Today’s inflation is a harbinger of changes that lie ahead

 Inflation is widely viewed as the number one problem facing the country – even Donald Trump’s continuing efforts to relegate American democracy to the dustbin of history takes a distant back seat – and barely a quarter of the public apparently believe that the Inflation Reduction Act passed by Democrats in Congress will do anything to help get inflation under control. And when the federal Bureau of Labor Statistics – the official inflation record-keeper – published data for July that indicated that the annual rate of Inflation had dipped to 8.5% – down from 9.1% in June – people just shrugged. 

After all, at 8.5%, the year-over-year rate of inflation for July remained the highest rate since December 1981 – except, of course, for the 9.1% rate in June. But it was a big deal, and may well turn out to have been a sign of things to come. Why? Because while the 8.5% rate of inflation was the composite of the preceding 12 monthly rates, the rate of inflation for the month of July actually came in at zero. 

For anyone who has filled up their gas tank recently, this should not have come as a surprise. After all, while global oil prices peaked this past March at $120 per barrel in the wake of Vladimir Putin’s invasion of Ukraine, and the price of gasoline peaked two months later at over $4 a gallon nationwide, oil and gasoline prices have each declined by 25% from those peak levels. 

And it’s not just gasoline prices that have come back down. The price of wheat, which was similarly impacted by the war in Ukraine, nearly doubled in March, but has since fallen back to where it was last year. Lumber and eggs, prices of which made headlines as inflation surged, have each tumbled 70% and 50%, respectively, from their peaks. Even the cost of air travel is coming down. 

And financial markets have taken notice. Market expectations of the rate of inflation over the next five to ten years – calculated by comparing the trading relationships between traditional fixed-rate US Treasury securities and “inflation-indexed” securities – have fallen back to 2.5%, just a bit above the Federal Reserve Bank’s 2% target.

Arguments abound about the confluence of events that have brought inflation roaring back to 1970s levels. Putin’s invasion of Ukraine upended global markets for oil and natural gas, as well as agricultural commodities. Covid-19 has had wide ranging impacts, roiling labor markets at home and global trade abroad. Millions of Americans, who may have previously given little thought to business or economics, have been forced to grasp the implications of “global supply chains.” 

And there are those who reject all of those factors, and assert instead that the singular cause of the sudden spike in inflation was the massive printing of money by the Federal Reserve Bank in the face of the collapse of economic activity at the onset of the coronavirus pandemic. This view – held by “monetarists,'' a school of economics that argues that inflation is primarily a function of money supply – is straightforward. As the economic activity shut down in early 2020, the Fed responded by flooding money into the economy with the hope of forestalling an economic collapse. Once the Fed did that, it was only a matter of time before that flood of new money flowing through the economy drove up prices. Forget Putin’s war and global supply chains; inflation, in the monetarist view, is simply about the money.

We may never know whose explanations are correct, but we will know in a few short weeks if the zero percent rate of inflation in July is matched again in August, and whether the evidence begins to suggest that inflation is indeed moderating. But whichever way it turns out, the impacts of the war, the pandemic, and the Fed’s printing of money may only be the first chapters in a larger inflation story.

As we debate the causes and trajectory of inflation today, the common expectation is that it will in relatively short order be brought back down to the 2% range, as reflected in financial market expectations. After all, low inflation has been with us for decades now, dating back to Fed Chairman Paul Volker’s determined success in taming post-Vietnam War inflation.

But an essential underpinning of the low inflation environment that we have come to take for granted since the 1990s was the fall of the Berlin Wall, the end of the Cold War, and the steady integration of Russia, China and other nations into the world economic order. Since the end of the Cold War, US foreign policy toward our Cold War adversaries has been built around a military policy of containment – implemented through regional military alliances – coupled with economic policies promoting rule-based, free trade and global economic integration, generally referred to as globalization. While economists disagree on the extent of the impact of globalization on inflation, it is generally viewed as having kept inflation in check by engendering global labor competition that suppressed wage growth and reduced the costs of manufactured goods. 

Enthusiasm over the entry of China and Russia into the World Trade Organization went beyond the potential economic benefits. In his 2005 book, The World is Flat, Thomas Friedman argued that free trade and economic interdependence would be the key to preventing future conflicts. In what he dubbed the "Dell Theory of Conflict Prevention," Friedman argued that "No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain." And others took the geopolitical case for globalization a step further, arguing that economic integration would necessarily bring in its wake political liberalization in Russia and China and other, smaller, authoritarian countries.  

Over the past decade, in events that foreshadowed what we have watched over the past year, Friedman’s theory was dealt severe blows, as Russia and China each demonstrated that rather than economic interdependence moderating their behavior in the world, it would be used as a weapon against their trading partners. 

In China’s case, in 2012, during the months leading up to Xi Jinping’s appointment as General Secretary by 18th Central Committee of the Chinese Communist Party, anti-Japanese demonstrations spread across China, ostensibly related to a dispute over uninhabited islands held by Japan, and Japan’s occupation of China in the 1930s. In response to the public outcry, and in violation of WTO rules, China halted the sale of critical rare earth metals that were essential to Japan’s electronics industries. The Japanese government has since warned Japanese companies of the political risks of investing in China and relying on it as a supply chain partner, and Japanese investment in China is now less than its investment in most other, far smaller, Asian nations.

For his part, Vladimir Putin has proven adept at using the dependency of European nations on Russian natural gas as a weapon in international affairs. In 2014, he cowed European nations into quietly acquiescing to his first war with Ukraine and annexation of Crimea out of fear that Russia would shut off natural gas supplies. 

When Xi Jinping and Vladimir Putin met in Shanghai on the eve of Russia’s invasion of Ukraine, they effectively put a nail in the coffin of the Dell Theory. In a paraphrasing of Tip O’Neil’s dictum that “all politics is local,” they declared in no uncertain terms that the pursuit of national interest – which really meant their own political interest – would henceforth prevail over whatever rules of conduct the United States and other nations might seek to impose. Ukraine and Taiwan were clearly in the cross-hairs, economic interdependence be damned. 

Three months after the Shanghai declaration, no doubt shaken by the harsh western sanctions levied against Russia in response to Putin’s invasion of Ukraine, Xi sought to tamp down rising geopolitical tensions and focus international attention instead on solidifying and expanding trade under the auspices of the WTO. 

But the horse had already left the barn. This past June, Apple Computer announced plans to diversify production away from China, notably to Vietnam, as well as India and Brazil. Apple’s decision mirrored recommendations from the Biden administration a year earlier that companies carefully consider geopolitical risk exposure in order to increase the resilience of their global supply chains. 

In the wake of Apple’s announcement, the words “Reinventing Globalization” were emblazoned across the cover of The Economist, and the magazine editorial observed that Apple’s migration away from China is becoming the norm, rather than the exception: “The pandemic and war in Ukraine have triggered a once-in-a-generation reimagining of global capitalism in boardrooms and governments… This new kind of globalization is about security, not efficiency: it prioritizes doing business with people you can rely on, in countries your government is friendly with.”

With the devastation of Ukraine continuing unabated, and Xi’s Taiwan rhetoric escalating by the day, advanced industrial nations that have long promoted unfettered globalization now have been given a clear vision of its downside: A move by China against Taiwan, which Xi appears to be suggesting is inevitable, if not imminent, would wreak havoc on the global supply of critical semiconductors. In the near term it would force the shutdown of Taiwan-based TSMC – the world’s largest supplier of advanced microchips – and, should China succeed, it would leave a geopolitical adversary in control of 90% of global advanced chip production. 

Globalization has always been a two-edged sword. In purely economic terms, the global search for low cost labor and profit maximization engendered an era of economic growth and the low inflation world that we have come to take for granted. Along the way the outsourcing of production from advanced economies to emerging economies across the globe contributed to a dramatic reduction in the percentage of the world population living in extreme poverty, most notably in India and China. 

But globalization did not come without costs. Here at home, placing American workers in direct competition with low wage workers across the globe eviscerated the manufacturing heartland of the United States. It contributed to the rising tide of income inequality. And, as exemplified by Donald Trump’s rise as the avatar of the aggrieved American working class, it ultimately contributed to the fracturing of our political system, and shredding the image of the United States as a beacon of democracy in the world. 

As we wait to see what lies ahead in the inflation reports for the next few months and learn whether this round of inflation is behind us, under the radar screen of much of the media, a reconfiguration of the global economic order is underway that could have far more lasting ramifications than the rate of inflation from one month to another. The era of globalization, characterized by the global search for low cost labor and profit maximization above all other considerations, is clearly coming to an end. The question that remains, as the editorial in The Economist asked, is whether the next era of globalization, which prioritizes security over efficiency, and doing business with people and nations you trust, can be accomplished without a new descent into protectionism and worsening inflation.

As Inflation Fades, Jerome Powell's Biggest Problem Will Be Republicans

Bored Ape Yacht Club NFT prices have been hammered. 

NFTs – “non-fungible tokens” – are proof of ownership of digital products, most commonly images, music or short videos, that exist on a blockchain. A blockchain is a digital ledger where digital items are stored, and – theoretically at least – cannot be hacked or stolen. Cryptocurrencies – such as Bitcoin or Ethereum – are kept on a blockchain; now NFTs are there too. 

Bored Ape Yacht Club (BAYC) is a collection of bored ape NFTs, like the one shown here that was posted for sale recently. Serena Williams apparently has purchased at least one of BAYC’s NFTs. So have Eminem, Stephen Curry and Shaquille O'Neal. 

Why those celebrities bought NFTs is a reasonable question. Just as you cannot put your cryptocurrency in your pocket, or bite it to see if it is real, you cannot keep other people from putting a picture of the image you own on their wall – or using it to illustrate their blog. 

If none of this makes sense to you, take heart: it probably doesn’t really make sense to them either. Just think of NFTs as the latest shiny thing to come along that people want to be part of, like your cousin who will not stop talking about the killing he made in a cryptocurrency he bought that has a picture of a dog on it. Perhaps those celebrities wanted to buy the digital images to support the artists that produced them. Perhaps being part of the crypto ecosystem – now branded as Web 3.0, or Web3 for short – enhances their personal brand value.

Or perhaps, as crypto critic Molly White has argued, they simply got caught up in the “litany of scams, failures and frauds” that White argues have been the sum and substance of Web 3.0; a universe where boosters and venture capitalists scheme “to separate regular people from their money.” 

And White’s perspective has been vindicated. As prices of BAYC NFTs, along with much of the crypto universe of assets, has come crashing down – as illustrated by the chart here showing the crash in the overall NFT market – it is the small investors who have taken the hit. Sure, the Winkelvoss brothers – of Facebook and The Social Network fame – have lost a billion here or a billion there, but like the other now-billionaire crypto boosters, they are doing just fine. 

The crash in NFT prices is a classic example of a market bubble. Indeed, the very existence of NFTs, along with the rise of cryptocurrency as an “asset class,” should be a lesson in financial hubris that we learn from. Of course, we never learn from financial bubbles, as economists Carmen Reinhart and Ken Rogoff observed in their 2011 book This Time Is Different: Eight Centuries of Financial Folly. 

Everyone denies that they are part of a bubble, until the world comes crashing down around them. Crypto enthusiasts in particular have chafed at comparisons between the rise of Bitcoin and the 17th-century market frenzy in which Dutch traders drove the price of tulip bulbs sky-high, before “tulipmania” came to a crashing end. After all, one crypto advocate wrote late last year, “Bitcoin is a technology, tulips are plants, and no discerning person would take the comparison much further.” 

Perhaps comparing Bitcoin and blockchain to tulip bulbs is a bit over the top. After all, cryptocurrency offers very real value as a covert means of exchange for those engaged in money-laundering, tax evasion, and myriad other criminal activities, while tulips are pretty flowers. But a comparison of the trading frenzy that has surrounded ownership of digital images of bored simians to tulipmania in 17th century Holland actually seems fairly straightforward. 

It is hard to assess the Web 3.0 bubble and ensuing crash outside of the context of the rest of the market bubbles that built up over the decade since the 2008 global financial collapse, and the integral role played by the Federal Reserve Bank. The fear among central bankers and Treasury officials of a prolonged depression in the wake of the 2008 collapse led to unprecedented efforts to push interest rates across the globe to zero, and below. These efforts were spurred on by belief that the deflationary cycle that characterized Japan’s “Lost Decade” following the 1990 collapse of the Japanese Asset Bubble was in part due to a failure of the Japanese central bank to respond aggressively to sustain economic growth. Driving interest rates to and below zero, drove asset values to historically high levels.

Asset values from stocks and bonds to real estate respond directly to central bank interest rate policies. Not to get too far into the weeds, but this is because the value of cash flow generating assets (stocks generate earnings/dividends, real estate generates rents, etc.) generally reflect projected future earnings discounted at prevailing interest rates. Therefore, as interest rates decline, asset values rise. Accordingly, as the US Federal Reserve Bank pushed interest rates towards zero in the wake of the 2008 financial collapse, and as rates were pushed to below zero in Europe, stocks, bonds and real estate each exploded in value, with stocks in particular rising 500% over the ensuing decade. 

This historical relationship is presented in the graphic shown here that was produced by Nobel laureate economist Robert Shiller. It presents the inverse relationship between stock “price/earnings ratio” (which calculates a stock price as a multiple of a company’s most recent annual earnings) and long-term interest rates. As illustrated here, stock market peak reached in 2021 marked the second highest level of stock valuations – stock prices on average rose to nearly 40 times company earnings – in the past 150 years, exceeded only by the “dot-com” bubble that peaked in 1999, and surpassing the market highs reached just before the market crash in October 1929 that ushered in the Great Depression. 

Accordingly, no one should be surprised that the NFT market collapsed as Federal Reserve Bank policies shifted in response to inflation fears. Just as central bank zero-interest rate policies and quantitative easing drove those asset values to new heights, the reversal of Fed policies over the past several months to push interest rates upward brought asset prices crashing back down (though by historical standards, as the graph above shows, they remain very high). 

Nor should anyone be surprised that the NFT price implosion has been more severe than the stock market as a whole. After all, investor enthusiasm for NFTs, like the Web 3.0 investment universe as a whole, grew out of the dramatic rise in stock prices in response to zero and negative interest rate policies since the post-2008 global financial collapse. As traditional stock, bond, and real estate investments became increasingly overvalued, investors naturally began to search for new “alternative investments” that might offer new investment possibilities. First money poured into unregulated hedge funds. Then private equity became all the rage. Then crypto rode the wave. And finally NFTs, the newest newfangled investment to come around, joined the party. 

In a 1996, then-Fed Chairman Alan Greenspan gave a seminal speech entitled “The Challenge of Central Banking in a Democratic Society,” in which he reflected on the challenge that investor “irrational exuberance” and ensuing market bubbles present to central bankers, whose job includes seeking to prevent damage to the broader economy as those market bubbles inevitably collapse. His comments came as the dot-com bubble was just beginning its ascent – the NASDAQ Composite Index had nearly doubled over the twenty-four months preceding Greenspan’s speech, and would increase a further 300% before the dot-com bubble burst three and a half years later – and six years into Japan’s “lost decade.” 

This time around, Jerome Powell faces an additional problem, beyond, as Greenspan suggested, having to balance the need to raise interest rates to slow the economy down and bring inflation into line, against the damage to the economy that might be caused by the ensuing collapse of stock and other asset markets. The widely held view is that the Fed waited too long to take inflation seriously. While inflation emerged on the horizon during the first half of last year, it was not until early this year that the Fed acknowledged that it was more than a transitory phenomenon. During the intervening months, the public perception took hold that inflation is out of control. That has left the Fed fighting a fundamentally different battle: it is fighting public expectations about inflation as much as it is fighting inflation itself. 

To an extent that seems remarkable given where we were just a couple of months ago, market fears of inflation have evaporated. Global commodity prices have begun to fall, and, in a symbolic breakthrough, oil dipped below $100, suggesting that the price of gasoline should soon follow. However, as Bloomberg’s John Authers observed, inflation fears are only abating because recession and deflation now loom as the greater risks. Nonetheless, Powell has indicated that the Fed plans to continue to raise interest rates. If zero growth was going to be sufficient to tame inflation a few months ago, now it is apparent that the Fed is willing to tolerate a recession of some duration to bring public expectations of future inflation into line. 

Powell is going to have a tough fight on his hands, one that goes well beyond the prices at the pump that have driven popular anger. He will be fighting a Republican Party that will be loath to let go of inflation as a central theme for the 2022 and 2024 elections. GOP strategists smell blood in the water, as memories of the 1980 presidential election – when double-digit inflation helped bring about the Reagan Revolution and twelve years of GOP rule – dance like sugar-plums in their heads. Every Jerome Powell press conference touting the Fed’s success in bringing inflation back into line will no doubt be met by a barrage of political ads, harangues by Tucker Carlson and Sean Hannity, and social media posts from Mar-a-Lago reassuring the faithful that, indeed, the sky is falling.

Whether, or when, the prices of bored ape NTfs recover from the drubbing they have taken over the past months remains to be seen. To add some perspective, it took the NASDAQ fifteen years from the collapse of the “dot-com” bubble in 2000 to get back to the level it had reached at the peak of the bubble, notwithstanding the fact that the NASDAQ includes the FAANG stocks (Facebook, Apple, Amazon, Netflix, Google) that have been central to the market rally over the past decade. 

But even a restoration of Fed zero interest rate policies – as former Treasury Secretary Larry Summers now apparently expects – and a relatively quick bounceback in the stock market, may not help. If one considers tulipmania to indeed be the more apt analogy to the NFT bubble, the future is less rosy. Tulip bulbs never returned to the prices reached during the peak of the bubble in 1637 (when a single bulb apparently sold for as much as the annual salary of a skilled artisan); and those celebrities looking to recover what they invested in their digital images of bored ape over the past year may have to wait a while. 

Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."

Artwork by Joe Dworetzky.  Follow him on Twitter @joedworetzky or Instagram at @joefaces. 

If Democrats Don't Stop Fighting Each Other, Things Could Get Much Worse.

The Supreme Court dropped the hammer this week. While Samuel Alito’s draft opinion, along with the names of a majority of justices prepared to support it, had been leaked nearly two months ago, nothing could prepare people for the shock and pain that has reverberated across the country.

The question of where the Court, and the nation, goes from here remains to be seen. Now that anti-choice activists have achieved the essential first step in their 50-year-long effort to outlaw abortion, there is no reason to believe it ends here. The next battles will no doubt include state-level legislation criminalizing women who travel across state lines to get abortions, as well as prohibiting the prescription and delivery by mail of abortion pill.

And then there is the Holy Grail of Christian conservatives: passage of a federal “human life” statute or constitutional amendment that would broaden the definition of “person” under federal law to include the “unborn,” as early as the moment of conception. Should an embryo or fetus be deemed a “person” under federal law, abortion would become tantamount to murder, and laws enacted in liberal states protecting abortion rights would be rendered moot. In that event, there would be no safe havens, there would be no recourse; abortion would become illegal everywhere in the country. 

This is a pivotal moment for the Democratic Party. For the better part of two years, Democrats in Congress have failed in their efforts to pass various iterations of Joe Biden’s legislative agenda. Progressives, in particular, yelled and screamed – most notably at Joe Manchin – and came up with all manner of excuses as to why they were not able to get anything done. Yet at no point have they looked in the mirror and considered the essential fact that from day one, they did not have the votes to pass the sweeping legislation of their dreams.

Counting votes is the most essential, elemental skill in democratic politics. I assumed that even if some members of Congress did not understand this, Joe Biden and his chief of staff Ron Klain surely do. I presumed that behind closed doors Joe Biden and Joe Manchin had quietly made a deal: that after Democrats tried to appease progressives by trying to get their multi-trillion dollar wish list passed, but failed because they didn’t have the votes, Biden and Manchin would get whatever they had agreed upon done. 

Apparently they didn’t have a deal. Apparently, the problem Democrats have with basic political math reached right to the top. 

The question, now that Roe v. Wade has been struck down, is whether Democrats are prepared to look in the mirror and realize that it is their own failure to heed the fundamental laws of electoral politics that has left them – and millions of American women – in the straits they find themselves in today. 

Roe v. Wade was struck down, in part, because Republicans know how to count, and understand that at the end of the day, you can’t achieve anything unless you have the votes. Up until the presidency of Ronald Reagan, the Republican Party was a broad-based coalition of generally small-government conservatives and fiscally conservative moderates that was welcoming to politicians with a range of views on taxes, abortion, and guns, among other issues. 

That all changed in the 1980s. In the wake of the Reagan Revolution, GOP strategists identified a discrete number of single-issue voting groups that the party would cater to going forward to drive voter turnout. The strategy was straightforward: as long as Republican candidates would swear fealty to those core issues – most notably anti-abortion, pro-gun, and anti-tax – those candidates would be assured that those single-issue voters would show up on Election Day, regardless of what other stances a candidate might hold. 

The execution of the strategy was not as simple as it might seem, as it required political maturity on the part of those voters. Anti-abortion voters, for example, were often vehemently opposed to trade with China, due to treatment of Chinese Christians by the Communist Party. Yet anti-abortion groups and their voters consistently kept their eyes on the prize, turning out for anti-abortion Republican candidates that supported trade with China along with those that opposed it. They understood, decade after decade, that they could not – in their eyes – let the perfect become the enemy of the good. 

The defeat of George H.W. Bush for a second term in 1992 after he violated his no-tax pledge has stood for the past 30 years as the object lesson to Republicans of the consequences of failing to toe the line, while the election of Donald Trump a quarter century later proved to be the defining example of the effectiveness of the Republican strategy. Trump, a man with few notable personal convictions, embraced the Republican single-issue voter playbook with a vengeance. He swore as he campaigned in 2016 that his tax cuts would be the largest ever, that his support for the NRA would not waver, and that his Supreme Court nominees would overturn Roe v. Wade. And he delivered.

It has become a truism of sorts that activists on the left and the right control the political parties. And while that may in large measure be true, it has widely differing implications for Democrats than it does for Republicans. For the GOP, fealty to Christian conservatives, gun rights activists, and anti-tax voters has been part and parcel of an intentional Election Day turn-out strategy that has succeeded in building a degree of Republican political power at the federal, state, and local level that far outstrips what raw demographics might appear to dictate.

For Democrats, in contrast, political activism on the left has rarely been accompanied by a commitment to turn out on Election Day for whomever the Democratic Party might ultimately nominate. Indeed, George W. Bush and Donald Trump each likely won the presidency on the backs of progressive voters who succumbed to Ralph Nader’s “Tweedledee vs. Tweedledum” assessment of democratic politics, and either stayed home, voted independent or voted Republican out of spite. 

This year, even as the prospect looms of Republicans not simply winning back majorities in the fall, but toppling of the democratic process itself two years down the road, we see articles and hear comments about this group or that group that may not show up in the fall should Joe Biden or Democrats in Congress not deliver whatever it is they care about before Election Day. The fact that Democrats might not have the votes does not seem to matter. 

Unlike Republican voting groups that have stayed the course for decades to achieve the victories that they won this week on guns and abortion, too many within the Democratic Party remain only too willing to cut and run if they don’t get what they want, when they want it. 

But the Democratic Party problem runs far deeper than its failure to pass legislation during the current term. As former Obama pollster David Schor has argued since the 2020 election, Democrats are increasingly losing ground among mainstream, working and middle class voters – of all races – as the discourse within the party increasingly reflects the language and issues of highly educated elites. “That’s really dangerous,” Schor observed in an interview last year, “because in the Democratic Party, if you don’t have non-white conservatives, and you’re just a party of educated, white liberals, that gets you to 25%-30% of the vote.” 

And the situation only looms to get worse. The emergence of inflation, and the increasing likelihood that we are heading into a recession, is only increasing the distance between party elites – who continue to be focused on issues surrounding racial justice, climate change, gender and sexuality, and identity politics – and the broader electorate that is overwhelmingly concerned about the economy and crime. Those in the party who ignore the chasm that now separates them from many in the country do so at their peril. 

This should be a road to Damascus moment for Democrats. For 40 years, Republicans treated every election as though Roe v. Wade itself was on the ballot, while too many Democrats, so often caught up in one internecine feud or another, failed to grasp the urgency of the moment. 

Perhaps – just perhaps – even as frustration over Roe is at a boiling point, and rage is pushing activists to accelerate their threats of retribution against a Democratic Party that has limited options to address the Court ruling, the shock of waking up in a post-Roe world will be enough for those who have argued over the years that there is no difference between the two parties to realize their own culpability for the Supreme Court decision this week. Perhaps, even as tempers flair, those in the party who have routinely vilified Joe Manchin and other political centrists will realize it is time to sheath their daggers. 

Through its decision, the Supreme Court has shaken the political equilibrium of the country and offered Democrats an opportunity to chart a new course. If Democrats hope to respond to the Roe decision and protect abortion rights for women across the country, they will need to compete more effectively than they have in years at the state and local levels where the coming battles will be fought, and they will have to win back voters that they have alienated. If Democrats hope to win those battles, they will need to start, as a unified party, by looking to Democrats who serve effectively in red states and districts, as models of how they might work to restore trust in their party across the electorate. 

Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."

Artwork by Joe Dworetzky.  Follow him on Twitter @joedworetzky or Instagram at @joefaces.