2020 Headlines I don’t expect to see 29 July 2019.

“VA for All.  Why shouldn’t your parents get the same care that Walter Reed Hospital offers to wounded warriors?”

“Single-payer media.  Think about it.”

“Just how much am I supposed to pay Jussie Smollett in reparations?”

“Did the Russians write the Steele dossier?  Durham investigation ponders the question.”

“China buckles–will reform trade rules AND massively cut carbon emissions.  Trump chortles; Environmentalists dismayed.”

“Iran buckles–will return to NPT and reduce support for Hezbollah.  Bolton tap dances the “Putting on the Ritz” segment from “Young Frankenstein”.”

“EU  buckles–will finally raise defense spending to long-agreed levels.  Poles eager to fight; Germans and French not so much.”

“Victory!  We’ve established a prohibition on abortion–just as with alcohol in the Twenties and drugs since the Seventies!  But gun-control will never work!”

“The EU blocked undesired immigration by paying Turkey, Niger, and Libya.  Now Trump has done the same with Mexico and Guatemala at a lower cost.  The “Squad” denounces agreements as “racist.”

“Illegal immigration de-criminalized!  120 million Chinese buy cruise-ship reservations for China-Hawaii-West Coast jaunts.”

“Oddly, the State Department appears to function just as before but with professional diplomats in most jobs, and without a bunch of courtiers from think-tanks.  Experts puzzled and Congress vows to subpoena the late George Kennan.”

“Congress approves Hudson River flood-gates to counter-climate change.  Mayor DiBlasio will reject federal funds: “New Yorkers would rather drown that accept money from a government that denies the reality of climate change!”

 

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The Asian Century 26 July 2019.

Back in the 1990s many of the Asian economies were riding high.  People were talking about the “Asian tiger” economies, if that gives you some idea.  Japan, Taiwan, South Korea were all enjoying remarkable success at manufacturing and selling things.  In particular, they seemed to have mastered the industrial production of actual things that people all over the world would want to own: cars, computer hardware, televisions, and the music systems of the day.  Moreover, the other Asian economies all seemed to be taking off on remarkably similar and promising flight paths to prosperity.  Since all of these places had been late to adopt the Western economic model and because they had been leveled in the Second World War, this performance amounted to an extraordinary achievement that called out for explanation.  Moreover, the “Asian tigers” were generally out-performing the Western economies.  The Soviet Union had fallen flat on its face in 1989, so it was discredited.  Neither the United States nor Western Europe, however, showed a comparable dynamism.  The European economies were all growing slowly, thanks to what would later come to be labeled “Euro-sclerosis.”  The United States had already begun the habit of living beyond its means that continues to plague it to this day.

Under these conditions the Asian countries took a justifiable pride in their performance.  In discussions of the differences between Western and Asian economic performance, attention naturally turned to asking whether cultural differences might not make as much difference as did specific economic policies.  Ultimately, various people began to suggest that “Asian values” offered the best explanation.

What were the “values” which purportedly gave the Asian economies the bulge over the Western ones?  According to the proponents of the idea the Asian societies were the product of unique historical circumstances.  Confucian values had become deeply entrenched in the culture and could not be rooted out by any transient or imported political regime.  The key Confucian values were subordination of the desires of the individual to the welfare of the community (conformity); a preference for strong leadership over political competition; a commitment to excellence in academic and scientific pursuits; hard work; and thrift.

In essence, this doctrine is a denial of the ideal of universal human equality and universal human rights. (“We hold these truths to be self evident: that all men are created equal…”)  The West had argued that “free markets and free people” were the twin keys to human progress.  Lots of people in Asian countries had been attracted by this doctrine because it promised to improve their situation.  Others had reacted against what they saw as just another face of Western imperialism or which unsettled their own lives.  (Thus, kids having rights is fine if you’re a kid; it is more problematic if you’re a parent.)  In any event, the rising relative power of the Asian economies seemed to justify an assertion of cultural independence.  Hence, the 1990s witnessed much discussion of “Asian values.”

Then the Asian financial crisis of July 1997 put a stop to all the big talk.  The bugs scuttled back into the woodwork.  But does that mean that there are no distinct Asian values?  Are universal values more credible?  Watch “To Live” and decide.

 

For more on the financial crisis, see http://en.wikipedia.org/wiki/Asian_financial_crisis

For criticism of the Asian values movement, see: http://www.brainsnchips.org/hr/sen.htm and http://academic2.american.edu/~dfagel/Markets&democracyfukuyama.html

My Weekly Reader 25 July 2019.

In 1940 there were 251,000 African-Americans living in Philadelphia, out of a total population of 1,931,000 or 13 percent of the population.  In 1970, there were 655,000 African-Americans living in Philadelphia out of a total population of 1,948,000 or 33.6 percent of the population. [1] Thus, Philadelphia’s African-American population almost tripled in both numbers and as a share of the population.  Much of the growth in the African-American population is explained by the “Great Migration.”[2]

The African-American immigrants in search of better lives received a frosty welcome in the City of Brotherly Love.  First, the white city had strong local ethnic identities: South Philadelphia was Italian; Pennsport, Gray’s Ferry, Kensington, Fishtown, and much of Northeast Philadelphia were Irish; Port Richmond was Polish.  During the Sixties and Seventies, these people felt themselves in crisis.  Many of them worked blue-collar manufacturing jobs.  In 1951, 46 percent of Philadelphia workers earned a living from manufacturing.  After the war, Philadelphia began to lose many of these jobs: by 1977, only 24 percent still worked in manufacturing.  During the Seventies, Philadelphia lost 100,000 manufacturing jobs.

Second, the cost of government rose dramatically, from over $100 million (1947) to over $500 million (1970).  Hence, from 1961 on, budget shortfalls led to repeated increases in both the real estate and wage taxes.[3]

Third, the national murder rate went up from the late 1950s through 1974.  In 1955 it stood at 4.5/100,000 people; in 1974 it stood at 10.2/100,000.[4]   This trend and other increases in violence, hit Philadelphia as hard as anywhere else.  Since the Forties, “the complexion of urban crime had changed…as big cities turned blacker, so did big city homicides.”[5]

Fourth, racism was a real force.  The early post-war out-migration by whites opened up housing for African-Americans in formerly all-white neighborhoods.  “Throughout the city and its suburbs, wherever blacks sought to move freely in the housing market there was community tension and frequently vandalism, intimidation, street riots, and evacuation of whole neighborhoods by whites.”[6]  For example, South Philadelphia and Kensington lost from 15 to 30 percent of their populations in the Seventies.  Also, African-American migration into previously white-dominated areas changed the composition of the public schools.  In 1961 there were 250,000 students in the public schools, about equally divided between whites and black.  In 1970 there were 291,000 students in the system, 63 percent non-white and 37 percent white.

Philadelphia’s white population hardly formed a single block.  To over-simplify, however, the blue-collar and lower middle-class “ethnics” wanted a campaign of resistance, while upper middle-class “elites” wanted change.  The former had the votes.  They twice elected Frank Rizzo, the tough former police commissioner, as mayor (1971, 1975).  Thus, majority opinion on integration in one Democrat-governed city in the Seventies.  A time of troubles.

[1] Timothy Lombardo, Blue-Collar Conservatism: Frank Rizzo’s Philadelphia and Populist Politics (2019).

[2] Nicholas Lemann, The Promised Land : The Great Black Migration and How It Changed America (1991); Isabel Wilkerson, The Warmth of Other Suns: The Epic Story of America’s Great Migration (2010).

[3] Russell Weigley, Philadelphia, pp. 664-665.

[4] Roger Lane, Murder in America, p. 303.

[5] Lane, Murder, p. 273.

[6] Weigley, Philadelphia, p. 669.

The Asian Century 8 24 July 2019.

China’s strengths and ambitions have been eye-catching.  What of its weaknesses and fears?  These, too, are striking.[1]

China’s economic progress rests on three pillars.  First, a rapid industrialization that required moving hundreds of millions of peasants out of low-productivity rural agriculture into higher-productivity urban factory work.  Second, engagement with the global capitalist economy to draw upon Western investment and expertise while selling China’s products abroad.  Third, the move from a centrally-planned economy to something more like a market economy.

This approach produced significant benefits for China.  China joined the World Trade Organization (WTO) in 2001.  This opened many markets to Chinese goods on advantageous terms.  Moreover, China pursued neo-mercantilist policies aimed to boost exports while restricting imports.  These included manipulating exchange rates for currency, subsidizing Chinese producers to lower their prices on world markets, and raising all sorts of non-tariff barriers to Western imports.  By 2010, China’s exports amounted to almost 25 percent of the world’s trade.

Then, in 2008, the Great Recession began.  World economic growth—and trade—slowed down.  China’s problem: how to keep everyone working so that political dissent did not arise?  China’s solution: invest in the domestic economy by providing a lot of credit.  This meant cheap loans to businesses to build things.  Trouble is, there’s investment and then there’s “investment.”  The Chinese government poured money into all sorts of make-work projects: construction and infrastructure (roads and bridges, high-speed rail) were favored targets for government largesse.

What are the results?  China over-built, over-invested, and over-borrowed.  Chinese debt has ballooned, about half of it is in real-estate.  Many industries suffer from excess capacity, while much of the building spree has produced empty buildings.  China’s economy isn’t growing at the fantastic rates of the first decade of the century; profit margins have fallen to low levels compared to Western economies; many companies can’t earn enough to service their debts and about 20 percent of it is non-performing.

Other problems are policy-driven, but not specifically financial in nature.  First, the one-child policy launched in the 1970s is now beginning to produce a demographic trap.  The labor force will start to shrink while the number of retirees will grow.  When America faces this problem, one solution is immigration.  Can China find immigrants?  How would the Chinese respond to immigrants from Southeast Asia?  From South Asia?  From Africa?  Can the Chinese substitute robots and artificial intelligence for human labor?

Second, Xi Jinping’s instinct is to clamp down on all forms of freedom as disruptive.  His “Belt and Road” plan is fascinating, but it is essentially a top-down government plan that is insulated from market considerations.  His pursuit of a “surveillance state” and his insistence on joint party-enterprise decision-making for the state-owned enterprises is likely to be “stifling in terms of creativity and disruption.”

Combine a gigantic asset bubble with a global economic slowdown and a not-agile government and what do you get?  Trouble for all, and not just for the Chinese.

[1] George Magnus, Red Flags: Why Xi’s China Is in Jeopardy (2018).

My Weekly Reader 23 July 2019.

During and immediately following the American Revolution, the Articles of Confederation had provided a framework for governing the country.  That framework proved unsatisfactory.  The current Constitution replaced it.  While the authors of the Constitution were experienced and practical men, it remained a theoretical system.  Would it work any better than had the Articles of Confederation?  Would it be able to foster a strong sense of national identity as well as provide effective government?  Could it overcome the distrust of the many Anti-Federalist who had opposed its adoption?  Carol Berkin has argued that four crises in the 1790s worked in various ways to legitimize the new system.[1]

The Whiskey Rebellion (1791-1794).  The new federal government needed revenue, both to operate the government and to pay off the national debt.  Congress passed a tax on distilled spirits.  Farmers living on the then-Western frontier of Pennsylvania and Kentucky often distilled rye and corn into whiskey.  That whiskey could then be traded for goods to merchants who shipped the whiskey east for thirsty consumers.  Both the farmers and the distillers resisted the tax, often violently.  Talking to them didn’t work, so President Washington finally led an army of 13,000 eastern militiamen.  The army cowed the rebels and asserted federal authority (although it didn’t stop moonshining).

The Genet Affair (1793-1794).  The French monarchy had provided vital aid to the American Republic during the War for Independence.  In 1793, the French Republic wanted American aid in its war with Britain and Spain.  Many Americans took sides for or against the French Revolution.  Ambassador Edmond Genet arrived in search of aid.  Before presenting his credentials to the American government and in defiance of a recent Neutrality Proclamation, he commissioned privateers to raid enemy shipping and recruited volunteers for an invasion of Spanish Florida.  Talking to Genet didn’t work.  Washington, supported by both Hamilton and Jefferson, demanded France recall its ambassador.  Which they did, planning to guillotine him.

The XYZ Affair (1797-1798).  Recalling Genet did nothing to solve the growing Franco-American conflict.  President John Adams sent off a delegation to negotiate with the French.  Upon arrival, various French diplomats demanded bribes before negotiations could begin.  Most of the Americans went home in a huff.  The Adams administration then published the reports of the delegation, with the names of French diplomats replaced by the letters X, Y, and Z.  Many Americans became yet more hostile to France and the Adams Administration pushed through more military spending.  A naval “Quasi War” with France began.  However, Thomas Jefferson’s Democratic-Republicans continued to favor the French Revolution and equated the Federalists with the old order.

The Alien and Sedition Acts (1798-1800).  The very divisive responses to the French Revolution and to relations with France embittered political debate.  The Adams Administration pushed through four Alien and Sedition Acts.  These extended the time to earn citizenship from 5 years to 14 years, allowed the government expel “dangerous” non-citizens, and allowed prosecution of those who made false statements that were critical of the government.  Under the guise of national security, the Federalists used the new laws in overtly political ways by prosecuting Democratic-Republican journalists, and by what amounted to future voter suppression.  (Many immigrants supported Jefferson’s party.)  Democrats attacked the Sedition law by invoking the First Amendment.  The reaction against the Alien and Sedition Acts helped spark the election of Jefferson as President in 1800.

[1] Carol Berkin, A Sovereign People: The Crises of the 1790s and the Birth of American Nationalism (2017).

An Imaginary Account of Robert Mueller Before Congress 4 22 July 2019.

Mueller: Dangling the possibility of presidential pardons in the media during the trials of people like Flynn and Manafort.  Did that prevent any of them from testifying?

Republicans: You got a bunch of people to roll.  You got Manafort on the tax and fraud stuff from 2014 and earlier.  You got Rick Gates on the same stuff.  What did they say about Trump-Russia contacts?  You got Flynn on the lying to the FBI thing and on some other stuff.  What did he say about Trump-Russia contacts?  You got Cohen on a bunch of stuff.  You got Papadopoulos on lying to the FBI.  He was the first contact reported between the campaign and the Russians.  What did he tell you?  Do you have any evidence that President Trump’s words altered their decisions about co-operation?  Is it your theory that President Trump is incredibly artful?  That his continued public sympathy for Flynn after Flynn abandoned the shared defense agreement with Manafort was just for show?  Do you suspect that each of these people held out some essential secret that would otherwise have revealed the true Trump-Russia conspiracy?

Mueller: Cohen provided false testimony to Congress and the President had to know that this testimony was false.  But we can’t tell if the President got Cohen to give the false testimony.  (p. 316.)

Republicans: So, this would be the first real danger to the President from your investigation?  Yet it is actually unrelated to Russian intervention in the election.  And you “failed to establish” any collusion between Trump and the Russians.  And Cohen is unlikely to have been called to give the testimony without the investigation into that alleged collusion.

Mueller: “Obstruction of justice can be motivated by a desire to protect non-criminal personal interests, to protect against investigations where underlying criminal liability falls into a gray area, or to avoid personal embarrassment.  The injury to the integrity of the justice system is the same regardless of whether a person committed an underlying wrong.” (pp. 320-321.)

Republicans: Fair enough.  Most of us have been to law school.  Given your interest is in defending “the integrity of the justice system,” then can you comment on the Randy Weaver and Ted Stevens cases?

Mueller: While the investigation did not establish that the President was involved in an underlying crime related to Russian election interference, he may have had other personal motives for his actions.  For example, he may have thought that the 2016 Trump Tower meeting or advance knowledge of the Wikileaks would be construed as crimes that delegitimized his election.  These could fall under the definition of obstruction of justice.  (p. 321.)

Republicans: And Justice is?

Mueller: Much of this was done “in public,” but he’s the President and he has the power to pardon.

Republicans: And so you yourself and your subordinates felt intimidated?

Mueller: The President ordered subordinates to do many things that might have obstructed justice, but mostly those subordinates didn’t do them.  (p. 322.)

Republicans: Is there a federal statute that bars “wanting to obstruct justice” as differentiated from actual obstruction of justice”?