Welcome to Tangle.
Since Thursday’s newsletter, we’ve gotten 100+ new Tangle subscribers. Welcome! Tangle is ad-free, independent, and non-partisan. Send in questions you want answered by simply replying to this email. If you like Tangle, please forward this email to a few friends or share this link on social media: https://tangle.substack.com
A big thank you.
Last night, I was invited onto CTV News, Canada’s #1 cable news network, to discuss the weekend’s biggest stories. It was my first time ever appearing on their network and they found me via Tangle. Your support, and everyone who shared the newsletter, were a big help. Thank you. You can watch here.
Someone sent you this so you can join the party. Subscribe below.
Today’s read: 8 minutes.
Recession fears, your data, and a personal story that seems relevant.
What D.C. is talking about.
The #TrumpRecession. Yesterday, the faces of President Trump’s economic agenda — Larry Kudlow and Peter Navarro — were working the Sunday morning news circuits. That is never a good sign for a president. Kudlow and Navarro were bullish that the United States is not headed towards a recession and argued vociferously that Trump’s trade war with China isn’t hurting American consumers or producers. Their tour de optimism was a reaction to what’s known as a “yield curve inversion.” That’s an economic indicator essentially saying a U.S. treasury bond (think: a loan) will return more cash in 3 months than it will in 10 years. Over the last 70 years, every time these yield curves have inverted — with one or two exceptions — a recession has followed.
What Republicans are saying.
Take a step back. Unemployment is at a 50-year-low, job growth is consistent, wages are moving in the right direction and consumer spending is high. Basically everyone who got in the market when Trump became president has been winning, and that includes a lot of growth in your 401k and other savings accounts. By standard metrics, the Trump economy is cruising and outpacing the global economy. Even GDP growth has exceeded expectations. Trump called the yield curve inversion “crazy” on Twitter and pointed the finger at the federal reserve to lower interest rates (the lower the interest rates, the less people have to pay back on certain loans).
What Democrats are saying.
This is all Trump’s fault. The job growth started under Obama, the economic warnings are only going to get worse and it could have been avoided. Trump’s trade war with China and his fragmented, disorganized policy being led by a rotating cast of characters has left us in a bad spot. The federal government has spent at least $23 billion repaying farmers for the money they’ve lost because of the trade war, and China is going to continue punishing U.S. farmers. The yield curve inversion is a clear indicator the floor could come out any day. In the meantime, Trump’s huge tax cut went largely to wealthy Americans and didn’t produce the reinvestment in America he said it would. Now, the U.S. deficit (that’s the year over year debt) has skyrocketed as a result.
It’s not a sexy talking point, but continuous economic success usually takes two presidents. If a president is in his first term, a strong economy is an indication that the previous and current president both made smart moves. Trump benefitted from inheriting a stable economy from Obama, then injected it with steroids. The concern has always been whether it will last (in the past, deregulation and tax cuts have caused some economic “overheating”). Nobody can predict a recession, and most of the people who try to are left looking silly. Kudlow was on television in December of 2007 promising Americans that a recession was not realistic and nowhere close. A few months later America was spiraling out into one of its worst economic crises ever, and Americans are still climbing back from that 2008 crash. All that being said, a recession is going to happen — it always does. It’s just a matter of when. I suspect Trump will do anything, even making huge concessions to China, in order to avoid one before the 2020 election. Without a humming economy his 2020 chances disintegrate. That, plus all the positive markers people seem to be ignoring, give me hope the economy will hold on for another few years. And, by the way, all you never-Trumpers should be hoping that, too. No matter how much disdain you have for Trump, a recession will hurt everyone — and nobody will be worse off than poor folks who will lose their jobs or middle-class Americans with already limited savings. While I have you thinking about the economy: I’ve been saying for a few years that the metrics we prioritize to discuss the economy are broken. I’d be far more interested in knowing how many Americans struggled to pay their rent or put food on the table vs. what the GDP growth or unemployment rate is. I wrote more about that here.
Kevin M. Kruse @KevinMKruse“There’s no recession coming. The pessimistas were wrong. It’s not going to happen.” — Larry Kudlow, December 2007 https://t.co/aajDQgEUNe
Not helping their cause.
Your questions, answered.
Reminder: Tangle is about repairing the relationship between reporters and readers. Simply reply to this email to submit a question and I’ll get to it in an upcoming newsletter.
My question is about data security. I recently watched Netflix's new documentary, The Great Hack. I feel that my generation, myself included, does not take this serious enough. The documentary at one point makes a claim that data is more valuable than oil. How do you see this reshaping our policies, economics, and general sense of security now and in the future?
- Chris, Philadelphia, PA.
I finally got a chance to watch The Great Hack this weekend, and I’d certainly recommend any American or anyone who spends time on the internet give it their time. It has a bit of a left-leaning tilt, but it’s a great exploration of how the 2016 election and Brexit went down and how data played a part.
To your question, I don’t think it’s about how data will reshape policies, economics or a general sense of security, I think it’s about how it already has. Cyber warfare has been going on since the 1990s, and the U.S. government’s infrastructure is notoriously dated. You’d be shocked at how many important agencies or classified documents are basically secured on Windows ‘97. Data breaches are commonplace now — from Facebook allowing a breach of 50 million users’ data to 22 million social security numbers being lifted from the Office of Personnel Management. The top 10 breaches of 2018 is a jaw-dropping list, and it doesn’t even include the Democratic National Committee (DNC) falling for a basic phishing scam that helped sink Hillary Clinton’s candidacy in 2016.
As for the politics of it all, I think what we’re witnessing now is only going to get worse. Political groups like Cambridge Analytica, which claims to have had 5,000 data points on every U.S. voter in 2016, will continue to find ways to buy and farm voter profiles. When that data is leveraged, I believe it is, in fact, far more valuable than oil. After all, President Trump essentially won the election by 70,000 votes across three states. Most people my age don’t care whether they get targeted Instagram ads. In fact, many of them love it! But if that data is in the wrong people’s hands, it can be a major cause for concern.
One of the most interesting pieces of the puzzle, which wasn’t covered in The Great Hack, is location data. The New York Times did a phenomenal story on this last year. In essence, location data is some of the most valuable, telling and easily given away personal data. Say, for instance, that a 25-year-old woman is a member of a yoga group and likes a vegan recipe page on Facebook. Five years ago, that data was considered extremely valuable. Advertisers would predict, based on that small amount of info, that this woman was probably a left-leaning vegetarian who took care of her body and liked to exercise. But with location data in the mix, an advertiser might now see that the same woman stops at McDonalds four times a week on her way to work (yes, your phone’s location info is probably on and sending hundreds of data points to various apps every day). All of the sudden, the calculation changes: habitual real-life actions are a lot more informative than the outward, vegetarian, healthy persona that woman is trying to cultivate on Facebook. And now advertisers are realizing it. Location is data is a purified version of personal info and it’s being sold left and right.
I’ll add, too, the story that begins The Great Hack, which was one of my favorites to tell friends even before I saw the movie. Lots of people, myself included, have suspected that an advertisement we saw appeared because our phone was “listening” to us. The general story goes something like this: you’re talking about apples with a friend, you go home an hour later, you open your phone to go on Instagram, and BOOM! — there is an ad for apples. Most people connect the dots and think Instagram is listening to you, but the truth is actually far more sinister: Instagram’s methodology for targeting advertisements is just so good that it profiled you as someone who likes apples on the same day you were talking about them.
How to handle these growing treasure troves of data will be one of the next great cultural and political battles in Western countries. It’s already starting as Republicans and Democrats are beginning to coalesce around rhetoric about reigning in big tech companies. Some people are advocating that data rights be protected like human rights. Others want to put a government stranglehold on big tech and begin regulating the cultivation and sale of personal data. It’s impossible to guess how it will play out, but the premise of your question — that younger generations simply don’t care — is accurate and important. If a whole generation of cell phone and internet users decide that getting personalized ads is worth the tradeoff of privacy, personal data will continue to be an extremely valuable asset and capable of swinging elections, selling products and spreading propaganda.
A (personal) story that matters.
I was on a much-needed vacation in Cape Cod this weekend with my girlfriend and her family, and sharks were all people were talking about. I snapped the photo above during a late-night walk on one of the outer beaches. ICYMI: Sharks are moving north in search of colder water and prey, thanks to climate change. Cape Cod is a particularly comfy new habitat for them since it restricted sealing back in the 70s, which means there is lots of food. One 15-foot great white shark was recently spotted in as little as five feet of water and last year a surfer was killed in a shark attack. Now, tagged sharks are pinging all over the Cape on a daily basis. At the inn where we stayed, the owner told us that business was down 30 percent from last year and family-oriented restaurants were hurting because fewer family tourists were coming to Cape Cod. Climate change is often spoken about in the future tense as a thing that might impact our lives 50 or 100 years from now, but this story draws a direct line between climate change, human safety and impact on businesses. If you subscribe, Wall Street Journal has more here.
You thought our rallies were big?
A disconcerting tweet.
Have a nice day.
The Business Roundtable, a group of the United States’ top CEOs, released a new purpose statement on what a corporation should prioritize. Their new statement says that, instead of prioritizing shareholders’ interest over all else, corporations must consider the constituencies that make up the business from top to bottom. All this comes at a time when income equality is getting worse, CEOs are getting richer, and the next generation of American consumers have rising expectations about how ethical businesses should be. “Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity,” the statement says. You can read more here.
Spread the word. Retweet the post below or Share https://tangle.substack.com on social media. Thank you!