I agree with Fareed Zakaria’s latest column in the Washington Post:

Ever since China abandoned its Maoist isolation in the 1970s, its guiding philosophy was set by Deng Xiaoping. At that time, China needed to learn from the West, especially the United States, and integrate itself into the existing international order. According to Deng, it should be humble and modest in its foreign policy, “hide its light under a bushel,” and “bide its time.” But the time has now come, in Xi’s view, and he said the Middle Kingdom is ready to “take center stage in the world.”

Xi’s speech is important because this party congress made clear that he is no ordinary leader. He ascended to a second term in office without naming any obvious successors from the next generation of party officials, thus maintaining a grip on power far more secure than his immediate predecessors. More important, the party enshrined his thoughts in the constitution, an honor previously accorded only to Mao Zedong in his lifetime. (Deng’s thoughts were added, but only posthumously.) This means that for the rest of his life, Xi and his ideas will dominate the Communist Party of China.

and

Meanwhile, consider how the United States must look now to the rest of the world. It is politically paralyzed, unable to make major decisions. Amidst a ballooning debt, its investments in education, infrastructure, and science and technology are seriously lacking. Politics has become a branch of reality TV, with daily insults, comebacks and color commentary. America’s historical leadership role in the world has been replaced by a narrow and cramped ideology. Foreign policy has become a partisan game, with Washington breaking agreements, shifting course and reversing policy almost entirely to score political points at home.

in one particular. I think we should be worrying a lot more about our own problems, what kind of country we want to be, and how to become (or remain!) that country than we are about China or any other country for that matter. Every single pragmatic problem he lists, i.e. debt, investments in education, infrastructure, and science and technology,are much graver problems in China than here. China has problems of its own with which it has shown little inclination to come to terms.

As I’ve written in the past, one of the reasons that reforming the tax code is so difficult is that every single provision in it has a constituency that will defend their pet provision strenuously. The editors of the New York Times leap to the defense of the deduction for state and local taxes, a subsidy to jurisdictions that depend on high taxes:

One change is getting a lot of attention: Republican leaders want to eliminate the state and local tax deduction. This would hurt many Americans, especially those who live in states like California and New York with high state and local taxes.

That group clearly includes many rich families, but more than half of this deduction benefited taxpayers with incomes of less than $200,000 in 2015, according to Government Finance Officers Association, which represents officials from local and state governments. Some of these people might do fine under the framework, but tax experts say many will clearly be hurt because their total itemized deductions exceed the new, higher standard deduction proposed by the framework – $24,000 for couples and $12,000 for singles.

They also provide some eye-catching infographics. One of those infographics shows the pictures of House Democratic and Republican leadership and the percentages of their constituencies who “use this deduction”. Unsurprisingly, the numbers vary from 20% “using” in Luke Messer’s Indiana congressional district to 48% “using” in Steny Hoyer’s Maryland district.

I wish they’d been simultaneously a little broader and a little narrower and shown us the percentages of all Congressmen’s districts who benefit by $2,000 or more per year from the deduction. I agree with the NYT editors that it’s puzzling that Congressmen would want to hurt their own constituents but defending deductions for the rich in the name of not hurting the little guy is equally “pathetic” to use the NYT editors’ word.

All of this illustrates why I’d support a revenue neutral reduction or elimination of the income tax on corporations in the interest of efficiency and increasing economic growth, balancing that with adding a new, higher personal income tax bracket above the presently highest one of 39.6% for those with taxable incomes above $418,400.

I have a couple of legal questions.

Here’s the first. Party A hacks into Party B’s email server and then, unsolicited, gives the information found to Party C. What crime if any has Party C committed?

Here’s the second. How far does attorney-client privilege extend? At what point does it become conspiracy?

I suppose I would be remiss in not mentioning that yesterday marked the centenary of the October Revolution (in the Old Style calendar; in the New Style November 7). The Bolshevik Revolution was a thoroughgoing disaster for Russia. Tens of millions of Russians died needlessly and it set Russia’s development back by 70 years.

And the disaster is ongoing. When a country’s institutions are torn down as thoroughly as the Soviets tore Russia’s institutions down, they aren’t replaced overnight. The only institutions left standing when the Communist Party collapsed were the military, the KGB, organized crime, and the last vestiges of the Orthodox Church.

Those are the institutions ruling and sustaining Russia today.

Read Erik Goepner’s and Trevor Thrall’s post at War on the Rocks to understand why I am perennially disappointed in American foreign policy:

President Donald Trump has expanded every aspect of the war on terror he inherited from his two predecessors. In his first nine months Trump has ordered a renewed surge in Afghanistan, increased the tempo of drone strikes, and granted the military greater autonomy. Meanwhile, in Afghanistan, the Taliban now control or contest more districts than at any point since 2001. And last week four American soldiers died in Niger, an increasingly active front in the war on terror. Americans are now fighting — and dying — in at least eight different countries across the Middle East and Central Asia. The deaths of American forces are a particularly sobering reminder of the war’s high costs and should prompt people to ask whether the costs are worth it.

Unfortunately, the evidence of the past 16 years clearly indicates that the answer is no. Enough time has now passed since 9/11 to reach two important conclusions. First, the threat posed by Islamist-inspired terrorism does not justify such a mammoth effort. Second, the aggressive military strategy the United States has pursued since 2001 has not only failed to reduce the threat of terrorism; it has likely made things worse.

which is basically the gospel I’ve been preaching for the last 25 years. A good rule of thumb for what our foreign policy should be is look closely at what American presidents have done over the period of roughly the last quarter century and do the opposite. I’d push the timeline back farther than that to include the entire post-war period but at least we stood by and watched the Soviet Union collapse without actually going to war with it.

I want to encourage you to read Isaac Stone Fish’s disquisition on China today at the Los Angeles Times:

One time the veil fell for me. I was visiting Henan, a Chinese province with all the charm of a New Jersey and the educational competencies of an Arkansas. At a restaurant, a drunk man outfitted like a mid-level Chinese Communist Party official — zippered jacket, black leather shoes, a man-purse — approached my table, complimented my Chinese, and asked me how I liked his province. I lied and told him it was very nice. He beamed with approval and staggered away. When I called for the check, the waiter informed me that the drunk man had paid for it.

Outside, his wife propped him up. “Hey!” he slurred. “I paid for your meal. I work for the tax bureau. I’m the boss here. They at this restaurant have to be nice to me or I’ll shut them down.” I, and the Party — not the rules, or slogans or statements — we are what matters, he seemed to say. His wife, mortified, interrupted with the usual banalities. “Welcome to Henan,” she said. “China has 5,000 years of history, and Henan has several important historic sites. I hope you enjoy your visit to China.”

His point is how the opacity of the Chinese Communist Party makes being able to report on what’s actually happening in the country difficult if not impossible. It’s also why it’s better to rely on externally measurable characteristics rather than on official government announcements and press releases.

I’m skeptical of Tim Rund’s proposal for using “shared services” to cut federal spending:

As the national debt clock spins towards the flashing red zone of 20 trillion dollars — a level greater than our gross domestic product — policymakers will need to find serious solutions to balance the nation’s books. The challenge ahead is one that will only be solved with a combination of policy changes, novel practices, and specific reform initiatives conducted over time. Fortunately, a handful of promising options are starting to emerge, which may help to broadly reduce federal expenditures and serve as catalysts for institutional change in government planning and execution.

One of these options is Shared Services — an increasingly attractive and sensible concept that is gaining interest in both the executive branch and Congress. Shared services is basically an administrative service designed to meet common, standardized requirements of multiple agencies with delivery of those services by third-party providers (public or private), often in the areas of information technology, business processes, or labor components. Though not entirely new, the idea of shared services in government is particularly timely and valuable now, given the pressing need to cut costs and reduce waste wherever we can. Beyond the obvious fiscal advantages, shared services also represents a data-driven, targeted, and fact-informed approach to reducing unnecessary government duplication, agency stove-piping, and other counter-productive inefficiencies that too often mark the operations of government. Shared services is not simply a way to save money, but a way to get government to work better for its citizens.

for three reasons. First, isn’t that exactly what the GSA is supposed to do? He doesn’t mention the GSA once in his op-ed. Is he unaware of what it does? Does he think its role should be expanded? Does he think it isn’t doing its job?

Second, the state of Illinois consolidates shared services under Central Management Services. I don’t believe its track record would show that it has saved money. In information technology terms it’s between one and two decades behind where most large companies are these days. IMO that’s no accident but inherent to the procurement and policy approaches inherent to government at all levels.

Third, a fundamental principle of optimization theory is that your best target for optimization is where there’s the most to optimize. In the federal government that’s health care spending, Social Security, military spending, and interest on the debt. Everything else is small potatoes in relative terms but all three of those are political hot potatoes.

Who’d a thunk it? If health care insurance is too expensive, people don’t participate. That’s what the editors of the Washington Post say about the Congressional Budget Office’s findings on the Alexander-Murray compromise:

The Alexander-Murray bill would restore the payments for two years. The CBO predicts that, though the damage has been done for 2018, the bill would restrain premiums and cut government spending in 2019. If the payments were continued beyond that point, the savings would presumably continue, as well.

But the Alexander-Murray plan contains much more, and the CBO’s findings on the bill’s Obamacare reforms are the most illuminating pieces of the new analysis. For example, the bill would allow all people to buy “copper” (as opposed to gold, silver or bronze) health-care plans, which would offer consumers less generous benefits at a lower monthly price. The CBO found that this provision would draw more healthy people into the individual market, lowering average premiums and saving the government $1 billion. Streamlining the process though which states can obtain waivers from Obamacare rules, meanwhile, would spur more state-based experimentation.

The causality goes the opposite direction from what the Reid-Pelosi Congress apparently believed. Lower costs result in more people being insured. More people being insured don’t necessarily result in lower costs.

If we genuinely want people to be able to obtain health care without being penurized by it, the name of the game is cost control. Affordability through subsidy is a sucker’s game. It will inevitably result in the prices rising to absorb any subsidy.

Will the Washington Post story that the Clinton campaign and the Democratic National Committee paid for the notorious “Russia dossier” change the trajectory of the investigation presently under way?

Updated

The editors of the Wall Street Journal join the scrum:

It turns out that Russia has sown distrust in the U.S. political system—aided and abetted by the Democratic Party, and perhaps the FBI. This is an about-face from the dominant media narrative of the last year, and it requires a full investigation.

The Washington Post revealed Tuesday that the Hillary Clinton campaign and Democratic National Committee jointly paid for that infamous “dossier” full of Russian disinformation against Donald Trump. They filtered the payments through a U.S. law firm (Perkins Coie), which hired the opposition-research hit men at Fusion GPS. Fusion in turn tapped a former British spook, Christopher Steele, to compile the allegations, which are based largely on anonymous, Kremlin-connected sources.

Strip out the middlemen, and it appears that Democrats paid for Russians to compile wild allegations about a U.S. presidential candidate. Did someone say “collusion”?

It will be interesting to see whether these revelations change the tune of those who’ve been screaming “Collusion!” in their opposition to Trump. It doesn’t prove that the Trump campaign didn’t “collude” with the Russians but it does suggest collusion cuts both ways.