Pat Lang on KSA

I also urge you to read Pat Lang’s assessment of the Pensacola shootings. Here’s the bottom line:

The Saudi who killed three people at Pensacola is representative of the breed.

It is time for a basic re-appraisal of our relationships in the ME.

As I have suggested elsewhere there must be some viable middle ground between isolationism and nursing a viper within your bosom.

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Comment From a Frenchman

I wanted to draw your attention to a comment on another blog that I found interesting:

I am French. And I love this site, always well informed.

The French situation resists any comfortable simplification.

Personally, I think our social and economic system was one of the best. It was evolving and sustainable. The State had an important redistributive role and it was moral. It remains an enviable goal. This is not socialism. I repeat: nothing to do with socialism. Fifteen years ago, the Navy Chief of Staff was able to write that there was an air of freedom in every village in France that was unknown elsewhere. I don’t think he could write it again. The total level of taxation (unduly complex) was high, but so was the redistribution. Over the past 15 years, taxes have increased and redistribution has fallen sharply.

French capitalism has always been deficient. Its followers are not entrepreneurs or directors. This is why the role of the State in the industrial sector was so important. This role, which was carried out without any problems, was rather beneficial. In all this, there is an original French way of doing things that escapes comfortable “isms”. We continue to live on his legacy, squandered more or less quickly. Capitalism dilapidation, of course. Our industrial base has almost been destroyed .

We have a cancer in France: the French-American Young Leader organization (created in 1972). For the past 15 years, all rulers have gone through this institution of intellectual rectification.

Read the whole thing. It touches on a number of notes that have been repeated themes here including the “Yellow Jackets”, the role of social cohesion and “denationalization”. I think he’s pointing his finger in the wrong direction—there are many more factors than those he identifies. For example, how is the European Union not a force for “denationalization”?

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The Saudis Are Not Our Friends

How much evidence do we need? The Saudis reject the Universal Declaration of Human Rights, they practice slavery in Saudi Arabia and maintain their practices when they come to the United States, as several well-publicized accounts have found, they execute people for witchcraft, the Crown Prince at the very least connived at the murder of Jamal Khashoggi, Saudi imams preach hatred, rich Saudis provide financial support for their radical form of Islam all over the world, many Saudis joined Daesh, and 15 of the 19 9/11 hijackers were Saudis.

Now we learn that the shooter in the murders at the Pensacola naval base was a Saudi officer brought there for flight training. Protestations that the Saudis “love the American people” are nonsense. The “enhanced screening” of candidates for military training in the United States for foreign officers is simple: no Saudis. They are not our friends.

There is an old proverb that characterizes this situation well: he who sups with the devil should have a long spoon.

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Parker On Impeachment

In her regular Washington Post column Kathleen Parker, no Trump supporter, articulates a view of Trump’s impeachment that approximates my own:

From this set of circumstances, House Democrats and most of the media have inferred that the president variously engaged in a quid pro quo, bribery and/or extortion and, more recently, abuse of power. Democrats have struggled to name that crime, so they might have difficulty landing on the correct language to use in their forthcoming articles of impeachment.

Here’s the obvious sticking point: If the elder Biden were not running for president, no one would question Trump’s request for information related to the younger Biden’s overpaid position on the board of a natural gas company while his father was vice president of the United States and, coincidentally, charged with pushing anti-corruption efforts in Ukraine.

But then, virtually everyone knows that the only reason Trump was concerned about corruption was because Joe Biden was a likely opponent in the 2020 election. We know, too, that military aid was withheld for a time but released once a whistleblower report surfaced. The perceived offense isn’t so much that Trump did these things but that an investigation — or at least the announcement of an investigation by Ukraine — would have directly benefited his 2020 election prospects.

When Biden says he never discussed the board position with his son other than to say, “I hope you know what you’re doing,” I take him at his word. But I also question why he didn’t say, “Son, I love you, but you can’t take this job as long as I’m vice president of the United States.”

Here’s the obvious sticking point: If the elder Biden were not running for president, no one would question Trump’s request for information related to the younger Biden’s overpaid position on the board of a natural gas company while his father was vice president of the United States and, coincidentally, charged with pushing anti-corruption efforts in Ukraine.

But then, virtually everyone knows that the only reason Trump was concerned about corruption was because Joe Biden was a likely opponent in the 2020 election. We know, too, that military aid was withheld for a time but released once a whistleblower report surfaced. The perceived offense isn’t so much that Trump did these things but that an investigation — or at least the announcement of an investigation by Ukraine — would have directly benefited his 2020 election prospects.

When Biden says he never discussed the board position with his son other than to say, “I hope you know what you’re doing,” I take him at his word. But I also question why he didn’t say, “Son, I love you, but you can’t take this job as long as I’m vice president of the United States.”

Let’s be honest: There was something odd going on with Hunter Biden and Burisma. Given his lack of qualifications, Hunter Biden’s hiring by Burisma was transparently because of his last name, as he admitted himself during an October interview with ABC News. This isn’t a crime, either, except perhaps of perception. The younger Biden got lucky when he was born a Biden and, apparently, has enjoyed the benefits without inconvenience to his conscience.

Trump may be everything his critics say he is: corrupt, dishonest, an embarrassment and a liar. But what he did wasn’t illegal in the vein of extortion or bribery, accusations which Democrats used before moving toward a discussion of broader concepts of high crimes and misdemeanors. While an act needn’t be criminal to be impeachable, the argument that Trump’s conduct rises to the level of impeachable offense revolves around the facts that, one, Trump was seeking help from a foreign nation and, two, that he might have benefited personally. Involvement of a foreign nation in the nation’s politics was an early concern of the Constitution’s framers, which is partly why they included the impeachment clause.

Given that Trump didn’t really care about an investigation and sought only to connect the former vice president with a corruption investigation, it is fair to infer that his motives were political. But asking a fellow head of state to investigate a person doing business in another country isn’t quite the same as inviting him to meddle in U.S. elections. Ultimately, the result might be the same, assuming a damaging finding about Joe Biden. But wouldn’t American voters want to know if such were the case? And, isn’t Trump the meddler to the extent that he, not Ukraine, would have used the information?

And abuse of power in the absence of a crime requires corrupt intent. It is true that one may infer intent from a pattern of actions but it is not true that one may infer intent from a series of assumptions. A higher level of proof than that is required.

If we are determined to ratify Gerald Ford’s declaration that a “high crime and misdemeanor” is anything the House says it is, it’s equally true that removal from office is warranted by whatever the Senate says.

To my eye what this entire scandal highlights in practically every aspect is that the real scandal is what is legal.

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It’s the Same Battle

In his latest New York Times column David Brooks defends capitalism against socialism:

I came to realize that capitalism is really good at doing the one thing socialism is really bad at: creating a learning process to help people figure stuff out. If you want to run a rental car company, capitalism has a whole bevy of market and price signals and feedback loops that tell you what kind of cars people want to rent, where to put your locations, how many cars to order. It has a competitive profit-driven process to motivate you to learn and innovate, every single day.

Socialist planned economies — the common ownership of the means of production — interfere with price and other market signals in a million ways. They suppress or eliminate profit motives that drive people to learn and improve.

It doesn’t matter how big your computers are, the socialist can never gather all relevant data, can never construct the right feedback loops. The state cannot even see the local, irregular, context-driven factors that can have exponential effects. The state cannot predict people’s desires, which sometimes change on a whim. Capitalism creates a relentless learning system. Socialism doesn’t.

The sorts of knowledge that capitalism produces are often not profound, like how to design the best headphone. But that kind of knowledge does produce enormous wealth. Human living standards were pretty much flat for all of human history until capitalism kicked in. Since then, the number of goods and services available to average people has risen by up to 10,000 percent.

If you’ve been around a little while, you’ve noticed that capitalism has brought about the greatest reduction of poverty in human history. In 1981, 42 percent of the world lived in extreme poverty. Now, it’s around 10 percent. More than a billion people have been lifted out of poverty.

You’ve noticed that places that instituted market reforms, like South Korea and Deng Xiaoping’s China, tended to get richer and prouder. Places that moved toward socialism — Britain in the 1970s, Venezuela more recently — tended to get poorer and more miserable.

You’ve noticed that the environment is much better in capitalist nations than in planned economies. The American G.D.P. has more than doubled since 1970, but energy consumption has risen only modestly. America’s per-capita carbon emissions hit a 67-year low in 2017. The greatest environmental degradations are committed by planned systems like the old Soviet Union and communist China.

The Fraser Institute is a free-market think tank that ranks nations according to things free-market think tanks like: less regulation, free trade, secure property rights. The freest economies in the world are places like Hong Kong, the U.S., Canada, Ireland, Latvia, Denmark, Mauritius, Malta and Finland. Nations in the top quartile for economic freedom have an average G.D.P. per capita of $36,770. For those in the bottom quartile, it’s $6,140. People in the free economies have a life expectancy of 79.4 years. Those in the planned economies have a life expectancy of 65.2 years.

Over the past century, planned economies have produced an enormous amount of poverty and scarcity. What’s worse is what happens when the political elites learn what you can do with that scarcity. They turn scarcity into corruption. When things are scarce, you have to bribe government officials to get them. Soon, everybody is bribing. Citizens soon realize the whole system is a fraud. Socialism produces economic and political inequality as the rulers turn into gangsters. A system that begins in high idealism ends in corruption, dishonesty, oppression and distrust.

I believe he’s probably communicating better by using the words “capitalism” and “socialism” but they don’t really convey what’s actually happening here in the United States. Whether the rich become powerful or the powerful become rich, it’s really the same battle. Planned economy or market economy? Both Venezuela-style planned economies and crony capitalist ones like ours are centrally planned, the former for the benefit of government officials and the latter for the benefit of big companies.

Don’t kid yourself. Neither Democrats nor Republicans have a smidgeon of problem with crony capitalism. The evidence for that is the number of politicians of both parties who have become rich over a lifetime of alleged public service. It is simply not credible that for a politician to begin a life in elected office with a negligible net worth and amass a fortune in the tens of millions over 30 years of holding office without political corruption. Or leave political office with few if any other credentials and receive a million dollar salary without what you’re peddling being influence.

Big companies are able to twist the power of government against their competitors. The return on investment of that is fantastic. For a few thousand in political contributions or a few million in jobs given to former politicians or government employees you can realize billions. There are thousands of examples of how this works including extending copyrights to absurd lengths, as Disney has managed to do, or getting regulations tailored so they help you and hurt your competitors.

For many of the ills in our society, from low levels of capital investment to income inequality, you need only look at the consolidation that’s taking place in practically every sector.

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When a Counter-Cyclical Program Isn’t

During the financial crisis and “Great Recession”, the number of individuals enrolled in the food stamp program AKA SNAP (“Supplemental Nutrition Assistance Program”) skyrocketed to the largest in history. By design a counter-cyclical program, as such it makes some macroeconomic sense. Proponents of the program point to improved health and reduced food insecurity for benefit recipients. Don’t look for the editors of the Wall Street Journal among them:

Judging by the rhetoric, you’d think President Trump was shutting down Great Depression bread lines. “The Trump administration,” Senate Minority Leader Chuck Schumer said, “is driving the vulnerable into hunger just as the Christmas season approaches.”

Humbug. Two incongruous facts: With the U.S. unemployment rate now at 50-year lows, there are seven million job openings for only six million job seekers. Yet as of last year 2.1 million potential hires—specifically, adults age 18 to 49, able-bodied, without dependents—were receiving food stamps despite not working.

One reason is that basic work requirements have been waived into oblivion. The 1996 welfare reform said that childless adults generally had to work or train at least 20 hours a week to qualify for food stamps. Otherwise, they’re supposed to be restricted to three months of benefits in a three-year period.

States can get this requirement waived, however, for areas that are economically struggling. This is defined as 10% unemployment, with some catchall language for places otherwise lacking sufficient jobs. Flimsy standards have prevailed. The Foundation for Government Accountability calculated in August that the average jobless rate in waived areas—more than 1,100 jurisdictions across 33 states—was 4.5%. “Nearly half,” the report said, “have unemployment rates at or below four percent.”

This makes the timing right to retighten the criteria.

I’m of mixed mind on this. On the one hand, tens of millions of people on SNAP more than was the case in 2007 after a decade of economic expansion is, to say the least, odd. The total cost of the program is around $70 billion per year. The fraud and erroneous payments in the program are estimated to be between $1 billion and $3 billion per year. It is not serving a Keynesian purpose. The claim is that it discourages work.

On the other hand, $70 billion a year is a flyspeck in the federal budget and SNAP is an effective program as federal programs go.

Just how much should we subsidize able-bodied adults who just won’t work?

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As the Stomach Turns

The spitting contest in Washington continues. The editors of the Wall Street Journal comment on the House Intelligence Committee’s apparent use of NSLs to secure phone call metadata of Rudy Giuliani, Devin Nunes, and others and then disclosing them in their report, an express violation of the law:

The impeachment press is playing this as if the calls are a new part of the scandal, but the real outrage here is Mr. Schiff’s snooping on political opponents. The Democrat’s motive appears to be an attempt to portray Mr. Nunes, a presidential defender and Mr. Schiff’s leading antagonist in Congress, as part of a conspiracy to commit impeachable offenses.

“It is, I think, deeply concerning, that at a time when the President of the United States was using the power of his office to dig up dirt on a political rival, that there may be evidence that there were members of Congress complicit in that activity,” Mr. Schiff told the press on Tuesday. Complicit in what? Doing his job of Congressional oversight? Talking to Mr. Trump’s lawyer to get a complete view of the Ukrainian tale? Apparently Mr. Schiff now wants to impeach Members of Congress too.

This is unprecedented and looks like an abuse of government surveillance authority for partisan gain. Democrats were caught using the Steele dossier to coax the FBI into snooping on the 2016 Trump campaign. Now we have elected members of Congress using secret subpoenas to obtain, and then release to the public, the call records of political opponents.

That’s a felony and, ironically, an impeachable offense for which no one will ever be scolded let alone impeached. Complaining that your political opponents are acting in a dangerous and lawless manner becomes less credible when you’re doing it yourself.

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About That Prevailing Wisdom

William Galston’s latest Wall Street Journal column relies on that “prevailing wisdom” I spoke of in an earlier post:

Let’s start with a definition. Suppose that for each issue there’s a continuum from one extreme to the other, defined by a scale from 1 to 5. There would be a meaningful center on an issue if more people placed their views at 3 on the scale than at either end.

By this standard, people with “centrist” views constitute at least a plurality—meaning the largest faction when there is not a majority—on many questions at the heart of today’s political contestation, starting with political identity.

Asked to place themselves on a right-to-left spectrum, 43% of respondents opted for the center, compared with 34% for the right and 23% for the left. Overall, there’s a basis for saying that the U.S. is a centrist country that leans modestly to the right.

This fact coexists with a significantly polarized party system. Sixty-five percent of Republicans identify with the right, 27% with the center, and only 8% with the left. By contrast, 42% of Democrats identify with the left, and the same share with the center. One major party has a dominant ideology while the other is divided down the middle, a straightforward explanation for the shape of the current contest for the Democratic presidential nomination.

Note that, unlike Nationscape he’s using an affiliational yardstick rather than the one they’re using. That’s circular—he’s assuming what he claims is true. Whether it in fact is true is important.

But he uses it to reach exactly the same point we reached the other day:

On some issues, however, rather than a dominant center, we find a national consensus across partisan and ideological lines. Fifty-eight percent of Republicans, 80% of Democrats and 67% of independents believe that government should “do more” to provide health care and a secure retirement for elderly Americans, a political reality that Donald Trump understands but Paul Ryan did not. The odds are that when these programs face their long-predicted financial crunch, politicians will have to focus on funding rather than cutting benefits. Similarly, the First Amendment stands out as a core tenet of America’s secular faith. More than 60% of Republicans, Democrats and independents believe that the right to free speech is nearly absolute, except when a speaker advocates violence.

I think there’s also a difference between what rank-and-file Democrats and Republican believe and what elected officials of each party believe.

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Objects May Be Smaller Than They Appear

At Bloomberg Barry Ritholtz scoffs at the NRF’s figures for Thanksgiving weekend that I expressed skepticism about yesterday:

I would bet my house that we didn’t have a 16% year-over-year sales gain this past weekend. I don’t do forecasts, but with inflation running at less than 2%, economic growth running at just a hair above 2% and employment slowing, I wouldn’t be surprised if we have real sales gains of between 1% and 2%. Then again, I don’t run a trade organization designed to promote and hype the retailing industry, a sector that has been under immense pressure during the past decade. It’s not called the retail apocalypse for nothing.

It is not just NRF sales reports that are suspect, but its holiday shopping forecasts as well: An earlier NRF survey of shoppers suggested retail sales for the period would rise “between 3.8 percent and 4.2 percent over 2018 for a total of between $727.9 billion and $730.7 billion.”

But this too is simply a guess. Asking people how much they spent last year (who can remember?) and how much they intend to spend this year (who really knows in advance?) gives you very little insight into their actual spending. Indeed, based on the track record of this methodology, the odds greatly favor this forecast being wrong.

The reason I was skeptical is that RetailNext and Sensormatic are measuring real, tangible things. That’s a lot different than the sentiment surveys the NRF is using.

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Getting Past the Politics

Holman Jenkins’s latest Wall Street Journal column about environmental policy opens as a political diatribe but, once you get past the fulmination, arrives at a point that approximates my view:

If stated properly, the “scientific consensus” would run as follows: climate models teach us to expect some warming from human-caused atmospheric CO2 increases, but disagree about how much. It’s hard to make cost-benefit judgments on such a basis, but happily the Green New Deal makes it easy—it would cost a lot of money and accomplish nothing since U.S. emissions are just 14% of the total and shrinking. India and China, not the U.S., will determine the fate of climate change.

Cost-benefit analysis also tells us a bunch of things that might be worth doing even in light of the uncertainties. A tax reform based on a revenue-neutral carbon tax could make our tax system more efficient and pro-growth. Government investment in basic research tends to have a high payoff, and battery research is a particularly attractive opportunity. Rethinking nuclear power and regulation is another area of huge potential. Safer and cheaper nuclear technologies continue to advance on the drawing board even in today’s inhospitable political environment.

And guess what? All the above would be easier to sell to other countries than Green New Deal masochism. Voters would readily gobble up new energy technologies and tax models that would make their societies richer and stronger.

Let’s put it another way. You may coherently support measures that reduce carbon emissions or you may oppose an increase in nuclear power generation but, if you do both, you must do so on a cost-benefit basis. I think that more power generated by small modular nuclear reactors, particularly if they’re based on thorium, is something we should be pursuing with all due haste.

I would quibble about one point in Mr. Jenkins’s formulation. If the models are, indeed, correct it doesn’t matter whether or in what proportion human-caused atmospheric CO2 increases. The effects will be felt regardless.

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