Author Archives: Sheila

Very Interesting…

I am aware of a number of upper-income folks who justify their continuing support of Donald Trump by asserting that–“like most Republicans”– he has been better for their portfolios. That has always struck me as a poor excuse for ignoring what another Trump Presidency would do to the country (and for that matter, the world), but I’ve chalked it up to selfishness and (misunderstood/shortsighted)  self-interest.

Evidently, I should have attributed it to ignorance, because it turns out that–when it comes to investment returns– Democratic administrations have greatly out-performed Republican ones.

As I was reading a recent issue of the Indianapolis Business Journal–a publication that covers local government far more thoroughly than the Indianapolis Star, by the way–I came across the regular column by Mickey Kim devoted to giving investment advice. This particular column was titled “Keep Calm and Don’t Mix Politics with your Portfolio,” and it was an effort to persuade people not to base their investment strategies on partisanship rather than performance, not to suggest that one party was better than the other for investment.

But the data was eye-opening, at least for me. (I readily admit to chosen ignorance about all things investment.)

My friend Sam Stovall, chief investment strategist for Wall Street research firm CFRA, dissected price changes for the S&P 500 going back to 1945 based on election results.

Republican administrations are generally viewed as “pro-business,” and conventional wisdom is that stocks do better with a Republican in the White House. There has, indeed, been a huge difference in returns during Democratic versus Republican administrations. However, as is often the case, conventional wisdom is wrong. Past performance is no guarantee of future results, but Stovall calculated from Harry Truman’s inauguration on April 12, 1945, through March 15, 2024, the average annual return for the S&P 500 was 44% higher with Democrats in the White House (9.5% vs. 6.6% during Republican administrations).

Further, according to Invesco and Haver Analytics, hypothetically speaking, the best-performing portfolio from 1900 to 2023 was the “bipartisan” one that stayed fully invested in the Dow Jones industrial average (a price-weighted index—cannot be invested in directly—of the 30 largest, most widely held stocks traded on the New York Stock Exchange) during both Democratic and Republican administrations. Again, past performance is no guarantee of future results, but starting with $10,000, this portfolio grew to almost $9.9 million.

Conversely, a “partisan” portfolio, invested only during Democratic or Republican administrations, underperformed by millions of dollars. The same $10,000 invested only during Democratic administrations grew to about $528,000. Invested only during Republican administrations, the initial $10,000 grew to a bit less than $181,000.

Kim concluded this analysis by reiterating his intended message, that “there can be a huge cost to letting a partisan political storm crash your portfolio.” His sound advice: “Develop an investment plan based on your long-term goals and stick to it. Your financial future will depend far more on how much you save and invest, not who wins the election.”

I am in no position to quibble with that advice, which strikes me as quite sound, but it certainly does raise a question about those upper-income Trump apologists. I suppose it’s possible that their portfolios grew under Trump, but given the truly excellent performance of the economy during the Biden Administration, it’s quite likely they’ve done as well or better with a Democrat in the White House. Is their purported reliance on portfolio performance an evasion intended to mask the actual reasons they support Trump (racism, misogyny, isolationism…)? Or do they actually not understand the significance of the data I’ve cited above?

Perhaps they’ve simply and unthinkingly accepted the old “country club Republican” belief that the GOP is the party looking out for the interests of the business community, while Democrats are “giving away” tax dollars via welfare and government spending. If so, someone needs to explain to them that both the short and long-term interests of the business community include such things as social stability, a well-maintained infrastructure, an educated and adequate workforce, and a population with enough disposable income to support robust consumer demand.

As investors are often admonished, past performance is no guarantee of future results. But the odds would certainly seem to be in the Democrats’ –and Biden’s–favor.

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Vouchers Again..

When we look at the growth of America’s polarization, and the reasons for it, we need to recognize the significant contribution made by voucher programs.

I have frequently written about the mythology of so-called “school choice” programs. The original argument was that they would allow poor children to escape sub-standard public schools, that children attending them would receive better educations, and that competition with “government schools” would trigger improvement in those schools. (The critics constantly complaining about the nation’s public schools for some reason never suggested putting additional fiscal or human resources into improving those schools. Instead, the “fix” was entirely punitive– siphoning off existing resources in order to generate competition.)

It is now pretty clear that the actual motivation for privatizing education was as a mechanism to evade the First Amendment’s prohibition against sending tax dollars to religious institutions (destroying teachers’ unions was the cherry on top….). Proponents successfully argued that the money was going to parents, who were then free to choose religious schools if they wished.

Of course, the vast majority of schools accepting vouchers are religious–and the vast majority of families using vouchers send their children to those religious schools. Meanwhile, those initial promises remain unfilled: voucher students have not performed better on standardized tests (often, quite the contrary); a majority of the families using vouchers are middle and upper-middle income, not poor; and far from triggering improvement in the nation’s irreplaceable public school systems, the programs have impoverished and hobbled them.

Most people who are familiar with the performance of voucher programs know all this. What is less well understood is how educational vouchers have deepened American divisions. A recent report from In The Public Interest focuses on how and why.

The report looks at what voucher schools do with the public dollars being bled from public schools.

They preach—and practice—discrimination. Education Voters of Pennsylvania has pulled together a list of the ways voucher schools have discriminated in that state, and Illinois Families for Public Schools has done the same for Illinois—both make for bracing reading.  But what’s true for Illinois and Pennsylvania is true across the country.

The study documents discrimination against LGBTQ+ students, discrimination on the basis of religion, and discrimination against students requiring special education attention. A large number of religious schools also teach that women should not have the same rights as men. In Wisconsin, Lutheran schools receiving public money hold to the following beliefs:

Since God appointed the husband to be the head of the wife (Eph 5:23), the husband will love and care for his God-given wife (1 Pe 3:7). A wife will gladly accept the leadership of her husband as her God-appointed head (Eph 5:22-24).

In church assemblies the headship principle means that only men will cast votes when such votes exercise authority over men. Only men will do work that involves authority over men (1 Co 11:3-10; 14:33-35; 1 Ti 2:11,12).

 Women are encouraged to participate in offices and activities of the public ministry except where the work involves authority over men.

The Arizona Lutheran Academy website includes the following text:

Many families are surprised to learn about the options and come to realize a private, Christian education can be a reality. It is rewarding to walk families through the tuition assistance process and see how God provides in ways that some never knew existed.

As the Executive Director of In The Public Interest wryly commented, “Well, not God, exactly. All of us are paying for it with money intended for public schools.”

Discrimination paid for with public money is bad enough, but what is worse is that voucher schools– especially but not exclusively religious voucher schools–can teach (or omit teaching) pretty much anything they want. A colleague and I looked at Indiana’s voucher schools a few years back, and found few of them bothering with civics.

More to the point, historians tell us that public schools were intended to be constitutive of a public. In other words, America’s public schools were established to do more than teach subject matter, important as that task is. They were meant to undergird e pluribus unum–to create an over-arching unity from our diversity. Residential segregation has always made that goal difficult, but even in neighborhoods where the children come from similar socio-economic households, they bring other differences to the classroom, where they should learn that the American Idea respects those differences but also welcomes all of them to a common civic table.

Enormous amounts of our tax dollars are being spent to avoid those lessons. Vouchers are contributing to America’s polarization and to the growth of Christian Nationalism–and they are doing so without producing any of the educational benefits originally promised.

They’re a very expensive scam.

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Words And Deeds

Among the hackneyed adages we all exchange from time to time is the one that admonishes us to Ignore what people say; instead, we’re told to look at what they do. These sorts of standard sayings persist in the culture because they point to a central truth, and this one is no different. Actions really do speak louder than words.

Which brings me to Arizona.

As everyone who reads or listens to the news now knows, the Arizona Supreme Court recently struck down a 15-week limit on abortion, and instead revived an 1864 law banning the procedure–a law so old, it preceded Arizona statehood. The law they revived reads:

“A person who provides, supplies or administers to a pregnant woman, or procures such woman to take any medicine, drugs or substance, or uses or employs any instrument or other means whatever, with intent thereby to procure the miscarriage of such woman, unless it is necessary to save her life, shall be punished by imprisonment in the state prison for not less than two years nor more than five years.”

Arizona only became a state in 1912.

Given the toxic politics of abortion bans in the wake of Dobbs, Republicans in the state publicly decried the ruling. Even those who had previously supported total bans issued more “moderate” criticisms of the court’s decision. But then–as another hoary phrase might have it–the rubber hit the road. Democrats in the Arizona legislature proposed to repeal the law–and Republicans refused to allow that repeal to go forward.

As the AP reported:

The Arizona Legislature devolved into shouts of “Shame! Shame!” on Wednesday as Republican lawmakers quickly shut down discussion on a proposed repeal of the state’s newly revived 1864 law that criminalizes abortion throughout pregnancy unless a woman’s life is at risk.

The state Supreme Court cleared the way on Tuesday for enforcement of the pre-statehood law. Arizona abortion providers vowed Wednesday to continue service until they’re forced to stop, possibly within weeks.

State legislators convened as pressure mounted from Democrats and some Republicans, including former President Donald Trump, for them to intervene.

House Democrats and at least one Republican tried to open discussion on a repeal of the 1864 abortion ban, which holds no exceptions for rape or incest. GOP leaders, who command the majority, cut it off twice and quickly adjourned for the week. Outraged Democrats erupted in finger-waving chants of “Shame! Shame!”

It is interesting, however, that–despite the candidates’ frequent allusions to their (Christian) religiosity and Right-wing bona fides, none of the ads talk about abortion. And as the media has reported, rather than repeating his frequent previous boasts about being the President who named the Justices who gutted Roe v. Wade, even Trump has tried to “moderate” his position by coming out for a Dobbs-like “states’ rights” position.
What has happened in Arizona should serve as a lesson to voters who might be tempted to believe these GOP efforts to downplay their efforts to end reproductive freedom for America’s women. Once in office, that new not-so-moderate “moderation” will evaporate.
Ignore what they say–and take note of what they do.
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P.S.

After I wrote yesterday’s post about White Rural Rage, I re-read my description of the Niskanen Center’s far more careful 2019 analysis, and decided that it bears re-posting. So here it is:

The Density Divide is the title of a very important paper issued in June by Will Wilkinson, Vice President for Research of the Niskanen Center. It looks in depth at the phenomenon that I usually refer to as the “urban/rural divide”–delving into the attributes that make individuals more or less likely to move into cities, and examining the consequences of those differences and the steady urbanization of the American polity.

The paper is lengthy–some 70 pages–but well worth the time to read in its entirety. It is meticulously sourced, and replete with graphs and other supporting data.

Wilkinson confirms what others have reported: a substantial majority of Americans now dwell in the nation’s cities and generate the lion’s share of the nation’s wealth. But he goes beneath those numbers, referencing a body of research demonstrating that people who are drawn to urban environments differ in significant ways from those who prefer to remain in rural precincts. He focuses especially on ethnicity, personality and education as attributes that make individuals more or less responsive to the lure of city life.

He goes on to describe how this “self-selected” migration has segregated Americans. It has not only concentrated economic production in a handful of “megacities”–it has driven a “polarizing wedge” between America’s dense and diverse urban populations and the sparse White populations remaining in rural areas. That “wedge” is what he dubs the “Density Divide.” (Wilkinson is careful to define “urban” to include dense areas of small towns–the divisions he traces aren’t a function of jurisdictional city limits. They are a function of residential density.)

Wilkinson finds that the “sorting mechanism of urbanization” has produced a rural America that is lower-density, predominantly White, and “increasingly uniform in socially conservative personality, aversion to diversity, relative disinclination to migrate and seek higher education, and Republican Party loyalty.”

That sorting has also left much of rural America in economic distress, which has activated a “zero-sum, ethnocentric mindset.” (That mindset is reflected in the angry rhetoric spouted by rural MAGA hat wearers about “un-American” immigrants and minorities, and disdain for “liberal elites”–all groups that are thought to reside in those multi-cultural cities.)

The density divide–together with America’s outdated electoral structures– explains the 2016 election. The “low-density bias” of our electoral system allowed Trump to win the Presidency by prevailing in areas that produce 1/3 of GDP and contain fewer than half of the population. That low-density bias continues to empower Republicans far out of proportion to their numbers.

Wilkinson reminds us that there are currently no Republican cities. None.

As he points out, the increase in return to human capital and density has acted to amplify the polarizing nature of selective urbanization. Temperamentally liberal people self-select into higher education and big cities, where the people they encounter exert a further influence on their political attitudes. They  leave behind a lower-density population that is “relatively uniform in white ethnicity, conservative disposition and lower economic productivity.” Economic growth has been shown to liberalize culture; stagnant or declining economic prospects generate a sense of anxiety and threat. (In that sense, the political scientists who attributed Trump votes to economic distress were correct, but the distress wasn’t a function of individual financial straits–it was a reaction to the steadily declining prospects of rural environments.)

Wilkinson argues that there are no red states or blue states–not even red or blue counties. Rather, there is compact blue urban density (even in small cities in rural states) and sprawling red sparseness.

This spatial segregation of people with very different values and world-views is radicalizing; Wilkinson reminds us that a lack of exposure to intellectual diversity and broadly different points of view breeds extremism. Because urban populations are far more intellectually diverse, more homogeneous rural populations have shifted much farther to the right than urban Americans have shifted left.

The United States population is projected to be 90% urbanized by 2050–not too many years after we are projected to become “majority-minority.” Those projections suggest we will see increasing radicalization of already-resentful rural inhabitants.

The prospects for returning to rational politics and a truly representative governance will depend entirely upon reforming an outdated and pernicious electoral framework that dramatically favors rural Americans. Whether those reforms can pass our very unrepresentative Senate is an open question.

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It’s More Complicated Than That…

A recent controversy reminded me that confirmation bias isn’t confined to the political Right. Those of us who lean Left engage in it too, and–unfortunately– so do serious observers of the political scene who ought to know better.

One reason for the academic process known as “peer review” is to ensure that scholars have accurately interpreted the work of other scholars, and to check that the methodologies they’ve employed have been correctly applied. (Errors in methodology aren’t necessarily intentional–they can be the result of the researcher seeing what she is convinced she’ll see.)

What triggered these reminders was a recent article from The Atlantic, pointing to serious flaws in the arguments and conclusions in White Rural Rage, a recent best-seller by political scientist Tom Schaller and journalist Paul Waldman. I was particularly interested in the article and the scholarship it cited, because my own reading has convinced me that urban-rural divisions are indeed a significant part of America’s current polarization. But the critique of this particular book looks to be firmly grounded.

In the weeks since its publication, a trio of reviews by political scientists have accused Schaller and Waldman of committing what amounts to academic malpractice, alleging that the authors used shoddy methodologies, misinterpreted data, and distorted studies to substantiate their allegations about white rural Americans. I spoke with more than 20 scholars in the tight-knit rural-studies community, most of them cited in White Rural Rage or thanked in the acknowledgments, and they left me convinced that the book is poorly researched and intellectually dishonest.

The Atlantic author, Tyler Austin Harper, says he was initially frustrated by the book’s resort to familiar stereotypes, but when he dug deeper, he found significant problems with White Rural Rage that extended “beyond its anti-rural prejudice. As an academic and a writer, I find Schaller and Waldman’s misuse of other scholars’ research indefensible.”

I won’t go through all of the misquoted scholarship that Harper enumerates in the linked analysis, but the largest error he identifies by far is the failure to define their use of the term “rural.”

The most obvious problem with White Rural Rage is its refusal to define rural. In a note in the back of the book, the authors write, “What constitutes ‘rural’ and who qualifies as a rural American … depends on who you ask.” Fair enough. The rural-studies scholars I spoke with agreed that there are a variety of competing definitions. But rather than tell us what definition they used, Schaller and Waldman confess that they settled on no definition at all: “We remained agnostic throughout our research and writing by merely reporting the categories and definitions that each pollster, scholar, or researcher used.” In other words, they relied on studies that used different definitions of rural, a decision that conveniently lets them pick and choose whatever research fits their narrative. This is what the scholars I interviewed objected to—they emphasized that the existence of multiple definitions of rural is not an excuse to decline to pick one. “This book amounts to a poor amalgamation of disparate literatures designed to fit a preordained narrative,” Cameron Wimpy, a political scientist at Arkansas State University, told me. It would be like undertaking a book-length study demonizing Irish people, refusing to define what you mean by Irish, and then drawing on studies of native Irish in Ireland, non-Irish immigrants to Ireland, Irish Americans, people who took a 23andMe DNA test that showed Irish ancestry, and Bostonians who get drunk on Saint Patrick’s Day to build your argument about the singular danger of “the Irish.” It’s preposterous.

Serious scholars confirm the existence of a very real urban/rural divide, and cultural differences between urban dwellers and Americans living in thinly-populated, economically-struggling parts of the country. But careful scholarship has distinguished between residents of non-metropolitan areas who fit the book’s “rural” stereotype and those who do not. In 2019, I cited a fascinating study from the Niskanan Center that focused on attitudinal differences linked to residential density–the lengthy study found that values of small town residents of “rural” America who lived close to others in the hearts of those communities differed from those of their more isolated neighbors.

The bottom line here is twofold: it’s important to avoid stereotyping, and essential to define our terms. As our political battles heat up, too many of us use language to label opponents rather than as vehicles to convey information.

Is there an urban/rural divide? Yes. Is it important to understand its roots and effects? Yes again. But as I used to tell my students–and as someone should have told the authors of this book–it depends upon how you are defining rural, and it’s more complicated than you want to understand.

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