The General Electric Split

The editors of the Wall Street Journal remark on the reorganization of General Electric:

How the mighty have fallen—and perhaps will rise again. On Tuesday General Electric CEO Larry Culp announced a split-up of its aviation, healthcare and energy units, capping two decades of market decline. Markets can be unforgiving, but they are the best allocators of capital.

“By creating three industry-leading, global public companies, each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees,” Mr. Culp said in announcing the separation of assets. At least that’s the hope. Shareholders cheered the breakup by driving GE’s stock price up 2.65%.

The Boston-based conglomerate founded by Thomas Edison has in recent years shed its locomotive, consumer appliances, lighting, oil and gas and aircraft-leasing businesses to pay off tens of billions of dollars of debt. Much of its problems stem from its legacy GE Capital division whose bad financial bets nearly sunk the company during the financial crisis.

For decades GE was a symbol of U.S. manufacturing and management prowess, and former CEO Jack Welch was hailed as a business genius. In 2000, the year before Welch retired, GE’s market capitalization hit nearly $600 billion. It’s now $122 billion, a tragic decline for the investors and retirees who had relied on its steady returns. During the bubble years GE relied on swelling profits from its financial arm to stoke shareholder returns.

My experience has been that a move like this is usually a prelude to selling off more saleable portions of the business and, occasionally, abandoning those with less potential. I’ve seen it at close hand 2, 3, 4 times.

Can someone explain to me what’s actually happening with GE?

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‘Splain Me: Opposition to Vaccination Mandates

Could someone please explain to me the opposition to mandates against being vaccinated against COVID-19? I genuinely don’t understand the argument.

Here’s what I think. I think that mandating vaccination is within the power of the states. I don’t think that it is within the power of the federal government and, especially, I do not believe that the president has the authority to require people to be vaccinated via executive order. I don’t even believe that requiring employees of government contractors to be vaccinated ex post facto is within the power of the president via executive order. I also think that issuing such edicts is a formula for a full-employment program for plaintiff’s attorneys.

I also think the states have the authority quarantine people. Whether they have the authority to quarantine people who aren’t sick is an open question.

I think that, although requiring children under 12 to be vaccinated against COVID-19 is within the power of the states, doing so would be a more complex matter than such a mandate for adults. Young children’s risk of contracting COVID-19 is so low and the risks of the vaccines are not non-zero. I have no idea of how many children would end up being exempt. The entire exercise could be meaningless.

So, could someone willing to talk about it please explain to me what’s wrong with mandates for adults to be vaccinated?

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Funny If It Weren’t So Sad

I found Ranjay Gulati’s plea in the Wall Street Journal not to allow the infrastructure projects funded by the Infrastructure Investment and Jobs Act to get out of control hilarious:

The newly passed infrastructure bill is a rare feat of bipartisan cooperation that President Biden and Congress should celebrate. From roads to waterways to power lines and more, the plan is poised to rebuild a nation in need of huge repairs. Once Mr. Biden signs the bill into law, the true work of fixing our infrastructure will begin.

But there is a danger. The bill could easily lead to out-of-control costs, blown deadlines, and both real and metaphorical bridges to nowhere. The Biden administration needs to coordinate efforts among federal, state and local agencies to deliver on the promise of this bill.

Allow me to provide some guidance to Dr. Gulati on how things are done in this country. Our system of government practically guarantees “out-of-control costs, blown deadlines, and both real and metaphorical bridges to nowhere”. Although the federal government will write the checks with the exception of a few pilot programs and the like most of the hard infrastructure projects will take place in and be managed by the states. As has been mentioned in the past some of them may take so long to get through the planning stage that President Biden will not live to see their completion if, indeed, they are ever completed. Most of what the federal government will do will be disbursing funds, establishing reporting criteria, and the like, and then figuring out how to explain why the states are not conforming with the reporting criteria on a timely basis in a politically palatable way. Most of the action will take place so far out of sight of the administering agencies they’ll have no real idea of what it is they are supposed to be administering.

Herding cats would be easier and more rewarding. Another example of why I think that programs like this should be funded and managed completely at the local level.

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Should the Senate Confirm Emanuel and Burns?

The editors of the Wall Street Journal urge the Senate to confirm the appointments of Rahm Emanuel and Nicholas Burns to be the U. S. ambassadors to Japan and China, respectively:

Japan’s new Prime Minister, Fumio Kishida, is eyeing a boost in defense spending. A prompt confirmation of Mr. Emanuel will accelerate cooperation and send a message to China about the strength of the U.S.-Japan alliance.

The Senate could also help by confirming the next U.S. ambassador to China—a position that has been vacant since October 2020. Mr. Biden has nominated Nicholas Burns, a seasoned foreign-policy establishment figure.

and, complaining about the “parochial interests” that are blocking Mr. Emanuel’s confirmation:

Mr. Emanuel, President Biden’s pick, is opposed by two progressive Democrats, Ed Markey and Jeff Merkley, who cited a police homicide that took place when Mr. Emanuel was mayor. GOP partisanship could also work against Mr. Emanuel.

But great-power politics hasn’t slowed down to accommodate the parochial interests of U.S. Senators. Japan’s significance to Asia’s security has surged since 2019 as China escalates its military threats against Taiwan. In the months since Mr. Biden’s election, Japanese officials have declared that an attack on Taiwan is a direct threat to Japan’s security. There’s anxiety in Tokyo about America’s resolve—and who can blame them if the U.S. can’t even send an ambassador to the country?

It probably doesn’t help that Mayor Emanuel is an obnoxious shmuck who may have alienated quite a number of people in Washington. I question whether Rahm has the temperament, credentials, or experience to do an effective job as our ambassador to Japan but I do think that we should give President Biden the benefit of the doubt and confirm his appointees to their posts.

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Another Glimmer

Here’s another glimmer of reality at the New York Times in the form of an op-ed by Nekima Levy Armstrong:

Those of us who had long fought for a reckoning over police abuse in Minneapolis expected to see a critical examination of the practices, laws, policies, contractual requirements and spending that undergird policing. We expected a well-thought-out, evidence-based, comprehensive plan to remake our police department.

Instead, what we got was progressive posturing of a kind seen throughout the country and a missed opportunity to bring about real change and racial justice.

This was made plain last week when voters rejected a proposal to replace the Minneapolis Police Department with a new Department of Public Safety. While many white progressives embraced the ballot measure as a sign of progress, many Black residents like me raised concerns that the plan lacked specificity and could reduce public safety in the Black community without increasing police accountability. The city’s largest Black neighborhoods voted it down, while support was greater in areas where more white liberals lived.

She goes on to warn about unintended consequences and furnishes some suggestions for reform:

What many Black people are demanding is a system that is effective, cost-efficient, non-militarized and transparent. We want officials to be accountable for who is hired, how they are disciplined and how they treat us. We want police leaders to admit that racism, white supremacy and misogyny are endemic in many police forces and we want them to commit to radically shift police culture.

For that to happen, there must be a re-examination of the purposes, practices, expenditures and almost unfettered power and discretion of the police. To responsibly reduce spending, elected officials must conduct a real cost/benefit analysis of hiring numerous officers to focus on low-level crime, traffic stops (as in the cases of Daunte Wright and Philando Castile), and small quantities of cannabis, to name a few. This would ultimately mean eliminating or reducing low-level traffic stops, repealing criminal laws and ordinances that do not improve public safety, and making a commitment to end the war on drugs.

Police departments must establish an early-warning system to flag problem officers and a robust disciplinary system when officers violate the law and people’s rights. Instead of continuing to allow police departments to investigate themselves when officers kill people, states should establish a special prosecutor’s office to investigate claims and bring charges when appropriate.

but posturing is easier, cheaper, more fun, and has lots less accountability so I think we should expect more of it. To once again cite my favorite example of a bad example, during the Chicago mayoral primary elections, the plurality of black votes went to the most conservative candidate on the ballot—a black Chicago businessman. To me that suggested that black Chicago voters were tired of posturing and business a usual and were much more concerned about “bread and butter issues”. The present incumbent was the preferred candidate of the progressive mostly white Lakeshore voters.

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Results Matter

I will quote this New York Times op-ed by Johnny Harris and Binyamin Appelbaum in full it is so short:

It’s easy to blame the other side. And for many Democrats, it’s obvious that Republicans are thwarting progress toward a more equal society.

But what happens when Republicans aren’t standing in the way?

In many states — including California, New York and Illinois — Democrats control all the levers of power. They run the government. They write the laws. And as we explore in the video above, they often aren’t living up to their values.

In key respects, many blue states are actually doing worse than red states. It is in the blue states where affordable housing is often hardest to find, there are some of the most acute disparities in education funding and economic inequality is increasing most quickly.

Instead of asking, “What’s the matter with Kansas?” Democrats need to spend more time pondering, “What’s the matter with California?”

Much of the meat of the piece in a video which, sadly, is paywalled. I did watch it. It’s a document of crumbling inner cities and numbers of homeless people.

Although there’s a glimmer there it does not appear that reality has actually dawned on Mssrs. Harris and Appelbaum. Claimed values don’t matter. Stated intentions don’t matter. Results matter. Everything else is just pretense. They’re saying what they need to say to get elected.

Don’t tell me your values or your intentions. Show them to me.

Let me use my favorite object lesson: Chicago. It’s easy to say that you want fewer carbon emissions. Over the last 50 years Chicago has gone from deriving 85% of its electrical power from non-emitting sources to 55%. As a famous Illinoisan once said, actions speak louder than words.

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What, Me Worry? Chapter 5

Norman Haller and Peter Pry explain why mutually assured destruction is endangered and what we could do about it in a post at RealClearDefense:

…U.S. decision-makers should tune out minimalists who ignore the math and advocate replacing the Triad with either a Diad (bombers and submarines only) or, even worse, a Monad (submarines only). Tuned out as well should be MAD proponents who are inattentive to the math and insist that an undefended America is a positive asset.

I predict that the step they list that is most likely to be the focus is the one they say we shouldn’t do: resuming negotiations.

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Yes, It Would

This article at 1945 by Constantine Atlamazoglou addresses a question. Would Russia go to war to stop Ukraine from becoming a member of NATO?

It is mostly a flat open space. Coupled with Belarus, it used to provide Russia with a wide buffer zone to its west. Ukraine joining NATO could mean U.S. troops and missile installations right on Russia’s border. Preventing that is a vital Russian interest.

On the flip side, Ukrainian accession to NATO will not offer any added security benefits to the U.S. and its European allies. Should Ukraine join NATO, a Russian attack against it would trigger the Alliance’s Article 5. Failure to invoke Article 5 in such an event, would be NATO’s end. But even if NATO were to invoke Article 5, the Alliance’s record is mixed and never tested against a superpower.

However, Putin will not wait for Ukraine to join NATO and cross his “red line.” If accession processes progress he will attack preemptively. At that point, Ukraine will not be covered by NATO’s defense umbrella. It is doubtful that Western nations will rush to the defense of a non-allied country that is not linked to their vital interests. This will leave Ukraine exposed.

The answer is obvious to anyone who knows anything about Russia: yes, it would. The reasons are incredibly numerous.

I can completely understand why the Ukrainians would want to become a member of NATO. It has no natural borders. It is indefensible. The only time in its history it has been a country distinct from Russia has been since the 1950s. I can only see one reason that NATO would want to admit Ukraine as a member and it is unutterably foolish.

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Chinese Are Consolidating Their Rare Earth Supply Chain

You might be interested in this post from Annie Fixler at FDD. The Chinese authorities are apparently moving to consolidate the country’s rare earths production:

Peng Huagang, secretary general of China’ State-owned Assets Supervision and Administration Commission, confirmed last month that the Chinese Communist Party (CCP) will “promote the restructuring of rare earths to create a world-class company.” While it remains unclear what this “restructuring” entails, Peng’s declaration indicates the CCP will not stand by as the United States and its allies seek to diminish their reliance on China for rare earth elements.

Peng’s remarks come on the heels of China Minmetals Corporation’s September Shenzhen Stock Exchange filing, which announced a planned restructuring with China Aluminum Company (Chinalco) and the People’s Government of Ganzhou, a municipality in southeastern China. A merger would create China’s “second-largest rare earth producer by capacity,” according to Reuters, behind China Northern Rare Earth Group. The latter is the world’s largest supplier of rare earths.

If you’re curious about how the U. S. military became dependent on Chinese producers for strategic materials, this post provides a pretty good history. The TL;DR version is that it was environmental regulation:

In the eyes of the U.S. government and major manufacturers, it no longer made sense to acquire rare earths from a U.S. source subject to stringent environmental regulations. Instead, the hard business of extracting useful minerals was exported to other countries, where environmental damage was safely out of sight. China happily obliged, allowing environmental harm to proliferate so long as the costs of rare earth mining were kept down.

It’s easier and cheaper to keep production going than it is to rebuild it once you’ve shut down. Not to mention the pushback from environmentalists.

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The Other Pandemic

I stumbled across this piece by psychologist Scott Barry Kaufman at The Atlantic, describing a phenomenon with which I was unfamiliar—”group narcissism”:

Collective narcissism is not simply tribalism. Humans are inherently tribal, and that’s not necessarily a bad thing. Having a healthy social identity can have an immensely positive impact on well-being. Collective narcissists, though, are often more focused on out-group prejudice than in-group loyalty. In its most extreme form, group narcissism can fuel political radicalism and potentially even violence. But in everyday settings, too, it can keep groups from listening to one another, and lead them to reduce people on the “other side” to one-dimensional characters. The best way to avoid that is by teaching people how to be proud of their group—without obsessing over recognition.

Groups may differ in their narrative about why they are superior—they might believe that they’re the most moral, the most culturally sophisticated, the most talented, the most powerful, or the most protective of democratic values. They may think that their greatness is God’s will, or that they’ve earned it through exceptional suffering in the past. Regardless, collective narcissists are resentful of other groups, and hypersensitive to perceived intergroup threat. As a result, collective narcissism often breeds prejudice. In one study, for instance, participants in Poland who rated high in collective narcissism were more likely to hold anti-Semitic beliefs. In other research conducted on Americans, high collective-narcissism scores predicted negative attitudes toward Arab immigrants.

Collective narcissists tend to respond to the perceived threats of other groups in outsize, often aggressive ways. In Portugal, a sample of collective narcissists who perceived Germany as having a more important position than their nation in the European Union “rejoiced in the German economic crisis”—and supported “hostile actions” toward Germans. Meanwhile, group narcissists glorify positively valued in-group members and tend to overlook their moral transgressions. A recent study conducted in Poland, Britain, and the United States found that those high in collective narcissism were more likely to judge a group member’s action—such as a verbal altercation provoked by a pub customer—as moral if it served in-group interests.

Read the whole thing. I think there’s a lot of this going around; it would certainly explain a lot.

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