The McKeesport School District (in the greater Pittsburgh area) thought it has a great deal Dick's Sporting Goods, the massive sporty stuff retailer, wanted to team up its foundation with the not-very-wealthy district. It was just the kind of public-private partnership that some folks would love to see more of.

From the beginning, we were clear that we weren't just looking to provide funding, we were looking to be a true partner sitting side by side with the McKeesport team to reimagine how the elementary school experience could be approached in a holistic way – one that serves the whole child, their family and the community.

Unfortunately, the current school board and district leadership did not uphold the written partnership agreement we had in place. When we sought a path forward, the school board president made it clear that there was ‘no page to get on.’ That response left no room for continued collaboration.

I could go digging for the nature of the disagreement, but I'm not sure I actually care who's right or wrong here because what jumps out at me is that the corporate partner yanked funding because they didn't approve of the choices made by district leaders and were disappointed that they, the private corporation whose primary business is selling sports equipment, did not have more say in how the school district was run. 

I don't care if the Dick's folks are the rightness right people in the history of being right-- I am extremely uncomfortable with the notion that a private company should be able to buy a controlling interest in a school district. Even if Dick's is on the side of the angels here, this creates a system of control that is too easy to corrupt and which disenfranchises the voters of the district.

On top of that, Dick's apparently told Channel 11 that "it remains open to the possibility of future partnership opportunities under new leadership." In other words, their money is now an election issue in McKeesport. Will they sponsor ads saying, "Vote for this person and we'll give your school some more money," because that seems like a bad thing. 

Most of the press coverage includes folks with all sorts of connections to the district saying that it was great that Dick's invested in the district and the money was a help and it sucks that now it's gone, and I certainly get that. But Dick's is disappointed that they didn't get to redesign "the elementary school experience," and that's just bananas. 

Again, I haven't looked into the specifics. Maybe's Dick's ideas are appallingly terrible, or just the kind of slop we often get from well-meaning amateurs. Maybe Dick's ideas were fabulous and the board and superintendent are dopes. The cure for that is not to have a private corporation come in and buy a say in how the district is run. The cure is to elect board members who aren't dopes. This kind of "partnership" is no way to run a public school system. 

New paper here.

An expansion of the post from February here.

Unemployed, I spent a week in April digging a small pond in our back yard. At the time, it was a distraction. Now it is… actually, a different sort of distraction.

Because although it’s not a very big pond — about 3 meters by 2, maximum depth about 70 cm — it has very quickly and suddenly filled up with life. The first water skater appeared literally on day one. Now there are about a dozen of them. We’ve also picked up water beetles, a couple of aquatic snails, some little swimming shrimp-like things, and several of these guys:



Ichthyosaura alpestris, “fish-lizard of the Alps”, aka the Alpine Newt.

But how did they get there?

In brief:  your Alpine Newt will spend nine months of the year on land, slithering around in the leaf mold in forests and brushy meadows, gobbling up insects and other small invertebrates.  But in early summer, they look for water, because they need water to breed.  So there were probably some around in our yard and in the vacant lots nearby.  And when suddenly we added our little pond to the local ecosystem, well, we basically set up a singles bar for newts.

They’re cool little guys.  They’re about 10 cm or 4 inches long — about as long as your middle finger, say — and they mostly hang out at the bottom of the pond.  But every 5 or 10 minutes they’ll swim up to the surface in a very leisurely sort of way, take a gulp of air, and then swim back down.  There are at least four of them, but sometimes we’ll only see one, or none.  We assume that’s because they’re out hunting, returning to the pond to rest. 

(And to get it on, presumably.  But apparently they only do that around dawn.  Dawn in northern Bavaria in May comes at 5 AM. There are things that will get me out of bed at 5 AM, but hoping to catch newts in flagrante doesn’t quite qualify.)

Anyway.  Remember my post a couple of months back about the blue-ringed octopus?  Well, it turns out the newt shares a trick with that pretty little mollusc:  they both have tetrodotoxin.  Unlike the lovely but lethal blue-ring, the newt only produces a modest amount.  If you ate one, your mouth would go numb, and then you’d probably have nausea, maybe muscle spasms, and perhaps some difficulty breathing for a while, but you wouldn’t die.  A smaller predator like a bird or a raccoon would have it worse, but still probably wouldn’t die.  But it would (presumably) be a nasty enough experience that the predator wouldn’t much care to repeat it.

Which is why the newts look the way they do.  Their backs and sides are a mottled grey-green, great natural camouflage.  But their throats and bellies are bright orange.  So camouflage is their first line of defense; they’re not toxic enough to advertise openly, like an Amazonian poison frog or such.  But if threatened or cornered, they may raise their heads to display their bright orange undersides:  warning!  I taste nasty and will make you sick!

— And how does the newt get the tetrodotoxin?  This is one of those things where you can’t just read wikipedia.  You have to search for papers, like people did in medieval times. 



[Melnikova and Magarlinov, ibid.  The green bits are probably safe to eat.]

Turns out the newt, like the octopus, gets its tetrodotoxin from symbiotic bacteria.  They live mostly in glands in the newt’s skin — that’s the cutout at lower left — but also in the ovaries, which is why the ovaries are bright red.  Makes sense, right?  The newt wants to pass the bacteria on to its children, and the bacteria want to be passed.

What’s interesting is that the newt is toxic, but it’s not very  toxic.  Presumably that’s because supporting all these bacteria carries a metabolic cost.  So, becoming more toxic still — evolving into a newt version of the blue-ringed octopus — isn’t worth the trouble.

(There are a couple of newt species in North America that have done this, becoming much more toxic, to the point where they could seriously injure or kill an adult human.  We think we know why, and it’s because of reasons that are beyond the scope of this short blog post.  That said, American readers please attend: don’t lick newts.)

So, Elon Musk destroys USAID ->  I’m unemployed, dig a pond -> newts hooking up -> tetrodotoxin.  And that’s our set of unexpected connections for this week.

The US Court of International Trade has acted to block pretty much all of President Trump’s tariffs. I guess the first question is “what the heck is the US Court of International Trade? The story seems to be that back in 1890, Congress created a “Board of General Appraisers, a quasi-judicial administrative unit within the Treasury Department. The nine general appraisers reviewed decisions by United States Customs officials …” In 1926, Congress replaced the Board of Appraisers with US Customs Court. The status of this court evolved over time, and in 1980 became the US Court  of International Trade, a “national court established under Article III of the Constitution”– the part of the constitution that establishes the federal judicial branch.

I’ve written before that a legal challenge to the Trump tariffs seemed inevitable. The key issue is that the Article 1 of the US Constitution–the part which lays out the structure and powers of the legislative branch–states in Section 8: “The Congress shall have Power To lay and collect taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States …” Over the years, Congress has written a number of exceptions into the law. For example, the International Emergency Economic Powers Act of 1977 (IEEPA) lets the President address “unusual and extraordinary” peacetime threats. For example , when Iran took US hostages in 1979, President Carter could immediately respond with trade sanctions.

The legal question is whether President Trump has the authority to invoke the “emergency” provisions and rewrite all tariffs for countries and goods all around the globe in whatever way he wishes. The law firm Reed Smith has been producing a “tariff tracker” that shows the results. The US Court of International Trade held that Trump has stretched the “emergency” provision considerably too far, that US importing firms are adversely affected, and that previous laws do not mean that Congress has given away all of its Constitutional power in this area to the President. (For those who keep score in this way, the Court decision was a 3-0 vote, and the three judges were appointed by Trump, Obama, and Reagan.)

The Trump administration justifications for its tariffs are full of goofy statements. For example, President Trump argues that the tariffs will all be paid by foreign companies, with no effect on US consumers and firms. Seems unlikely, but say that it’s true. In that case, foreign exporters to the US would have lower profits, but would be exporting the same quantity of goods at the same price to US markets. The idea that tariffs won’t affect the quantities or prices of what foreign exporters sell in the US market is inconsistent with the idea that the tariffs will give breathing space to US producers.

Or Secretary of Commerce Howard Lutnick explained in an interview a few weeks ago what kind of manufacturing jobs were going to return from China to the United States. He said, “The army of millions and millions of human beings screwing in little screws to make iPhones — that kind of thing is going to come to America …” I suppose Lutnick deserves some credit for expressing a concrete idea, but my guess is that most supporters of Trump’s tariffs do not have in mind a US economy based on an “army of millions and millions of human beings screwing in little screws to make iPhones …”

The trade economist Richard Baldwin has just published an e-book called The Great Trade Hack: How Trump’s trade war fails and global trade moves on. He rehearses the arguments over tariffs at some length: how they will not reduce the trade deficit, or revive US manufacturing, or help the middle class. Baldwin writes fluently, and this book is for a generalist readership. Here, I want to touch on one of Baldwin’s themes that I haven’t discussed recently. He writes:

Tariffs persist precisely because they fail economically, yet succeed politically. They provide symbolic relief, project toughness, and shift blame onto external actors without confronting difficult domestic policy challenges like higher taxes or expanded social programmes. …

Tariffs don’t coordinate investment across firms and sectors. They don’t train workers. They don’t bridge skill gaps or modernise vocational education. They don’t fund infrastructure, improve logistics, or support research and development. They don’t unlock capital, align upstream and downstream firms, or connect regions to supply chains. In short, tariffs can defend an industrial base, but they cannot create one.

Reindustrialisation requires more than tweaking relative prices. It needs a strategy. A real one. With planning, sequencing, and sustained commitment. It needs a trained workforce, one that matches the needs of 21st-century manufacturing. And to get those workers, federal and local governments must partner with industry. Firms can’t do it alone. No company will invest heavily in training workers if they’re unsure those workers will stay once their skills are upgraded. That’s why, in most countries, governments step in – funding training with tax dollars to solve the coordination problem. It’s a public good with private benefits, and it only works when governments and employers pull in the same direction.

It also needs reliable infrastructure, stable regulation, and targeted investment incentives. It needs the trust of industrialists – not just that the cost of imported goods will be higher this year, but that America will be a profitable place to make things for decades to come. And this is critical: building a modern manufacturing operation is a long-term proposition. From planning to permitting, from equipment procurement to workforce training, the timeline is measured in years, not months. For investors to commit, they need confidence that support policies – tariffs, subsidies, tax credits, training programmes – will remain in place long enough to generate a return. If the policy environment is unpredictable or politicised, those factories won’t get built.

That’s the real shortcoming of Trump’s pray-and-spray, tariff-first and tariffs-only approach to reshoring manufacturing. There’s no plan to use the breathing room tariffs might create. Without that plan, the most likely outcomes from the 2 April tariffs are higher prices, reduced manufacturing, riled allies, and retaliation against exports from industries where America is competitive today.

We are seeing with President Trump one of the dangers of electing someone with a business background to government: the lessons of business and government overlap in some areas, but are not the same. Baldwin writes:

Trump’s real estate experience also taught him one simple rule: the seller is ripping off the buyer. From that premise, it’s just a logic hop-skip-and-jump to the idea – which the President is firmly convinced of and which shapes his attitude towards trade – that a bilateral trade deficit is theft. … This notion is completely false – as anyone versed in mainstream, positive-sum business practices would attest. Nevertheless, it is a cornerstone of Trump’s belief system.

I’m confident that the US Court of International Trade decision will be appealed to the US Supreme Court, but I suspect that President Trump might benefit politically if the courts take his tariff plans off the table. Trump blocked by the courts is a powerful political force. On the other side, if Trump is forced to face the actual effects of his tariffs, my expectation is that as the gains from international trade are diminished, he won’t come out looking so good.

The post Will the Courts Save Trump from His Tariffs? first appeared on Conversable Economist.

Recent Chaos Has Made the Fed Act In Nervous and Unusual Ways

That’s quite a headline to unpack but follow along and the connections will become clear.

When the Fed (Federal Reserve) fights inflation it does so by undermining workers. Huh? They raise interest rates which makes it more expensive for businesses to start or grow, which leads to fewer job openings. That means there are more applicants to apply for each opening meaning businesses don’t have to offer sweet deals to find workers. See my previous pieces (link1, link2, link3) explaining this further, including quotes from the Fed acknowledging this is how it works.

Chairman Powell just said they are looking at the, “possibility that inflation could be volatile going forward”. More of his statements make it clear they are anticipating inflation spikes created by general business uncertainty, and by supply chain choke periods, also brought on by uncertainty. Where does the uncertainty come from? It’s obvious but we’ll come back to that.

If they do have to raise rates to fight inflation then, well, see that previous paragraph about how it works.

The uncertainty has created some crazy actions by the Fed. They just bought a large volume of bonds. Without going into detail, that’s something they usually do when trying to go the other way, trying to heat up the economy at times that’s needed. The opposite of fighting inflation. So are they going in two directions at once? Kind of. That’s what a chaotic economy brings. But it’s a little worse than that.

They did this without telling anyone. Only investment companies that track many things about the economy happened to notice. That’s odd because usually the Fed makes a lot of publicity about it when they do this because that’s part of the idea. To let everyone know when the Fed is actively trying to heat up the economy so everyone gains confidence and jumps on the growth bandwagon.

So why did they do it now, and quietly? The Treasury Department had a sale of bonds, which they do constantly. They didn’t sell nearly as many as they would normally. Why? Because of economic uncertainty. The U.S. Treasury having trouble selling bonds? That’s such an oddity that it could spook investors and business planners, so the Fed quietly stepped in to buy a bunch and make things look normal.

Get that. The Fed had to pull this, “Don’t look behind the curtain. Nothing to see here. Just go on about your business as normal” move because things are in such an unpredictable state.

Why are things in that state? Let’s go straight to the most authoritative of sources. The following are recent quotes directly from the Fed’s media releases of statements from Powell, and from interviews with Powell, and from a member of the Fed board, Austan Goolsbee.

Powell said the increased likelihood of inflation is, “really due to the tariffs” and called it, “tariff inflation“. Regarding the state of the economy generally he said there was, “heightened uncertainty”.

Tariffs are expected to cause the supply chain to become erratic. “We may be entering a period of more frequent, and potentially more persistent, supply shocks — a difficult challenge for the economy.”

As part of dealing with this the Fed is considering tweaking its policies to be less focused on keeping unemployment low, or as they put it, “shortfalls of employment“, and more focused on fighting inflation. That is, more damage to working people might have to be tolerated in order to deal with higher inflation.

That’s because they may find themselves stuck in a Catch-22 where, “Prices are going up while jobs are being lost and growth is coming down.” Or as one headline put it more clearly, “Higher prices or higher unemployment? The economy could face a no-win dilemma”.

Powell plainly states what the price of this will be, “We understand that elevated levels of unemployment or inflation can be damaging and painful for communities, families, and businesses.”

Oof! That’s a lot of hard, direct statements. You could suspect those quotes are cherry picked but read the sources and you’ll find they reflect the overall Fed message.

All of this because of confused and chaotic policies. And that because too many people were either conned into, or willfully chose, to throw their vote to someone who has long since proven himself to be a confused and chaotic man.

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The post Trump May Force Fed to Hurt Workers appeared first on DCReport.org.