WEEKLY BRIEFLY NOTED: FOR 2024-09-28 Sa
My weekly read-around...
My weekly read-around...
Relative heft in “geöëconomics”; non-managers gain relative wage ground; JD Vance is sad people noticed he is a neofascist; China is opaque; our political parties are hollow shells; very briefly noted; SubStack Notes; & state-capacity liberalism, Xi Jinping as aging emperor, is Trump’s “success” worth having?, Second-International socialists, & weekly briefly noted for 2024-09-19 Th…
ONE IMAGE: Nominal Current Exchange-Rate Shares of Global GDP
Current exchange-rate shares of global GDP capture economic heft in the world economy—the extent to which nations, or their rich citizens and organizations that can mobilize societal wealth and use it as a form of power, can accomplish purposes and become factors and forces that must be taken into account by everyone. From this perspective, the three most interesting and important things to have happened since 1979 in these relative economic-and-financial power terms are:
The rise of China as a factor that must always be taken into account.
The rise and then decline of Japan as a factor that must always be taken into account.
The erosion of the position of the European Union as a factor that must always be taken into account.
In what is called these days “geo-economics” (God! I hate that word!), the US is no more or less dominant than it was in the late 1970s—but back then the principal other powers were a potentially-peer power European Union and Japan, while now Japan is an economic great power but not one of the hyperpowers, and the European Union and China are both of potentially equal significance:
ANOTHER IMAGE: US Real Wages: Non-Managers & All Workers:
Ignore the plague spike: that is a shift in the composition of those at work. Marvel at how starting during the Vaccination Summer of 2021 the relative wages of non-managers underwent a year-long apparently-permanent upward jump.
Figure that managers are 10% of the workforce and 20% of the wage bill. That means that your typical manager saw their real income fall by 10% as a result of the plague disruption and subsequent wheeling of the labor market into its new configuration, while non-managerial real wages have kept growing along their pre-plague track:
Calculations by Arin Dube.
YET A THIRD IMAGE: Clipped from Twitter:
It is the expressed policy of the Trump campaign that a renewed Trump administration would arrest, imprison, and deport 20 million people from the United States, is it not? And there is no point for Trumpists to say they are only after “illegals”. They are not—they are especially after legal residents of Springfield, Ohio who have fled here from Haiti. If you are Slovenian-American or Czech-American, you are probably OK. (But I wouldn’t place bets if you are Ukrainian-American.) And if you are Indian-American, I would watch out:
ONE AUDIO: Shifting Policies in & with Respect to the Central Country:
It is almost needless to say that nothing, nearly nothing, is clear:
On today's show Andrew Sharp and Bill Bishop begin with a raft of measures announced this week to stimulate the economy. Topics include:
A pop to the stock market just in time for the PRC's 75th anniversary, stimulating mergers and acquisitions,
whether this week's measures indicate more relief in the months to come,
and more.
Then: The disappearance of prominent economist Zhu Hengpeng, and
a reminder of structural problems under Xi that have continued to intensify, regardless of monetary policy.
At the end: The Ministry of Commerce announces that the owner of Calvin Klein and Tommy Hilfiger are under investigation,
the US Commerce Department moves forward with a proposed rule that would effectively ban Chinese vehicles from the US, and
a Substack post offers a taxonomy of Democrat China policies and questions about who might set the agenda for a Kamala Harris administration.
<https://overcast.fm/+AA9M0upXB9Q>
ANOTHER AUDIO: Hollow Political Parties
Geoffrey Kabaservice, Sam Rosenfeld and Daniel Schlozman on:
Schlozman, Daniel, & Sam Rosenfeld. 2024. The Hollow Parties: The Many Pasts and Disordered Present of American Party Politics. Princeton: Princeton University Press. <https://press.princeton.edu/books/hardcover/9780691248554/the-hollow-parties>.
<https://overcast.fm/+AAqKmPvpluk>
America’s founders deeply mistrusted political parties…. But the disunity that Washington warned that parties would bring has always been present in America, and still is. What political parties can do at their best is to make disunity manageable by facilitating compromise and preventing political conflict from turning into violence. Sam Rosenfeld (an associate professor of political science at Colgate University) and Daniel Schlozman (an associate professor of political science at Johns Hopkins University) have together written… The Hollow Parties: The Many Pasts and Disordered Present of American Party Politics… a historical narrative…. Schlozman and Rosenfeld argue that American parties historically had been highly successful at organizing political choices and political conflict, and providing a way of organizing collective action toward collective goals. But in recent decades, they assert, both the Republican and Democratic parties have become hollow: unable to organize themselves internally (in terms of making party decisions) or externally (in terms of shaping conflict in the broader political arena). They have lost critical core functions—including voter mobilization, fundraising, ideological advocacy, and agenda setting—to para-party organizations that Schlozman and Rosenfeld term “the party blob.” So even as political polarization has in many ways reinforced Americans’ partisan identities and strengthened party leaders' command over rank-and-file legislators, the parties have become less and less capable of fulfilling their proper functions…. Schlozman and Rosenfeld discuss how the hollowing-out of the Republican Party has made it vulnerable to Donald Trump…. A similar process of hollowing-out in the Democratic Party has rendered it largely ineffectual in important ways; it has become what Schlozman describes as “a party that has been less than the sum of its parts and that has been unable to figure out its post-New Deal purpose”...
I disagree with many of their conclusions about the Democratic Party. On the technicratic–interest group level, the Democratic Party has done absolutely fine attempting to figure out how to manage its task of being a social democratic wolf in neoliberal sheep's clothing in the years since 1980. It is only—“only”—in mobilizing and connecting with voters and with explaining to the unengaged what the Democratic Party is about that we have failed…
Very Briefly Noted:
Economics: Charlie Steindel emails, apropos of GDP estimates:
Charles Steindel: ‘Little or nothing in the revisions on the output side (growth is a bit higher in the last few years, though). The big story is income. The statistical discrepancy has been largely wiped out, and it came from upward revisions in income--a lot of it was wages and salaries, and the personal saving rate is now estimated to be above 5%. As I long suspected, BEA had also been drastically undercounting net interest.(they kept on saying it wasn't so, but I could never slallow that). The world now makes a bit more sense, on the good side…Economics: Is “secular stagnation” and the era of low interest rates over? The very sharp Anatole Kaletsky says: yes:
Anatole Kaletsky: ‘The Fed’s neutral rate estimate of 2.9%… assumes… the post-2008 crisis period… [was] a permanent “new normal”…. This seems unlikely, considering that the deleveraging that followed the GFC is over, that US companies and households now have historically strong balance sheets and, most importantly, that long-term changes in the capital intensiveness of industry, in geopolitics, in fiscal policy and in demographics are all moving the global economy away from excess savings and secular stagnation toward higher investment and lower savings… <https://public.hey.com/p/KApBzP5DYJmFMnmurxK4NZbG>Economic Development: The half-stalled fertility transition in Africa is, in some ways, the thing most likely to make the future in fifty years significantly bleaker than it would otherwise be. Without truly massive amounts of investment in education, infrastructure, and physical capital resource scarcity will have truly baneful consequences for opportunity and equality on a global scale:
Yaw: The Economic & Geopolitical History of Uganda Part I: Pre-Colonial & Colonial Times: ‘Uganda, like most of Sub-Saharan Africa, is in Stage Two of the demographic transition, marked by high birth rates (36 per 1,000 people) and relatively low mortality rates (6 per 1,000 people) yielding a rapidly growing, youthful population. Essentially, Uganda is experiencing the benefits of medical advances, reducing infant mortality, without the lower birth rates that typically follow industrialization and urbanization… <https://yawboadu.substack.com/p/economic-and-geopolitical-history-b57>Neofascism: Scott Lemieux says: “Even though I’ve seen it many times it still sort of amazes me that Bill Ackman has been a full-on MAGA guy for less than a year and he’s already become the very dumbest and most gullible crackpot on a Newsmax-drunk-uncle email chain.” And yet, as Scott points out, the New York Times made Ackman the driver of their assault on Ivy League administrations last fall. An incredibly gullible guy with no friends to tell him when he is off-base, no filter, and no ability to protect himself against lying grifters:
Southpaw: ‘At this point, I don’t expect the CEO of Pershing Square to bring any more analytical firepower to publicly promoting a conspiracy theory than a Villages retiree brings to forwarding an email. But tbh I did expect him to remember that ABC hosted the debate: Bill Ackman: ‘This is a fascinating analysis by a lighting expert of how CNN used lighting techniques to present KamalamHarris more favorably than real Donald Trump during the debate, and used the same approach with Tim Walz and JD Vance in their appearances... <https://twitter.com/nycsouthpaw/status/1837289589729370164>Suphatra Rufo—and Usha Vance—just what, exactly, do they think they are doing? I mean, odds were always good that they were going to be Newt Gingriched at some point. But now their husbands have decided to go all-in on, in public at least, leading mobs that hate their guts—and their husbands tell lots of lies about people who look like what their own children look like:
Scott Lemieux: ‘Chris “someone roasting a chicken in Dayton proves that Haitian immigrants were killing and eating pets in Springfield I am a very serious intellectual” Rufo has a secret that seems material given his participation in Trump/Vance’s fascist war on Ohio:
Christopher F. Rufo: ‘There have been rumors circulating that call into question the harassment against my family…. Here is a statement from my wife Suphatra: ‘I came to the United States as an undocumented immigrant in the late 1980s. My mother brought me here to escape abuse and human trafficking in my native Thailand. I grew up in a small town in New Hampshire where we were the only minority family. I experienced a lot of intolerance growing up. I remember being refused service in a restaurant. I remember boys holding back the doors at my school so I couldn't get in, yelling "go back to your country." I remember the school librarian asking me if I was a child prostitute in Thailand. I remember my college boyfriend being stopped at a grocery store and asked if he had purchased me… <https://www.lawyersgunsmoneyblog.com/2024/09/adventures-in-wilhoits-law>…
& Christopher F. Rufo: The Cat Eaters of Ohio: ‘The establishment media called it a racist myth, but is it?… The Daily Wire has dispatched a reporter to Springfield to investigate. The Federalist has published a police report with allegations that a group of Haitians emerged from a city trail with dead geese in hand…. There is a legitimate debate to be had about migration and culture…. These revelations do not mean that assimilation is impossible, but the establishment will need to engage in a more honest debate, rather than simply smearing critics as racists and conspiracy theorists. One can make the case for migration, but one cannot, at the same time, deny that it comes with costs—which, in this case, seem to include a pair of flayed cats on a blue barbeque in Dayton, Ohio…That Trump is leaning into “eating the dogs, eating the cats” is unsurprising, given who he is and known to be. What is surprising is that people still want to vote for him given who he is and known to be. What is surprising is Vance. Is he hoping that his fellow Republicans will throw everything down the memory hole when the post-Trump era arrives?:
Ed Luce: Trump, Vance & American blood & soil: ‘A myth about migrants eating pets masks a calculated political bet…. The striking fact of Vance’s [RNC] speech was not his awkwardly-phrased passage about… [his second-generation] immigrant… wife…. Nor was it his avoidance of American exceptionalism…. It was the degree to which Vance inverted… his 2016 bestseller, Hillbilly Elegy. Then, Vance thought that the people with whom he was raised were culpable for their own plight of relying on handouts and food stamps…. Eight years later, he now claims that the same people are victims of outside forces…. He has swapped a self-questioning brand of libertarianism for straight-up ethno-nationalism…. There are plenty more votes in describing Americans as victims than as culprits…. Vance has even defended the pet disinformation story as useful fiction because it reveals a deeper truth… <https://www.ft.com/content/c40f5b90-3943-4bf2-91db-ca281d8877ac>A much worse look on the dog-whistle front than I expected to ever see:
Felix Su: ‘[Trump-appointed Fed Governor Michelle] Bowman is an incredible hack. Even if you grant her “concerns,” what would keeping rates higher for longer do to mitigate “price pressures” from “geopolitical tensions” or “increased demand for housing?” She even scapegoats immigrants for that! Trump’s Aileen Cannon for the FOMC: “I still see some upside risks to inflation as supply conditions have largely normalized and any further improvements to supply seem less likely to offset price pressures arising from increased geopolitical tensions, additional fiscal stimulus, and increased demand for housing due to immigration…” <https://x.com/grandmasterfei/status/1836592120758702302https://x.com/grandmasterfei/status/1836592120758702302>Management Cybernetics: Or you have to be able to change the purpose of the company and get near-universal buy-in. Mark Zuckerberg changed Facebook from Facebook to global VR-AR central, after all, and spent $70 billion building some nice gaming headsets and one hell of an AR-glasses concept demo. Sam Altman is transforming OpenAI from a blue-sky research organization into a scarecrow covered with glue to pick up money that blows by. Andy Grove shifted Intel from manufacturing excellence to excellence in chip design and then to the maintenance of an effective chip-design monopoly. That is also a “founder mode” task, and almost always only something a founder can do—managers and shareholders take a look at such episodes, and see them as hair-brained schemes to light all their money on fire for relatively low probabilities of big returns:
Dan Davies: The general theory of founders, managers and systems: ‘Notes on “founder mode”…. I’ve been fascinated by the fact that left to themselves in charge of something, intelligent people with an engineering background will always seem to independently come up with something that looks quite like Stafford Beer’s cybernetics…. “Founder mode[’s]”… central point is… there is no reason at all to believe that the best way to design a system of information flows and allocate bandwidth will produce something which looks like a normal org chart… [and] that the relationship between the org chart and the correct information design will be stable at different moments in time…. “Founders” don’t really go around suddenly jumping into operational tasks at random for the joy of nitpicking; they do things when they think that they have new information that requires them to get involved…. In order to identify what information has the red-handle property, you have to know what the purpose of the company is…. That’s why Graham identifies it with foundership…. But… it’s a position in the system rather than a unique property of start-up guys… <https://backofmind.substack.com/p/the-general-theory-of-founders-managers>Cyber & Other Grifts: I am incredibly grateful to Nate Silver for his work, and owe him a huge intellectual debt that I will never be able to repay. But I wish I did not agree with so much of this critique of Silver’s On the Edge. In my view, Silver has been grifted by some pretty bad actors and has also grifted himself:
David Karpf: On the Edge Puts Its Bets in the Wrong Places: ‘Nate Silver offers a disjointed paean to gambling and venture capitalists…. An increase in gambling addiction is a society-level problem, foisted on the very public officials that Silver derides…. Gambling, like cigarettes, should probably face more institutional friction, not less…. Poker players, sports bettors, and venture capitalists flourish in regulatory gray zones, where the rules are less well-defined and the edges are available if you’re smart and you’re willing to hustle…. It invites us to ponder whether there’s any societal value to all this gambling. The stock market… produces valuable byproduct information… on the state and worth of publicly traded companies. What is the social benefit of building an equivalent marketplace for establishing the betting line on NBA games?… Why incur and encourage all the systemic risk, when the societal value is effectively nil?… Silver asks and answers none of these questions…. Silver manages to interview a lot of powerful people who rarely speak to journalists, but when they talk to him, they tell him nothing of note…. Cost-benefit analysis is not some arcane Riverian wisdom. It is intro-level textbook material… <https://foreignpolicy.com/2024/09/20/on-the-edge-book-review-nate-silver-risk/>Central Country: Looking across Eurasia, nowhere other than in Western Europe do you ever have the development of something that might be called the “Third Estate” with political voice. “First Estate”—the guardians of the ideology, the pronouncers of what the society was for, the “Identity” branch of the organization in terms of Stafford Beers’s Viable Systems Analysis—yes. “Second Estate”—the thugs-with-spears and their bosses, yes. But the idea that merchants and manufacturers were in any sense people whose buy-in was needed and who had to be negotiated with was foreign. And that old habit of thought still holds in the High Councils of the Chinese Communist Party:
Bloomberg News: China’s Policy Shift Upends the Lives of Its Best and Brightest: ‘Finance, consumer tech and property—key drivers of growth for much of this century—are now out of favor. Instead, resources are funneled toward endeavors such as electric vehicles and chip production. “High quality” growth is the new mantra, not “high speed…”. A clash of values between those in power and the generation of people who grew up in the reform era… [which] lauded individual ambition, the idea of “the entrepreneur” and wealth accumulation. But it’s no longer glorious to get rich…. What’s becoming clearer… is that… a lifelong career … in an affluent middle class was [but] a moment in a bubble… <https://www.bloomberg.com/news/newsletters/2024-09-20/china-s-policy-shift-upends-the-lives-of-its-best-and-brightest?cmpid=BBD092024_CN>
Re: US Real Wages: Non-Managers & All Workers
The chart suggests that this is possibly the reason behind the demand that workers end remote and hybrid working and return to the office. All the bleating about "productivity" is just cover for trying to reestablish their salaries and relative position in the corporation. Self-important "Empty suits" trying to justify their value?
Hare-brained