You know, it’s darned hard to have a plutocracy that celebrates consumption and measures status based on how much you spend on the one hand and is able to criticize the excesses of the wealthy on the other. I don’t know how the pundits who claim to care about the conditions under which ordinary people live manage it.

That’s the problem with the “tax cuts for the rich” leitmotif. There’s a broad swathe of the American people whose reaction to them is “Well, good for them. Did you see what Kimye were (or were not) wearing?”. It is a recurring theme in American popular culture. How many movies are there celebrating the lavish lifestyles of criminals who were genuinely awful people? How does The Great Gatsby in its cinematic renderings always manage to be recast as a celebration of clothes, cars, and wealth?

Here in Illinois we have two billionaires running against each other for governor. Whomever is elected our next governor will be a billionaire.

Scott Sumner advises the Chinese to call Trump’s bet because:

• China has a big economy.
• American consumers are impatient.
• The Chinese people are more accustomed to hardship than we are.

He may be right. However, it reminds me of something me auld mither once said. She said that the American soldiers fared better than the Brits during World War II because the Brits were more willing to endure great hardships. Americans would endure them—they fought back.

I think the wisdom of the advice depends on the actual state of the Chinese economy—something we have very nearly no way of knowing, the political situation in China—again, something we have very nearly no way of knowing, and the length of time that the stand-off continues.

If the Chinese economy is much more precarious than Dr. Sumner seems to think it is, calling Trump’s bet could be disastrous for them. If the political position of the Chinese leadership is more precarious than Dr. Sumner seems to think its, calling Trump’s bet could be disastrous for them.

If prices rise by just a few cents, the Chinese competitive advantage evaporates. In a trade war time is not on their side. If prices rise just a bit and the trade war goes on for long enough, you’ll see capital investment in the U. S. in manufacturing, particularly “lights out” manufacturing. If that happens China’s advantage goes away permanently.

Maybe I’m misreading Barry Ritholtz’s prescription for “fixing” Facebook:

I propose a simple three-step test for what determining what should not be circulated on the site as news:

1. Is the item demonstrably false?
2. Does it target a specific group for discrimination, harassment or abuse?
3. Does the dissemination of the false claim hurt this group of people?

If the answer to all three of those questions is yes, than the posts/news items are deleted. If this nonsense amounts to a substantial enough chunk of their content, they get banned. They are free to find another place to post their false, abusive, bullshit.

but it seems to me that he’s saying that Facebook’s problems were inevitable when it made the transition from being a small club to a massive platform and public accommodation.

I think it’s much more difficult than Mr. Ritholtz seems to. Both #2 and #3 are ultimately subjective. “Target” implies intent and there is nothing so benign that cannot be construed as hurting someone. What is missing from his formulation is the concept of reasonableness. Would a reasonable individual find the statement hurtful?

And #1 is much more difficult than Mr. Ritholtz seems to think. When there isn’t even a general agreement on what are facts and what are fictions, how can you prove something is false? Consider an example fairly frequently encountered in certain circles: “President Obama saved the economy”. Is that true, false, or unprovable. You might think it is true, another false, while I think it is unprovable. With enough craft practically any statement can be rephrased so as to be unprovable.

How about this one: “Donald Trump is an imminent threat to America”. True, false, or unprovable?

I think that Facebook was doomed from the start. Unless the company could grow big and powerful enough quickly enough to prevent upstarts, the caravan was always going to move on. And no company should be allowed to be that powerful.

Most of the time the articles I take note of and point out to you are recent ones—editorials, op-eds, etc.—but this time I want to commend to your attention a piece written more than 55 years ago by John Courtney Murray, S. J., “The Return to Tribalism”. In it Fr. Murray analyzes two “dangers” facing American society at the time:

Is there some danger that a false, fallacious or fictitious unity might be foisted on the American people? I think there is! I think there are two dangers and both of them are clear and both of them are present.

One of them is historical; it is the product of the contemporary historical moment of world crisis. The other is more inherent, a derivative from the very nature of political society itself.

Here’s another snippet:

What is civil unity in itself, and in its relation to religious pluralism in society? And secondly, how is it to be achieved?

Well, if this be the question, the outlines of the answer are not unclear. They are to be found quite readily in what we like to call the “liberal tradition of the West,” the tradition that has dictated the norms for the creation of civil unity, the unity of a people. And it was said long ago by the Stoics, and even before them, that civil unity is based upon two things, first upon a constitutional consensus, and secondly, upon a community of interests. If you want the Latin, first, consensus juris, and secondly, utilitatis communio.

Civil unity, therefore, is established by two things. First of all, by the rule of law, the rule of common law, and secondly, by the rule of law that serves as a framework for the orderly pursuit of a common good. And when you speak of civil unity, the enemy to it is not the stranger nor the religious heretic; the enemy of civil unity is the outlaw, whether he exists in the criminal underground or in the areas of criminality that today are appearing overground—some great corporations, for instance. Or whether he exists in the international scene, like the Communist, who is, by definition, the outlaw—one who stands beyond the bounds, the horizons of civilized community a

Perhaps you will see the resonance between the challenges Fr. Murray cautions against and our present situation. Perhaps not. Murray couldn’t see the rise of the weird combination of consumerism, individualism, technologically-enabled self-isolation, and the urge to power we see now. As Mencken noted, “The urge to save humanity is almost always only a false-face for the urge to rule it”.

At the Financial Times Mark Leonard, director of the European Council on Foreign Relations, explains how he thinks the Chinese leadership see Donald Trump, his trade war, and his foreign policy, particularly his policy with respect to China:

Few Chinese think that Mr Trump’s primary concern is to rebalance the bilateral trade deficit. If it were, they say, he would have aligned with the EU, Japan and Canada against China rather than scooping up America’s allies in his tariff dragnet. They think the US president’s goal is nothing less than remaking the global order.

They think Mr Trump feels he is presiding over the relative decline of his great nation. It is not that the current order does not benefit the US. The problem is that it benefits others more in relative terms. To make things worse the US is investing billions of dollars and a fair amount of blood in supporting the very alliances and international institutions that are constraining America and facilitating China’s rise.

In Chinese eyes, Mr Trump’s response is a form of “creative destruction”. He is systematically destroying the existing institutions — from the World Trade Organization and the North American Free Trade Agreement to Nato and the Iran nuclear deal — as a first step towards renegotiating the world order on terms more favourable to Washington.

Once the order is destroyed, the Chinese elite believes, Mr Trump will move to stage two: renegotiating America’s relationship with other powers. Because the US is still the most powerful country in the world, it will be able to negotiate with other countries from a position of strength if it deals with them one at a time rather than through multilateral institutions that empower the weak at the expense of the strong.

My interlocutors say that Mr Trump is the US first president for more than 40 years to bash China on three fronts simultaneously: trade, military and ideology. They describe him as a master tactician, focusing on one issue at a time, and extracting as many concessions as he can. They speak of the skilful way Mr Trump has treated President Xi Jinping. “Look at how he handled North Korea,” one says. “He got Xi Jinping to agree to UN sanctions [half a dozen] times, creating an economic stranglehold on the country. China almost turned North Korea into a sworn enemy of the country.” But they also see him as a strategist, willing to declare a truce in each area when there are no more concessions to be had, and then start again with a new front.

For the Chinese, even Mr Trump’s sycophantic press conference with Vladimir Putin, the Russian president, in Helsinki had a strategic purpose. They see it as Henry Kissinger in reverse. In 1972, the US nudged China off the Soviet axis in order to put pressure on its real rival, the Soviet Union. Today Mr Trump is reaching out to Russia in order to isolate China.

In the short term, China is talking tough in response to Mr Trump’s trade assault. At the same time they are trying to develop a multiplayer front against him by reaching out to the EU, Japan and South Korea. But many Chinese experts are quietly calling for a rethink of the longer-term strategy. They want to prepare the ground for a new grand bargain with the US based on Chinese retrenchment. Many feel that Mr Xi has over-reached and worry that it was a mistake simultaneously to antagonise the US economically and militarily in the South China Sea.

Instead, they advocate economic concessions and a pullback from the aggressive tactics that have characterised China’s recent foreign policy. They call for a Chinese variant of “splendid isolationism”, relying on growing the domestic market rather than disrupting other countries’ economies by exporting industrial surpluses.

So which is the real Mr Trump? The reckless reactionary destroying critical alliances, or the “stable genius” who is pressuring China? The answer seems to depend on where you ask the question. Things look different from Beijing than from Brussels.

That’s quite a difference from the way Mr. Trump is portrayed here in the United States or in Europe, isn’t it? Which is the real Donald Trump?

I think both and neither. I’m not sure it’s a coherent plan and the Chinese leadership is projecting. I suspect what the Chinese authorities are seeing is a general dissatisfaction among Americans with the international order that is emerging and Trump is responding to that.

The Wall Street Journal has an excellent article by Bob Davis cataloguing the history of opening up trade with China. In it he asks the question was it a mistake for the U.S. to allow China to join the World Trade Organization? Or should we have blackballed it? Skeptics of the deal by which the U. S. didn’t veto China’s membership in the WTO of which I was one turned out to have been right:

Looking back now, whose expectations for the wider impact of the deal proved most accurate? On the issue of U.S. manufacturing jobs, critics made the right call. A study by the MIT economist David Autor and colleagues calculated that Chinese competition cost the U.S. some 2.4 million jobs between 1999 and 2011, battering factory towns that made labor-intensive goods.

That result haunts one of Mr. Clinton’s senior China negotiators, Robert B. Cassidy, who believes that his work only helped big businesses, not ordinary workers. “When you retire you like to think that you accomplished a lot,” he says now, at age 73. “What kind of benefit did I produce from working around the clock? I was incredibly disappointed.”

Nor did China open up politically, as many WTO advocates had hoped. Beijing tamed the internet by limiting its use to commerce, technology and social media. It blocked political organizing by threatening and sometimes jailing those who posted critical comments. More recently, it has turned the internet itself into an instrument of the state by using it to identify and track dissidents. “It’s Orwellian,” says Jerome Cohen, a New York University law professor and China specialist.

The article also confirms the points I have been making here for some time:

China never fully followed through on its WTO pledge to allow foreign banks to operate in its local currency. It also pledged not to force foreign firms to transfer their technology, but today about one in five companies—many in aerospace and chemical industries—say that they’ve been pressured to do just that in order to do business in China, according to a July survey by the American Chamber of Commerce in Shanghai.

Note that it is now nearly twenty years since the negotiations. The Chinese authorities obviously had no intention of opening their banking system. They bargained in bad faith.

I don’t think opening up trade with China was a mistake. It did too much good for too many people. But it was done too suddenly, without follow-through to ensure that the Chinese authorities lived up to their side of the bargain. It should have been done slowly, over the period of decades or even a century and each step in the process should have required specific actions by the Chinese. Opening up their banking system. Divesting the SOEs. Ending export subsidies. Ending import quotas and tariffs. Political requirements. Requirements for working conditions. Environmental requirements. Changes in their judicial system.

We needed to be more Confucian. If your plan is a one year plan, plant rice. If your plan is a ten year plan, plant trees. If your plan is a hundred year plan, teach children. We are too impatient. We’ve been so busy planting rice that we failed to take steps when opening trade up with China too far resulted in the loss of millions of manufacturing jobs over the period of less than ten years. We needed a hundred year plan.

Why can’t we be more like Norway? Because we aren’t a small ethnically homogeneous petrostate.

Why can’t we be more like Denmark? Are you kidding? Up until a few years ago Denmark was a tiny country (about the size of Maryland with the population of Minnesota) 98% of whom were ethnic Danes and cultural Lutherans.

Why can’t we be more like France? We actually are quite a bit like France except that we’re much larger and more diverse and we don’t have an official arm of the government telling us to speak English, how it should be spoken, and insisting on American-ness. Can you imagine the uproar if there were a government agency insisting on American-ness? But Frenchness is a fundamental building block of modern France.

Why can’t we be more like Germany? Again, we are actually quite a bit like Germany except that Americans are much worse about following the rules than Germans are. Imagine Germany without order and that’s us.

Why can’t we be more like Italy? California is a lot like Italy except that it’s enormously more diverse and it’s full of money-grubbing Americans. Italy is likely to become more like California.

Before you read Jean Pisani-Ferry’s remarks musing over whether Europe is our friend or foe at Project Syndicate, let me tell you a story.

Once upon a time, about 400 years ago, England deposited its real “wretched refuse” on newly-established colonies in the New World, thousands of miles from Old Blighty, far enough away that they couldn’t do any harm. The refuse included the debtors that James Oglethorpe had transported to Georgia to join in his utopian trust, poor people including destitute children who were forced to sell themselves into servitude, people who practiced the wrong religion, or were members of the wrong ethnic group, or ne’er-do-well sons of English aristocrats. But not the aristocrats themselves. They stayed home in England.

The motley assortment of misfits had a challenge before them: how to maintain a society that vaguely resembled the one that they knew without an aristocracy to tell them what to do and how to do it? Other than the occasional press gang or ambitious crown governor they were largely left to their own devices for two hundred years to work that out and what they came up with laid the foundation for the United States.

After those colonies had the unmitigated gall to separate themselves from the Mother Country, occasional rich people sent their sons to England to further their education, the erstwhile colonies continued to accept misfits, particularly the Irish, and the American hayseeds could always serve as objects of derision to the English. During the early period our relationship with France was warmer than that with England but that largely ended when Napoleon crowned himself emperor. And that’s about where things stood for a century.

Until the Brits needed us to fight the Prussians, Germans, and Austrians in the Great War, a cause supported by some of our wealthy (they had been educated in England, remember?). Then it was ixnay on the ayseedhay. We helped pull their onions out of the fire and were largely forgotten again until the Germans began invading their neighbors in the mid 1930s at which point we began hearing about our common heritage, Western values, and the like.

Let’s fast forward to the modern day. We’ve engaged in a long list of activities for the last 60 years or so which have promoted British interests, French interests, and German interests but not our own including just about every war we’ve engaged in over the period until 9/11. We’ve reciprocated by drawing our NATO allies into our war in Afghanistan. All the while the Germans have been cozying up to the Russians, the Iranians, and the Chinese and the French and English have been snickering up their sleeves at us.

Throughout 300 of these 400 years we’ve been more diverse ethnically, racially, and religiously than any European country. 15% of our population (at least) has been black or American Indian or Mexican for that period. We don’t really have that much commonality of experience with the Europeans. The notion of a frontier is vital to an understanding of the development of American society, something of which the Europeans have no awareness. They also don’t know how large we are. The distance from New York to Los Angeles is about the same as that between Paris and Moscow. We are decentralized in a way unknown in any European country.

We have a lot more in common with former English colonies like Canada or Australia and even with former Spanish colonies like Mexico or former Portuguese colonies like Brazil. Nonetheless we keep being taught English history as though it were our own (at least I was) despite more Americans having German ancestry than do English ancestry. I, for example, don’t have a drop of English ancestry.

My point is this. What is Europe to us? We aren’t friends. We aren’t exactly enemies. We’re more like complete strangers. We’re competitors. Their vision of a rules-based liberal order in which they provide the rules and we provide the order is already crumbling around their ears.

I seem to be agreeing with a lot of people today. Now I agree with Roy Cordato’s observation in RealClearPolicy that Bernie Sanders and Alexandria Ocasio-Cortez aren’t socialists; they’re dirigistes:

f the self-proclaimed socialists of the Democratic Party are not socialists, what are they? First and foremost, they are unshackled welfare statists, directed by a morality that values, above all, a form of outcome-based egalitarianism. As a result, they favor all-encompassing government programs thought to minimize income inequality and the outcomes that flow from such inequalities. As we have seen, this includes a steeply progressive income-tax system, government control of payments for health-care services, tuition-free higher education, guaranteed employment, etc. But note that none of their proposed programs seeks to nationalize any industries. What they do seek is to equalize the benefits these industries provide through one or another kind of government payment scheme.

In the area of economic policy, these self-proclaimed socialists embrace, not socialism, but what is called “dirigisme,” which Merriam-Webster defines as a system that embraces “economic planning and control by the state.”

Dirigisme or dirigism (from French diriger, meaning ‘to direct’) is an economic system where the state exerts a strong directive influence over investment. It designates a capitalist economy in which the state plays a strong directive role, as opposed to a merely regulatory one.

According to the Encyclopedia Britannica, “Dirigiste policies often include centralized economic planning, directing investment, controlling wages and prices, and supervising labour markets.”

Dirigisme is considered to have been “an inherent aspect” of the fascist economies of post-WWI Italy, Spain, and Germany. These economies, according to Wikipedia, were “based on private individuals being allowed property and private initiative, but these were contingent upon service to the state.”

Such arrangements lead inevitably—not possibly or even likely but inevitably—lead to the directors of these regimes becoming wealthy while the rest of the society becomes poor. They become wealthy because they can and the society becomes poor because the directors are unable to direct as well as they think they can. The very tools that they use obscure the price signals that a market economy uses to produce efficiencies in the allocation of resources including capital.

We don’t need laissez-faire capitalism to be prosperous and we don’t need dirigism to keep people from being desperately poor but the alternative does require prudence, determination, and forebearance, all of which are in critically short supply.