Current Affairs

Contracting:

America, China, Hong Kong, Russia, Ukraine, Austria, Hungary, Poland, Slovakia, Turkey, Syria, Libya, Iraq, Yemen, Kosovo, Afghanistan, Philippines, Venezuela, Nigeria, South Africa, Malaysia, and Brazil, though the latter may be in flux.  Tunisia and Iran are problematic, but arguably hard to call.  Saudi may be headed toward collapse, but I don’t think you can say they are less free just yet.  Ethiopia is losing more political freedom, though still making very real economic progress.

Advancing:

Mexico and Colombia, if only by consolidating previous gains, and still there is a chance of a turnaround in Argentina at some point.  Latvia?  Where else?  You could make a (modest) case for India and some of the smaller African countries.

Neutral:

Japan, South Korea, Canada, and much of Western Europe though many of these cases appear fragile to me.

Overall this is not a thrilling ledger.  I haven’t listed most of the smaller countries, but in the longer run they often follow the lead of their larger neighbors.

File under Not Good.

The South China Morning Post reports that iPhone maker Foxconn has replaced more than half of its workforce with robots since the launch of the iPhone 6. The figures were provided by the local government in Kunshan, where the company is based.

“The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots. It has tasted success in reduction of labour costs,” said the department’s head Xu Yulian … 

Since September 2014, more than 500 companies in the Chinese province of Dongguan have spent a total of $630M on robot and AI technology to replace human workers. It was reported back in January that Foxconn had received a $12M government subsidy to help minimize layoffs in response to reduced iPhone orders.

Here is more, via Kurt Busboom.  And, via “anon from cl”, there is this from Adidas:

Adidas, the German maker of sportswear and equipment, has announced it will start marketing its first series of shoes manufactured by robots in Germany from 2017.

More than 20 years after Adidas ceased production activities in Germany and moved them to Asia, chief executive Herbert Hainer unveiled to the press the group’s new prototype “Speedfactory” in Ansbach, southern Germany.

The 4,600-square-metre plant is still being built but Adidas opened it to the press, pledging to automate shoe production – which is currently done mostly by hand in Asia – and enable the shoes to be made more quickly and closer to its sales outlets.

Here is my recent paper on premature deindustrialization.

Changsha is the ugliest and most ungainly Chinese city I have seen, which is saying something.  Nonetheless for a food pilgrimage it is a serious rival for #1 spot in the world, perhaps surpassing Chengdu for the quality and novelty of its dishes.  Very little effort is required to do well, and some of my best courses I had at the Hunan restaurant in the Sheraton, also the only time I saw an English-language menu.

Even at major hotels, hardly anyone speaks passable English, much less good English.  But you can find many hanging portraits of Chairman Mao, who converted to communism in this city.

Carry an iPad, so you can look up and communicate the Chinese characters for “eggplant with orange chilies on top.”

There were plans to erect the world’s tallest building, and ground was broken, but the foundations were not extended and they have since been repurposed as a fish farm, hail Friedrich Hayek.

When they set their minds to it, they can build towers at the rate of three stories a day.

Changsha

The marginal value of entering a park here is high, as I stumbled upon card games, group exercise sessions, dance clubs, and performances of traditional music, all at higher rates than in most other Chinese cities I have visited.  At the entrance to one I read on the sign: “Don’t sneeze into the face of others,” and also I was ordered to reject “feudal superstitious practices.”

The people seem…different.  I feel the cab drivers often are on the verge of cackling, except when they are cackling.  Then the verge disappears.  The word “rollicking” frequently comes to mind, which of course is a sign you would not want to be governed by this province.

Kind of like New York.

Hogan’s lawsuit was not “frivolous”—at least, not in the mind of the judge, who allowed the suit to proceed over Gawker’s many appeals, nor in the minds of members of the jury, who were so disgusted by Gawker’s conduct that they ordered the mischievous media mavens to pay Hogan tens of millions of dollars more than he asked for. And it is not at all clear that Thiel and Hogan did anything to menace to press freedom: As the legal scholar Erwin Chemerinsky told the New York Times when the verdict came out: “I think this case establishes a very limited proposition: It is an invasion of privacy to make publicly available a tape of a person having sex without that person’s consent.”

It’s also not clear what policy response Gawker’s outraged defenders would recommend. Put caps on the amount of money people can contribute to legal efforts they sympathize with? That would put the ACLU and any number of advocacy groups out of business. It would also represent a far greater threat to free expression than a court-imposed legal liability for the non-consensual publication of what is essentially revenge porn. If Marshall and others are worried about the superrich harassing critics with genuinely frivolous lawsuits—as, yes, authoritarian characters like Donald Trump have attempted to do—they would have more success backing tort reform measures to limit litigiousness overall than attacking Thiel for contributing to a legitimate cause he has good reason to support.

Here is more.  Here are Thiel’s own words (NYT), here is one bit:

“It’s less about revenge and more about specific deterrence,” he said in his first interview since his identity was revealed. “I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest.”

Mr. Thiel said that Gawker published articles that were “very painful and paralyzing for people who were targeted.” He said, “I thought it was worth fighting back.”

Mr. Thiel added: “I can defend myself. Most of the people they attack are not people in my category. They usually attack less prominent, far less wealthy people that simply can’t defend themselves. He said that “even someone like Terry Bollea who is a millionaire and famous and a successful person didn’t quite have the resources to do this alone.”

Plug those numbers into the formula, and the prediction is that the Democratic share of the two-party presidential vote in 2016 will be 44.99%.

That is from Timothy Taylor, here is an earlier piece by Jeff Sommer.

Donald Trump may get the nuclear suitcase, a cranky “park bench” socialist took Hillary Clinton to the wire, many countries are becoming less free, and the neo-Nazi party came very close to assuming power in Austria.  I could list more such events.

Haven’t you, like I, wondered what is up?  What the hell is going on?

I don’t know, but let me tell you my (highly uncertain) default hypothesis.  I don’t see decisive evidence for it, but it is a kind of “first blast” attempt to fit the basic facts while remaining within the realm of reason.

The contemporary world is not very well built for a large chunk of males.  The nature of current service jobs, coddled class time and homework-intensive schooling, a feminized culture allergic to most forms of violence, post-feminist gender relations, and egalitarian semi-cosmopolitanism just don’t sit well with many…what shall I call them?  Brutes?

Quite simply, there are many people who don’t like it when the world becomes nicer.  They do less well with nice.  And they respond by in turn behaving less nicely, if only in their voting behavior and perhaps their internet harassment as well.

Female median wages have been rising pretty consistently, but the male median wage, at least as measured, was higher back in 1969 than it is today (admittedly the deflator probably is off, but even that such a measure is possible speaks volumes).  A lot of men did better psychologically and maybe also economically in a world where America had a greater number of tough manufacturing jobs.  They thrived under brutish conditions, including a military draft to crack some of their heads into line.

To borrow a phrasing from Peter Thiel, perhaps men did better in the age of “technological progress without globalization” rather than “globalization without technological progress,” as has been the case as of late.

Here’s a line from Martin Wolf:

Princeton professors Anne Case and Angus Deaton note, in addition, a sharp relative deterioration in mortality and morbidity among middle-aged white American men, due to suicide, and drug and alcohol abuse.

(Addendum: note this correction.)

For American men ages 18-34, more of them live with their parents than with romantic partners.

Trump’s support is overwhelming male, his modes are extremely male, no one talks about the “Bernie sisters,” and male voters also supported the Austrian neo-Nazi party by a clear majority.  Aren’t (some) men the basic problem here?  And if you think, as I do, that the incidence of rape is fairly high, perhaps this shouldn’t surprise you.

The sad news is that making the world nicer yet won’t necessarily solve this problem.  It might even make it worse.

Again, we don’t know this is true.  But it does help explain that men seem to be leading this “populist” charge, and that these bizarre reactions are occurring across a number of countries, not just one or two.  It also avoids the weaknesses of purely economic explanations, because right now the labor market in America just isn’t that terrible.  Nor did the bad economic times of the late 1970s occasion a similar counter-reaction.

One response would be to double down on feminizing the men, as arguably some of the Nordic countries have done.  But America may be too big and diverse for that really to stick.  Another option would be to bring back some of the older, more masculine world in a relatively harmless manner, the proverbial sop to Cerberus.  But how to do that?  That world went away for some good reasons.

If this is indeed the problem, our culture is remarkably ill-suited to talking about it.  It is hard for us to admit that “all good things” can be bad for anyone, including brutes.  It is hard to talk about what we might have to do to accommodate brutes, and that more niceness isn’t always a cure.  And it is hard to admit that history might not be so progressive after all.

What percentage of men are brutes anyway?  Let’s hope we don’t find out.

In the Empire of Amerigo there is heated debate about the priorities of the polity.

The Egalitarians push for much higher military spending, on the grounds that many poor people around the world require Empire protection from aggressors or at the very least from severe external pressure.  The Egalitarians have a subcult, called The Samanthas, who favor direct military intervention in very destructive civil wars.  They are willing to cut domestic spending on social services to achieve this end, even though their founder did not draw this exact same conclusion.

The opposing party The Three-Percenters favors much higher social spending to the nation’s less fortunate citizens, who are for the most part within the global top three percent.  The Three-Percenters are an openly elitist party, and they emphasize how place of birth determines an individual’s moral worth, Amerigo coming first of course with no prize for second place.

The Egalitarians have been pushing hard for affirmative action.  It turns out that no one on the country’s Supreme Council has a military background, and they believe this should be rectified by an explicit system of quota.  Furthermore only a few members of the legislature ever have killed another human being in service of their country.  So the military point of view, as would be required to implement true egalitarian social justice, is badly underrepresented in the upper tiers of government and society.

After the great wage equalization of 2104, it became the common view that willingness to die and more importantly the willingness to kill for one’s country — or not — was the most fundamental remaining difference among citizens of Amerigo.  The self-proclaimed Proud Killer Faction earns some of the lowest wages in the country, yet they continue to push for greater recognition at the federal level, realizing it is not enough to control several state governments.

So far the Three-Percenters have the more popular view, because after all humans are naturally elitist and clubbish, and so their coalition rule has remained unchallenged for several terms of government.  Yet virtually all philosophers and academics back The Egalitarians, with some radicals even endorsing the Proud Killer Faction.

Addendum: There is another, now-vanquished faction of The Egalitarians, called The Medicoors.  They argue the strange and indeed untenable view that those on the verge of death have almost infinitely less than anyone else, even the very poor, and so a true egalitarianism means everything should be redistributed their way to prolong their lives, even if only for a short period of time.  They ruled the government for almost a century.  At first they were mocked for the doctrine of being “Forward Lookers,” and then finally they were defeated by the success of their own efforts.  Medical technology raised life expectancy to three hundred years of age, thereby inducing voters to think of themselves as nearly eternal, at least for the time being.  Some seers have predicted that eventually the Medicoors will make a major political comeback…

Which search terms correlate with support for which politicians?  Why not at least ask this question?

John Kasich. Places that like Kasich are richer in some fairly policy-wonkish search terms: “net cost,” “renewable portfolio standard,” the economist Joseph Stiglitz, Financial Times writer Martin Wolf, and Vox writer Dylan Matthews. These terms have a ring of plausibility. They might be good fodder for small talk…if you are talking with a Kasich supporter!

But then there are terms that I don’t entirely understand: Route 73 and Haven Pizza. Maybe someone can explain those to me. It is also true that with billions of search terms to choose from, occasionally a correlation will arise by chance. These might be false positives.

Ted Cruz. Many Cruz-related search terms are related to domestic life of a certain kind: family photos, felt Christmas stockings, scentsy plug ins, balloon animals, Baby Trend car seats, and DIY cribs. Easy enchiladas are particularly Cruz-y. Mmmm, enchiladas. And udder covers…I wasn’t expecting that one. Maybe the Cruz campaign could start distributing Cruz-themed udder covers!

Donald Trump. Note that the correlations are weaker. That could be because Trump support is broad-based in the Republican Party. Or it could be that the connection between the voter and the Google-searcher is indirect (i.e. they are different individuals who live near one another).

That is from Sam Wang, via the keen-eyed Jordan Schneider.  And what about the Democrats?

Near Clinton supporters it’s cheap bedroom furniture, Nicki Minaj fans, and pink hoverboard shoppers. And “career in” – Google auto-complete as a job counselor!

And the strongest correlate with Bernie Sanders support?: “candied nuts,” next in line is “best oatmeal,” ladies and gentlemen that is proof this is not just data mining and false correlations.  The list is dominated by recipe terms, and “corn syrup substitute” is number four!  Oh where oh where is Martin Wolf?

Only about one-quarter of U.S. corporate stock is held in taxable accounts, far less than most researchers and policymakers thought. The share has declined sharply from more than four-fifths in 1965.  In a report published today in the journal Tax Notes, my Tax Policy Center colleague Lydia Austin and I found the other three-quarters of shares now are held in tax-exempt accounts such as IRAs or defined benefit/contribution plans, or by foreigners, nonprofits or others.

That is Steven M. Rosenthal, here is further information.

James E. Campbell has written an excellent book on this contested and…polarizing…topic.  Here is just one of many good bits:

As they [some commentators] see it, party polarization has been asymmetrical.  The Republican Party allegedly has been captured by right-wing zealots while the Democratic Party has remained a reasonable center-left party.  The claim of asymmetrical party polarization is half-true and completely understandable.  First, there should be no mystery to asymmetry.  If the parties are very competitive, as they are, and the public is skewed to the conservative end of the ideological scale, the parties should be similarly skewed.  In a center-right nation, the right-wing party should be further to the right than the left-wing party is to the left.  If the two parties were equally ideological, the Democrats would be in a permanent minority.  That said, the increased polarization of the parties cannot be entirely attributed to the Republican Party becoming more conservative.  Before the Republicans began moving to the right, Democrats had moved further to the left.  Party polarization followed the staggered nature of the realignment.  In the 1970s, congressional Democrats moved significantly to the left, while there was little change in congressional Republicans.  The Republican shift to the right came later and was augmented by the growth of conservatism in the public.  The polarization of the parties was a two-step dance — maybe three big steps: One big step to the left and two smaller steps to the right.

There is also this:

A five- or ten-percentage-point shift in ideological preferences may seem like “small potatoes,” but a nation that is 40% moderate and 60% ideological (liberal or conservative) operates quite different politically from one that is a 50-50 split.

By the way, it is sometimes noted, or noticed, that left-leaning thinkers have become crazier lately.  I think overall that is true.  It may be a sign that America is switching from a center-right to a center-left nation, given Campbell’s analysis above.

Recommended, due out in June from Princeton University Press.  And here is Timothy Taylor on polarization.

In 2015, total nominal credit expansion was nearly 4 times greater than total nominal GDP expansion.

That is from Christopher Balding, more of interest at the link.

It’s not clear the EU is imploding, but let’s just say it were, or that it will.  That still makes “remain” better than “leave.”  As the implosion proceeds, the United Kingdom would end up with a rather gracious out, and one which does not drive Scotland away, once other nations would start leaving or radically paring back the terms of their participation.  Along the way, “ever closer union” would not be a threat to sovereignty.  Conversely, if the country votes for “leave” in June, it will be perceived as yet another domino in the cascade of anti-globalist nationalism and would bring a rather sudden shock to London as a financial center and relations across the Irelands.

Look at it this way: there is no general case for being the first rat to leave a sinking ship, if that ship has stores of food.  And the United Kingdom, with its own currency and set of distinct historical traditions, can leave whenever it wants and resort to its perpetual life raft.

Option value!  It’s not enough that leaving be better than staying.  Since “wait and see” is an option, leaving has to be much better than staying, given the mathematics of the expected value of irreversible decisions.  I just don’t see that case has been made.

Here is my earlier post on Brexit.

In my view, the focus of left-wing attention on trade restrictions is due not to the importance of international trade flows in altering income distribution, but rather springs from different motives: from attempts to hook up some of the energy that for two centuries now has been abundantly focused on nation and cross-connect it to class. As Ernst Gellner wrote, leftists have been faced with what they regard as a historical anomaly in the rise of nationalism, and have reacted by embracing:

[Gellner]: The Wrong Address Theory…. Just as extreme Shi’ite Muslims hold that Archangel Gabriel made a mistake, delivering the Message to Mohamed when it was intended for Ali, so Marxists basically like to think that the spirit of history of human consciousness made terrible boob. The awakening message was intended for classes, but by some terrible postal error was delivered to nations. It is now necessary for revolutionary activists to persuade the wrongful recipient to hand over the message, and the zeal it engenders, to the rightful and intended recipient. The unwillingness of both the rightful and the usurping recipient to fall in with this requirement causes the activist great irritation…

That is from Brad DeLong.

Two days ago I reported on how Italian food was the big winner from culinary globalization.  How are things going in Italy itself?:

Annual spending by Italian families on restaurants and cafes shrank nearly 2% between 2007 and 2014, Eurostat’s latest data show, while consumption of ethnic foods such as Chinese or North African has nearly doubled during that period.

The Masuellis—with a back-of-the-envelope way of running their business—can’t get bank loans to modernize their restaurant. They had to sell a property to fund the restaurant in 2011 and 2012, and have also reached into their own pockets to pay salaries and taxes at times.

Mr. Masuelli considered firing some of his five employees, but the rigid labor laws meant the cost of dismissing them was too high. At the same time, new health and safety regulations have eaten into profit.

More broadly there is this:

Officer Pang is a top supervisor in one of China’s biggest police departments, in the southern metropolis of Guangzhou. But for two weeks, he and three other Chinese police officers are in Italy with strict orders: to protect Chinese tourists.

Of course it is only four officers, but isn’t that what they said at first about RoboCop?  I also enjoyed this paragraph:

“It’s our duty to make Chinese fall in love with Rome and Italy,” said Alessandro Zucconi, the president of the Young Hoteliers Federation in Rome, who agreed that “misunderstandings” sometimes occur between the two cultures. “They are not like the Germans, who mostly come knowing our culture and literature better than we do.”

Developing…

Dalibor Rohac had a new and important book just out — Towards an Imperfect Union: A Conservative Case for the European Union, obviously of great relevance to the Brexit debates.  Here is the book’s home page, here is the publisher’s home page for the book.

My own view is this: if the United Kingdom could simply press a button and obtain the current status of Canada, via-a-vis the EU, probably they should do so.  But they cannot, and in some issues, as with Catalonian independence, the path is everything.  I’ve read through much of the Treasury report, and I believe it underestimates the economic cost of Brexit.  Were Brexit to happen, probably the UK would see a major recession, and possibly a financial crisis, and there is even a chance significant parts of the EU could unravel in response.  And for what gain?  The country would not be able to boost living standards through EU immigration cuts.  Building new trade agreements would take a long time and in few of the most important cases would the UK hold most of the bargaining power.  Security issues probably would worsen.

Even if the Brexit vote fails, it remaining on the table as a live option, as would result from a close vote, would dampen investment in the UK.  The best way forward is for the UK to swallow its pride and admit the whole referendum idea was a mistake by voting unanimously to stay.  No one would take the unanimity vote as a sincere reflection of preference, but best not to know the true state of public opinion on this one!

I sometimes call Brexit “the Donald Trump of England” — don’t be fooled!