The Discrepancy Between Means and Ends

Jamie Dimon is the chairman and CEO of JP Morgan Chase & Co. As such he is one of the most powerful people in the United States and the world. Today Mr. Dimon has an op-ed in the Wall Street Journal>, ostensibly a call for American leadership in “the Western world”. Here’s the opening:

Russia’s invasion of Ukraine punctured many assumptions about the future of the world and thus was a pivotal moment in history. America and the West can no longer maintain a false sense of security based on the illusion that dictatorships and oppressive nations won’t use their economic and military powers to advance their aims—particularly against what they perceive as weak, incompetent and disorganized Western democracies. In a troubled world, we are reminded that national security is and always will be paramount, even if it seems to recede in tranquil times.

It should also lay to rest the idea that America can stand alone. U.S. leaders must always put America first, but global peace and order is a vital American interest. Only America has the full capability to lead and coalesce the Western world, though we must do so respectfully and in partnership with our allies. Without cohesiveness and unity with our allies, autocratic forces will divide and conquer the bickering West. America needs to lead with its strengths—not only military but also economic, diplomatic and moral.

and here are his objectives:

  • Rededicate ourselves to the qualities and principles that made America great
  • Develop a Marshall Plan for global energy and food security
  • Increase military spending, along with our allies, as much as necessary to protect the world
  • Recover our economic dynamism
  • Deal with China thoughtfully and without fear

I could be glib and remark that Mr. Dimon is probably the biggest single obstacle to achieving any of those objectives but I’ll be a bit more practical. See my previous post:

U. S. power overseas is a consequence of our military strength and our military strength is downstream from the productive U. S. economy—our production of stuff. Not finance or services.

To that end we need to undo the financialization of the U. S. economy that has taken place over the last half century. We’ve got to consume less, save more, make more of what we consume, and borrow less.

A couple of final points. I think that Mr. Dimon is dreaming if he thinks that “the Western world” is languishing from a dearth of U. S. leadership. If anything there’s too much U. S. leadership and an almost complete vacuum of followership on the part of our putative allies. Their attention is focused unswervingly on their own parochial interests as it has been for decades.

Second, they’ll follow if it’s in their interest to do so. They, too, are interested in a more vibrant U. S. economy.

Finally, why is Mr. Dimon publishing this op-ed at this time? Is he interested in throwing his hat into the ring? Why should he take such a demotion not to mention pay cut?

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What’s “a Better China Trade Strategy”?

After reading the editors’ of the Washington Post’s editorial advocating a revival of the Trans-Pacific Partnership (TPP), it’s still not clear to me what “a better China trade strategy”, their stated objective, would be. Here’s the gist of it:

In the closing weeks of the year, Japan announced a surge of defense spending, Taiwan extended its period of mandatory military service, and the Biden administration, which is keeping Trump-era tariffs in place on thousands of Chinese products, tightened export controls blocking Beijing’s access to strategic computer-chip technology.

Missing from this defensive formula is a positive strategy for competing with China on trade. China is consolidating its position at the center of Asia’s trading system. Its trade in Southeast Asia grew 71 percent in the past four years, according to a recent Wall Street Journal analysis. Beijing is on a trajectory to dominate the economic landscape of the world’s most productive region, increasing its leverage over the United States and its allies.

concluding:

It isn’t enough to promote industrial policy and tighten export controls on computer chips and maintain tariffs on Chinese goods; the United States needs a positive economic strategy to engage with Asian states to expand export markets and counterbalance China’s pull. The time might not be right in this Congress, but Washington would be wise to turn its attention to Pacific trade while it can still do so on its terms.

It isn’t easy to summarize the joint and national interests of countries which in aggregate contain 30% of the world’s population succinctly but let’s give it a try. China is politically controlled by the Chinese Communist Party, irredentist, nationalist, and racist. China has border disputes with every neighboring country. That isn’t particularly extraordinary—so do we. The difference is that a number of China’s border disputes are “hot”, i.e. there’s fighting going on. We have border disputes with Canada and Mexico but if we’re actually fighting with either one of them it’s news to me.

China has been engaged in a program of occupying, annexing, and Siniticizing areas adjacent to it since 1950. Every single one of its neighbors is aware that there is no future for them in a close relationship with China (see above). Why are they cozying up to China?

Three reasons: they want China’s trade, they know that a close relationship is the price for that trade, and they don’t trust us. Why should they? If we had set out to deliberately engage in a program of causing people to mistrust us we could hardly do worse than what we’ve been doing over the period of the last 60 years.

What should we do? You’re going to get tired of my repeating this. U. S. power overseas is a consequence of our military strength and our military strength is downstream from the productive U. S. economy—our production of stuff. Not finance or services. Consequently, we need to do four things all at once:

  • Ensure that we are, if not self-sufficient, at least near-shoring production of strategic goods.
  • Bolster our productive economy
  • Refurbish our military
  • Take a less interventionist stance

and to accomplish those we’ll need to stifle two powerful domestic constituencies: free traders and international interventionists. Those are tall orders. As the Magic 8-Ball might tell us, don’t count on it.

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Socialism for the Rich

I’m just full of questions today. Why do we subsidize the beachfront houses of the top 1% of income earners? See here and here.

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The Health Care Systems

Chris Pope concludes his post at City Journal on our healthcare systems like this:

The United States cannot solve its health-care challenges by adopting one or another country’s health-care system wholesale. But it could avoid lots of heartache by better aligning its four principal health-care systems. In recent decades, the Netherlands and Germany have sought to break down barriers between employer-sponsored insurance and individual coverage. The United States should do something similar.

I’ve said it before. We have an employer-based healthcare system larger than Germany’s, a single-payer system (Medicaid) larger than Canada’s, and a “dual payer” system like France’s or Australia (Medicare) larger than both of those systems put together. Needless to say our tightly regulated individual insurance system (PPACA) is larger than Switzerland’s by an order of magnitude. We even have a fully socialized system like National Health in the system of the Bureau of Indian Affairs although it is significantly smaller than BNH.

I agree that we need reform but I find it farfetched that uniting our healthcare systems under any single system will result in cost savings until and unless the Congress is willing to limit that system which it has shown little inclination to do. The burden of proof is on anybody who thinks that just scaling up any of these systems will inherently result in cost savings.

Practically no one would like the way I would reform our healthcare systems so I won’t even bother to outline it. Suffice it to say that the focus would be on public goods (non-excludable and non-rivalrous) and, consequently, would be limited to public health.

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‘Splain Me

The definition of “schadenfreude” is taking pleasure from the misfortunes of others. Other than schadenfreude what is the interest in the squabbling among Republicans over who will be the next Speaker of the House?

I have even less interest in what Republicans do or do not do than most. No Republican has even run for mayor of Chicago in the last 45 years. That’s why it always galls me when Republicans say “Well, that’s what you get for electing Democrats”. Who else are we going to elect? They’re the only ones running.

I sincerely believe that if every Republican were to mysteriously vanish from the State of Illinois, it wouldn’t solve a single one of the state’s problems.

According to House rules the majority and minority caucuses each nominate one candidate and whichever of those candidates receives a majority of the votes cast by House members becomes speaker. In theory the Speaker of the House is not a partisan role like House Majority Leader. In practice it is.

As I’ve said before IMO the Speaker of the House is the most powerful individual in the United States. Not the president. Not the Chief Justice of the Supreme Court. Not the Chairman of the Joint Chiefs of Staff. Not even the CEO of Amazon. The Speaker of the House.

I also think that the accretion of power by party leaders is what makes the United States undemocratic. Consequently, reducing the power of party officials is more urgent than electoral reform or even civil service reform, both of which are long overdue.

So, what’s the big deal about Republicans squabbling over who will be the next speaker? I think it’s healthy. Healthier than no contest, anyway.

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What Will Happen in 2023?

I used to do annual prediction posts but I’ve given that up so I’ll ask you. What do you expect to happen in 2023?

Some reasonable guesses:

  • On January 2, 2024 the war in Ukraine will continue to grind on.
  • At best: economic malaise; at worst: recesssion.
  • Another major conflict somewhere in the world that we’re up to our hips in.
  • Government by edict (“executive order”).

Anything else?

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2022’s Reckoning

HeyJackass! reports the preliminary yearend tally in Chicago as 734 homicides, 2,936 shot. I’m sure that Mayor Lightfoot is touting that as a significant accomplishment but, as the author observes, there have been 700 or more homicides every year of Mayor Lightfoot’s term. By my calculations that’s the worst tally ever when adjusted for population. By far the greatest percentage of both victims and perpetrators are black and the percentage is even worse when considered by black population. Chicago’s black population has declined substantially over the last several decades. It’s lower than it was 50 years ago as is Chicago’s total population.

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Stay on the SAFE-T Act

The Illinois Supreme Court has issued a stay on the provision of the SAFE-T Act abolishing cash bail. Tim Ward reports at ABC 7 Chicago:

SPRINGFIELD, Ill. (WLS) — The Illinois Supreme Court has halted the Pre Trial Fairness Act, a provision of the Safe-T Act, hours before it is set to go in effect at the first of the year.

The decision handed means, until further notice, every county in the state must maintain a cash bail system.

The court issued the order Saturday evening, keeping the cash bail system until further notice as the state appeals a judge’s ruling on the matter.

“Throughout the entire state of Illinois, we need to have the same rules, the same protections for every single person no matter where they live,” said Kane County State’s Attorney Jamie Mosser.

Earlier this week, a Kankakee County judge ruled that a portion of the Safe-T Act, that ends cash bail in Illinois, is unconstitutional after states attorneys in 65 Illinois counties challenged the new law.

In his 33-page opinion, Judge Thomas Cunnington cited the need for a separation of powers, saying “…the appropriateness of bail rests with the authority of the court and may not be determined by legislative fiat.”

It’s a step in the right direction but I suspect the stay won’t be maintained forever. I question Judge Cunnington’s reasoning in this.

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The Schneiders

I’ve posted about a number of the lines in my family history but I don’t believe I’ve posted about the Schneiders. My maternal grandmother’s given name was Annunciata Augusta Schneider. She was named for her father, August Schneider, who in turn was named after his mother’s uncle, August Didier. Her given name was Celestine Didier.

My maternal grandmother’s mother’s given name was Mary Jane Flanagan. I’ll write a separate post about the Flanagans. There’s a lot to write about there, particularly my great-great-grandfather Edwward Flanagan. He was in the Civil War, was a cowboy, working on some of the famous trails out west in the 1870s, and then became a cattle grader.

August Schneider was an alcoholic. He deserted the family and he and my great-grandmother were divorced, quite a scandal in those days. My grandmother was the oldest of five children: Sylverius (William Sylvester), Celestine, Edward, and Joseph. Her mother managed to eke out a living as a cook for a prosperous family. That left my grandmother to care for her four younger siblings.

They were incredibly poor. They lived in the cheapest possible housing in St. Louis—a houseboat moored on the Mississippi. One room with just a stove for both heating and cooking. No central heat, no electricity, no plumbing. I presume they dredged water from the river. The stench must have been unimaginable. No wonder my grandmother ran away and joined a vaudeville troupe.

All but one of the Schneider children died relatively young: my grandmother, known as “Joanne” or “Babe” at 51 of a brain aneurysm, Bill (Sylverius) at 28, Celestine at 18, and Joseph at 12. Jennie (Mary Jane) outlived all of her children but my grandmother and Ed. Hers was a tragic life.

Ed was called up for World War II, the Korean War, and Vietnam. He served in the Navy. He lived to be 96. I met Ed many times. I wouldn’t say we were close but I definitely knew him and was fond of him and his family. His children are my closest living blood relatives other than my siblings.

August lived into his 80s. He died in a poor house on the other side of the river. I’ve seen his grave.

Those are the Schneiders. One of the great mysteries in my family history is how August’s father, William Schneider, and his mother, Celestine Didier, met. Although a third generation American Celestine was a native speaker of French. I presume she also spoke English at least a little but when my mother met her as a very young child she spoke only French. Her family was prosperous and her uncle and guardian August Didier was married into one of St. Louis’s most prominent families, one that went back before the city’s founding. At the time of his death her grandfather’s estate was valued at nearly $600,000 in today’s money.

Update

It has been pointed out to me that I did not represent how awful the Schneiders’ circumstances actually were. The Schneider kids were in and out of orphanages throughout their childhoods, as their parents’ fortunes varied. Ed was quite resentful about that. The youngest, Joe’s, official cause of death was epilepsy. Ed said he died of malnutrition. Celestine’s grave was violated by a graverobber.

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The Forever War?

George Friedman opens his post with a list of the ways that wars end:

  1. A war ends when one side lacks the material to continue. Germany’s campaign in World War II ended when it was unable to produce and field the weapons needed to fend off the Allied powers.
  2. A war ends when one side’s morale is exhausted – when soldiers and civilians are simply unwilling to bear the burden of war, even if victory is possible. This was the case for the United States in the Vietnam War.
  3. A war ends when there is no hope of a radical increase in military power, and when foreign intervention is impossible. In WWII, Britain persevered knowing it could not defeat Germany but reasonably expecting an American intervention.
  4. A war ends when the consequences of defeat seem tolerable to civilians. In World War II, the Italian public saw Allied occupation as a preferable alternative. (Conversely, nations will continue to fight when the cost of defeat is catastrophic.)

concluding that the war in Ukraine is likely to continue for a long time:

Over time, then, the sense of the impossibility of victory will trigger peace talks, but not until reality forces it.

I wonder if the war will continue until there aren’t enough Ukrainians between the ages of 15 and 45 to maintain an organized resistance.

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