America’s Start Up Boom, Blinken Visits Zelenskky, Biden’s Strength With Likely Voters

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SIMON ROSENBERG

MAY 14

Happy Tuesday all. Got a few things for you today: 

America’s Start Up Boom – The Wall Street Journal is calling the American economy “the envy of the world.” The stock market is in record territory again. Best job market since 1960s. Lowest uninsured rate ever. Most robust recovery in the G7, lowest inflation rate too. Strong wage and real wage growth. Annual deficit trillions less. The 3 big Biden bills are driving hundreds of billions in new investment, accelerating our energy transition, creating jobs and opportunities for American workers for decades to come. 

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And now, in the Economist, this story – “America is in the midst of an extraordinary start up boom” – full of remarkably good news. An excerpt: 

Although America has a deserved reputation as a country at the cutting-edge of innovation, fuelled by entrepreneurial vim, in recent years some economists have worried that this reputation no longer holds true. Startups have formed a smaller and smaller portion of the business landscape: in 1982 some 38% of American firms were less than five years old; by 2018, 29% were that young. The share of Americans working for startups likewise fell. Silicon Valley sizzled with high-tech wizardry, but its giant companies hoarded the best researchers, leading to a slower spread of new ideas throughout the country. Researchers, including at the Federal Reserve, pointed to this decline in dynamism as a cause of weaker productivity growth.

Suddenly, what was old appears to be new. An array of data indicate that Americans are rediscovering their go-getting spirit. The most striking evidence comes from applications to form businesses, a proxy for startup activity. These soared in mid-2020, when America was still in the grip of covid-19. The initial surge was easy to dismiss: some of the new firms were scams, trying to profit from the government’s financial assistance for small businesses; others reflected the strangeness of the moment, with companies set up to import face masks or flog hand sanitiser.

Chart: The Economist

But now, well after the pandemic has faded away, the surge continues (see chart 1). Last year applications to form businesses reached 5.5m, a record. Although they have slowed a touch this year, the monthly average is still about 80% higher than during the decade prior to covid, compared with just a 20% rise in Europe. Startups normally play an outsized role in creating employment in America, as elsewhere. By definition, every startup job counts as new, whereas mature companies have more churn. That difference has become even starker. In the four years before the pandemic, established firms added one net job for every four created by startups; in the four years since the pandemic, established firms have actually lost one job for every four created by startups (see chart 2).

Chart: The Economist

Perhaps even more important than the numbers is the kind of ventures that are being created. In 2020 and 2021 many startups catered to the working-from-home revolution. These included online retailers, small trucking firms and landscapers. Since mid-2022, however, the baton has been passed to technology firms, according to Ryan Decker of the Fed and John Haltiwanger of the University of Maryland. A paper published in March by the Census Bureau found a particularly sharp increase last year in business applications based around artificial intelligence (AI). For researchers, this carries echoes of the 1990s, when computers and the internet took off. “It feels like a step-change increase across the economy in entrepreneurial potential,” says Kenan Fikri of Economic Innovation Group, a think-tank. “You never know which firm is going to be the next growth firm. So the more shots on goal you have, the better.”

It’s all very encouraging, a remarkable sign of the health and vitality of our economy. The American can do spirit is alive and well today. Much to celebrate here, and a reminder of our basic understanding of the current moment: 

Joe Biden is a good President. The country is better off. 

The Democratic Party is strong, winning elections all across the country, raising tons of money and enters the general election united and ready to go. 

What do they have? They have Trump, the ugliest political thing we’ve ever seen, and a party far more a raging dumpster fire than a well-oiled political machine. 

Additional Hopium resources on the strength of the Biden economy: 

On The 2024 Election – I’ve been diving into polls and the election quite a bit in the last few days (hereherehere) so just two points today: 1) in the last few weeks we’ve seen Biden’s best national polls of the year, and as I write in my posts, Biden’s emerging strength with likely voters is a very important new development in our understanding of the 2024 election. 

All likely voters, Biden-Trump (via 538): 

  • Echelon 49%-46% (+3)
  • ABC News 49%-45% (+4)
  • NPR/Marist 51%-46% (+5)

2) For Trump to be winning the 2024 election he needs to be clearly ahead, outside the margin of error, in MI, PA or WI. If President Biden wins these three states, assuming we also gain the single Nebraska electoral college vote (likely), we hit 270. In the new NYT poll Trump isn’t ahead outside of the margin of error in any of these states among likely voters. Thus, in this poll, despite the headline and framing, Trump is not ahead or winning the election. 

The 2024 election is close and competitive now, with Biden and Dems having gained a few points in recent months. We are seeing encouraging polling in the Senate and House battlegrounds, and we have meaningful financial and organization advantages over the Republicans that will matter over the next six months as voters increasingly check in. We have a long way to go, there will be good days and bad days, we lots and lots of work to do, but today, in every way imaginable, I would much rather be us than them. 

Upcoming Events – Got a few things coming up:

  • Wed, May 22nd, 7pm ET – Monthly Hopium Community Wide Get Together w/Simon – Register
  • Thur, June 20th Evening – Simon speaks in person at a Wisconsin Democratic Party Event (Madison) – more details soon
  • Fri/Sat, June 28-29 – Simon speaks in person at Network NOVA’s 8th Annual Women’s Summit, Tyson’s Corner, VA – More info, register

I will also note that I’ve been a little slow at getting back to those who’ve requested me for events for this summer. Between my daughter’s lacrosse play offs and graduation festivities this spring, and some critical travel dates that are still getting ironed out, I’ve been unable to commit to as many events as I hoped. Will try to get back to everyone soon – appreciate the patience all!

Kennedy Seeks Ballot Access In CA On Far-Right Party Line Which Backed Trump in 2016 – Kennedy was a Trump appointee. His campaign is staffed by Republican staffers, paid for by Republican donors. He parrots Putin talking points, and has defended Russian-backed Julian Assange and Edward Snowden. Here’s some new lovely stuff from this fraud, liar and MAGA-scam candidate via The Washington Post

Independent presidential candidateRobert F. Kennedy Jr. said this week that he has qualified to be on the ballot in California and will accept the nomination of the American Independent Party, which has a history of associating itself with far-right figures and individuals who have expressed racist views.

Kennedy’s alliance with the American Independent Party, which has previously supported segregationist and former Alabama governor George Wallace as well as Donald Trump in 2016, is part of his campaign’s attempt to get access on states’ ballots through gathering signatures or receiving the nominations of minor parties.

The American Independent Party’s recent former chairman, Robert J. Walters, wrote a book in 2015 that claimed genetic differences rather than discrimination led to Black students performing worse in schools compared with White students. The party promoted his book to their Facebook followers in 2022.

Three states — Utah, Michigan and Hawaii — confirmed that Kennedy is on the ballot, and he hinted at a recent event that more announcements were imminent. The California secretary of state’s office confirmed that it received the paperwork from the party, which now only exists in California, but the state will not certify candidates until Aug. 29, after its deadline to receive requests for ballot access.

Blinken Visits Zelenskyy – The Ukrainian government released this short video recapping the opening remarks by President Zelenskyy and Secretary of State Blinken. It is well worth watching. 

Zelenskyy’s office released the following statement with the video: 

Today, I hosted Secretary Blinken for a detailed discussion of the battlefield situation, support for our soldiers, and ongoing defense cooperation. 

We discussed the need for Patriot systems in Ukraine to protect our cities and communities, such as Kharkiv and the surrounding region. Two Patriots for the Kharkiv region could significantly contribute to the protection of lives from Russian terror. 

We also talked about preparations for the Global Peace Summit. It is important for us that the United States and President Biden participate and that America’s role in maintaining rules-based international order does not weaken. 

I am grateful to the American people, the United States Congress, and President Biden and his team for their support in our fight for freedom and independence. We appreciate the United States’ decision to continue its support for Ukraine, and we discussed how to best implement the announced aid packages and get weapons into the hands of our warriors as soon as possible.

In related news, the The Financial Times has posted this story, “Russian planning sabotage across Europe, intelligence agencies warn.”  An excerpt: 

Assessments suggest Kremlin agents preparing covert bombings, arson and attacks on infrastructure

European intelligence agencies have warned their governments that Russia is plotting violent acts of sabotage across the continent as it commits to a course of permanent conflict with the west. 

Russia has already begun to more actively prepare covert bombings, arson attacks and damage to infrastructure on European soil, directly and via proxies, with little apparent concern about causing civilian fatalities, intelligence officials believe. 

While the Kremlin’s agents have a long history of such operations — and launched attacks sporadically in Europe in recent years — evidence is mounting of a more aggressive and concerted effort, according to assessments from three different European countries shared with the Financial Times. 

Intelligence officials are becoming increasingly vocal about the threat in an effort to promote vigilance. 

“We assess the risk of state-controlled acts of sabotage to be significantly increased,” said Thomas Haldenwang, head of German domestic intelligence. Russia now seems comfortable carrying out operations on European soil “[with] a high potential for damage,” he told a security conference last month hosted by his agency, the Federal Office for the Protection of the Constitution. 

Haldenwang spoke just days after two German-Russian nationals were arrested in Bayreuth, Bavaria, for allegedly plotting to attack military and logistics sites in Germany on behalf of Russia. 

Two men were charged in the UK in late April with having started a fire at a warehouse containing aid shipments for Ukraine. English prosecutors accuse them of working for the Russian government. 

In Sweden, security services are meanwhile investigating a series of recent railway derailments, which they suspect may be acts of state-backed sabotage. 

Russia has attempted to destroy the signalling systems on Czech railways, the country’s transport minister told the FT last month. 

In Estonia, an attack on the interior minister’s car in February and those of journalists were perpetrated by Russian intelligence operatives, the country’s Internal Security Service has said. France’s ministry of defence also warned this year of possible sabotage attacks by Russia on military sites. 

“The obvious conclusion is that there has been a real stepping up of Russian activity,” said Keir Giles, senior consulting fellow at Chatham House, the think-tank. “One cannot tell if that’s a reflection of the fact that the Russians are throwing more resources at it; whether they are being more sloppy and getting caught; or whether western counter-intelligence has simply become better at detecting and stopping it,” he added. “Whatever it is though — there is a lot going on.” 

A defendant alleged to have violated EU trade restrictions in connection with deliveries of electronic components for military equipment to Russia enters the courtroom at the Higher Regional Court A defendant in Baden-Württemberg who is alleged to have violated EU trade restrictions in connection with deliveries of electronic components for military equipment to Russia. 

One senior European government official said information was being shared through Nato security services of “clear and convincing Russian mischief”, which was co-ordinated and at scale. The time had come to “raise awareness and focus” about the threat of Russian violence on European soil, he added. Nato issued a statement on Thursday declaring its deep concern about growing “malign activities on allied territory” by Russia, citing what it said was an “intensifying campaign . . . across the Euro-Atlantic area”.

Everyday I take inspiration from the courage and resilience of the Ukrainian people, and know their fight is our fight too. 

Keep working hard all. Proud to be in this fight with all of you – Simon

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