On a recent episode of the Citizen Stewart Show, my friend and co-host Chris Stewart gave me a hard time because my essay outlining my dream high school called for a yearly course on what I dubbed “attention management.” He didn’t take issue with teaching kids to have a healthy relationship with technology and social media, but he did question whether an hour a day was essential and pushed against what he dubbed “toxic productivity.” 

I’d had a vague awareness of this growing trend of productivity critics but have since done a deep dive into their world. I’m astounded by how robust this movement has become. In the past few years, we’ve seen one bestselling book on the subject after another, including How to Do Nothing: Resisting the Attention Economy (New York Times best-seller, 2019 favorite book of Barack Obama), Do Nothing: How to Break Away from Overworking, Overdoing, and Underliving, Can’t Even: How Millennials Became the Burnout Generation, and Laziness Does Not Exist.

To some of these productivity critics, time management gurus like Cal Newport (author of Deep Work, among other books) are pushing a vacuous, capitalistic ethos that values: 

•     Getting things done at all costs
•     Prioritizing work over family and friends 
•     Filling time with tasks
•     Staying busy for its own sake 

Newport addressed these critics in a short blog post:

 From my experience with successful young people, what you need, put simply, is a drive to keep working, with a laser-like intensity, on something even after you’ve lost immediate interest. Tenacity. A grating thirst to get it done. These are the precursors of accomplishment.

Having good productivity habits compliment this crucial skill. They take this intensity and place it in a schedule. They keep small things from crowding your mind. They eliminate the stress of what appointment you might be forgetting or what vital errand has to be done. But productivity is not a substitute for this work. Within the scope of this reality, productivity plays a crucial role. If you want to get ahead in a meaningful, low-stress, controlled manner you have to pay attention to these little habits.  

I agree with Newport that productivity is essential and misunderstood, but the word has become too loaded to be helpful. This is why the course I wish to design for a high school is called attention management (a term I didn’t invent)and not productivity. The latter is an economic term of art used to describe a company’s outputs (profits, goods) relative to its inputs (by which we often mean worker time). The term conjures up images of Amazon workers peeing themselves because they don’t want to log a bathroom break in the Orwellian tracking software. 

Attention management is different. It means mastering your time to focus on the work, passions, and people you care about the most. 

What’s a task that must be done but requires low cognitive lift? 

What work do you care most about that requires you to be at your best? 

How do you organize your day to maximize the latter while still getting the former done?

Can you sustain periods of frustration and boredom in the ways an elite athlete can endure fatigue?

The image I have in mind here is a high school student spending three hours every morning writing their first novel, in front of a canvas sketching their first masterpiece, or in the editing bay stitching together their first short film. 

Attention management is a skill that can be taught, practiced, and mastered over many years. It’s also an increasingly rare skill, which means those who attain it stand a great chance of rising above the rest. In this sense, it’s not a recipe for capitalistic exploitation; it’s an antidote to it. 

Notice that nothing about this vision is incompatible with what many productivity critics are calling for. Only the most privileged and lazy have both the desire and ability to devote themselves to a life of leisure. The rest of us must work whether we like it or not. Let’s make it as enjoyable and efficient as possible. The surest way to lose time for hobbies, family, friends, or simply doing nothing is to task switch and scroll the internet when you’re supposed to be producing professional work or mastering your craft. We must stop pitting deep work against these other meaningful aspects of life. 

It’s also worth mentioning that the skill of attention management applies equally well outside of the professional world. Talk to any parent, and they’ll tell you how hard it’s become to keep phones away from the dinner table. Ask a young woman how rare it is to go on a date with someone who can carry on a basic conversation. Or ask a football coach how the spirit of locker room camaraderie has changed in the era of social media. As adults, we are painfully aware of how hard it is to build the capacity to truly focus. Many of us had the benefit of building habits before the age of the smartphone, streaming content, or hyper-realistic video games. Think about how much more difficult this must be for our kids. Many of them simply don’t know what it’s like to focus. Our job as educators is to teach them how. 

The post The False Choice Of Toxic Productivity appeared first on The Branch.

We’re excited to launch Sweat the Technique, a new podcast from Lost Debate. 

The show is all about how we get better, faster. Each week, we’ll apply lessons from the classroom to all areas of life — from parenting, to relationships, to sports, to hobbies, and more. 

Sweat the Technique is hosted by four former principals and superintendents who’ve led gap-closing schools. 

That includes: 

• Doug Lemov, author of internationally bestselling books and trainer to many successful educators and leaders in professional sports
• Ryan Hill, founder and CEO of a network of 23 KIPP public charter schools in New Jersey and Miami
• Stacey Shells Harvey, founder and CEO of ReGeneration Schools
• Me, Ravi Gupta, former leader of Tennessee’s highest performing network of charter schools and founder of the largest-ever training organization for Democratic candidates and staffers

In our first episode, I interview my co-host Doug Lemov about his seminal book Teach Like a Champion, which revolutionized the training of educators across the world. We discuss why teaching, like any great art, can be broken down into discrete skills – and how you can teach those skills to novices with awe-inspiring results. We also discuss critiques of his work, why he believes they are misguided, and why the techniques from his books are relevant to everyone, not just teachers. 

Listen here and if you like it, share the episode with friends and leave us a review. 

The post Teaching Like A Champion With Doug Lemov appeared first on The Branch.

A few weeks after Donald Trump’s November 2016 victory, I found myself in a hotel ballroom in Nashville, addressing hundreds of aspiring candidates, political operatives, and grassroots volunteers. I spoke about how we, as a generation, couldn’t count on our elders to solve our problems—how we had to lead the way in a new, uncertain phase of our civic life. The message seemed to resonate with a mostly millennial crowd who shared a distinct sense that, as dispiriting as the prior election had been, our time had finally come. When I concluded my remarks, I gave the podium to a man who had, by that point, become the embodiment of the sentiment of my speech and a mascot for our generation: Jason Kander. 

Although it was my first time meeting Jason, I’d been a fan of his ever since I’d watched his legendary campaign ad, the one where he disassembled and assembled an AR-15 blindfolded (a pro-gun control ad, if you were curious). He was the first millennial elected to a statewide position and was at that particular gathering to give his first public speech since his United States Senate loss, a race in which he came up 2.8 percentage points short in a state Hillary Clinton lost by 19 points. Second to the presidential election, Jason’s Senate contest was the race I was most closely watching on November 8th. 

As heartbreaking as Jason’s 2016 defeat was, a funny thing happened in the aftermath of that election: Jason became a political star. The Nashville event was the first of countless progressive gatherings he’d keynote over the next two years as he stumped for candidates, pushed for voting rights, and built momentum for his much-speculated run for president. I’m sure he still wanted to be a U.S. Senator if he could, but the consolation prize was pretty sweet. By 2018, he was texting celebrities like Lin-Manuel Miranda, cavorting with party luminaries like President Obama, and had built an early-state grassroots infrastructure that was the envy of his would-be competitors. In his words, he’d become “the guy who won by losing.” 

I’d like to say that Jason and I became friends during those initial years, but it’d be more accurate to describe us at the time as acquaintances. He would speak at summits I’d host and occasionally drop in for a podcast interview. I was in awe of his ability to be in all places at all times. One day, he’d be speaking at one of my events in Arizona, and the next day, I’d get a text from my mom saying she’d just met him while canvassing for a congressional campaign on Staten Island. He was famous for almost never turning down an invitation—something I interpreted at the time as a virtue—a sign that he had what it took to go the distance. 

Of course, there was a hidden side to Jason’s relentless work ethic: a secret that became public when he bowed out of political life in late 2018, citing untreated trauma and mental health issues stemming from his service in Afghanistan. I didn’t hear much from Jason for a year after that, and I often thought about what had become of him. Then, at some point in 2019, we started talking, sharing fitness tips and other life hacks. He became an enthusiastic member of a workout group I created for burned-out professionals, a community that helped motivate him in his quest to reclaim his pre-campaign physical health. We began trading ideas and drafts of our various writing and entrepreneurial projects, and one day, during the early days of the pandemic, he called and asked me to help him revive his successful but latent podcast (which I won’t name here because it contains partisan content; “Lost Debate” is a 501(c)(3)). We’ve been co-hosting that show once a week ever since. 

In short, although we’d become close friends, there was a part of me that still wondered what the heck had happened back in 2018. Jason would share tidbits here and there, and as time went on, I realized he was totally comfortable sharing the details. Through short and sometimes-awkward conversations, I’d developed a rough sense of the story. Yet, I had so many questions that I couldn’t find the time or courage to ask. How bad could things have gotten to stop him from doing something he seemed to love so much? What kinds of symptoms were we really talking about? Would he ever run again?

I went searching for clues in his first memoir Outside the Wire and found none. That book is compelling for a political memoir, which is like saying something is riveting for an instruction manual or erotic for a religious text. While the book is funny, witty, and insightful in ways other authors in the genre often fail to achieve, there are no truly good political memoirs. Politicians are always scared of publishing something that will give fodder to their next opponent. Jason, by his own admission, was planning a run for President of the United States, which meant there was a limit to what he’d been willing to share. 

Invisible Storm, Jason’s forthcoming book, is not a political memoir—at least not a normal one. There’s no faux humility, no opaque euphemisms, and no contrived three-act hero story. He doesn’t distill his “values” from every phase of his life or end with a begrudging admission that he may just be the guy for the top job after all. 

This book is real. It chronicles night terrors and daymares, panic attacks, sleep paralysis, suicidal thoughts, and crippling guilt. There has never been a book written by a politician—current or former—with this level of candor. Consider, for example, the following passage:

“My nightmares evolved. Instead of being in a meeting with an Afghan warlord, I was at home. Instead of coming to attack me, violent people were coming for Diana … I’d wake up in terror, but I couldn’t move a muscle because my body remained asleep.”John Doe

When I said I’d wondered what truly happened back in 2018, well, I don’t have to wonder anymore. The combination of Jason’s lucid writing and willingness to bear all makes for one moving description after another. He describes the “voltage of danger” he sensed everywhere in civilian life, how whenever he sat at a restaurant, he had to face the door, how he shook hands with every attendee at every campaign event in part so he could “assess every threat in the room,” and, most alarmingly, how he’d “come to understand why some people chose suicide.” This is not typical politician-speak. 

The big question that looms over this work is what these revelations mean for Jason’s political future. “You have to be a little crazy to be in politics,” Jason writes, “but what you cannot be is mentally ill.” I’d argue that contemporary politics has yielded many a successful mentally ill candidate, including for some of our highest offices. With that said, let’s give his claim a little oxygen: Is this memoir a sign that Jason won’t ever run for office again? After all, there’s a vast difference between admitting you smoked pot in college and saying you’ve contemplated suicide. If he did run after writing this book, he’d certainly be setting a new standard for authenticity in politics. In that spirit, a reporter recently called to ask whether Jason would run for president again, and my honest answer was, “As a friend, I don’t want him to run, but as a citizen, I have a different opinion.” He’s built a wildly successful, happy, and fulfilling life outside of electoral politics. Why change that? 

The obvious answer is that certain people are born to do one thing, and it’s possible that Jason Kander was put on this earth to run for office, or, more accurately, to serve in high office. Some of the most interesting parts of Invisible Storm involve him grappling with his own ambition. Consider, for example, the following:

“I was jealous of people—the normal people who could be happy doing a regular job, raising kids, and diving into hobbies. I didn’t understand them, but I envied them all the same. … But the truth was, I just wanted to be a person who wanted those things. Someone who didn’t fear slowing down and could imagine actually living a fulfilled life.”John Doe

There are two ways to read a passage like this. You could read it as a confirmation that Jason will never truly be able to leave the game. Or you can believe that he never knew how to be fulfilled outside of politics until he truly dealt with his shit. In other words, is he more Tom Brady or Andrew Luck? I lean toward the latter, in part because I know how awesome Jason’s life is right now and how happy he seems, but it’s easy to see the other side. However, part of me believes the speculation on Jason’s political future is missing the point of Invisible Storm. The true value of this work is how it chronicles his journey to recovery. Whether he runs or not, he’s given people struggling with trauma and mental illness a reason to hope. 

Jason isn’t just honest about his mental health; he also details certain inconvenient truths about his political life that most politicians aren’t willing to admit. Case in point is when he talks about the pressures of fundraising, admitting that he’d kept in better touch with his Georgetown Law School friends than those he served with in Afghanistan. Or when he describes his reaction to being elected Secretary of State of Missouri: “It was the perfect role for someone desperate to avoid dealing with himself” and “public adulation and media attention are a useful distraction.” If I could share just one quote from this book with the candidates I’ve coached over the years, it would be that one. There’s an emptiness and a lack of self-awareness I’ve sensed in most aspiring candidates who’ve walked through my door, and Invisible Storm may just be the best model for how candidates can go about a true process of growth and self-discovery. 

Most political memoirs treat the “political spouse” as a one-dimensional figure—an opportunity to humanize the author. I heard a politician once say, “I’m not perfect. Just ask my wife,” as if anyone thinks that’s necessary. This book doesn’t do that. Jason’s wife Diana is every bit a main character in his journey, peppering the book with first-person accounts of her own struggles with post-traumatic stress disorder (PTSD). We get unvarnished depictions of her experience of his deployment and all-consuming campaigning, as well as their collective descent into PTSD. She wrote:

“The only way I could avoid the fear that he might be hurt or kidnapped was to pretend like it already happened and try to go about my day as if he was already gone.”John Doe

Upon his return, Diana’s often-futile efforts to help Jason wound up taking a heavy toll. “Instead of saving him,” she wrote, “I’d joined him in the drowning.”

We learn early on in Invisible Storm that Jason and Diana met in high school and attended prom together after Jason’s original date canceled. They attended law school together, often staying up all night studying and debating, about which he wrote, “Every night was a slumber party with my best friend.” They operated as one, which made her particularly susceptible to adopting his pathologies. “When you live with someone who tells you how dangerous the world is,” she writes in one harrowing passage, “how vulnerable you and your family are, you start to believe it.” 

At its heart, this book is a love story. It’s a window into one of the best marriages I’ve ever encountered—a partnership that’s all the more inspiring because of how imperfect it’s been. As they make painfully clear, Jason and Diana passed up countless opportunities to slow the pace of their life down and seek help. Yet, they remained fully committed to each other every step of the way, even as they endured the full gamut of communication challenges that any couple might experience. Of course, in the end, Jason and Diana tackled recovery like they’d done nearly everything else: together. “At night we’d compare our lessons and our homework like we had when we were law students.” He dedicates the book to her: “My teammate, my soulmate, my best friend, and my hero.” If that doesn’t get you misty, I don’t know what will.

The post Jason’s Candor appeared first on The Branch.

As the Supreme Court nears the end of this term and issues a flurry of opinions, we want to point you to a few important looming decisions. We’ve extensively covered the coming decision on abortion rights in Dobbs, both in this newsletter and on our show, but it’s not the only Supreme Court decision that could have sweeping consequences for our country. Here are three additional cases whose outcomes may upend established law. 

Carson v. Makin

This dispute involves a Maine program that offers tuition assistance for students to attend private high schools when they live in an area without a public option. At issue are two families who were denied funding because they planned to use it to pay for Christian schools that offered religious instruction. Maine law limits tuition payments to nonsectarian institutions. 

This case comes on the heels of the 2020 case of Espinoza v. Montana Dept. of Revenue, in which the court ruled 5–4 that a similar voucher program could not exclude religious institutions simply because they were religious. In the lower court ruling in Carson, the First Circuit sided with Maine and interpreted Espinoza to mean a state can’t exclude a school simply because of their denomination, but they can exclude a school if the funding would go towards teaching religion. In short, the First Circuit is distinguishing between restrictions based on “religious status” and “religious use.” Restrictions based on the former are unconstitutional; those based on the latter are not. 

The parents in Carson argue that there’s no constitutional basis for the First Circuit’s distinction. Here’s SCOTUSblog summarizing the parents’ position: 

Indeed, they suggest, the framers of the Constitution opted to protect religious “exercise,” rather than “mere belief or conscience, to ensure that Americans would be free to live out their faith.” And for these parents and others who would use the tuition-assistance program, they explain, ensuring that their children receive a religious education is a religious obligation; barring them from participating in the tuition-assistance program because the funds would be used for religious purposes discriminates “not only against that religious use, but also against the religious status that impels it.”John Doe

Maine, on the other hand, says their program is unique in that it intends to replicate a public education where a regular public school is not feasible. They argue that a public education “should be a nonsectarian one that exposes children to diverse viewpoints, promotes tolerance and acceptance, teaches academic subjects in a religiously neutral manner, and does not promote a particular faith or belief system.” They want to ensure “every child has access to a free public education—i.e., a religiously-neutral education where subject matter is not taught through the lens of any particular faith.” They distinguish this program from other school voucher programs that provide money to families “who for academic, religious, athletic, or other reasons want to opt out of the public education system, and send their children to private schools.” They argue that their law doesn’t involve a choice to leave the public school system but a narrow circumstance in which no public school is available. 

The stakes in this case are enormous. As the National School Boards Association argued in a brief supporting Maine, the elimination of the distinction between religion status and religious use would force states to either dramatically expand voucher and school choice programs (the likely path in red states) or to shut them completely (the likely outcome in blue and purple states, including Maine). Put simply: this is the most important school choice case in recent memory. 

My take: I side with Maine here. The families involved are not being denied a “generally available public benefit.” There is no general right to attend a Christian school at state expense in Maine, but there is such a right to a public education. This is a narrow situation in which the state is trying to find the closest approximation to a public school where none is available. It’s also worth noting that the facts for the parents here aren’t flattering. The state alleges that the two schools at issue “will not hire LGBTQ teachers or admit LGBTQ students.” It would be odd to require the government to fund educational institutions with those practices.

My prediction: the court seems poised to rule in favor of the parents. Amy Howe has a telling readout of the oral arguments, and even Chief Justice Roberts seems inclined to strike down the Maine law. 

New York State Rifle & Pistol Association Inc. v. Bruen

For the first time in 11 years, the Supreme Court has taken on a Second Amendment case. The case involves New York State’s concealed carry permitting process, which requires anyone who wants a license to prove to authorities that they have “proper cause” for carrying the weapon. Openly carrying a handgun is completely illegal. The petitioners are two men whose applications were rejected because the licensing officer determined they did not have exceptional cases for self-defense that would distinguish them from the general public. The district court dismissed their claims, and the U.S. Court of Appeals for the Second Circuit affirmed the lower ruling. 

It’s important to note that there are two different types of requirements a state can impose for licenses: objective and subjective. Objective requirements, which are generally on safer legal ground, can include restrictions on age, criminal history, and citizenship. This case involves subjective requirements, which place much greater discretion and power in the licensing authority. In this case, that discretion involves the decisions over what constitutes a sufficiently heightened need for self-defense. The New York State Rifle & Pistol Association (NYSRPA) argues that licensing officers are incredibly strict and stingy with their interpretation of what constitutes a need for self-defense for the general public but are generous with permits for celebrities and the well-connected.

In support of NYSRPA, 26 states argue that non-discretionary concealed carry laws (“shall issue” laws) reduce violent crime. As evidence, they pointed to Arizona’s murder rate, which dropped significantly in the 20+ years after the state passed a “shall issue” concealed carry law. On the other side of the debate is a coalition of cities who argue that discretionary permits are a critical tool to combat street violence. The National Coalition Against Domestic Violence also weighed in, arguing that “shall issue” permits increase the risk of domestic violence. They claim the presence of a firearm often increases the frequency of deadly incidents of abuse. 

My take: it’s no secret that the rich and powerful can buy concealed carry permits (usually for their bodyguards) in New York, while it’s next to impossible for anyone else to get one. That’s not fair. At the same time, I don’t want New York City to turn into a densely populated Wild West town, with millions of armed people packed together in close proximity. The state should reform the policy so that the hyperconnected don’t game the system, but anything they’d do to fix the law would likely be too little and too late for this court. 

My prediction: The court is almost certain to side with the petitioners and strike down this law. In the 2008 case of District of Columbia v. Heller, a much less conservative court argued that “all Americans” have the right to “possess and carry weapons in case of confrontation.” That ruling was considerably more narrow than this one (it involved a blanket ban on handguns and required any firearm kept in the home to be unloaded and disassembled), but everything I know about this court tells me they will take a sweeping view of the Second Amendment. 

Kennedy v. Bremerton School District 

This is a case we covered on The Lost Debate Show back in April. It involves a high school football coach who engaged in a number of prayer rituals during and around his official duties. As we covered on the show, there is significant disagreement over many of the facts in this case, but what is undisputed is that the coach would kneel at the 50-yard line after games and pray. Sometimes students would join him for those prayers, and in later instances, he did so alone. 

After a series of exchanges between the coach and school officials, the coach was warned to keep his religious activities “physically separate from any student activity.” He defiantly launched a press tour and announced he would resume praying at midfield before the school placed him on administrative leave. The district then decided not to renew his contract. Perhaps crucially, in his final few games, he was not joined by any students when praying at midfield. The coach eventually became a bit of a political celebrity, appearing at a 2016 Trump rally. 

What makes this case particularly interesting is that it pits the coach’s right to the free exercise of his faith against the Constitution’s prohibition of government endorsement of religion. To make matters more complicated, the court has applied at least two different tests when interpreting the First Amendment ban on “an establishment of religion.” The most restrictive test, called the Endorsement Test, prohibits the government (including any official—i.e., potentially this coach—in their official duty) from endorsing a particular religion or religious belief. The more permissive test is called the Coercion Test, which, as the name suggests, only outlaws actions that would be seen to coerce someone into religious exercise. Under the Coercion Test, an official could endorse a religion or belief; they just wouldn’t be able to compel someone to engage in a religious activity. 

Given this is a conservative court, the justices are almost certain to apply the Coercion Test. So the question becomes: Could players and other students feel compelled to participate in the coach’s prayer rituals? At least one player anonymously reported joining the ritual for fear of losing playing time. 

My take: this one is a close call. So much of this, in my opinion, comes down to why the district didn’t renew the contract. If it was merely because of the coach’s final act of defiance, this gets especially tricky because no students participated alongside him. But if the court believes he was fired for a pattern of behavior that included prayers with students, then he clearly violated the Coercion Test. 

My prediction: The court will likely side with the coach. Three years ago, during an earlier phase of this litigation, four justices joined an opinion by Alito which suggested that the district violated the coach’s constitutional rights. The court has only grown more conservative since then. 

What Next

The Supreme Court will hand down these opinions in the weeks ahead. If you’re looking for helpful resources to consult when they do so, here are a few:

• SCOTUSblog. In-depth analysis from hardcore Supreme Court lawyers. 
• The Oyez Project. This website includes a plethora of original source multimedia from the court, including the complete audio of oral arguments before the court. 
• Jess Bravin. The Wall Street Journal’s Supreme Court reporter. 
• Adam Liptak. The New York Times’ Supreme Court correspondent.

And of course, subscribe to The Lost Debate Show and this newsletter to stay up to date with our reactions to the decisions as they come down.

The post Three Supreme Court Cases To Watch appeared first on The Branch.

At the start of the year, we ran a story on The Lost Debate Show podcast about warning signs of a global recession. Quoting investor Jeremy Grantham, we asked whether we were in the midst of a “super bubble” – defined as a 3-sigma deviation from trend — the fourth such in 100 years. 

In case it isn’t obvious, bubbles are bad and super bubbles are worse. Here’s Grantham explaining why:

As bubbles form, they give us a ludicrously distorted view of our real wealth, which encourages us to spend accordingly. Then, as bubbles break, they crush most of those dreams and accelerate the negative economic forces on the way down. 

When our current super bubble bursts, warned Grantham, it’s going to be particularly devastating because it’s the first to include so many asset classes under historic overvaluation all at once: equities, housing, and commodities. 

Unfortunately, it seems that Grantham may have been right. Here are five reasons to think our day of reckoning may have already arrived. 

Storm Clouds from China

China is facing four major economic challenges at once: massive Covid lockdowns, planned deleveraging in key sectors (especially property), an increasingly tense relationship with its largest trading partner (the U.S.), and the growing war-related costs of its alliance with Russia. 

Covid lockdowns may be the most potent of those forces, at least in the short term. Chinese authorities are currently enforcing full or partial lockdowns in at least 27 cities, affecting up to 180 million people. This lockdown is not only a drag on the well-being of their population and a looming humanitarian crisis (only half of Chinese aged 80 and older are fully vaccinated against Covid), but it’s also threatening the global economy. China alone could keep inflation high at a time many thought it would start to wane. It’s true that China’s struggles could have some deflationary effects, as its weaker domestic demand means it consumes less oil and other imported goods and commodities. But given they are a net exporter, that deflationary effect could be dwarfed by the coming scarcity and increased cost of goods the country manufactures and ships abroad. 

The lockdowns are only part of the story. A May 1st Wall Street Journal article painted a bleak picture of almost every sector of the Chinese economy. Here are just a few of the details from that story: 

• “On Saturday, purchasing manager indexes released by China’s government showed contractions in factory and service-sector activity for a second straight month in April. They fell to their lowest levels since the pandemic began in 2020.”
• “Cement production in mid-April was less than 40% of full capacity. Shipments of smartphones dropped 18% from a year earlier in the first quarter. Excavator sales within China were down 61% in April compared with the previous year.”
• “Surveyed unemployment in China’s 31 largest cities has surpassed the level it hit when Wuhan was locked down in 2020. Youth unemployment is now 16%, according to official data.”
• “More than 10 million college students are due to graduate this year, a record for China, but a gauge of vacancies compiled by the China Institute for Employment Research at Renmin University of China and job search website Zhaopin suggests there aren’t nearly enough jobs for them all.”
• “About a third of China’s 290 million migrant laborers haven’t returned to their cities of employment since the Lunar New Year in February amid the Covid restrictions. The number of people employed at small- and medium-size businesses has shrunk by around 30%, according to research firm J Capital Research, based on interviews with Chinese labor agencies.”

An incompetent (at least as it relates to Covid management) authoritarian government with a colossal and growing population of young and migrant laborers out of work? That sounds like a recipe for civil unrest, which could only serve to further deepen China’s economic struggles. 

It’s worth remembering that China in many ways led the recovery from the 2008 financial crisis, but there’s little reason to believe they will do so this time. A prior IMF projection had China accounting for a quarter of global economic growth in the five years through 2026, but their latest forecast would have China on pace for its worst year for growth since 1990 (aside from 2020).

The collateral damage from China’s struggles is already doing damage to its neighbors, who are seeing exports to the country drop as prices for key goods increase.

Big Trouble in Big Tech

The technology sector is facing one of its most turbulent stretches in years. Recent lackluster earnings reports have sent stock prices of major growth companies like Lyft and Uber plunging. Shares of Amazon, Meta, and Netflix are all down 30% this year (as of Sunday) — more than double the 13% drop in the S&P. 

These losses were driven by real concerns over the fundamentals of these companies. In April, Amazon reported its slowest quarterly revenue growth in almost two decades. Warehouses were overstaffed and underutilized, all while operating expenses have grown faster than sales revenue. Netflix lost subscribers for the first time in over a decade, leading to a $54 billion hit to its market cap in a single day. Meta has announced a hiring freeze for mid- to senior-level positions just months after announcing it would make a hiring push to invest more staffing in their Metaverse work.

This is a huge risk to the system, because of these companies’ unprecedented share of the market. Here’s Lu Wang, Vildana Hajric, and Isabelle Lee in Bloomberg: 

The five tech giants, Meta Platforms Inc., Apple Inc., Amazon.com Inc., Microsoft Corp. and Alphabet Inc., at one point accounted for a quarter of the S&P 500, boasting an influence that’s greater than any comparable group of stocks since at least 1980. Now that the group, known as the Faangs, has seen their total value shaved by 23% from the December peak, a drag that the market has no chance of shaking off. The S&P 500 is mired in its second-longest correction since the global financial crisis.

What’s driving this retrenchment? Each of these companies has a host of unique challenges and opportunities. For example, the return to normal would seem to hurt Netflix (as people are spending less time in front of their TVs) but should be helping Uber and Lyft. But there are certain headwinds that are common to most of these companies. 

The first culprit is inflation, which has not only decimated consumer spending power but is also driving up prices for workers, a problem that seems particularly stark for Amazon, who employs an army of drivers and warehouse workers. Then there are rising interest rates, which are drying up the flood of capital seeking outsized returns in the tech sector. And the aforementioned lockdowns in China are ensnaring supply chains and driving up costs for all manner of goods. Apple has said that the Covid surge in China could hinder sales by up to $8 billion this quarter.

In short, Big Tech could be the equivalent to housing in 2008 — the anchor to our economy’s Lusitania. 

Nowhere to Put Your Money 

Stocks Thursday saw their largest single-day decline since the start of the pandemic — continuing a five-week decline in the S&P 500 and an overall bleak year for equities. These losses are spreading from speculative stocks to reliable blue chip companies. Bitcoin also dropped below $35,000 over the weekend, down over $10,000 from the start of the year.

What’s going on here? The easiest explanation is that rising interest rates make the stock market — especially the most speculative equities — less attractive. But that doesn’t explain why stocks dipped after Chairman Powell signaled he would be unlikely to raise interest rates by more than a half a point at a time. It’s hard to tell what’s driving this decline, and it’s likely a combination of forces. Investors may be deleveraging — unwinding trades conducted on margin. Some funds may also be liquidating after some big bets gone wrong. And, of course, this could just be animal spirits. The story we’re being told is that we’re heading for recession, and sometimes the story is enough to guarantee we’ll get there.

Labor Continues to Get More Expensive 

Many economists have been predicting we should see inflation wane right about now. They could be right, but there’s worrying signs that cost categories will continue to rise. I’ve already discussed China and supply chains, but this problem isn’t specific to the price of hard goods. The Wall Street Journal reported over the weekend that major hospital corporations like HCA and Universal Health Services are seeking to raise prices for services by as much as 15% in response to increased salaries due to nursing shortages. These hospital corporations account for a huge portion of overall healthcare costs, accounting for $1 trillion a year in spending. 

Rising labor costs aren’t specific to healthcare, of course. And even the good news here is bad news. April brought a twelfth straight month of job gains above 400,000, and the unemployment rate remains at 3.6%, essentially where it was before the pandemic began. That’s great, but with it comes an employee base that will be demanding higher wages, driving up the costs of services across most sectors.

Many Energy Crises on the Horizon

Energy markets appear volatile in every corner of the globe. Indian power plants are running out of coal, as two-thirds of households are facing regular power cuts. In the United States, grid operators are warning that power-generating capacity is trailing demand, and predict rolling blackouts this summer from California to Indiana to Texas. The main culprit is an aging grid combined with the fact that traditional power plants are being retired faster than renewables and other replacements become operational. Then there’s the ongoing war in Ukraine which has injected uncertainty into the energy markets, most recently with the G-7 pledging to phase out Russian oil imports.

All of these trends point to another possible global spike in energy prices, which would lead to a further rise in the cost of goods and services. 

The bottom line: it’s past time to batten down the hatches, board up the windows, and lock up the stables. There’s a storm coming, and it may already be here.

The post Five Signs Of A Coming Global Recession appeared first on The Branch.

On Thursday, the White House signaled that action is imminent on permanent student loan relief as Biden announced he expects to make a decision “in the next couple of weeks.” The administration had already extended the pandemic-era student loan moratorium until August 31. 

The White House is apparently considering income ceilings on eligibility: a cap of up to $150k for individuals and up to $300k for couples. Biden told reporters that the total amount forgiven per borrower would be at or above the $10k he’s previously promised but below the $50k that progressives such as AOC and Warren have been calling for. The administration is also apparently weighing limiting forgiveness to undergraduate loans, excluding those who took out loans for professional degrees like law and medicine. 

As we gear up for Biden’s announcement, let’s look at the cases for and against relief. I’ll conclude by sharing where I come down on the issue. 

The Case For Student Debt Relief 

Debt is crippling a generation. The total amount of student debt owed in this country has more than doubled since 2008, now totaling at least $1.7 trillion. More students owe more debt than ever before. The amount of households with student debt has tripled — from 8% in 1989 to 21% in 2021 — while the average quantity of such debt owed by households increased nearly four-fold in real terms from 1989 to 2019. This forces people to delay or forgo major life decisions such as purchasing a house, starting a family, or launching a business. 

Government created this crisis; government should solve it. “Government has been acting like a predatory lender,” argued Slate’s Jordan Weissman on a recent episode of the Plain English podcast. “They give out loans indiscriminately, they don’t check credit scores, and they don’t even ask questions about the kinds of schools you’re going to.” Borrowers from for-profit colleges hold on average 40% more debt and are twice as likely to default. The government has made it as easy as possible for these for-profits to prey on vulnerable customers and has done next to nothing to control costs or discriminate on the basis of quality of program or major. This dynamic is also at play in non-profit and public colleges as well, where, as Dominic Pino and many others have argued, the government restricted supply (making it hard to start a university) while manufacturing demand. To make matters worse, the government also makes it extremely difficult to discharge student loan debt in bankruptcy. 

The vulnerable suffer the most. On average, women owe nearly $3k, or 10%, more student debt than men. Black borrowers owe over $13k, or nearly 50%, more than white borrowers and are twice as likely to default. One report from the US Department of Education found that “the typical African American student who started in the 2003-04 school year and took on debt for their undergraduate education owed more on their federal student loans than they originally borrowed.” As Elizabeth Warren has argued, “canceling student debt would substantially increase Black household wealth, help close the racial wealth gap, and help them avoid default.”

Students with debt are more likely to overwork and sell out. Multiple studies have shown that student debt pushes graduates to choose work they are less passionate about and deters them from public interest careers that offer lower salaries than corporate work. A study in the Economics of Education Review revealed that recent graduates with student debt take jobs that have higher initial salaries but lower potential wage growth. And while those with student loans have higher incomes, they don’t have statistically significant higher hourly wages, suggesting that student debt is forcing loan holders to work longer hours.

It’s good politics. Biden’s support among young voters, especially young voters of color, has been dropping significantly over the past year. This is an emergency for the administration. Young voters delivered Biden his widest margins in 2020, and he’s going to need them in 2024. He started his term with around 60% approval among 18-to-34-year-olds, but his support has tanked by somewhere between 13 and 24 points, depending on the survey. A January poll found that 64% of young people supported Biden’s extension of the loan moratorium and 53% supported either canceling all student loan debt or forgiving up to $50k. Another 9% supported forgiving up to $10k. Biden must take dramatic action to flip perceptions, and this is one of the few options he has that may (emphasis on *may* — more on this below) not require congressional action. 

The Case Against Student Debt Relief

Student loan forgiveness is regressive. Less than 20% of the approximately 250 million adults in the US have student loans, and most of them are in the top 50% of earners. That’s because college graduates turn out to have high incomes. And while only 25% of those with student loans went to graduate school, they owe around 50% of all student debt. Those graduate degree-holders make, on average, over $1 million more in a lifetime than high school graduates. Is it really fair to use a blue collar worker to pay off the debt of a white collar worker who earns significantly more? 

Biden doesn’t have the authority. Proponents of debt relief, including Elizabeth Warren, believe that the Higher Education Act of 1965 gives Biden the power to unilaterally cancel all student debt. They cite an obscure provision from the Act that gives the Department of Education the ability to settle or forgive an unspecified amount of student debt. The law doesn’t put a cap on how much can be forgiven and doesn’t offer much in the way of other details on when or how the provision should be applied. Biden himself has signaled that he believes the provision has limits, saying he’s “prepared to write off $10k in debt, but not 50 because I don’t think I have the authority to do it by signing [an executive order.]” It’s unclear why he thinks the law would give him the ability to cancel some, but not all debt. Nancy Pelosi has said Biden doesn’t have the authority to cancel any student debt. Then, of course, there’s the Supreme Court, which, in its recent vaccine mandate cases, signaled increasing skepticism of the federal government using vague statutes to justify sweeping policy change. To use a metaphor from the late Justice Antonin Scalia, pushing through debt relief in this way would be like pushing an “elephant through a mouse hole.”

This move would do nothing to solve the underlying causes of the crisis. A one-time forgiveness won’t decrease the costs of college, drive borrowers to high quality programs, or place students in professions that our society needs.

We’ve already canceled significant debt. Due to the existing moratorium, the Committee for a Responsible Federal Budget has estimated that $5.5k per borrower has been effectively canceled already, from the lack of interest that would have accumulated on existing debt. This may not be an argument against forgiving debt in general, but it could be used to persuade officials to hew closer to the $10k forgiveness target instead of the $50k.

It’s unfair to those who’ve already paid off their debt. Over 34 million people have paid off their student loans entirely. What message are we sending them and to future people like them? Is there a way to apply forgiveness retroactively? Could we even afford that? 

The politics are actually not good. It’s easy to imagine the conservative talking points about liberals siphoning money from the pockets of blue collar Americans and sending it to elite college graduates. “This is who the Democratic base is — upwardly mobile urban professionals with high incomes,” argues Brian Riedl, an analyst at the Manhattan Institute, a conservative think tank. “Subsidizing college graduates with often expensive graduate degrees is really going to offend those who did not go to college, as well as those who paid off their student loans.” About 58% of the 2020 Biden electorate graduated from a four-year college or university, well above the national average and up from 2012 figures. “Given that trend,” argued Jerusalem Demsas in a recent Atlantic piece, “student-loan forgiveness may seem like the classic tale of a political party transferring a valuable benefit to a crucial constituency.”

We’re overselling how helpful this would be to Black borrowers. The majority of student loan debt is held by white borrowers, as just 23% of Black Americans older than 24 had a college degree in 2019. Here’s Jerusalem Demsas again:

Across the board, student-loan advocates have centered racial justice in their demands for loan forgiveness. They cite a variety of statistics showing that Black college graduates have more student-loan debt than their white counterparts, and that they pay off their loans at a slower rate than white graduates. But the former simply reveals that Black Americans are on average poorer than white Americans, and the latter is likely because of labor-market discrimination, neither of which is addressed by student-loan cancellation. Student-debt cancellation does not actually change anything about labor-market discrimination or credit-market discrimination or discrimination within institutions of higher education, nor does it address the rising cost of college.John Doe

My Take

Some form of debt forgiveness is inevitable, even as it may eventually be struck down by the courts. If we’re going to forgive debt, I agree with the Biden administration’s moves to means-test relief and to cap the total amount forgiven in most cases (though I’d probably set my caps lower than they’ve proposed). That would go a long way in ensuring that wealthy borrowers — like Ivy League lawyers — don’t benefit from his moves. 

However, to quote Rahm Emmanuel, we shouldn’t “let a good crisis go to waste.” We should use debt forgiveness to attempt to solve structural problems in our higher education system. To start, Biden should — either through executive order or legislation — restrict future federal loans to institutions that have a strong track record of keeping costs down, growing their student populations, and producing employable graduates. 

I would also make an exception and forgive all total debt — with no means testing — for certain essential professions that are in short supply, such as teachers, social workers, doctors, and nurses. Estimates suggest that canceling loans for social workers would cost around $18 billion and deliver relief to roughly 400k people; and for teachers, it would cost $117 billion, leaving another 3 million people debt-free. Doctors and nurses would cost around $250 billion and would directly benefit roughly 1 million people. I would make these profession-based incentives permanent and would, in perpetuity, forgive loans to people working 10+ years in each of those fields. Biden could even package this move as a form of national service, something that could inspire future generations to give back. 

As for the politics, the above-described moves would mitigate the political risks for Biden by making relief less regressive. And let’s face it: Biden has nothing to lose and everything to gain. His presidency is in a crisis with historically low approval ratings across the board. He may as well go bold and let the chips fall where they may. 

Of course, the albatross hovering over every borrower is the Supreme Court. They could easily kill this dream with one stroke of a pen, but it’s worth trying.

The post Should Biden Forgive Student Loan Debt? appeared first on The Branch.