Harris, Trump, and Plato

The US has high prices for branded drugs but it has some of the lowest prices for generic drugs in the world and generic drugs are 90% of prescriptions.

***

Donald Trump said during his rally in New York on Wednesday that if elected president he would put a “temporary cap on credit-card interest rates” of “around 10 percent.” He said, “We can’t let them make 25 or 30 percent.”

Sounds like Harris

***

Harris, Trump, and Plato

The disregard for the truth has become a characteristic of this election. It is so casual as to be a style, like slipping into an accent. Where did such a profound change in human thinking become routine?

The Open Science Collaboration tried to replicate one hundred published psychology experiments sampled from three of the most prestigious journals in the field. Of the studies that had originally reported positive results, an astonishing 65 percent failed to show statistical significance on replication, and many of the remainder showed greatly reduced effect sizes.

In 2011 a group of researchers at Bayer decided to review significant drug papers. Looking at sixty-seven recent drug discovery projects based on preclinical cancer biology research, they found that in more than 75 percent of cases the published data did not match up with their in-house attempts to replicate.

 

So how do we "follow the science?" Have we just conceded the impossibility of truth? Are Trump and Harris just the personifications of Platonic unreproducible ideals?

Or are they simply ragged competitors seeking success having found the lowest common denominator?

Social-Welfare Spending

Democracy is the theory that the common people know what they want, and deserve to get it good and hard.--Mencken

***

About 9% of converts to Islam in the U.S. are Latino nationwide according to a 2020 survey, an increase from 5% in 2017. The majority are women.
Spanish converts to Islam have increased by a factor of 10 in the last 30 years.

***


Social-Welfare Spending

Ask any budget expert in Washington to explain the ballooning deficit and debt, and Social Security and Medicare will be high on the list of causes. That’s wrong. The real driver, the elephant in the room, is means-tested social-welfare spending—Medicaid, food stamps, refundable tax credits, Supplemental Security Income, Temporary Assistance for Needy Families, federal housing subsidies and almost 100 other programs whose eligibility is limited to those below an income threshold.

True, Social Security and Medicare are a drain on general revenue and will become big fiscal problems if not reformed. But they aren’t the major source of our current fiscal crisis, because both are financed largely by dedicated payroll taxes. Since its inception, Social Security has produced cash surpluses 60% of the time. In 2023 Social Security payroll taxes funded 88.9% of benefits. The cost of Social Security’s Old-Age, Survivors and Disability Insurance program, net of payroll tax collections, was only $88.1 billion. Medicare payroll taxes and premiums funded 49.7% of Medicare expenditures, producing a net cost of $509 billion.

Demand for reform would be even stronger if the public understood how generous social-welfare benefits are. In reporting household income, the Census Bureau doesn’t count 88% of transfer payments made to households that are defined as being poor. The census doesn’t count refundable tax credits (for which the beneficiary receives a check from the Treasury), food-stamp debit cards, free medical care through Medicaid, or benefits from about 100 other federal transfer payments as income to welfare recipients. When those benefits are counted as income, 80% of those who are today counted as being poor are no longer poor, and almost half have incomes equivalent to American middle-income earners.--wsj

NaNoWriMo

A major sign of Chinese economic malaise: In 2018, 51,302 new startups were founded in China. Last year, that number dropped to 1,202.

***

NaNoWriMo

National Novel Writing Month, or NaNoWriMo, is a U.S.-based nonprofit organization that promotes creative writing around the world. Its flagship program is an annual, international creative writing event in which participants attempt to write a 50,000-word manuscript during the month of November. The emphasis is on creating a first draft that can be worked on later and improved.

The project started in July 1999 with 21 participants. In 2022, 413,295 people participated in the organization's programs.

AI has been a sticking point with the program. NaNoWriMo has tolerated AI programs, both generative AI (ChatGPT, Gemini, Midjourney, etc.) and non-generative AI tools (Grammarly, email spam filters, etc.). This year they have taken a stronger stand.

On Saturday, NaNoWriMo published its position on the technology, announcing that it doesn’t explicitly support or condemn any approach to writing, but did so with a flair. “We believe that to categorically condemn AI would be to ignore classist and ableist issues surrounding the use of the technology and that questions around the use of AI tie to questions around privilege,” NaNoWriMo said, arguing that “not all brains” have the “same abilities” and that AI tools can reduce the financial burden of hiring human writing assistants.

"Classist and ableist." "Privilege."

This was not taken well by many. There have been resignations from the Board, and outrage on the social media platforms. While plagiarism is a legitimate primary concern, the general tone has been anxiety over the devaluation of the human creative spirit.

“Generative AI empowers not the artist, not the writer, but the tech industry,” Star Wars: Aftermath author Chuck Wendig said in response to NaNoWriMo’s stance. “It steals content to remake content, graverobbing existing material to staple together its Frankensteinian idea of art and story.”

Fascinatingly, the very openness of NaNoWriMo to intervention by AI so as to blunt the "classist,' the ableist,' and the "privilege" that generates them reveals the subtle and much more dangerous element that has not been mentioned but must disturb protesters: quality.

Equity, as a historical economic concept, values all work equally--not the work's product or the product's value to a consumer. And that undermines the very objective of art.

Lies and Spies

Welfare:

The Europeans would also love to shift more of that burden to the wealthy, but experiments with things such as wealth taxes have largely failed, and their governments have clearly concluded that big welfare states can be funded only with a big, broad tax base that includes the middle class.--wash po

***

Chicago's spending on public schools (more than $24,000 per student, not counting debt service and capital expenditures) has increased 107 percent since 2012, but proficiency in reading and math in grades 3-8 plummeted 63 percent and 78 percent, respectively. Only 22 percent of 11th-graders can read at grade level, only 19 percent do math at grade level. Black students’ percentages are 11 and 8. While school enrollment declined 9 percent in 2020-2022, spending increased 35.7 percent, with one unionized employee for every eight students.

***

Lies and Spies

What is the purpose of a national intelligence agency? Information and disinformation. To perceive the truth or create a mythology that benefits the agency's nation-state.
So, believing Guatemalan President Jacobo Árbenz a threat to the stability of America's region, the CIA armed, funded, and trained a force of 480 men led by Carlos Castillo Armas. The force invaded Guatemala on June 18, 1954, backed by a heavy campaign of psychological warfare, including bombings of Guatemala City and an anti-Árbenz radio station claiming to be genuine news of rebellion success. The invasion force actually fared poorly militarily, but the psychological warfare and the possibility of a U.S. invasion intimidated the Guatemalan army, which refused to fight. Árbenz resigned on 27 June, and following negotiations in San Salvador, Carlos Castillo Armas became President on 7 July 1954. (There is a rumor that the CIA, flushed with the success of this project, was encouraged to try a similar project in Cuba with the Bay of Pigs.)

Similarly, in the Second War, the Allies ordered heavy clothing for their troops with the hope of convincing Hitler's spies the Allies would attack Europe in the north, at least further north than Normandy.

The Russians are famous for this. They infiltrated an American church group and through them created a completely fraudulent history of African-American church burnings that embarrassed the Americans internationally. During the Second War they created an elaborate hoax implicating Churchill himself in the death of the Polish patriot, General Wladyslaw Sikorski. (This hoax was so successful it appeared as a London stage play.)

So....the Americans get information that Saddam Hussein has the plans and wherewithal to develop weapons of mass destruction. The Americans and their friends invade Iraq. What self respecting intelligence agency would not create the evidence to justify the invasion whether the WMDs were there or not? How is it possible that in our culture of insincerity and mendacity, with shameless commercial hucksterism and mortifyingly dishonest politicians, we have to have an outbreak of honesty in the Intelligence agency?

Vacuum

“Democratic societies are necessarily placed at risk when people conceive of their relationships as being grounded on principles of command and control rather than on principles of self-responsibility in self-governing communities”--Ostrom

***

To give presidential candidates, who don’t even know who we are, power over our most intimate relationships is to bestow them with one more power of which they are not worthy.--Miltimore

***

From a paper:
“These results strongly suggest Neanderthal-derived DNA is playing a significant role in autism susceptibility across major populations in the United States.”

***

Vacuum

Harris entered the 'debate' with some templates to fill. As the event progressed, a pattern emerged that was at least unsettling. Part of Harris' template was to repeat known falsehoods. The 2025 project. The Charlottesville lie. January 6th. The 'bloodbath' calumny. An IVF falsehood, a new one. These were typical of the distortions and deceptions Harris worked into her presentation.

While these lies had long been exposed, Harris blithely rolled them out.  And it gave the observer an unsettling feeling. Harris' confidence in her insincerity was astonishing. Certainly, some devotees have cult-like acceptance of these lies but there can't be so many as to justify them. And she would be preaching to the choir.

In some ways this has the feel of 'creative non-fiction' but it may be something more basic. We may have a culture that no longer distinguishes between truth and falsehood. Or no longer thinks it matters.

And it seems that anything will fill Kamala's mental vacuum.

Pole-Sitting and Luddites

Haitian illegal immigrants have an incarceration rate 38 percent below native-born Americans and legal Haitian immigrants have an incarceration rate about 81 percent below native-born Americans

***

Inflation-adjusted median household income was $80,610 in 2023, up 4% from the 2022 estimate of $77,540, the bureau said in its annual report card on households’ financial well-being. This move returned incomes to about where they were in 2019, the peak that was hit just before the pandemic.

***

Pole-Sitting and Luddites

“When it gets too hot, we lightly spray water on our arms, legs, and faces; the water helps dissipate a lot of heat,” a New York Times essay by Stan Cox, the author of an anti-air-conditioning book titled “I Swore Off Air-Conditioning, and You Can Too” suggests as an alternative to modern air-conditioning technology. Cox also advocates restricting dishwashers and refrigeration.

If this sounds like the statement of a wide-eyed, religious devotee sitting on a pole in the Byzantine desert...it should. That is not to dismiss the notion but rather to dignify it at least with a history and a seemingly hard-wired human tendency to challenge change, materialism, innovation, and comfort. And human success.

Rousseau was maybe not as innovative as once thought.

Capitalism

Moral certainty is always a sign of cultural inferiority. The more uncivilized the man, the surer he is that he knows precisely what is right and what is wrong. All human progress, even in morals, has been the work of men who have doubted the current moral values, not of men who have whooped them up and tried to enforce them. The truly civilized man is always skeptical and tolerant, in this field as in all others. His culture is based on "I am not too sure." -H.L. Mencken, writer, editor, and critic

***

The empirical literature from dozens of countries over many decades again confirms the theory: In case after case after case—and regardless of the model used—economists have found that tariffs reduce national economic output and make a nation worse off on net, while tariff liberalization generally does the opposite.

***

Is a reaction developing against the management of the debate in sympathy for Trump?

***

Capitalism

The incredible success of the last two hundred years has been defined by its enemies. 'Capitalism' is a strange term encompassing freedom, markets, social attitude, enlightenment principles, and competitive risk with success and failure. It is inadequate but McClosky has a reasonable correction of its nature:

'“Capitalism” is a misleadingly loaded and scientifically foolish word, imposed over a century ago by followers of Marx. A scientifically more accurate word for what happened after 1800 is “innovism.” Explosive innovation in the past two centuries has made the poor rich, now even in China, and coming along in India. The Swiss, for example, have escaped from the grim business plan of exporting young men into the wars of Europe, and have become instead one the richest of nations, festooned with BMWs and central heating and educations in three or four languages. The Great Enrichment of the Swiss, rising from $3 a day in 1800 to well over $150 a day now, happened because its bourgeoisie in the past two centuries steadily, gently set aside the aristocratic and priestly passions that had troubled Europe for so long. Not that such passions entirely disappeared. They pop up in Putin’s Orthodox nationalism and Maduro’s holy socialism, in both cases to justify tyranny.'

Debate

 

“Storming a breech, conducting an embassy, ruling a nation are glittering deeds. Rebuking, laughing, buying, selling, loving, hating, and living together gently and justly with your household and with yourself is something more difficult.” --Montaigne

***

Last year the United States became the world’s largest LNG exporter, surpassing Qatar and Australia. U.S. exports rose 14.7 percent to a record 88.9 million metric tons (MT), or 8.6 billion cubic feet per day.
U.S. supplied almost a fifth of all gas to the EU and the U.K., up from 5 percent in 2021. 

***


Debate

One of America's mysteries is its reverence for debates and their peculiar skill sets.

This debate was certainly a mess. The Trump camp will talk about ABC bias and slanted questions and analysis with ridiculously selective fact-checking. They will be right but they did agree to the circumstances and certainly knew what was coming. What is astounding is they seem surprised, as if they thought the left-leaning press was going to rise to the occasion and become even-handed. But there is no denying the impression: Trump was as expected and Harris, while mediocre and unabashedly untruthful and calculating, was better than expected.

Harris was brilliantly, sympathetically bland, repeating each question in a way that gave her the option to take her answer in any direction. And she often ended her comments with some statement that would stimulate the direction of Trump's response.

The moderators vigilantly guarded the DNC's interests.

No questions on the debt, none on Americans being killed in the Middle East by Iranian proxies, no question on the American killed by the Israelis, no question on America's military readiness, no question on Harris' childish economic suggestions like national rent control and taxation of unrealized capital gains, no question on Iran, no question about the execution of an American by Hamas.

And no question about China.

It was a display of two mediocre candidates for the most important position in the free world being interviewed by two shallow partisans disguised as the Free Press.

Engines and Cabooses

‘Ideas are more powerful than guns. We would not let our enemies have guns, why should we let them have ideas.’ – Joseph Stalin

***

Engines and Cabooses

The train cars get to the same place, all at the same time--some with less work. So why does the caboose envy the engine? 

Technology and the individual make a powerful partnership and certainly are factors in the explosion of human economic development of the last 200 years. McClosky suggests that success is partly dependent upon the individual just being left alone to fulfill his vision.

The interference is usually assumed to be caused by religious or government entities. But it also seems to be true that success itself stimulates opposition. Royalty. Kulaks. The Rich. Somehow in us there arises a strange opposition to success. This has expanded from revolutionary minorities into democracies.

Perhaps this explains antisemitism. The proportion of people with an IQ of 140 or more is about six times higher among Jews than any other population. Jews, forming much less than a single percent of the world’s population, have won 32% of the Nobel Prizes awarded in the 21st century. They dominate classical music. Many Jews have been factors in the great economic revolution of the last 200 years.

The curiosity of this great growth over the last two centuries is that the expansion of the quality of life and wealth has been led by a very few. Their creations have expanded to fill the culture and enrich everyone. Those discoverers and developers have become more enriched than others, but the growth in wealth of the least in the culture has been extraordinary. A simple comparison of those cultures that have not participated shows the disparity.

So why would those in that successful culture, having benefitted so much from the creators in the culture, resent them?

Inquiring Minds

In early 2024, six out of 10 teachers nationwide said they were experiencing burnout, and one in five said they intended to leave their job at the end of the academic year, according to a study by Rand Corporation.
The most common reason for teacher stress? Student behavior.

***

If Trump forces Affordable Care Act plans to cover IVF, he will encourage more Americans to move to taxpayer-subsidized plans from small business offerings that often can’t afford to cover IVF.

***

Inquiring Minds

Although it has received little national attention, Linda Sun, a former top-level aide to New York governors Kathy Hochul and Andrew Cuomo, has been arrested as an alleged spy for Beijing. This has raised some anxiety about the impact of the CCP and its espionage influence in the U.S.

A big part of the CCP’s overseas influence operations is carried out by its “united front” network, a complex network of agencies and organizations that are coordinated by a party agency called the United Front Work Department.

Newsweek investigation in 2020 found 600 United Front organizations in the United States. Nicholas Eftimiades, senior fellow at the Atlantic Council, said that if each of the organizations had recruited several people, the CCP could have “at least 20,000 to 30,000 actively working—knowingly or not—on behalf of China.”

As for classic spies, the size of China’s top intelligence agency, the Ministry of State Security (MSS), has an estimated 100,000 employees, around five times the size of the CIA.

One/Two State

The rightness of a thing isn't determined by the amount of courage it takes. -Mary Renault, novelist

***

One/Two State

David Friedman, Trump's ambassador to Israel, is making the rounds, talking about his book, One Jewish State.

He was one of the leading architects of the historic Abraham Accords,

He argues that while Israel doesn't want a Palestinian state, neither do the Palestinians who fear the incompetence and corruption of their leaders. He gives as an example a dispute that occurred during the Trump administration.

Several small Arab towns in the Israeli section close to the West Bank were complaining about how they were treated over something. The Israeli government sent representatives to speak to them and Friedman, as U.S. Ambassador, was included. Friedman offered that the lines drawing the territory were arbitrary and Trump and the Israelis had agreed they could redraw the boundaries so the unhappy Arab towns could be included in the Arab-administrated West Bank.

The Arabs were horrified by the suggestion. They would never want to live under such a corrupt government. They immediately withdrew all their complaints.

Stats

Stats

Googol is the number 1 followed by 100 zeros (10^100). Googolplex is (10^googol or 10^10^100). It’s so big that it’s not even possible to spell it out in long form (1000000000...). We would fill the whole universe before we come even close to writing out the number. It is even bigger than the number of atoms in the universe.

***

The UN recently tried to claim more than 175,000 people die from “extreme heat” every year. The real number is closer to 43,000 which the UN later acknowledged very quietly. In fact, a valid study showed that global extreme heat deaths have declined by 13.9% every ten years. 

Another study shows that over the past 30 years, the annual global average of days with heat waves has only increased from 13.4 to 13.7. Cold kills far more, up to four times as many. Heat deaths for youngsters has actually declined by 50% over 30 years, but you would never know that from the data the UN publishes. Malnutrition actually causes many more youngsters to die in Europe and Central Asia than does heat. They also claimed heat deaths of old people increased 85% in 22 years while failing to mention that the population of old people has increased almost the same number.

***

In the year to June, 80,200 New Zealand citizens moved abroad, almost double the numbers prior to the Covid-19 pandemic. Meanwhile, just 24,900 returned, according to Stats NZ — the country’s official data agency. The net loss of 55,300 citizens (which follows a net loss of 56,500 in the year to April) smashed the previous record of 44,400 in February 2012.

About half are going to Australia.  

Economic factors figure highly in explanations for why so many New Zealanders are moving overseas.
While Australia has so far avoided recession and enjoyed a booming jobs market since the pandemic — in large part due to its dominant mining industry — New Zealand’s central bank warned on Wednesday that its economy is on the brink of its third recession since the beginning of 2022.

***

In 2014 fewer than 10,000 migrants crossed the Darian gap. Last year more than 500,000 did. Another surge is expected as a result of Venezuela’s presidential election on July 28th, which was stolen by the ruling autocrat, Nicolás Maduro.

***

Results show that from 2003 to 2022, average time spent at home among American adults has risen by one hour and 39 minutes in a typical day. Time at home has risen for every subset of the population and for virtually all activities. 

A conclusion was then leapt to: Preliminary analysis indicates that time at home is associated with lower levels of happiness and less meaning, suggesting the need for enhanced empirical attention to this major shift in the setting of American life.

***

'Our results indicate a significant decrease in the difficulty of the SAT math section over time, alongside a decline in students’ math performance. The analysis shows a 71-point drop in the rigor of SAT math from 2008 to 2023, with student performance decreasing by 36 points, resulting in a 107-point total divergence in average student math performance.'

You are never dedicated to something you have complete confidence in. No one is fanatically shouting that the sun is going to rise tomorrow. They know it's going to rise tomorrow. When people are fanatically dedicated to political or religious faiths or any other kinds of dogmas or goals, it's always because these dogmas or goals are in doubt. -Robert M. Pirsig, author and philosopher (6 Sep 1928-2017

***

Authorities in Rome have caught a thief after he got distracted mid- break-and-enter and sat down to read a book on The Iliad.

***

Following a post-election review, the UK has announced it wil restrict the sale of some weapons to Israel, citing concerns they could be used in violation of international humanitarian law. The ban includes parts for fighter planes, helicopters, and drones.

***

Authorities have suspended an Austrian surgeon’s license after allegations emerged she let her 13-year-old daughter help out (quite a bit) during an operation.

***


Sheldon Richman on classical liberalism and democracy:

'First, classical liberalism, or what we moderns call libertarianism, is not mainly about believing; it’s about respecting each individual’s person, property, and liberty, and particularly about the government’s respecting those things. It’s also about understanding that freedom leads to social cooperation (the division of labor and trade), peace, and prosperity. Economic theory and history show it.

Second, it’s democracy, not freedom, that requires faith in the absence of evidence. It’s a religion that holds that if we believe hard enough, tens of millions of us going to the temple polls to vote will make the right decisions. No one explains why it should work out that way. And it doesn’t. It’s a faith in magic, and magic is not real.

There is a glitch in the democratic religion: most voters are ignorant. Poll after poll shows that most people know little about the government and the economic process, which the government regulates. They are not only ignorant of basic economic theory, which the evaluation of candidates requires; they are also ignorant of basic indisputable political facts, such as who their so-called representatives are, how they vote, which party controls the Senate and House, and how much the government spends and borrows. How can they vote wisely?'

A Limit of Free Expression

The median estimated elasticity of the socially optimal fertility rate is 2.4 in the US, well above today’s 1.7.

***

Asked if Israel’s prime minister Benjamin Netanyahu is doing enough to secure a hostage deal, President Biden—whose appearance at a rally for Kamala Harris in Pittsburgh yesterday was his first public appearance since his convention speech on August 19—answered “No.” 

A senior Israeli source told Axios’s Barak Ravid that “it is puzzling that Biden is pressing Netanyahu, who agreed to the U.S. proposal as early as May 31 and to the U.S. bridging proposal on August 16, and not Hamas leader Yahya Sinwar, who continues to vehemently refuse any deal.”

***

Ireland ranks as the loneliest country in Europe, with almost a fifth of people lonely most or all of the time and nearly two-thirds of people suffer from anxiety or depression, according to EU data. One in seven children live in homes below the poverty line, defined as 60 percent of the median disposable household income.

***

A Limit of Free Expression

According to the WashPo, a coordinated attack on anti-Xi demonstrators in San Fransisco last November was planned, developed and carried out by the Chinese Communist Party.

Violence was instigated by pro-CCP activists and carried out by coordinated groups of young men embedded among them, verified videos show. Anti-Xi protesters were attacked with extended flagpoles and chemical spray, punched, kicked, and had fistfuls of sand thrown in their faces.

The Chinese Consulate in Los Angeles paid for supporters’ hotels and meals as an incentive to participate, according to messages shared in WeChat groups reviewed by The Post. At least 35 pro-CCP Chinese diaspora groups showed up to the APEC summit protests — including groups from New York, Pennsylvania, and Washington State.

Videos show at least four Chinese diplomats from the consulates in Los Angeles and San Francisco among the crowd of pro-CCP protesters, sometimes directly interacting with aggressive actors over four days of protests from Nov. 14-17. Some Chinese diaspora group leaders with ties to the Chinese state participated in some of the violence, the videos show.

Chinese diplomats hired at least 60 private security guards to “protect” Chinese diaspora groups gathered to welcome Xi, according to people involved in the arrangement.

This puts a different spin on demonstrations. They can be foreign-sponsored events. And that raises a bigger question for a state: sovereignty.

Trickle Down Wealth

Toby Roberts’s gold medal win in Paris this summer has promoted a surge in interest in climbing in the U.K.

***

In 2023, the interest on the national debt was $961 billion.
In federal fiscal years 1962 to 2023, interest on the national debt ranged from 9% to 27% of federal revenues, with a median of 16% and an average of 17%. 

In 2023, the interest on the national debt was 20% of federal revenues.

***

Trickle Down Wealth

in 2017, 44 percent of all households had real (inflation-adjusted) incomes that 50 years earlier were earned only by those in the top 20 percent. Real wages increased by 74 percent over the past 50 years and the real median household income nearly doubled.

The improvement in living conditions from subsistence farming in the 17th Century to the current comfort levels across all income groups is obvious.

Income shifting has filled in the gaps.

There seems to be a generality here that is reminiscent of "The Israel Test." The rise of the standard of living in free cultures seems inexorable--but comes at a price. Creativity and production are not as uniform across a culture as their rewards. Free economic cultures produce products with great success but reward producer and consumer differently, the producer with financial reward, the consumer with product and lifestyle. So producers, gaining most of the wealth, none-the-less 'raise all boats.'

Like the symphony and the audience.

The nidus of producers creates general wealth and comfort that diffuse throughout society with creators and producers ending up with a concentration of much wealth--although the general society benefits enormously without much contribution.

In free societies, the general population is thrilled with the culture's success but human nature, particularly envy, sees only disparity, not success, and consequently tears at its supposed wound until the culture is disrupted.

State-Directed Production

No one is more dogmatically insistent on conformity than those who advocate “diversity.”--Sowell

***

Nearly $2 billion of American Rescue Plan funds were earmarked for nonexistent county governments in Connecticut and Rhode Island.
$13 million went to a water park in Danville, Ill

***

State-Directed Production

Chinese e-commerce giant Temu is the latest warning sign that the world’s second-largest economy could be headed for a doom loop caused by overproduction and Beijing’s industrial planning.

PDD Holdings, the parent company of Temu and Pinduoduo, stunned Wall Street on Monday with weak quarterly results and a warning that intense competition will dampen future earnings.

Shares sank more than 30%, wiping out $50 billion in PDD’s market value and ending founder Colin Huang’s short-lived reign as China’s richest man.

In an analysis written before the earnings report, a top China scholar described an economic landscape that helped explain PDD’s woes.

Other China watchers have blamed the recent stagnation on the real estate meltdown, the country’s aging population, and President Xi Jinping’s tighter grip on economic policy.

But a longer-term driver is Beijing’s decades-old strategy of favoring industrial production over all else, resulting in enormous overcapacity, wrote Zongyuan Zoe Liu, a China scholar at the Council on Foreign Relations, in Foreign Affairs magazine.

“Simply put, in many crucial economic sectors, China is producing far more output than it, or foreign markets, can sustainably absorb,” she added. “As a result, the Chinese economy runs the risk of getting caught in a doom loop of falling prices, insolvency, factory closures, and, ultimately, job losses.”

When profits shrink, companies boost production higher and drop prices lower to generate enough cash to service their debt, Liu explained, adding that government-designated priority sectors also sell products below cost to meet political goals.

This dynamic has been destabilizing the global market with a flood of cheap Chinese exports creating a sharp backlash in the form of stiff tariffs. The domestic market is also marked by overproduction and cutthroat price competition that risks sending the economy into deflation, Liu warned.

“Analogously, although China’s vibrant e-commerce sector might suggest a plethora of consumer choices, in reality, major platforms such as Alibaba, Pinduoduo, and Shein compete fiercely to sell the same commoditized products,” she said. “In other words, the illusion of consumer choice masks a domestic market that is overwhelmingly shaped by the state’s industrial priorities rather than by individual preferences.” (from Fortune)

Interestingly, even though vast sums are pouring into AI, the money is going to companies that can expand the most quickly rather than the most innovative ones.

Transfers

Thomas reports that Austin's roof solar panel permit fees are about $4000. $1/sq. ft.

***

10% to 27% of non-citizen adults in the U.S. are now illegally registered to vote
The U.S. Census recorded more than 19 million adult non-citizens living in the U.S. during 2022. Given their voter registration rates, this means that about two million to five million of them are illegally registered to vote.

A leap, but...

***

Transfers

George Will raises an interesting question: Why does the government, which is substantially staffed by progressives, use — actually, abuse — statistics to suggest the futility of progressive anti-poverty policies?

Will explains why the reality of income inequality in America is unwelcome on both the political left and right. Two slices:

In more than 50 years, government transfer payments (Medicaid, food stamps, etc.) to the average household in the bottom quintile of earners, have risen (in inflation-adjusted dollars) from $9,700 to $45,000 annually. Why, then, does the government, which is substantially staffed by progressives, use — actually, abuse — statistics to suggest the futility of progressive anti-poverty policies? Because this provides a permanent rationale for government growth: perpetual undiminished poverty.

In their 2022 book “The Myth of American Inequality: How Government Biases Policy Debate,” Phil Gramm, Robert Ekelund and John Early demonstrate gross defects in the Census Bureau’s measurement of inequality. By not counting about 88 percent of government transfer payments that enlarge the buying power of lower-income households, and not counting taxes that lower the wealth of higher-income households, government statistics purport to prove that the average income in the top quintile of earners is 16.7 times that of the average in the bottom quintile. Counting transfers and taxes, however, the actual ratio is 4 to 1.

…..

Economist Pierre Lemieux, writing in the Cato Institute’s journal Regulation, says that in 2017, 44 percent of all households had real (inflation-adjusted) incomes that 50 years earlier were earned only by those in the top 20 percent. “Recall,” he says, “that real wages increased by 74 percent over the past 50 years and the real median household income nearly doubled.”

Amid increased attention to income inequality, the populist right — “national conservatives” — and the progressive left favor “industrial policy” that regressively funnels money upward to corporations. The populist right advocates protectionism (tariffs to shield corporations from competition), and the populist left advocates hundreds of billions of dollars of subsidies (for semiconductors, electric vehicles, solar panels, etc.).

In the Grip of a Higher Purpose

A man at the Carnegie Museum in Oakland was injured in a shooting Friday. This apparently was accidental.

***

Niners rookie receiver and first round draft pick Ricky Pearsall was shot in the chest during a robbery attempt in San Francisco’s Union Square on Saturday afternoon, the team said in a statement.

***

In the Grip of a Higher Purpose

The current election is not a good example of this divergence, but most national debates on government revolve around how much confidence the citizen has--or should have--in the government doing the right thing, regardless of motive. 

Here is a cautionary tale, from a paper by Coyne and Hall.

'In July 1946, 20-year-old Helen Hutchison walked into the Vanderbilt University prenatal clinic in Nashville, Tennessee. Helen found herself pregnant after her husband had returned from combat in World War II. The pregnancy, however, had not been easy. During her visit to the clinic Helen’s doctor handed her a small drink.

“What is it?” she asked.
“It’s a little cocktail,” her doctor replied. “It’ll make you feel better.”
“Well I don’t know if I should be drinking a cocktail,” she responded in jest.
“Drink it all. Drink it all down” (quoted in Welsome 1999, p. 220).

Helen did as her doctor ordered.

Three months later Helen’s daughter, Barbara, was born. Not long after, Helen began to experience some frightening health problems; her face swelled, and her hair fell out. She then experienced two miscarriages, one of which necessitated 16 blood transfusions (Welsome 1999, p. 220). Baby Barbara experienced her own health problems from early childhood. She suffered from extreme fatigue and developed an autoimmune disorder and eventually skin cancer.

…Unbeknownst to Helen, she and her unborn baby had been subjects in a government-funded experiment. She was one of hundreds of women who received an experimental “cocktail” between 1945 and 1947 during one of their prenatal visits, compliments of the U.S. Atomic Energy Commission (AEC), which provided the materials (Wittenstein 2014, p. 39).

The 829 women of the Vanderbilt clinic were but a few of hundreds of thousands of individuals, mostly U.S. citizens, who would be subjected to illegal experiments and suffer human-rights violations during in the post-World War II period at the hands of scientists with funding and materials provided by the U.S. government. These experiments were meant to provide the government with information about the effects of atomic weapons on the human body to advance military capabilities in the name of “national security.”

This paper tells the story of U.S. government activities related to human experimentation after World War II.'

That’s Coyne and Hall writing on Dr. Mengele, USA Style: Lessons from Human Rights Abuses in Post World War II America. 

It’s interesting that these immoral experiments using radiation and also agents of chemical warfare are less well known to the public than say the Tuskegee Study even though they involved far more people.