@kentwillard I’m continually astonished by how little understanding there is of how little Trump’s trade restrictionism actually accomplished, and how counterproductively he focused on balance without paying attention to sectoral composition, as if selling soybeans can compensate for losing capabilities in manufacturing. 1/
@kentwillard I agree re autos. “Chicken tax” and CAFE standards were not intended as industrial policy, but their effect has been terrible industrial policy, cautionary tales more than proofs of concept. /fin
@artcollisions we split, spent a few days in Mobile AL. we were fortunate to find our little neck of the woods did not suffer too much. we thought our garage was likely to flood, but it didn’t.
@artcollisions Here in Pinellas County! 🙂
here in Pinellas County, if you wanna get picked up, dress as debris.
@ofnumbers in a sense, only SpaceX has survived. the others exist, but they’ve not seemed to have succeeded. 1/
@ofnumbers they all — including NASA — face soft budget constraints, due to some mix of plutocratic support and state subsidy. SpaceX has those too, but whether it’s “profitable” or not, it’s clear SpaceX has been a justified use of the resources it’s required, while the others arguably have not (for NASA, arguably have not recently, though JWST is perhaps humanity’s most extraordinary accomplishment even if it went way over budget). 2/
@ofnumbers institutional survivorship is not much of a measure of success in the sector, i think. nor is a public/private distinction very informative. /fin
@kentwillard (there’s definitely a bad political economy syndrome around tariffs. look at the US auto market’s pathological specialization into trucks, based partly on laxer CAFE standards, but also a “chicken tax” 25% tariff. that said, i think there may be a case for universalizing a modest universal tariff — 10% or less — as there are positive resilience and capability externalities to home production. just freelancing it is dangerous, though, as each industry will go for chicken taxes.)
i remember in the 1980s angst over the “coarsening” of the American mind. i guess that was about obscenity and cuss words and pop-culture rather than classics and stuff. 1/
wherever you site yourself, whomever you vote for, contemporary political polarization has coarsened minds much more insidiously than all of that shit. 2/
we can’t think properly, can’t consider and weigh ideas, because we know the political valence or implication of every claim, and can’t avoid prejudging or overcompensating for prejudging it all. /fin
@EvolLove I also find Japan very impressive.
@EvolLove China is more prone to deflation than inflation, inflationary pressure has been very rare there. They’ve not killed off any of their population. They’ve expanding the scope of private business, not confiscated it in general, although they have cracked down on some industrialists (“oligarchs?”).
China I think is deservedly characterized as a successful development story more than pure exploitation or some kind of cheat.
@EvolLove I really do hope to visit sometime, and learn more!
@EvolLove I guess I just think the characterization is incomplete. China definitely has its problems, and I detest the authoritarian control over political participation and speech. There are definitely large populations of people living in terrible conditions, including both underpaid, exploited internal migrant workers and left-behind subsistence farmers. But I think there are hundreds of millions of people also enjoying the fruits of modernity and prosperity.
@EvolLove I haven’t been to Sweden, but from traveling in other Nordics (Finland, Norway), my impression has always been things seem quite expensive there!
@EvolLove I agree that nonintegration of Russia into the West was a profound lost opportunity, and I think triumphalism and dismissal of Russian concerns and pride contributed significantly to that catastrophe.
Russia’s leaders, however, have been far from entirely innocent too. Perhaps too late, Obama really did try to reset things with Russia, and behaved generously and deferentially towards them. Then 2014 reopened a door to 1944.
@EvolLove All these awful things about China are true, but it’s also true that China’s rocketship development has been the greatest prosperity miracle in human history, bringing hundreds of millions of people from near subsistence poverty into the technologically advanced global middle class in 40 years. 1/
@EvolLove I think a synthesis between the good parts of what China does and Nordic social democracy could be practical, and would be the best system of governance ever devised. Use more Western-style transparent, open forms of subsidy to engender competitive industries in roughly the same way China does, require continued independence of firms — nonconsolidation — as a condition of subsidy. https://drafts.interfluidity.com/2024/09/04/income-driven-repayment-of-fixed-capital/index.html /fin
@EvolLove I agree with this Part 3 much more than Part 1!
The US was hubristic in imagining, long after we were the world’s industrial heartland, it was indispensible, could govern the world via the dollar. China and Russia want to do some things we think quite bad, and even if they are quite bad, we are not their rulers. China is more than capable of anchoring a prosperous community of trading states. Dollar sanctions and export controls can only be bumps in the road. 1/
@EvolLove I don’t think that China is “doping their economy”. Yes, they are using stimulus and papering over bad investments. But bad paper is only paper. Their real economy, their capacity to produce and adapt their production, is now best in the world. All the games they’ve played with subsidy and finance have been more like testosterone than fentanyl, if we want to reach for doping analogies. /fin
@EvolLove We’ve entered an era of heightened geopolitical distrust and competition, which is good for no one. Some of that is down to leaders with revisionist geopolitical ambitions — Putin, Xi. From the US side, much of it is due to our having mismanaged our trade policy for decades, in ways that left us unhappy, incapable, and vulnerable, and lashing out at others rather than taking full responsibility ourselves. 1/
@EvolLove We are all in a bad way now.
I hope we can find our way back to a more stable, better balanced win-win. /fin
@EvolLove I think we can all learn a lot from China. They’ve succeeded not because they are constitutionally better or tougher, but because they found some institutions that sustain competition while Western institutions invite consolidation and cartel. https://drafts.interfluidity.com/2024/08/13/china-as-a-model/index.html
@EvolLove I’m not a fan of inviting desperation for virtuous side effects. I am a fan of setting terms of competition that inspire and motivate innovation and efficiency. I don’t think we require hard times, just serious institutions. Football players can be both well-paid and stalwart competitors.
Re petro dollar, yeah. And foreign demand for dollar holdings more broadly. https://www.interfluidity.com/v2/63.html
@EvolLove Prices fall to approximately input prices when they are produced competitively by efficient factories. American producers have grown fat and lazy by expecting thick profit margins to be a sustainable norm rather than an occasional, transient reward for innovating ahead of your competitors. American firms should be selling goods at close to the price of our inputs too, and be disciplined by competitors when they reach for margin.
@EvolLove Yeah. You can finance general government from tariffs much more if you are small economy that serves largely as a trading hub. Even Trump’s most aggressive tariff proposals would raise well under $1T a year, under the implausible presumption that trade volumes wouldn’t fall. You can’t finance a modern administrative state through tariffs. Some people think they don’t want a modern administrative state. To them, I’d say careful what you wish for.