Policy By Other Means

At Project Syndicate Brahma Chellaney reviews some cases in which China has used trade as a lever in accomplishing non-economic objectives:

NEW DELHI – China denies mixing business with politics, yet it has long used trade to punish countries that refuse to toe its line. China’s recent heavy-handed economic sanctioning of South Korea, in response to that country’s decision to deploy the Terminal High Altitude Area Defense (THAAD) anti-missile system, was just the latest example of the Chinese authorities’ use of trade as a political weapon.

Like war trade is policy by other means. The United States has been using trade to accomplish non-economic objectives for well over a century. Why should China be any exception?

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It Ain’t Amazon

Finally, someone other than me is talking sense about retail. In this case it’s Vitaliy Katsenelson:

Jeff Bezos and Amazon get most of the credit, but this credit is misplaced. Today, online sales represent only 8.5 percent of total retail sales. Amazon, at $80 billion in sales, accounts only for 1.5 percent of total U.S. retail sales, which at the end of 2016 were around $5.5 trillion. Though it is human nature to look for the simplest explanation, in truth, the confluence of a half-dozen unrelated developments is responsible for weak retail sales.

Read the whole thing. The developments he includes in addition to online include

  • Changes in consumption needs and preferences
  • Phlegmatic growth in personal income
  • Health care costs
  • Too much retail capacity

to which I would add higher taxes, the dominance of retail conglomerates cobbled together via borrowing, and bad management.

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Who Should Serve?

I think the issue of whether the transgender should be allowed to serve in the military is one deserving of more serious discussion than I’ve been seeing. As usual where you sit seems to be where you stand.

Serving in the military is not a right. The military takes whom it wants, not necessarily those who want it. There are exceptions, the most notable being when Harry Truman desegregated the U. S. military in 1948. Is that a fair comparison with the transgender today? Why or why not? With women today? Why or why not?

In 1948 nearly all of those serving were draftees; today none are. Is that a relevant consideration?

How do you balance force readiness and cohesion, morale, and so on with ideas of legal and social equality?

I’m glad I don’t need to make decisions like this.

The aspects of this matter on which I think we all should agree is that it shouldn’t be decided by presidential spasm and announced by tweet.

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The Internal Contradictions

If you haven’t already noticed it, my world view and, consequently, my way of expressing myself tends to be highly syncretistic. Basically, I look at it as pragmatic. It’s been called “eclectic”. I try to include anything that yields good explanations, not just including traditionally American views but those of classical economics, John Maynard Keynes, the Fabian Socialists, even Karl Marx. Two of Marx’s ideas that creep into my writing are “internal contradictions” and “superstructure”.

Twenty-five years ago it looked as though Japan’s rapidly growing economy would yield Japan the global hegemony that its military failed to give it 75 years ago. If you don’t believe me, look at movies like Gung Ho (1986) and Rising Sun (1993). I, armed with even a little knowledge of Japan, attempted to assuage the concerns of my friends and colleagues by explaining to them that Japan’s internal contradictions would prevent the dire consequences they feared. Shortly thereafter, largely for the reasons I’d cited, Japan entered its “lost decade”, its economy has never really recovered, and their demographic problems will give the Japanese people more than enough to worry about for the foreseeable future.

I’m not really worried about China’s rise for much the same reasons.

Even as I write this our own two major political parties are frozen by their own internal contradictions like Buridan’s ass. The Republicans’ internal contradictions are the easiest to identify. You can’t reconcile a conflict between people who don’t believe there’s a legitimate role for government in just about anything except the military and those who depend for their livelihoods (like many elected officials) on the government.

The Democrats, too, have internal contradictions a-plenty. An embarrassment of riches. They’re the party of Wall Street and the party of the little guy. The party of Bill Gates, Warren Buffett, Jeff Bezos, and Mark Zuckerberg and the tribune of the poor.

That was my reaction to Steve Malanga’s post at City Journal:

Democrats knew after 2014 that they had serious problems. A party task force examining that year’s election results acknowledged the stark losses. But the group’s recommendations for revival were bland at best, focusing largely on organization and infrastructure rather than on ideas that might appeal to the electorate. Recommendations included expanding voting rights, working harder to control redistricting, and building an “open and accessible” party. The resulting document said almost nothing about policies except in the broadest terms, and ignored the fact that Republicans were winning in many states with an agenda that included fiscal restraint and a pro-business approach to economic growth. And the task-force report made no acknowledgment that the increasingly leftward drift of the party had driven away many of its traditional blue-collar constituents. As early as 2013, trade unions whose membership once formed part of the Democratic Party’s core were in revolt against the Affordable Care Act, the growing power of public-sector unions, and the increasing influence that the environmentalist, no-growth agenda had on the party. Many of those trade union members defected to Trump in 2016.

The Democrats’ latest effort to craft an electoral comeback concedes, in a new op-ed by Senator Chuck Schumer, that “Americans are clamoring for bold changes.” But the prescriptions that Schumer offers can only be described as bold if you ignore Clinton’s 2016 campaign platform. The new, “better deal” Democrats propose includes, for instance, a $15 minimum wage, a key Clinton proposal. That’s not only new packaging for an old idea but also an unusual proposition, considering that even Democratic economists worry that boosting mandatory wage floors so dramatically (the current federal minimum wage is $7.25 an hour) will undermine the economy, especially in light of a new study showing that Seattle’s $15 minimum is destroying low-wage jobs. The new proposals also include limiting the ability of pharmaceutical companies to raise drug prices—another Clinton proposal—and thwarting mergers that consolidate power among big companies, a policy that Clinton backed as far back as October of 2015.

Strikingly absent from the new agenda are any ideas that might appeal directly to the party’s defecting blue-collar voters. Trump won a majority of votes among those without a college degree, and so far he’s governing like he’s mindful of those voters. Since taking office, Trump has greenlighted construction of the Keystone XL pipeline project, an initiative that the Obama administration blocked for years. He’s touted a $1 trillion infrastructure-building program, and on the first day of his presidency, he invited union leaders to the White House to ask their support in getting it through Congress. Trump rolled back Obama-imposed regulations on coal mines that would have significantly raised operating costs for mining companies. Indeed, Trump’s outreach to blue-collar workers has been so extensive that he’s even worried many traditional Republican constituencies with his plans to rewrite trade pacts to slow the seepage of American jobs overseas, potentially at the cost of higher prices at home.

The basic contradiction that both parties have is between their rank-and-file members and their donors, whose interests frequently barely intersect let alone coincide. And yet the two political parties retain such a firm grasp on the electoral process that either one of them losing their grip on power entirely is inconceivable. And so we twist in the wind.

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June Foray, 1917-2017

The unsurpassable voiceover artist June Foray has died at the age of 99. From Hollywood Reporter:

June Foray, the famed “first lady of voice actors” whose repertoire of characters include Rocky the Flying Squirrel, Pottsylvanian spy Natasha Fatale, Tweety Bird’s owner Granny and a sinister talking doll, has died. She was 99.

Foray, who worked alongside such animated legends as Mel Blanc, Chuck Jones, Stan Freberg and Jay Ward during her unseen yet spectacular eight-decade career, died Wednesday according to close friend Dave Nimitz who posted a notice of her passing on Facebook.

Over the years she gave voices to Warner Bros. Granny and Witch Hazel, Betty Rubble, both Rocket J. Squirrel and Natasha Fatale, Talky Tina of a chilling Twilight Zone episode, Cindy Lou Who, and, quite literally, thousands of others, working well into the 21st century. She won a Grammy, an Emmy, the Television Academy Governor’s Award, and multiple Annies (animation awards). There is a June Foray Award in the Annies for “those who have made a significant and benevolent or charitable impact on the art and industry of animation”.

We shall not see her like again.

Try to find the interview by Joe Piscopo of Rocky and Bullwinkle with Ms. Foray providing Rocky’s voice and Bill Scott Bullwinkle’s. I’ve tried to find it but haven’t succeeded. It’s a gem.

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Even a Relatively Good Economy Buoys the President

Although I have some quibbles with Charles Lane’s most recent Washington Post column, I agree with his central premise. Economic good news buoys the president; bad news would harm him. I especially agree with his conclusion:

Morals of the story: Even a bizarre president can’t necessarily bring down the global economy. And, awkwardly for Trump’s opponents, it might take a really bad global economy to bring down a bizarre president.

Other than as Cheerleader-in-Chief or Wet Blanket-in-Chief the president’s effect on the economy is pretty indirect. However, if there’s a sharp downturn the president is likely to get the blame.

One of my quibbles with the column is that I wonder where Mr. Lane thinks we are in the business cycle? According to the National Bureau of Economic Research, the business cycle’s official scorekeeper, the longest period from trough to trough in the business cycle since the end of World War II is 128 months.

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No, They Didn’t Copy Everything

This story at LiveScience about finding a 6th century manuscript in the binding of a 16th century book is interesting on its own:

In the mid-16th century, a bookbinder picked up a piece of parchment — one that was already centuries old — and used it to bind a book of poetry. This parchment’s text remained unreadable for nearly 500 years, but now, thanks to state-of-the-art imaging techniques, people can read its words once more, according to a new study.

An analysis of the sixth-century text revealed that it was part of the Roman law code. Whoever made the poetry book likely considered the text to be outdated, as at that point, society was using the church’s code, rather than Roman laws, the researchers said.

but it also highlights a point I’ve made here from time to time. The claim that all ancient manuscripts were just copied willy-nilly is just plain wrong. What was preserved by copying and what was allowed to crumble into dust was subject to editorial judgment.

That’s why we don’t really know what happened two millennia ago. Everything from the classical era that we have has been dragged through the judgment of medieval monks. If they thought it was worth saving, they copied it. If they didn’t, they didn’t. The Aeneid, Plato’s Republic, and Aristotle’s Ethics were all preserved because they were believed to prefigure Christianity or supported ideas that supported Christian ideas.

That’s why any notion that our ideas of individual liberty derive from ancient Greece and Rome is just plain wrong. To whatever extent those ideas derive from ancient Greece and Rome, they derive from whatever part of ancient Greece and Rome that medieval monks thought was worth preserving and, consequently, at the very least were compatible with Christian ideas.

In the English-speaking, French-speaking, and German-speaking world, the ancient past is viewed almost entirely through the lens of Christianity.

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Where Freedom Stands in the Hierarchy

If Chris Patten, the last British governor of Hong Kong, is sincere in what he writes at Project Syndicate:

LONDON – Nowadays, the West can be described as decadent. That does not mean simply that we are addicted to “bread and circuses,” from welfare programs in Europe (which we can barely afford) to the Super Bowl in the United States. It means also that we are increasingly reluctant to allow our own vision of civil liberties and human rights to shape our foreign policies, owing to the potential commercial costs.

Consider the case of the Chinese dissident and Nobel Peace Prize laureate Liu Xiaobo, who recently died while serving an 11-year prison sentence for calling for democracy in China. The Chinese authorities refused Liu’s request, made just weeks before his death, to seek treatment abroad for his aggressive cancer, and his wife remains under house arrest.

China’s treatment of dissidents like Liu is nothing short of savage. Yet Western leaders have offered only a few carefully phrased diplomatic statements criticizing it.

then I think that he’s operating under a misconception. For most of the people in “the West” civil liberties and human rights barely register in their hierarchy of values. Their views are more like the lines from a play I recall:

Freedom is the most important thing in the world to me. After I’ve eaten.

I wish I recalled the play’s name. Cactus Flower, perhaps?

Once you get past health care fully paid by someone else, an education paid for by someone else, a sinecure at wages higher than your skills and abilities could demand, and a pension higher than your ability or willingness to save can provide, add a little of this and a little of that and ultimately you’ll get down to civil liberties and human rights somewhere. Patrick Henry has been dead for almost 250 years.

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Hitting the Right Notes

In his piece on Illinois’s fiscal situation at RealClearPolicy Thomas Aiello hits all the right notes but the tune is still sour:

This budget has serious changes that will affect everyone. Unfortunately, it fails to address the looming pension crisis that will be devastating to the people of Illinois if nothing is done in the short-term. Illinois has $203 billion in unfunded pensions and postretirement health-care liabilities with no long-term fiscal solution. The debt-to-revenue ratio for state and local governments is nearly 5-to-1, putting both levels of government on a path towards insolvency. If state lawmakers want to set Illinois up for future success, they must include real pension reform in the budget.

I do have one quibble with Mr. Aiello’s analysis. Contrary to common belief the young are not the most likely to start new businesses or become entrepeneurs. The middle aged are. We depend on the young to be consumers not for business investment. When they’re overly burdened by educational debt they can’t play that role.

I predict that Illinois’s legislators will be disappointed with the results of their tax increase. They anticipate getting an additional $4.3 billion from their 32% tax increase. I think they’re ignoring the run-on effects and it will be closer to $4 billion.

But the legislators and their families are doing fine, so everything’s good.

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Read It and Weep

At Forbes Adam Andrzejewski recounts Illinois’s tale of woe—too many people making too much money working for state and local governments:

Illinois is broke and continues to flirt with junk bond status. But the state’s financial woes aren’t stopping 63,000 government employees from bringing home six-figure salaries and higher.

Whenever we open the books, Illinois is consistently one of the worst offenders. Recently, we found auto pound supervisors in Chicago making $144,453; nurses at state corrections earning up to $254,781; junior college presidents making $465,420; university doctors earning $1.6 million; and 84 small-town “managers” out-earning every U.S. governor.

Using our interactive mapping tool, quickly review (by ZIP code) the 63,000 Illinois public employees who earn more than $100,000 and cost taxpayers $10 billion. Just click a pin and scroll down to see the results rendered in the chart beneath the map.

I don’t begrudge hard-working professional earning in the vicinity of $100,000 per year or a little over. I do begrudge physicians earning over $1 million, school superintendents earning over a quarter million, and people with no more than high school educations earning a cool quarter million, all paid from the public purse. And keep in mind that when that junior college president earning a half mil retires, she’ll be paid $375,000 a year or more (adjusted for inflation) for the rest of her life.

How this will be paid by a state with a declining population and shrinking economy, I have no idea.

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