The graph at the top of this post is from Joe Wallace and Anna Hirtenstein’s report at the Wall Street Journal. It pretty much says it all but note the upper right hand corner. The TL;DR version is that increases in South Asian and Middle Eastern imports are compensating for decreases in U. S. and European imports:

Sales are booming in Russia’s export market, the world’s largest in crude and refined fuels. And new trade arrangements have given Mr. Putin cover to use natural-gas exports as an economic weapon against Ukraine’s European allies. Before the war, Russia supplied Europe with 40% of its gas. It has since throttled flows through the Nord Stream pipeline to Germany and other conduits, driving prices higher and putting pressure on European households and businesses.

Oil revenue more than makes up the difference. “Russia is swimming in cash,” said Elina Ribakova, deputy chief economist at the Institute of International Finance. Moscow earned $97 billion from oil and gas sales through July this year, about $74 billion of that from oil, she said.

The country exported 7.4 million barrels of crude and products such as diesel and gasoline each day in July, according to the International Energy Agency, down only about 600,000 barrels a day since the start of the year.

I presume that the increase in the price of oil means that the Russian can offer oil to Indian, Egyptian, etc. customers at a discount from market price.

If our strategy is to starve the Russian economy, it’s not working. It is, however, making the Europeans very nervous as winter draws near.

The Office of the United Nations High Commissioner for Human Rights has released a “final report” on Xinjiang. Here is an excerpt from its conclusion:

Serious human rights violations have been committed in XUAR in the context of the Government’s application of counter-terrorism and counter-“extremism” strategies. The implementation of these strategies, and associated policies in XUAR has led to interlocking patterns of severe and undue restrictions on a wide range of human rights. These patterns of restrictions are characterized by a discriminatory component, as the underlying acts often directly or indirectly affect Uyghur and other predominantly Muslim communities.

As might well have been anticipated the Chinese authorities reject the report:

Before the report was released, China’s ambassador to the UN, Zhang Jun, said Beijing was “firmly opposed” to it.

“We all know so well that the so-called Xinjiang issue is a fabricated lie [made] out of political motivations, and its purpose definitely is to undermine China’s stability and to obstruct China’s development,” he told reporters.

My question is who’s right? Are the Chinese engaging in systematic violation of the human rights of the Uyghurs, as averred by the OHCHR, or is the report false, as claimed by the Chinese ambassador? Both cannot be true. It may, however, be true that the report is simultaneously biased and politically motivated as well as being true.

I can’t adjudicate that completely but I doubt that the Chinese have singled out Muslims for abuse as the report implies. Their actions in Xinjiang are completely consistent with China’s actions in Tibet. I suspect that anyone who isn’t Han Chinese is a second class citizen in an increasingly nationalistic China.

At Larry Sabato’s Crystal Ball Kyle Kondik and J. Miles Coleman now rate control of the next Senate as a toss-up with the momentum moving towards the Democrats:

The end of the summer has been kind to Democrats. President Joe Biden’s approval rating, though still clearly weak, is improving, and House generic ballot polling shows a political environment that, at least at the moment, is roughly neutral. A few recent House special elections, specifically last week in upstate New York, give some credence to the reality of that polling. Gas prices, perhaps the easiest-to-notice indicator of the broader inflation problem, have fallen sharply from their spike earlier this summer, though one cannot predict with any level of certainty where gas prices will be on Election Day.

Democrats, hoping to make this election more of a choice than a referendum, are benefiting from some damaged Republican candidates in several key races as well as the emergence of abortion as a key issue in the aftermath of the Supreme Court’s Dobbs decision — and perhaps also from a continued focus on a particularly visible former president, Donald Trump. We have detailed many of these factors in our recent updates on the overall House, Senate, and gubernatorial picture.

Monday is Labor Day, a traditional campaign kickoff date that now is more of a signal that the never-ending campaign season is nearing conclusion. So we think it’s time to make a couple of key rating changes in the Senate. These changes reflect improving odds of Democrats holding their tiny majority, but still suggest an overall battle for the majority that is effectively a Toss-up.

We are moving 2 of our 4 Toss-ups, Arizona and Pennsylvania, from Toss-up to Leans Democratic, signifying a small Democratic edge in these 2 closely-watched contests. Our new Senate ratings are shown in Map 1. They reflect 49 seats at least leaning Democratic (including those not on the ballot this year), and 49 seats at least leaning Republican, with just 2 Toss-ups: Georgia and Nevada.

As things now stand for Republicans to capture the Senate the Republican candidates would need to prevail in both of the present toss-up contests (Nevada and Georgia) or capture some seats presently rated “leans Democratic”, “likely Democratic”, or “safe Democratic”, and not lose any seats rated leaning, likely, or safe for Republicans.

There are a number of things they’ve been talking about since I was in grad school (and dinosaurs ruled the earth) including nuclear fusion, artificial intelligence, and the hydrogen economy. At Newsweek Ed Browne reports on an interesting development in producing hydrogen:

Researchers at the University of California, Santa Cruz (UCSC) have found a way to produce hydrogen by developing a special type of aluminum composite that reacts with water at room temperature.

On its own, aluminum is a reactive material that splits oxygen away from water molecules, leaving hydrogen gas behind.

Aluminum won’t necessarily do this on its own, however. That’s because at room temperature the metal forms a layer of aluminum oxide, which essentially protects it from reacting with water.

What scientists have discovered is that by using an easily produced composite of gallium and aluminum, it is possible to get this material to react with water at room temperature, producing hydrogen.

“We don’t need any energy input, and it bubbles hydrogen like crazy,” said UCSC chemistry professor Scott Oliver in a university press release. “I’ve never seen anything like it.”

The fact that this aluminum-gallium mixture produces hydrogen has been known for decades. But what the UCSC team found was that increasing the concentration of gallium in the composite also increased the production of hydrogen.

“Our method uses a small amount of aluminum, which ensures it all dissolves into the majority gallium as discrete nanoparticles,” Oliver said.

What’s more, the composite can be made with easily accessible aluminum sources like foil or cans.

The downside is that gallium is relatively expensive, although it can be recovered in this process and reused multiple times.

That sounds very promising. Now let’s see if their results can be replicated and it can be done at scale. Hydrogen would certainly be a better solution for many uses than solar or wind power.

The editors of the Washington Post remark on the occasion of the death of Mikhail Gorbachev:

Mr. Gorbachev, who died Tuesday at 91, never intended to destroy the Soviet system. But in a lifetime inside it, he saw its decay and the need for change. While many in the West viewed the Soviet Union as an implacable Cold War adversary and a rigid party hierarchy, Mr. Gorbachev saw cracks and failures, and drew lessons from them. In Stavropol, he had set out on a conformist career path in the Komsomol. Once, the job brought him to a rural village of low, smoke-belching huts along the River Gorkaya Balka. He was shocked at what lay before him: poverty and desolation. “On the hillside, I wondered: ‘How is it possible, how can anyone live like that?’ ” he later reflected. Another time, after Soviet and Warsaw Pact forces crushed the Prague Spring, Mr. Gorbachev visited a factory in the Czech city of Brno as part of a Soviet delegation. The workers refused even to talk to Mr. Gorbachev. “This was a shock to me,” he later said. “This visit overturned all my conceptions.” He realized that the Soviet use of force had been a mistake.

I think the encomiums being heaped on Mr. Gorbachev are mistaken. He differed from his predecessors in that he wasn’t a committed revolutionary but a bureaucrat. The obits being written are burdened by amnesia.

May he rest in peace.

One of these things is not like the others. It has recently been argued that China was following the “Japanese model” in its economy. The Japanese model was to move relatively unproductive labor from agriculture to manufacturing and utilize the economic surplus for personal consumption. That might have been a reasonable argument until 2000. What China has been doing is a lot more like the Soviet model.

The Soviet model was to move relatively unproductive labor from agriculture to manufacturing and utilize the surplus for government spending.

Call it “socialism with Chinese characteristics” or “capitalism with Chinese characteristics” but that is undeniably what the Chinese have been doing.

What of the United States? Our pattern is much more like that of Brazil or Mexico than it is like those of the Asian countries in the chart above. Our PCE are higher. As I have contended for some time, the United States is better understood as BOTH a First World and a Third World economy simultaneously within the same borders.

Thomas Fazi updates us at UnHerd on the “lab leak hypothesis” for the origin of COVID-19. The short version is that Jeffrey Sachs has co-authored a report calling for an investigation:

Considering the endless ways in which the pandemic and our response to it have changed the lives of every human being on the planet, it’s astonishing to consider how little is actually known about the origins of the virus. Two and half years on, we are still very much in the dark as to when, how and even where SARS-CoV-2 first made its appearance.

This isn’t because our efforts to get to the bottom of the mystery have proved fruitless, but rather because those efforts have been systematically thwarted by the world’s two most powerful governments: America and China. This is the mother of all Covid conspiracy theories — but it’s also true.

One of the main “conspiracy theorists” is none other than Jeffrey Sachs, director of the Center for Sustainable Development at Columbia University, president of the UN Sustainable Development Solutions Network and chair of the Lancet Covid-19 Commission. He is not your typical tinfoil-hat-wearing internet crank. Sachs recently co-authored a paper in the Proceedings of the National Academy of Sciences calling for an independent inquiry into the virus’s origins. He believes there is clear proof that the National Institutes of Health (NIH), the primary US public health agency, and many members of the scientific community have been impeding a serious investigation into the origins of Covid-19 in order to cover up evidence that US-funded research in Wuhan may have played a role in the creation of the SARS-CoV-2 virus.

We’ll probably never know for sure. I can’t imagine the Chinese authorities cooperating fully on any study which might potentially reflect badly on China or the Chinese Communist Party.

If history is any gauge the virus probably arose naturally but things go against historical precedent every day. As I see we’ll probably never know for sure.

When the editors of the Wall Street Journal single out my home state for attention it always gets my attention. In this case they’re criticizing Amendment 1 on which I’ll be voting in November:

Democratic supermajorities in the state House and Senate voted last year to put the measure before voters. Amendment 1 would change the Illinois Constitution to read that “employees shall have the fundamental right to organize and to bargain collectively through representatives of their own choosing for the purpose of negotiating wages, hours, and working conditions, and to protect their economic welfare and safety at work.”

The National Labor Relations Act already governs private workers and limits who can bargain about what. Illinois can’t expand the collective-bargaining rights of private employees beyond what federal law allows.

Democratic state Sen. Ram Villivalam, who is sponsoring the measure, admitted as much last year. “The Amendment refers to ‘employees,’ and not workers or individuals,” he said. “This was done with intention. As the Members of the House should be aware, the National Labor Relations Act governs organizing and collective bargaining in the private sector and, as such, preempts any direct State regulation on the subject.” He added that Amendment 1 thus “could not apply to the private sector.”

For the last several weeks we’ve been inundated with phone calls, many of which open with “do you support union workers”? Which probably polled better than “do you think public employees’ unions don’t have enough power in Illinois?”

I suspect that if you asked Illinoisans what the state’s most important priority was that probably wouldn’t be the pick of a large percentage of us. A greater problem is how we’re going to live up to the commitments we’ve already made to public workers with fewer Illinoisans than there were ten years ago and Illinois’s median household income declining.

At Brookings Andre Perry declaims that President Biden’s announced forgiveness of student loans doesn’t address the root cause of the problem but at least it’s a start:

According to the White House, the plan will “provide relief to up to 43 million borrowers, including cancelling the full remaining balance for roughly 20 million borrowers.” But it does not go far enough in addressing the root of the problem: a postsecondary education system that has seen tuition rise three-fold in the last 30 years. That same system will put future borrowers in peril.

The plan does take some admirable steps toward helping overburdened graduates. For example, borrower participation in income-based repayment plans was stunted by confounding complexity, bad management, and predatory practices on the part of loan servicers. The Biden plan lowers the amount borrowers have to pay from 10% to 5% of income and forgives loan balances after 10 years, down from 20. Making payments more affordable helps people whose wages do not keep pace with their cost of living and for those whose pay is throttled by wage discrimination.

Let’s stop right there. So, what’s the “root cause”? Mr. Perry seems to think that it’s that the cost of higher education is rising too fast.

In 1960 the tuition at my admittedly pricey alma mater was $1,800 per year. According to the Census Bureau the median household income then was $5,600. By 1970 tuition at my alma mater had risen to $5,400 per year and the Census Bureau tells me that the median household income was $9,870.

Putting my education (my grade school education) to work that means that in ten years tuitions had tripled while income had not quite doubled. Here’s what the St. Louis Federal Reserve says that college tuitions have risen over the years:

and here for comparison is GDP (I’m pretty sure I could combine those into one graph but I’m too lazy):

Said another way college tuitions were rising far faster than GDP. Note that it took ten years for college tuitions to triple back then. Assuming that Mr. Perry’s figure are correct, tripling over thirty years sounds like a major slowing of the increase in the cost of tuition.

Is the underlying problem, as Mr. Perry avers, that tuition is increasing in cost too fast? Or is it that incomes are not increasing fast enough to keep up?

Extra credit: will forgiving student loans decrease tuitions, increase tuitions, or have no effect?