I found Robert D. Kaplan’s latest essay in The National Interest on the “second Cold War”, a bewildering and frustrating combination of insight and absurdity:

This second cold war, conducted on a teeming planet whose anxiety is intensified by the passions and rages of social media, is only in its beginning stages. The aim, like in the first Cold War, is negative victory: not defeating the Chinese, but waiting them out, just as we waited the Soviets out: because at some point, as its middle class matures and continues to expand, mainland China may face its own equivalent of the internal upheavals that have roiled Hong Kong, Latin America, and the Middle East.

There are fundamental differences between the two cold wars. But in order to prevail we must concentrate on the similarities: the need for open-ended dialogue and focusing on our strong suit – liberal values in the face of increasingly intrusive technologies. For this cold war could end with echoes of 1989: with one side’s domestic order proving more resilient than the other’s.

I could not disagree with his conclusion more. We didn’t win the Cold War by tenaciously waiting out the Soviets. We won with soft power. The people living under Soviet rule wanted the same things we had and the Soviet regime was not delivering it. The Soviet position became untenable.

The examples of absurdity are not difficult to find:

The benefit of a wide-ranging and confidence-building dialogue with China, of the kind pursued by Washington throughout the middle and latter parts of the Cold War with both Beijing and Moscow, is that a human rights issue like the treatment of the Uigurs can be brought up and discussed, with the possibility of some improvement in the situation that will not be seen as a concession by the Chinese, and not trumpeted as such by us.

To what end? All that run-on sentence illustrates is that Mr. Kaplan is still clinging bitterly to the belief that liberalization of trade and open discourse will impel the Chinese Communist Party to soften its hardline policies. We now know with a confidence born of experience that will not be the case.

IMO the best insight in the piece is this:

After all, globalization was never a conflict-free security order, as originally advertised, but merely a value-neutral, temporary stage of economic development.

but he fails to ask the follow-up question: if we had known globalization would be “a value-neutral, temporary stage of economic development” would it have taken the form it took? That isn’t how it was sold. It was sold not merely as a money-making scheme but as a means of democratizing and liberalizing China.

I always recognized the absurdity of that position which is why I advocated for an interaction based on reciprocity in which we maintained a discreet distance from China, considering it with a skeptical eye.

The only way we will win this second Cold War is the same way we won the first—by maintaining the vigor of our own economy and reinforcing liberal values at home. I think that will be a harder task than the first time around because so many people owe enormous fortunes to maintaining things as they are.

The New York Times has endorsed both of the women candidates still running for president on the Democratic ticket. After outlining each of Sen. Warren’s and Sen. Klobuchar’s very different virtues they conclude:

There will be those dissatisfied that this page is not throwing its weight behind a single candidate, favoring centrists or progressives. But it’s a fight the party itself has been itching to have since Mrs. Clinton’s defeat in 2016, and one that should be played out in the public arena and in the privacy of the voting booth. That’s the very purpose of primaries, to test-market strategies and ideas that can galvanize and inspire the country.

Ms. Klobuchar and Ms. Warren right now are the Democrats best equipped to lead that debate.

May the best woman win.

or, in other words they think that a diversity hire is the most likely to prevail in the general election. We’ll see.

Elizabeth Warren has an unworkable plan that she can’t get enacted into law and more than half of the country doesn’t want for everything. Amy Klobuchar is a senator from a relatively small state which, like a lot of the Upper Midwest, is being forced into the Republican column by coastal Democrats who are out of step with the rest of the country. At least she’s a pragmatist. IMO we could use a little pragmatism right about now.

Of those two I would undoubtedly favor Sen. Klobuchar. I think the most important issue facing the Democratic Party isn’t health care or immigration or Russian interference in our elections but political corruption and IMO she’s better prepared to face it.

I found Nikolas Kristof’s New York Times column, reacting to some unkind remarks about those who’ve died “deaths of despair”:

When my wife and I wrote about my old schoolmates who had died from “deaths of despair,” the reaction was sometimes ugly.

“They killed themselves,” scoffed Jonathan from St. Louis, Mo., in the reader comments. “It was self-inflicted.”

Ajax in Georgia was even harsher: “Natural selection weeding out those less fit for survival.”

Our essay, drawn from our new book, “Tightrope,” explored the disintegration of America’s working class through the kids on my old No. 6 school bus in Yamhill, Ore., particularly my neighbors the Knapps. The five Knapp kids were smart and talented, but Farlan died after years of drug and alcohol abuse, Zealan died in a house fire while passed out drunk, Nathan blew himself up cooking meth, Rogena died of hepatitis after drug use, and Keylan survived partly because he had spent 13 years in the Oregon State Penitentiary.

Working-class men and women like them, of every shade, increasingly are dying of “deaths of despair” — from drugs, alcohol and suicide. That’s why life expectancy in the United States, for the first time in a century, has declined for three years in a row.

Plenty of readers responded with compassion. But there was a prickly scorn from some that deserves a response because it reflects an ideology that underlies so many failed policies. It arises from the myth that we live in a land of limitless opportunity and that those who struggle have simply made “bad choices” and failed to muster “personal responsibility.” Dr. Ben Carson, who grew up poor and black in Detroit and is now the nation’s housing secretary, has described poverty as “more of a choice than anything else.”

a mixture of things with which I agreed and things I didn’t. For example, I agree that it is wrong to dismiss those who have despaired. And consider this passage:

What changed was diminishing access to good jobs, reduced commitment to investment in human capital, a hurricane of addictive drugs (some peddled by the pharmaceutical industry), and the rise of a harsh social narrative that vilified those left behind — a narrative that workers often internalized. Workers lost their dignity and hope, and that exacerbated the spiral of self-medication and self-destruction, of loneliness and despair that swept through my No. 6 bus.

I agree that we aren’t producing enough “good jobs” to provide them for all of the people who are here and all the people who are coming here. But I disagree that we have a “reduced commitment to investment in human capital”, viz.

and

Point to the declines in those graphs. Quite to the contrary they illustrate increases at every level. We spend more on education than nearly any country. We spend more on health care than any other country. Our problem is not a lack of commitment.

I’m unprepared to say that personal responsibility has less to do with the despair than the trend to reduce guilt and shame as motivating forces in our society or than the decline of all institutions other than the government—marriage, family, church, and social institutions of all sorts.

The cure for despair is hope. In my view the most important things the government can do to instill hope is to reverse the many things it has done over the last half century that have produced the present situation including the financialization of the economy, mass immigration, and too great a dependency on imports.

The graph above, illustrating the increase in the number of zoning laws over the years, looks alarming until you recognize that it parallels the increase in population over the period.

Among the earliest zoning regulations were enacted in New York City in 1885:

There were early efforts to temper New York’s building streak. A landmark 1885 law restricted tenement buildings to one-and-a-half times the street width (the Supreme Court ruled that height restrictions were legal in 1909, when builders challenged Boston’s decision to restrict buildings around Copley Square to 90 feet).

That was rather obviously a response to the great increase in the number of immigrants in New York City. Remember that bump in the late 1980s in the graph above? A response to Mexican immigration.

You might find this piece by Mene Ukueberuwa at the Wall Street Journal as interesting as I did. Some have expressed alarm at the inclination of the young to embrace socialism as a solution to our manifest problems. The Harvard economist Edward Glaeser has an explanation—the cards have been stacked against them:

Critics often blame today’s socialist surge on millennials’ laziness. More charitably, some note that left-wing professors dominate college campuses. One free-market economist has a different explanation. Edward Glaeser, a Harvard professor and Manhattan Institute senior fellow, believes the problem lies more in economics than culture or education.

Mr. Glaeser, 52, argues that young people have radicalized politically because “there are a number of ways in which the modern American economy isn’t working all that well for them.” Many public policies make it harder to get a job, save money or find an affordable home, leaving young idealists thinking, “Why not try socialism?” But that cure would merely worsen the disease.

Mr. Glaeser decries policies that constrain the job market and increase the cost of living compared with what the economy would produce if left alone. “In many cases,” he says, “there seems to be a sense in which insiders have managed to stack the deck against outsiders.” People who have secured a foothold in one way or another—homeowners, union laborers, retirees—have advocated policies that make it harder for “newcomers,” including immigrants and young people, to advance.

Consider the housing market. “In the 1960s and earlier,” Mr. Glaeser says, “America basically had a property-rights regime that meant that anyone who had a plot of land could pretty much put up anything reasonable on that plot of land.” Since then, cities and towns have circumscribed the areas where homes can be built, capped numbers of units, and imposed strict requirements on developers—all of which raise prices. “So there’s this intergenerational redistribution that’s occurred by restricting housing supply.”

People who bought homes while the rules were lenient, or who are wealthy enough to have bought lately, have seen their values soar. Meanwhile, “younger people just don’t have housing wealth.” By 2013, a 35- to 44-year-old person at the 75th percentile had less than half as much home equity (adjusted for inflation) as his counterpart did 30 years earlier.

Prices are especially inflated in high-income metropolises such as New York and the San Francisco Bay Area. As a result, many highly educated millennials forgo future earnings and settle in less expensive places like Salt Lake City, Boise, Idaho, and Nashville, Tenn. “We have people who are moving to areas primarily because of housing being inexpensive rather than because it’s particularly productive,” Mr. Glaeser says. Those who lack college degrees can’t afford to live close to the well-paid service jobs in major cities. “Prior to 1980, poor people moved to high-wage areas,” he says. Today, “we have a trickle.”

The shift of income toward those Mr. Glaeser calls the “entrenched” is most explicit in entitlement programs. “The original Medicare design is relatively mild,” he says. A comparatively young age distribution and a limited range of treatments made the plan feasible when it began in 1966. “But basically the system is set up so that no matter what medical treatment can be created, they pretty much all get to be paid for.” The program now exceeds 3% of gross domestic product. Young people “see many of these benefits, including Social Security” as “going to older rich people.” They’re funded by payroll taxes, which snag a disproportionate share of low-earners’ paychecks.

Taxpayers also pony up ever more to fund the retirements of government employees. “Some of the most egregious things at the urban level are the public pension plans,” Mr. Glaeser says. “This is a system that stacks compensation very strongly toward the end of life with very long, very generous pensions.” Public liabilities have swelled since 1960 as government hiring outpaced population growth, and state and local pensions now claim about 1.5% of GDP each year. Each payment to a former bus driver or teacher might come at the expense of a young family’s savings or a small-business owner’s investment in new jobs.

How did the land of opportunity become overgrown with policies that keep newcomers from moving up? Mr. Glaeser cites a theory developed by the economist Mancur Olson, author of “The Rise and Decline of Nations” (1982). “Olson had this vision of how economies rise and fall,” Mr. Glaeser says. “A successful, stable economy acquires these interest groups, which essentially block change, which protect their interests, and which make it impossible to do anything new.”

Olson demonstrated this trend with case studies of advanced societies in varied regions and eras. For example, “Japan under the Tokugawa shogunate, where all of these local guilds had conspired to reduce trade. Or ungovernable England during the 1970s before Thatcher, when labor unions made it impossible to change anything.”

America isn’t like that—or so Mr. Glaeser thought: “I remember reading Olson in either the late 1980s or early 1990s and thinking, ‘Well, that’s interesting, but it doesn’t sound like America. We’re a vibrant, open society.’ ” But Mr. Glaeser’s later research changed his mind: “When I came back to thinking about this 30 years later, Olson seemed more like a visionary.” As America and its population have aged, voters have gradually embraced policies that benefit the relatively well-off while sapping overall growth.

The young, being both poor and inexperienced, have always been fonder than their elders of overt redistribution. But in the baby boomers’ youth during the Cold War, “socialism was off the table, because it was associated with an evil empire that we opposed.” The poverty and brutality of Soviet Russia also proved the system impractical. “For those with no memory of the Cold War,” Mr. Glaeser says, “the stigma is absent.” That now includes everyone under 30.

Yet Mr. Glaeser cites polling that suggests most young people’s vision of socialism might be better described as “hyperredistribution.” They don’t seek state control of the means of production, but punishing taxes on the rich to fund programs like free college for all. “They say, ‘Well, there are a whole bunch of projects—a whole bunch of government spending that helps old people. I want mine. If we’re going to spend a huge amount on Medicare, why aren’t we spending a whole lot on education for me?’ ”

I think that pointing the finger at Baby Boomers for the trend towards more regulation, for increases in zoning regulations, and for various social programs is misdirected fire. Two of the three largest redistributionist programs were created by the Greatest Generation abetted by the Silent Generation, Medicare and Medicaid. The other, Social Security was a whole generation older. Much of the Silent Generation hadn’t been born when it was created and the Baby Boomers weren’t even a gleam in anyone’s eye. The only major social program which you might attribute to the Baby Boomers is the Affordable Care Act and it by design is self-financing. Whether that’s how it turns out is another story and it was created by the Silent Generation abetted by Baby Boomers and Gen Xers. I’ll post on the increase in zoning regulations in a later post. Suffice it to say for now that they’ve been around for a very long time and the Baby Boomers are not particularly culpable for them.

But I think there’s a kernel of truth in what’s being said. Millennials face far greater headwinds than Baby Boomers did. I would attribute most of that to globalization considered broadly but increased regulations and out-of-control benefits programs play a role as well.

Wait until the young figure out that “the rich” don’t have enough money to pay for all of the programs they’re espousing—Green New Deal, publicly funded higher education, M4A, federally funded daycare, etc.—and they’ll end up paying for them.

There was one passage in Peggy Noonan’s Wall Street Journal column on the Democratic presidential candidates’ debate that I found thought-provoking:

There was also in the debate a kind of detachment from real life. A voter asked: “How will you prioritize accessing quality affordable child care?” The candidates were indignant that women can be held from the workforce by the high cost of child care. Pete Buttigieg vowed to get “federal dollars” involved, and spoke of stunted careers. Ms. Warren said, “My plan is universal child care for everyone.” She told of how she was almost forced “off track” by child care problems. Mr. Sanders said, “Every psychologist in the world knows 0 through 4 are the most important years of human life, intellectually and emotionally.”

No one spoke with compassion for parents, for mothers who forgo the earnings and status (“I have a job”) and relationships (“I’m not lonely all day”) of having a job to stay home with kids under 4. No one said that actually a lot of parents think the most important thing is to stay home and raise the kids, that many struggle to do it, and we might want to help them. No one noted we don’t give any particular honor to those who stay home, even though our culture depends on them.

What seemed to guide all the answers was a technocratic assumption that it’s best for little children to be raised by well-compensated strangers as mom is absorbed into the workforce, where she’ll finally achieve full self-actualization.

It was all so . . . cold. And detached from real life as many live it.

The reality is that very few Americans have careers. 90% or more have jobs, will never have a career, and do not aspire to careers. Nonetheless there is a focus, as President Clinton might say, like a laser on the top 5% of income earners who do have careers.

We aren’t creating more jobs for professionals at the rate we need to and a lot of the jobs we are creating are being filled by outsourcing companies. We are also requiring educations that used to be required for a career for ordinary jobs and those jobs aren’t paying enough to justify the educational loans that people are taking out. There’s a tragic mismatch.

What today’s politicians are focused on, like that laser, is themselves, their needs, and their aspirations. That must change.

China’s real economic problem isn’t trade war with the U. S. It’s increasing centralization. That’s the thesis of Yasheng Huang’s op-ed in the New York Times:

The trade war has merely compounded an economic slowdown in China that is substantially of the country’s own making.

The deceleration is serious. In 2018, China’s gross domestic product grew by about 6.5 percent, the lowest rate since 1990. And part of the slowdown is a predictable result of deliberate government decisions, in particular policies that favor the state sector at the expense of the private sector — even though the state sector is woefully inefficient, whereas the private sector long has long been the country’s growth engine.

And here’s a startling bit of evidence:

The most striking evidence, documented by the Peterson Institute of International Economics in October, is the drop in credit to the private sector and the rise in credit to the state sector in recent years. The largest banks in China are state-owned and hew closely to government command. In 2013, 35 percent of bank credit to nonfinancial enterprises went to the state companies and 57 percent to private companies; in 2014, 60 percent went to the state sector, and only 34 percent to the private sector. (The rest went to enterprises with foreign or mixed ownership.) By 2016, the distribution was even more skewed: with 83 percent of credit going to state-owned or state–controlled companies, and just 11 percent to private firms. (According to the Peterson report, 2016 is the last year for which official data are available.)

All of which underscores something I’ve been suggesting for some time. For the Chinese leadership keeping the CCP in control is more important than prosperity, more important than continuing economic growth. That’s China’s real economic problem.

In his latest New York Times column David Brooks confronts Bernie Sanders’s talk of class war head on:

The G.O.P. has been swallowed by Trump’s culture war, and many Democrats seem to be rushing to join Sanders’s class war.

These Democrats are doing this even though it’s political suicide. Class-war progressivism always loses to culture-war conservatism because swing voters in the Midwest care more about their values — guns, patriotism, ending abortion, masculinity, whatever — than they do about proletarian class consciousness.

Democrats are doing this even though the Sanders class-war story is wrong.

Sanders starts with a truth: Workers need more bargaining power as they negotiate wages with their employers. But then he blows this up into an all-explaining ideology: Capitalism is a system of exploitation in which capitalist power completely dominates worker power. This ideology crashes against the facts.

In the first place, over the past few years wages for workers toward the bottom of the income stream have been rising faster than wages for those toward the top. If the bosses have the workers by the throat, how can this be happening?

Second, wages are still generally determined by skills and productivity. For example, Edward Lazear of Stanford University finds that between 1989 and 2017, productivity in mostly high-skill industries rose by roughly 34 percent and wages in those industries rose by 26 percent. Productivity in industries with mostly less-skilled workers rose by 20 percent while wages grew by 24 percent.

As Michael Strain of the American Enterprise Institute puts it, capitalism is doing what it’s supposed to do. It’s rewarding productivity with pay, and some people and companies are more productive. If you improve worker bargaining power, that may help a bit, but over the long run people can’t earn what they don’t produce.

Third, and most important, most of the increase in earnings inequality has happened between companies, not within them. As John Van Reenen of M.I.T. has found, all over the world superstar businesses are racing ahead of their competitors. As those companies grow more productive, they earn more profit per employee and pay their workers more. Companies that can’t match that productivity don’t, and their workers lag behind.

A recent Brookings Institution/Chumir Foundation report also notes that there is a growing productivity gap between superstar companies and everybody else. Whether it is in tech, retail, manufacturing, utilities or services, productivity growth at the leading companies in each industry has remained very strong. Those productive businesses are capturing larger and larger market shares. But productivity is not growing fast among the lagging companies. Workers in those businesses suffer.

His prescription is pretty standard:

The real solution, therefore, is not class war to hammer successful businesses. It’s to boost and expand productivity for everybody else. That’s done the old-fashioned way — by having better schools and better vocational training, by having more open competitive markets, by creating incentives to expand investment, by making sure superstar businesses don’t use lobbyists to lock in their advantages.

I hate it when people talk about social class in the United States because we have next to no class system here. What we have are enormous differences in income which isn’t the same thing. All of the richest people in the U. S. come from obviously middle class backgrounds.

My favorite definition of “upper class” is that you’re upper class if no matter how badly you screw up you won’t be allowed to fail. Examples: Kennedys and Bushes are upper class. The converse of that defines the lower class: no matter how hard you try you won’t be allowed to succeed. If there are any people who fit that definition from birth it would be blacks and Native Americans and it’s darned hard to disaggregate the effects or race from those of behavior.

I think the risk today is that those big differences in income will become a real class system.

The one question I would ask Mr. Brooks is how have businesses been able to offload the costs of increasing productivity onto workers? That should be the point of attack.

The Senate’s impeachment trial of President Donald Trump has officially begun. ABC News reports:

The Senate has set the stage for the impeachment trial of President Donald Trump after Chief Justice John Roberts administered an oath of “impartial justice” to every senator on Thursday.

The trial will begin next week, but some terms are still up in the air, including whether to allow more witnesses and evidence as Democrats point to new claims made by Lev Parnas, an associate of Trump’s personal attorney Rudy Giuliani, who says Trump was aware of his efforts to pressure Ukraine to investigate former Vice President Joe Biden.

Here are my predictions:

1. Trump will be acquitted.
2. If witnesses are called Democrats will be disappointed with the results.
3. The results of the vote on the trial will largely be along party lines. Where you stand will depend on where you sit.
4. Everyone will complain about the other team’s partisanship.

The only real question will be whether more Democrats vote for acquittal than Republicans vote to convict.

The real message is that our government and politics are completely corrupt and it’s not merely a question of people engaging in illegal conduct but what is legal.