Which of the following countries most closely resembles the U. S.?

  1. Canada
  2. Mexico
  3. United Kingdom
  4. Japan
  5. Germany
  6. France
  7. Russia
  8. Brazil
  9. India
  10. China
  11. Australia
  12. Other
  13. None. We’re sui generis

and why? I don’t think it’s Canada, UK, Japan, Germany, France, Russia, India, China, or Australia. Superficially, we’re like Canada or Australia. Large land area, mostly English speaking, economically strong. But Canada has a population 10% of ours and Australia is even less populous. And only about 15% of Canadians are of anything other than Western European descent and Australia is even more Anglo. So, not really very much like us at all.


Soft Landing or Hard for China?

At Bloomberg Tyler Cowen summarizes China’s conundrum in a few paragraphs:

…might there be a chance that China can avoid an economic crackup altogether?

China has several factors going for it here, including increases in labor productivity, productivity-enhancing migration of labor to cities and technology transfers from abroad. A fourth set of factors, which have operated in the past but not so much now, are liberalizations and improvements in government policy. Even when Chinese businesses get into trouble, and might otherwise go bust or be forced to lay off workers, these broad rising tides often have come to the rescue.

So if you think China can reach the proverbial soft landing, your basic take should be that government-run fiscal policy will keep matters afloat long enough for underlying pro-growth forces to validate once more most of China’s struggling investments and debt burdens.

If you are more pessimistic, your core scenario might run like this: Most Chinese have not yet lived through a true economic crash, and policy makers seem to have an increasing focus on the short term and maintaining political power. Given that dynamic, each time China postpones a major recession it encourages more debt and a greater overextension of investment. That requires stronger underlying positive forces to come to the rescue each time, whereas productivity improvements and urbanization probably are slowing down, although Chinese data as usual do not yield definitive answers.

I’m more concerned about how the Chinese people and authorities will respond when the inevitable “crackup” happens. Will they accept it as just something else that must be endured? Will they blame each other? Or will they blame external enemies? China has an enormous capacity to create mischief and the Chinese authorities could potentially try to deflect blame from themselves and onto some external enemy, e.g. Japan, India, Russia, or us. Not a great time to be one of China’s neighbors.

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Who, Me?

I found the editors of the Wall Street Journal’s demand that Democrats be held responsible for the flaws in the Affordable Care Act astonishing in its naïveté:

At every stage of the ObamaCare saga, liberals said not to worry. Sure, the law was unpopular when Democrats rammed it through Congress on a partisan vote in 2009-10, but voters would learn to love it once the subsidies started rolling. That didn’t happen, and in 2014 President Obama tried to buck up Democrats by saying that “five years from now” people will look back on the law as “a monumental achievement.” Two years later it’s worse.

Nothing could shake the liberal faith in their supposed landmark: Not the website fiasco of 2013, or the millions of individual health plans that were cancelled despite President Obama’s promise about keeping them. The left kept the faith as the entitlement subtracted from economic growth, hurt incomes and killed jobs. MIT economist Jonathan Gruber called the critics stupid, and Mr. Obama denigrates anyone who disagrees with him as illegitimate or politically motivated.

Now reality is confirming what the critics predicted. ObamaCare’s regulatory mix—benefit mandates, requiring insurers to sell coverage to all comers, and narrow ratings bands that limit how much premiums can vary by health status—was tried by several states in the 1980s and ’90s. Every one saw the same results that are now unspooling nationally: high and rising costs, low and declining enrollment, and less insurer and provider competition.

because of its flawed understanding of the political process.

I don’t agree with the opponents of the PPACA who’ve claimed for years that the law was a stalking horse for a fully socialized healthcare system. If only that were the case! I also don’t agree with the supporters of the law who claim that the law was the best that could have been passed because of the “60th senator problem” for the same reason. That’s just not how our system works.

I think the PPACA is what you pour out when you toss all of the slogans about healthcare reform on which the progressive caucus of the Congress have agreed, e.g. “guaranteed issue”, “community rating”, into a blender, seasoned with a soupçon of political reality. Whether it could work or not was irrelevant.

Meanwhile, the great thing about being a U. S. senator is that you never need to take responsibility for anything. There are always 99 other senators plus the president to blame. And you don’t have all of that pesky constituent service to worry about, as they have in the House. Since everyone in the state is notionally your constituent, there’s always plausible deniability. All you really need to worry about are raising money for your re-election campaign and not getting caught.


Dana Milbank Hates Baby Boomers

Generation Xer Dana Milbank pretty clearly hates Baby Boomers if his most recent Washington Post column is any indication:

Before the emails start pouring in, let me make clear that this isn’t an indictment of individual boomers, nor of boomers’ contributions to art and science. But as a generation of leaders, they have been disastrous. Boomers seized the White House in 1992 and the House in 1994 and have generally dominated government since. Clinton, like Trump, is a boomer, which guarantees that the generation will control the White House through at least 2020.

And what does this generation have to show for its quarter-century of leadership?

Boomers inherited the sole superpower after the Greatest Generation won the Cold War — and squandered U.S. influence with two long and inconclusive wars.

They gave us the financial collapse of 2008, the worst economy since the Great Depression, a crushing federal debt and worse inequality. They devoured fossil fuels and did little about global warming while allowing infrastructure and research to deteriorate. They expanded entitlement programs and are now poised to bankrupt those programs. Their leadership has led to declining confidence in religion, the presidency, Congress, the Supreme Court, banks and big business, schools, the media and the police. They may leave their children (the millennials) worse off than they were.

Far be it from me to praise the Baby Boomers. His characterization of them as “idealists” is a stretch. It was obvious to me it was a stretch in the 60s and 70s and it’s obvious now. They were always self-serving. Opposition to the Viet Nam War, for example, wasn’t founded on idealism but in self-interest. “Give peace a chance” was less the anthem of the anti-war protests than “Hell, no, I won’t go!” The draft was the basis of the opposition to the war. Just look how quickly the anti-war movement faded after the draft was abolished.

I would ask a question, however. Were the U. S. senators who voted for the Authorization to Use Military Force mostly Baby Boomers or Silent Generation, those born during the Great Depression through the end of World War II? They were mostly Silent Generation just as the most of the present Congressional leadership is. Of present Congressional leaders only Paul Ryan is a Gen-Xer (John Boehner was a Baby Boomer). Harry Reid, Nancy Pelosi, and Mitch McConnell are all Silent Generation.

As far as the financial world goes, Alan Greenspan is Greatest Generation, Angelo Mozilo and Bernie Madoff—Silent Generation. In Time’s list of those responsible for the financial crisis about half are Silent Generation and about half Baby Boomers and most of those just barely Baby Boomers, i.e. born in 1946. In other words, it doesn’t really support Mr. Milbank’s case.

He might want to go back and do a little more research with an open mind.


Late in the Day

The editors of the New York Times have a strategy for alleviating the problems with the Affordable Care Act—more subsidies:

Congress and the next president could further strengthen the health care law by offering subsidies to middle-income families who currently receive little or no help. Lawmakers should also consider applying to the health care exchanges the kind of reinsurance program Congress has used to encourage insurers to participate in Medicare’s Part D prescription drug benefit program. The Affordable Care Act’s flaws are fixable, but only if politicians from both parties work together in good faith.

Let’s be clear. Both of the measures they propose are subsidies, one provided to insureds and the other to insurers.

It’s a bit late in the day for the editors to be appealing to good faith. It was power politics that has carried the ACA so far and it will be power politics that continues to sustain it.

Just for the record, I hold no antipathy to the Affordable Care Act and never have. I have always thought it was a sideshow that distracts us from the reform that we really need: lowering the cost of healthcare. It is arithmetically obvious that as long as healthcare spending continues to rise at a multiple of the rate of prices and incomes in the non-healthcare economy that federal healthcare spending will require more and more money as well as a greater proportion of total spending.

Oddly enough, a measure has recently been introduced that actually might do that: MACRA. It’s a series of changes and regulations governing how Medicare reimbursement is to be conducted.

The reason I say “oddly” is that there’s very nearly radio silence about it in the general press. It could potentially end up being more significant than the ACA but it’s not without risk. One of these days I’ll get around to posting about it.


The Best Campaign Ad of 2016

is for a Texas county commissioner.


Will the Anger End?

Believe it or not, the election will take place in just two weeks and for most of us I presume it couldn’t happen soon enough. I expect the temperature to continue to rise until then.

My question is will the anger end? Regardless of who is elected president, I suspect it may not. A lot of attention is focused on the alt-right, the right-wing ideologues who reject mainstream conservatism but I don’t we should ignore the alt-left, either. Those would include groups like BLM or people like the Bernie Bros.

I think it’s patently obvious that Trump is incapable of fulfilling the promises that attract the alt-right to him but Hillary Clinton isn’t even promising anything to the alt-left.

I don’t think there will be a honeymoon period. I think the anger will just continue to grow.


Pogo Lives!

You might want to take a look at this post by Dominic Tierney at The National Interest on America’s need for an enemy:

A threatening rival can also reinforce a sense of national identity. The Harvard political theorist Karl Deutsch described a nation as “a group of people united by a mistaken view about the past and a hatred of their neighbors.” According to the political scientist Clinton Rossiter, “There is nothing like an enemy, or simply a neighbor seen as unpleasantly different in political values and social arrangements, to speed a nation along the course of self-identification or put it back on course whenever it strays.”

The role of foreign peril in cultivating a sense of national identity may be especially important in the United States. American self-identity is not based on an ancient shared heritage, but rather on a set of political ideals: the creed of individual rights and democracy. This is a fragile basis for unity in a continent-sized country populated by huddled masses from all over the world. The existence of the other may be essential to shore up American identity and reinforce a sense of political exceptionalism.

My college education was in part financed by an NDEA loan (National Defense Education Act). The Interstate Highway system, originally called the “National System of Interstate and Defense Highways”, was justified as necessary for U. S. defense. Our system of locks, dams, and flood control systems isn’t maintained by a civilian agency. It’s maintained by the Army Corps of Engineers.

Many expensive, large scale government programs in the United States have historically been sold on the basis of national defense. A shrewd politician could sell a national health system on the basis of defense.

Whenever I read analysis of this sort, always sadly, I’m reminded of Walt Kelly’s waggish parody of Oliver Hazard Perry’s message to President Harrison following the Battle of Lake Erie, which Kelly put in the mouth of his Everyman, Pogo Possum: we have met the enemy and he is us.

With ourselves for an enemy we hardly need an external one.


Friedman on Putin and Russia

I recommend that you read George Friedman’s remarks on Putin and Russia at RealClearWorld. Here’s a snippet:

But the Russians were not in Syria to save Bashar al-Assad, control pipelines, build naval facilities or intimidate the United States. They were there so Putin could appear to be more powerful than he was, and that was primarily for the benefit of his public. As the economy weakened and privations increased, he had to give it all a meaning, and Syria made him appear to be restoring Russia’s greatness. Convincing Western public opinion of his power was of secondary value, and in the course he made the cover of the Economist.

I think that’s quite astute. Putin is more of a politician than he is a strongman dictator in the stamp of Stalin. A lot of what he does from seizing the Crimean peninsula from Ukraine to his support for Bashar al-Assad is to maintain his domestic support. These actions have geopolitical implications and strategic value for Russia but don’t ignore their domestic political value.

Putin does what he does because it maintains his popularity. The polls that show 80%+ approval may be in part because Russians are afraid to speak their minds or the polls are manipulated but a lot of it is that he’s doing things that are popular in Russia.

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Check Your Assumptions

Why does every analysis of the battle to re-take Mosul assume victory? This post at Hurriyet Daily News by Tolga Taniş is no exception:

ISIL may also play the Turkey card and try to draw Ankara into the clashes by staging attacks at risky and critical locations in the region.

They will lose Mosul sooner or later, but they will not finish; because then, they will turn to their “classic terror acts” of assassinations, bombings and suicide attacks. They will continue with their idea of territorial control in Syria. However, even though in Iraq all anti-government armed forces have been consolidated, in Syria there are several different radical groups, whom some of them are fighting ISIL. This too will constitute another difficulty for ISIL.

Losing Mosul will strike a major blow to ISIL in terms of financing. They made $500 million in 2015 from oil sales. They sold their oil to the people living in the region they were in control of. They also made $360 million from tax revenues. When they lose the largest city they are controlling, these figures will decline; thus lessening their operational power.

I’m not even sure what victory in the conflict would be. If you remove DAESH’s control over Mosul but destroy the city in the process, would that be a victory? Or if a substantial chunk of the city’s population flees? Or if most of DAESH’s operational strength remains undegraded?

It might be a better idea to figure out what the objective is before declaring victory. And many hazards remain. If DAESH harasses the Kurds enough they might withdraw to defend their own territory. There’s no guarantee that the Iraqi military will retain force cohesion. The Turks might just decide to occupy the territory between their borders and Mosul. There are all sorts of things that could go wrong.