Month: November 2020

Days after a vehicle convoy of President Trump’s supporters escorted the Biden-Harris Bus down a Texas highway, another caravan of Trump supporters shut down a stretch of New Jersey roadway on Sunday. 

Videos surfaced on Twitter Sunday afternoon of what appears to be hundreds of vehicles, could be a lot more, of Trump supporters shutting down a stretch of Garden State Parkway in New Jersey.

One Trump supporter could be heard saying: “We shut it down.” 

NJ: Trump vehicle convoy shuts down the Garden State Parkway. @realDonaldTrump pic.twitter.com/djgi96aZFk

— Breaking911 (@Breaking911) November 1, 2020

Around noon, it appears one stretch of the Garden State Parkway was in gridlock, 

Garden State Parkway in Democratic New Jersey at a standstill in support of President Trump. @TeamTrump @EricTrump @DonaldJTrumpJr @POTUS pic.twitter.com/3tAL8oC3Tv

— The Lakewood Scoop (@LakewoodScoop) November 1, 2020

One Twitter user said: “whoever organized the trump parade on the garden state parkway, f**k you man, now i’m late to work.” 

whoever organized the trump parade on the garden state parkway, fuck you man, now i’m late to work pic.twitter.com/LCvLo4Ispe

— bert (@_____Bert_____) November 1, 2020

Someone said the traffic jam is “miles long.” 

Rally for @POTUS on the Garden State Parkway NOW! @PeteHegseth @dbongino Miles long…. pic.twitter.com/heQskl9zk1

— JC Cole & Folsom ‘68: A Johnny Cash Tribute (@68Cash) November 1, 2020

Many of the president’s supporters’ vehicles had flags that read “Trump 2020.” 

Ironically, some Trump supporters have previously complained about radical leftists shutting down highways; so it seems, no matter the political affiliation, shutting down roads and cities to make a political point appears to be a way to be heard.

Last week, pollster Nate Silver and his giant brain were so confident in a Biden win that he suggested the only way Trump is reelected would be through a ‘major polling error’ or cheating.

Nate Silver is spreading unfounded speculation that the only way Trump can win is to steal the election. This is irresponsible and will ensure a Trump victory isn’t accepted by Democrats.

— @amuse (@amuse) October 27, 2020

This weekend, however, Silver – sporting a ‘battle beard’ – shoehorned a giant caveat into weeks of confidently proclaiming a Biden win; Pennsylvania. 

“Pennsylvania has not bumped up to a 7- or 8-point Biden lead like we see in Michigan and Wisconsin. It’s 5 points,” Silver told ABC‘s “This Week,” adding that if Trump were to win, “it would come down to Pennsylvania.”

Silver then sets the expectation for an unfair vote, saying “Among the votes that were sent in by mail, there are some provisions about a naked ballot, a security envelope. That could make things more complicated. You could have the courts involved. You have some protests, looting in Philadelphia. There’s lots of stuff going on.”

And then, Silver says that if Biden doesn’t win PA, he’ll become the underdog.

“Maybe a lot of little things add up and Biden loses Pennsylvania by half a point, and then he doesn’t quite pull off Arizona or North Carolina. He does have other options. … But still, without Pennsylvania, then Biden becomes an underdog.”

Just days ahead of November 3, the @FiveThirtyEight presidential election forecast has Joe Biden with a 90 in 100 chance of winning the Electoral College.@NateSilver538 breaks down the forecast: https://t.co/5MmblAJP8o pic.twitter.com/wrDdKLFdA6

— This Week (@ThisWeekABC) November 1, 2020

Silver has given Trump a 10% chance of winning, down from the 28.6% chance he gave Trump vs. Clinton in 2016.

vs.

And here’s Nate’s giant hedge:

It’s after midnight on Nov 3, the US population has voted, and the election results are popping up across the media landscape. When will we know who is the next president? Well, due to the special circumstances surrounding this election including a record number of mail in ballots and countless court challenges involving the voting process, we may have to wait…. a while.

Below we lay out a timeline of key events and catalysts that everyone should be aware of.

After Election Day on November 3, the results of the election need to generally be finalized by December 8, which is known as the Safe Harbor Day, as this is when states select their EC Voters.

As Bank of America’s Michelle Meyer writes, in the 2000 election, this date proved to be an important factor for why the Supreme Court stopped the controversial Florida recount, which gave President Bush the win. Those selected EC voters will then officially cast their votes on December 14, to be counted by the next Congress on January 6 who will then declare the winner. Finally, January 20 is Inauguration Day which will begin the next presidential term.

The battle for the Senate

According to the Iowa Electronic Markets, the probability of the Democrats taking over the Senate and maintaining the House (Democratic Sweep) is the mostly likely outcome with a 57.5% probability, although this probability slumped on PredictIt last week sparking the furious Monday Selloff as traders braced for the risk of gridlock. But back to the IEM, the second most likely outcome with an 18.5% probability is a continued split Congress with the Republicans holding the Senate and the Democrats holding the House.

In the Senate, there are 35 seats up for grabs with 12 currently held by Democrats and 23 by Republicans. 10 of the Democrat seats are in solid Democrat states and 11 Republican seats are in likely or solid Republican states, according to the Cook Political Report. As we have discussed extensively in the past few months, there are a few seats that are at risk to flip parties. Specifically, current polling suggest Arizona (McSally) and Colorado (Gardner) are likely to turn Democrat, while Alabama (Jones) should turn Republican. That would at the very least whittle the Republican majority by 1 to 52-48. That said, 7 of the Republican seats are currently rated as toss ups with 4 in battleground states, leaving open the possibility of a Democratic majority.

That said, the overall composition of the Senate is unlikely to be determined until sometime in January due to election rules in Georgia which stipulates the race goes to a runoff if no candidates garners 50% majority in the general election and currently no candidate is projected hit the 50% threshold.

And with that in mind, here is a key primer for…

How to follow the news on Election Day. Here are a few tips from Bank of America:

Here are a few tips:

1. Be wary of exit polls: The track record of exit polls is tenuous at best. In 2004, exit polls showed John Kerry winning the popular vote by 51% to 48% only to ultimately lose by the same margin. Similarly, there were major flaws in the 2016 exit polls which substantially underestimated the number of white working-class voters while overestimating the number of college-educated white voters, leading to bias results favoring Hilary Clinton. Pollsters claim they have fixed the issues ailing Election Day polls but the better mouse trap is yet unproven. Moreover, there has been unprecedented surge in early voting (both in person and mail-in) with over 70mn votes cast nationwide to-date and there is a major skew in voter day preference by party. Admittedly, pollster are aware of this issue and will enhance their methodology by polling at large and early voting centers but nevertheless this creates greater uncertainty in their estimates.
2. Brace for head fakes: Results from battleground states should begin to trickle in just after polls close within each state (Table 3). First battleground states to report will be Florida, Georgia and New Hampshire where polls close at 7pm EDT (polls in Florida’s panhandle will close at 8 pm), followed by North Carolina, Ohio and Michigan, Pennsylvania, Minnesota, and Wisconsin. Type of ballots reported first will vary across states. For example, according to reporting done by the Upshot blog of the New York Times, battleground states such as Florida, North Carolina, Ohio, Arizona, and Iowa will report early in-person and processed mail-in votes first. Meanwhile, Georgia, Michigan, Pennsylvania, Minnesota, Wisconsin, and Nevada will not follow any specific order. Getting a clear sense of who is winning will be difficult given the large number of early voting by mail and absentee ballots and different rules around processing ballots, which we discuss below.
3. Key demographics: In 2016, President Trump was able to tip the election by winning the older and suburban vote. A post-mortem of the 2016 election by the Pew research center showed that Trump won the age groups 50-64 and 65+ by a margin of 6 and 9 points, respectively and edged out the suburban vote by 2 points. During the 2020 election cycle, polls have shown President Trump consistently running below his 2016 election numbers in these key demographic groups. In this context, keep an eye on results coming out of suburban areas such as Maricopa County in Arizona and Peach County in Georgia and older leaning regions such as Sumter County and Pinellas County in Florida. Results in these regions could prove to be a canary in the coalmine.

For those who need a cheat sheet, here is a table summarizing the key election details including poll closing times, ballot processing and deadlines, heatmap of Electoral College votes, and competitive Senate races (Battleground states highlighted in blue, bold Senators indicate predicted flipped seat)

Of course, the one biggest features of this election is the record number of early voters, which at last check were over 93 million between 59 million ballots and 34 million in-person votes as of Nov 1, a whopping 67.6% of the total votes counted in the 2016 general election.

So how are the mail in ballots being counted?

According to BofA, states could have a challenging time working through such a large number of mail-in ballots. The rules also vary by state in terms of when the ballot can be sent and counted. The most common state deadline is on Election Day when the polls close (see Table 3 above).

However, some states will accept a mailed ballot if it is received after Election Day as long as it is postmarked prior. The rules differ in terms of when the ballots can be counted. Some states do not allow mail-in ballots to be opened before Election Day which could mean counting delays. This includes a few of the critical swing states – such as PA and WI. Moreover, mail-in ballots may be contested for signatures that don’t match voter registration cards.

A risk is that the lead in the race swings back and forth between Democrat and Republican candidate depending on what kinds of ballets are being counted. A recent WSJ/NBC poll found that 47% of Biden supporters plan to vote by mail whereas 86% of Trump supporters will vote in person (see here). Indeed, according to the US Elections Project website, there have been over 48 million ballots returned and of the states that identify party affiliation, 48% were Democrats, 29% were Republicans and 22% had no party affiliation. As these votes are tallied it could potentially give a lead to Biden, then in-person voting could swing the election toward Trump, then Biden could regain ground as officials work their way through remaining mail-in votes. In other words, political analysts may not feel comfortable calling the winner despite the data on hand.

Addressing this issue, Reuters has an article today discussing the “Red mirage, blue mirage”, in which it warns of early U.S. election wins:

Imagine that the polls have closed in Florida, counties are beginning to report early vote counts, and it looks like former Vice President Joe Biden is way ahead. An hour later, Pennsylvania counties begin to report and it seems to be a slam dunk for U.S. President Donald Trump.

Don’t be fooled, voting experts and academics say. Early vote counts in the most competitive, battleground states can be particularly misleading this election because of the surge in mail-in or absentee ballots, and the different ways that they are processed.

The states that count mail-in votes before Election Day are likely to give Biden an early lead, since opinion polls and early voting data suggest those ballots favor the Democrat. Conversely, the states that do not tally mail-in votes until Nov. 3 will likely swing initially for Trump.

These so-called red or blue mirages will disappear as more ballots are counted, though experts say it may take days or even weeks to process the huge number of mail-in ballots, spurred by voters seeking to avoid crowded polling stations because of the COVID-19 pandemic.

“Be patient,” said Gerry Cohen, a member of the Wake County Board of Elections in North Carolina. “You need to count all of the votes, and that’s going to take some time.”

As Reuters expands, here is what to expect in some of the most bitterly contested states :

Blue Mirage

Florida and North Carolina allow election officials to begin processing mail-in ballots weeks before Election Day, and the results of those counts are expected to be released as soon as polls close on Nov. 3. If both states follow that schedule, it is likely that Biden will appear to be ahead initially, as the latest Reuters/Ipsos opinion poll shows that people who already have voted in Florida and North Carolina support the Democratic challenger by a more than 2-to-1 margin over the president.

In both states, a majority of people who plan to vote in person on Election Day support Trump.  A blue mirage is not expected to last long in either state. Experts say they expect Florida and North Carolina to finish counting most of their mail-in and in-person ballots before the end of the night.

Texas, Iowa and Ohio – which Trump won easily in 2016 but polls show could be competitive this year – also allow early processing of mail ballots, so could show a similar blue mirage, according to experts. All three states are expected to finish counting most ballots on Nov. 3.

Red Mirage

In Pennsylvania, Michigan and Wisconsin, mail-in ballots cannot be counted until Election Day. While Michigan did recently pass a law that allows many cities to start processing mail-in ballots, such as opening ballot envelopes, the day before the election, they cannot begin to count votes. Because mail-in ballots typically take longer to count than ballots cast in person, the initial results could skew Republican. Then, some experts say, expect a “blue shift” as election officials wade through the piles of mail-in ballots.

Pennsylvania and Wisconsin may be slowed by their lack of experience with high volumes of mail-in ballots. About one in 20 votes in the two states were cast by mail in the 2018 congressional election, compared to a quarter of Michigan’s votes and about a third of Florida’s.

Pennsylvania’s vote counting could go on for days. Democrats in the state recently won a victory in the U.S. Supreme Court to allow officials to accept mail-in ballots up to three days after the election as long as they are postmarked by Nov. 3.

“Something I’m prepared for on election night is for Pennsylvania to look more Republican than it may actually be, whoever ends up winning the state,” said Kyle Kondik, a political analyst at the University of Virginia’s Center for Politics.

Ballots in Wisconsin and Michigan must arrive by Election Day, although litigation is under way over whether the states should count ballots that arrive late if postmarked by Nov. 3.

Expect to wait for Arizona

On election night in 2018, Arizona Republican Martha McSally appeared to be on the road to victory in the state’s U.S. Senate race, telling her supporters she was going “to bed with a lead of over 14,000 votes.” Six days later, McSally conceded the race to Democrat Kyrsten Sinema as election officials tallied hundreds of thousands of mail-in ballots, including many from the Democratic-leaning metropolitan areas of Phoenix and Tucson that were handed in at voting centers on Election Day.

Arizona officials said they hope it will take less time to count ballots this year as Maricopa County, which includes Phoenix, has upgraded its equipment and added an extra week to handle early mail-in ballots. But if the race is close, it could still take days to fully count the votes. That would be “an indication of things going the way they’re supposed to,” said C. Murphy Hebert, a spokeswoman for the Arizona Secretary of State. “The process is complex, and we would just invite folks to be patient.”

* * *

The risk of a contested election

As is becoming clear, it is possible if not probable that we don’t have a result of the election on November 4th. The economic implications will depend on the reason and duration of the delay. We see three scenarios:

1. Benign: Results are delayed due to counting backlogs given the large number of absentee and mail-in ballots but a result is expected within days.
2. Painful: If the count is close, it could result in a dispute about ballot validity and lead to a recount at the state level. C
3. Crisis: Either side refuses to accept the results, leading to a legislative battle and a high degree of government dysfunction

According to Bank of America, the outcome of the election will impact the economy through two critical dimensions: confidence and stimulus expectations.

An uncertainty shock

Uncertainty about result of the election could mean the following: 1) businesses delay hiring and investment; 2) households may increase precautionary savings; 3) financing costs could rise due to market stress or concern over credit losses. Since the global financial crisis, there has been increased attention on the impact of uncertainty on the economy with substantial research coming out of academia and the Federal Reserve System. One of the most commonly referenced measures of uncertainty is the Economic Policy Uncertainty (EPU) index from Baker, Bloom and Davis.

In a recent paper, Baker, Bloom, and Davis (2015) quantify the impact that uncertainty can have on the economy, using their news-based EPU measure. Using a VAR model, they found that a 90 point increase in the EPU index would lead to a peak GDP drag of 1.2pp. To put that into perspective, the news-based EPU index spiked to a high of 504 in May (on a monthly average basis) from a February level of 216 – a 288 point increase (Chart 3). Fortunately, uncertainty has come back down to 290 as of September, but this is still a net increase of 74 points.

It may not be that simple, however. Research by Jackson, Kliesen, and Owyang (2018) at the St. Louis Fed found that there are nonlinear effects of uncertainty. In order to trigger the nonlinearity of this model, uncertainty must rise above recent historical highs – as such, the potential damage from an election uncertainty shock will be lessened so long as the EPU index does not surpass the prior peak. Based on our read of the literature, if the EPU jumps half way back to the COVID peak as a result of a contested election, it could theoretically drag down GDP growth in 1H between 1-1.5pp. But this could be tempered by the fact that it is following a highly uncertain event, so there is already some degree of uncertainly already priced in. It also depends on how long the shock persists; presumably it would fade early next year. As such, we would assume something smaller than what the models imply, perhaps in the order of a 0.5-1.0pp hit to 1H GDP growth, all else equal.

The drag to the economy from heightened uncertainty would show through as a hit to confidence –confidence measures are still depressed with a modest improvement in business confidence. These confidence measures are vulnerable to the potential double whammy of a contested election + increase in the spread of the virus.

The story for stimulus

The first order impact of the election will be on the trajectory for additional stimulus. Here are our expectations:

• Biden win + Democratic Congress (‘Blue wave’): $2.0 – 2.5tr in stimulus, including additional funds for the COVID health response. Passed right after inauguration.
• Biden win + divided Congress: $500bn – 1tr in stimulus. Passed after inauguration but with some delay. There is also some chance of continued gridlock in this scenario.
• Trump win + divided Congress (‘Status quo’): $1.5 – 2.0tr in stimulus. Passed in the lame duck session because neither side gains an advantage by waiting for a new government to form.

Needless to say, a clear victory could accelerate stimulus negotiations. This is particularly the case if it returns the status quo so neither side has a reason to delay. The two sides are not that far apart — both agree on additional unemployment insurance (around 100% replacement income which is about $300-400 additional/week) and aid for small businesses. They disagree over state & local aid and liability protections for businesses but these appear surmountable hurdles. It is even possible that stimulus is passed in the lame duck session with a status quo result.

The worst case scenario, and one which could lead to a 20% drop in markets according to BofA, a scenario of a Biden victory with a Republican Senate could make it harder to get any package through, creating a risk of sustained gridlock. By contrast, a “Blue Wave” would make a stimulus package very likely by February, one that is likely in excess of $2tr. Under any election result, there will be much more clarity on the path for fiscal stimulus with a fading of the uncertainty shock.

In the event of a contested election that looks like either scenario 2 or 3, the political environment creates a challenge for additional stimulus. Markets will likely become discouraged about the prospects for compromise. However, there is a threshold. If markets sell off violently and the economic data deteriorate, we could see Washington facilitate the passage of stimulus even in a highly contentious environment.

To summarize, BofA believes that an election result of status quo could lead to an earlier passage of stimulus (in lame duck), a “Blue Wave” makes a stimulus package very likely but only after inauguration and a highly contested election would likely create an impediment to stimulus but if the markets and economy deteriorate, an emergency stimulus could be triggered. A clear victory would be a net positive for the economy as it reduces some of the negative risk from higher uncertainty. A Blue Wave likely means greater stimulus which thereby provides the greatest near-term boost to the economy.

The Fed wild card

If there is not a result and financial conditions tighten due to a contested election, BofA believes the Fed’s credit facilities will once again be needed. The Fed could consider easing terms to facilitate the flow of credit. The Fed could also ramp up the QE program, buying Treasuries and MBS at a faster rate, as well as corporate credit as needed, particularly if it sees concerns over market liquidity. Ultimately the focus could be on credit (MBS and corporate credit) versus USTs in a risk-off scenario. Or as BofA recaps, “the Fed has tools and will use them.”

Legislation

The timeline for legislation action will depend on who controls the Senate. If there is a Blue wave, we can assume there will be parallels to the first 200 days of Presidents Obama and Trump in which both had a united Congress. When Obama took office in 2009 he faced an economic collapse from the Global Financial Crisis requiring immediate passage of stimulus. Indeed, the American Recovery and Reinvestment Act was passed on January 28, 2009, just 9 days after the inauguration. He then tackled his number one legislative priority – health care reform – but the Affordable Care Act wasn’t signed into law until March 2010. Similarly, Trump still faced obstacles in passing the Tax Cuts and Job Act, which was signed into law on December 22, 2017. Thus, even with a sweep, we therefore think it is reasonable to assume that the legislative agenda won’t be realized until early 2022

The Biden-Harris team has proposed a detailed agenda including increasing spending on child care and education, health care, retirement, disability benefits, R&D, infrastructure and climate change among others. This would be partly financed by increasing taxes on high-income households and corporations. According to the Committee for a Responsible Federal Budget (CRFB), Biden’s spending programs would total $10.65tr over a 10 year period but would be offset by tax revenues of $4.3tr and $750bn in savings from immigration reform (Table 5). The CRFB also come up with a potential path under a Trump second term, although they admit that there is more guesswork. They find that there would be a $5.1tr increase in spending with the bulk focused on infrastructure of $2.7tr. Tax policy would also be deficit negative, costing $1.7tr.

Depending on the political environment, the economy might receive another boost in early 2021 from legislative changes. However, despite potentially a large price tag, it is unlikely to provide the same jolt to the economy as the COVID-related stimulus. The policies focus on the medium term, particularly infrastructure spending and education reform. The most fiscal restraint will likely be under a scenario of Biden and a divided Congress while the easiest path to fiscal expansion should be under a Blue wave.

Authored by Jezzamine Wolk via Campus Reform,

Campus Reform spoke with young minority college students who plan to vote for President Donald Trump. 

For part three of the four-part series, students condemn the narrative that they are “traitors” to their community.

Each student interviewed said that they have faced criticism for their political beliefs and that many times it comes from White liberals.

“I’m not trying to put down White people, but it usually is a White liberal who comes up to me and tries to tell me all Black people need to x,” said Wayne State University senior Christopher Gaffrey. 

“That’s the same mentality that kept people of color, and like you and other people, oppressed for countries and all over the world,” he added.

University of Utah student Seodam Kwak said,

“They believe that your identity basically dictates your political view.”

WATCH:

The same brokerages that have been notorious for freezing up and locking people out of their accounts during points of volatility over the last year now claim they are ready and well positioned for post-election volatility in markets. 

We’ll believe it when we see it…

Exchanges have also said they “have spent months planning” for dealing with volatility that may arise as a result of the outcome of the election, according to Reuters. With just 6 days left until the election, we are about to find out if they are bluffing or not. 

In addition to brokerages like Robinhood and TD Ameritrade freezing out customers during the volatility induced by the Covid-19 pandemic earlier this year, exchanges like Euronext and the Tokyo Stock Exchange also suffered outages. New Zealand’s stock exchange was hit by cyberattacks in August and in July, a Deutsche exchange was similarly compromised. 

Kevin Kennedy, head of U.S. options at Nasdaq Inc., commented: “This thing could take days, weeks, months, so we embarked on a journey of increasing our capacity by multiple times.”

NASDAQ reportedly started shoring up its exchange after the volatility in March put everybody on notice that it could be an issue. NASDAQ saw its volume of trades increase by 2.5x from their 2019 peaks in March. Options markets saw volumes triple – and just think – this was before Softbank was manipulating the NASDAQ via the options market.

CBOE also says it is taking preparations, including increasing the size of its Chicago based trading floor for additional brokers and market makers: “This was done to ensure adequate liquidity and broker coverage in anticipation of potential expanded volumes and volatility around the election.” 

And while the CBOE and NASDAQ held up mostly well during March, brokerages like Ameritrade and Robinhood – well…didn’t.

During the pandemic volatility, Ameritrade’s website was often slow and many times unusable until the market had been open for an hour or two each morning.

“We’re lining up all available client service resources to be available to assist on the phones. In addition, we are communicating with clients about our election-related education and commentary,” Ameritrade, which is now Schwab, commented.

Robinhood – the startup brokerage that has helped “gamify” the stock market via its app went down on numerous occasions during the first and second quarter of 2020, inciting outrage from its users who couldn’t trade or have access to their funds at arguably one of the most crucial points in the trading year. 

Robinhood commented: “This year, our engineering teams have worked diligently to further harden our infrastructure, improve reliability, and increase capacity.”

We’ll see how well that statement holds up on November 4. 

Authored by Ethan Yang via The American Institute for Economic Research,

If you get your information about American politics from the media, politicians, and even from a lot of Washington, DC think tanks, you’re doing it wrong. It goes without saying that politics is about mass mobilization and power; narratives and oversimplification are the tools of the trade. That would be fine if real-life consequences didn’t come out of half-baked ideas about policy, but guess what, they do. If you find yourself constantly frustrated by the superficial and borderline false explanations given to support various political agendas, then you should look into John Tamny’s latest book, They’re Both Wrong: A Policy Guide for America’s Frustrated Independent Thinkers. The name speaks for itself and Tamny spares no time taking aim at both Conservatives and Liberals, dismantling their frequently peddled narratives, besting their emotional facade with independent, fact-based analysis.

Today, it is rare to find any sort of analysis that resembles Tamny’s independent and truth-focused writing. Few people in politics seem to care about looking a couple inches below the surface and a few steps ahead into the future when it comes to making the case for their policies. Why would they? Politics is war, power is the end that justifies the means, victory is all that matters. If it riles up the masses and gets the right team elected, that’s all they could ask for. The problem with the way all this works however, is that politicians don’t need to live with the consequences of their decisions. The rest of us definitely do. That’s why the level of analysis and thought Tamny exercises in his book is so desperately needed in today’s politics. To bring back some semblance of concern for the consequences of the policies politicians are empowered to make and to usher in some sobriety to the drunken party that is Washington, DC. 

Unlike the other books I review, Tamny’s book doesn’t have some groundbreaking thesis or an ultimate idea. It’s quite straightforward and the title says it all. The book itself is a collection of essays, each touching on a common belief or talking point perpetuated by either the American left or right. Each essay could essentially function as a policy brief discussing with a high degree of detail and insight on why a certain talking point is mistaken. At the end of the book, the reader will have received an introduction into how to think clearly about important issues in American politics. Whether or not you agree with Tamny’s reasoning, you will at least be able to see past the emotional appeal of certain ideas and start thinking about the facts. That is certainly something we can all agree is important, especially today.

Debunking Conservative and Liberal Narratives 

Tamny doesn’t wait to warm up the reader; he goes right for the hot stuff by starting off the book with a chapter on immigration and conservatives. We hear it all the time; “Build the wall,” “Protect American jobs,” and “Immigrants are just here to take welfare.” In an interview with Tamny, I asked him what conservatives are missing when it comes to immigration. 

His answer: “Basic economics.”

According to Tamny, the Conservative aversion to immigration seems to go against everything that they ever believed in and also just falls short of reality. Firstly, how will a wall along the Mexican border help anything? Roughly a thousand people still manage to escape North Korea every year, the most totalitarian regime on the planet. How big is the government going to have to get to fund a border wall over 1,700 miles long and adequately patrol it? Not only is that a silly question but conservatives would be betraying their commitment to limited government. 

When immigrants come to this country they are not here to take welfare. They are here to establish a better life and have a shot at prosperity. That’s why someone would flee Communist North Korea or the Soviet Union for America. Last time I checked, there are more handouts in socialist countries and people leave those countries for places like America. Immigrants want to come to work, not take welfare. Tamny points out in his book that immigration was at its most recent lows during the Obama administration, not the Trump administration. The reason for this is simple; President Obama presided over a worse economy. I’m sure the Obama administration was far more open and accommodating than the Trump administration but immigrants are interested in working. There was more work to go around during the Trump and Bush administrations and the immigration trends follow that.

Tamny writes 

“If immigrants were in fact crossing the border for handouts as conservatives regularly argue, wouldn’t the Obama years have coincided with a massive increase in crossings? Wasn’t Obama all about amnesty and handouts as is?

Furthermore, immigration restrictions to protect workers are basically central planning and antithetical to free markets. A competitive and dynamic workforce is good for everybody. Companies get better choices for workers which in turn produces better services for everyone. Lower costs, more inventions, and more services brought about by immigration produces net benefits for society. 

Just like central planning frequently trips over its own feet in attempting to predict and run all market transactions, so too does attempting to “protect American jobs.” Which jobs are conservatives referring to when they say that? Do they somehow know exactly what jobs are being protected now and forever into the future? How do they know that the immigrants they let in won’t in some way contribute to the creation of new jobs? That’s a silly question because the notion that the government can somehow be an all-knowing and all-powerful benevolent steward of each and every one of our jobs is a fatal conceit. Something a Socialist like Bernie Sanders might think, not a Conservative. 

Tamny has many more chapters where he debunks conservative talking points and dives into the facts surrounding everything from school choice to domestic energy production. 

He also saves equal room for the Liberals to make sure they get their turn to have their bubbles popped.

Just to pick a random topic, Tamny goes after the left hard on their demagoguery over corporations. If you thought Conservatives perpetuated economically questionable and factually dubious narratives about immigration, take a look at how liberal politicians talk about corporations. According to labor unions and their allies in politics, you would think that we all live under the boot of corporate tyranny. Normal people like you and me are worked to the bone for scraps as rich fat cats at the top enrich themselves with the fruits of our labor. Then they put their money into cementing their power by rigging the system. 

That would be somewhat reasonable if there wasn’t an entire wing of American politics that demonizes corporations. It’s not tyranny if half of Congress is opposed to this alleged corporate scheme. However, Tamny digs a bit deeper than just that. If you look at the state of the workforce right now with NBA players collecting millions of dollars and workers at oppressive corporations like Facebook getting impressive new work complexes it seems like corporations are doing all the work. Corporations are bigger than ever and we are all collectively more wealthy and more comfortable than ever before. If anything, the bigger the corporation, the better the employees are treated. 

That isn’t to say that there aren’t plenty of cases of worker abuse and poor working conditions, but that’s also just how humans treat each other and all of history is dominated by poor working conditions. What has done more for worker welfare is not onerous labor regulations but increased competition and commercial success. When companies are forced to fight over workers, they treat them better. When companies make a profit, those gains are passed down to all members of the firm be it through pay raises, benefits, or fancy new amenities. 

Would you rather work in a startup in someone’s garage where your boss can only afford to pay you minimum wage and you all share a table, or would you rather work at Apple’s fancy new campus? Employment is a two-way street. Employees and corporations both have something they each want. In a free-market economy, such relationships are governed by a system of competing interests and facilitated by mutual benefit.

Tamny explains

“Benefits focused on retaining the best workers aren’t just a Silicon Valley or a Wall Street concept. People are essential and companies, far from exploiting them, are going out of their way to retain them.”

This is not to suggest that corporations are perfect or that those who are skeptical of corporate power are completely wrong. The main takeaway here as with every chapter in Tamny’s book is to look beyond the surface narrative you are being given. Perhaps you have found Tamny’s explanation about corporate power or immigrants unconvincing. That’s fine but rather than engaging with the fear-mongering narratives surrounding corporations and immigrants, do some independent research. Don’t be satisfied with the first thing out of your favorite politician who just wants your vote or that news anchor who wants to keep your eyes glued to the screen.

The bottom line: Do your own research, understand what you’re talking about, and engage honestly. Emotions and soaring rhetoric sound great on TV but that is not how you run a country. 

Key Takeaways

Tamny’s book is incredibly refreshing and intellectually stimulating, especially in polarized times like this. Although the common narratives Conservatives and Liberals like to use may be entertaining, perhaps even inspiring, they cannot be more harmful. Politics first and foremost is conflict. It’s about power and victory more than it is about the truth. In They’re Both Wrong, Tamny gives his thoughts on the problems associated with the various talking points that both sides like to offer. 

Although I am not saying that he is right about everything or that each chapter is to be treated as the final word on a matter, his book starts a conversation based on facts, not emotions. You may disagree with him but there is no denying that he cares about the consequences of his ideas and not just winning the argument. However, it must be said that after reading, I find it difficult to disagree with him. If anything, reading this book will give the reader a strong foundation in which to approach political issues. 

Such a book is essential not just because it provides insightful commentary on important political issues but because it provides a timeless lesson. This is that a country, a government, and a society cannot sustain itself on a foundation of weak narratives. Independent thought and rigorous conversations are what form the backbone of a vibrant democracy.