What Is Happening With Russia’s Economy?

At Foreign Policy Jeffrey Sonnenfeld and Steven Tlan set out to debunk several “myths” about what’s happening with the Russian economy. Here they are:

  1. Russia can redirect its gas exports and sell to Asia in lieu of Europe.
  2. Since oil is more fungible than gas, Putin can just sell more to Asia.
  3. Russia is making up for lost Western businesses and imports by replacing them with imports from Asia.
  4. Russian domestic consumption and consumer health remain strong.
  5. Global businesses have not really pulled out of Russia, and business, capital, and talent flight from Russia are overstated.
  6. Putin is running a budget surplus thanks to high energy prices.
  7. Putin has hundreds of billions of dollars in rainy day funds, so the Kremlin’s finances are unlikely to be strained anytime soon.
  8. The ruble is the world’s strongest-performing currency this year.
  9. The implementation of sanctions and business retreats are now largely done, and no more economic pressure is needed.

Some of the arguments they make are convincing, others less so. What’s my take?

I have no idea. I strongly suspect that the Russians are lying about the health of their economy and the British are lying about what terrible shape it’s in. That’s one of my problems with information about the Russian-Ukrainian War more generally. I think that everybody is lying. The Russians are lying, the Ukrainians are lying, the British (who derive much of their information from Ukrainian sources), the Chinese are lying, we’re lying.

My offhand guess is that the Israelis probably have a more realistic assessment of Russia than we do and until very recently they haven’t exactly been panicked about it.

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The Slippery Slope

The editors of the New York Times urge President Biden to fulfill his promise relating to climate change by executive order:

Without congressional backing, Mr. Biden has fewer tools to achieve his goals, which now seem out of reach. His best course is to take the same regulatory path President Barack Obama was forced to follow after the Senate’s last colossal climate failure — a cap and trade bill that passed the House in 2009 but died in the Senate the following year. Using his executive authority, Mr. Obama secured big improvements in automobile efficiency and ordered reductions in power plant emissions, which didn’t take effect, although the power companies managed to achieve them on their own by burning cleaner natural gas and closing inefficient coal-fired plants.

Would that be more likely to improve the environment or to encourage open rebellion? I sometimes wonder if the editors of the NYT actually want a civil war. It would certainly provide big news.

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The Effect of Taxes

There’s an important unappreciated point in the remark that economist Lawrence Summers made to Chris Anstey of Bloomberg yesterday. In the interview he encouraged Congress to enact tax increases:

Former Treasury Secretary Lawrence Summers said that Washington is forgoing a key tool in helping the Federal Reserve quell inflation, and urged that lawmakers look at raising taxes.

“Fiscal policy makes a big difference,” Summers said on Bloomberg Television’s “Wall Street Week” with David Westin. “Just the right thing to do is to raise taxes right now to take some of the demand out of the economy.”

Summers said that any tax hikes shouldn’t go toward funding fresh outlays — in contrast to the package of tax hikes and expanded social investment that President Joe Biden has sought from Congress for more than a year now.

“This is not the time for anything that’s going to be a big new spending program,” said Summers, a Harvard University professor and paid contributor to Bloomberg Television. He also rejected “stimulative” measures such as continuing the moratorium on student debt.

That is a classic Keynesian prescription and it illustrates neatly why Lord Keynes (and MMT-ers) may have been technically correct but are politically wrong. Politically, t’s a lot easier to give handouts than it is to raise taxes. That is why the focus of all true “stimulus” packages should be on investment rather than on consumption. And simply renaming consumption investment is sophistry not a change of state.

A moratorium on student debt payment or, worse, a debt jubilee is consumption not investment. Paying for the healthcare of the non-working elderly is consumption not investment. Even worse is paying more for the same amount of care when healthcare prices rise in response to increased demand, just as one would expect.

Paying for highways or bridges to nowhere is consumption not investment. Paying for the maintenance of existing and well-used roads and bridges may well be investment but very little federal highway spending takes that form. Most is used for new construction and I question whether most new highway construction these days is actually investment.

Another key point is that the effect of taxation which is not immediately spent is to withdraw money from the private sector. That money might have been spent on personal consumption or it might have been invested. Taxing “the rich”, while a good political slogan, is a risky strategy. When you tax “the rich” are you reducing personal consumption (and hence reducing the likelihood of inflation) or are you reducing investment?

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Do Amyloid Plaques Actually Cause Alzheimer’s?

The prevailing theory for years has been that clumps of proteins called “plaques” in the brain are a cause of Alzheimer’s. Now this article by Charles Piller at Science recounts how people are beginning to wonder if the studies that formed the foundation for that theory were mistaken or even fraudulent. That will be interesting and devastating if true.

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What If We Were a Democracy? (Updated)

With all of the pontificating over being a democracy, you hear precious little about what the U. S. would be like if our laws were what people wanted rather than what activists in one party or the other wanted. Let’s consider a few issues.

Abortion

If the majority of Americans had their way, after 15 weeks abortion on demand would be illegal in most cases. That is amazingly similar to the Mississippi law the challenge to which ultimately resulted in the Supreme Court striking down Roe v. Wade and Casey.

Trans Rights

The majority of Americans think that individuals with gender dysphoria should not be subject to discrimination. They also do not believe that coverage of gender transitions should be mandatory for insurance companies.

Gun Control

The majority of Americans think that gun control laws should be stricter, that private ownership of assault weapons should be banned, but that it should not be illegal for Americans to own handguns.

War in Ukraine

Americans are ambivalent about the war in Ukraine. In general they support the administration’s position, think that our support for Ukraine is about at the right level and that we should have sanctions against Russia.

Chinese Imports

By far the greatest number of Americans think we should have higher duties on goods imported from China.

Federal Taxes

The majority of Americans think that the federal income tax is too high.

Healthcare

The majority of Americans think we should have a healthcare system based on private insurance (like Germany’s) and that our present system has major problems.

You might notice that the views held by the majority of Americans more closely resemble those I’ve expressed around here than they do those of the advocates in either political party. My interpretation of that is that our present system is not a representative democracy. I also doubt that most of those who complain how undemocratic the U. S. is realize what democracy in the U. S. would mean.

Feel free to cite other issues in comments. Please provide supportive links.

Note: I did not include opinion on immigration because there is no consensus on it. Most American think that immigration has in general been good for the country but are uneasy about the present situation at our southern border. Some think that we should have more immigration, some less.

Update

It has been brought to my attention in comments that the findings of polls sponsored by the Kaiser Family Foundation differ sharply with those of the Gallup organization to which I linked. Gallup’s recent poll on the subject found that 50% of Americans think that abortion should be illegal except under certain circumstances, 13% thought that it should always be illegal and 35% thought it should be legal under all circumstances. That is consistent with their findings for the last 50 years. The KFF poll on the other hand found that 74% think abortion should not be regulated by law while 25% think it should.

I have examined the methodology of both polls and they both appear to be proper and I do not believe that either organization is dishonest. I see no way of reconciling these differences.

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Throw the Bums Out!

It apparently took fellow Chicagoan Joseph Epstein two years to come to the conclusion I did in 2020, expressed in his Wall Street Journal op-ed, titled genteelly “Biden and Trump Are Both Bums”:

I have watched more than 16 hours of the Jan. 6 committee hearings and plan to watch the rest. I have learned some things, though not many. And I grant that the hearings might have been more effective if some aggressive Republicans—one imagines Rep. Jim Jordan scowling in his shirt sleeves—were present to cross-examine the witnesses. But then I have my own motive for watching. I hope they will sweep Donald Trump out of public life and return American politics to their old, calm, yes even dull days.

The hearings have revealed that Mr. Trump clearly enjoyed the violence visited on the Capitol on Jan. 6, 2021—and that he inspired it. He has yet to renounce that violence or denounce the groups that participated in it. A bully, a narcissist and a sociopath, Mr. Trump has been called many names, but he is above all shameless, which isn’t the first quality one looks for in a president.

Granted, he stabilized the economy, slashed regulations, and stimulated employment among blacks and Hispanics. He forced various North Atlantic Treaty Organization members to pull their weight, got us out of the misbegotten treaty with Iran, and moved the U.S. Embassy in Israel to Jerusalem. One could even argue that Vladimir Putin might not have gone into Ukraine had Mr. Trump still been president.

But, discredit where discredit is due, Mr. Trump is also responsible for Joe Biden, who may go down as among the most ineffective presidents in American history. Mr. Biden won 81 million votes in 2020. Yet who can doubt that roughly 50 million were votes less for him than against Mr. Trump, whose relentlessly rebarbative style pushed his accomplishments into the shadows? Mr. Biden meanwhile went back on his promise to unite the country and instead led a progressive program of big spending that, along with inducing inflation, further divided the country.

I learned a new word in reading that op-ed: rebarbative. It means unattractive and objectionable. Le bon mot. I wish I had known that word years ago. I would have used it in describing Donald Trump rather than shmuck.

Here is what to my eyes is the best part of the op-ed:

My sense is that, just as Mr. Trump gave us Joe Biden, liberal culture earlier gave us Mr. Trump. It’s easy to imagine all those Americans, struggling to make a living, worrying about the fate of their families amid rising crime and plummeting educational standards, tuning their TV sets in 2014 and 2015 to the antipolice riots in Baltimore and Ferguson, Mo. Changing the channel, they heard college students say that disagreement made them feel unsafe. On another channel they were told that failing to celebrate transgenderism made them bigots. Bring on the Donald!

Various polls show that as many as 85% of Americans feel the country is heading in the wrong direction. Surely one of the chief reasons is that for six years it has been led by men of dubious character. I haven’t voted in the past two presidential elections—on both occasions being unable to discern the lesser-evil candidate—but I can think of several current-day politicians I would be able to vote for in 2024, among them Sens. Tim Scott, Joe Manchin and Chris Coons, Gov. Ron DeSantis, former Gov. Nikki Haley and former Rep. Tulsi Gabbard. None are corrupt; none, unlike Messrs. Trump and Biden, off-the-wall nutty.

All of which is why I wish the Jan. 6 committee well in disqualifying Mr. Trump from high office. In doing so, it would also likely eliminate the candidacy of Mr. Biden, for it has been said, with some persuasiveness, that the only hope he has to win re-election is to be opposed by Mr. Trump.

I watched the televised proceedings of the January 6 committee last night. It couldn’t have been clearer that it’s primary objective was to disqualify Donald Trump from running in 2024. Much as I might agree with that objective I didn’t see much probative in the proceedings, consisting as it did of testimony that would not have been allowed in any court. I’ve said it before. I sincerely wish that neither Donald Trump nor Joe Biden runs again in 2024. Both should be twilighted.

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More on Election Reform

The editors of the Wall Street Journal also remark favorably on the reform bill drafted by the Senate:

Under the reform, objections would need support from a fifth of the House (87) and Senate (20). The finality of the Governor’s electors means Congress couldn’t relitigate state disputes on mail ballots or voting machines. No rejecting electors merely because Congress sees shadows of “voter suppression” or “fraud.”

One weakness is that the bill would continue to let Congress raise objections that an elector’s vote wasn’t “regularly given,” which is the same nebulous term Congress has abused for 20 years. This provision deserves more debate. The one-fifth threshold isn’t enough protection given that two years ago 147 House and Senate Republicans objected to electors from one state or another.

Other helpful provisions: The bipartisan bill would expedite lawsuits over electoral votes. An aggrieved presidential candidate could get an initial hearing from a three-judge panel, and appeals would go directly to the Supreme Court. The bill doesn’t say the Justices must hear the case, and that’s another weakness. A High Court imprimatur is warranted in these cases.

The best fix for the ECA would be full repeal. The Founders didn’t want Congress choosing the President, so he wouldn’t be subservient to it, and the ECA is too close for comfort. The courts are better suited to sort out disputes over electoral law and votes, as the Supreme Court did in 2000 in Bush v. Gore. The judiciary also performed well in 2020, as Trump-appointed judges rejected flimsy fraud claims.

But Congress, being Congress, isn’t likely to remove itself entirely from election certification. In that event the Senate reform goes a long way to diminishing the margin for catastrophic political error. The mystery is why it took 18 months to propose it.

So, no, the bill isn’t the last word on reforming presidential elections but it appears to be a step in the right direction.

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Reforming Presidential Elections

The editors of the Washington Post are strongly in favor of a piece of legislation making its way through Congress:

Sens. Susan Collins (R-Maine) and Joe Manchin III (D-W.Va.) have been laboring for months to overhaul the country’s arcane system of counting and certifying votes for president and vice president. Finally, they’ve released a product — and it’s a fine one. Their bill not only guards against the gambits the lame duck White House attempted in 2020, but it also limits the potential for other nefariousness by a future candidate. A companion bill addresses the security of election workers and the U.S. Postal Service and reauthorizes the Election Assistance Commission.

The Electoral Count Act as it stands is full of ambiguities. According to one scholarly study, the losing party in nine of the past 34 presidential elections could have exploited gaping holes in the law to overrule the people’s decision. So far, enough has stood in the way — sometimes a general respect for norms, sometimes particular political courage — to prevent disaster. But the events following the 2020 election, including the Jan. 6, 2021, attack on the Capitol, made clear that the danger of a constitutional coup is real, and growing.

The bill introduced this week would create blocks against the specific maneuvers Mr. Trump attempted. It would clarify that the vice president’s role in certifying electoral votes is “solely ministerial”; that speaks to the former president’s efforts to coerce Vice President Mike Pence — with the help of a mob — into rejecting the votes of several states. It would raise the threshold for Congress to challenge a state’s submitted results from a single member of both chambers to at least one-fifth of members; that answers last year’s frivolous objections from six GOP senators and more than 100 representatives.

Perhaps most important are changes that would impede state-level mischief. By identifying governors as responsible for submitting a slate of electors, appointed according to rules in place before Election Day, the legislation would exclude competing lists from other officials. Better yet is a process to counter a rogue governor who lodges an illegitimate submission for approval by a friendly House or Senate. Under the reformed act, any such attempt could be challenged by a vice-presidential or presidential candidate in federal courts, to whose judgment Congress would be bound. Finally, the bill would ensure that state legislatures can’t simply override the popular vote by calling it a “failed election.”

The Electoral Count Reform Act will not fix everything, because it can’t fix everything: Some additional protections can be provided only by the states; others, including enhancements to the Voting Rights Act desired by Democrats, aren’t politically possible.

IMO, presuming it meets constitutional muster, that’s a good start but it’s no more than a start. As much attention needs to be devoted to restoring confidence in the integrity of elections as to preventing coups. I think that means that a number of the reforms imposed after the 2000 presidential election need to be reversed or, at least, constrained. For example, there should be an election day as prescribed by statute rather than an election period that varies from state to state.

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What They Got Wrong

Today is “what I got wrong” day on the New York Times opinion page. Paul Krugman admits to having been wrong about inflation; Michelle Goldberg about Al Franken; David Brooks about capitalism; Zeynep Tufekci about the power of protest; Tom Friedman about Chinese censorship; Gail Collins about Mitt Romney; Farhad Manjoo about Facebook; and, the subject of this post, Brett Stephens about Trump supporters. Here’s the meat of Mr. Stephens’s column:

When I looked at Trump, I saw a bigoted blowhard making one ignorant argument after another. What Trump’s supporters saw was a candidate whose entire being was a proudly raised middle finger at a self-satisfied elite that had produced a failing status quo.

I was blind to this. Though I had spent the years of Barack Obama’s presidency denouncing his policies, my objections were more abstract than personal. I belonged to a social class that my friend Peggy Noonan called “the protected.” My family lived in a safe and pleasant neighborhood. Our kids went to an excellent public school. I was well paid, fully insured, insulated against life’s harsh edges.

Trump’s appeal, according to Noonan, was largely to people she called “the unprotected.” Their neighborhoods weren’t so safe and pleasant. Their schools weren’t so excellent. Their livelihoods weren’t so secure. Their experience of America was often one of cultural and economic decline, sometimes felt in the most personal of ways.

It was an experience compounded by the insult of being treated as losers and racists —clinging, in Obama’s notorious 2008 phrase, to “guns or religion or antipathy toward people who aren’t like them.”

No wonder they were angry.

with this as the clincher:

Oh, and then came the great American cultural revolution of the 2010s, in which traditional practices and beliefs — regarding same-sex marriage, sex-segregated bathrooms, personal pronouns, meritocratic ideals, race-blind rules, reverence for patriotic symbols, the rules of romance, the presumption of innocence and the distinction between equality of opportunity and outcome — became, more and more, not just passé, but taboo.

It’s one thing for social mores to evolve over time, aided by respect for differences of opinion. It’s another for them to be abruptly imposed by one side on another, with little democratic input but a great deal of moral bullying.

This was the climate in which Trump’s campaign flourished. I could have thought a little harder about the fact that, in my dripping condescension toward his supporters, I was also confirming their suspicions about people like me — people who talked a good game about the virtues of empathy but practice it only selectively; people unscathed by the country’s problems yet unembarrassed to propound solutions.

What struck me about Mr. Stephens’s column and, indeed, about the others as well was the lack of introspective insight about why they were wrong. Every single one was wrong because to have responded objectively to the evidence of their senses would have required them to turn away from their ideologies and in each case ideology triumphed. And that’s why they’ll be wrong again.

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The Pack Has a New Member


The pack has a new member. Above he’s poking his head out of the sherpa bag, preparing to board the plane for Chicago. As you can see he’s a merry little soul.

And here he is take his first steps in our backyard. He was very interested in all of the smells.

It will be an adventure. He’s going to have a very good life. That’s our job.

Needless to say none of us got much sleep last night.

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