At RealClearMarkets Jeff Snider, in a post less opaque than usual, offers a similar critique of what both the federal government and the Federal Reserve have been doing for the last 15 years:

The problem isn’t really debt, though, at least not how most people look at it. They naturally worry governments will run out of capacity to borrow, that there will come a day probably soon bond markets will go belly up the way Wachovia once did.

No. The real danger is quite the opposite. Perversely, the more Big Government fails to add anything outside the shortest run, the more demand there is for its increasingly shoddy paper. That’s because by “shoddy” I mean credit profile. That isn’t what determines demand.

What we’ve instead seen is the public sector getting larger and larger at the expense of the private sector which cannot flourish in the post-2009 environment. There are simply too many constant “headwinds” starting with a monetary system and credit capacity that was never fixed from “subprime mortgages.”

The government takes on a larger share of economic activity and greater responsibility for redistribution. Both of those only make things worse. The poorest and those most negatively affected by the disastrous economy get hooked and can never come off. They often vote accordingly.

It is actually the same in China, too. As the Chinese economy continues to dwindle, economic circumstances worsening all the time, Beijing takes it upon itself often forcing local authorities to shoulder more of the marginal load. An already-overbearing central system becomes more centralized.

Washington is really no different. Since Bush, it’s only a matter of degree.

Because none of it actually works in the economic sense – it sure does in a political one – appetite for government debt in the market remains as stout as ever; at the expense of the private economy, of course. Worsening economy feeds more demand for safe and liquid. Central governments can borrow however much they wish, while hardly anyone else outside giant companies can.

They used to call this “crowding out.” I haven’t heard that term thrown around in years, maybe decades. If there is a Chinese equivalent, it probably hasn’t been uttered since Mao. The real downside of all this government spending isn’t finance, it has always been the economy.

November 2008 was a watershed. It was supposed to have been when governments collectively rescued us all from another 1930s. There is no evidence, real proof, that was ever a possibility. On the contrary, there are mountains of evidence that we did and continue to suffer a depression. Does it really matter if it wasn’t Great?

To any rational observer aware of all the facts, we ended up pretty darn close to a worst case anyway. What do we really have to show for it? All the debt, none of the recovery, a centralized spiral of bad ideas, predictably ineffective results, and, above all, no way out.

The future continues to be one of more government and its debts, not less. They’ll sell you on the Great Depression that didn’t happen so you won’t notice the silent one that did.

Just a few observations.

First, although it may not be obvious, the effect of taxation is to remove money from the private sector. When you remove money from the private sector while resolutely adding it in the public sector through issuing of increased credit, referred to by Mr. Snider as debt, if you’re surprised that the federal government gets bigger, you haven’t been paying attention.

And, second, if the wealthiest can get wealthier without taking any risks, don’t you think they will? Hiring employees is a risk. Building new facilities or starting new companies are risks.

Here’s the kernel of David Stockman’s statistics-dense post at the Brownstone Institute:

The average worker in the bottom half of the wage distribution generated earnings that do not even remotely support a middle-class living standard. In fact, this figure amounts to only 65% of the Federal poverty line for a household of 4 persons ($27,750) and is barely above the $14,580 poverty level for a single person household.

In other words, the overwhelming bulk of the 84.5 million workers in the bottom half of the wage distribution pulled in paychecks over the course of 2022 which were below or just above the Federal poverty line!

That is to say, the US economy is badly broken, yet you do not hear a peep from either wing of the Uniparty.

and here’s his peroration:

Why isn’t the US economy generating middle-income jobs at the scale needed to provide better opportunities to the 84.5 million workers below the median wage level?

The short answer, of course, is that the US economy desperately needs far less speculation on Wall Street and far more productive investment on Main Street—when, in fact, the opposite has been happening during the past two decades.

To wit, net real private investment (i.e. after inflation and D&A) declined from 6.7% of real GDP in the year 2000 to just 4.8% as of 2022. Yet given the fearsome competitive pressures of the global labor and product markets, the US economy actually needs net investment at rates well above historical levels.

He’s sounding themes I have for many years right here. His blames all of this on the way the Federal Reserve operates but I doubt that’s enough. I think we’re measuring success the wrong ways, in terms of the number of low-wage jobs being generated and the amount that people are spending on basic necessities. If you’re not going to include the price of food and fuel in your reckoning of inflation, you shouldn’t include it in other statistics, either.

At CNBC Kevin Brenninger reports that George Santos has been expelled from the House of Representatives for corruption:

The House voted Friday to expel Rep. George Santos from Congress for his alleged finance crimes and his campaign lies, shrinking the GOP’s already slim majority.

Lawmakers voted 311-114 to oust the New York Republican. The measure required the support of two-thirds of the chamber to pass. Two members voted present.

Santos is the sixth House member in U.S. history to be booted from Congress, and the third since the Civil War.

The removal of Santos lowers the number of House Republicans to 221, with 213 Democrats. This makes it even more difficult for the majority to pass legislation without Democratic support.

This expulsion is long overdue. All I can say is it’s a start. 90% of House members make the others look bad.

Crime has been generating what look like contradictory headlines.

In October, the Federal Bureau of Investigation’s annual report showed violent crime in 2022 fell to its relatively low, prepandemic level. Yet in November, Gallup reported that a record-high 63% of U.S. adults said the “crime situation in the U.S. is extremely or very serious.”

This seems to suggest that either the crime data is wrong or people are unrealistically negative. There is another possibility: More people are experiencing crime, but it isn’t captured in FBI measures.

“There has long been a mismatch between public perception and reality on crime,” said Ames Grawert, senior counsel at the Brennan Center for Justice, a liberal-leaning legal-policy institute. “But it’s understandable that people would be worried about crime today and we have to take them seriously.”

When you look at how the crime statistics come together, it shows that violent crime can fall and people can simultaneously experience more crime.

The FBI’s crime-statistics system originated in 1930. Its most reported figure, the rate of violent crime, combines the most serious offenses: homicide, rape, aggravated assault and robbery.

This rate is back to its prepandemic level, which itself came near the end of a multidecade decline. From 1991 until 2014 violent crime in the U.S., like much of the world, fell sharply, from 783 incidents per 100,000 people to 362. Grawert called it “one of the least remarked upon but most important social phenomena of our lifetimes.” In 2022, the rate stood at 381, down from a recent peak of 399 in 2020 and back to its 2019 figure, also 381.

But these figures come with qualifiers. The FBI has been changing to a more granular data-reporting system. The switch was supposed to be completed in 2021. But that year many police departments were still learning the new system, so the FBI used data from police departments covering only 52% of the country, and extrapolated the rest, making it difficult to know whether violent crime actually rose or fell compared with 2020. For 2022, the FBI has data from departments covering 94% of the country.

Another caveat is that the violent-crime rate is largely driven by aggravated assaults and robberies, which are far more numerous than homicides. Homicides are naturally a major concern, and the homicide rate abruptly soared in 2020 amid the pandemic—and in 2022 was still 43% higher than in 2014. Much of the decline since the 1990s has been reversed during the past three years.

Then he turns to what I think is a critical component:

An even more important caveat is that violent crimes reported to the police almost certainly undercount actual crimes experienced by people, and trends in the two can diverge.

Separate from the FBI, which gets its data from the police, the Justice Department asks people whether they have been the victims of crime and whether they reported it to the police.

The September National Crime Victimization Survey showed only about 40% of violent crimes were reported to the police in 2022. The number of people who said they were a victim of violent crime rose 42% from 2021, but only 29% more reported crimes to the police.

This data has caveats, too. The survey, traditionally conducted in person, temporarily switched to phone interviews in 2020 and its data that year was at odds with other sources. (It showed no particular increase in crime.) That means 2021’s data isn’t easy to compare to the previous year, leaving the exact crime trend over the past three years unclear.

I’ve already reported the drastic change here in Chicago on 911 responses—the number of calls that should have resulted in a police response has soared. Why? There are multiple reasons but one of them is that when prosecutors won’t prosecute and when they do prosecute judges won’t convict, it discourages the police from responding. Why should you potentially put yourself in harm’s way when it will accomplish nothing?

The FBI relies on local reports and local reports depend on police responses not on police non-responses.

I live in one of the nicest, safest neighborhoods in Chicago. In the last year we’ve had a homicide within four blocks of where I’m sitting and multiple armed robberies and carjackings within two blocks. None of this has ever happened here before. My wife is worried—the subject comes up on nearly a daily basis.

Update

Ruy Teixeira remarks on the same Gallup poll:

It is not hard to discern the continuing influence of current Democratic Party orthodoxy, which views a strong law and order approach as essentially racist and seems way more interested in making it harder to arrest, jail, and prosecute criminals. Voters have pushed back against this orthodoxy in cities from San Francisco to Minneapolis to New York but the national Democratic Party appears terrified to break with the activist groups and liberal elites who push “criminal justice reform” above all else.

What would Kissinger do? That’s the question that Martin Indyk raises in a Washington Post op-ed and the subject is the conflict between Israel and Hamas:

Henry A. Kissinger trained his statecraft on the pursuit of order between states in the international system. He is therefore not usually remembered for his peacemaking achievements. Indeed, he was intensely suspicious of pursuing peace. And yet, in the Middle East, where he devoted much of his energies as secretary of state, he laid the foundation for an Arab-Israeli peace which has managed to withstand all the challenges of Middle Eastern wars that have followed. What lay behind this unusual and oft-overlooked achievement? And what might Kissinger, who died on Wednesday, have done to resolve the Israeli-Palestinian war that rages today?

In Kissinger’s mind, it was always critical to avoid bringing too much passion to the pursuit of peace. He recognized that kings and emperors throughout history — and the American presidents who succeeded them — would be tempted to use their immense power to try to end conflicts. But that instinct needed to be resisted, Kissinger believed, because giving in to it was more likely to lead to more war. He called this “the paradox of peace.” Instead, Kissinger favored an incremental approach to peacemaking: a step-by-step process that would ameliorate conflict and buy time for the warring parties to come to terms with one another, learn to live together and, eventually, end their conflict.

Although I think that Dr. Indyk makes a good point I also think he’s confusing two very different questions. Those are:

1. What should be done about Hamas?
2. What should be done to resolve the matter of Israel and Palestine?

Let’s consider the second question first. The conflict between the Israelis and Palestinians is what is referred to as a “wicked” problem. It has no solution as such. The only possible approach to ameliorating the situation is to establish and continue a process for resolving it. The Camp David Accords 40 years ago were the initiation of that process and there have been talks ever since. That process was greatly impeded by Yassar Arafat’s refusal to participate further. That has actually been the history of these talks. They will proceed for a while and then break up, each side blaming the other’s intransigence. That is to be expected.

This process should be continued and I believe that confidence-building steps would be helpful. There are any number of possibilities including beginning the land swaps that have been discussed and Israel’s reducing or eliminating the financial support it provides to West Bank Israeli settlements.

The first question is very different. The resolution of that is to apprehend Hamas members and execute them on the spot.

Mark Episkopos repeats a point I have made for going on two years at Responsible Statecraft:

A purely cartographical view of the Ukraine war neglects key military factors, including differentials in manpower and resources, attrition rates, and logistics challenges, that many experts say are not unfolding in Ukraine’s favor.

“Despite everything that’s happened, despite all the stuff we have given, the Bradley’s, the M1 [Abrams] tanks, Patriot air defense systems, the Challenger tanks, the Leopard [tanks], all those things, nothing changed at all except the casualty count,” said former U.S. Army Lt. Col. Daniel Davis, Senior Fellow and Military Expert at Defense Priorities and host of the Daniel Davis Deep Dive.

“While the lines haven’t changed, I don’t call it a stalemate because I think time is continuing to work against Ukraine,” he said in an interview, noting the stark year-on-year decline in U.S. military aid to Ukraine.

What’s worse something between 15% and 30% of Ukraine’s population has fled the country. Of those 2/3s are women, many of them young. Unless they return to Ukraine soon, it is quite possible that the next generation of Ukrainians will be small and the longer the Ukrainian refugees are gone, the less likely they will be to return. Russia isn’t Ukraine’s only problem.

Dr. Episkopos concludes:

Whether the Kremlin continues to bleed Ukraine white or opts for large-scale offensives, there is a salient threat that, in the absence of diplomatic off-ramps, Russia’s growing advantages may eventually reach a critical mass and translate into the ability to impose a grim fait accompli on Kyiv and its Western partners.

I’m surprised that no one has mentioned that Hamas’s October 7 attack on Israel and its aftermath are a textbook example of “fourth generation warfare” (4GW), quite cynically so. Hamas has gotten into Israel’s OODA loop and the Gazan people are being sacrificed to put Israel on the political disadvantage.

Bret Stephens suggests a different way of looking at the pro-Palestinian protests going on in the United States, United Kingdom, and Europe in his New York Times column—it’s dooming any prospects the two-state solution may have had. He opens by distinguishing between 1967 opposition and 1948 opposition:

For decades, the question of a Palestinian state has come down to two dates: 1948 and 1967. Most Western supporters of Palestinian statehood have argued that the key date is the Six-Day War of June 1967, when Israel, faced with open threats of annihilation, took possession of the Golan Heights, the West Bank, East Jerusalem, Gaza and the Sinai Peninsula.

According to this line of thinking, the way to peace rested on Arab diplomatic recognition of Israel in exchange for the return of these so-called occupied territories. That’s what happened between Egypt and Israel at Camp David in 1978, and what might have happened at Camp David in 2000 if Yasir Arafat had only accepted the offer of full statehood made to him by Prime Minister Ehud Barak of Israel.

Yet there has always been a second narrative, which dates “the occupation” not to 1967 but to 1948, when Israel came into being as a sovereign state. By this argument, it isn’t just East Jerusalem, the West Bank and the Golan Heights that are occupied by Israel: It’s Haifa, Tel Aviv, Eilat and West Jerusalem, too. For Palestine to be “liberated,” Israel itself must end.

The slogan “from the river to the sea, etc.” is an endorsement of the 1948 “rejectionist” front. Mr. Stephens continues:

For one, they put a growing fraction of the progressive left objectively on the side of some of the worst people on earth — and in radical contradiction with their professed values.

“A left that, rightly, demands absolute condemnation of white-nationalist supremacy refuses to disassociate itself from Islamist supremacy,” Susie Linfield, a professor of journalism at N.Y.U., wrote in an important recent essay in the online journal Quillette. “A left that lauds intersectionality hasn’t noticed that Hamas’s axis of support consists of Iran, famous most recently for killing hundreds of protesters demanding women’s freedom.”

For another, they reinforce the central convictions and deepest fears of the Israeli right: that Palestinians have never reconciled themselves to the existence of Israel in any borders, that every Israeli territorial or diplomatic concession is seen by Palestinians as evidence of weakness, that a Palestinian state in Gaza and the West Bank would only serve as a launchpad for an intensified assault on Israel, that every criticism of Israeli policies in the occupied territories veils a deep-seated hatred of the Jewish state.

When the left embraces the zero-sum politics of Palestinian resistance, it merely encourages the zero-sum politics of hard-core Israeli settlers and their supporters.

A third consequence is that it abandons the Palestinian people to their worst leaders. It’s bad enough that the West has long accepted, and funded, Mahmoud Abbas’s repressive kleptocracy based in Ramallah. But what Hamas has given the people over whom it rules is infinitely worse: theocratic despotism, soaked in the blood of Palestinian “martyrs,” most of whom never signed themselves or their families up to serve as human shields in an endless — and, in the long run, hopeless — battle with Israel.

Said another way it’s a variant of Conquest’s Third Law: the behavior of the Palestinians’ supporters in the West can best be understood by assuming that they’re controlled by a cabal of their worst enemies. I don’t think that they are but they’re sure acting like it.

Whatever else you may think of Henry Kissinger, who died yesterday, he certainly left his mark on the world. The editors of the Washington Post declaim:

Henry A. Kissinger, who died on Wednesday at 100, was one of the most consequential statesmen in U.S. history. Though his greatest triumphs occurred a half-century ago, his legacy is complex, contested and contains lessons that should inform Americans facing complicated foreign policy challenges now.

In less than four years during the early 1970s, Mr. Kissinger brokered the opening of relations between the United States and China, the withdrawal of U.S. troops from Vietnam, major arms-control agreements with the Soviet Union, and Israeli-Arab accords that made the United States the dominant power in the Middle East.

While forging and defending this policy of “detente” — the easing of tensions with the Soviet Union — Mr. Kissinger also pursued what he regarded as a zero-sum contest for global influence with the Soviets, spurring him to what he once privately described, late in life, as his proudest achievement: the negotiation of disengagement agreements between Israel and Egypt and Israel and Syria following their 1973 war. Rather than rely on multilateral forums, the then-secretary of state invented “shuttle diplomacy” and personally brokered the deals, which had the benefit of excluding Moscow. In the aftermath, a once-formidable Soviet presence in the Middle East withered, and the United States became the region’s arbitrating power — a state of affairs that has endured into the 21st century.

He is castigated for his role in the bombing of Cambodia and IMO insufficiently praised for crafting what has been very nearly the only actual foreign policy in American history. Like it or loathe it, it was a foreign policy rather than the emergent style more typical of the United States, in which competing domestic interests contend with one another. I also wonder if he would be receiving so much posthumous lambasting if he had not served the only American president to resign from office under a cloud.

Update

Here’s an excerpt from the editors’ of the Wall Street Journal’s encomium:

Kissinger was a target of both the right and left in those perilous Cold War years, often unfairly. His 1973 peace agreement with North Vietnam that ended the U.S. participation in the war is often mocked because the North overran the South two years later.

But Kissinger and Nixon inherited the unpopular war from Lyndon Johnson and had little choice other than to manage U.S. withdrawal. Kissinger’s strategy was to negotiate a settlement that allowed the South to take over its own defenses without half a million U.S. troops. He achieved his peace settlement and won a controversial Nobel Peace Prize for it. But the strategy collapsed when the U.S. Congress slashed aid to the South in 1975. Saigon fell within weeks. A Senator named Joe Biden was among those voting to abandon the South.

Kissinger has long argued, rightly we think, that the South would have survived if Congress hadn’t abandoned support. And Lee Kuan Yew, the late leader of Singapore, often said that U.S. support for South Vietnam gave the countries of Southeast Asia the time to build resistance to Communists in their countries. They are freer today because of it.

The left also blames Kissinger for supporting dictators. But the alternatives then, as now, weren’t usually democrats of the left’s imagining. They were often Communists who would have aligned themselves with the Soviets, as Fidel Castro did in Cuba.

In Chile, for example, Salvador Allende won a presidential election with 37% of the vote and took the country sharply to the left with Cuban and Soviet intelligence and other aid. The U.S. provided covert aid to Allende’s political opponents, but declassified briefings from the time show the U.S. was unaware of the military coup that deposed him.

Kissinger wasn’t responsible for Augusto Pinochet’s coup or its bloody excesses. Chile eventually became a democracy and free-market success. Cuba remains a dictatorship.

My own criticism of Dr. Kissinger is that he was objectively wrong too frequently. He was wrong on our handling of the Soviets (he overestimated them) and wrong about the Chinese. Much good has come from opening ties between the U. S. and China. Millions of Chinese people have benefited at substantial costs to Americans and the political benefits envisioned never materialized.