Cromwell

MBS is the power behind a semi-feudal hereditary monarchy; Xi is the head of a bureaucratic state driven by a 19th and 20th century ideology. They don’t seem very similar at first glance.

But they are both autocrats, and they have something else in common: they can’t stand dissenters. And so, while MBS ultimately permitted women to drive, he imprisoned women who fought for the very same right; similarly, Xi changed his covid policies in response to public demonstrations, but he is going after anyone who went out on the street to demand those very same changes.

Are you surprised? That’s what autocrats do. As a matter of self-preservation, they may take public opinion into account, but conceptually, they don’t view it as relevant.

I laid out four possible scenarios for the debt ceiling crisis last month. I did not include a fifth scenario in which some payments are made under a prioritization scheme. We were told during the Obama years that this was practically impossible, and I’m sure Biden will say the same thing, but circumstances might have changed. If so, what happens next?

Priority would undoubtedly be given to bond payments and to entitlement programs. Everyone else–federal employees, recipients of government spending programs, and contractors–would be left out in the cold. It would be similar to a government shutdown, but worse, because the line of victims would be much longer.

Confidence in the federal government would fall. Bond and stock prices would drop significantly. Making payments on the federal securities that are universally viewed as safe harbor investments would, however, prevent a worldwide financial crisis.

It would be a victory for Republicans who want to dismantle the government at virtually any cost, but it wouldn’t last. Within a week or two, mounting pressure from angry investors, public employees, national security hawks, and taxpayers denied essential federal services would result in a deal. The GOP will deservedly get the blame for the chaos in the interim, with the Democrats gleefully pointing out that the bond payments were largely made to foreigners, including the Chinese.

Is this really worth it, Kevin?

Last week’s issue of The Economist went to great lengths to argue that international trade is not a zero-sum game. True, but trade intersects with geopolitics, which is. A more powerful China inevitably means trouble for the United States.

From a geopolitical standpoint, is China rising or falling? It depends on whether one focuses on hard or soft power, as follows:

1. China’s hard power has never been greater, and it is increasing. China has the financial wherewithal to buy off many Third World countries and to influence the decision-making process of important American allies. In addition, China’s military is becoming more stronger, more professional, and more dangerous.
2. As to soft power, China’s complex language has always been a serious handicap, and an official ideology that effectively sets China well above all other countries has little to offer the rest of the world. The government has made things worse with its clumsy and opaque response to the virus and with its obnoxious “wolf warrior” diplomacy. As a result, China’s only reliable ally at this point is Russia, which is nothing to crow about.

Frankly, Xi is looking more like Kaiser Wilhelm II every day. The German Empire threw its unqualified support to a decaying fellow empire (Austria-Hungary) that looks a bit like today’s version of Russia. As with the Triple Entente, the bonds tying America to its allies in Europe and Asia, as well as unaligned countries with a concurrent interest in limiting China’s territorial claims (e.g., India) are getting stronger with time, thus threatening China with encirclement. Xi could stop this unfavorable trend by playing a bit less to his domestic nationalist gallery and returning to the more pacific tone of his predecessors. Whether he will or not remains to be seen.

C: There is a very real possibility that Ron DeSantis will be the Republican nominee in 2024. How do you feel about that?

M: At least he’s not Trump, but I don’t completely trust him.

S: He’s not Trump, and I don’t trust him.

C: There are obviously points of similarity and difference in your responses. Mark, tell me what you mean.

M: First, let me tell you what I think of Trump.

C: Please do.

M: Trump cut my taxes and business regulations, so, at least on the economy, there was a lot to like there. He’s a totally orthodox Republican on those issues. I’m grateful for that, and I haven’t forgotten.

C: I suspect there is a “but” coming next.

M: But the man is way too fixated on his own grievances and on stoking the divisions in this country. He’s corrupt and narcissistic. He doesn’t care about the American people; he only cares about himself. He loves dictators and ignores the Constitution. He tried to overthrow the government. A tax cut doesn’t justify all of that.

S: Whatever you say, you pathetic RINO.

C: What about DeSantis?

M: I’m mostly OK with what he says about wokeness, but that’s a really small part of the job, and he makes it sound like the biggest part of the job. He doesn’t sound that friendly to business. The Disney thing scares me. If you say something bad about him, he might want to take over your business. And then there’s his ridiculous position on vaccines. Why would I support someone like that?

C: Have you written him off?

M: No, but he has a lot to prove to me.

C: Would it help you to know that he supported big tax and spending cuts in Congress?

M: Yes, but that might have been pure opportunism. As I said, he has a lot to prove to me. He’ll get his chance during the debates.

C: Sebastian, I take it you don’t agree?

S: Hell, no!

C: Why not?

S: The thing about Trump that RINOs like him don’t understand is that the man is on my side. He makes that clear every day. He does battle with the establishment every day. I know he won’t sell me out.

C: Do you really know that? The man has a history of screwing over everyone who supports him. He demands loyalty, but gives none.

S: Every time Trump does something the left and the establishment think is corrupt or outrageous or racist or narcissistic, he’s really telling me he wants to burn it down. That’s what I want.

C: Why?

S: Because I don’t get the respect I deserve–the respect I used to get from this country as a hard-working, self-sufficient, law-abiding taxpayer. If there’s no other way to get it, I say burn it down.

M: And make me a poor man?

S: If necessary, yes. Your money means nothing to me.

C: And DeSantis?

S: First of all, he owes his job to Trump, so he should be willing to wait his turn. If there’s one thing I hate, it’s disloyalty. Second, there’s nothing about his background that suggests that he wants to burn it down. My guess is that he would sell out to the establishment the minute he gets the nomination in order to get elected. Third, his focus on wokeness is OK, but it doesn’t really address my concerns. I don’t really care about trans people–I don’t even know any. What I care about is controlling the border and protecting white Christians. Trump has a clear record on that; DeSantis doesn’t.

C: So you may disagree with Mark on many things, but you agree on one thing–you don’t trust DeSantis until he proves it to you.

S: Exactly. And he has a long way to go.

C: OK. I’ll see you both in a few months, when the field is finally set.

Bret Stephens is a CL. He thinks economic growth is tied inextricably to a small state. As a result, he thinks high levels of Chinese growth are logically impossible, and he has been predicting the decline of China for years. He is now taking China’s covid problems and population issues as evidence that he was right all along. Was he?

In this post, I will examine the rising or declining issue as it pertains to the Chinese economy. Tomorrow, the topic will be geopolitics.

China’s impressive growth rate over the past three decades was the result of several factors, including:

1. A large, underemployed rural workforce that was willing to move to the cities and sacrifice current comforts for the hope of a better future;
2. A relatively predictable and business-friendly government;
3. Protectionist measures, including forced technology transfers, that were accepted by companies lured by the enormous Chinese market;
4. Technological changes that made globalization more attractive to large corporations. and
5. Huge investments in infrastructure.

Very little of this blueprint was original; you could say the same things about the UK and the US in the19th century, to say nothing of Japan, South Korea, and numerous other countries more recently. Two things make China stand out, however: its sheer size; and the fact that it had been a communist country. To make capitalism work in a nation that had demonized it for decades was a truly remarkable accomplishment.

The factors listed above can no longer be the catalyst for the rise of China. The demographic dividend has been spent. Xi has made it clear that he prefers stability and a state-driven economy to dynamism, creative destruction, and the creation of private power centers. The rest of the world now views China as an adversary and a potential predator, not just as a source of cheap goods. There are no technological changes on the horizon that make moving your plant to China more attractive, particularly after the government’s response to the virus. Finally, there are only so many miles of highways and subway lines you can build without creating waste.

China does have the advantages of size, an enterprising people, and lots of money to invest. As a result, an actual decline is unlikely. What you are more likely to see is a degree of stagnation over the next decade or so. Stephens isn’t exactly wrong, but he isn’t exactly right, either.

As I’ve noted many times before, Ron DeSantis has not been a budget cutter as governor of Florida. According to Jamelle Bouie, however, DeSantis was, in fact, a budget hardliner as a member of the House, at which time, among other things, he supported cuts to Social Security and Medicare.

Whoops! The elderly are a huge part of the reactionary base. Wars on wokeness and cuts to “welfare” are certainly welcome to them, but reductions in Social Security and Medicare? Not so much.

Chances are, the Hungarian Candidate’s enthusiasm for entitlement cuts back in the Tea Party’s heyday were just as opportunistic as his war on wokeness is today. Nevertheless, Trump and his other adversaries are going to make him wear this, bigly.

Like Japan in 1941, China is a highly nationalistic country that clearly seeks to be the dominant power in its neighborhood. Does that make them essentially similar?

No, because China is not a militaristic nation. Historically, it used its size and higher levels of culture to control its back yard. Today, it can buy virtually everything it wants, so military action is not necessary.

Taiwan is an exception, of course.

In 2011, there was a huge uproar over the debt. The GOP was determined to cut spending on entitlements and social programs; to that end, it manufactured a crisis over the debt limit. The MSM collaborated in this by giving lots of publicity to “experts” who told us the sky would fall without cuts. In the end, there was no grand bargain, but there was no disaster, either.

The GOP cut taxes and increased the deficit dramatically during the Trump years. The silence about the debt from the right, the deficit scolds, and the MSM was deafening. Today, however, with a Democrat in the White House and a GOP majority in the House, the MSM are once again taking the issue seriously, even when the first major action of the new reactionary majority was to try to increase the deficit by getting rid of the new IRS agents.

Two observations are pertinent here:

1. The MSM should know better than to treat the GOP’s position on debt as a good faith argument, because it is abundantly clear that it isn’t; and
2. Debt can be a problem when real (not nominal) interest rates on federal securities become uncomfortably high. Today, nominal interest rates are higher than they were a year or so ago, when money was essentially free, but the inflation that has driven those rates has also reduced the real value of the debt, which results more or less in a wash. As long as the Fed doesn’t raise rates well beyond what appears to be currently contemplated, I don’t see a problem here.

The universal rule is supposed to be that one doesn’t negotiate with terrorists. Experience tells us that it is rarely followed; even the Israeli government does it. What does that mean for Biden and the debt ceiling?

There is no legal, moral, economic, or constitutional basis for refusing to pay existing debts, so as a purely intellectual matter, Biden is right to say he won’t negotiate. As a practical matter, things get murkier. Assuming, for purposes of argument, that Biden really has (mistakenly) rejected relying on the Fourteenth Amendment to deal with the problem, his first step should be to force the GOP to put something on the table; in other words, he shouldn’t negotiate with himself. He is following that direction as of today. After the GOP has exposed the outrageousness of its demands, whatever they may ultimately be, the real discussions will begin. Where that will lead, I can only guess.

Louis XIV identified himself completely with the French people, so it seems likely that he viewed Versailles as a monument to French culture, not just himself. If so, history has vindicated him. The French people are clearly proud of Versailles. If you go there, or watch a French documentary on the place, the emphasis will be on its grandeur, not the suffering of the taxpayers who funded it and the workers who built it.

In a sense, Versailles is a lot like Xi’s concept of the “Chinese dream;” China is great, therefore you are. The difference is that Xi isn’t building anything that will evoke Chinese greatness centuries from now. Airports, highways, and innumerable identical high-rise buildings don’t count. Neither do Uighur camps.

The Chinese government has reversed course and wants more children. What can it do?

Start by considering the reasons many young Chinese workers don’t want kids. They are expected to work 12 hours a day, six days a week (the “996” program), so they have little time or energy for child care. Migrant workers typically have no access to public services in the largest cities, so they either leave their children with older relatives in rural areas or pay for education and health care out of their own pockets. The welfare state is rudimentary at best; families are expected to take care of their own. Residential spaces are small, cramped, and expensive. Under these circumstances, why would they want to add to their burdens?

It would be possible for the state to change these conditions, but any such measures would either offend vested interests or impose enormous costs, which would have to be passed on to taxpayers or consumers. The government has consequently been reluctant to take any effective action up until now. Is there anything else it can do?

Yes. It can restrict access to birth control. Don’t be surprised if that starts happening in the near future.

Ross Douthat thinks the dangers of climate change have been overstated; the most important long-term issue for America and the world, in his view, is a “birth dearth.” He most likely would say otherwise if he lived in Florida, California, or Arizona, but the aging of America unquestionably presents us with some serious policy challenges, so let’s go with it. How could our demographic issues be resolved?

There are two obvious answers to that question. The first would be to provide better financial incentives for women to have children. Douthat occasionally shows some interest in this approach, but he hardly seems passionate about it. The second, and even better, option would be to increase the levels of immigration into the United States. This would serve two purposes: it would provide us with additional essential workers; and it would be a compassionate solution to the problems at the border. On its face, it seems like a no-brainer.

Douthat does not support the immigration solution even though it is completely consistent with the teachings of his beloved Catholic Church. He appears to believe that the best way to increase our population is to compel American women to give birth against their will; in other words, the rights of the American unborn are entitled to more weight than the rights of the Central American born. That tells you demographics aren’t really an overriding issue in his eyes; this is really about a soft form of racism.

The great would-be emperor Xi

Wants more children in China, you see.

But they won’t multiply.

Few are born; more will die.

It’s a tale that won’t end happily.

Joe Biden knows as well as anyone that nothing moves the radical right more than the immigration issue. He has done what he can, within the limits of simple humanity, not to provoke them. Since no legislative solution to the immigration problem is in sight, even though the framework of such a deal is only too obvious, he is kicking the can down the road. The solution will have to wait for another day.

On Afghanistan, on the other hand, Biden rejected the kick the can “solution” and withdrew the troops knowing that defeat, chaos, and unpopularity were likely to follow. That raises the question: is the debt ceiling issue more like immigration or Afghanistan?

I think it is somewhere in between. My guess is that Biden will take a deal with cosmetic cuts if he can get one, but he won’t give in to any demands that put his legislative legacy and party unity at risk.

Crosby was the quintessential gifted 1960s bohemian; a firm believer in experimentation and personal freedom, he pushed back at every boundary he encountered. Sometimes he went way too far for his own good, but as anyone who has watched “Echo in the Canyon” can tell you, he didn’t seem to have many regrets about it. In a more censorious age, that was kind of refreshing.

Crosby was a talented musician and a character. He left a musical legacy from which all of us have been the beneficiaries. He will be missed.