In case you’ve been wondering, I’ve been following the biggest story in Chicago news, the arrest of Chicago Alderman Ed Burke, probably the second most powerful man in Chicago, second only to the mayor, on charges of extortion and attempted extortion. ABC 7 Chicago reports:

CHICAGO (WLS) — Longtime 14th Ward Aldermen Ed Burke has resigned as chairman of the City Council’s Finance Committee, according to a statement from Mayor Rahm Emanuel.

Burke’s resignation comes a day after he was charged with one count of attempted extortion.

Mayor Emanuel’s statement said, “I have spoken with Alderman Ed Burke, who agreed that the best course of action is for him to resign as Chairman of the Committee on Finance. Because of his affection for the city, deep respect for the institution of City Council and the needs of his constituents, Alderman Burke took the appropriate step to put the interests of the city above all else.”

Finance Committee Vice Chairman 40th Ward Alderman Pat O’Connor will take over Burke’s responsibilities on the committee.

Meanwhile, Alderman Burke is promising to fight this in court and he maintains his innocence. In a surprising move, Burke addressed the charge as he arrived home Thursday night.

“I look forward to trying this case in court,” Burke said. “I’ve done nothing wrong.”

The feds disagree. In their 37-page complaint, prosecutors said the powerful alderman “engaged in attempted extortion…” by illegally trying to steer business to his law firm, which specializes in property tax appeals.

You can probably imagine my views on this subject. I don’t think there are enough FBI agents and federal attorneys to investigate all of the corrupt and criminal Chicago politicians. You may also wonder how I reconcile my preference for local government over the federal government with the events reported. My answer is two-fold: I don’t think the federal government is any better, it’s worse if anything and farther away. And I don’t believe it’s just Chicago. I think that all big governments are corrupt.

And what to say about politicians having interests in law firms that specialize in property tax appeals? That’s corrupt on its face.

In her column in the Wall Street Journal Peggy Noonan, referring to Randy Newman’s now-nearly half century old album, Good Old Boys, says something vitally important:

And I realized as I listened: This album could never be made now. Mr. Newman would be attacked on social media, his label boycotted. He’d be accused of cultural appropriation, ethnic condescension, racial insensitivity. They would ban this.

And yet it is a masterpiece. And 45 years ago, in a less enlightened age, we could tolerate it, withstand it, even praise it.

What a loss if it didn’t exist.

And it isn’t just one album. It’s practically every book ever written or every movie ever made. It isn’t just Birth of a Nation. It’s Duck Soup and Gone With the Wind and Citizen Kane, too. It’s Huckleberry Finn and Moby Dick and A Farewell to Arms and The Grapes of Wrath.

And what would be thrown in the shredder aren’t just works of a century ago or forty-five years ago. They’re the works of five years ago. Or last year. It doesn’t stop with what’s written or what’s recorded. It extends to what you’re allowed to talk about or even think. Beware the self-appointed art commissars.

I’ve got to admit that my concerns about “Medicare for All” are different from those of Robert Gebelhoff as expressed in his piece in the Washington Post:

When proponents of Medicare-for-all are asked how they plan to pay for their vastly expanded entitlement program, they typically stress that such a system would save hundreds of billions of dollars because it cuts out the administrative services and profits in the private health-care industry. The government would also be able to use the size of its customer base against drug companies, forcing them to lower prices: Overall, according to one generous estimate by the conservative-leaning Mercatus Center, such a reduction would lower national spending by $2 trillion over the next 10 years.

Of course, that’s not nearly enough for the government to cover the entire cost of health care. The Mercatus Center found that, even with those savings, a Medicare-for-all system would add some $32.6 trillion in spending over the course of 10 years. So how would we cover those costs under Medicare-for-all? Simple, its proponents argue: through taxes. Sure, this might be a huge raise in the average person’s payment to the government, but taxpayers would also be getting rid of other monthly payments in the form of health insurance premiums. The average consumer’s costs would stay about the same, the system would be more efficient and it wouldn’t add any more debt to the government because taxpayers are covering it.

But this poses a whole other round of questions that are rarely asked of progressives. If health-care costs continue to rise — as they have for decades in every country regardless of the structure of its health-care system — how are we supposed to structure our tax collection to pay for a single-payer system? Will we automatically keep raising taxes to match health-care costs? How do we guarantee that lawmakers regularly update what will inevitably be an unpopular tax burden so that health-care spending doesn’t result in massive deficits in our federal budget?

I worry about other things. For example, what’s the evidence that M4A would reduce the costs of administration at all? Proponents need to ask themselves a few questions. Most education in the U. S. is public education. Why is our cost per pupil of education so much higher than anywhere else in the world? Most of those costs are administrative costs. Most road and bridge construction in the U. S. is done by governments at various levels. Why are our costs per foot of road or bridge so much higher than anywhere else in the world? Why is our military spending so much higher? Occam’s Razor leads to the conclusion that our costs for everything done by government are much higher than anywhere else in the world. What happens if M4A does not merely fail to realize savings in administrative costs but actually costs more?

I’m glad that Mr. Gebelhoff is thinking about the ongoing costs of health care but merely wondering about how the proponents of M4A plan to continually raise taxes to meet the escalating costs isn’t nearly enough. What about the distortions in the economy that will inevitably be created by a program at the scale of M4A that doesn’t control costs?

But what should concern us most is the blithe lack of concern about any of the details that proponents of M4A exhibit. As in any other edifice it is simply not true that the details will take care of themselves.

Finally. Somebody who sees Germany and the entire EU experiment more as I do. It’s Jakub Grygiel at The American Interest:

In blunter terms, the EU promise was that Germany would not dominate Europe; Germany would become Europeanized rather than Europe Prussianized.

The EU has succeeded, but only to a degree. Berlin is not Europe’s capital—indeed, Europe has no capital. But German power is not containable by the EU and, after Brexit, will be even less so. The 2008 financial crisis showed to the debt-ridden Southern European states that German power is decisive and opposing it in financial matters is futile. More disturbingly, Berlin has no qualms of pursuing policies that undermine the security of other EU members. Two policies in particular are worth recalling. In 2015 Chancellor Merkel opened Germany’s borders to, what turned out to be, hundreds of thousands refugees. While she won widespread international admiration from Bono and the UN, her own electorate began to have serious doubts. And other European countries, on the forefront of the migration crisis, resented the unilateral German decision which immediately affected them and over which they had no say.

The second decision was to strike a dubious deal with Russia to build a second gas pipeline (Nord Stream 2) that has no economic value but enormous geopolitical consequences: by not having to cross Ukraine and Central Europe, Russian gas can be delivered directly to German industries while Moscow can threaten to cut off supplies to states deemed by it to be part of its sphere of influence. This German decision abets Russian imperial aspirations toward Ukraine as well as toward EU member states in Central Europe. Berlin may speak highly of the EU, but wields its power as it wishes, in open disdain of other EU members.

The harsh reality is that the European Union was a project that may have had a chance in a benign geopolitical environment. In a competitive world, with antagonistic external powers and growing internal imbalances, the EU is failing.

No, Berlin is not Europe’s capitol. Whatever Brussels’s pretensions, Europe is ruled from Frankfurt so it’s a distinction without a difference.

The key points to keep in mind are that nations follow their interests and that Germany’s interests are not only not ours, they’re contrary to ours. Why do we pursue them? NATO, the ur-European Union, was described as having the triple purposes of keeping Germany down, the Soviets out, and the Americans in. At this point all of those have failed and now Germany is keeping the countries of southern and eastern Europe down. If Germany refuses to sweeten the deal with France, the whole thing could come tumbling down like a house of cards.

Here’s your question for today. At the end of 2019 will any state have its own single-payer system? I say “No”. Hawaii is the best candidate for such a system and it backed off from the system its legislature passed a decade ago.

Also, I think that politicians would rather run on a national single-payer system, e.g. “Medicare for All”, than have a couple of state single-payer systems that people are watching for signs of success (or failure!). Consequently, any state’s plans will receive only lukewarm support from the national Democratic Party.

Yesterday Apple announced that its first quarter revenue for 2019 would be sharply below what had been expected:

Apple cut its revenue guidance for its fiscal first quarter, sending its stock sharply lower in after-hours trading as concerns continue to mount over the company’s future iPhone and China growth.

In a letter to investors, Apple CEO Tim Cook said the company now expects revenue of $84 billion in the quarter ending Dec. 29.

Apple had anticipated revenue of between $89 billion and $93 billion for the quarter. The number is also lower compared with the $91.5 billion in revenue analysts previously anticipated, according to earnings-tracker Refinitiv.

“Based on these estimates, our revenue will be lower than our original guidance for the quarter, with other items remaining broadly in line with our guidance,” Cook wrote.

reported USA Today while at Atlantic Alexis C. Madrigal analyzed the news:

And here we are in early 2019 and it’s clear that the Chinese economic slowdown is already bad. Today’s news makes it clear that the slowdown might be very bad, and worsening at a pace that took even Apple by complete surprise.

The other Asian economies are already seeing the damage. And that’s before the trade war tariffs snap into place come March

“So, what is the positive signal?” Jayant Menon, the lead economist at the Asian Development Bank, asked the South China Morning Post, rhetorically, this week. “There isn’t one,” he said.

I would add a couple of observations. First, no other American company is as exposed to the behavior of Chinese consumers as Apple. China accounts for nearly 20% of Apple’s iPhone sales and, as noted by Mr. Madrigal, Apple is now an iPhone company. Nike, the other U. S. company with substantial consumer sales in China, has seen flat sales in China for a couple of years now. Will it have an announcement of its own?

The message here is that doing business with China has risks as well as rewards.

My other observation is that smartphones are a commodity product but a commodity product like few others. You’ve got to produce something new every once in a while and that’s an expensive or even impossible proposition. Apple can’t maintain its brand by producing a product that’s just as good as those of every other smartphone manufacturer in the world. It’s got to produce something new and sexy. Does Apple without Steve Jobs have that mojo? Stay tuned.

I’m sticking to a prediction I’ve made before. In 10 years I won’t be a bit surprised if none of the companies with the biggest fully capitalized value, e.g. Apple, Amazon, Facebook, Google, etc., don’t exist in their present forms.

Hey, kids! Try your hand at David Ignatius’s multiple choice quiz for 2019 in his column at the Washington Post. Here’s one of the questions:

The Democratic candidate leading in public opinion polls on Dec. 31, 2019, will be: (a) Joe Biden, who promises to nominate former Homeland Security secretary Jeh Johnson as vice president; (b) Beto O’Rourke, whose campaign is boosted by a barnstorming country-music band headed by cable TV host Joe Scarborough; (c) Kamala D. Harris, who gains the endorsements of Michelle Obama, Elizabeth Warren and Hillary Clinton; (d) Amy Klobuchar, who runs on a platform of “Make America Smart Again.”

I think that a better question would be whether there will be a revolt against the present leadership of the Democratic Party, a prospect I find dubious, or whether the leadership will be able to get behind a candidate who doesn’t remember when Truman was president?

IMO the answers to most of his questions are either “None of the above” or “All of the above”.

In the slug of an op-ed at the New York Times by Mustafa Akyol, an important question is asked:

In modern-day “re-education” prisons, Beijing is forcing ethnic Uighurs to forsake their religion. Why don’t Muslim governments rise up in anger?

Here’s how he answers the question:

There are three answers. One is that coziness with China, the world’s second-largest economic power, pays. China is the top trading partner of 20 of the 57 member states of the Organization of Islamic Cooperation. Its ambitious Belt and Road Initiative, a huge path of commercial and transportation infrastructure intended to pass through much of the Middle East, holds a lucrative promise for many Muslim nations.

Moreover, China does not shy away from offering its economic assistance as hush money. In July 2018, The Global Times, the mouthpiece of the Chinese Communist Party, ran an interesting editorial suggesting that China’s government would help Turkey secure its “economic stability” — but only if Turkish officials stopped making “irresponsible remarks on the ethnic policy in Xinjiang,” which means stop criticizing China’s human rights violations. (At about the same time, Germany’s chancellor, Angela Merkel, was also promising to help the Turkish economy, but only if Turkey corrected its own human rights violations. In other words, Turkey was being pulled in opposite directions, and, sadly, the dark side has proved stronger so far.)

A second reason for Muslim silence is that the Chinese government crackdown on Uighurs is based on a premise that law and order can be restored by eradicating enemies of the government and traitors within a society. This is authoritarian language that most Muslim leaders understand well. It is their own language.

The third reason is that most Muslims who are likely to feel solidarity with their oppressed coreligionists think of the oppressors as “the West,” defined as the capitalist, hedonist, Zionist civilization led by the Great Satan. These Muslims, particularly the Islamists, believe that all of their coreligionists should unite with other anti-Western forces — a stance that evokes Samuel Huntington’s prediction of a “Confucian-Islamic” alliance against the West in his 1993 article in “Foreign Affairs” titled “The Clash of Civilizations?”

Those may be factors but I think the answer is simpler than that. The Uighurs aren’t Arabs. Sometimes things are a lot less than they seem and the “clash of civilizations” may be one of them. For many people in the world tribe remains the highest value.

Martin Wolf considers China’s prospects for the future in a piece at the Financial Times:

Future demand will depend on the emergence of a mass-consumer market, while growth of supply will require an upsurge in growth of “total factor productivity” — a measure of innovation. Yet, in 2017, private consumption was only 39 per cent of GDP. If it is to drive demand, the savings rate must tumble and the share of household incomes in GDP must jump. Neither will be easy to achieve. But the biggest hurdle of all, especially to the needed upsurge in productivity growth, is the shift towards a more autocratic political system.

For one and a half decades, China has benefited from the reforms introduced by Zhu Rongji, premier from 1998 to 2003. No comparable reforms have happened since his time. Today, credit is still being preferentially allocated to state businesses, while state influence over large private businesses is growing. All this is likely to distort the allocation of resources and slow the rate of innovation and economic progress, even if an outright financial crisis is avoided.

In sum, China may well fail to replicate the success of other east Asian high-growth economies, in becoming a high-income country in short order. It will surely be far harder for it to do so, because the distortions in its economy are so large and the global environment is going to be so much more hostile.

None of these are novel observations. Indeed, I and others much more prestigious than I have been pointing these things out for 15 years. Fifteen years ago I pointed out that China had some grave challenges to meet in the years ahead, among them demographics, the environment, and their corrupt, inefficient banking system. None of those changes have been addressed.

Will China continue to outperform its critics’ expectations? The answer may well depend on the preferences of the Chinese. Will the instinct to concentrate power in a few hands serve it well?

I’ve been skeptical of the “Thucydides Trap” scenario but the U. S. isn’t the only candidate for the role of “established power” while China isn’t the only candidate for “rising power”. Are demographics destiny and which direction do they point?