Expect a new, decentralized narrative in the post-Coronavirus world

Tridivesh Singh Maini Current Events, Politics , , , , , ,

Introduction

Many analysts have argued that the US and China will continue to be the two most important global players in a post-corona world, but they will not be the sole drivers of the narrative with regard to economic and geopolitical issues. While the US has become insular under Trump and has failed to foster a spirit of international cooperation even during the midst of the coronavirus pandemic, China’s suppression of crucial information with regard to the coronavirus has been criticized by a number of countries – not just the US.

During the midst of the coronavirus pandemic itself, many countries have risen to the occasion not just in terms of dealing with the pandemic, but also providing assistance to other countries. This includes the Asian countries of South Korea, Taiwan and Vietnam, and Western countries like Germany and France, which have both risen to the occasion by speaking up for removal of sanctions against Iran, and also providing financial assistance.

Increasing importance of South Korea, Taiwan, and Vietnam

If one were to look at the instance of Asia, countries like South Korea, Taiwan, and even Vietnam, which has been successful in controlling the virus, are likely to enhance their stature globally, and will become even more relevant in the economic and strategic sense not just in Asia, but on the global stage.

All three countries have provided medical assistance to a number of countries, including the US. Taiwan and Washington have also joined hands to carry out research and to develop a vaccine for finding a cure for the virus.

The success of South Korea and Taiwan blunts the narrative about authoritarian governments being in a position to control the epidemic better, an argument which Beijing has been trying to push. The success of Vietnam has shown that resources are helpful, but not necessary, for handling situations like pandemics. Even with meagre resources, the ASEAN nation has restricted the number of cases and not recorded a single death so far. This has been attributed to the timely response by the country’s leadership. Vietnam has also been able to relax the lockdown and open certain businesses.

India too has been able to contain the spread of the virus and has provided aid and assistance to a number of countries in spite of a paucity of responses.

In a post-corona world, China is not likely to drive the Asian narrative.

Western narrative: Not driven by the US

In the West, while Trump has been criticised for his handling of the coronavirus, Germany has been relatively successful in containing the outbreak of the virus compared to other EU member states. What is interesting is that while Germany has publicly criticised China it has not taken the US stand on a number of issues.

First, along with the UK and France, Germany provided medical assistance to Iran via the Special Purpose Vehicle (SPV), which had been set up to circumvent sanctions imposed against Iran (the medical assistance reached Iran on March 31, 2020).

Second, when Trump reduced US funding to the World Health Organisation (WHO), Merkel spoke in favor of greater international cooperation, and support to WHO at this point of time, while also indirectly criticizing the step taken by Trump. Even in the past, Merkel has been at variance with Trump on numerous issues including the US approach to Iran and Trump’s approach towards globalization.

Emmanuel Macron too has been critical of China, but not necessarily echoing the US line. Both leaders have also been emphasizing the need for revival of the European Union (EU) and making it relevant.

Conclusion

In a post-corona world, a number of changes are likely to occur in the world order. First, if smaller countries have been successful in dealing with the pandemic their stature will rise, and they will benefit both in economic terms as well as geopolitical clout.

Second, the belief that a democratic system is incapable of dealing with a crisis like the coronavirus has also been challenged.

Third, the international world order will have numerous layers, and the influence of both Washington and Beijing on the narrative are likely to reduce with new players likely to speak up on crucial economic, environmental, and strategic issues. While trade and travel may be restricted, there is a possibility of greater ‘international cooperation’ and a new narrative which does not emanate merely from Washington or Beijing, but collectively from a number of countries.

Finally, cooperation will not be restricted merely to regional blocs or geography. In a number of instances, medical aid and assistance has been extended by one country to another far flung country. The new world order promises to be an interesting one, though it will be complex.

Nightcap

Brandon Christensen Links , , ,
  1. China’s race to find aliens first Ross Anderson, Atlantic
  2. What happens if China makes first contact? Abhijnan Rej, Diplomat
  3. Is coronavirus a preview of alien life reaching earth? Jeffrey Kluger, Time
  4. A beautiful photo essay of some old, abandoned airplanes Zero Anthropology

The Biden Rat

Jacques Delacroix Current Events, Politics , , , ,

I don’t like the crucifixion of poor old Joe Biden (who denied everything today – finally). This, for two unrelated reasons.

First, during the Kavanaugh hearings, I answered firmly the question, “Do women lie?” Yes, some women lie some of the time (as absolutely anyone, male or female, over six well knows.) Do some women lie about sexual harassment? My answer, based on intuition but fed by some experience is also, “Yes.”

I am not changing my mind because it would be convenient to do so. Mr Biden’s accuser deserves to be heard; Mr Biden deserves the civilized presumption of innocence.

Second, and much more importantly, I smell a big rat. I doubt that Republicans would under their own power, resuscitate the charge against Mr Biden because those who live in glass houses…. Rather, I suspect (without proof so far) that there is a concerted effort from the higher ranks of the Dem party to disqualify Mr Biden.

I imagine they have finally understood what a miserable, pathetic candidate Mr Biden is. (For one thing, it’s unthinkable that he could debate Mr Trump on TV.) I think they are engineering a coup, a way to get rid of him, and to replace him at the last minute with someone nobody selected in a primary process. A few names come to mind beginning with Mrs Clinton who is still owed a presidency, somehow.

Or, it was the plan all along and the Dem elite never meant for Mr Biden to be President. Does this sound paranoid? For sure but, do you remember what happened to the Sander candidacy in 2016. Anyone who would have predicted this sort of machination in 2015 would have been called paranoid. I would have joined in.

I am disturbed both by the sheer evilness of what I think is going on, and by the likely noxious consequence for the election. I don’t especially wish for Mr Trump, preoccupied by persecutions with an illegal and an immoral basis (we now know) throughout his administration to be forced to pivot at the last minute and have to face a more vigorous opponent for whom he is not prepared.

Those Republicans who gleefully join in the prosecution/persecution of Mr Biden are not thinking clearly.

Wats On My Mind: the state of the economy

Derrill Watson Current Events, Economics , , , , , , ,

I wrote the following update for my Principles of Macroeconomics students and thought it might just count as an update for Wats On My Mind.

In the first two minutes of class, I asked you how you would know how the economy is doing. Let’s focus on our three big areas: GDP, unemployment, and inflation.

Initial estimates are that GDP decreased by 4.8% in the first quarter (Jan-Mar). Let me comment on that a bit:

  1. That number is almost certainly inaccurate. It will be revised 3 months from now, 6 months from now, and be finalized 9 months from now. That is totally normal – as more and more data rolls in, our estimates get better. My bet is that the number is worse than that because closed firms won’t be reporting anything yet.
  2. The number for the second quarter will certainly be worse than that. We were only closed for 2-3 weeks in March, so the fact that we’re done that much in such a short window is a bad sign. We have already been closed longer in this quarter and the careful, measured opening we’re doing right now – which I think is wise to prevent a new spike of cases – won’t make for an instantaneous rebound.
  3. This is as bad as we saw during the Great Recession, but faster. Again, my hope and expectation is that our recovery will also be faster.
  4. GDP dropped in the EU by 14%. So it could be a lot worse!

The Bureau of Labor Statistics also released new numbers. So far 30 million Americans have filed for unemployment. That is roughly 18-19% of the workforce. This is officially, as expected, the highest unemployment rate since the Great Depression in the 1930s. The good news is that the number of new applicants has been going down each week, from 6.8 million at the end of March to “only” 3.8 million last week. (Recall: That’s still 4x larger than the previous high set in the 1980s.) The other bit of good news is that 90% of unemployed workers expect to return to their old job, while that number is usually only 40%. That gives me more encouragement that we could quickly bounce back.

Inflation is DOWN. If this were primarily a supply shock, we would be seeing overall higher prices. That means the drop in aggregate demand is bigger than the supply shock. To a Keynesian or a Monetarist, that also means that all the fiscal and monetary stimulus we have done so far is not enough and more needs to be done. To a Classical economist, the thing that needs to be fixed is still supply – demand itself is not terribly important. A Hayekian, of course, thinks all this stimulus is making things worse – it messes with the price signals markets rely on.

To get a rough estimate of where inflation is going, I have been recommending comparing TIPS bonds to nominal bonds because the difference between the interest rate on those bonds (the TIPS spread) is the market’s best guess of inflation. As you can see here the TIPS spread fell from 1.8% in 2019 to 0.5% at the end of March. During April, it has recovered slightly to 1-1.2%. A very rough guesstimate based on that suggests we would need a stimulus 3x as large as we have done right now to return inflation expectations to normal. !!!

The very idea of having Congress spend an extra $5 trillion on top of what is already being done is more than my little fiscally-conservative heart can comprehend just now. Politically, though, I expect Congress will find it in their hearts/re-election campaigns to have another round of stimulus. The Federal Reserve has even called on Congress to spend more, so have no fears of monetary offset hampering anything. Here is a monetarist arguing the Fed needs to do a great deal more to ensure spending expectations don’t fall. One of the points, though, is that we should not expect hyperinflation is around the corner.

On that first day, most students suggested looking at the stock market. From Feb 21-Mar 23 the Dow lost 10,000 points – 1/3 of its value. Since then it has recovered more than half. Notice that the drop came BEFORE quarantine and that the stock market has been recovering even as unemployment has climbed to record heights. This is another reason I don’t recommend imagining that the stock market gives a clear and unbiased view of what’s going on in “the economy”! The situation right now is clearly much worse than it was a month ago, so trying to figure out current conditions would not make sense. If I wanted to give it the best spin possible, I’d say the stock market is predicting better times ahead despite how bad things currently are.

 A few other data points:

  • 59% of Americans say they can social distance as long as needed, which is up from a few weeks ago. (Gallup)
  • Western European countries started reopening earlier than we have and they are starting to see an increase in cases and deaths again. Now, so far that’s only a 3-day trend and it could just be a blip, but it’s not encouraging.
  • Most people are actually behaving like decent, responsible people during the crisis – and they usually do.

Be Our Guest: “Resolved: Human Government is Despotism”

Brandon Christensen Philosophy , , , ,

Jack Curtis is back with another guest post, this time on despotism. Here’s a sneak peak:

All human government is to some degree despotic; if it were not there would be no need for organized force. The more realistic issue seems to be: How much despotism should be tolerated in return for the benefits of human organization? And, with homo sapiens involved, that depends upon whom you ask.

Read the rest. It’s excellent, as usual. If you’ve got something to say, and nowhere to say it, why not Be Our Guest?

Nightcap

Brandon Christensen Links , , ,
  1. The family Coronavirinae Marc Henry, Inference
  2. “Physical distancing” versus “social distancing” Irfan Khawaja, Policy of Truth
  3. Avoidable unemployment Chris Dillow, Stumbling & Mumbling
  4. Connecting fascism with Integralism is a historical mistake Nathan Pinkoski, Law & Liberty

Nightcap

Brandon Christensen Links , , ,
  1. Permutations on Ernst Bloch’s “S is not yet P” Nick Nielsen, Grand Strategy Annex
  2. “‘Emergencies’ have always been the pretext …” Peter Boettke, Coordination Problem
  3. The Villager And The F-18 Deep Prasad, Medium
  4. Neill Blomkamp’s experimental film studio is AWESOME Andrew Liptak, Verge

Nightcap

Brandon Christensen Links , , ,
  1. Virus deaths in Democratic and Republican states James Rogers, Law & Liberty
  2. How fractured is the British left? Leontios Xenophilos, American Affairs
  3. An argument against moral blameworthiness Bill Rein, NOL
  4. Pity the poor stepmother Susan Hill, Spectator

An update from Texas

Brandon Christensen Culture , , , , ,

I am still working from home. The weather has been spectacular here over the past few days. I immediately head outside with the kids at 5 o’clock. We just run around and play. The younger one likes throwing the football around in the grass. The older one likes to play with the ants in the cracks of the sidewalk.

I was looking forward to going to Oslo this fall, but I just received news that the event has been postponed. I’ve still got the inaugural family camping trip to Ouachita to plan, so that’s exciting.

The political landscape here is much different than it is on the west coast or in Austin. Authority is decentralized. There are more black and Mexican people here, and fewer other minorities (including Central Americans). I have more black friends now than I ever did in California. It’s odd. In some ways, the non-South is now more racist than the old South. I can’t put my finger on it but I swear it’s true. You can carry on a friendly conversation with anybody here, something that’s missing out west and up north.

My guess is that this has something to do with the fact that segregation was blatantly racist in the South during the Cold War, and Washington felt it had to do something about it in order to win friends (despots) abroad. The racism in the north and the west was less blatant, and as a result nothing has ever been done about it.

I mean, I didn’t grow up with any black people. Or Mexicans. There are tons of them in California, but they don’t live in white residential areas. Down south, at least in the parts of Texas I’ve lived in, this is not the case. There are still “sides” of town, but at least we all share the same town. There’s still racism here, but the racism is more honest than, say, the zoning found up north and out west. This familiarity between blacks, Mexicans, and whites is something you as an individual have to work hard on to achieve in the non-South.

The federal government forcibly dismantled Jim Crow. It did so only after it conveniently ignored the 14th Amendment for decades, but at least it finally did so. There’s a place for Washington down here in Texas. Decentralized tyrannies are still tyrannies. I just started watching Waco, the Netflix series. It’s good. Washington is responsible for the deaths of several innocent women and children. It’ll never pay the price. Those people were just too strange for the broad public to really give a shit.

It’s a never-ending balancing act: finding a comfortable equilibrium between federal, state, and local governance. The feds are better at protecting the descendants of slaves than the state and local governments. But the state and local governments are better at protecting non-conformists and religious extremists than the federal government.

Libertarianism hasn’t been able to shake its racist stigma yet. Sure, leftists call us racists all the time, but a kernal of truth is still a kernal of truth. I have witnessed several people I once respected sweep libertarianism’s ugly, recent past under the rug and then turn to grab their paycheck. Libertarian Inc. has its place in our society, but it won’t be effective so long as the racist label sticks with us. And the racist label won’t come off until we grapple with the brutal truth of what we’ve become comfortable with and what we will tolerate.

Nightcap

Brandon Christensen Links , , ,
  1. Historicizing Foucault Stuart Elden (interview), JHIBlog
  2. Historicizing inflation George Selgin, Alt-M
  3. Historicizing Hong Kong Brian Fong, Diplomat
  4. Historicizing West Africa Barnaby Crowcroft, Literary Review

Nightcap

Brandon Christensen Links , , ,
  1. Pandemics as an externality Robin Hanson Overcoming Bias
  2. The 21st century sucks Scott Sumner, MoneyIllusion
  3. Farewell, Mr President Irfan Khawaja, Policy of Truth
  4. Tolstoy wrote stories for children John Kuhner, LARB

Nightcap

Brandon Christensen Links , , ,
  1. Coronavirus and Ramadan Declan Walsh, New York Times
  2. The future of China’s political economy South China Morning Post
  3. Ricardo, Marx, and interpersonal inequality Branko Milanovic, globalinequality
  4. Polystate, part 2 Rick Weber, NOL

Brazil will not become Venezuela

Bruno Gonçalves Rosi Current Events, Politics , , , , , , ,

Judge Sérgio Moro has left the Bolsonaro government. Chosen to be Minister of Justice, Moro achieved prominence for leading the Carwash operation that took several corrupt politicians to jail, including former President Luiz Inácio Lula da Silva. Moro’s departure exposes a very serious weakness within the Bolsonaro government, and in the medium term, it will lead to the weakening of the government and the country. According to Moro, his departure is due to attempts by President Bolsonaro to unduly interfere with the Federal Police. Bolsonaro countered the accusations, but the scenario remains shaky for the president. If Moro is speaking the truth, and if he can substantiate what he said with material evidence, this can lead to impeachment and even arrest of the president.

It is important to remember how Bolsonaro came to power. Going back a few decades in the past, Brazil emerged from a military dictatorship in 1985. The years since then have been called the New Republic by Brazilian analysts. One of the most relevant leaders of this period was Fernando Henrique Cardoso. As finance minister (1993-1994) of the Itamar Franco government (1992-1994) and later as president (1995-2002), FHC led a series of reforms that made the country’s economy, previously marked by developmentalism, freer. FHC was succeeded by Luiz Inácio Lula da Silva (2003-2010). Historically a radical socialist affiliated with the Workers’ Party, Lula came to power in 2003 promising a moderate government. To a large extent, this promise was kept, but the Lula government was soon hit by serious allegations of corruption. These complaints continued under the government of his successor, Dilma Rousseff (2011-2016), who ended up being impeached in 2016. Because of his corrupt actions as president, Lula ended up arrested by Sérgio Moro in 2018. Despite the moderate tone of Lula and Dilma as presidents, throughout their time in power, both signaled measures that resembled their party’s most radical years. This nod often sounded like a threat that both could trigger the bases of their party to take radical measures as was seen in other South American countries that had elected left-wing governments, especially Hugo Chavez’s Venezuela. Lula went so far as to declare that in Venezuela under Chavez there was an “excess of democracy”.

It was in the face of multiple corruption scandals and the threat of a radical turn to the left that Jair Bolsonaro gained prominence. For many years an inconsequential politician from Rio de Janeiro, Bolsonaro gained fame with his stripped-down and even pimp language. As early as 2014, he began to be welcomed throughout Brazil under the shouts of “myth” for the open way in which it criticized the “left”. He soon became a popular phenomenon. Although many analysts doubted his viability as a candidate, he ended up winning the presidency.

Unfortunately, Bolsonaro is far from a classic liberal or a Burkean conservative. A retired army captain, he entered politics to defend the interests of his fellow soldiers. In addition, he has always defended Rio de Janeiro’s military police officers, who are constantly accused of human rights abuses. Finally, Bolsonaro has always declared himself an uncompromising admirer of the Military Dictatorship (1964-1985). Although he showed no signs that he would like to extinguish democracy in Brazil (as many analysts on the left feared), he was also unable to see the many damages that the military did to the country during their years in power.

In his practice as president, Bolsonaro shows himself to be an impatient man, unable to respect the bureaucratic procedures of a liberal democracy. Worse than that, if Sérgio Moro’s allegations are true (and there is good reason to believe that Moro is not a frivolous man), Bolsonaro is trying to control the Federal Police to avoid investigations against his eldest son, Senator Flávio Bolsonaro, accused of corruption and involvement with militias. There are good reasons to believe that, with the departure of Sérgio Moro, the Bolsonaro government has come to an end.

Fortunately, as Dilma Rousseff’s impeachment demonstrates, Brazil is not Venezuela. Despite its many setbacks and weak record as a liberal democracy, the country still stands out in South America for its record of solid institutions that survived even during anti-liberal governments. Although imperfectly, Brazil has the institutions expected from a classic liberal democracy: division of powers, a bicameral legislature, a supreme federal court, and (at least formal) independence between the powers. Unfortunately, there are high levels of corruption in all of these spheres, largely due to the great attributions of the state provided for in the 1988 Constitution. Much is expected of the state, and the state controls an immense amount of resources. It is said that a thief was once asked why he robbed banks. “Because that’s where the money is,” was his reply. Likewise, there is a good reason why many people enter politics in Brazil.

There are crucial reforms that need to be made in Brazil if the country is to become a viable democracy. Fortunately, many of these reforms have been made in the past. Since its independence from Portugal in 1822, the country has, at least superficially, classic liberal institutions. Never has a head of government in Brazil dared to govern without a constitution, as was the case in other South American countries. Bolsonaro’s impeachment, if confirmed, will be a major blow, but it will not destroy Brazil. But it also shows that, more than populist politicians, Brazil needs leaders who will lead it to a deeper liberalism. Popular support for this type of reform exists, but it is contrasted by the desire for a “myth”.

Nightcap

Brandon Christensen Links , , ,
  1. Hayek’s rapid rise to stardom David Glasner, Uneasy Money
  2. Why I am not a natural lawyer FH Buckley, Law & Liberty
  3. British Imperial Federation (pdf) William Smith, Political Science Quarterly
  4. The people who profited from the Trail of Tears Caitlin Fitz, Atlantic

Wow, what a week

Brandon Christensen Current Events , , ,

I think it’s time to start re-opening our society. Last I heard, 50,000 Americans died from coronavirus. And throughout the world? 191,000. There are 7.6 billion people living today.

I think most of the arguing from here on out will be: 1) on whether the relative dearth of deaths was because of the lockdown, 2) why the data don’t match up, and 3) ___________ (fill in the blank, use the ‘comments’).

I think that, here in the States, there will be enough pushback that a lockdown on such an epic scale won’t happen again. Americans long ago chose money over public health, and that’s not necessarily a bad thing.

Check out these numbers.

This thing is far from over. Singapore has seen a rise in cases. But I think it’s time to open up shop again. Government schools can close for good. Don’t go shopping just because you’re too lazy to pick up a book. Nursing homes have always scared me, so why not rethink the whole concept? This is manageable. Government proved that it is unfit for the task. Government also proved that it is responsive to the people. Same old story, same old song and dance. That’s not a bad silver lining for a pandemic like this one.

I have more to say about federation as a foreign policy. I just don’t know what yet. I’d like to focus on present-day India, the Caribbean, and Mexico, as well as the 19th century’s Federal Republic of Central America, Five Civilized Tribes, and Gran Colombia. It’ll be a long, slow process.