Category: Political Science

The real losers from the U.S.-China trade war

The countries caught in the middle, as I argue in my latest Bloomberg column.  Excerpt:

n this setting, many Pakistani businesspeople work with both China and the U.S. Now President Donald Trump is essentially telling them to choose sides. Will they do business with Huawei or not? Will they work to open up the Chinese economy or not? And so on.

If you’re Pakistan, on the actual matters under consideration, you will side with China. Pakistan is not going to ban Huawei or push China to open its markets to major U.S. tech companies. China will get its way on those issues, and win some very public victories in the Pakistani public arena. Pakistani leaders and businesspeople who sided with the U.S., or expressed strong American loyalties, will feel burned. Their side just lost a very big debate, centered on a conflict that did Pakistan no good in the first place and was at least in the proximate sense started by Trump.

In other words, the U.S. is making it harder for many foreigners to be on its side, even partially. Over time, it is limiting its own soft power in the countries caught between America and China — and soft power is the one area in which America still has (or is it, already, had?) a big advantage over China.

There is much more at the link, including coverage of Singapore and South Korea.

On Left Straussianism

We might therefore say that the left intellectual becomes the left Straussian when they decide that, in addition to sometimes filtering their own public speech to advance an ideological agenda, they’re additionally responsible for “protecting” the public from being exposed to conversations not disciplined by political strategy. To the extent that their own ideas are not already disciplined by such a strategy, they limit discussion of them to close friends and sympathetic colleagues.

And:

In each case, thoughtful criticism of an author’s argument—for being confused, or incomplete—was overshadowed by the left-Straussian assertion that, regardless of whether the argument was true or reasonable, it was “irresponsible” for the author to make it in public.

And:

Those who engage in such tactics would never endorse Strauss’s hard distinction between the elect few and the unthinking many—at least not explicitly. But the care they take to pre-screen intellectual material indicates that they share his dark foreboding about the “costs” of public intellectual conversations reflecting rather than repressing the complexities of private ones. Attempting to marginalize or disqualify intellectual arguments itself implies a gap between the commentator, who trusts themselves to evaluate the arguments in question, and their imagined audience, who is assumed to lack either the tools or the ability to do so unaided. Left Straussians may not believe that they are philosopher-kings but they repudiate, in practice and increasingly even in theory, the possibility of the philosopher-reader.

Here is the full piece by Anastasia Berg and John Baskin, via Agnes Callard.

China fact of the day

We find that party members on average hold substantially more modern and progressive views than the public on issues such as gender equality, political pluralism, and openness to international exchange.

That is from Chengyuan Ji and Junyan Jiang, via the excellent Kevin Lewis.  Of course this may partly explain why China’s rising middle class is not so outright enthusiastic for democratization.

Shipping the good economists out?

How many of you even get that reference these days?  Here is the latest from DOA, from Liz Crampton at Politico:

The Agriculture Department is moving nearly all its researchers into the economic effects of climate change, trade policy and food stamps – subjects of controversial Trump administration initiatives – outside of Washington, part of what employees claim is a political crackdown on economists whose assessments have raised questions about the president’s policies.

Since last year, employees in the department’s Economic Research Service have awaited news of which members of their agency would be forced to relocate, after Agriculture Secretary Sonny Perdue stunned them by declaring he was moving most of the agency to a location outside the capital. The announcement sparked claims that Perdue was trying to pressure economists into leaving the agency rather than move their families.

On March 5, the department began notifying people who were allowed to stay in Washington, but didn’t provide a comprehensive list, only telling employees in person if they made the cut.

But current and former employees compiled one anyway, covering all 279 people on staff, 76 of whom are being allowed to stay in Washington…

A USDA spokesman declined to directly address the employees’ allegation of political bias, but provided a written statement from Perdue saying that the moves were not prompted by the work being done by ERS.

In general I am reluctant to post this kind of report, because I find it difficult to know what is truly going on here, so do read this with an open mind.  Still, it seemed newsworthy.

I thank John Chamberlin for the pointer.

The recent political revolution is a major shift toward the right

And when I say recent, I mean in the last few weeks.  That is the topic of my recent Bloomberg column, here is one bit:

The populist “New Right” isn’t going away anytime soon, and the rise of the “New Left” is exaggerated.

Start with Australia, where Prime Minister Scott Morrison won a surprising victory last week. Before the election, polls had almost uniformly indicated that his Liberal-National Coalition would have to step down, but voters were of another mind. With their support of Morrison, an evangelical Christian who has expressed support for President Donald Trump, Australians also showed a relative lack of interest in doing more about climate change. And this result is no fluke of low turnout: Due to compulsory voting, most Australians do turn out for elections.

Hard Brexit is alive and well, the European Parliament elections later this week could be a disaster, and Modi seems to be on the upswing in the Indian election.  But perhaps most importantly there is this:

One scarcely noticed factor in all of this has been the rising perception of China as a threat to Western interests. The American public is very aware that the U.S. is now in a trade war with China, a conflict that is likely to provoke an increase in nationalism. That is a sentiment that has not historically been very helpful to left-wing movements. China has been one of Trump’s signature causes for years, and he seems to be delighting in having it on center stage.

The Democratic Party is not well-positioned to make China a core issue. Democrats have been criticizing Trump’s tariffs for a while now, and it may be hard for them to adjust their message from “Tariffs Are Bad” to “Tariffs Are Bad But China Tariffs Are OK.” Their lukewarm support for free trade agreements — especially the Trans Pacific Partnership, which could have served as a kind of alternative China trade policy — also complicates matters. The net result is that Republicans will probably be able to use the China issue to their advantage for years to come.

Nor did Obama stand up to China on the militarization of the South China Sea.  Do read the whole thing.

Don’t relax about nuclear war

That is the theme of my latest Bloomberg column, here is one bit:

Each generation has its own form of recency bias, as it is called in behavioral economics. Just after Sept. 11, for example, there was great concern about follow-up attacks. (Thankfully, nothing comparable followed.) Now we worry a lot — maybe too much — about insolvent banks, insufficiently high inflation, and the Chinese shock to U.S. manufacturing.

So what about nuclear war? Looking forward, the reality is that the risks of such a war are quite small in any particular year. But let the clock run and enough years pass, and a nuclear exchange of some kind becomes pretty likely.

I have found that people with a background in financial market trading are best equipped to understand the risks of nuclear war. An analogy might be helpful: Say you write a deeply out-of-the-money put, without an offsetting hedge. This is in fact a very risky action, though almost all of the time you will get away with it. When you don’t, however — when market prices move against you — you can lose all of your wealth quite suddenly.

In other words: Sooner or later the unexpected will come to pass.

And:

Meanwhile, a generation of hypersonic delivery systems, being developed by China, Russia and the U.S., will shorten the response time available to political and military leaders to minutes. That raises the risk of a false signal turning into a decision to retaliate, or it may induce a nation to think that a successful first strike is possible. Remember, it’s not enough for the principle of mutual assured destruction to be generally true; it has to be always true.

Do read the whole thing, which includes a discussion of Steven Pinker as well.

The deregulatory polity that is Idaho

Something rather remarkable just happened in Idaho. The state legislature opted to—in essence—repeal the entire state regulatory code. The cause may have been dysfunction across legislative chambers, but the result is serendipitous. A new governor is presented with an unprecedented opportunity to repeal an outdated and burdensome regulatory code and replace it with a more streamlined and sensible set of rules. Other states should be paying close attention.

The situation came about due to the somewhat unconventional nature of Idaho’s regulatory process. Each year, the state’s entire existing body of regulations expires unless reauthorized for an additional year by the legislature. In most years, reauthorization happens smoothly, but not this year.

Instead, the legislature wrapped up an acrimonious session in April without passing a rule-reauthorization bill. As a result, come July 1, some 8,200 pages of regulations containing 736 chapters of state rules will expire. Any rules the governor opts to keep will have to be implemented as emergency regulations, and the legislature will consider them anew when it returns next January.

Here is more from James Broughel at Mercatus.

Bhutan’s prime minister spends his weekends as a surgeon

Take that Adam Smith!:

Dr Lotay Tshering was one of Bhutan’s most highly regarded doctors before he entered politics last year, and while his prime ministerial duties occupy him during the week, on weekends he returns to the hospital as a way to let off steam.

“Some people play golf, some do archery, and I like to operate,” Tshering told AFP as he tended to patients one Saturday morning at Jigme Dorji Wangchuck national referral hospital, describing his moonlighting medical work as a “de-stresser”.

“I will continue doing this until I die and I miss not being able to be here every day,” he added. “Whenever I drive to work on weekdays, I wish I could turn left towards the hospital.”

Far from finding the two roles hard to juggle, Tshering said he had found that there was unexpected crossover between prime minister and surgeon. “At the hospital I scan and treat patients. In the government, I scan the health of policies and try to make them better,” he said. He has also put healthcare reform at the heart of his political agenda.

Here is the full story, via Anecdotal.

What should I ask Eric Kaufmann?

I am doing a Conversation with him, no associated public event.  I am a big fan of his book WhiteShift (perhaps the best book of the year so far?), here is my review.  Here is Wikipedia on Eric:

Eric Peter Kaufmann (born 11 May 1970) is a Canadian professor of politics at Birkbeck College, University of London. He is a specialist on Orangeism in Northern Ireland, nationalismpolitical demography and demography of the religious/irreligious.

Eric Kaufmann was born in Hong Kong and raised in Vancouver, British Columbia, Canada. His ancestry is mixed with a quarter Chinese and a quarter Latino. His father is of Jewish descent, the grandfather hailing from Prostejov in the modern Czech Republic. His mother is a lapsed Catholic; he himself attended Catholic school for only a year. He received his BA from the University of Western Ontario in 1991. He received his MA from the London School of Economics in 1994 where he subsequently also completed his PhD in 1998.

Here is Eric’s home page.  He’s also written on what makes the Swiss Swiss, American exceptionalism, and whether the Amish will outbreed us all.

So what should I ask Eric?

Why a U.S.-China trade deal won’t change much

That is the topic of my latest Bloomberg column, here are some bits:

The trade talks are chaotic because a trade deal would be chaotic. By which I mean, it would be difficult to interpret and enforce, not unlike the present situation…

The basic problem is easy enough to state, though it is all but impossible to solve. Many of the U.S. objections to Chinese trade practices, regardless of their merits, are fundamental objections to how the Chinese economy is organized. They are more than mere complaints about easily monitored variables such as tariff rates.

…If a trade agreement is concluded, then, it is likely to have two parts: the parts that are easy to enforce, and the parts that aren’t. To the extent that the U.S. insists on greater Chinese compliance on the easier parts, a self-interested China will respond by shifting more trade onto the difficult-to-enforce parts of the agreement.

The tug of war will never cease. Trump will continue to tweet and move markets. The Chinese will continue to organize their economy to maximize state control. And maybe, over time, we will all recognize the broader truth: In a highly legalistic world, vague and hard-to define-strategies offer a competitive advantage.

Here is a new Reuters piece on how China already had started walking back many of its earlier commitments.

My Conversation with Karl Ove Knausgaard

Here is the audio and transcript, this was one of my favorite Conversations. Here is the CWTeam summary:

Knausgård’s literary freedom paves the way for this conversation with Tyler, which starts with a discussion of mimesis and ends with an explanation of why we live in the world of Munch’s The Scream. Along the way there is much more, including what he learned from reading Ingmar Bergman’s workbooks, the worst thing about living in London, how having children increased his productivity, whether he sees himself in a pietistic tradition, thoughts on Bible stories, angels, Knut Hamsun, Elena Ferrante, the best short story (“Tlön, Uqbar, Orbis Tertius”), the best poet (Paul Celan), the best movie (Scenes from a Marriage), and what his punctual arrival says about his attachment to bourgeois values.

Here is one excerpt:

KNAUSGÅRD: You have this almost archetypical artist putting his art before his children, before his family, before everything. You have also Doris Lessing who did the same — abandoned her children to move to London to write.

I’ve been kind of confronted with that as a writer, and I think everyone does because writing is so time consuming and so demanding. When I got children, I had this idea that writing was a solitary thing. I could go out to small islands in the sea. I could go to lighthouses, live there, try to write in complete . . . be completely solitary and alone. When I got children, that was an obstruction for my writing, I thought.

But it wasn’t. It was the other way around. I’ve never written as much as I have after I got the children, after I started to write at home, after I kind of established writing in the middle of life. It was crawling with life everywhere. And what happened was that writing became less important. It became less precious. It became more ordinary. It became less religious or less sacred.

It became something ordinary, and that was incredibly important for me because that was eventually where I wanted to go — into the ordinary and mundane, even, and try to connect to what was going on in life. Life isn’t sacred. Life isn’t uplifted. It is ordinary and boring and all the things, we know.

And:

COWEN: So many great Norwegian writers — Ibsen, Sigrid Undset, Knut Hamsun — there’s nationalism in their work. Yet today, liberals tend to think of nationalism as an unspeakable evil of sorts. How do we square this with the evolution of Norwegian writing?

And if one thinks of your own career, arguably it’s your extreme popularity in Norway at first that drove your later fame. What’s the connection of your own work to Norwegian nationalism? Are you the first non-nationalist great Norwegian writer? Is that plausible? Or is there some deeper connection?

KNAUSGÅRD: I think so much writing is done out of a feeling of not belonging. If you read Knut Hamsun, he was a Nazi. I mean, he was a full-blooded Nazi. We have to be honest about that.

COWEN: His best book might be his Nazi book, right? He wrote it when he was what, 90?

KNAUSGÅRD: Yeah.

COWEN: On Overgrown Paths?

KNAUSGÅRD: Yeah.

COWEN: To me, it’s much more interesting than the novels, which are a kind of artifice that hasn’t aged so well.

KNAUSGÅRD: Yeah.

COWEN: But you read On Overgrown Paths, you feel like you’re there. It’s about self-deception.

KNAUSGÅRD: It’s true, it’s a wonderful book. But I think Hamsun’s theme, his subject, is rootlessness. In a very rooted society, in a rural society, in a family-orientated society like Norway has been — a small society — he was a very rootless, very urban writer.

He went to America, and he hated America, but he was America. He had that in him. He was there in the late 19th century, and he wrote a book about it, which is a terrible book, but still, he was there, and he had that modernity in him.

He never wrote about his parents. Never wrote about where he came from. All his characters just appear, and then something happens with them, but there’s no past. I found that incredibly intriguing just because he became the Nazi. He became the farmer. He became the one who sang the song about the growth. What do you call it? Markens Grøde.

COWEN: Growth of the Soil.

And:

COWEN: Arnold Weinstein has a book on Nordic culture, and he argues that the sacrifice of the child is a recurring theme. It’s in Kierkegaard’s Fear and Trembling. It’s in a number of Ibsen plays, Bergman movies. Has that influenced you? Or are you a rejection of that? Are you like Edvard Munch, but with children, and that’s the big difference between you and Munch, the painter?

I told you we ask different questions.

KNAUSGÅRD: Yeah, yeah. You just said different. You didn’t say difficult.

Knausgaard showed up for the taping carrying a package of black bread, which he forgot to take with him when leaving.  So for the rest of the day, I enjoyed his black bread…

Americans trust their government more than you are being told

That is the topic of my latest Bloomberg column, here is the opening:

Americans’ trust in their government is abysmally low, according to both survey data and a more subjective reading of opinions about President Donald Trump and Congress. I hold a contrarian view: Trust in the actual operations of government is pretty high, and the real growing mistrust is of each other.

Consider first that the Trump administration’s record spending and deficits don’t seem all that unpopular, even among those who detest Trump or might favor different spending priorities. No major candidate is campaigning on a platform of fiscal responsibility and restraint, and that is a sign of high trust in government.

I go through the major government programs, and show they are (mostly) pretty well trusted by the American people.  Here is another consideration:

Finally, interest rates on government debt have been remarkably low for years, probably the single best measure of trust in a government; less trusted countries such as Argentina and Turkey have to pay very high interest rates to borrow. The recent rise in U.S. rates is due more to an economic expansion than to rising fears of default.

Here is the basic model:

In reality, as people get older, they rely on government for more and more. While that is indeed a form of trust, it also increases anxiety about those in charge, and their values and priorities. The higher level of anxiety exists precisely because there is, for better or worse, greater dependence. Don’t confuse the resulting nervousness with a lack of trust.

Our leaders aside, we trust the actual operation of government on the ground, so to speak.  These days, what we do not trust is each other:

Many Democrats and Republicans do not want their children to marry into the other political party, for instance, and these preferences are growing stronger. So when one branch of the government is affiliated with one of the parties, as it inevitably is, members of the other party will voice a low level of trust. But their complaint may be about the supporters of that branch of the government as much as the government itself.

Recommended.

The politics of CEOs

We find that more than 57% of CEOs are Republicans [defined by 2/3 or more campaign contributions to Republicans], 19% are Democrats…and the rest are Neutral [do not contribute 2/3 of their campaign spending to either of the two major parties].  Therefore, Republican CEOs are more than three times as Democratic CEOs.  Furthermore, Republican CEOs lead companies with almost twice the asset value of companies led by Democratic CEOs.

That is from 2000-2017, across the S&P 1500.  And:

We show that the median CEO directs 75% of his or her total contributions to Republicans.

And:

We find that companies led by Republican CEOs are less transparent to their investors on whether how, and how much they spend on politics.

The most Republican-leaning sectors are energy (89.1%), manufacturing, and chemicals.  Business equipment and telecoms are the least-leaning R to D sectors for their CEOs, though still Republican by clear margins.  In the Northeast and West the number of Democratic CEOS has almost caught up to the Republicans.  As for female CEOs, they lean Republican 34.3% to Democratic 32.3%, a small margin but still more Republican donors.

That is all from a new paper The Politics of CEOs, by Alma Cohen, Moshe Hazan, Roberto Tallarita, and David Weiss, NBER link here.