Tariffs and Capital Investment

 Many posts have dealt with tariffs and trade. 

Kyle Pomerleau, Thomas Brosy, Robert McClelland, et al. "The Impact of Tariffs on the Cost of Capital in the US, AEI, September 30, 2026

Since 2025, the second Trump administration has imposed significant levies on most imports. Although tariffs are routinely discussed as a consumption tax, 36 percent of all imports are capital assets used to produce goods and services. As a result, tariffs place a meaningful burden on new investment in the United States.

We estimate that Trump’s tariffs (before the Supreme Court’s decision) raised the cost of capital by as much as 2.7 percent. This is equivalent to raising the METR [marginal effective tax rate] on new investment by 4.2 percentage points. The burden varies significantly by asset, industry, and legal form of organization, placing the largest burden on equipment. A 4.2 percentage point increase in the METR roughly offsets the OBBBA’s tax cut on investment. The burden that tariffs place on investment is an underappreciated effect of these taxes that has important implications for tax reform, the macroeconomy, and the distribution of the tax burden.

Leaners

Many posts have discussed partisan polarization and aversive or negative partisanship

Steven Shepard at Pew:

A majority of Americans consider themselves either Republicans or Democrats. Most say they identify this way because they view their own party’s policies as good for the country and the other party’s policies as harmful.

But many Americans don’t consider themselves Republicans or Democrats. Instead, these Americans identify as independents (or with some other party) and many “lean” toward one of the two major parties. For these Americans, opposition to the other party’s policies is more of a motivating factor than support for the policies of the party they lean toward.About this research

This Pew Research Center analysis examines the reasons partisans – U.S. adults who identify as Republicans and Democrats – give for their party affiliation. It also looks at “leaners” – people who don’t identify with one of the two major parties but say they lean toward one of the parties – and the reasons they lean toward the party they choose, and the reasons they decline to identify with that party.

A Pew Research Center survey of 9,750 U.S. adults, conducted from May 26 to June 1, finds:

• 72% of Republicans say a major reason they identify with the GOP is that its policies are good for the country. A nearly identical share (73%) say a major reason is that the Democratic Party’s policies are harmful for the country.
• Two-thirds of Democrats say a major reason they identify with the Democratic Party is that its policies are good for the country. A larger share (75%) say a major reason is that the Republican Party’s policies are bad for the country.
• Majorities of Republican leaners (56%) and Democratic leaners (64%) say a major reason they lean toward their preferred party is that the other party’s policies are harmful.
• Relatively few Republican leaners (34%) and Democratic leaners (27%) say a major reason they lean toward their preferred party is the perceived good of its policies.

While most Americans identify with one of the two major political parties, a sizeable share say they are independent.

Still, most independents lean to a party – and they tend to have more in common with those partisans than with the other side’s leaners. For more on political independents, read our 2019 report.

The survey also highlights why leaners do not affiliate with their party. Roughly four-in-ten Republican leaners, and about the same share of Democratic leaners, point to frustration with the leadership of the party they lean toward – or disagreement on some issues – as reasons for rejecting the partisan label.

Dining Alone

Many posts have discussed social capital, volunteering and civic virtue.

Derek Thompson at The Atlantic:

Until 1975, half of Americans said they entertained guests at their home every month.

Then something changed. Americans stopped throwing parties. Even more fundamental, they stopped visiting one another. From 1975 to 1998, the share of Americans who gave or attended a monthly dinner party declined by half. The share of Americans saying they never entertained people at home tripled. Although cultural critics often bemoan the decline of organized religion, the dip in church attendance was downright modest compared with the collapse in hosting, according to data gathered by the DDB Needham Life Style Surveys.

In his 2000 book, Bowling Alone, Robert Putnam wrote that if these trends continued, the ancient practice of visiting with friends “might entirely disappear from American life in less than a generation.” Check your calendars. One generation and change later, Putnam’s prediction needs an update.

So what’s the state of hosting in the 21st century? To get an apples-to-apples answer to that question, the polling group Data for Progress replicated the DDB Needham Life Style Surveys cited by Putnam. Unfortunately, the upshot is about as brutal as you’d imagine.

In the past 30 years, Americans have seen double-digit declines in practically every measure of socializing. They are less likely to play cards; attend a sporting event; go to the bar; volunteer; work on a community project.

When it comes to hosting people at home, the declines are particularly stark. Since 1995, the share of Americans who say they’ve hosted guests or attended a dinner party has declined by about 20 percent, from 88 to 67 percent—and that’s in addition to the declines that Putnam noted a quarter century ago.

Combining the two surveys, we get this astonishing fact: The share of Americans who say they host friends or family at their home at least monthly has fallen from 42 percent in 1975 to 12 percent in 2026—a 70 percent collapse in a half century.

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Poverty and Housing Costs

A number of posts have dealt with poverty.

According to the most accurate measure, California does poorly.

Alex Horowitz, Liz Clifford, and Linlin Liang at Pew:

Housing costs are usually the largest item in a household’s budget and can determine a family’s financial stability. In the United States, a housing shortage estimated at 4 million to 7 million homes has driven rents so far above historical norms that these costs have become a significant cause of poverty. Zachary Parolin, a professor at the University of Oxford in England, examined 2023 housing costs in the U.S. and identified the states (counting Washington, D.C., among them) where the greatest share of poverty is attributable to high rent. They are Hawaii, California, D.C., New Jersey, Massachusetts, Colorado, Maryland, Connecticut, New York, and New Hampshire.

This analysis by The Pew Charitable Trusts explores Parolin’s work and examines the ways housing supply and costs affect poverty. As cities and states move to address high housing costs and increase supply through changes to zoning codes, building codes, and permitting processes, a key question is who will benefit from those changes. Parolin’s research, building on his earlier work focused on California and published by the Niskanen Center, bolsters evidence that housing costs have a direct impact on poverty and that policies to enable more housing will help reduce poverty and benefit low-income households in particular.

Key takeaways:

• In Hawaii, California, D.C., New Jersey, Massachusetts, Colorado, Maryland, Connecticut, New York, and New Hampshire, 16% to 34% of poverty is attributable to above-average housing costs.
• High housing costs are offsetting some of the anti-poverty effects of measures such as the Supplemental Nutrition Assistance Program (SNAP), which provides food assistance to low-income households.
• Removing regulatory barriers to housing increases supply and lowers rents.
• In the states examined in this analysis, a drop of approximately 20% in inflation-adjusted rents—as happened in Austin, Texas, and Minneapolis after those cities made reforms—could reduce poverty by 18% to 26% and child poverty by 21% to 38%.

Oppo Fail

Inaccurate opposition research can backfire very, very badly.  Senator Eric Schmitt demonstrated the idea yesterday.

A phenomenal moment in the Senate.

Eric Schmitt, R-Mo., claims he has evidence Jack Smith went to a HAWKS game in Atlanta.

Smith denies it.

Schmitt declares he has busted Jack Smith for perjury.

Smith, vexed, says he went to HAWKEYES game in Maryland.

Watch the whole thing: pic.twitter.com/J07o5Uwfxi

— Sahil Kapur (@sahilkapur) September 29, 2026

From Jack Smith's opening statement:

The charges against President Trump were the result of the evidence.  Grand juries in two separate districts reached this conclusion based on his actions, as alleged in the indictments they returned.  Rather than accept his defeat in the 2020 presidential election, President Trump engaged in a criminal scheme to overturn the results and prevent the lawful transfer of power.  The evidence showed that President Trump attempted to induce state officials to ignore true vote counts; to manufacture fraudulent slates of presidential electors in seven states that he had lost; to force his own Vice President to act in contravention of his oath and to instead advance President Trump’s personal interests; and, on January 6, 2021, to direct an angry mob to the United States Capitol to obstruct the congressional certification of the presidential election and then exploit the rioters’ 1 violence to further delay it.  Over 140 heroic law enforcement officers were assaulted that day, a fact we should never forget.    

And, as set forth in the original and superseding indictments issued in the Southern District of Florida, President Trump stored classified documents at his Mar-a-Lago social club after he left office in January 2021 and he repeatedly tried to obstruct justice to conceal his continued retention of those documents.  Highly sensitive information was held in non-secure locations, including a bathroom and a ballroom where events and gatherings took place.  Tens of thousands of people came to the social club during the time period when those classified documents were stored there.

Ballot Campaigns and Generative Engine Optimization

Artificial intelligence is an increasingly important topic in politics, policy, and law.

RACHEL BLUTH and WILL MCCARTHY at POLITICO write that AI presents a challenge and an opportunity to campaign strategists who work on ballot measure campaigns.

“Its completely revolutionized how we’re looking at messaging,” said Amanda Malo, the president of BASK Digital Media, a strategy agency working on a number of ballot measures in the state. “Whatever that thing spits out, you take as truth — even though you may have seen advertising about the measure for months.”

Research suggests chatbots can sway voters, sometimes more persuasively than conventional campaign messaging. That’s making it increasingly important for campaigns to understand where large language models are pulling information from, and how to make their arguments more likely to appear in their results.

To do so, Malo’s group developed a tool it’s calling GEO, or generative engine optimization, which models what types of messaging and narratives voters might receive. Based on those simulations, the campaign can then rewrite its website, trying to answer word for word the questions voters might ask LLMs.

Another strategist for a major advocacy group, granted anonymity to describe the organization’s tactics, said the ballot guide they produce now uses the exact title and summary of initiatives as they’ll appear on the ballot, so it gets properly scraped by AI crawlers.

...

Malo and Kunal Basu-Dutta, the founder of Modern Bay Strategies in Oakland, said adapting to AI is the next evolution of search engine optimization, or SEO. In the old days of Googling, when people clicked on links, the goal was to drive voters to a website, where strategists had full control of a message’s presentation.

...

“You have to write with the understanding that if someone takes this out of context or if someone sees it just by itself, does it still stand?” Basu-Dutta said. “Can people understand this with the 10 words they’re able to pull, as opposed to ‘can we drive them to a website so that they can fully digest it?”

That calculation is leading to what Basu-Dutta called a “flattening and simplification of language” in the messaging.

Instead of long paragraphs on a website, he goes for four short sentences. A long caption on an Instagram carousel has become several short ones under each photo. One webpage with a lot of text is getting broken up into several pages. Infographics, a favorite of political posts on Instagram, are being de-emphasized because it’s unclear what a large language model will scrape from an image.

CBO Tax Data

 As many posts have pointed out, the federal tax system is more progressive than many people believe.  Higher-income people do pay higher rates and bear a larger share of the tax burden than people with lower incomes.

Once again, CBO stats make the point:

Data tables here.

The share of federal taxes paid by households in the top quintile of the income distribution increased from 55 percent in 1979 to 70 percent in 2023. Most of that increase was due to the change in the share of federal taxes paid by the top 1 percent of the distribution, which grew by 12 percentage points—from 14 percent in 1979 to 26 percent in 2023.