In his Wall Street Journal column Walter Russell Mead muses on the predicament in which Germany finds itself:

As recently as 2020, almost the entire world agreed with the smug German self-assessment that Germany had the world’s most successful economic model, was embarking on the most ambitious—and largely successful—climate initiative in the world, and had perfected a values-based foreign policy that ensured German security and international popularity at extremely low cost.

None of this was true. The German economic model was based on unrealistic assumptions about world politics and is unlikely to survive the current turmoil. German energy policy is a chaotic mess, a shining example to the rest of the world of what not to do. Germany’s reputation for a values-based foreign policy has been severely dented by Berlin’s waffling over aid to Ukraine. And German security experts are coming to terms with a deeply unwelcome truth: Confronted with an aggressive Russia, Germany, like Europe generally, is utterly reliant on the U.S. for its security.

Can you guess who did not agree with “the smug German self-assessment” he describes? Yes, that would be me. I made my assessment by speaking with actual Germans in Germany and several things were always obvious to me:

• German policies were and always have been guided by German national interest.
• One of those policies continues to be what it has been for 150 years—German domination of Europe.
• Those policies are deeply mercantilist, relying on running a substantial trade surplus.
• The Germans are deeply resentful of depending on the U. S. for security but they’re more than willing to let us keep paying to defend them as long as we’re willing to do it.
• Germany’s relationship with China was contingent on running a substantial trade surplus with it.

I also find Germany’s energy policies completely baffling. It is NIMBYism run riot—apparently, they believe that carbon emissions in China stay in China and clear-cutting old growth Brazilian forests to make compressed wood pellets to burn in German stoves is carbon neutral.

Now all of their assumptions are falling apart at once. The very large trade surplus they ran for so long with China has largely evaporated. It was predicated on Germans building factories in China and then on the Chinese building their own factories using German machine tools. Now the Chinese are making their own machine tools and in some years Germany actually runs a trade deficit with China. Their gamble on relying on Russian oil and gas has lost which puts their energy policy in a shambles I think they’re trying to straddle in the hopes that the problems with Russia will evaporate before Germany actually needs to spend anything.

Not only do the Germans continue to be dependent on the U. S. for security but they are coming face-to-face with being economically dependent on the U. S. and dependent on the U. S. for energy as well. I’m not sure how it’s all going to work out.

“Direct democracy” refers to the form of government in which all policy initiatives are determined by direct popular vote. The closest approximation to that of which I am aware is in Switzerland where, although there is in fact a bicameral legislature, all matters of substantial scope are approved by popular vote. H. L. Mencken called that “mobocracy”. The Founding Fathers were deeply distrustful of it. In Federalist 55 James Madison wrote:

In all very numerous assemblies, of whatever characters composed, passion never fails to wrest the sceptre from reason. Had every Athenian citizen been a Socrates; every Athenian assembly would still have been a mob.

Our present government is blithely referred to as a “democracy” but in reality it is quite distant from a democracy and becoming more so all of the time. That’s not merely because small states have equal representation to large ones in the Senate as averred by many of those who complain about “rule of the minority” but, as Ezra Klein recently astutely observed, our political parties are dominated by “those who staff and donate to them” and they are more radical than most party members.

So, why not direct democracy? I think the reason can be inferred from American opinion on the issue presently dominating news broadcasts, abortion. Consider Gallup’s determination going back 50 years:

The results are even more stark when the question is phrased more specifically. Fully 71% of Americans think that third trimester abortions should be illegal.

Given that perspective complaints about our undemocratic system ring hollow. Those making such complaints don’t mind minority rule as long as they’re in the minority that rules.

That brings me to my own principle complaint about our present system of government. Neither extremists who call themselves Democrats nor extremists who call themselves Republicans represent me or anything that approximates my views and my views are demonstrably closer that of most voters than either one of those groups. How democratic is it, what good does it do me to vote when all of the candidates share similar views and those views are little like my own?

If you cannot tell from the contents of this post, I have just returned from voting in Illinois’s primaries. I left a lot of blanks.

Michael Gerson makes some perceptive observations in his latest Washington Post column on the debate over abortion. They include the risks of the increasing radicalization of both political parties:

Decades ago there were more pro-choice Republicans and pro-life Democrats to help blunt the partisan edge of the debate. Now, views on the topic have sorted by party and geography. The GOP has become captive to an ideology of power that often (on issues such as immigration, refugees and poverty) belies its pro-life pretenses. And many Republican state legislatures — where post-Roe legal changes will mostly play out — have become laboratories of radicalism.

the legal aspect of the SCOTUS decision, generally ignored by its critics:

Roe has always been vulnerable because it was so poorly argued. Its medical line-drawing was fundamentally arbitrary. Its legal reasoning was uncompelling, even to many liberals. “The failure to confront the issue in principled terms,” said Archibald Cox, President John F. Kennedy’s solicitor general, “leaves the opinion to read like a set of hospital rules and regulations. … Neither historian, nor layman, nor lawyer will be persuaded that all the prescriptions of Justice [Harry] Blackmun are part of the Constitution.”

The breathtaking overreach of Roe has been cited as the cause for an enduring political backlash. And one legal mind who famously did the citing was Justice Ruth Bader Ginsburg, a strong supporter of abortion rights. Speaking at the University of Chicago Law School in 2013, Ginsburg faulted Roe as being too sweeping, giving the pro-life movement “a target to aim at relentlessly.” Abortion rights, she argued, would have been more deeply rooted had they been secured more gradually, in a process including state legislatures — which in the early ’70s were moving toward liberalized abortion laws. “My criticism of Roe,” she said, “is that it seemed to have stopped the momentum that was on the side of change.”

a succinct statement of the battlespace:

Tens of millions of Americans believe abortion is a fundamental right. Tens of millions believe developing human life has moral worth and should have legal protection.

the inherent fragility of relying on weakly-argued court decisions:

In the United States, lasting legitimacy is the product of democratic consent. Rule by court diktat is written in sand, even if the tide rises only once in a half-century.

Here’s his conclusion:

For the foreseeable future, the abortion debate — with all its tragic complexities — has been returned to the realm of democracy. And there is little evidence our democracy is prepared for it.

The irony, of course, is that those who despise the decision include in their criticisms that it is undemocratic. One wonders what they mean by democracy? More on this in my next post.

While in this Atlantic piece via MSN Derek Thompson complains about the state of air travel:

Keyes: There’s a labor-supply issue, not just for airlines but also the TSA. If you live in Milwaukee and you’re looking for an entry-level job, you could become a transportation security officer for $19.41 an hour, or you could go on Amazon’s website and see that there’s a job in the area for $19.50. Would you rather help load and unload bags outside in the dead of winter in Milwaukee, or work in a climate-controlled environment in a warehouse for Amazon? That’s the trade-off a lot of folks are making. Labor shortages cause delays and cancellations. In normal times, airlines might have a reserve crew of pilots or flight attendants that they can call in. But now there is not the reserve in place to bridge the gap. The result is a huge swath of delays and cancellations.

Thompson: Laurie Garrow, a professor at Georgia Tech, directed me to FlightAware, a website that tracks airline-industry statistics. On any given day, it seems normal to have a cancellation rate of about 1 percent—or one cancellation for every 100 scheduled flights. Last Thursday, JetBlue canceled 14 percent of its flights. Last Thursday and Friday, American canceled 10 percent of its flights. On Friday, Saturday, Sunday, Delta canceled 8 percent of its flights. Meanwhile, Frontier and Spirit canceled just 1 percent of their flights in that time. Why are the major carriers having these major problems right now?

Keyes: Today’s airline that gloats about not having cancellations is tomorrow’s airline that’s experiencing a meltdown. I don’t want to pretend that Spirit and Frontier don’t experience meltdowns. They absolutely do. That said, a few factors can explain why we’re seeing higher rates of cancellations among legacy full-service airlines. First, many of the budget airlines like Spirit already trimmed their summer schedules when they realized they didn’t have enough pilots and crew to operate the schedule they had planned. The legacy full-service airlines can suffer sometimes from hubris.

Second, many of the legacy airlines have hubs in crowded corridors like New York, Chicago, and Boston, which can suffer from compounding cancellations when there’s a thunderstorm [which are more common in the summer]. Those cancellations beget more cancellations. A flight from JFK to Miami that gets canceled results in a further cancellation for that flight out of Miami.

One of the factors which he discreetly does not mention is that the pilots and other staff retiring are qualitatively different from those who are replacing them. Those retiring are largely Baby Boomers and those replacing them are preponderantly Millennials. For good or ill they are not interchangeable. Those two cohorts are drastically different not just in their levels of experience but in their attitudes towards work.

Over the weekend I was chatting with one of my relatives about retirements among physicians. The reality is that the level of dedication to their professions shown by Baby Boomer docs and Millennial docs is drastically different. Generally, Baby Boomer docs are working even when they’re not at work; not so Millennial docs. Note that I’m not saying that Baby Boomer docs are right and Millennial docs are wrong. I’m saying different and we’d better get used to it.

Let me answer Nicholas Goldberg’s question from his LA Times piece via Yahoo: are Biden And Feinstein too old to do their jobs?

But Feinstein, who turned 89 last week, has kicked off a heated national debate by refusing to step down from her job even as people begin to clamor about her age and competence.

And she is hardly alone among her peers in clinging to power as she ages. Famously, Ruth Bader Ginsburg sat unbudgingly on the Supreme Court until she died at age 87. (Remember how she fell asleep during the State of the Union address in 2015?)

There’s House Speaker Nancy Pelosi (D-San Francisco), who is 82 and apparently going strong. Sen. Mitch McConnell (R-Ky.) is 80, and he’s waiting to become senate majority leader again if Republicans win control in November.

Incumbency turns out to be a very pleasant place, and power an aphrodisiac that is difficult to give up — to the point that the word “gerontocracy” has suddenly become common.

Is this a problem? I think it is.

I disagree with his remarks about Nancy Pelosi and Mitch McConnell. They’re too old, too. So are Steny Hoyer, Jim Clyburn, Patrick Leahy, and Bernie Sanders. Before you say “Damn Boomers” none of them are Baby Boomers—they’re Silent Generation and they’re displaying the insecurities common to that cohort.

The preferred thing would be for them to retire gracefully but failing that they should be voted out of office and failing that House and Senate rules should be changed to require annual cognitive fitness tests of all members over age 70 with the results to be made public.

What happens inevitably in these circumstances is that the nature of their jobs change to accommodate them with their staffs picking up the slack. That really isn’t right. They weren’t elected to have their staffs do their jobs for them.

For the last several days I have been in San Antonio to attend a family wedding. The wedding itself was lovely and it was nice to see my siblings, their spouses, and their offspring. We all live in different cities and there is no longer a focal point as there was when my mom was still alive. Despite remaining close emotionally we don’t see each other that often these days.

My family is growing—most of my nieces and nephews have children of their own now, ranging in age from newborns to two. I suspect actually hope that this will be the last family wedding for a while. Stable marriages are sort of a tradition in my family—there have been two divorces in the last century and that includes not just my great-great-grandparents but all of their children and their children’s children. While it’s possible I’ll live to see another family wedding I doubt I’ll feel like traveling to one.

I am the eldest living member of my family. We’re getting old. Oddly, despite my age I’m probably the most active of my generation and I am one of only two (me and the spouse of one of my siblings) still working. I probably walk as much in a day as my mom did at my age in a month.

It has been some time since I’ve been in San Antonio. It is much changed but much the same. It struck me as a city of contradictions.

It is now the seventh largest city in the U. S.—almost as populous as Chicago. It doesn’t really look it. Here’s an example of the contradictions. In San Antonio’s downtown nearly every other building is either a hotel or a parking structure for a hotel. Banks and office buildings have been converted to hotels. Just three or four blocks from town center I saw a completely vacant lovely old Beaux Arts office building. Across the street from my hotel was a Sons of Hermann Hall. If you’re not familiar with it, the Sons of Hermann is a mutual aid society for German immigrants. We generally don’t think of Texas as being a locus for German immigration but it was back at the turn of the 20th century. Now the Sons of Hermann is basically an insurance company.

My impression is that San Antonio’s economy is in transition from what it was to technology, particularly biotech, which I suspect is true in many of Texas’s major cities. The need for large downtown areas is much reduced, particularly now with WFH taking hold. I didn’t have the time to do a lot of exploring but I suspect the level of sprawl is formidable. At the rate that Texas’s population is growing I wouldn’t be surprised if there were to be what amounts to a continuous suburb running from Dallas-Fort Worth all the way to San Antonio.

Matt Stoller is convinced that the key to controlling inflation is government regulation—a lot of government regulation. In his crosshairs are shipping, oil and gas, railroads, trucking, and airlines.

For decades, there hasn’t been a big shift in markups between industries. But that changed during the pandemic, because the pandemic and the policy response itself shaped who could profit. Big pharma wasn’t in a position to profit, but oil refineries were. While not every firm with market power raised prices, market power could still elevate profits in other industries.

Ironically, while this analysis might lead some to think that the Fed shouldn’t be raising rates and drawing down its balance sheet, I draw the opposite conclusion. If you look at the most potent industry markup, you’ll see it is not what you’d expect from a pandemic, like transportation or health care. It’s finance/insurance. Number two is oil and gas, a heavily junk bond fueled industry that shut refineries and has less capacity than it did in 2019. Number three is real estate and rentals. In other words, the most financialized sectors of the economy are the ones most adept at exploiting pricing power during the pandemic. That is likely a result of cheap money from the Fed sloshing around Wall Street, or what I wrote up as the Cantillon effect. That needs to stop.

Regardless, supply side measures focused on individual markets, like antitrust, regulatory policy, industrial subsidies to re-shore supply chains, and ending cheap capital for Wall Street are the key ways to address inflation. But reducing government spending or further lowering wages for workers, while they could work, aren’t hitting the drivers of the problem.

I think he’s jumbling up and confusing a lot of things. Prices, inflation, government power, monopoly power, and so on.

First, almost all monopolies are created by government action. Patents, licenses including occupational licensing, exclusive contracts, and so on. Take waste management, for example. Maybe there are some but I don’t know of any jurisdictions in which there are multiple waste management companies competing to take away you garbage. It’s a very highly regulated sector. Nearly every waste management company has a local monopoly.

Insurance and finance are among the most heavily regulated sectors and, sure enough, they are dominated by a handful of very large companies. The financial crisis of 2008 exacerbated that. Small banks that were in trouble were liquidated (bought by bigger banks). Big banks on the other hand received bailouts and got bigger.

But, according to the charts Mr. Stoller produces, waste management had very small increases in profits during the pandemic but insurance and finance had very large increases. Both of those groups are very consolidated and highly regulated. How is that possible? Mr. Stollers is that they’re not regulated enough. Mine is that they have been misregulated. Addditional misregulation won’t help.

I’m also curious about how he plans to control foreign shipping companies. I don’t believe that the shipping companies are as much at fault as over-reliance on overseas producers, much of which in turn has been created by industry consolidation (in other industries) and bad regulations.

Consequently, although I agree with Mr. Stoller that monopoly power is a problem, my preferred solution is different. I think that governments should be creating fewer monopolies in the first place.

I hear that Ken Griffin who IIRC is Illinois’s richest man is moving Citadel to Florida. That will means a loss of probably a billion dollars a year in state tax revenue when you add up his personal state income taxes, those of the highly compensated Citadel employees he’ll be taking with him, and Citadel itself’s taxes. That’s quite a chunk of change which the state can hardly afford to lose.

My interpretation of that is that Mr. Griffin has decided that Richard Irvin doesn’t have a chance to getting the Republican nomination for governor and it throwing in the towel. Griffin has been Irvin’s primary financial backing.

I have been too busy to post today but I didnt’t want to let the day go by without remarking on what is surely one of the biggest stories of the day if not the biggest—the reversal of Roe v. Wade by the Supreme Court,

As I’ve said before I think that abortion is wrong, that Roe v. Wade is bad law, and that present policy is bad policy but nonetheless I regret SCOTUS’s decision. I think they should have upheld it on grounds of stare decisis And freedom of religion but now the SCOTUS has spoken. I just hope there isn’t too much civil disorder.

My best guess is that some states will ban abortion outright, some will restrict abortion more than it is now. Some states like Illinois will try to set themselves up as abortion destinations.

As I’ve also said before the policy position that some are staking out (abortion on demand all the way to term with very few restrictions) is extreme—when nearly every G7 country has more restrictive laws than that abortion on demand to term is extreme.

Now I’ll be scouring the Internet for commentary. My guess is that most of the commentary will be quite agonistic.

One last thought. I wonder how many people will be asking themselves why they didn’t push for Roe v. Wade to be codified into law? Not many I suspect. I don’t think the Supreme Court should be creating law when the law is contrary to the policy a majority of its members prefer.

Update

If Amy Howe’s reporting at SCOTUSBlog is correct, I concur with Chief Justice Roberts’s opinion. Mississippi’s law should have been upheld, Roe and Casey should not have been reversed, and the decision is likely to harm the judiciary.