The Middle Kingdom.

China has emerged from backwardness and isolation with astonishing suddenness.  The death of Mao Zedong, followed by the overthrow of his immediate successors, brought to power Deng Xiaoping.  While opening China to foreign trade, investment, and learning, Deng counseled modesty.  “Hide your brightness, bide your time.”  Now that time has come.  China has begun to exert its power in ways unprecedented in modern times.

The Romans built roads to hold their empire together, then they built a lot of other things to increase its value.  Alarm has begun to spread at a new “One Belt, One Road” enterprise launched by ChiComCo.[1]  The “Belt” is an overland transportation system (roads, railroads, bridges and tunnels) and its attendant support systems (power generation and transmission, a regulated version of the Internet).  The “Road”[2] is the complementary sea-route to Europe, along with all the logistical support (like ports).[3]

Chinese companies can count on the lion’s share of construction contracts.  For example, Chinese construction companies have built “95 deep-water ports, 10 airports, 152 bridges, and 2,080 railroad” segments in countries along the routes of the Belt and Road.  As it is completed, the Belt and Road facilitates Chinese trade.

Recognizing the rising economic power of China, the United States sought to counter this with the “Trans-Pacific Partnership” (TPP) trade treaty.[4]  However, American politics suddenly shifted against an open world economy.  Not only Donald Trump, but Bernie Sanders and then Hillary Clinton declared the TPP a bad deal for Americans.  While the leaders of many countries likely to be touched by China’s great plan attended a “Belt and Road” conference in May 2017, the United States sent only a delegate.  Some of the negative commentary about China’s investments abroad is couched in humanitarian, rather than economic or strategic, terms.  China founded its pursuit of prosperity on seizing land for economic development projects and then shoving huge numbers of people off the land.[5]  (One counter to this is that countries like Pakistan or Cambodia act in similar ways—without greatly improving the economic lives of their citizens.)  The Chinese investment may have a long-term effect of putting the critical infrastructure of developing countries under Chinese control.  Hence, many people see the United States as ceding global leadership to China.[6]

It’s difficult to know what to make of this charge.  On the one hand, George W. Bush in his second term and Barack Obama in both his terms sought to limit American engagement abroad in the interest of strengthening a redoubled country at home.  The Trump Administration’s “America First” rhetoric and policies falls in line with these earlier efforts.  Thus the national impulse seems to be running toward dealing with domestic problems.  It is hard to deny that America has pressing domestic problems that will not be easily resolved.

On the other hand, China’s strengths are many and real.  It would be foolish to think that these will not reshape the global order.  So, where is the sweet spot?

[1] “China’s plan to run the world,” The Week, 16 June 2017, p. 11.

[2] Obviously, the planners hadn’t been reading Cormac McCarthy.  See: https://en.wikipedia.org/wiki/The_Road

[3] For the historical antecedents, see: https://en.wikipedia.org/wiki/Zheng_He

[4] The treaty was highly favorable to Americans.  It created a free trade zone encompassing 40 percent of the world’s trade, while creating safeguards for American interests through labor and environmental standards.

[5] Along the way, China moved  86 percent of its people out of extreme poverty.  Many of them moved into lives of middle-class abundance—and stress.

[6] American announcement that the country would withdraw from the Paris Climate Control agreement is offered as a further example of American abdication.

Donner, party of ten! No, eight.

Western lands appealed to many Americans during the 18th and 19th Centuries.  Mexican Texas, Mexican California, and Oregon exerted a magnetic attraction on malcontents of the Mississippi Valley watershed during the 1830s and 1840s.[1]  Real estate speculators and promoters have been talking up America’s “wonders” since John Smith touted the 17th Century Chesapeake.  In 1845 one of Smith’s successors described—accurately enough—the charms of California: “a paradise” of “perpetual spring” with fertile lands and a healthy climate.  With visions like that dancing before their eyes, it’s not surprising that some of the migrants skimmed over the bits about what lay between the point of departure (Independence, Missouri) and the destination.  For example, migrants were warned to leave Independence by 1 May at the latest and to get a move on.  While California might be a land of “perpetual spring,” things were rather different in the Sierra Nevada mountains, where the snow storms could block the passes.

George and Jacob Donner, and James Reed headed a party of 74 people in 19 wagons.[2]  The Donner Party suffered a minor, but spectacular, disaster.  In mid-April 1846 the pilgrims headed west from Springfield, Illinois; a month later they departed Independence.  Having left late, the party then dawdled along the way, failing to catch up with a larger wagon train.  Starting to feel a certain urgency, they consulted their guidebook.  It mentioned a newly-discovered short-cut.  Great!  Problem solved.  Then they encountered a grizzled old trapper heading east.  He didn’t think much of the supposed short-cut.  What to do?  Ignore his inconvenient opinion.  Great!  Problem solved.

Unfortunately, the short-cut took them through the Wasatch Range and over a long stretch of arid salt flats.  Many of the draft animals died there.  Further slowed by these losses, the party reached the Sierra Nevada well behind the recommended dead-line.  Heading into the mountains, they found themselves snowed-in by November 1846.  They could neither go forward nor go back.  They had too little food to last out the winter.  Eventually, in December 1846, they sent out a couple of messengers to try to bring back help.  The pass was snowbound on both ends, so it was February 1847 before help finally reached them.  Only 48 people survived the winter, and nine of them died while being moved west into California.  Many of those who did live had engaged in cannibalism.[3]

Of the 34 who died in the winter camps, 25 were men and 9 were women.  Why was that?  People who study this sort of stuff figure that age, sex, and the size of the family group played the largest role in deciding who survived.  People under the age of 35 had a better chance of surviving than did older people, although most children under 6 died.  Two thirds of men between 20 and 39 died.  Nutritionists tell us that men metabolize protein faster than women, and women do not require as high a caloric intake. Women store more body fat (although you shouldn’t mention this in conversation if you want your genetic line to continue).  This can delay the physical decline caused by starvation and overwork. Men also tend to do more dangerous and physically demanding work.  Men wore down faster than did women.  Then, bachelor males survived at lower rates than did those who were those traveling with family members.  Maybe families were more ready to share neighbors with family than family with neighbors?

[1] Ray Allen Billington, The Far Western Frontier, 1830-1860 (1956).  Still a hell of a book.

[2] Michael Wallis, The Best Land Under Heaven: The Donner Party in the Age of Manifest Destiny (2017).  Reviewed by David Price, WSJ, 6 June 2017.

[3] Although not in murder.  People who died of natural causes were consumed by the survivors.   For an analogous case, see Nathaniel Philbrick, In the Heart of the Sea: The Tragedy of the Whaleship Essex (2000).

Memoirs of the Addams Administration 6.

Any way you look at it, President Donald Trump has had a bad couple of weeks.  Democrats glory in every one of his spectacular mis-steps, while mainstream Republicans insist that he has to be just like them to survive.[1]

After President Donald Trump dropped the Director of National Intelligence (DNI) from the National Security Council, America’s intelligence agencies leaked information that compromised the National Security Adviser (NSA), Lt. General (ret.) Michael Flynn.[2]  Apparently, the leaks included actual transcripts of the conversations between Flynn and Soviet–sorry, Russian–ambassador Sergey Kishlyak.[3]  Flynn resigned as NSA.  On the other hand, Steven Mnuchin was confirmed as Secretary of the Treasury.[4]  The Trump administration now has in place the secretaries of Treasury, State, Defense, and Education

Trump is already at the head of the enemies list of a diverse group.  The New York Times, which had criticized the EffaBeeEye for releasing news of a new investigation of Hillary Clinton’s e-mail messages shortly before the election, reported that the national police force had launched an investigation of connections between the Trump campaign and Russian organs of the state.  Senator John McCain (R-Arizona), who has been attacked by Trump on many occasions, said that “It’s a dysfunctional White House.”  Fred Kaplan (D-Slate.com) said that the scandal “could conceivably oust Donald Trump from power” if further revelations show that he is “secretly beholden to a foreign power.”

All the same, if you leave aside the whole are-we-sliding-toward-a bureaucratic/military-coup issue, the pressing issue of the moment is what course President Trump will adopt on the dollar.[5]  A strong dollar allows American consumer to buy lots of stuff on the cheap.  A strong dollar also makes American products more expensive on foreign markets.     Trump’s “America First:” bumper-sticker doesn’t provide any guidance on the correct policy to follow here.  Consumer America loves a strong dollar; Producer America hates a strong dollar.  “Which will you have?”[6]  It isn’t clear which America is “Consumer America” and which is “Producer America.”  The revolt by tech workers against the “Not-A-Muslim-Ban” suggests that much of the economy of the future is against Trump, while much of the economy of the past is for him.  Of course, the mechanization of manufacturing that has destroyed so many jobs means that manufacturing still needs export opportunities.

The mainstream Democrats found themselves confronted by their own “Tea Party,” in the guise of the “Resistance” movement.[7]  Odds are that this is an authentic revolt by the Democratic equivalents of the Republican idiots of 2009.  Maybe its get-out-the-vote ardor will just help Democrats regain some seats in 2018.  However, the enthusiasm and support for the “Resistance” shown by mainstream Democrats will come back to haunt them if zealots gain the upper hand in party policy-setting.  The question is whether the white working-class voters who abandoned Hillary Clinton in November 2016 can be won back by an emphasis on racism, LGBT issues, and abortion.  (Well, that one answers itself.)

[1] “Trump: Can he regain control of his presidency?” The Week, 24 February 2017, p. 6.

[2] “Flynn resigns amid growing Russia scandal,” The Week, 24 February 2017, p. 4.

[3] JMO, but if this happened in a Third World country, the New York Times would be all over the story of a looming coup.

[4] “Washington: Mnuchin takes top Treasury job,” The Week, 24 February 2017, p. 32.

[5] “Issue of the week: President Trump’s dollar dilemma,” The Week, 24 February 2017, p. 34.

[6] See: https://www.youtube.com/watch?v=UtTBykcnjX4

[7] “’The Resistance’: A liberal Tea Party?’ The Week, 24 February 2017, p. 17.

Poisonville.

A couple of recent books have high-lighted the big changes that swept over one part of America.[1]  Charles Murray and Brian Alexander[2] have both tried to understand the situation of the folks “I left behind me” when I went East to grad school.  Murray adopted the macro-perspective, while Alexander preferred to flesh-out the story by looking at the home town he had abandoned and to which he later returned.[3]

Once upon a time Lancaster, Ohio, incarnated the prosperous, moderate, conformist America of the golden years that followed the Second World War.  No one in the Boston-Washington corridor would have thought of places like Lancaster as an American Athens.  However, some basic cultural values of the Classical Greeks also then prevailed in Middle America: moderation and self-restraint.  The wealthiest Lancastrians did not live in gated communities; most children went to the public schools; women of all social classes joined in the community initiatives.[4]

Then things went wrong.  Over the last thirty-odd years, Anchor Hocking, a glass-maker and the chief employer in town, got passed around by Wall Street investment firms and the bankruptcy courts.  Along the way Lancaster went from being a town of 29,000, of whom 5,000 worked for Anchor Hocking, to being a town of 39,000, of whom 1,000 worked for that same company.  Production down-shifted from high-skill to lower-skilled products; and workers’ commitment to quality down-shifted with it.  In the process, the company’s pension fund dried up and its’ obligations were passed to the federal insurance program; wages were held down; and the generous fringe-benefits once offered by the company were cut to the bone.  Demoralization spread among the workers.  One worker says his co-workers snort Percocet and Oxy on the job.

Brian Alexander—like everyone else, so far as I can tell—sees the modern economy as the snake in this Garden of Eden.  His rogues’ gallery includes foreign competition, Milton Friedman, the powerful bargaining of big box stores, and companies that put profits for stock-holders ahead of wages for workers.

What seems to be missing is any awareness of the rebounding of foreign economies after the Second World War, which created formidable competitors for American industry; the great labor offensive of the 1970s that led companies to shift production to “right to work” states or over-seas; the huge impact of automation on many industrial processes, which destroyed millions of jobs; the nostalgia for small shops that imposed a quaintness tax on consumers, which many sought to evade by going to Walmart; or the inadaptability of many older workers, which left them languishing in backwaters.

These changes have come in for a lot of attention because of the supposed political consequences.  That is, “Rust Belt” one-time Democrats put Donald Trump into the White House.  Now Democrats and mainstream Republicans are thrashing around trying to figure out what went wrong.  Neglect of/contempt for blue collar workers is an easy explanation.  Certainly, it has been my one.  Is it the right one?

[1] Maybe, just maybe, other people in my social group missed out on them as well?  IDK.

[2] Charles Murray, Coming Apart: The State of White America, 1960-2010 (2012); Brian Alexander, Glass House: The 1% Economy and the Shattering of the All-American Town (2016).  See Roger Lowenstein, “Why They Voted For Trump,.” WSJ, 18-19 February 2017.

[3] Alexander is not the first to explore these issues in this fashion.  See also https://waroftheworldblog.com/2015/03/22/our-kids/

[4] Many of the early thrillers by John D. MacDonald offer glimpses of this world.  See, for example, Area of Suspicion (1954).

“Chaebol.”

“Chaebol” is a Korean word for “rich clan.”[1]  Probably, in the misty past, that meant families that owned a lot of farm land.  One way or another, they probably had connections to the government.  In the misty present, South Korea has become a major industrial and commercial society.  So long as the Japanese Empire ruled Korea, the country remained a subordinate part of the rough-draft of the “Greater East Asia Co-Prosperity Sphere.”  That is, it provided cheap labor and raw materials to Japanese industry.[2]  Then, in 1945, came liberation and national independence, if not national unity.  Then, from 1950 to 1953, came the terrible Korean War.[3]

After the war, the government of the Republic of Korea (aka ROK, aka South Korea) set out to join the modern world.  Those were hard times and there wasn’t much to go around.  The government channeled the scant available resources toward companies that were “bullish” on South Korea.  The government also fended-off foreign competition and stepped down hard on the labor movement.  The government pushed a drive for export-led growth.

Hyundai, Samsung, LG, and Hanjin are among the leading “chaebol.”  Generally, these are conglomerates of related industries within sectors of the economy.  Samsung makes electronics, Hyundai makes cars, and Hanjin is a (now bankrupt) shipping company.  That is, they try not to compete with one another.  Each one has his share of the pie.[4]

A glance at the names of the “chaebol” demonstrates just how successful this effort proved to be.  A further glance north of the Demilitarized Zone (DMZ) at the Peoples’ Republic of Drudge,[5] shows an alternative strategy for development.  In any event, the “chaebol” have molted into families that own a lot of companies.  One way or another, they probably have connections to the government.  That is, rich people finance the election or re-election of pawns.

One “tarantula on a piece of Angel food cake” in this success story is the deep resentment felt by ordinary South Koreans.  In the 1950s and 1960s, the “chaebol” got scarce resources in very hard times.  Ordinary people had to do without.  That has become a folk memory.  Today, the “chaebol” continue to pile up wealth when South Korea no longer needs to fight for survival.  Ordinary people resent that selfishness.  The problem for the “chaebol” is that, in the 1980s, South Korea made the shift from a military-industrial complex government to something approaching a real democracy.  In these circumstances, no longer can every scandal involving the “chaebol” be swept under the rug.[6]

A second “tarantula” appears in the series of scandals and errors plaguing the “chaebol.”  The Asian financial crisis of the 1990s; Samsung phones catching fire; and the sinking of the ferry boat “Sewol”[7] all have called into question the ethics and competence of the “chaebol.”

Then there’s the sinking of the F.V. “Majestic Blue.”  But that’s unrelated.

[1] Carlos Tejada, “Money, Power and Family: Inside the Chaebol of South Korea,” NYT, 18 February 2017.

[2] Not that it has anything to do with economic policy, but you might want to see “The Handmaiden” (2016, dir. Park Chan-wook).  It has been described as an “erotic psychological thriller.”  JMO, but if this doesn’t get your motor running, then you’ve got issues.

[3] Americans commonly—and wrongly—believe that the horrors of that war are encapsulated in the Anabasis of the First Marines from “up on the reservoir” down to the sea.

[4] “Oh what a good boy am I.”

[5] I stole that from someone, perhaps from Walt Kelly.

[6] “There ain’t no clean way to make a hundred million bucks…. Somewhere along the line guys got pushed to the wall, nice little businesses got the ground cut out from under them… Decent people lost their jobs…. Big money is big power and big power gets used wrong. It’s the system.”–Raymond Chandler, The Long Goodbye (1953).

[7] See: https://en.wikipedia.org/wiki/Sinking_of_MV_Sewol

“Bug Eyed with Fear and Vengeance.”

In the opening scene of The Hamlet[1], Ab Snopes strides across his future landlord’s barnyard, then tracks manure into the front hall.  His behavior, and that of the whole scabby Snopes clan, deteriorates from there on across a trilogy of novels.  When David Mikkelson needed a user name for a group, he picked “snopes.”  Soon, impressed by the amount of sheer nonsense he encountered on the internet, he and his wife started a fact-checking site called Snopes.  To this day, the site tracks manure into the front hall of many internet fantasies.

Recently, the editor at the Snopes site reportedly told The Atlantic[2] that the majority of political false reports and rumors now come from or are aimed at liberals.  To follow one example ripped from the pages of Snopes, in February 2017 a story circulated that Donald Trump had met Vladimir Putin at an exclusive Swiss Alpine resort in June 2016. The story originated with three newly-created “fake news” sites.  “Redirects subsequently put in place for these fake news sites demonstrate that they were established as a promotional effort for the psychological thriller film ‘A Cure for Wellness’.”[3]

In similar fashion, surveys of Democrats conducted in July and November 2016 revealed an increase in a disposition to believe conspiracy theories from 27 percent to 32 percent.[4]  Political psychologists suggest that a belief in conspiracies is a coping mechanism on the part of people who have lost power or status in some fashion.  Thus the same survey that found an increase in Democrats’ conspiracy belief also found a decline in Republican conspiracy belief from 28 percent to 19 percent.[5]  As one academic expert on George Orwell put it, “people are hungry for frames of reference to understand this new reality.”[6]

Perhaps one sign of the post-election state of mind among Democrats is to be found in the surge of sales for “dystopian classics.”  George Orwell’s Animal Farm and 1984 topped the sales charts at Amazon.com.[7]  Sinclair Lewis, It Can’t Happen Here[8] and Aldous Huxley, Brave New World, came close behind.  Sales of Margaret Atwood’s The Handmaid’s Tale (1984) jumped 30 percent in 2016 and 100,000 copies were printed in the three months following the election.

It has been suggested that alarmed Democrats are turning to works of fiction because non-fiction journalism can’t keep up with reality.  It isn’t for want of trying.  To take one example, one “The Interpreter” column in the New York Times offered “scholars of authoritarianism” a platform from which to compare Donald Trump to Recep Tayyip Erdogan, Vladimir Putin, and Rodrigo Duterte.[9]  Will all this turn out to be incitement to some rash act?

[1] William Faulkner, The Hamlet (1940).

[2] Which was read by a reporter at the New York Times, who quoted the Snopes editor in a story which I read and am now trying to write about for the blog which you are reading.  Just laying out the provenance here.

[3] See: http://www.snopes.com/trump-putin-switzerland/  The film was produced for Regency Films, owned by Amon Milchan.  https://en.wikipedia.org/wiki/Arnon_Milchan

[4] Brendan Nyhan, “More Democrats Turn to Conspiracy Theories,” NYT, 16 February 2017.

[5] It is curious (to me anyway) that in July 2016, essentially equal percentages of Democrats (27) and Republicans (28) were disposed to believe in conspiracy theories.  I wonder if that is just a result of an election campaign and that the numbers are lower between elections?

[6] Alexandra Alter, “Fears for the Future Prompt A Boon (sic) for Dystopian Classics,” NYT, 28 January 2017.

[7] Understandably, sales of his Homage to Catalonia (which details the murderous behavior of the Communists to their fellow-leftists during the Spanish Civil War) and The Road to Wigan Pier (which lambast middle-class contempt for the values and behavior of working people) failed to budge.

[8] The novel commonly is taken as an attack on Huey Long, the Louisiana demagogue and rival to Franklin D. Roosevelt until Long’s assassination.

[9] Amanda Taub, “The Travel Ban and an Authoritarian ‘Ladder of Violence’,” NYT, 2 February 2017.

Memoirs of the Addams Administration 4.

In his second week in office, President Trump issued an executive order requiring that any new regulation must be accompanied by the removal of two existing regulations.[1]  Given the cumbersome mechanism for removing existing rules and regulations, this should put a stop to new rules and regulations for a year.[2]  (He allowed an exception for national security-related issues.)  A cost-benefit analysis of this issue is murky.  The Office of Management and Budget suggests that regulations drain-off $110 billion a year from the economy.  On the other hand, the same regulations may save the economy an estimated $872 billion a year.  The “benefits” of regulation actually are non-monetary and can be difficult to calculate in a conventional manner.[3]  In short, neither the “costs,” nor the “benefits” of regulation can be calculated.

President Trump nominated Neil Gorsuch to fill the Supreme Court vacancy created when Antonin Scalia augured-in.  Judge Gorsuch is a highly-regarded jurist, as was Judge Merrick Garland, who was denied even a hearing in a shameless piece of Republican obstructionism.[4]  He’s also 49 years-old and could sit on the Court for decades, short-circuiting every Democratic initiative launched by the turn of semi-annual or quadrennial elections.  Democrats demonstrated dismay.  “This is a stolen seat,” declared Senator Jeff Merkley (D-Oregon); the “Republicans stole this seat from Obama” declared the Charlotte Observer (D-North Carolina); while the Atlantic (D-Massachusetts) denounced it as a “deal with the devil.”

Still, the Republicans controlled the Senate when President Obama nominated Judge Garland.  They weren’t going to approve a pro-Democratic Justice when the election tides had been running against the Democrats for three out of four successive elections.  Hearing followed by rejection isn’t any different than rejection through no hearings.  The assumption in the White House appears to have been that whichever party held the White House got to choose which ever justice it wanted for the Supreme Court.  If that’s true, then what about Robert Bork?[5]

[1] “Washington: Trump orders regulatory rollback,” The Week, 10 February 2017, p. 32.

[2] See Emmarie Huetteman, “How Republicans Will Try to Rescind Obama Regulations,” NYT, 31 January 2017.

[3] Perhaps not everything can be reduced to a balance sheet.  Still, do we want a flight into mysticism and “personal feelings” on behalf of people whose standard of living depends upon other people generating wealth?

[4] “Battle lines drawn over Supreme Court pick,” The Week, 10 February 2017, p. 5.

[5] See: https://en.wikipedia.org/wiki/Robert_Bork