Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

13 May 2019

Chaos is not a Plan

For an essay on Elizabeth Warren’s qualifications for the presidency, click here. For brief descriptions of and links to recent posts, click here. For an inverse-chronological list with links to all posts after January 23, 2017, click here. For a subject-matter index to posts before that date, click here.

As of 10:45 am EDT this morning the Dow had dropped 1,208 points, or more than 4.5%, from its recent high of April 23. The self-evident reason is China’s salvo of tariffs on $60 billion worth of US goods. That salvo responded to our adding 15% more tariffs on $200 billion of Chinese goods last Friday. We are now in a full-fledged trade war with China.

My personal retirement portfolio has been almost totally defensive and out of equities since February 2, 2018. Why? Because we have a president who is not only a nasty, lying, litigious lout; he’s incompetent and erratic, too. He thinks that chaos is policy. With chaos as a “plan,” failure was inevitable. It just took some time.

The most likely positive outcome of this needless trade war with China is our own capitulation, under the fig leaf of some temporary bit of good news. For a whole bunch of reasons, China is not going to capitulate. China’s leaders need a good excuse to go all-in on their Belt and Road Initiative, with the aim of eventually making our 5% of the world’s population commercially irrelevant. They also have the ancient Asian desire to “save face.” That’s why China started small, with tariffs on $60 billion worth of trade, versus our $200 billion.

The entire “war” against China is misdirected. The vast majority of our technology and intellectual property now used by and in China was not stolen. Our oligarchs gave it up voluntarily in exchange for access to China’s huge market and to low-cost Chinese labor for worldwide exports from China, including to our home market.

Our oligarchs sold out our factory and other skilled workers for market access and cheap Chinese labor. In so doing, they created our divided society, with an aristocracy of oligarchs and their educated elite, and the rest of our workers as serfs.

The jobs they cost us in so doing are not coming back. But we still have the world’s greatest innovation machine. What we need is an industrial policy designed to keep at home the good jobs that producing our future innovations will create.

Otherwise, our own innovation, exported to low-wage countries, will continue to create more oligarchs at home and fewer jobs for line workers. Our already lopsided economy—top heavy with a vanishing middle class—will continue to skew, and our politics will continue to run off the rails.

It’s really quite simple. We need to manage our own economy to keep at home more of the economic benefit of our chief comparative advantage in trade: our innovation. To do that, we have to control and manage our oligarchs for the good of all our people. Antitrust law will playing a leading role, as Elizabeth Warren understands, and control of technology and intellectual property will play a supporting role.

If China is going to continue to try to steal our technology and intellectual property, as it has been doing more recently, we have to play our cards much closer to our chest. That will be a tricky job. We don’t want to hide our innovations too much, because we might miss out on world-wide trade, as well as globalized cooperative research and development. In hiding our innovation, we might forego new opportunities for innovation and/or new markets for good and services. But we have to keep enough of the production of our own innovations here at home in order not further to inflame our already-divided society of wealthy oligarchs and serfs.

Curtailing trade in goods and services, through tariffs or otherwise, is not the answer. We need to manage our technology and intellectual property to maintain our chief comparative advantage in trade. We need to ramp up our exports of future goods and services to give our own workers more of the benefits of our national innovation machine.

Doing that will require restricting our exports of technology and intellectual property and managing their production and use at home with intelligent industrial policy. Only in that way can we maintain a balanced economy with good jobs for everyone, not just the oligarchs and the educated elite. A trade war in existing goods and services, let alone steel, oil-driven cars and aluminum, is not the answer.

More generally, we need a plan, not a war. We need something like China’s Belt and Road Initiative, but focused on maintaining the comparative advantage of our innovation machine and harnessing it for our working people. To make that plan, we need leaders who understand the situation and believe in planning, not chaos.

Links to Popular Recent Posts

For a deeper discussion of how badly we Americans have failed to plan our future, click here.
For an essay on Elizabeth Warren’s qualifications for the presidency, click here.
For comment on how not doing our jobs has brought us Americans low, click here.
To see how modern politics has come to resemble the Game of Thrones, click here.
For a discussion of the waste of energy and fossil fuels caused by unneeded long-range batteries in electric cars, click here.
For a discussion why Democrats should embrace the long campaign season and make no premature moves, click here.
For a discussion how Trump and Brexit have put the tree world into free fall, click here.
For a review of how our own American acts help create our president’s claimed “invasion” of Central American migrants, click here.
For a review of basic facts that must inform any type of universal health insurance, click here.
For a discussion of how the West’s fall and China’s rise affect the chances of our species’ survival, click here.
For a discussion of what the Mueller Report is and how its release could affect American politics, click here.
For a note on the Mueller Report as the beginning of a process, click here.
For comment on the special candidacies of Beto O’Rourke and Pete Buttigieg, click here.
For reasons why the twin 737 Max 8 disasters should inspire skepticism and caution with regard to potentially lethal uses of software and AI, click here.
For my message to Southwest Airlines on grounding the 737 Maxes, click here.
For an example of even the New York Times spewing propaganda, click here.
For means by which high-school teachers could help save American democracy, click here.
For a modern team of rivals that might comprise a dream Cabinet in 2021, click here.
For an analysis of the global decline of rules-based civilization, click here. For a brief note on avoiding health lobbying Armageddon, click here.
For analysis of how to save real news and America’s ability to see straight, click here.
For an update on how Zuckerberg scams advertisers, click here.
For analysis of how Facebook scams voters and society, click here.
For the consequences of Trump’s manufactured border emergency, click here.
For a brief note on Colin Kaepernick’s good work and settlement with the NFL, click here.
For an outline of universal health insurance without coercion, disruption of satisfactory private insurance, or a trace of “socialism,” click here.
For analysis of the Virginia blackface debacle, click here. For an update on how Twitter subverts politics, click here.
For analysis of women’s chances to take the presidency in 2020, click here.
For brief comment on Trump’s State of the Union Speech and Stacey Abrams’ response for the Dems, click here.
For reasons why the Huawei affair requires diplomacy, not criminal prosecution, click here. For how Speaker Pelosi has become a new sheriff in town, click here.
For how Trump’s misrule could kill your kids, click here.
For comment on MLK Day 2019 and the structural legacies of slavery, click here.
For reasons why the partial government shutdown helps Dems the longer it lasts, click here.
For a discussion of how our national openness hurts us and what we really need from China, click here.
For a brief explanation of how badly both Trump and his opposition are failing at “the art of the deal,” click here.
For a deep dive into how Apple tries to thwart Google’s capture of the web-browser market, click here.
For a review of Speaker Pelosi’s superb qualifications to lead the Democratic Party, click here.
For reasons why natural-gas and electric cars are essential to national security, click here.
For additional reasons, click here.
For the source of Facebook’s discontents and how to save democracy from it, click here.
For Democrats’ core values, click here.
The Last Adult is Leaving the White House. Who will Shut Off the Lights?
For how our two parties lost their souls, click here.
For the dire portent of Putin’s high-fiving the Saudi Crown Prince, click here.
For updated advice on how to drive on the Sun’s power alone, or without fossil fuels, click here.
For a 2018 Thanksgiving Message, click here.

Links to Posts since January 23, 2017

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