Posts Tagged ‘Economics’

LinkSwarm for July 12, 2019

Friday, July 12th, 2019

The Jeffrey Epstein child sex trafficking scandal dominates today’s LinkSwarm, as does other people getting arrested for the same offense. Some kind of crackdown going on? We can only hope so.

Also, if you live in Austin, traffic on I-35 is going to be screwed up again this weekend.

  • The Jeffery Epstein scandal may be even worse than we thought:

    Even by the standards of stomach-turning celebrity criminal scandals, the bits of information about multi-millionare Jeffrey Epstein and allegations of an underage sex-trafficking ring are utterly bizarre, pointing to something perhaps even bigger and worse going on. Just the reports out this morning prompt at least ten big questions.

    One: How did Jeffrey Epstein make his fortune in the first place? One claim is a massive Ponzi scheme.

    Two: Could Epstein really have been connected to some sort of intelligence service? In yesterday’s press conference, labor secretary Alex Acosta offered a weird, vague, contradictory, meandering answer when asked about this. If Epstein was working for some sort of spy agency, which one? What was the aim, to collect blackmail on prominent figures? Who was being blackmailed, and what did they do?

    Three: Why did the office Manhattan district attorney Cyrus Vance try to keep Epstein from being registered as a top-level sex offender? “A seasoned sex-crimes prosecutor from Mr. Vance’s office argued forcefully in court that Mr. Epstein, who had been convicted in Florida of soliciting an underage prostitute, should not be registered as a top-level sex offender in New York.” The judge denied the request and declared, “I have to tell you, I’m a little overwhelmed because I have never seen a prosecutor’s office do anything like this.”

    Four: After Epstein was labeled a “Level 3 sex offender” — meaning the worst — Epstein was required by law to check in with the NYPD every 90 days. He never checked in at all over an eight-year span. How did that not generate any consequences?

  • And speaking of Epstein, why is nobody talking about former Palm Beach County State Attorney Barry Krischer.

    The former Palm Beach County State Attorney had made national news three times during his career. Once when he went after Rush Limbaugh, then after Ann Coulter, two Republicans, and when, after being handed the case of Epstein, a co-founder of the Clinton Global Initiative, he gave him a pass.

    Barry Krischer is a Democrat. Jeffrey Epstein is a billionaire donor to Democrats.

    As Chief Prosecutor, Krischer had made his reputation with a zero-tolerance policy of prosecuting juveniles as adults. But after Epstein had abused underage girls, Krischer, according to the detective on the case, ignored police efforts to charge him with four counts of unlawful sexual activity with a minor and instead the billionaire abuser was indicted only on a minor charge of solicitation of prostitution.

    Interviews with over a dozen girls and witnesses were ignored.

    The victims were not notified of when they needed to appear before Krischer’s Grand Jury. Calls by the police to issue warrants for the arrest of Epstein and his associates were ignored by Kirscher’s subordinates. Eventually, Kirscher’s people stopped taking phone calls from the police.

    The Palm Beach police chief claimed that information was being leaked to Epstein’s lawyers and wrote a public letter attacking Krischer and urging him to disqualify himself from the case. Instead the travesty went on. State prosecutors allowed Epstein to skip sex offender counselling, and hire a private shrink.

    When the judge asked assistant state prosecutor Lanna Belohlavek if all the victims had signed off on the deal, she claimed that they had. The lawyer for the victims has said that was not the truth.

  • “Secretary of Labor Alexander Acosta on Friday resigned from his post amid scrutiny over a plea agreement he cut with wealthy investor Jeffrey Epstein for sex abuse charges over a decade ago.”
  • Over on Althouse’s blog, many commenters are suggesting that Scott Walker replace him. To which I say: Bring it!
  • Even after pleading guilty and registering as a Level 3 sex-offender, Jeffrey Epstein is still mingled with the Hollywood elite.
  • Speaking of child sex offenders, singer R. Kelly has been arrested on 13 federal sex trafficking charges, including “child pornography, enticement of a minor to engage to engage in criminal sexual activity and obstruction of justice.” The only question is, after all the similar crap Kelly has pulled over the years, how is he not already in jail for the rest of his life?
  • “Epstein, Bean & Buck: The Democratic Donors’ Sex-Creep Club.”

    While serving as the highest-ranking elected woman in America for decades, San Fran Nan has chronically downplayed, whitewashed or excused the sleazy habits and alleged sexual improprieties of a long parade of Dem pervs — from former San Diego Mayor Bob Filner to former New York Reps. Eric Massa and Anthony Wiener to former Oregon Rep. David Wu to former Michigan Rep. John Conyers and current presidential candidate Joe Biden.

    Since the woke-ty woke Democrats are now gung-ho on undoing special treatment of wealthy liberal sex creeps, perhaps they will soon be revisiting the matter of two of their other “faves,” Oregon real estate mogul and deep-pocketed left-wing White House donor Terry Bean and West Hollywood Clinton pal Ed Buck.

    Here, let me help.

    Terry Bean is the prominent gay rights activist who co-founded the influential Human Rights Campaign organization. He is also a veteran member of the board of the HRC Foundation, which disseminates Common Core-aligned “anti-bullying” material to children’s schools nationwide.

    Like Epstein, Bean had a penchant for rubbing elbows and riding on planes with the powerful. Upon doling out more than $500,000 for President Barack Obama and the Democrats in 2012, he was rewarded with a much-publicized exclusive Air Force One ride with Obama. His Flickr account boasted glitzy pics with Michelle Obama and Bill Clinton.

    Buck, of course, is the Democratic donor who had two dead overdosed black men in his apartment on different occasions. (Hat tip: Director Blue.)

  • Speaking of our supposed betters raping children, “Ex-U.N. Worker Jailed for 9 Years in Nepal for Raping Two Boys in ‘Alarm Bell for the Humanitarian Community.'” Oh, now there are alarm bells over Canadian Peter John Dalglish raping children? But not so much when various UN peacekeepers did the same thing in Africa in past decades.
  • Dow-Jones Industrial Average hits record high of 27,000.
  • Meet the anti-woke left. The usual quotient of socialist claptrap, but also a fierce critique of victimhood identity politics and the dysfunction of the Democratic Party.

    Just as significant as Trump’s victory was Hillary Clinton’s loss, they tell me, in that it represented a rejection of an era of neoliberalism. ‘I’m from Indiana’, Frost tells me. ‘Bill signs NAFTA. That obliterated the towns where I’m from. People are extremely bitter about Bill Clinton for very good reasons. And she is married to that, literally and figuratively – she defends that legacy. How did we not see Trump coming?’

    What’s more, Trump represented a repudiation of the entire establishment – Democrats and Republicans. ‘There is a severe crisis of legitimacy in our institutions’, says Frost: ‘The Republicans did not want Trump to win either… He was nobody’s first choice, except the American people’s, apparently.’

    Snip.

    Three years on from the 2016 presidential election, Democrats are still largely in denial or in despair about Trump’s victory. The now-discredited Russia-collusion narrative provided an excuse to avoid any soul-searching. ‘The whole Rachel Maddow and the NBC crowd have infected the minds of boomers with this dystopian narrative’, Khachiyan tells me. ‘Even my mom, who’s from Russia, buys the collusion narrative.’

    ‘The narrative isn’t itself so interesting’, she argues, but it shows ‘the willful failure of the Democratic Party. Again and again, they fall on their face. There’s some kind of Freudian, masochistic thing they have where they get off on publicly humiliating themselves.’

  • E-Verify will do more to deter illegal aliens than the wall.
  • “Democratic lawmaker unloads on Ocasio-Cortez, chief of staff for ‘using the race card.'” The AOC-Pelosi tiff reminds us, yet again, that the primary purpose of “social justice” is to force in-group ideological conformity on the left. But when it comes to actually threatening a politician’s ability to get their beak into the trough, Rep. Clay and others still know which side their bread is buttered on. (Hat tip: Stephen Green at Instapundit.)
  • Democrats have tapped former fighter pilot Amy McGrath to lose to Mitch McConnell in the Kentucky senate race. In one day, she raised $2.5 million…and flip-flopped on whether she would have confirmed Brett Kavanaugh to the Supreme Court. She lost her last race by 10,000 votes, and expect her to do much, much worse against Cocaine Mitch.
  • “The Data Shows Socialists — Not Sanctions — Destroyed Venezuela’s Economy.”
  • John O’Sullivan wonders if anyone can beat Boris Johnson for Tory leadership and the PM spot. Probably not, but it provides a light romp through Borismania…
  • David Scheller of Ammo To Go wrote to point out his deep, detailed look at suppressors. I was happy to see that Texas has more silencers owned than the next three states combined.
  • How bad is the cartel violence in Mexico? Would you believe a 30 minute shootout at Kindergarten graduation?
  • Greek conservatives win in a landslide over leftist Prime Minister Alexis Tsipras’ Syriza’s party. Kyriakos Mitsotakis took over as Prime Minister on July 8.
  • Did the Russians who died aboard the A-12 Losharik submarine prevent a “planetary catastrophe?” Color me skeptical. Short of a Red Tide nuke launch scenario, it’s hard to conceive of any sort of accident, up to complete meltdown or even nuclear warhead detonation, that would result in “planetary catastrophe” on the Russian arctic seafloor. Assuming they were actually in the Barents Sea when the fire broke out, I don’t see how they’d be tapping undersea cables (as widely speculated), as the only one there is the Norway-to-Svarbald cable, which is hardly of crushing information importance. But the Russians have been known to lie before, and the fact that no less than seven first rank captains died aboard the ship (all but unheard of on a submarine) only fuels the speculation. And the arctic is way too far north for discovering either Cthulhu or Godzilla…
  • Seattle City Council candidate Brendan Kolding wants to clean up the homeless drug user problem.

    “It’s gotten worse under this entire current council,” he said. “Because we’ve practiced the policy — and I give Chris Rufo credit for this — the policy of false compassion where we’re not holding people accountable, where we’re not investing in adequate services, where we’re not allowing our law enforcement professionals to do their job.”

    “We just need a sea change at City Hall. We need to reverse the culture because it’s only getting worse … We can offer them treatment and shelter and then insist that if they don’t accept services, we will enforce the law unless they choose to move along. We need both carrot and stick.”

  • “I-95 proves that the government cannot provide services that don’t suck.”

    For those readers who blessedly have not had to drive I-95, it is a national disgrace. It has been congested for as long as I can recall (over 30 years of personal experience with the stretch shown, and what we drove yesterday). It has been congested in exactly the same locations for those 30 years.

    The same exact locations. 30 years. Offered for your consideration, the 20 miles on each side of Fredericksburg, VA. It was a parking lot in the 1980s; it was a parking lot yesterday. The reason then was that the highway lost a lane (more lanes in Richmond to the south and Washington to the north). The reason now is the same.

    So riddle me this, Big Government Man: how in 30 years is it not possible to widen 40 miles of Interstate to remove what everybody in the Northeast Corridor knows is a notorious choke point? And please don’t be so dim and predictable as to say “there isn’t enough funding” – we spent a cool trillion dollars on a “stimulus” that the President swore would be “shovel ready” projects. You don’t get more shovel-ready than widening I-95.

    So we see that it’s not possible for the government to provide services that don’t suck.

  • Prenda Law copyright troll John Steele sentenced to five years in prison.
  • “A traffic stop turns up whiskey, a gun and a rattlesnake, police say — and that was before they found the uranium.” The big surprise here is that it’s from Oklahoma rather than Florida… (Hat tip: Ace of Spades HQ.)
  • Tankfest 2019. I visited the Bovington Tank Museum in 2014, and if you’re interested in tanks and in the UK for an extended period of time, I highly recommend it.

  • Tales from the Lunar Module Simulator.
  • Aviation Week and Space technology profile of the SR-71 from 1981.
  • Dwight celebrates the fortieth anniversary of Disco Demolition Night.
  • And speaking of unlikely events of mass hysteria: 300,000 people on Facebook swear to storm Area 51. Great, they’re going to kill off Alex Jones’ entire audience…
  • “Fun New Teen Vogue Quiz Helps Girls Find Out What Kind Of Hooker They Should Be.”
  • Pentagon China Expert Gen. Robert Spalding on China’s Strategy Against Trump and America

    Tuesday, June 11th, 2019

    Here’s an interesting interview with Gen. Robert Spalding, chief China analyst for the Joint Chiefs of Staff, who analyzes the pressures the trade war puts on China, and how they respond to Trump’s challenge.

    “When you look at the full scope of everything China does, it mixes in its own brand of expansive influence into its economics.”

    Also a bit on Huawei and 5G, and how China intends to use technological leadership to extend its own censorship regime.

    Trump Wins Mexico Border Deal

    Friday, June 7th, 2019

    His tweets would seem to indicate so:

    Mexican sources evidently confirm it, as Mexico will evidently deploy its National Guard along its southern border and elsewhere:

    Optimistic reactions:

    Cautious optimism seems the order of the day. Hopefully the State Department will release the actual agreement soon.

    (Hat tip: Zero Hedge.)

    Grappling With Modi’s India

    Wednesday, June 5th, 2019

    A few bits of news about India have crossed my path this week, enough to do a little mini-roundup. India is a vast topic, and a vastly important one for the 21st Century, but the news we get about it light on insight and heavy on disasters and politics.

    So naturally this post is about disaster and politics.

  • Disaster: India is suffering from an epic heat wave, hitting 123°F.
  • Politics: How the media missed Narendra Modi’s landslide victory:

    We didn’t see it coming. The tsunami of support that propelled Prime Minister Narendra Modi and his Hindu nationalist Bharatiya Janata Party (BJP) into a second five-year term was a surprise to many of us reporting on the mammoth Indian general election.

    Getting an accurate reading on how 900 million people will vote is extremely difficult and almost impossible to gauge from big cities like Delhi or Mumbai. Far in advance of the April-May voting, Reuters made a series of sorties into the farms and small towns where most of India’s people live to get a sense of what was being talked about, what was at stake.

    Snip.

    Despite the rural anger, at no time did we get a feeling that Modi was going to lose the general election. The assessment by Reuters’ correspondents was that he was going to win with reduced support from voters and might need partners to stay in power.

    But instead, the BJP increased its seats tally to 303 against 282 in the 2014 election. And including its partners, Modi’s National Democratic Alliance has more than 350 MPs in the lower house, close to the two-thirds majority it would require to make transformative changes to the Indian constitution.

    Snip.

    But after a suicide bomber killed 40 Indian paramilitary policemen in Kashmir in February, and a Pakistan-based Islamist militant group claimed responsibility, the election focus immediately swung to national security from economic issues.

    We decided to check back in the rural core of the country – and found that the attack and a strong response from Modi – including sending warplanes into Pakistan – had changed some minds and Modi was benefiting.

  • Is Modi an economic reformer, streamlining India’s economy? This piece argues yes, but in a way that distinctly tempers my enthusiasm:

    First, he’s ensured that the government has more revenue to spend. Thanks to the Goods and Services Tax enacted in 2017, Modi has streamlined an enormously complex system of state and federal tax collection, broadening the tax base and sharply reducing the amount of money lost to fraud. That’s a historic accomplishment in a country with so many development needs.

    Modi has directed unprecedented amounts of money toward the country’s seemingly endless need for new infrastructure. Construction of roads, highways, public transport and airports have sharply increased the country’s long-term economic potential. Although the process remains unfinished, the government has also brought electricity to remote villages that have never had it, a boon for economic potential, public safety and basic quality of life.

    The BJP-led government has also expanded a biometric identification system, begun under the previous Congress Party–led government, that has already taken iris scans and fingerprints from well over a billion people to help citizens prove who they are so they can receive services. It has provided bank accounts for 300 million people who have never had them, creating new opportunities for these people to access credit and state subsidies. It also brings them into the formal economy to potentially make the government more responsive to their needs. The government says these measures have cut sharply into waste and fraud within India’s welfare system, allowing the state to provide more and better services at a much lower cost.

    Health care reform could help half a billion poor people afford treatment for cancer and heart disease. A program known as Ujjwala Yojana has helped women in the countryside gain access to cooking gas for the first time. The Swachh Bharat program has built tens of millions of toilets for hundreds of millions of people. Modi’s commitment to renewable energy is part of his plan to make India a leader on climate change. None of these projects are complete, but all of them will help the vast majority of India’s people lead safer, healthier, more productive and more prosperous lives.

    Some of that is good. Some of the infrastructure spending is probably necessary, on the order of the rural electrification and infrastructure projects the U.S. undertook in the 1930s. I would not want to live in a country that makes biometric ID mandatory for free citizens (also, it’s hardly immune to errors, fraud or hacking). And the “climate change” rathole just increases living costs for ordinary people to no demonstrable benefit.

  • And here’s an Indian businessman who says he’s not a real reformer:

    When I was an idealistic 20-something in the late 1990s, my hope was that India would one day elect a free-market reformer like Ronald Reagan, who would begin to shrink the dysfunctional bureaucracy and free the economy to grow faster. Looking back, I see how clueless I was.

    In Delhi every politician is wedded to big government, and there is no constituency for free-market reform. I kept hoping for Reagan, and India kept electing Bernie Sanders.

    Prime Minister Narendra Modi is no exception. Five years ago he led the Hindu nationalist Bharatiya Janata Party, known as B.J.P., to power on a Reaganesque promise of “minimum government,” and now he seeks a second term in the general election that ends on Thursday. But in office, Modi has wielded the tools of state control at least as aggressively as his predecessors. In this campaign, he went toe to toe with rivals, vying to see who could offer the most generous welfare programs, and it appears to have worked.

    Snip.

    Hopes for a big-bang Indian reformer revived years later with the rise of Mr. Modi, who in 2002 had been elected as chief minister in the western state of Gujarat. By courting multinational companies, building roads and streamlining the state bureaucracy, Mr. Modi oversaw a stunning boom. The state economy grew at a pace close to 12 percent annually in his first term. In 2014, Mr. Modi’s record in Gujarat helped lift him into the prime minister’s office.

    Like many India watchers, I heard in Mr. Modi’s call for “minimum government, maximum governance” the voice of a red-tape and regulation-busting reformer in the Reagan mold. In retrospect this reading ignored how Mr. Modi had delivered “maximum governance” in Gujarat: by force of personality, cutting foreign investment deals himself and intimidating bureaucrats into building roads on time without demanding bribes.

    This was economic development by executive order, not economic reform by systematically expanding freedom. Mr. Modi has tried to govern India the same way, but the top-down commands that rallied tens of millions of his fellow Gujaratis haven’t worked nearly as well on the sprawling Indian population of 1.4 billion. He centralized power in the prime minister’s office, and many private business people now say he treats them much as his socialist predecessors did, often suspicious of their motives and contribution to society.

    One November evening in 2016, he ordered the withdrawal of large rupee bills — 86 percent of the currency in circulation — at midnight. The aim was to flush cash out from under the mattresses of rich tax dodgers. One of his cabinet ministers said Mr. Modi was delivering on a “Marxist agenda” to reduce inequality. Today, however, the aftershocks are still rippling through the economy, and have been especially painful for the poor.

    In some ways Mr. Modi has proved more statist than the Gandhis. Before he took power he criticized Congress welfare programs as insulting to the poor, who “do not want things for free” and really want “to work and earn a living.” As prime minister, Mr. Modi doubled down on the same programs, expanding the landmark 2006 act that guaranteed 100 days of pay to all rural workers, whether they worked or not.

    On the economic front, then, every Indian party is on the left, by Western standards. The Congress traces its economic ideology to socialist thinkers, but the B.J.P.’s thinking is grounded in Swadeshi, a left-wing economic nationalism.

    The consensus from all this seems to be that Modi has indeed run a cleaner government than his Congress Party predecessors, has some real economic reforms under his belt, but isn’t what anyone in America would consider a real free market reformer.

  • LinkSwarm for March 15, 2019

    Friday, March 15th, 2019

    In one of the more important but confusing stories this week, UK’s Parliament rejected PM Theresa May’s Brexit deal, rejected a no-deal Brexit, and rejected a second referendum, but voted to delay Brexit until June. Whether the EU will consent to this delay or not remains to be seen. Borepatch thinks not, mainly due to EU elections coming up.

    Enjoy a complimentary LinkSwarm:

  • Democrats have a race problem:

    In the Trump era, Democrats are so intent on appealing to immigrants and minority voters they will tolerate insults to Jews, a constituency that voted for Clinton by better than a 3-to-1 margin in 2016. This is not inconsequential, as Jewish conservative Jeff Dunetz pointed out last week: “According to the FBI, almost 60% of the hate crimes in 2017 based on religion were against Jews.” Liberals would like us to believe that Trump supporters are responsible for this, but who is to blame when, for example, Somali immigrant Mohamed Mohamed Abdi is charged with attempted murder for allegedly trying to run over two men outside a Los Angeles synagogue? How can liberals claim Trump is responsible for three black men attacking Jews in Brooklyn? Police are alarmed by increasing anti-Semitic violence in New York City, which probably has a lot more to do with the “progressive” politics of that Democrat-run fiefdom than it does with who’s occupying the White House. Meanwhile, 11 white people were attacked in New York over the weekend, and a black transgender suspect has been arrested in what police say was an apparent hate-crime spree. Such is the toxic racial climate in the city that sends to Congress such Democrats as Rep. Alexandria Ocasio-Cortez, who spent her weekend trashing Ronald Reagan for a capacity crowd of liberals in Austin, Texas.

    Democrats and their media allies have spent years building this bonfire of racial resentment. CNN devoted hour upon hour of coverage to the “Black Lives Matter” movement that provoked riots in Ferguson, Missouri, and by the time of the 2016 Republican convention in Cleveland, anti-Trump protesters were marching with Communist posters advocating revolution. Barely six weeks before Election Day 2016, a “Black Lives Matter” riot erupted in downtown Charlotte, N.C., and does anyone still wonder why Hillary lost North Carolina, a state that Obama had carried twice? Trump got 63 percent of the white vote in North Carolina, carrying the state by a margin of more than 170,000 votes. Is it likely that Democrats can reverse that verdict by doubling-down on identity politics? Yet liberals continue intensifying their incendiary rhetoric that has sparked incidents like the smearing of the Covington Catholic boys, the Jussie Smollett hoax, and a spree of attacks on Trump supporters across the country. Democrats and their media allies have done everything in their power to demonize the nearly 63 million Americans who voted for Trump in 2016, and what does that foreshadow for November 2020?

    Certainly by now, working-class white voters must be tired of deranged Trump-haters getting in their faces and shouting, “RAAAAACIST!” Perhaps that’s why the latest Iowa poll shows Democrat primary voters favoring two old white guys, Joe Biden and Bernie Sanders. However, the crowded field of Democrats contending for the 2020 presidential nomination, cheered on by their Greek chorus of left-wing journalists, will probably make it easier for Trump to get re-elected. The more white voters become alienated from the Democrats, the more extreme the Democrats become, and the media are so out of touch with voters in places like Iowa that Democrats are caught in a sort of feedback loop of extremism.

  • The left-wing crackup:

    The constituent elements of the American left have radicalized and they are tearing the Democratic Party apart. Meanwhile Donald Trump has delivered on a growing economy, deregulation, strong borders, the rule of law, and he is apparently going to leave the cows and their diapers for later.

    The radicalized Democrats are now running as socialists. In the middle of a growing economy they are casting their lot with Venezuela. They expect to win in 2020. Call it the left-wing crack-up.

    (Hat tip: Director Blue.)

  • Is Corbynism coming to America?

    Less than four years ago, Jeremy Corbyn was an obscure backbencher in the British Parliament. In his 30 years as a member of the Labour Party, his greatest legislative accomplishment was paradoxically the lack of any: From 1997 to 2010, when Labour was last in government, Corbyn was the MP who voted against his own party more than any other. Despite his perpetual insubordinations, successive Labour Prime Ministers Tony Blair and Gordon Brown declined to expel Corbyn from their party. “There was no threat,” a deputy Labour chief whip told the Financial Times about Corbyn and his small band of hard-left rebels in 2016. “These people were tolerated because no one had ever heard of them.”

    Today, everyone in British politics has heard of Jeremy Corbyn, who, as leader of Her Majesty’s Most Loyal Opposition, has utterly transformed the Labour Party. Once a broad-based movement that could command large parliamentary majorities, today it is a sectarian personality cult, offering meager resistance to a shambolic Conservative government. Once the party whose leaders created NATO and stood stalwart against the threat of international communism, today Labour is led by people who sing the praises of anti-Western despots and terrorists. And once the natural political home of British Jewry, Labour today is mired in an anti-Semitic morass, to the point where 40 percent of Jews say they would “seriously consider” leaving the country were Corbyn to become prime minister. Indeed, Labour has become so toxic that, last month, nine MPs quit the party, calling it “sickeningly, institutionally racist,” “a threat to national security” and “a danger to the cohesion of our society, the safety of our citizens, and the health of our democracy.”

    How Labour reached this deplorable condition is one that should seriously concern liberals in the United States, where a similar dynamic is playing out in the Democratic Party. An insurgent progressivism favorably disposed to socialism, hostile to Jews and openly admiring of Jeremy Corbyn and all that he represents is steadily making inroads against an aging, centrist Democratic establishment. Here, a constellation of elected officials, media personalities, and activists are mimicking the tactics of their ideological comrades in Britain to take over and transform the Democratic Party into a vehicle for their extreme agenda.

  • Related: Jexodus.
  • “Migrants Use Almost Twice The Welfare Benefits As Native-Born Americans.”

    According to a report by Breitbart, in recently released research by the Center for Immigration Studies (CIS), analysts discovered that about 63 percent of non-citizen households, those who live legally and illegally in the U.S., use some form of public welfare while only about 35 percent of native-born American households are on welfare.

  • “Five adults arrested at compound in Taos County indicted on terrorism charges.”
  • “Twice-Deported Illegal Alien Charged With Raping 12-Year-Old Girl.”
  • Illegal alien arrested for murder of 59-year old woman. “U.S. Immigration and Customs Enforcement said agents tried to deport Carranza nine times before, but their detainer requests were not honored in Los Angeles and Santa Clara counties, both so-called ‘sanctuary cities.’ In every occasion, local authorities declined to cooperate with a federal request to hold Carranza in jail due to his immigration status — as is often the policy with “sanctuary cities” and counties — and he was released back on the street.”
  • At a 10-year high, wage growth for American workers likely to keep accelerating.” (Hat tip: Stephen Green at Instapundit.)
  • Meanwhile, some manufacturers can’t fill open jobs. (Hat tip: TPPF’s Cannon.)
  • Never Trump Bulwark writer attempts to take down Victor Davis Hanson. The attempt goes very, very badly for him.

    [Gabriel] Schoenfeld only fuels the popular perception of The Bulwark Never Trumpers as an angry, coastal elite who are anguished that their warnings about Trump were ignored by both hoi polloi and their conservative “grifters and trolls.” In careerist fury, he now damns others for his own self-immolation — as if the country must suffer for the sins of not listening to his own genius, which would probably have given the country a 16-year Obama-Clinton regnum.

    That Never Trumpers at The Bulwark were wrong about the Trump nomination, the general election, and the first two years of the Trump administration seems only to have fueled their spitefulness. If Schoenfeld is representative of this rump movement, then they are engaging in projection.

    Read the whole thing for a detailed, comprehensive takedown.

  • Another big money Democratic donor caught up in the college admissions scandal.
  • The CDC’s “gun violence” numbers are useless, says that well-known pro-gun outlet, 538.
  • How China is screwing Vietnam out of energy opportunities.
  • Another week, another UK Muslim rape gang.
  • SPLC founder Morris Dees fired, though evidently for sexual harassment rather than smearing innocent conservatives.
  • “California Veterans Home Threatens to Eject 84-Year-Old Widow for Bible Study Group.”
  • Some of the power has been restored, but Venezuela’s water runs black.
  • Venezuela’s premier university destroyed by socialism. A sad photo essay. (Hat tip: Wretchardthecat on Twitter.)
  • Related tweet:

  • “Son defends parents caught in college admissions scandal while smoking blunt.” Can’t imagine why such a fine specimen of academic scholarship would need a leg up in their college admissions. (Had tip: IowaHawk via Andrew Wimsatt.)
  • “Media Matters President Wrote Blog Posts About ‘Japs,’ ‘Jewry’ And ‘Trannies.’” Political correctness for thee, but not for me. (Hat tip: Stephen Green at Instapundit.)
  • Democratic Governor of overtaxed New Jersey wants to hike taxes even more.
  • What if Ayn Rand was right?
  • “The Army’s Next-Generation Combat Helmet Has Arrived.”
  • “To Avoid Confusing Words, Ilhan Omar Will Now Respond To All Questions With ‘I Am Groot.'”
  • You know, Hayek’s Nobel Prize would look good on my mantle.
  • Random tweet:

  • Two Essays: Workers Vs Elites

    Thursday, January 17th, 2019

    Here are two pretty interesting essays on the “revolt of the masses” currently roiling world politics.

    The first is from Christopher Caldwell about France from two years ago, and which prefigures the “yellow vest” riots:

    In France, a real-estate expert has done something almost as improbable. Christophe Guilluy calls himself a geographer. But he has spent decades as a housing consultant in various rapidly changing neighborhoods north of Paris, studying gentrification, among other things. And he has crafted a convincing narrative tying together France’s various social problems—immigration tensions, inequality, deindustrialization, economic decline, ethnic conflict, and the rise of populist parties.

    Snip.

    A process that Guilluy calls métropolisation has cut French society in two. In 16 dynamic urban areas (Paris, Lyon, Marseille, Aix-en-Provence, Toulouse, Lille, Bordeaux, Nice, Nantes, Strasbourg, Grenoble, Rennes, Rouen, Toulon, Douai-Lens, and Montpellier), the world’s resources have proved a profitable complement to those found in France. These urban areas are home to all the country’s educational and financial institutions, as well as almost all its corporations and the many well-paying jobs that go with them. Here, too, are the individuals—the entrepreneurs and engineers and CEOs, the fashion designers and models, the film directors and chefs and other “symbolic analysts,” as Robert Reich once called them—who shape the country’s tastes, form its opinions, and renew its prestige. Cheap labor, tariff-free consumer goods, and new markets of billions of people have made globalization a windfall for such prosperous places. But globalization has had no such galvanizing effect on the rest of France. Cities that were lively for hundreds of years—Tarbes, Agen, Albi, Béziers—are now, to use Guilluy’s word, “desertified,” haunted by the empty storefronts and blighted downtowns that Rust Belt Americans know well.

    Guilluy doubts that anyplace exists in France’s new economy for working people as we’ve traditionally understood them. Paris offers the most striking case. As it has prospered, the City of Light has stratified, resembling, in this regard, London or American cities such as New York and San Francisco. It’s a place for millionaires, immigrants, tourists, and the young, with no room for the median Frenchman. Paris now drives out the people once thought of as synonymous with the city.

    Yet economic opportunities for those unable to prosper in Paris are lacking elsewhere in France. Journalists and politicians assume that the stratification of France’s flourishing metropoles results from a glitch in the workings of globalization. Somehow, the rich parts of France have failed to impart their magical formula to the poor ones. Fixing the problem, at least for certain politicians and policy experts, involves coming up with a clever shortcut: perhaps, say, if Romorantin had free wireless, its citizens would soon find themselves wealthy, too. Guilluy disagrees. For him, there’s no reason to expect that Paris (and France’s other dynamic spots) will generate a new middle class or to assume that broad-based prosperity will develop elsewhere in the country (which happens to be where the majority of the population live). If he is right, we can understand why every major Western country has seen the rise of political movements taking aim at the present system.

    Snip.

    After the mid-twentieth century, the French state built a vast stock—about 5 million units—of public housing, which now accounts for a sixth of the country’s households. Much of it is hideous-looking, but it’s all more or less affordable. Its purpose has changed, however. It is now used primarily for billeting not native French workers, as once was the case, but immigrants and their descendants, millions of whom arrived from North Africa starting in the 1960s, with yet another wave of newcomers from sub-Saharan Africa and the Middle East arriving today. In the rough northern suburb of Aubervilliers, for instance, three-quarters of the young people are of immigrant background. Again, Paris’s future seems visible in contemporary London. Between 2001 and 2011, the population of white Londoners fell by 600,000, even as the city grew by 1 million people: from 58 percent white British at the turn of the century, London is currently 45 percent white.

    While rich Parisians may not miss the presence of the middle class, they do need people to bus tables, trim shrubbery, watch babies, and change bedpans. Immigrants—not native French workers—do most of these jobs. Why this should be so is an economic controversy. Perhaps migrants will do certain tasks that French people will not—at least not at the prevailing wage. Perhaps employers don’t relish paying €10 an hour to a native Frenchman who, ten years earlier, was making €20 in his old position and has resentments to match. Perhaps the current situation is an example of the economic law named after the eighteenth-century French economist Jean-Baptiste Say: a huge supply of menial labor from the developing world has created its own demand.

    Snip.

    Guilluy has written much about how little contact the abstract doctrines of “diversity” and “multiculturalism” make with this morally complex world. In the neighborhoods, well-meaning people of all backgrounds “need to manage, day in, day out, a thousand and one ethno-cultural questions while trying not to get caught up in hatred and violence.” Last winter, he told the magazine Causeur:

    Unlike our parents in the 1960s, we live in a multicultural society, a society in which “the other” doesn’t become “somebody like yourself.” And when “the other” doesn’t become “somebody like yourself,” you constantly need to ask yourself how many of the other there are—whether in your neighborhood or your apartment building. Because nobody wants to be a minority.

    Thus, when 70 percent of Frenchmen tell pollsters, as they have for years now, that “too many foreigners” live in France, they’re not necessarily being racist; but they’re not necessarily not being racist, either. It’s a complicated sentiment, and identifying “good” and “bad” strands of it—the better to draw them apart—is getting harder to do.

    France’s most dangerous political battles play out against this backdrop. The central fact is the 70 percent that we just spoke of: they oppose immigration and are worried, we can safely assume, about the prospects for a multiethnic society. Their wishes are consistent, their passions high; and a democracy is supposed to translate the wishes and passions of the people into government action. Yet that hasn’t happened in France.

    Guilluy breaks down public opinion on immigration by class. Top executives (at 54 percent) are content with the current number of migrants in France. But only 38 percent of mid-level professionals, 27 percent of laborers, and 23 percent of clerical workers feel similarly. As for the migrants themselves (whose views are seldom taken into account in French immigration discussions), living in Paris instead of Bamako is a windfall even under the worst of circumstances. In certain respects, migrants actually have it better than natives, Guilluy stresses. He is not referring to affirmative action. Inhabitants of government-designated “sensitive urban zones” (ZUS) do receive special benefits these days. But since the French cherish equality of citizenship as a political ideal, racial preferences in hiring and education took much longer to be imposed than in other countries. They’ve been operational for little more than a decade. A more important advantage, as geographer Guilluy sees it, is that immigrants living in the urban slums, despite appearances, remain “in the arena.” They are near public transportation, schools, and a real job market that might have hundreds of thousands of vacancies. At a time when rural France is getting more sedentary, the ZUS are the places in France that enjoy the most residential mobility: it’s better in the banlieues.

    Read the whole thing.

    There are also some related thoughts on the elite/worker divide from Instapundit Glenn Reynolds:

    In the old Soviet Union, the Marxists assured us that once true communism was established under a “dictatorship of the proletariat,” the state would wither away and everyone would be free. In fact, however, the dictatorship of the proletariat turned into a dictatorship of the party hacks, who had no interest whatsoever in seeing their positions or power wither.

    Yugoslav dissident Milovan Djilas called these party hacks the “New Class,” noting that instead of workers and peasants against capitalists, it was now a case of workers and peasants being ruled by a managerial new class of technocrats who, while purporting to act for the benefit of the workers and peasants, somehow wound up with the lion’s share of the goodies. Workers and peasants stood in long lines for bread and shoddy household goods, while party leaders and government managers bought imported delicacies in special, secret stores. (In a famous Soviet joke, then-leader Leonid Brezhnev shows his mother his luxury apartment, his limousine, his fancy country house and his helicopter only to have her object: “But what if the communists come back?”)

    Djilas’ work was explosive — he was jailed — because it made clear that the workers and peasants had simply replaced one class of exploiters with another. It set the stage for the Soviet Union’s implosion, and for the discrediting of communism among everyone with any sense.

    But the New Class isn’t limited to communist countries, really. Around the world in the postwar era, power was taken up by unelected professional and managerial elites. To understand what’s going on with President Donald Trump and his opposition, and in other countries as diverse as France, Hungary, Italy and Brazil, it’s important to realize that the post-World War II institutional arrangements of the Western democracies are being renegotiated, and that those democracies’ professional and managerial elites don’t like that very much, because they have done very well under those arrangements. And, like all elites who are doing very well, they don’t want that to change.

    Snip.

    But after the turn of the millennium, other Americans, much like the workers and peasants in the old Soviet Union, started to notice that while the New Class was doing quite well (America’s richest counties now surround Washington, D.C.), things weren’t going so well for them. And what made it more upsetting was that — while the Soviet Union’s apparatchiks at least pretended to like the workers and peasants — members of America’s ruling class seemed to view ordinary Americans with something like contempt, using terms such as “bitter clingers,” “deplorables” and flyover people.

    Suddenly, to a lot of voters, those postwar institutional arrangements stopped looking so good. But, of course, the beneficiaries showed no sign of giving them up. This has led to a lot of political discord, and a lot of culture war, since in America class warfare is usually disguised as cultural warfare. But underneath the surface, talk is a battle between the New Class and what used to be the middle class.

    Both essays are well worth your attention.

    Paris Burning and the Existential Crisis

    Saturday, December 8th, 2018

    So French President Emmanuel Macron was forced to delay implementation of his carbon tax hike because the peasants were revolting French citizens were blocking traffic, burning vehicles, and battling police throughout the streets of Paris.

    Nearly 300,000 protesters, many wearing yellow vests, took to the streets, including tens of thousands in Paris. Participation in the “yellow vest” protests, named after the yellow vests French drivers are required to keep in their vehicles for emergencies, fell to approximately 166,000 with 8,000 in Paris in the second weekend, but by the third weekend the protest gained momentum and violence.

    The protests were sparked by Macron’s plans to increase taxes on gasoline, diesel, and electricity, and to enforce stricter limits on emissions from vehicles, in an effort to force people out of their cars and suburban homes, and onto public transit and back into densely populated cities. In Paris, protesters sang the national anthem and carried signs saying “Macron, resignation” and “Macron, thief,” and stormed barricades erected by the 3,000 to 5,000 security forces deployed to guard the presidential palace and National Assembly. Outside of Paris, protestors blocked highways, overran motorway toll booths, and obstructed access to gasoline stations and shopping malls.

    On average, French gasoline costs a whopping $7.00 per gallon, and diesel more than $6.00 per gallon, with a majority of the price coming from fuel taxes imposed by the national government. These taxes had been scheduled to increase annually in the coming years, to meet Macron’s carbon dioxide emission reduction goals.

    “We’re going to tax you until you bleed until you adopt a lifestyle more in tune with the way we think you should live.” For global leftists elites, global warming is not just a holy cause, but an existential struggle whose high stakes (“We’re all going to die!”) require ignoring any democratic pushback from the less-enlightened masses. And we’re just supposed to ignore the fact they write themselves cushy green energy tax breaks while imposing the overwhelming majority of the costs for such policies on ordinary people who live differently than they do. (While Paris burns, Macron is conspicuous by his absence.)

    But it’s important to remember that conservatives have an existential threat of their own (deficit spending triggering hyperinflation that will destroy the economy), the solution to which (cutting back on the welfare state) is also deeply unpopular with wide swathes of the populace.

    The difference, of course, is that the doomsday scenario of anthropocentric global warming is entirely conjectural, while hyperinflation has happened several times throughout history.

    This is why you’re seeing the signs of that weird left-right populist nationalist fusion across Europe: No taxes increase, but also no welfare state cuts, while also restricting immigration so only natives get the cushy welfare handouts. That seems like an obvious recipe for electoral success in countries where even the EU’s weak tea “austerity” is increasingly unthinkable. But it’s not a recipe for growth, and can’t stave off the inevitable doom of a demographically unsustainable welfare state. In America it takes the form of President Donald Trump, a dogged tax-cutter and deregulator working diligently to get the economy growing again, but not someone who has tried to pare back the deficit or the welfare state in any meaningful way.

    Europe’s sclerotic economy and demographic decline are going to bring on a crisis there long before it hits here, but it will eventually hit here. In the long run, the big government welfare state is likely to be seen as one of the longer-running mass delusions in history.

    There will come a reckoning. The only question is whether you and I will be there to see it…

    LinkSwarm for November 30, 2018

    Friday, November 30th, 2018

    Hope everyone had a happy Thanksgiving!

  • Trump Derangement Syndrome is breaking up marriages as “woke” women leave their sane husbands. “Part of what causes fights is that I don’t want to hear his side, and he hates that. Mostly I tell him he needs to think about this more clearly before he talks to me about it, and then I walk away.” Golly, can’t imagine why their marriage isn’t a Hallmark movie.
  • Texas speaker-in-waiting Rep. Dennis Bonnen will speak at the Texas Public Policy Foundation orientation in January. “One of the open secrets about the capitol in recent sessions has been the degree to which the Straus/Gordon Johnson team despises TPPF. The Straus/Gordon Johnson team loathes TPPF more than any conservative organization. That includes Empower Texans.” That’s some bold talk…
  • MSBNC in action:

  • Hamas is still freaking out over that Israeli raid a few weeks ago. “Hamas officials suspect Israel has been operating a base inside Gaza, and Hamas is turning itself inside out trying to figure it out.”
  • ESPN has lost 14 million viewers over seven years. How’s that “all social justice warrioring, all the time” format working out for you? (Hat tip: Stephen Green at Instapundit.)
  • Deutsche Bank offices raided:

    In what appears to be the latest in a string of financial crimes and scandals that have generated some $18 billion in fines since the financial crisis, prosecutors are investigating whether two employees in the bank’s wealth management division helped clients set up accounts in offshore tax havens, including the British Virgin Islands, and possibly allowed criminals to move money through these shelters, some of which may have flowed through accounts at the bank (other employees may also have been involved, prosecutors said). According to Frankfurt prosecutors, the investigation, which stems from revelations contained in the ‘Panama Papers’, covers behavior that stretched through this year, meaning that it could become a blemish on the performance of the bank’s newly-installed CEO Christian Sewing.

  • Another jihad attack against Jews the media won’t label as a jihad attack:

  • GM’s destructive subsidies:

    General Motor’s announcement that it’s cutting thousands of jobs and closing several plants has met intense criticism because the company was the beneficiary of a $50 billion government bailout in 2009—which wound up costing taxpayers $11 billion—even as the government awarded the United Auto Workers’ health-care fund a 17.5 percent stake in the restructured company. Like many big American companies, GM has been the recipient of government-subsidized largesse over several decades. One particular piece of this history is especially noteworthy now. Nearly 40 years ago, in one of the most egregious cases of eminent domain abuse in American history, GM built a plant on land seized from homeowners and businesses in Detroit, obliterating a multi-ethnic neighborhood known as Poletown—all for a plant that will now be shuttered so that GM can invest somewhere else in new manufacturing facilities.

    Beset by foreign competition, America’s automakers began retrenching in the late 1970s, closing manufacturing facilities in and around Detroit even as the city struggled to rebound from the riots of 1967. Dodge had closed a giant plant in Hamtramck, a suburb that adjoins the Poletown neighborhood, and when GM announced that it wanted to build a new plant somewhere in America with modern industrial technology—though it was closing plants elsewhere—Detroit officials pleaded for an opportunity to find a site for the new facility. Mayor Coleman Young came up with a plan: seize some 1,500 homes and 144 businesses in Poletown, a low-income community of 3,500 where Polish immigrants had once settled. By the early 1980s, Poletown was a more diverse neighborhood, housing older Poles but also more recent immigrants and black Detroit residents. As the city deteriorated, Poletown remained relatively stable. “There is no place for us to go, no place we want to go,” two elderly residents told the New York Times in 1980, to no avail. To Detroit officials, Poletown’s appeal was its proximity to the Dodge site, providing some 465 acres for GM—if officials could just move out those inconveniently located businesses and people. To help make it happen, in April 1980 the Michigan legislature passed its infamous “quick-take” law, providing that government agencies could seize land deemed necessary for a “public purpose” and determine later how much to compensate the private landowners. That law accelerated the process of clearing out Poletown.

  • The Second Amendment was always an individual right.
  • Detecting a stealth aircraft is one thing, but shooting it down during the terminal tracking phase is another.
  • Don’t be Dick’s.
  • Things to be thankful for:

    The cost of the ingredients of a Thanksgiving feast for ten are now said to cost an average worker their wages for under 2.25 hours of labor. A 16 pound turkey now costs less than what an average worker earns in an hour.

    We live lives of such astonishing wealth that we scarcely notice it. Only a fool would rather be an Emperor in 1600 than a poor person living today. Compared to a king of several centuries ago, poor people in the developed world live in astonishing luxury. In the developed world, we eat fresh vegetables in midwinter, our homes are heated toasty warm in the winter and cooled and dehumidified in the summer, we travel in enormous comfort (no wooden wheeled carriages without shock absorbers for us, and indeed, we can fly to the other side of the world for a quite modest sum of money), our medical care is incomparably better, our beds more comfortable, our entertainment options beyond any ancient potentate’s wildest dreams. This is true even of quite poor people, at least in developed countries.

    Whence comes this bounty? It is not because of union organizing, or minimum wage laws, or the triumph of the proletariat over the evil factory owners. Indeed, a few centuries ago, there were few mass production factories to triumph over.

    No, the source of this bounty is productivity, and the engines of productivity are deferred consumption being invested in improved infrastructure (that is, capital accumulation), improved technology, and specialization. Thanks to our better means of making things and the sacrifices needed to construct those means, productivity per worker is orders of magnitude higher, and thus there’s more stuff to go around.

    Centuries ago, it required something like 750 hours of human labor to produce a simple tunic; today it requires minutes of human labor. Almost no one is capable of truly internalizing this change. The shirt on your back once was a valuable capital good requiring four months of constant labor to produce. Now it’s not even worth repairing if it tears, it’s too inexpensive to replace it. Because of this change in productivity, even quite poor people in developed countries own many sets of clothing.

    Centuries ago, there was barely enough food to go around, and often far too little, as a result of which starvation was common. It required constant labor by most of the population to produce enough food. Then, mechanization of agriculture set in, and the production of synthetic fertilizer, and pest control, and improved breeding methods; today, it requires very few people to grow more than enough food for everyone. There is so much food, in fact, that obesity has become a disease of the poor, an unprecedented development in human history.

    So it is across the span of consumer goods. The amount of labor it requires to produce enough light to read at night has gone down by orders of magnitude, and the quantity of light produced by an ordinary lightbulb is 100 times greater than that of a candle at a tiny fraction of the price. Many goods didn’t even exist before; in my father’s youth there were no televisions, and now people can buy 4k 130cm flat screens.

    (Hat tip: Borepatch.)

  • The case against carbohydrates gets stronger.”

    People have a hard time believing that weight control isn’t just a matter of calories eaten and calories burned. But there is an alternate hypothesis about obesity, which is what my group studies. The carbohydrate-insulin model argues that overeating isn’t the underlying cause of long-term weight gain. Instead, it’s the biological process of gaining weight that causes us to overeat.

    Here’s how this hypothesis goes: Consuming processed carbohydrates (especially refined grains, potato products and sugars), causes our bodies to produce more insulin. Too much insulin, one of the most powerful hormones, forces our fat cells into calorie-storage overdrive. These rapidly growing fat cells then hoard too many calories, leaving too few for the rest of the body. So we get hungry, and if we persist in eating less, our metabolism slows down.

    Snip.

    We started the participants on a calorie-restricted diet until they lost 10%-14% of their body weight. After that, we randomly assigned them to eat exclusively one of three diets, containing either 20%, 40% or 60% carbohydrates.

    For the next five months, we made sure they didn’t gain or lose any more weight, adjusting how much food they received, but keeping the ratio of carbohydrates constant. By doing so, we could directly measure how their metabolism responded to these differing levels of carbohydrate consumption.

    Participants in the low (20%) carbohydrate group burned on average about 250 calories a day more than those in the high (60%) carbohydrate group, just as predicted by the carbohydrate-insulin model. Without intervention (that is, if we hadn’t adjusted the amount of food to prevent weight change), that difference would produce substantial weight loss — about 20 pounds after a few years. If a low-carbohydrate diet also curbs hunger and food intake (as other studies suggest it can), the effect could be even greater.

    This result could explain in part why U.S. obesity rates have been going up for decades. Individuals have a sort genetically predetermined weight  —  lighter for some, heavier for others. Despite this, the average weight for American men has gone from about 165 pounds in the 1960s to 195 pounds today. Women, likewise, have gone from an average of 140 pounds to about 165.

  • “Half As Many Google Employees Protested Building Chinese Surveillance Tech As Protested Pentagon Project.”
  • Evidently Creepy Porn Lawyer is considered a crook even by his porn star client.
  • Actual headline, not from The Onion or The Babylon Bee: “PETA Defends Graphic Animal Mutilation In Lars von Trier’s The House That Jack Built.”
  • “Aides Force Ocasio-Cortez To Watch Entire Run Of ‘Schoolhouse Rock!’
  • Ricky Jay, RIP.
  • [INSERT SNAPPY TITLE TO SOMEHOW ACTUALLY MAKE PEOPLE WANT TO READ ABOUT A TRADE PACT HERE]

    Tuesday, October 2nd, 2018

    Late Sunday, President Donald Trump announced that the Canadian government had given in and was joining the United States and Mexico in a revision of the NAFTA trade agreement, one of Trump’s key 2016 campaign promises.

    Here are some highlights of the agreement:

    1. Canada agreed to ease protections on its dairy market, among them, it will now provide US access to about 3.5% of the market (Canada is likely to compensate dairy farmers);
    2. The US relented on its demand to eliminate the dispute settlement system on Chapter 19, a big win for Canada;
    3. Canada agreed to the terms of the US-Mexico deal, among them a de minimis of US$100 (the amount of imports without duties, which in NAFTA is US$20), stricter rules of origin for autos, a 10 year sunset clause with a 6 year revision and an update on several topics from labor to commerce to intellectual property; and
    4. The US and Canada reached an agreement to protect Canada’s autos from high auto tariffs if the US imposes them under law 232 with a quota of 2.6 million vehicles exported. The latter is similar to the “side-letter” that Mexico agreed with the US that protects 2.4 million vehicles. So far there are no exemptions from steel and aluminum tariffs.

    Here’s the text of the deal itself.

    What strikes me is that the most contentious ongoing U.S. Canada trade dispute issue, softwood lumber, does not seem to have been addressed. (I say “seem” because a search of the document on the ustr.gov site just brought up an error.)

    The Last Refuge was quite happy about the pact:

    I’m still going through the USMCA text (even speed reading, it will likely take a while); here’s the link to the AGREEMENT DETAILS. However, many people have asked about how the NAFTA loophole was being closed.

    Well, the answer is exactly what it had to be – there was really no option. The U.S. now has veto authority over any trade deal made by Canada and/or Mexico with third parties. This is what Ambassador Lighthizer described as the “Third pillar”.

    Last year, despite the inevitability of it, we didn’t think Canada and Mexico would agree to it. The NAFTA loophole was/is a zero-sum issue: Either Can/Mex agree to give veto authority to the U.S. –OR– President Trump had no option to exit NAFTA completely.

    Well, Canada and Mexico have agreed to the former, so there’s no need for the latter.

    Then they print the text of Article 32.10.

    Both Canada and Mexico structured key parts of their independent trade agreements to take advantage of their unique access to the U.S. market. Mexico and Canada generate billions in economic activity through exploiting the NAFTA loophole. China, Asia (writ large), and the EU enter into trade agreements with Mexico and Canada as back-doors into the U.S. market. So long as corporations can avoid U.S. tariffs by going through Canada and Mexico they would continue to exploit this approach.

    By shipping parts to Mexico and/or Canada; and by deploying satellite manufacturing and assembly facilities in Canada and/or Mexico; China, Asia and to a lesser extent EU corporations exploited a loophole. Through a process of building, assembling or manufacturing their products in Mexico/Canada those foreign corporations can skirt U.S. trade tariffs and direct U.S. trade agreements. The finished foreign products entered the U.S. under NAFTA rules.

    Why deal with the U.S. when you can just deal with Mexico, and use NAFTA rules to ship your product directly into the U.S. market?

    This exploitative approach, a backdoor to the U.S. market, was the primary reason for massive foreign investment in Canada and Mexico; it was also the primary reason why candidate Donald Trump, now President Donald Trump, wanted to shut down that loophole and renegotiate NAFTA.

    This loophole was the primary reason for U.S. manufacturers to relocate operations to Mexico. Corporations within the U.S. Auto-Sector could enhance profits by building in Mexico or Canada using parts imported from Asia/China. The labor factor was not as big a part of the overall cost consideration as cheaper parts and imported raw materials.

    If the U.S. applies the same tariffs to Canada and Mexico we apply to all trade nations, then the benefit of using Canada and Mexico -by those trade nations- is lost. Corporations will no longer have any advantage, and many are likely to just deal directly with the U.S. This is the reason for retaining the Steel and Aluminum tariffs on Canada and Mexico.

    I reached out to Vance Ginn of the Texas Public Policy Foundation, who is much more of a fan of the original NAFTA than President Trump, and asked him a few questions about the new agreement:

    1. How big a win for President Trump is this, if it is indeed a win?

    I’m cautiously optimistic about the USMCA because even though certain industries, like producers of autos and dairy products, will likely benefit, the provisions related to the auto sector will cost Americans more for autos along with potentially reducing profitability of the auto sector as higher priced cars reduce the number consumed. People prosper from trade so the focus should be on reducing trade barriers, which the USMCA may have done but we won’t know until all details are available. Based on what we do know, it appears that there is reason to believe the original NAFTA should have remained intact.

    2. What do you see as the most important provision for increasing free trade?

    Most important is that there aren’t many changes to the original, beneficial NAFTA. However, the USMCA provision to ban tariffs on digital trade appears to be the most important. In addition, removing trade uncertainty is a big plus, though there is now a 60 day waiting period before it can be voted on by Congress.

    3. The summaries I’ve seen don’t cover the longest-running and thorniest US/Canadian trade dispute, namely softwood lumber subsidies and tariffs. What, if anything, does the agreement do to address that dispute?

    I haven’t seen anything. Mostly covers the trade dispute of dairy products. One of the things to look for when the details are revealed.

    4. How applicable will the 2018 NAFTA precedent be for President Trump’s other trade disputes?

    The USMCA could provide a framework to get marginal gains while protecting specific sectors, like manufacturing, comes at a cost. The takeaway shouldn’t be that tariffs are a good bargaining chip because taxes aren’t a reasonable tool to use for that purpose. Taxes should be used to only collect revenue to fund limited government spending. Instead of looking at trade deficits and fair trade rhetoric, there should be a focus on making the U.S. and states as competitive as possible in the global market by instituting sound policies while working to eliminate barriers to trade.

    My own impression is that President Trump scored a solid single here thanks to his unorthodox negotiating style, and probably increased his trade negotiating leverage somewhat with other countries.

    Semiconductor Update: GlobalFoundries Gives Up On 7nm​

    Thursday, August 30th, 2018

    GlobalFoundries has given up work on their 7nm process node. This is a direct result of AMD choosing TSMC over GlobalFoundries to fab their next generation microprocessor.

    GlobalFounderies was always something of an odd duck. It was spun out from AMD in 2009 to turn their manufacturing arm into a foundry because AMD itself could no longer afford the huge upfront capital investment state-of-the-art wafer fabrication plants demanded. As it exists today, GlobalFounderies​ is a Frankenstein’s monster of agglomeration, having gobbled up Singapore-based Chartered Semiconductor and what remained of IBM’s fab infrastructure (back in the day, IBM had some of the best semiconductor design capabilities in the world) in New York and Vermont. (SK Hynix, NXP and ON Semiconductor, all integrated device manufacturers rather than foundries, are similar merger-assembled aggregations.) GlobalFounderies actual owner is the Emirate of Abu Dhabi.

    With UMC screwing the pooch by letting Chinese spies walk out the door with Micron design IP, there was an opening for a (sorta, kinda) American chip foundry to provide a viable rival to TSMC, but GlobalFoundries evidently found it too difficult to do profitably.

    TSMC has already broken ground on a fab that will theoretically take them down to 5nm and is expected to cost $500 billion NT, which works out to over $16 billion US at current exchange rates. That’s more outlay than all the profit TSMC made all of last year.

    Some thoughts (partially based on scuttlebutt, gossip, etc.):

  • Right now there’s no non-TSMC foundry choice if a fabless chip company wants to attempt a sub 14nm design. It’s Taiwan or nothing.
  • To the best of my knowledge, no one outside TSMC, Intel and Samsung are even attempting 7nm. Word is that TSMC’s 7nm is actually closer to 10nm, and Intel is evidently in a world of hurt getting yields up on its 10nm process.
  • Samsung says they’re going to 7nm in 2019 using Extreme Ultraviolet (EUV) lithography, a long, long awaited technological shift that will probably involve its own painful learning curve. Others have speculated that, despite those plans, Samsung seems pretty happy sitting at 14nm with high yields for most of its own chip needs (as opposed to its foundry customers).
  • What this means is that the cutting edge of wafer fabrication technology is probably going to be centered on the Pacific rim for the foreseeable future. China won’t be on that cutting edge, because they can’t steal technology fast enough or hire enough enough qualified process techs to get it done.

    We may finally have reached a point that building a cutting edge, state-of-the-art wafer fabrication plant is a money-losing proposition for everyone.

    That means fabless chip designers working at the cutting edge will be dependent on Taiwan and South Korea for the foreseeable future, a fact that has a lot of foreign policy relevance, especially in relation to China…