OK then. Aside from a momentary laugh at Donald Trump's expense, why else was I reading James Surowiecki's recent piece about startup companies? The pointer came from Jim Pethokoukis, who has been writing about the decline of American entrepreneurship for quite a while. This is potentially something to be concerned about, but I've always held back a bit. The problem is distinguishing between different kinds of startups. There's no question that we have fewer of them than we used to, but a lot of that is due to large companies taking over the mom-and-pop space in restaurants, retail, and other small businesses. Whatever your personal opinion of that is, there's not much reason to think the country as a whole is suffering because Wal-Mart has made it harder to start up a small general store and McDonald's has made it harder to start up a small local diner.

What we really care about are the kinds of startups that launch innovative products or adopt innovative business techniques to build whole new markets. Think light bulbs, radios, cars, package delivery, software, and social networks. Those are the kinds of entrepreneurs we don't want to discourage.

And apparently we aren't discouraging them—at least in the true startup phase. Surowiecki points us to some recent research suggesting that "high-quality" startups are as plentiful as ever:

New work by the MIT economists Scott Stern and Jorge Guzman shows that in 15 U.S. states between 1988 and 2014 there was no long-term decline in the formation of what they call “high-quality” startups...But there is a catch. While Stern and Guzman show that high-growth firms are being formed as actively as ever, they also find that these companies are not succeeding as often as such companies once did....As many seeds as ever are being planted. But fewer trees are growing to the sky.


I would argue that this is yet another reason to be very skeptical of modern antitrust law and its emphasis on "consumer welfare." Forty years of experience suggests that it just hasn't worked: instead of producing an economy that's good for consumers, it's produced an economy dominated by large companies that have little to fear from antitrust authorities. They're allowed to get as big as they want as long as they're able to make a plausible case that increased bigness is good for consumers—and they're very, very good at making that case. As a result, big market incumbents get ever bigger, and startups have an ever harder time in ever more markets. In the long run, this is decidedly not very consumer friendly.

If we want a more dynamic economy, we should quit protecting large, hulking incumbents. Our key interest should be ensuring plenty of competition, not engaging in pointless arguments about consumer welfare—a concept that's inherently fuzzy and far too easy to manipulate by smart corporate legal teams. To accomplish this, antitrust law needs to return to its older, cruder goal of simply keeping companies from getting too big and too dominant.

Competition is the engine that drives capitalism. Without it, governments have to rely on ever larger stacks of regulation to keep corporations in some semblance of order. But why bother? Focus instead on making markets friendly to startups, and then let competition do the heavy lifting of keeping them in line. It's better for consumers in the long run and it scales back the need for heavy-handed regulation. This really ought to be something that both Republicans and Democrats can manage to agree on.

I'm reading James Surowiecki's piece about startup companies, and couldn't help but laugh when I got to this:


Hmmm. Can we all think of an entrepreneur who (a) names all of his startup companies after himself, and (b) runs about the lowest-quality businesses imaginable? Sure we can. In fact, I'd like Stern and Guzman to rerun their correlations after removing all Trump businesses from their dataset. They might find out that he's personally responsible for the entire effect.

Today Brings Yet More Obamacare Non-Failure

I've written frequently about the fact that the rapid growth in US health care costs has slowed down in recent years. Here's the latest version of the slowdown, courtesy of the Urban Institute:

The raw data for this chart comes the national health expenditures forecast issued annually by the Centers for Medicare and Medicaid. As you can see, their latest forecast for the year 2019 is about $500 billion less than it was in 2010. The cumulative forecast for 2014-19 is now $2.6 trillion less than it was in 2010.

It's hard to say how much, if any, of this decrease is due to Obamacare. My own guess is that the cost-saving parts of Obamacare haven't had time to really kick in yet, which means the recent slowdown in health care costs is most likely just an extension of the slowdown that's been percolating behind our backs for more than three decades.

But that doesn't mean there's nothing to say about Obamacare here. CMS did forecasts both before and after Obamacare passed, and they predicted that Obamacare would increase spending. Lots of conservatives predicted the same thing. But it didn't happen. Here's the chart for private health care spending:

The figures are even more dramatic for Medicare and Medicaid spending. The jury may still be out on Obamacare's long-term effect on controlling health care costs, but one thing is sure: all the hysteria about Obamacare causing costs to skyrocket was entirely unfounded.

Brexit Now Looking Like It Will Probably Fail

Peter Eavis says that Brexit is likely to lose and Britain will remain part of the EU:

Asking people to predict a result of an election has, over time, provided more accurate forecasts than asking people their voting intentions, according to a study by Justin Wolfers, a University of Michigan economist and an Upshot contributor, and David Rothschild, of the Microsoft Research and Statistics Center.

When Survation asked, “Regardless of how you plan to vote, what do you think the result will be?” just shy of 40 percent of people said the “remain” camp would win. Only 26 percent said that “leave” would prevail.

The betting markets agree:

The betting odds for the EU referendum changed direction over the weekend and now firmly favour a Remain vote with just three days to go....Ladbrokes has given just a 27% chance of a Vote Leave while William Hill has it as 28.5%. Ladbrokes added that 95% of betting on was a Remain vote on Monday.

My sense—though I'd prefer actual data if anyone has collected it—is that secession votes usually follow a pattern: the leavers get an upward bump a few weeks before voting day, but stayers get a bump in the few days before voting day. A fair number of people flirt with the idea of leaving, but then get scared at the last minute and decide to vote for the status quo instead. Basically, in any secession referendum, I figure that Leave needs to be polling at 55 percent or higher to have a realistic chance of winning.

As of today, the polls are still tied, so my guess is that Brexit will fail on Thursday. If I'm right that about 5 percent of the leavers will get cold feet and change their minds, the final tally will be something like 53-47 percent in favor of remaining in the EU. We'll find out in a couple of days.

Illegal Immigrant Tries to Kill Donald Trump!

An illegal immigrant who is apparently mentally ill tried to grab a policeman's gun yesterday so that he could shoot Donald Trump. I gather that it was a fairly half-hearted effort, but still: "Illegal Immigrant Tries to Kill Trump"! Where are the headlines? Jim Geraghty comments:

The recent chaos on the Trump campaign, as big a story as it is, shouldn’t cause this event to disappear from the public’s attention. It illuminates the disconcerting fact that once legal temporary immigrants enter the country, the authorities have no real way to keep track of them. And a lot of them take advantage of that fact....We need border security. But even if you completely sealed the southern border, America would still have a significant number of illegal immigrants walking its streets.

Quite so. But forget the media. We all know they're in thrall to political correctness and won't print anything that might cast Mexican immigrants in an unfavorable light. But what about Trump? His Twitter feed is empty. Why isn't he shouting about this from the rooftops? I mean, it totally vindicates his point about building a wall and—

Wait. What? I should read the whole story. Fine. Here's the BBC:

A British man arrested while trying to grab a policeman's gun at a Donald Trump rally in Las Vegas has been described in his home town as "a strange one"....Surrey Police said it was "providing family liaison support on behalf of the Foreign and Commonwealth Office"....The BBC understands he lived with his mother Lynne in Dorking, Surrey until about 18 months ago.

Surrey police? Dorking? A British man? What's that all about?

Ah, I get it. Michael Sandford is white. And he's from Britain. A wall wouldn't keep him out. And anyway, Trump's base doesn't hate residents of Dorking who overstay their visas. He's not the right kind of illegal immigrant. So we'll all ignore him.

POSTSCRIPT: On another note, Geraghty, like many conservatives, complains that we have "no real way to keep track" of visitors who overstay their visas. That's true. But what exactly do they expect? GPS tracking collars? It's not as if someone who's illegally overstaying their visa is going to voluntarily check in at their nearest consulate. And even if we did track them somehow, what good would it do? I'm puzzled by this whole thing.

Donald Trump Is Broke

Today's big news is the overall implosion of the Donald Trump campaign. He's repeatedly melted down on the stump over the past month. He's trailing Hillary Clinton by a mile in the latest polls. He fired his campaign manager this morning. His ego apparently doesn't allow him to beg other people for money, so he's barely done any fundraising at all. The fight to stop him at the Republican convention now has the support of nearly 400 delegates. With the election only 20 weeks away, he still has virtually no staff. He's being hammered by negative advertising on TV and isn't doing anything to fight back. (So far he's run exactly zero ads.)

Except for the personal meltdown stuff, all of this is basically a money problem. Trump doesn't have any. In fact, pretty much everything you need to know about Trump's campaign—and his underlying  business acumen, though that's a story for another time—is captured in FEC form 3P. As you can see, it shows that Trump ended the month of May with $1.28 million on hand. That's disastrous. It's unbelievable. It's less than a tenth of what he should have. It's less than a well-run congressional campaign should have. It's $40 million less than Hillary Clinton's campaign has. It's Donald Trump in a nutshell.

So will he just finance the campaign out of his own wallet? Not a chance. Bluster aside, he doesn't have the ready cash to do it. And he wouldn't even if he could. After all, this is the guy who eagerly transferred the five-figure salary of his longtime bodyguard to his campaign at the first opportunity. Do you really think he's ready to blow $500 million on a nearly certain losing cause?

tronc Unveils Its Content Monetization Engine













From Pema Levy:






One Side In the Ad-Blocker Wars Is Doomed

MoJo editor Clara Jeffrey points me to this today:









