Another Peter Zeihan video, this one on domestic politics, where his insights have usually been…less than stellar. But this time it’s about how screwed the Democrat Party is, though he mostly dances around the real reasons behind their decline, instead wielding his well-worn hammer stenciled “demographics.”
“Is there a future for the Democratic Party in the United States? And the short version is ‘probably not.'”
“The Democratic Party is not what it used to be. It has been through several iterations since it was formed back in the 1800s. But in its most recent iteration, one that dates roughly back to the post-World War II environment, the party basically it it’s formed around three big pillars of voters. The first is organized labor, with capital being on the Republican side of the equation. The second are ethnic minorities with most white people edging towards the Republicans again. And then the third group is coastal elites, specifically of the white tower crowd. People who live in cities and have a very different way of looking at the world than say rural voters who are more likely to be Republicans.” On the last point, Zeihan has shifted from talking about the postwar Democratic Party to the modern one, as Democrats used to own a goodly portion of rural voters, AKA “the farm vote,” especially in the South. Look at this county by county map of the 1932 Presidential election, and you see that Republican rural counties are few and far between. By 1952, rural counties really like Ike…but not in the South, which is still overwhelmingly blue. That change accelerates with the rise of the “new left” in the 1960s and the conscious decision by the left to start pushing conservatives out of the Democratic Party. (At least that was the case in Texas, as outlined in Wayne Thorburn’s Red State.) By the 1980s the process was well underway, as seen by party switches from such politicians as Phil Gramm and Kent Hance, and was mostly complete everywhere except minority majority counties, though in Texas we’re now seeing that Democrat-to-Republican pattern repeat itself with Hispanic majority counties. Smaller cities and suburban voters were where Republicans managed to maintain a foothold during the Democrat-dominated period between FDR’s election in 1932 and Reagan’s in 1980.
“If you look at it just on the numbers, if you add up all racial minorities in the United States with all organized labor or blue-collar workers with everyone who’s living in the cities, it’s a super majority of the population. And it’s pushing 70% of the total. It should, by the numbers, not only be the dominant party, but it should be the only party in the United States. And yet and yet and yet, they keep losing elections by ever more impressive margins.” “All organized labor or blue-collar workers” is another slight of hand, as those are two ever-more-divergent categories. All across the Western world, not just in the U.S., ruling liberal elites can rarely be bothered to hide their contempt for native blue-collar workers, which seems to be one driving factor in their importing immigrant classes to supplant them.
I’m snipping the “but the world changes and politics changes” section (Cold War, digital revolution, Baby Boomers retiring) because it’s all so very non-specific to the question at hand.
“But for the Democrats, this has not been a gift. Three basic things have combined to make it nonfunctional in its current form.”
“First, those liberal, coastally educated, urban living elites, they’re not nearly as united as you might think. And more importantly, they have a hard time resonating their ideas with the rank and file of the United States.” Here’s the first time Zeihan tiptoes up to the central truth that “their ideas,” the whole panoply of radical leftwing social justice, victimhood identity politics, DEI racism, radical feminism, importing millions of illegal aliens, supporting Islamic terrorists killing Israelis, etc., are all profoundly unpopular with everyone outside the leftwing college educated urban elites who make up the ideological core of the Party.
“Most Americans do not own six figures.” Actually, they sort of do, but I think what he meant was most Americans don’t earn six figures. “Most Americans have not graduated from graduate programs. And so, the sort of tunnel vision that you can get if you’re a part of this coastal elite just doesn’t really carry out to others. And when you see people starting to protest for trans rights, that just doesn’t resonate for most of the country.” Americans were more than happy to let the confused freaks do whatever the hell they wanted to with their own bodies, but once the groomers started “transitioning” and mutilating normie children behind their parents’ backs, normie parents started hating Democrats with a deep, righteous anger.
“The second issue is racial.”
“One of the huge mistakes the Democratic Party has made over the last 30 years is to simply bet that, because birth rates were higher under Hispanics than they were under whites, that the country was going to become more and more and more leftist, more and more democratic.” That is, in a nutshell, the John Judis and Ruy Teixeira Emerging Democratic Majority theory. And it 2021, Teixeira said that wasn’t happening.
“Instead, we saw two things happening with specifically the Hispanic population. Number one, they became steadily and steadily more wealthy, which tends to put them over into the Republican camp. And second, Hispanics, especially first and second generation Mexican Americans, are very strong in blue-collar work, specifically the trades like electricity and welding and similar items. Construction. Well, the United States is going through an industrial renaissance where those skill sets are massively in demand. And so if you want to look at politics through the lens of the economic halves and halves nots, the Hispanics have become more and more in the category of the haves moving forward, so for them tax rates have become as important, if not more, for most than things like racial equality.” Except we have racial equality under the law, and republicans support a color blind society based on individualism, while Democrats want perpetual social justice ethnic grievances which well-heeled upper middle class white liberals can signal their virtue by supporting.
“And so more and more of these people have shifted over in the general direction of Trump style Republicans.”
“And the third issue is cultural. If you’re a first or second generation Mexican-American, a first or second generation immigrant from any background, odds are that where you came from is less organized than the United States and less wealthy. You came to pursue the American dream, which means you have some firsthand experience in your family of what a system with weak rule of law looks like. One of the great things that we have forgotten in this country is that most migrants have a deeper degree of religiosity than most Americans. And so when you get a Mexican immigrant or Nigerian immigrant and they come to the United States, they are far more likely to be socially conservative than, say, the social liberals of the coasts.”
“We have all of these things happening at the same time, changing our idea of identity, and the net result is a lot of factions that used to be core to the Democratic coalition are now toss-ups. Hispanics were as likely to vote for Trump as they were likely to vote for Harris. Same for people under age 30. The youth are now in play as well.” No mention of why this might be the case, or why social justice, open borders and Covid lockdown policies are all widely unpopular with “the youths.”
“You pull this all together and at the moment it is absolutely impossible for the Democrats to win any big election unless there’s something else very big in play. Does this mean that the Democrats are dead forever? Not quite what I’m saying. What I’m saying is they can no longer count on winning by the numbers. There has to be another issue out there that motivates.”
Most of the the reasons Zeihan are correct (or at least correct enough), but save Hispanics, there’s very little deeper analysis of why all these various, formerly solid demographic have fallen away from the Democrat fold. And the answer is that the ideas promulgated by the ideological core of the Democrat Party are deeply unpopular. From mutilating children in the name of transsexism to importing millions of illegal aliens to legalizing shoplifting to putting repeat offenders back out on the street, there seems to be no 80/20 hill social justice-infected Democrats aren’t willing to die on.
In a way, the scarcity of details Zeihan provides on the manifest unpopularity of the Democrat Party is less notable than the fact he did a video noticing them at all. After all, a large portion of his bread and butter is speaking at various functions for those same “liberal, coastally educated, urban living elites” that he says are out of touch with much of America. That he can even tiptoe up to the truth indicates that the widespread unpopularity of Democrats has finally so established itself as consensus inside-the-beltway wisdom that it’s no longer taboo to talk about.
But the same thing that’s making the Party so wildly unpopular (the ideological capture of the Party’s core by radical social social justice) is the same thing that prevents the Party from being able to self-correct. The hard left is now so firmly entrenched in the urban centers that make up the Party’s shrinking base that they’ve nominated (and have a puncher’s chance of actually electing) a jihadi commie as mayor of America’s largest city.
A political party exists to win elections, but the Democrat Party’s social justice-infected insane wing is focused on taking complete control away from the corrupt wing, not only for the graft, corruption and patronage, but also to actively foment revolution against capitalism and “fascism” (i.e, anything that stands between their own will to power and complete control of the country). And they’re willing to lose election after election until they achieve that goal.
As the Party shrinks, it becomes ever more shrill and leftwing, and as it becomes ever more shrill and leftwing, the Party shrinks. It’s a self-reinforcing feedback loop, a purity spiral Democrats seem incapable of escaping from.
Maybe by 2050 or so, an elderly Zeihan can post a holographic lecture on how social justice drove Democrats the way of the Whigs…
Of the many self-inflicted dooms besetting the Democratic Party, the blue state exodus gets talked about far less than Trump Derangement Syndrome or the radical wokeness destroying the party (along with everything else it touches). But for a party that once crowed about “demographic destiny” making them the “permanent majority party,” the shifting demographics of people fleeing blue states due to lousy governance, and the resulting shift in electoral votes, is going make Democrats winning the presidency much more difficult in 2032.
“There is a year that should absolutely terrify Democrats. It’s not 2024 or 2026 or even 2028. It’s 2032.”
“The population movement right now is a flashing red warning sign for Democrats. The reason is the 2030 reapportionment. Every ten years, the US conducts the census. One big thing done with that data is the recalculation of how many seats each state gets in the House of Representatives, and how many votes it gets in the Electoral College. And those numbers move in tandem. You gain two House seats. You gain two electoral votes. If you lose a House seat, you lose an electoral vote.”
“Democratic states are losing population and Republican states are gaining.”
“Here’s one way to think about it. In 2020, Joe Biden won* a 306 to 232 victory in the Electoral College. Then, after 2020, the census was finished and representation was reallocated for the 2022 midterms and 2024 presidential election. Under the new map, winning those same states would have shrunk Biden’s victory margin by six electoral votes to 303 to 235.”
“The next census will happen in 2030, and the map will again change for the 2032 presidential election. And right now, the outlook for that map is a disaster for Democrats.”
“Blue states like California and New York shedding House seats and electoral votes, and red states like Texas and Florida gaining four new electoral votes and House seats each.”
“In 2024, Donald Trump won a 312 to 226 victory in the Electoral College. Under this projection, the exact same state and vote breakdown would swell that margin by 20 electoral votes to 322 to 216.”
“Right now the wind is absolutely blowing away from Democratic controlled states and towards Republican controlled ones. And it’s worth asking why.”
“The red areas of the country are becoming a bigger and bigger share of the pie, and it gets to a flashing red problem for Democrats, both for their political survival and brand identity.”
“For the most part, it is expensive as hell to live in a blue area governed by Democrats. The data is clear eight of the ten states with the highest rent prices are solid blue states, and eight of the ten states with the highest cost of living index are also solid blue states.”
“Having a high GDP or on-paper prosperity doesn’t mean much when most people can’t afford their lives.”
“So why are blue cities and states in such an affordability crisis right now? Well, to start, obviously we’re all thinking it 1, 2, 3: taxes. It’s just the fact that Democratic controlled states tend to impose higher tax rates. Sometimes that means taxes that some GOP states don’t even have, like the income tax.”
“Culture is another part. By now it’s clear that Covid in 2020 presented a particular challenge for blue states and cities. Many of which, took a much softer approach to urban disorder and unrest and are still trying to reverse the damage.”
“On a lot of stuff, Democrats also just tend to be more lax or more compassionate, depending on your point of view.”
“The upside might be that a homeless person is treated with more dignity, or you won’t get thrown in jail just for having a bag of marijuana. But the downside might be that now a public park is inaccessible to families wanting to use it, or people are doing hard drugs on the street without the law intervening, which isn’t actually compassionate to anyone.”
“But more than taxes or culture or anything else. The overwhelming majority of this issue stems from one big fact: housing. It has just become really expensive for people to buy or rent a place to live in many blue states. By any conceivable metric, the US overall is in an affordable housing crisis right now. The average renting American now spends over 30% of their income on rent. The ratio of income to housing prices is at a record high right now, and at its highest in blue states.”
“And we have clear data showing us that this has now become a direct drag on Democrats. An NBC analysis of the 2024 presidential race found that Trump made his biggest gains in the counties that have the worst housing markets. Remember those top ten most expensive states and how eight of them were blue states? Five of those eight were also in the ten states that swung the most towards Trump in 2024.”
“And even when people don’t move out of a blue city or state, the people that stay are increasingly reacting to the high cost of living. By losing faith in the Democratic Party. Again, especially middle and working class people. It’s not a coincidence that Trump’s biggest gains in 2024 were in diverse, working class congressional districts in California and the New York City area, places where the Democratic Party has full control and has failed to address the cost of living.”
“But we also know that there is a way to address this in cities, mainly because many blue cities in red states have done it. Take Austin, which is the seat of a county that voted for Kamala Harris by almost 40 points. It’s seen explosive growth over the past 15 years, partly because the city and state have been very successful in making housing more affordable. That’s not because every landlord there suddenly became a socialist or because they banned Blackrock, but because they fundamentally just built more housing, making more space and lowering the prices.” The City of Austin government proper had very little to do with that, though I’m sure it’s several orders of magnitude easier to build apartment buildings here than in San Francisco, and you see them going up all the time. But Austin is surrounding by bedroom communities in far more growth-friendly counties, and Texas beats the hell out of California for pro-growth policies.
“That’s the kind of thing that makes families move there, companies open there, students stay there. And remember, each one of those people is a tiny little piece of building another electoral vote every ten years. By contrast, cities like New York and LA and San Francisco and Boston are in an absolutely different spot. It is simply incredibly expensive to live there.”
“The Democratic Party sees its political power decrease when fewer people live in the states that it controls, but it is the policies of its own politicians which are preventing more people from living in them.”
The only “growth” that blue state politicians seem to embrace is that of their own bank accounts and the ranks of illegal aliens—the same illegal aliens that drive up the cost of housing for ordinary, non-subsidized citizens. The bluer the city or state, the more likely they are to pursue actively anti-growth policies on the assumption that more people equal more destruction of the environment. And how can Democrats create safe cities when the Soros-backed Democrats they elect are determined to keep violent felons on the street as long as they hail from designated victim groups?
How can Democrats pursue pro-growth policies when so many core ideological constituents are anti-growth?
We’ve previously covered that China’s demographics are in severe decline and that China’s GDP may be overstated by 60%. Now a researcher says that China’s population could be overstated by 37-50%.
(Before we dig in, two caveats: First, the channel is Lei’s Real Talk, from someone who came over from communist China and was a student in the U.S. during the Tiananmen Square crackdown, but she doesn’t use her full name, which she says is to protect her family back in China. Second, she’s using AI to answer some of her questions. Still, the math-based questions don’t seem conducive to the “AI hallucinations” we see elsewhere, but some caveat lictor seems in order.)
“We know China is facing a series of economic challenges. Weak consumer, confidence falling real estate prices, high debt, industrial overcapacity, sluggish exports, and so on and so forth. But the underlying issue of the faltering economy, in my opinion, is a severe population crisis.”
“China’s actual population is far below than the official figure of 1.4 billion.”
“I want to compare China and India’s population between the 30-year period from 1990 to 2020. Let’s also compare their average fertility rate between the two countries and their medium age.” If you run those very basic numbers, things don’t add up.
“In 1990, China’s population is over India is by about 270 million [1.14 billion vs. 870 million], and 30 years later China’s population is still over India by 30 million [1.41 billion vs. 1.38 billion].”
“However, if you look at the fertility rate, India’s average fertility rate [2.97%] during the 30 years years is so much higher than China’s [1.70].” All these are the official published rates.
“With that kind of fertility rate in India consistently over 30 years, India’s population should be larger than China’s. Mathematically it’s impossible that China’s population is still greater than India’s.”
I’m skipping over a detailed breakdown of the two country’s respective fertility rates by decades.
“I asked GPT to apply the fertility rates for each country and give me the total population in 2020 for India and China respectively, and this is the results it generate. In 2020 population, India’s population was 1.38 billion, China’s was only 890 million.” India’s number is off the official figure by 4%. China’s number is off by 37%, or 520 million people. And this is at a time when life expectancy for China has been increasing.
Analysis of various other population factor considerations snipped.
“I asked AI to recalculate everything by replacing the official fertility of 1.7 and 1.5 from the year to 2000 to 2010 replaced them with Dr. Yi Fuxian [University of Wisconsin Madison demographic researcher whose work we previously mentioned here] fertility assessment of 1.1. It came up with a shocking total population of 695 million, and that’s less than half of the announced population of 1.4 billion.”
We didn’t see a huge drop in economic output because China’s economy is investment driven.
“Population loss took place over 30 years, and particularly started since 2000, and this reduction in population didn’t show up as reduction in consumer spending until this generation reached the age of 18, or even older, when they started to spend money. So now we start to see the impact on consumer spending because there’s a time lag.”
Plus Flu Manchu deaths.
“China suddenly saw a wave of kindergarten closures, so in some cases private kindergartens have been shrunk by 20% in some regions.”
“So for all these factors combined, I think China’s real population may be between 600 million and to 800 million.”
Given the GDP overstatement estimates, this enormous overstatement of China’s population seems plausible. It also makes all those wild claims of “China will soon overtake the US economically” look even more ridiculous.
China’s “one child per couple” policy will be seen by future generations as one of the greatest self-inflicted catastrophes in history.
This is a pretty startling tidbit via Texas Republican congressman Chip Roy:
BREAKING: according to @TxDPS – 2,824,613 non-citizens have DL’s, CDL’s, or ID – after working with my friend @brianeharrison to run this to ground. That’s why this matters – a lot. https://t.co/OxC125vWaF
Given that the entire population of Texas is some 31,000,000 people, that means that just under 10% of the population are non-citizens, the majority of which are probably illegal aliens, and most of them have probably been imported under the Biden-Harris administration.
In a major reversal from her guidance just days ago, Secretary of State Jane Nelson now says non-citizen driver’s licenses may not be used as a form of voter identification.
The Texas Department of Public Safety issues driver’s licenses and personal identification cards to lawfully present noncitizens, which are clearly marked “Temporary Visitor” or “Limited-Term” and expire after one year or when the individual’s period of lawful presence ends.
An advisory from the Secretary of State issued Tuesday afternoon stated that while citizens should not use these types of IDs to vote, poll workers should nonetheless offer a regular ballot to people on the voter rolls who present a noncitizen ID. This contrasts with previous guidance from the Secretary of State’s office in 2018, which specifically stated that DPS-issued driver’s licenses and personal identification cards “should not be used if ‘Limited Term’ or ‘Temporary Visitor’ appears on the face of the card, as this indicates the person is not a U.S. Citizen.”
Instead, voters with such IDs were urged to show other forms of identification, including naturalization certificates or passports.
After backlash, Nelson has issued “updated guidance” reversing the decision:
When an individual attempts to vote by presenting a temporary or limited-term driver’s license (which federal regulations say must be issued only to non-citizens who are lawfully present in this country) election workers must require that the individual produce a naturalization card or naturalization certificate demonstrating U.S. citizenship to receive a regular ballot.
I still expect Democrats to try to harvest illegal alien votes (and pursue other avenues of voting fraud) in deep blue cities, but state vigilance has helped forestall this particular avenue of illegal alien voting fraud.
The Biden-Harris administration allegedly redirected funds meant for securing the southern border to advancing its open borders agenda.
The Center for Renewing America reported that the Federal Emergency Management Agency has been using funds allocated to U.S. Customs and Border Protection to spur illegal border crossings.
Specifically, CRA Executive Director Wade Miller levied accusations against the Biden-Harris administration for propagating the illusion that CBP had enough taxpayer funding, but then moving those dollars to FEMA to advance open-border policies.
He described this process as being even more scandalous than FEMA funding illegal aliens with its own money.
“It appears that much of the money used by FEMA to fund illegal immigration was transferred to FEMA from CBP,” Miller posted on X. “The Biden/Harris admin is defunding border security to facilitate open borders.”
Miller explained later that “Democrats set up the CBP funding levels to make it look like CBP had non-laughable funding levels, with the intent of then later transferring those funds to fund the open borders agenda through FEMA.”
While U.S. Department of Homeland Security Secretary Alejandro Mayorkas revealed that FEMA is running out of money amid the ongoing hurricane season, FEMA actually spent exorbitant amounts of money on welfare for illegal aliens.
For example, in the past two years alone, FEMA covered approximately $1 billion worth of food, shelter, and transportation for illegal aliens.
Now, not only is FEMA allegedly out of money, but the federal government has also been accused of taking taxpayer dollars from CBP’s pockets and transferring it to FEMA to continue its spending on illegal aliens.
“Absolutely nothing that Border Czar Kamala Harris and President Biden do – or intentionally fail to do – surprises me,” State Rep. David Spiller told Texas Scorecard. “They continue to consciously endanger every Texan and American by their indefensible open border policies.”
Having this many illegal aliens running around lose is an active threat to Texas and the United States. A second Trump presidency is necessary to secure the border and start the deportation of all illegal aliens.
I’ve covered Peter Zeihan videos on China’s crashing demographics before. We already knew China was “the fastest aging society in human history, with the largest sex imbalance in human history.” Now he’s dug into new some new data.
It’s much worse than he thought.
“We’ve gotten some new data out of the Chinese that has made it way to the U.N, and so the updates have allowed us to update our assessment, and oh my God, it’s bad.”
“Here is the new data, and as you can see, the number of children who are under age 5 has just collapsed, and they’re now roughly twice as many that are age 15 as age 5.”
“What happened back in 2017, well before Covid, is that we had a sudden collapse in the birth rate, roughly 40% over the next five years among the Chinese, the ethnic Han population, and more than 50 percent among a lot of the minorities. And that is before Covid, which saw anecdotally the birth rate drops considerably more.”
“We’re never going to get good data on death rate, or at least not anytime soon, because the Chinese, when they did the reopening, just stopped collecting the data on deaths and Covid and everything because they didn’t want the world to know how many Chinese died, so they don’t know.”
And if you look at the data from the Shanghai Academy of Science, it’s even worse than the official state numbers.
“China aged past the point of demographic no return over 20 years, ago and it wasn’t just this year that India became the world’s most populous country, that probably happened roughly a decade ago. And it wasn’t in 2018 that the average Chinese aged past the average American, that was probably roughly in 2007 or 2008.”
“This is not a country that is in demographic decay, this is a country that is in the advanced stages of demographic collapse. And this is going to be the final decade that China can exist as a modern industrialized nation state, because it simply isn’t going to have the people to even try.”
“Labor costs you’re having now or as low as they’re ever going to be. Consumption is as high as it’s ever going to be.”
“So even before you consider the political complications or issues with operating environment or energy access or geopolitical risk or regulational risk, the numbers just aren’t there anymore so you have to ask yourself why you’re still there.”
Add to that the fact that China economy is probably overstated by 60%, and it looks like China’s brief days in the sun are already over.
Fallout from the House speaker’s race, Biden busted for mishandling classified files, more blue state teachers raping their students, Cadillac’s EV breaks into double digit sales, and the Imelda Marcos disco musical! It’s the Friday LinkSwarm!
Kevin McCarthy finally wins Speaker of the House race on 15th vote after offering concessions to the House Freedom Caucus.
How is McCarthy doing? Early signs are encouraging. “The House of Representatives passed a new rules package Monday that overhauls the way it functions by putting up more barriers to congressional spending and creating a more deliberate process for passing legislation, which were key demands of the more conservative members of the Republican Party.” (Hat tip: Sarah Hoyt at Instapundit.)
House Speaker Kevin McCarthy (R., Calif.) used Thursday morning’s press briefing to criticize the Department of Justice’s handling of the issue.
“They knew this happened to President Biden before the election, but they kept it secret from the American public,” McCarthy told a scrum of reporters on Capitol Hill.
Chicago Board of Education Inspector General Will Fletcher reported 470 sexual complaints against Chicago Public School employees from students in 2022.
“The report details students being abused, groped, groomed, assaulted and threatened by school officials.
“One investigation found a former Junior ROTC staff member had sex with a 16-year-old high school student for a year. When he learned there was an investigation, the staff member threatened to kill the girl and her family if she cooperated with investigators.”
The teachers’ union in Chicago, Randi Weingarten’s American Federation of Teachers, so praised by Joe Biden, has done nothing and said nothing about it so far as I can tell, and I did look, focusing instead on promoting critical race theory into the school system. Left unsaid is that the union ensures that firing any of these teachers involved in this activity is virtually impossible. Chicago’s public schools’s firing rate of bad teachers owing to their union membership, as of a few years ago, is 0.1%.
What’s vivid here amid all this widespread predatory behavior from the teaching classes, which like Harvey Weinstein, are prolific campaign donors to Democrats, is that the low outrage factor stands in sharp contrast to the sexual abuse scandals of the Catholic Church, which was ordered by courts to pay billions in reparations to the victims, has seen its leaders publicly apologize for the abuses, and has many programs now to prevent child abuse by perverts in authority. This activity was evil and inexcusable and rightly punished.
As for the more widescale abuse now seen in Chicago’s public schools, along with comparable scandals in the Los Angeles public school system, and other bad cases in New York and other blue cities, well, crickets. The perversion has gotten out of control in Chicago and the story barely makes the national news.
How Biden’s inflation is destroying family budgets:
The reality of the inflation report for American families – year-over-year real wages have been negative for 21 straight months. pic.twitter.com/1Bh4DNqZBF
A federal appeals court on Friday struck down the Trump-era ban on bump stocks, a firearm accessory that enables a semi-automatic gun to shoot at an increased rate of fire.
In a 13-3 decision, the 5th Circuit Court of Appeals in New Orleans held that the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), acting under “tremendous” public pressure, short-circuited the legislative process by approving a rule to define bump stocks as “machineguns,” which are illegal to possess. The court said ATF did not have the authority from Congress to do so.
This is what a real pro-natalist policy looks like: “Hungary addresses falling birthrates by exempting moms under 30 from income tax for life.” More:
Hungary has taken several measures in recent years to encourage its citizens to have more children, including three years of paid parental leave and state-funded daycare.
The country previously suspended income tax for moms with four or more children, but this new policy specifically encourages women to have children sooner, which in the long run means a higher likelihood of having more children overall.
Israel hit Syria again, and I heard just about nothing about it. Ukraine has really pushed Syria out of the headlines.
Speaking of Ukraine, Russia has largely captured the salt mining town of Soledar, though at a high cost in man. And good luck checking those hundreds of miles of salt tunnels for partisans…
“Tesla plans Houston-area expansion with large new industrial site in Brookshire…Little is known about Tesla’s plans, but the Fortune 500 company signed a lease late last year for about 1.03 million square feet at 111 Empire West, part of the 300-acre Empire West Business Park in Brookshire.” A bold move, considering how radically car sales have dived this year.
Other EVs update: “GM delivers record Cadillac Lyriq deliveries in Q4 – 12 per month.”
“David Byrne, Fatboy Slim Disco Musical ‘Here Lies Love’ Sets Broadway Debut. The musical, which has had a long journey to Broadway, centers on the life of Imelda Marcos, the former first lady of the Philippines.” They say the mirror ball shine bright on Broadway… (Hat tip: Dwight.)
The rich world was a population column from [as opposed to a pyramid] 1945 to 1992, and with the end of the Cold War, the developing world became a column in 1992 until now. The problem is that this is all temporary, because birth rate keeps dropping. People keep living older and your column eventually inverts into an open pyramid upside down. And now you no longer have children, you no longer have a replacement generation at all, and there aren’t enough people in their 20s and 30s to buy everything, and there aren’t enough people in their 40s and 50s to pay for the retirees. So this decade was always going to be the decade that most of the advanced world moves into mass retirement, and the economic model collapses, and next decade was always going to be the decade that that happened to the developing world.
“The Chinese have jumped the ship and this is their last decade, too.”
“We now know that they’ve lied about their population statistics and they’re they over counted their population by over 100 million people, all of whom would have been born since the one child policy was adopted. So this is one of those places where they’ve got more people in their 60s and their 50s and their 40s and their 30s and their 20s.”
“Mao was concerned that as the country was modernizing, the birth rate wasn’t dropping fast enough, and that the young generation was literally going to eat the country alive. So they went through a breakneck urbanization program which destroyed the birth rate, at the same time they penalized anyone who wanted to have kids, and both of those at the same time have generated the demographic collapse we’re in now.”
The male to female sex ratio in China was bad before, and now it’s obviously worse.
“Without young people, we’ve seen their labor costs increase by a factor of 14 since the year 2000, so Mexican labor is now one-third the cost of Chinese labor. Their educational system focuses on memorization over skills, so despite a trillion dollars of investment in a bottomless supply of intellectual property theft, they really haven’t advanced technologically in the last 15 years. Mexican labor is probably about twice as skilled as Chinese labor now, even though it’s one-third the cost.”
“They’ve consolidated into an ethnic-based paranoid nationalistic cult of
personality, and it’s very difficult for the XI Administration to even run it, because it’s not an administration anymore no one wants to bring Xi information on anything.”
The Biden Administration has adopted the Trump Administration’s trade policies on China.
“They now have tech barricades that prevent the Chinese from buying the equipment, the tools or the software that’s necessary to make semiconductors. In fact, [Biden] went so far as to say any Americans working in the sector have to either quit or give up their American citizenship. Every single one of them either quit or was transferred abroad within 24 hours.”
“They’re completely dependent on the U.S Navy to access international trade, they are the most vulnerable country in the world right now. And based on how things go with Russia, we’re looking at a significant amount of raw materials falling off the map, specifically food and energy, and the Chinese are the world’s largest importer of both of those things. So there’s no version of this where China comes through looking good.”
“Say what you will about the Russian economy (it’s corrupt, it’s inefficient, it’s not very high value-add), but it’s a massive producer and exporter of food and energy. You put the sanctions that are on the Russians on Beijing and you get a de-industrialization collapse and a famine that kills 500 million people in under a year.”
“Even if the Chinese were able to capture Taiwan without firing a shot, it doesn’t solve anything for them. They’re still food importers, they’re still dependent on the United States, they’re still energy importers. And even if they take every single one of those semiconductor fab facilities intact, they don’t know how to operate them, because they can’t operate their own, their own are among the worst in the world.”
“One of the fun things about Russia versus China right now is that the Russian information security is so poor that American intelligence is literally listening on everything, but in China we can hear into the office but there are no conversations happening.” I suggest taking both these revelations with a few grains of salt. Maybe Zeihan has great sources in the intelligence community, or maybe Zeihan’s great sources are lying.
Plus more on how Xi has killed or exiled any possible challenger to his power, and how they’re now having a massive Flu Manchu outbreak. “Their overall health is worse than ours, diabetes as a percentage of the population is higher, they don’t have a critical care system like we have, and their hospitals are really their only line of defense.”
Next: Why EVs are a disaster.
“All kinds of people think I’m full of shit!”
Rogan: “What is your perspective on EVS?” Zeihan: “They’re not nearly
as good on carbon as people think. Most of the data that exists doesn’t take into the fact that most of this stuff is processed in China where it’s all coal doesn’t take [into account] the fact that most grids they run out are also majority fossil fuels. And that extends the break-even time for carbon from one year to either five or ten based on what model you’re talking. Cyber trucks are far worse than EVs, but the bigger problems we’re just not going to be able to make them much longer.”
To electrify everything “We need twice as much copper and four times as much chromium and four times as much nickel and ten times as much lithium, and so on. We have never, ever, in any decade in human history, doubled the amount of a mainline material production in ten years, ever, and we need all of this by 2030. No, it’s just not technically possible.”
Zeihan says California’s mandates for phasing out gasoline by 2035 aren’t quite as bad as they seem, as the bureaucracy has the ability to move the goal posts if they prove to be unfeasible. Pardon me if I’m not sold on the beneficent rationality of California’s hard left bureaucracy.
Speaking of things I’m skeptical of:
There is a fascinating discussion happening in the environmental community right now, because they’re being confronted with reality. So California and Germany have very similar Green Tech policies, but the Germans have spent three times as much as California, but are only getting about a fifth as much power. I don’t know if you’ve ever been to Germany, but the sun doesn’t shine in Germany. And now, with the Russians on the warpath and their clean-ish energy from natural gas going away, they’re going back to lignite coal in force. It was already their number one source of power. The idea that Germany’s green is ridiculous, because they rely on really, really dirty coal, now especially. But there’s now a conversation going on between the German environmentalists and the Californian environmentalists about why California, in relative terms of doing so well at this, while Germany is not. And the answer is simple geography, but that’s never been part of the conversation in the environmental community before. Now it is. They should have had this conversation 15-20 years ago, but they’re having it now. And as soon as they come to the conclusion, unwillingly but they’ll get there, that we have to choose where we put our copper and our lithium and our nickle, EVs are not going to make the cut.
This assumes that California environmentalists are susceptible to the sweet voice of reason, and that modern environmentalism isn’t half religion and half scam. “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” California’s Democratic power establishment has shown an amazing propensity to impose radical solutions that bring obvious and immediate harm to people that are not them. Why should they worry about forcing other people to buy pricey EVs when they already have theirs?
Next up: The drug war, both here and in Mexico.
Rogan starts by noting that marijuana legalization in California led to cartels planting massive amounts of weed in national forests, and suddenly guys who were game wardens are now wearing tactical gear and carrying machine guns.
“I think the mafia is a great example for why you shouldn’t look for the silver bullet [of drug legalization], because, yes, that in the 1920s during prohibition, was one of the big reasons it got going, but the mafia didn’t waste any time in diversifying and neither have the cartels.”
“They’ve gotten into cargo theft and kidnapping and avocados and limes and real estate and local government.”
“Now the attractiveness of gutting them of some of their primary income. Should we look at that? Of course! But it’s not so simple as removing one and it just all stops.”
“The challenge we’re seeing in Mexico right now is that the, uh, the air quotes “good” cartel the, one that saw drugs as a business, is being broken up. If you remember El Chapo—” Rogan: “That’s the good cartel?” Zeihan: “Sinaloa cartel, yeah. He thought of himself as a Korean conglomerate president. So it was like ‘We smuggle drugs. That’s our business. You don’t mess with things that mess with the business. You don’t trip the old lady, you don’t steal her purse, you don’t shoot at the cops. These are people who live where we operate, we want them to be on our side, so maybe even throw a party every once in a while. You focus on the business.'”
“The replacement cartel is Jalisco New Generation, They’re led by a former Mexican military officer who thinks that rather than don’t shit where you sleep so that the people on your side whenever you move into a town, you shoot it up. You do kick over the old lady, you do take her purse, you make the people scared of you, that’s the point of this. Drug running is a side gig.”
“We are here to be powerful, and drug running is just one of the ways we make that happen. And he has taken the fight to every cartel and the Mexican government, and they’re in the process of trying to break into the United States.”
“El Chapo and the Sinaloa became the largest drug trafficking organization in America under the Obama Administration. And one of the reasons our birth rate went down, so far so fast is they basically either co-opted or killed American gangs. So they killed the people who were doing the killing. Not a lot of Americans got killed after that.” I think he meant to say murder rate.
“All of the other cartels control the access points in the United States, but
Jalisco New Generation now is challenging every single one of them trying to break through. And if they do, and they bring their business acumen, if you will north of the border, they’re going to start killing white chicks named Sheila in Phoenix and then we’re gonna have a very different conversation.”
“Sinaloa they co-opted the Hispanic gangs, especially the Mexican gangs, because there wasn’t a language barrier there, and they really targeted and gutted a lot of the African-American gangs. They took over drug smuggling and distribution from them to deny them income and then they just shot a lot of people…it was pretty much completed by the time we got to 2013.”
“Look at the violent crime rates in the United States, they’ve been trending down really significantly since about 2004 and the drop from 2004 to roughly 2014 was amazing. That’s largely Sinaloa.”
And now all the cartels are fighting and the murder rate in Mexico is skyrocketing.
He’s not a fan of legalizing cocaine:
Also says that cartels are now laundering money via marijuana dispensaries using the federal reserve.
And he’s not a fan of Crypto:
Bonus: “Maxine Waters is not exactly the brightest person in congress.”
With Russia shutting down the NordStream gas pipeline for maintenance, Peter Zeihan wonders if the end of Germany’s vaunted economic engine is nigh.
Some takeaways:
NordStream has made Germany “horrendously” dependent on Russia for energy.
Russia is blackmailing Germany to stop supporting Ukraine.
“Four things that the Germans rely upon to be the economic powerhouse that they are:”
That cheap natural gas.
Their economic model it is based on access to large volumes of cheap Russian energy, both in terms of for electricity, and as industrial inputs to power the entire German manufacturing model. So that all by itself could kill the German system almost overnight. Well, not overnight, but within a year.
“The Germans rely on a large, robust, highly skilled workforce, but Germany has one of the fastest aging societies in the world…Germany will hit mass retirement this decade, and so the model was always in danger on demographic grounds.”
Third: “Access to central European labor all the way from Poland to Romania and even further east…but that’s going away too. Because just as the Germans are rapidly aging, the central Europeans are aging even more rapidly…the birth rate in all of these countries is actually lower than it is in Germany, so it’s every bit as terminal.”
Fourth, you need the global economic trading system that is now breaking down and America is backing away from.
His conclusion:
All of this put together suggests that the manufacturing model that has sustained Germany, that has provided the tax base, that has provided economic growth, that has made the population relatively happy with their situation, it’s gone. And it’s going to vanish within the next year. And a Europe that does not have a German motor at its heart is a Europe that all of a sudden needs to find a very very different way to function.
As with a lot of Zeihan’s observations, he has a lot of fundamentals right but his conclusions seem overstated. Germany has the resources to abandon their green delusions and restart coal and nuclear plants, assuming they have the political will. And the degree to which globalization is breaking down is the significant subtraction of China and Russia from it. There’s still a lot of U.S./EU trade to be had, even if it does get a bit more expensive. And Germany, so high up on the value-added foodchain, is well-position to survive.
The labor shortage is a trickier problem to solve, and probably was one of the main reasons Angela Merkel was so intent on raking in Islamic “refugees.” But maybe real refugees from the Russo-Ukrainian War might provide an opportunity. It would be pretty ironic if Ukrainians were to find their lebensraum in the bosom of Germany…
There more you start poking around online, the more you turn up reasons why China is screwed.
The first installment in this series was popular. Well, there’s a lot more reasons why China is screwed.
It’s screwed all the way down.
First up: Demographics:
Takeaways:
Remember all that talk of an “Asian Century?” Yeah, not so much.
“China will soon run out of people.”
China’s population pyramid is about to shift from a huge bulge of people in their prime earning years to one where that bulge is disproportionately elderly.
“Everything that made China what it is today has relied on a large, young, and productive workforce. Now, that workforce is about to succumb to biology just as every other generation has in every other country, ever.” Their demographic dividend is running out.
“China’s working-age cohort grew from 58% of the country in 1978 to 74% in 2010. But in less than twenty years, the UN predicts that number will be roughly back where it was in ‘78. By then, China will have twice as many seniors as children under 15.”
“Per capita wealth remains low, on the level of Mexico, the Maldives, and Kazakhstan. That means this mass of retirees won’t just contribute less to the economy, but will also require immense financial support — the kind China’s fractured pension and healthcare system isn’t remotely prepared for.”
“Unfortunately for China, the One-Child Policy has set the cultural expectation firmly at one.”
Replacement fertility: 2.1 children per woman. China’s official fertility rate: 1.6. “Yi Fuxian, a scientist at the University of Wisconsin-Madison [estimates] the true number at 1.18.”
“China’s preference for male babies means that between 2020 and 2060, there will be roughly 3 single men for every 2 single women.”
“China’s 2020 Census, [tallied] 14.65 million births the previous year — the lowest level since 1961.”
Japan, which is also aging, provides a best case scenario. “With a median age of 48.6, Japan is the 2nd oldest place on earth. Today, its share of the world’s manufacturing exports has fallen from 12.5% to just 5.2. Japan did not fade into global irrelevance. It’s still a great power. But it never fulfilled what once seemed certain: its rise to rival the U.S. as a superpower. And it never will.”
That’s part 1. Part 2 focuses on China’s out of control property market:
It starts off talking about the ghost cities, especially Ordos.
“Ordos does have an interesting story to tell. Just, not the one you might expect. The missing context, at the time, was far stranger than what the unimaginative pessimists concocted: Nearly all of these half-finished homes have owners — the vast majority of which have no intention of ever moving in.”
“All over China are millions of empty, some unfinished, but almost universally sold homes — not just in far-flung corners but also in Beijing, Shanghai, and Shenzhen. Over one-fifth of all urban homes — 65 million in all — sit vacant.”
China relied on “a surplus of cheap labor, which means, by definition, wages are low. You can only compete with the entire rest of the world for so long — and neither do you want to. Low-value manufacturing has long since moved South, to places like Vietnam, Laos, and Bangladesh.”
All the long-hanging fruits of infrastructure spending have already been built.
“Individually, Chinese consumers really don’t spend very much — just 32% of GDP — less than half that of the US, and far below countries like Japan and Germany. Worse, this number has actually been decreasing over time.”
“Chinese consumers are spending, but only on one thing, something not considered ‘consumption’: houses!”
China’s home ownership rate “is among the highest in the world — 90% — to much of the developed world’s mid-60s. It gets much weirder, still. If you can believe it, the majority of recent purchases have been 2nd and 3rd homes. In 2018, for instance, 87% of new home buyers already owned at least one.”
“Because the government tightly controls how much cash is allowed to leave the country, Chinese people simply don’t have a lot of options, and of them, housing is seen as the only sure thing.”
Also, given the sex imbalance mentioned above, for men, home ownership = marriage.
“For all of these reasons, prices have risen to extreme levels. In Shenzhen, Beijing, and Shanghai, it takes 40 years of the average income to afford a home.”
Most are bought before construction even begins.
And here’s where the demographics above provide a double whammy. “The majority of homebuyers, meanwhile, are aged between 20-50 — precisely the segment China will soon lose.”
One huge reason for the bubble: Local governments using their control of land to balance their budgets:
They created what are basically state-owned shell companies called “Local Government Financing Vehicles”. They gave these LGFVs free valuable land, which they then used to take out loans that local governments themselves couldn’t. The trick is that because their debt is hidden, local governments appear far healthier than they really are, while at the same time, meeting the quotas set by Beijing. Following the 2008 crisis, LGFVs transformed from a little quirk of its financial system to the backbone of local economies. If these ‘financing vehicles’ default on their loans, or if housing prices fall too steeply, local governments now have just as much to lose as homeowners. If a local government stops taking out loans, it instantly loses over a third of its revenue, causing a different kind of doomsday. So while the central government may direct local officials to control their debt, the best they can really do is feign cooperation.
Flu Manchu only temporarily halted home price rises, and they’re still soaring.
“Solutions are far too costly to assume their implementation.”
There are a lot more videos of China suckage, but I’ll have to split this up and get to those another time.
Here are two videos where Peter Zeihan argues that China is screwed for many reasons, not least of which is demographics.
Takeaways:
One child per couple means that China is “the fastest aging society in human history, with the largest sex imbalance in human history.”
“They’ve run out of people of childbearing age.”
They were going shrink in half by 2100. “Then they realized that they had been overcounting people for some time.” Then new data moved the date moved up to 2070. And now they’re saying it will be 2050. “For that to be true, the Chinese would have overcounted the population by 100 million.” And all of those missing people are of childbearing age.
Their population actually peaked 15 years ago.
“We’ve seen a 12-fold increase in Chinese labor costs since 1991.”
“China isn’t getting rich, it’s getting old.” They’re facing demographic collapse within a decade.
Xi’s instituted a cult of personality, and silenced anyone capable of independent thought. “He knows that the country’s current economic model has failed. And he knows he can’t guarantee economic growth, and he knows he can’t keep the lights on, and he knows he can’t win a war with the Americans.”
Xi’s solution? “Naked, blatant, ultra nationalism. Ethnocentric ultranationalism of the Nazi style.”
At the top, they don’t care about keeping the lights on. “A third of the country is facing power rationing.”
“These are the sorts of things that you do if you know that the bottom’s falling out and there’s nothing you can do about it, and you have to shift the conversation to remain in power.”
“In China, money is a political good. It exists to serve the needs of the CCP.”
“All of the economic growth we have seen in China since 2006 is because of debt.”
Corporate debt is 350% of GDP, “making China the most indebted country in human history in both absolute and relative terms.” Every country that’s come within half of this has collapsed under the debt load.
I’m omitting discussion of how China is screwed on semiconductors (covered enough here), and also the possibility of invading Taiwan (this video was released late last year, before Russia invaded Ukraine).
“The Biden administration in bits and pieces is redefining strategic ambiguity, and it’s not clear to me what the endgame is here.” Well, there’s a whole lot that isn’t clear about the Biden Administration…
Zeihan thinks Biden might recognize Taiwan for a foreign policy win. Zeihan also thinks that both China and Russia are so weak we can wait them out. (Remember: Pre-Ukraine invasion.)
Zeihan dismissive of both Obama and Trump foreign policy.
“Joe Biden has been on the wrong side and the right side of every foreign policy decision the U.S. has made in the last 45 years, because he doesn’t have any core beliefs he tacks with the wind.”
Now let’s forward to March 24, where Russia’s colossal failure in Ukraine has actually made China even more screwed.
Takeaways:
The biggest damage that we are seeing from the Ukraine war (outside of Ukraine, obviously) is in China. Because in one month the Russians have pulled back the blinders on what has been a 50-year strategic program, the idea that China can come to global power with American sponsorship, with American indifference, that it can take Taiwan, that it can intimidate Japan, that they can dominate all of east Asia and yet not suffer economically at all. It was always ridiculous, but now it’s been shown to just be absolutely stupid.
No one can escape the power of global markets because of trade.
“The yuan is only traded internally because it’s the most manipulated currency in history. The euro confiscates bank deposits to pay for bailouts.”
Russia is the world’s second largest oil exporter, and it can’t export more to China because the pipes that go east don’t interconnect with the ones that go west. “The rail lines are already beyond capacity.”
In the west: “One way or another, those pipes aren’t surviving this year.” (Not sure that’s correct, but I’ve long thought that we should be seeing more structure hits inside Russia than we’ve seen thus far.)
“The stuff that goes to the Black Sea is in a war zone, so insurance companies will not give the indemnification that is necessary for vessels to operate in that area. So the only way a ship can go and dock it overseas right now is if a country gives its sovereign indemnification and takes all the risk.”
Primorsk, on the Baltic, is open. However: “Ship captains for the most part are refusing to go, and European dock workers are refusing to unload the cargo when it arrives. So that is still in use but not nearly as much, maybe a quarter of what it used to be before the war started.”
To get more oil to China: “You would have to build a fundamentally new infrastructure from the fields in northwest Siberia to Chinese population centers that is greater than the distance from Miami to Anchorage, most of which is through virgin territory that is very rugged. That’s a 10-year program minimum even with the Chinese building it.”
“We’re looking at the single largest removal of crude from the market ever, and in proportional terms it’s going to have a shock somewhat similar to World War II.”
We have insurance companies not doing it, shipping companies not doing it, dock workers not doing it and now Halliburton, Baker Hughes and Schlumberger have pulled out, and they do the technical work that makes a lot of this possible. All the super majors are gone, and we even have a couple of major projects out in Sakhalin that are probably just going to die because the Russians can’t make those projects work by themselves. Most of the oil and gas out of that goes to China, so we’re actually looking at an environment where the Chinese see reduced flows rather than increased, as Russia is just melon-scooped out of the market.
When the Russians fell under sanctions, everything that the Chinese thought was true about their future was laid bare as, at best, wishful thinking and bad analysis. So they are now looking east to the United States and west to the Russians in a little bit of a panic, because they are being tied indirectly to what’s going on in Ukraine. And they have now found out not only does the west’s and specifically the United States’ financial tools work very well, they now know they would work much better against China than against Russia, because at its core Russia is a commodities exporter, most notably oil, natural gas and food. China imports all those things, so if an equivalent sanctions regime was done against the Chinese, you’d have 500 million dead Chinese in less than a year from starvation.
Here I think he overstates the case, as there are a lot of emergency avenues a communist government could pursue to stave off starvation. Like invading Mongolia and turning it into emergency farmland. Which is not to so they wouldn’t have some starvation, especially in worse-case scenarios…
“The Chinese have always seen themselves as anti-American [well, the commies, anyway -LP], they’ve always seen themselves as anti-Western, anti-democracy and now they’re realizing that the mood of the man in the White House determines whether their country exists.”
As tight as the sanctions are, as big as they’re getting, they’re nothing compared to the corporate boycotts. Almost every single company that left Russia was under no legal requirement to do so, they just didn’t want to be associated with the war. And we’re talking about those ESG, social goody two-shoes mammoth companies like Exxon and Halliburton, who are now gone, and everyone else followed. So if that happened to China, you know that’s all of their investment that matters. That’s all of their technology transfers, that’s all of their end markets. This system, if it turned against China, would be far more damning than anything we’ve seen out of Russia so far.
I think Zeihan overstates the case a bit, and probably immanizes the timeline of crisis more than warranted, but the demographic and economic challenges China faces are very real.
Also keep in mind that no one in 1988 expected the Soviet Union to collapse as quickly as it did, either…
