another person's perspective, and Trump can't do that.  He will never be able to do that.  When he brags about being a genius, he sounds like an idiot, and when he brags about his "stability," he sounds like a loon.  The thing is, in principle, one can brag about intelligence without sounding like such a fuckwit.  One can never brag about sanity without sounding crazy.

Sunday music: If you don't love bluegrass, you hate America

Jon Stickley, "Crazy Creek," from The Jon Stickley Trio (self-titled debut album).

Saturday, January 6, 2018

The Bannon kerfuffle: Did Trump want/expect to win in 2016?

There is so much to unpack with Fire and Fury, and... I haven't read it.  I probably won't.  I'll still comment on a couple of big points that have already slipped out.  One of the more interesting pieces is the contention, made by Bannon, that Trump didn't think he was going to win the 2016 election.  Some of the messes we are experiencing, then, are the result of that lack of preparation.  I thought I might tackle this one.

Did Trump want to be President?  Clearly, no.  He never wanted the responsibilities of the job.  That much has always been obvious.  Trump has always been fundamentally uninterested in public policy and administrative tasks.  That is separate from two other questions.

1)  Did Trump want to win the election?

2)  Did Trump expect to win the election?

When addressing these two questions, I'll make some basic observations about Trump.  First, he can't tolerate any public humiliation.  Second, he doesn't think coherently, so he has a remarkable tolerance for cognitive dissonance.  Third, he has a remarkable capacity for self-delusion.  I don't really think there is a clear answer to either question, then.

Did Trump want to win?  Here was the bind.  If he won, he'd be president.  He didn't want the job, but he can't stand losing.  Neither outcome was tolerable.  Solution?  Well, a) he shouldn't have run in the first place, but b) losing and saying it was "rigged" might actually have been kind of OK for him, if he could tell himself that he didn't really lose.  Remember that capacity for self-delusion thing.  So, maybe he didn't want to win.  Then again, that's still losing, so...  Again, he was in a bind.  That's why he shouldn't have run.  If you hate losing more than anything else, don't run.  Particularly if you don't even want the job.

So, did he want to win, or did he not want to win?  Can you both want to win and want to lose?  Have you ever been ambivalent about anything?  Trump really may have been ambivalent about what he wanted on election night.  I'd bet he was.  He was damned either way.  Either he lost, which he hates, or he was stuck with a job that he would despise, being constantly scrutinized and criticized by the media, which he hates.  Also, being investigated by the FBI...

When he entered the presidential election, he didn't think it through because he never thinks anything through.

The harder question, though, is whether or not Trump expected to win.  As of election day, 2016, the betting markets were heavily against Trump.  The polls were heavily against Trump.  The analysts (hi!) were heavily against Trump.  He looked doomed.  Why?  Because he is the worst candidate in history.

Enough revisionist history bullshit.  Pundits and other lower life forms try to re-write their assessments ex post facto, such that Hillary Clinton was always the weaker candidate than Donald Trump, but... no.  Just... no.  Listen to this again and tell me that Hillary Clinton was a weaker candidate than this fucking rapist piece of fucking shit because she sent emails from the wrong account while serving as Secretary of State.



Oh, but Hillary didn't go to Wisconsin!

If you wanted to say that... fuck you.  You don't get to say that after the fact and claim that Pussy-grabber is the stronger candidate because Hillary didn't go to Wisconsin.  Bull-fucking-shit.

And if you tell me that Hillary Clinton is just kind of "shrill," or something like that to justify your claim that Pussy-grabber was the stronger candidate...

There will be consequences.  Hillary Clinton did not follow proper procedure as Secretary of State for her communications.  That was a problem.  Donald Trump is a rapist.  You don't get to say that Trump is the stronger candidate because he won.  No.  The fact that he won meant that the candidates didn't fucking matter.

(And no, youtube caption, those aren't "lewd" remarks.  Trump was bragging about rape.  Fuck all you people.  Yes, I use the word, "fuck."  You know what I'm not doing?  Bragging about sexual assault!  Think about words, and think about meaning!)

Once the Access Hollywood tape surfaced, there weren't a whole lot of intelligent people who gave Trump a chance in the 2016 election.  Why?  Because the idiotic rapist motherfucker brags about his ability to get away with sexual assault.

However, among the unwashed masses, you could find people who expected Trump to win.  They were called "Republicans."  In the 2016 American National Election Studies survey, we did what we always do:  ask people whom they expected to win, regardless of their preferences.  By a 2-1 margin, expectations were that Clinton would win, in the pre-election survey (61.3% to 34.8%, with a smattering of other answers given by the most truly stupid respondents).  Those answers were not randomly distributed.  93.6% of "strong Democrats" (the most "Democratic" on a 7-point scale) expected Clinton to win, and on the opposite end of the spectrum, 75.4% of "strong Republicans" expected Trump to win.  Of course, the Democrats were more sure of their expectations, and by 54% to 33.3%, Independents thought Clinton would win, but the point is that partisans, as always, expect their side to win.

This is among the masses.  Elites?  Well, elites can at least focus more on the polls.

Here's the deal, though.  There are two things going on with the masses:  lack of information, and propensity to go with hopes.  Elites have more information, but they aren't necessarily less likely to have psychological biases.  (Sometimes elites have more psychological biases!  That's a whole other can-o-worms, though.)

Elites can, in principle, look at polls.  Voters could too, but... most aren't particularly literate.  Sorry (not sorry), but it's true.  Candidates usually obsess over polls.  How they interpret the polls, though, is another matter.

A sane, intelligent candidate polling the way Trump did in 2016 would think, "well, I'm going to lose.  OK, then.  Maybe I'll try to lose with some dignity."  Dignity.  Does anyone remember what dignity looked like in the political system?  I think that was before we had to talk about pussy-grabbing, my button is bigger than yours, and such.  Anyway...

What did Trump do?  He accused everyone of being involved in a massive, global conspiracy against him.  The polls were all a lie and the election was being rigged against him.  The polls being faked were a part of that global conspiracy.  Yes, remember that he really did talk about a global conspiracy back in October of 2016.

As crazy as it sounds for me to type that, it really is just what Trump was saying, going into the election, which was why, when asked if he would accept the results of the election, he said that he would accept the results, "if I win."

Did Trump think he was going to win?  Did he think the conspiracy was real?  Did he think the polls were really fake?  They were wrong, but that's different from being intentionally faked as a part of a global conspiracy.  Was he setting himself up, psychologically, to deal with a loss, preparing a challenge to that loss, explaining that he was really about to win...?

Or none of the above?

Giving a clear answer for what was going on in Trump's head as he said this stuff requires there being a clear thing going on in Trump's head as he said this stuff.

In math, one of the standard approaches to a "proof" is to take a proposition, assume that it is false, and show how that leads to a contradiction.  In so doing, you prove your proposition.  What constitutes a proof-through-disproof?  Let's say that assuming your proposition is false leads to X equaling both 4 and 5 at the same time.  Since 4≠5, the proposition cannot be false.  Therefore, it must be true.

A normal human being experiences discomfort attempting to hold two inconsistent ideas in his head at the same time.  This discomfort is called "cognitive dissonance."  Trump is not a normal human being.  He does not experience cognitive dissonance.  He "believes" whatever is convenient for him at the time.  I'm not actually certain it is appropriate to say he "believes" anything, given the brazenness and crassness with which he lies about every fucking thing ever.  Leon Festinger would have had so much fun studying Trump...  The man without fear of cognitive dissonance.  It's almost like he belongs in a comic book!  (Wrong part of Manhattan, though...)

So, did Trump expect to win?  Did he expect to lose?  I... don't think that either is appropriate to say.  I don't think he had a clear single belief because Trump doesn't have a clear single belief about anything.  This is part of what makes it so frustrating for any sane, intelligent person to listen to Trump.  Is it possible that he expected to lose, as Steve Bannon has implied?  Sure.  Is it possible that he expected to win because Trump believes himself to be such a winner?  Sure!

Is it possible that both were true?  If Trump were a sane person, then no.  But, this is Donald Trump, who is incapable of feeling cognitive dissonance.  From one moment to the next, he says whatever is most convenient at the time, and may convince himself of whatever is most convenient in that very instant.  I have no clue what Trump really believed about his chances in 2016.  I don't think it is appropriate to say he even had a belief.  I don't think it is appropriate to say that Trump has thoughts or beliefs about anything.

This is the President of the United States of America.  I don't think it is appropriate to say that he has coherent thoughts or beliefs about anything.  That is truly terrifying.

Is Steve Bannon correct to say that Trump expected to lose?  That completely misses the point.