In an op-ed at the Wall Street Journal scholar Michael Auslin remarks on developments in Chinese foreign policy and politics:

China will remain an integral part of the global economy. Its strengthening military will give it influence beyond Asia. And its political voice will be heard in international councils. Yet the world now understands the dark side of doing business with Beijing, while Chinese citizens chafe against Mr. Xi’s increasing domestic repression. With the Chinese Communist Party unwilling to reform, Beijing faces major strains ahead.

The Chinese government has linked economic aid to its strategic objectives. In particular, its Belt and Road initiative has promised $1 trillion of infrastructure spending throughout Eurasia. But Chinese aid increasingly is seen as a “debt trap” ensnaring less-powerful nations. They often surrender key facilities or agree to a greater Chinese presence in their countries after they becoming unable to repay development loans.

Malaysia and longtime Chinese ally Pakistan have announced they will be cutting back on Sino-funded projects for fear of indebtedness to Beijing. A recent election in the Maldives oriented the small Indian Ocean nation away from China. Expect more skittishness on the part of potential Chinese partners in vital locations around the globe.

Beijing’s heavy hand against foreign corporations—for example, demanding they list Taiwan as part of China or risk repercussions to their businesses—also is wearing Western patience thin. And the U.S. and Europe are angry over decades of rampant intellectual-property theft. Many companies are playing along for fear of losing China’s market, but they will take the first opportunity to rebuff Beijing’s demands.

Another blow has come courtesy of Mr. Trump. However much criticized at home, his tariff war is hitting China’s economy hard. Its stock market is around a four-year low, while Beijing’s bluster is offset by repeated overtures to resolve the confrontation. Thanks to China’s $350 billion trade surplus with the U.S., Washington can target a broad range of Chinese goods with tariffs. The damage to American firms from the current trade war may be significant, but China can’t weather a prolonged battle nearly as well.

The trade war has highlighted other weaknesses in the Chinese economy. Doubts about the country’s official 6.7% economic growth are widespread, while its massive debt burden, estimated at 300% of gross domestic product, raises alarms, especially within the private and state-owned-enterprise sector. Some Chinese businesses have gone on foreign spending sprees and now seek to unload their holdings. Insurance giant Anbang, for example, wants to sell its $5.5 billion real estate portfolio, which includes the Waldorf Astoria Hotel. Beijing has clamped down on other big spenders, due to fears of corporate failures as well as an overheated property market. Rampant speculation has led to regional bans on corporate property purchases amid concerns of a real estate bubble.

All these problems come on the heels of increased repression in China. Mr. Xi, now president for life, has created a cult of personality unseen since the Mao era. He dominates his putative co-leaders, and his anticorruption campaign served to eliminate potential elite opposition figures. He has clamped down on civil society with impunity.

The country also is poised to become the world’s first total surveillance state. It already has 200 million surveillance cameras and plans to operate more than 600 million, all using the most advanced facial recognition software. This even extends to special glasses worn by the police.

Despite Mr. Xi’s repressive policies, the first signs of discontent have emerged. Mr. Xi’s ambitious reform program, first unveiled in 2013, has resulted in little change. A critique of the government from a professor at the prestigious Tsinghua University recently went viral, while Chinese officials have begun to walk back their boastfulness about the state of the economy. Mr. Xi has had to defend his propaganda blitz.

There are still hundreds, likely thousands, of protests every year against official corruption and the government’s heavy hand. Then there is the severe yet largely hidden repression of Muslim Uighurs in Xinjiang, where as many as one million are reported to be held in modern concentration camps. Combined with its repressive policies in Tibet, the Chinese Communist Party has engendered a seething hatred from the country’s minorities.

No one should expect a revolution soon in China. And as shown by El Salvador’s recent switch of diplomatic recognition from Taipei to Beijing, its economic pull remains attractive to many poor nations. But China’s road ahead is increasingly rocky. Far from adopting many of the norms of the postwar world, Beijing has attempted to rewrite them in its own favor. Now the question is how far will China’s leaders go in curbing their assertive behavior and rapacious policies. Sticking to the current path will lead to greater tension between China and the world and risk more unrest at home.

Chinese politics are more opaque if anything to us than their government or economy are. My advice: ignore the press releases and observe the behavior. If the Chinese people behave as though the Chinese economy is in recession, it probably is. If China’s authorities behave as though they were losing control, they probably are.

I don’t think we should waste time trying to discern what will happen in China or what we want China to do. In particular we need not be concerned that China’s influence will eclipse our own. I have confidence that the Chinese authorities will be their own worst enemies. I think we should reserve our attention to what will happen in the United States and what we will do.

The editors of the New York Times, the Washington Post and the Wall Street Journal are all convinced that President Trump has put his foot in it by declaiming that he’ll limit birthright citizenship by executive order one week before the midterm elections. Here’s the WSJ’s take:

Mr. Trump has the political high ground as long as he is trying to stop lawlessness or deter migrant caravans mobilized by left-wing groups in Central America. Even deploying soldiers to the border in nonmilitary roles can be justified to assist immigration agents overwhelmed by asylum seekers. The U.S. has to send a signal that no one can bum-rush the border—not least to deter migrants from making a trip that will end in disappointment, or worse.

By contrast, the birth citizenship gambit puts Mr. Trump on the wrong side of immigration law and politics. Did Michael Cohen give him this legal advice?

The right to citizenship for anyone born on U.S. soil is derived from the Fourteenth Amendment adopted in 1868: “All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” This is the common law doctrine of jus soli, or right of the soil.

Opponents of birth citizenship try to obscure this plain meaning by interpreting “subject to the jurisdiction” as applying only to those who owe allegiance to America. Because alien parents owe allegiance to a different sovereign, the argument goes, their children have no right to citizenship.

or is he? Isn’t the meaning of the phrase “subject to the jurisdiction” a candidate for interpretation by the courts? Every case I have seen cited to date only pertains to the children of legal immigrants. In what sense is someone in the United States illegally, who doesn’t obey other U. S. laws, who doesn’t pay taxes other than unescapable use taxes, and who votes in the elections of other countries subject to the jurisdiction of the United States? I don’t know the answer to it but it seems to me to be a legal and political question.

Additionally, until Mr. Marshall arrogated to the courts the sole right to interpret the laws, difficult as it may be to credit, that right belonged equally to the courts, the other branches of government, and the citizenry. That was part of the common law.

As to the politics, the political streets are littered with the figurative corpses of people who’ve underestimated Donald Trump’s political acumen. I don’t know whether the American-born children of illegal aliens should have birthright citizenship. I do not know whether the 14th Amendment covers their case. I don’t know what the courts would decide on the subject. And I do not know whether stirring that particular pot is good politics or bad.

We will probably find out the answers to at least one of those questions very soon.

I have a question. Is nationalism on the part of whites the same as “white nationalism”?

Also, I can see the allure of a world without nationalism. I don’t think that a world in which the United States is the only country that isn’t nationalistic is particularly appealing.

This isn’t in response to any particular article but to a whole raft of articles I’ve seen lately. People in South and Central America or people who have ties to the people of Latin America are strongly predisposed to blame the entire region’s problems on the United States. I’ve seen at least a dozen articles over the last week or so to that effect.

I won’t dispute that the U. S. has intervened in the affairs of Latin American countries and continues to do so or argue that our interventions have been benign. The record says otherwise. If it had been up to me I would not have so intervened but most of the intervention took place before I was born.

What I dispute is that we caused their problems. I think they have the causality backwards. Every repeat every country colonized by either Spain or Portugal has similar problems and those problems have moved us to intervene in those countries. We didn’t create a Mexico divided by race into social classes. That predates the existence of the U. S. let alone U. S. intervention.

As proof I would submit that even Latin American countries in which we have barely intervened have very similar problems and that countries South and Central American countries that weren’t colonized by Spain or Portugal tend to be more prosperous than those that were.

In an op-ed in the Wall Street Journal award-winning economist Edmund Phelps argues against Keynesian stimulus:

Among economists and policy makers it is widely thought that fiscal stimulus—increased public spending as well as tax cuts—helped pull employment from its depths in 2010 or so back to normal in 2017. The new tax cuts on personal income are thought to be increasing demand further.

But is there evidence that stimulus was behind America’s recovery—or, for that matter, the recoveries in Germany, Switzerland, Sweden, Britain and Ireland? And is there evidence that the absence of stimulus—a tight rein on public spending known as “fiscal austerity”—is to blame for the lack of a full recovery in Portugal, Italy, France and Spain?

A simple test occurred to me: The stimulus story suggests that, in the years after they hit bottom, the countries that adopted relatively large fiscal deficits—measured by the average increase in public debt from 2011-17 as a percentage of gross domestic product—would have a relatively speedy recovery to show for it. Did they?

As the accompanying chart shows, the evidence does not support the stimulus story. Big deficits did not speed up recoveries. In fact, the relationship is negative, suggesting fiscal profligacy led to contraction and fiscal responsibility would have been better.

Isn’t this a fluke? Don’t history and theory overwhelmingly support stimulus? Well, no. First, the history: Soldiers returning from World War II expanded the civilian labor force from 53.9 million in 1945 to 60.2 million in 1947, leading many economists to fear an unemployment crisis. Keynesians—Leon Keyserling for one—said running a peacetime fiscal deficit was needed to keep unemployment from rising. Yet as the government under President Harry S. Truman ran fiscal surpluses, the unemployment rate went down (from 3.9% in 1946 to 3.1% in 1952) and the labor-force participation rate went up (from 57.2% to 58.9%).

Standard economic theory points to other ill-effects of fiscal stimulus. Economist Franco Modigliani showed in 1961 that fiscal deficits have a negative impact on both the supply of labor and the supply of saving. I explored this territory further in a 1965 book on “fiscal neutrality.” The deficit may cause people to feel richer, and thus to work and save less. The Keynesian James Tobin showed in 1955 how consumer demand can simply crowd out investment demand. Another possibility, suggested by Robert Mundell’s early work, is that the effect of a country’s fiscal stimulus is diffused over the global economy, so that the deficit-running country itself feels little of the effect.

If fiscal stimulus is not effective in combating a recession, what about monetary stimulus—increasing the supply of money or reducing the cost of money in relation to the return on capital? We can perform a similar test: Did countries where monetary stimulus in the years after they hit bottom was relatively strong—measured by the average quantity of monetary assets purchased by the central bank from 2011-17—have relatively speedy recoveries? This is a complicated question, but preliminary explorations do not give strong support to that thesis either.

I don’t know if “most economists” believe it but my account of Keynesian stimulus (counter-cyclical deficit spending to offset a shortfall in aggregate demand) would be somewhat different. I think that Keynes was right on the theory but it’s very difficult to make work in practice. In other words I believe that a properly timed stimulus carefully applied can reduce the depth of a recession. The problem is not that it can’t but in practice stimulus is almost always applied too late and rarely applied prudently.

In the specific case of the ARRA, I think that the stimulus provided by the Bush Administration, although probably inadequate, was responsible for reducing the depth of the recession of 2008-2009 and that the stimulus of 2009 was mostly misapplied—plain old pork barrel politics rebranded as fiscal stimulus—and might even have contributed to the shallowness of the recovery.

In his New York Times column Ross Douthat seems to think that it is:

To the extent that any Republicans deserve credit for this constraint, though, they are mostly elected Republicans in the Senate. The House is more pure, uncut MAGA, more reflexive in its defense of a president whose behavior is often indefensible, more poisoned by the worst Trumpist tendencies (witness the steady migration of the Iowa congressman Steve King toward an overt white nationalism) and more inclined to allow Trump a free hand should he seek to make his actual presidency exactly like his Twitter feed.

So a Democratic House would supply a much more effective check on that temptation, along with more vigorous scrutiny of corruption in the White House, about which congressional Republicans have been studiously incurious. And it would offer that check without jeopardizing any potential conservative legislative achievements — because, let’s be frank, the congressional G.O.P. isn’t going to do anything serious with its power if it gets re-elected except confirm judges, and you don’t need the House to elevate Amy Coney Barrett if there’s one more high court vacancy.

At the same time, for the genuinely populist sort for conservative (that is, the best kind), having a Democratic House might force Trump himself back toward the economic populism of his campaign, which he mostly abandoned but has suddenly remembered in the last days before the midterms, talking up a phantom middle-class tax cut and proposing an “America First” approach to drug pricing.

I think he’s misreading both political parties, assuming good faith and willingness to compromise where none exists. Today’s Republican Party at the national level is divided between anarcho-capitalist objectivists like Rand Paul and Paul Ryan and MAGA nativists. The only thing those two wings can agree on is cutting taxes. Today’s Democratic Party at the national level is divided between social democrats who view anyone who disagrees with them as fundamentally evil and Rubinesque technocratism as a façade for plain old machine politics—credentialism as a pretext for personal enrichment. The only thing they can agree on is that more money is needed to accomplish their goals and their goals are forever changing.

Where is there room for compromise? There’s barely room for compromise within the two parties let alone between them. Consequently, Mr. Douthat is preaching kicking the can down the road and hoping for the best as a political strategy.

If only we could get rid of everybody. We need a Mulligan.

I’m having some difficulty finding a hook for commenting on Joseph Michael Newhard’s defense of income inequality at the Foundation for Economic Education. The best I can come up with is a series of counter-punches. For example:

People don’t maximize income; they maximize utility. If college students only cared about maximizing income, they would all major in petroleum engineering.

That’s factually incorrect. There are just a handful of programs in petroleum engineering in the entire country, they all have limited enrollments, and they’re all highly selective. In other words market and preference aren’t determining the number and wages of petroleum engineers. Artificial scarcity is.

And I challenge his notion that people major in lower-earning fields by preference. They do so because they can’t cut it in the highly competitive highly remunerative and for good reason. A very high percentage of people who enroll in college just aren’t college material. Only about half of people who enter college these days actually graduate with a degree over six years.

Or how about this? Wages aren’t determined by productivity. The most productive person with the title “business analyst” at Big A$$ Incorporated earns just about the same as the least productive person with that title. Your wages are determined by your position in the organization and the wages of people whom you resemble superficially, not by your own productivity.

When I graduated from college (before the glaciers descended and dinosaurs ruled the earth), a CEO of a major company earned on average 17 times as much as the average workers in his company (in France it was 13 times). Today major company CEOs earn 350 times what his average worker does. That can’t be explained by productivity, a failure to apply oneself, or anything other than cooperative boards of directors.

The reasons we should be concerned about increasing income inequality is that, at least in the U. S, income inequality leads to social inequality and income is increasingly running in family lines. That means a stratified, class-based society. That isn’t the United States I grew up in or the U. S. that I want.

Do I believe in strict income equality? Of course not. But there’s got to be something between the crony capitalism-based inequality we have now and Soviet-style enforced equality in which everybody but the party bosses are equally poor.

I rarely read The Weekly Standard but I wanted to commend this article there by Andrew Ferguson on the mess that Illinois is in to your attention. I wish the article had started with this paragraph because it sets the stage:

A few years ago a pair of NPR reporters worked with a demographer from the Brookings Institution on a silly but revealing project. They set out to find the “perfect state”—the state that was most representative of the USA as a whole. They tested five criteria for a state’s population: racial makeup, educational attainment, age, median income, and religiosity. Illinois took the prize, mapping the country more closely than any other state in one category after another. In some important respects, Illinois is the country built to scale. You don’t have to be a native deeply attached to your home state to worry that if Illinois can’t make it, then maybe the country can’t either.

and it should give you a certain sense of foreboding. Illinois is the state most representative of the U. S. as a whole. If the U. S. adopts the practices that has caused Illinois’s decline, it will suffer from the same problems as Illinois.

What are those practices? Sadly, the article doesn’t really do much to explain them. The closest it comes is this. Political machines are like single-celled organisms:

The purpose of the machine is to keep the machine alive. This is the evolutionary stage that the Chicago machine, downstate version, has reached over Madigan’s long reign. There’s little chance that Rauner, given a second term, could reverse it, and no sign that Pritzker, once elected, would care to. Governor Pritzker’s political destiny will likely resemble that of Louisiana’s Oscar K. Allen, a puppet that the state’s true ruler, Huey Long, installed in the governor’s chair in the 1930s. He earned the nickname “OK.” “A leaf blew in through OK’s office window yesterday,” one observer said. “He signed it.”

So, what happened in Illinois? Political corruption is the obvious response but that’s no answer. Why the political corruption? You can’t blame old man Daley—the corruption preceded him. He was part of it rather than its cause.

In Illinois’s case I think the answer is complacency born of prosperity. You come to accept political corruption as long as the trains run on time and once the trains stop running on time it’s too late.

Illinois is not California or New York. I do not know a single person in Illinois who, like so many Californians or New Yorkers, cannot imagine life outside their home states. Illinois is a place that people live in and come to for work and Chicago, once known as the “city that works” is its epitome. When the work is gone, driven out by political corruption and politicians who think that Illinois is California or New York, the people will leave and it’s happening even as I write.

I think that the editors of the Wall Street Journal strike about the right note in their remarks on the murders in Pittsburgh over the weekend:

Robert Bowers simply hated Jews.

This irrational hatred is one of humanity’s oldest and manifests itself in murder almost daily in the Middle East. Jews are killed simply because they are Jews, as they have been throughout history. This is why millions have sought refuge in a Jewish state, Israel, and also in the religious protections embedded in the Constitution of the United States.

The outpouring of support and grief for the victims of the Pittsburgh massacre is a reminder of America’s unique role as a refuge for the world’s religious. Muslim states often persecute non-Muslims as well as Muslims who do not share their brand of Islam. China persecutes people of all faiths. America protects them.

The U.S. has seen an increase in anti-Semitic acts in recent years, according to the Anti-Defamation League. But there are still fewer in America than in most of the rest of world, and the sources of anti-Semitism range across the political spectrum, including some on the right like Robert Bowers but also from the pro-Palestinian left, especially on university campuses.

I understand that people are shocked and in grief but the notion that Jews are not safer here than in any European country and even safer here than in Israel is simply without basis. Based on the FBI’s hate crimes statistics and European anti-Semitic hate crimes statistics the incidence of such crimes is an order of magnitude greater in France and the United Kingdom than it is here and five times as great in Germany or Sweden than here. And anti-Semitism is considerably stronger in Eastern Europe than in Western Europe.

Hatred of Jews didn’t start last year or the year before—it’s been around for millennia. The temperature is rising in the U. S. and Jews are the canaries in the coal mine to mix metaphors. While I agree that President Trump needs to moderate his rhetoric, the notion that Trump is the only problem is cynical political opportunism.