The Dive - 1/1/21

Your monthly compilation of what's what on global politics, American society, and an assortment of odds and ends

Jan 01, 2021

Quote of the Month

“I am indeed recommending leisure, but a leisure that will allow you to do greater and fairer deeds than what you leave behind. Knocking on the doors of the high and mighty, drawing up alphabetical lists of elderly persons without heirs, wielding great power in the forum - all such power is brief, invidious, and if truth be told, sordid. One man will be far ahead of me in political influence, another in military service and the prestige that it confers, a third in the extent of his patronage. I cannot equal them; their influence is greater than mine - but I don’t mind being beaten by everyone: it’s worth it, as long as I am the victor over fortune.”

- Seneca, Letters on Ethics, 68.10-11

My recent scribblings:

1. Why competition with China could be “short and sharp”

Why you should read it: In Foreign Affairs, Michael Beckley and Hal Brands argue that strategic competition between the United States and China will more resemble a short but strenuous sprint than a century-long marathon.

“Much debate on Washington’s China policy focuses on the dangers China will pose as a peer competitor later this century. Yet the United States actually faces a more pressing and volatile threat: an already powerful but insecure China beset by slowing growth and intensifying hostility abroad… China’s window of opportunity may be closing fast. Since 2007, China’s annual economic growth rate has dropped by more than half, and productivity has declined by ten percent… Meanwhile, global anti-China sentiment has soared to levels not seen since the 1989 Tiananmen Square massacre. Nearly a dozen countries have suspended or canceled participation in Belt and Road Initiative (BRI) projects. Another 16 countries, including eight of the world’s ten largest economies, have banned or severely restricted use of Huawei products in their 5G networks. India has been turning hard against China since a clash on their shared border killed 20 soldiers in June. Japan has ramped up military spending, turned amphibious ships into aircraft carriers, and strung missile launchers along the Ryukyu Islands near Taiwan. The European Union has labeled China a “systemic rival”; and the United Kingdom, France, and Germany are sending naval patrols to counter Beijing’s expansion in the South China Sea and Indian Ocean. On multiple fronts, China is facing the blowback created by its own behavior.”

“Many people assume that rising revisionists pose the greatest danger to international security. But historically, the most desperate dashes have come from powers that had been on the ascent but grew worried that their time was running short…Given that China is currently facing both a grim economic forecast and a tightening strategic encirclement, the next few years may prove particularly turbulent… Today, the United States again needs a danger-zone strategy, which should be based on three principles. First, focus on denying China near-term successes that would radically alter the long-term balance of power. The most pressing dangers are a Chinese conquest of Taiwan and Chinese preeminence in 5G telecommunications networks. Second, rely on tools and partnerships available now or in the near future rather than assets that require years to develop. Third, focus on selectively degrading Chinese power rather than changing Chinese behavior. Seduction and coercion are out; targeted attrition is in. Such an approach entails greater risk. But the United States must act assertively now to prevent more destabilizing spirals of hostility later.”

Why it matters: “Successfully navigating the danger zone will not end U.S.-Chinese competition, any more than surviving the early Cold War brought that rivalry to a close. Today, the reward for skillful statecraft will simply be a somewhat less volatile Sino-American rivalry. That rivalry may still be global in scope and extended in duration. But the possibility of war might fade as the United States shows that Beijing cannot overturn the existing order by force and Washington gradually grows more confident in its ability to outperform a slowing China. Now as before, the United States can win a long rivalry, so long as it weathers the coming crisis.”

2. Why China is pulling back from its expansive “Belt and Road”

Why you should read it: Financial Times journalists James Kynge and Jonathan Wheatley observe that Chinese political leaders appear to be reconsidering the wisdom of their “project of the century,” the $1 trillion-plus Belt and Road Initiative.

“What was conceived as the world’s biggest development programme is unravelling into what could become China’s first overseas debt crisis. Lending by the Chinese financial institutions that drive the Belt and Road, along with bilateral support to governments, has fallen off a cliff, and Beijing finds itself mired in debt renegotiations with a host of countries… The data that describes China’s predicament comes from researchers at Boston University who maintain an independent database on China’s overseas development finance. They found that lending by the China Development Bank and the Export-Import Bank of China collapsed from a peak of $75bn in 2016 to just $4bn last year… If it persists, it will exacerbate an infrastructure funding gap that in Asia alone already amounts to $907bn a year, according to Asian Development Bank estimates. In Africa and Latin America — where Chinese credit has also formed a big part of infrastructure financing — the gap between what is required and what is available is also expected to yawn wider.”

“Overall, though, China’s rethink betrays a tacit recognition that its overseas lending bonanza has been ill-conceived… Debt sustainability — or the ability of debtor countries to repay their loans — had to be part of any reassessment of the Belt and Road Initiative, says Kevin Gallagher, director of the Boston University Global Development Policy Center, which compiled the data on Chinese overseas lending… Debt renegotiations have proliferated as the pandemic has clobbered emerging economies in Africa and elsewhere. A report by Rhodium Group, a consultancy, says at least 18 processes of debt renegotiation with China have taken place in 2020 and 12 countries were still in talks with Beijing as of the end of September, covering $28bn in Chinese loans.”

Why it matters: “So far, Beijing appears keen to pursue a soft touch, deferring interest payments and rescheduling loans. But the experience is reinforcing a growing sense of wariness that now infuses Mr Xi’s big project… China is finding out, says Mr Hillman, that ‘risk runs both ways along the Belt and Road and the damage can return to Beijing.’”

3. How China has fallen behind on semiconductor manufacturing

Why you should read it: Foreign Policycolumnist Salvatore Babones explains why Chinese companies just can’t make microchips of comparable quality to those produced in the United States, Taiwan, South Korea, and Japan.

“China has the ambition, and it can do things at scale. It can also raise the money, even (when necessary) from unlikely sources. But it lacks the broad ecosystem of commercial cooperation, intellectual property protection, and intelligent venture capital that makes deep technology collaboration possible. China’s command economy is a cookie-cutter economy, but high technology is a networking game… China’s electronics industry relies on U.S., Taiwanese, South Korean, and Japanese suppliers for many key components, but the most strategic of strategic technologies is the microprocessor. And despite years of strategic investment, China has (so far) been unable to master the production of these highly specialized but utterly ubiquitous computer chips.”

“If China has been unable to match its international competitors on microprocessors, it’s not for want of trying—or spending. China established a $22 billion National Integrated Circuit Industry Investment Fund in 2014 (known as the Big Fund) in a bid to reduce its reliance on imported chips, but to little avail. Today, only 16 percent of China’s semiconductors are made locally, and these tend to be the least sophisticated in every category. Last year, China announced a second Big Fund to invest a further $29 billion in semiconductor development… Despite all the promised investment, China’s chipmakers and designers now seem to be short on cash. Huawei going cap in hand to the Shenzhen government is no surprise, given its high exposure to the U.S. and Indian markets. But other Chinese chipmakers with little connection to the United States are also facing financial difficulties. Wuhan’s Hongxin Semiconductor Manufacturing Company had promised to build China’s first 7-nanometer chip fab, but ran out of money in August. It has since been taken over by the municipal district government—effectively a bailout… If China is allowing such well-connected firms as semiconductor foundries and university research groups to go bust, financial conditions in the country must be much more dire than its announcements of multibillion-dollar investment funds would suggest.”

Why it matters: “China made chipmaking its top civilian technology priority of the last decade, but it has little to show for it. Even before many of its leading companies were hit with U.S. export and financial controls, China proved itself unable to establish a competitive presence in the market for relatively simple memory chips—never mind complex microprocessors. As the cutting edge of chip design goes even farther down the path of multiple integration, with CPUs, GPUs, AI accelerators, and wireless modems all printed on a single wafer a few molecules wide, China will find it ever more difficult to catch up.”

4. Why we shouldn’t worry about deficits and debt

Why you should read it: In a discussion paper for the Brookings Institution, economists Larry Summers and Jason Furman note that concern over budget deficits and the national debt make little sense in an era defined by persistently low real interest rates.

“The last generation has witnessed an epochal decline in real interest rates in the United States and around the world despite large buildups of government debt… while the future is unknowable and the precise reasons for the decline in real interest rates are not entirely clear, declining real rates reflect structural changes in the economy that require changes in thinking about fiscal policy and macroeconomic policy more generally that are as profound as those that occurred in the wake of the inflation of the 1970s… The decline in interest rates has three important implications: (i) as monetary policy is limited in its ability to stabilize the economy and financial system, fiscal policy must play a critical role; (ii) fiscal sustainability cannot be assessed by traditional debt-to-GDP ratios but should instead be understood with measures like nominal or real interest as a share of GDP; and (iii) many public investments pay for themselves, or come close to paying for themselves, and the risk of not undertaking these investments is larger than the risk of doing too little deficit reduction.”

“The main concerns about fiscal expansion in economic downturns is that they will lead to unsustainable debt and may not be affordable in countries that currently have high debt levels. This concern is misplaced. At a minimum, countries can always come back later to raise revenues or reduce spending in order to get debt trajectories back on a desired course. More importantly, this may not even be needed as fiscal support may help fiscal sustainability by increasing output more than it raises debt, thus reducing the debt-to-GDP ratio… The case for a fiscal expansion in a depressed economy at the effective lower bound does not rest on nor require that fiscal expansions reduce the debt-to-GDP ratio. Fiscal expansions could easily pass a cost-benefit test even without these effects, but to the degree to which the dynamic cost is smaller than the static cost, or even negative, the net benefit will be even larger.”

Why it matters: “Currently the primary worry for policy in the United States and several other countries is doing too little to expand the debt, not doing too much. Low interest rates create more scope and need for expansionary fiscal policy, a reason to reassess views of debt sustainability, and more reason to undertake public investments. Overall U.S. debt service obligations are currently modest and the debt is modest relative to future GDP and the ability to generate taxes from this GDP. Even the more conventional and misleading measure of the debt-to-GDP ratio is stable over the next decade and assuming current law is complied with, which requires both the tax cuts to expire and Social Security reform, it will be essentially stable over the next three decades as well, although could plausibly be anywhere from among the lowest in postwar history to around 190 percent of GDP. Additional investments of about 1 percent of GDP that initially raised the debt above this path could potentially pay for themselves and to the degree they do not would still leave interest as a share of GDP below its historic levels.”

5. How the WTO broke itself

Why you should read it: In the New York Times, editorial board member Farah Stockman outlines how the World Trade Organization’s overweening ambitions resulted in its current woes.

“When the W.T.O. was born in the 1990s, faith in free markets was at a record high. The Soviet Union had just collapsed. The United States, the world’s sole superpower, embraced an almost messianic belief in the ability of unfettered capitalism to improve lives around the world. Americans pushed more than 100 nations to join together to create a strong international body to remove barriers to international trade and protect investors… But the power of the W.T.O. became a problem pretty quickly. Domestic laws and programs that got in the way of ‘free trade’ were swatted aside like cobwebs. The W.T.O. has ordered countries to gut programs that encouraged renewable energy and laws that protected workers from unfair foreign competition, as if international commerce were more important than climate change and workers’ rights.”

“The W.T.O. wasn’t just powerful. It was ambitious. Unlike the previous trade regulator, known as the General Agreement on Tariffs and Trade, which dealt primarily with tariffs, the W.T.O. aimed to tackle a whole host of things that had little to do with traditional trade. That’s partly because of corporations, which lobbied their governments behind closed doors to rewrite the rules of trade to their advantage… The W.T.O.’s decision-making looked even more questionable after the body turned a blind eye to China’s bad behavior. Its judges ruled against government subsidies for locally produced solar panels in the United States and India, on the grounds that they were unfair to foreign producers. But a smorgasbord of subsidies in China were deemed no problem at all. “

Why it matters: “The world has a historic opportunity to change the direction of international trade rules and carve out more space for countries to experiment with solutions to climate change and income inequality… That’s why the incoming administration should use this moment to try to get agreement on some of the deep-seated issues that brought us here in the first place. One reason the world has avoided those tough conversations for so long is that litigation is easier than negotiation. Now that that’s no longer an option, maybe W.T.O. member states will be able to forge an agreement to meet the moment.”

6. What was Trumpism?

Why you should read it: The Atlantic staff writerGeorge Packer President Donald Trump’s legacy and finds it wanting, to say the least.

“America under Trump became less free, less equal, more divided, more alone, deeper in debt, swampier, dirtier, meaner, sicker, and deader. It also became more delusional. No number from Trump’s years in power will be more lastingly destructive than his 25,000 false or misleading statements. Super-spread by social media and cable news, they contaminated the minds of tens of millions of people. Trump’s lies will linger for years, poisoning the atmosphere like radioactive dust.”

“Monopoly of public policy by experts—trade negotiators, government bureaucrats, think tankers, professors, journalists—helped create the populist backlash that empowered Trump. His reign of lies drove educated Americans to place their faith, and even their identity, all the more certainly in experts, who didn’t always deserve it (the Centers for Disease Control and Prevention, election pollsters). The war between populists and experts relieved both sides of the democratic imperative to persuade. The standoff turned them into caricatures.”

Why it matters: “Trump’s legacy includes an extremist Republican Party that tries to hold on to power by flagrantly undemocratic means, and an opposition pushed toward its own version of extremism. He leaves behind a society in which the bonds of trust are degraded, in which his example licenses everyone to cheat on taxes and mock affliction. Many of his policies can be reversed or mitigated. It will be much harder to clear our minds of his lies and restore the shared understanding of reality—the agreement, however inconvenient, that A is A and not B—on which a democracy depends.”

7. How the Tea Party gave birth to Trumpism

Why you should read it: Historian Geoffrey Kabaservice makes the case in the Washington Post that the Trump presidency is the natural outgrowth of the Tea Party movement that emerged a decade ago.

“Periodic upwellings of grass-roots anger and enthusiasm have energized the conservative movement for decades. The first outbreak dates to the ‘America First’ isolationist and nativist groundswell of the late 1930s and early 1940s. Sen. Joseph McCarthy’s Red Scare followed in the early ’50s. Next came the insurgency around Sen. Barry Goldwater’s presidential candidacy in 1964 and the similar movement around Ronald Reagan’s presidential candidacies in 1976 and 1980. Then there was the surge that won a Republican House majority in 1994 — and made Newt Gingrich speaker — and, finally, the tea party… The tea party, though, was something new. It departed from the cyclical pattern of previous conservative movements. The 87 Republicans swept into the House by the tea party wave in 2010 mostly came from gerrymandered conservative districts, so they had no need to moderate to win over Democratic and independent voters; their only threat to reelection was being outflanked from the right in a GOP primary…“The tea party cohort was notable mainly for its anti-institutionalism and breaking of norms… Unlike previous iterations of the conservative movement, the tea party’s opposition to governing and its own party’s establishment was an enduring feature. Its House caucus was defunct by 2012, when most grass-roots tea party activism had also sputtered out. But the tea party ideal lived on — mostly online and out of public view — through the continuing radicalization of its remaining followers.”

“Trump in 2016 articulated grievances that were based on the real problems of non-college-educated Americans in rural regions and postindustrial towns, communities that have been destroyed by job losses, family dysfunction, and epidemics of drug and alcohol addiction. The tea party had also channeled the anger and disappointment of Americans who had lost manufacturing jobs to automation and globalization, who sensed that both parties had permitted much of the economy’s gains to be captured by special interests, and who felt disdained by the cultural elite and ignored by the political elite. But both the tea party and Trump’s movement also were rooted in fact-free conspiracy theories about the treachery of Democrats and elites, who allegedly plotted to destroy the livelihoods and traditions of ‘real Americans’ for their own benefit… Trump and Republicans in Congress could have chosen to pursue policies that would have improved the lives of their supporters. But the tea party’s contempt for policymaking carried over into the Trump administration; the GOP couldn’t even be bothered to assemble a platform at this year’s convention… Trump’s permanent revolution has no fixed principles other than smashing a nebulous ‘deep state,’ forcing all institutions of society to bend to its will, and waging never-ending war against Democrats, independents and non-Trump Republicans. It has become a perpetual grievance machine unwilling (and unable) to address those grievances through governance or the legislative process. And in refusing to accept Trump’s defeat, the conservative movement increasingly insists that the rule of law, truth and democracy are what the revolution says they are.”

Why it matters: “When all is said and done, though, Trump lost reelection despite the political advantages that accrue to an incumbent president. That strongly suggests that he did not somehow repeal every law of political gravity. At some point, a party has to deliver more than grievance-mongering. The GOP’s donors will want something to show for their investments. The party’s constituents — especially the non-college-educated, working-class citizens who make up much of the Republican base — need the government’s help with their problems. And the party’s long-term viability may be in doubt if a strategy of mindless, implacable obstruction endangers the stability and prosperity of the country, causing too many voters to consider it an existential threat. Cynical political realism, if nothing else, suggests that the Republican Party can’t carry on forever as a permanent revolution.”

8. Why the fight against climate change requires carbon capture

Why you should read it: Science-fiction author Kim Stanley Robinson contends in Bloomberg that any serious attempt to combat climate requires the removal of carbon from the atmosphere, akin to a sewer system for the skies.

"Decarbonizing our energy and transport sectors as quickly as possible remains the centerpiece of every serious plan to deal with this danger, including President-elect Joe Biden’s, but everything else ever suggested has to be considered, too… Among these all-hands-on-deck possibilities are technologies to draw carbon out of the atmosphere and sequester it on or inside the Earth. Sometimes called carbon drawdown or carbon negative, these projects now look more attractive than ever, even necessary. Old objections that the very idea of removing carbon will encourage people to slack off on rapidly addressing the sources of new emissions no longer really obtain when we’re at this point.”

“… it makes sense to discuss a technology we haven’t quite mastered: direct-air capture, or DAC. This process involves using machinery to filter out CO₂ from ambient air, then disposing of the captured gas—either by injecting it underground, binding it to rock, or putting it to industrial use. Drawdown machines, if scaled up to some significant proportion of the need, would help us a lot…. DAC is sometimes compared to the auto industry. A car, like carbon-drawdown machinery, is complicated and expensive. Yet we build millions of them each year, because we like what they do. An even better comparison may be to a sewage-treatment plant—a costly tool to deal with waste we can’t ignore. We’re spewing billions of tons of carbon waste into our life support system; as with our other wastes, it needs to be properly disposed of if we aren’t to poison ourselves. Paying for that cleanup is necessary, whether it’s for street sweepers or air scrubbers.”

Why it matters: “The carbon and material costs of building so many units would have to be calculated into the overall cost-benefit equation, but these factors pertain for everything we manufacture, even for vital climate solutions such as lithium-ion batteries and solar panels. We seem to think those costs are worth it. In the case of DAC, pulling CO₂ out of the air is a pure good, without possible bad side effects. We won’t be in danger of overdoing it and creating a new ice age anytime soon! And if we ever did get to that point, it would be a nice problem to have… In an all-hands-on-deck emergency, direct-air capture could become one of the strongest hands. It’s worth looking into.”

9. How contemporary social justice activists depend on the coercive apparatus of the state to punish ordinary people

Why you should read it: British journalist Nick Cohen observes in The Critic that the contemporary trans-Atlantic social justice movement relies on the power of the state to compel adherence to its ideology and edicts.

“The social justice movement needs the repressive capitalist state it professes to oppose. Without the power of governments to enact punitive laws, and of corporations to compel workers to change or pretend to change their behaviour, it will fail. Like the early Christians, social justice warriors win by capturing power rather than persuading pagans through argument to see the light of their gospel… For the social justice movement, if I can use the label to capture the whirling confusion of middle-class leftish protest, is not concerned with challenging the elite. It wants to be the elite. As befits a movement staffed by the educated children of the bourgeoisie, its main concern is to control the masses. Average people get abused as regularly as the famous. The socialist concept of oppressive power pressing down from above has been replaced by the Foucauldian notion of oppressive power circulating at all levels via problematic discourses that need to be corrected. Needless to add, those with the time and education to address thought crime are drawn from the ranks of the privileged.”

“They [ordinary people] are targets because the social justice movement wants a revolution in manners of the masses that is beyond the ability of normal democratic politics to achieve. Because the fight is impossible to win by argument, social justice warriors, like all utopians, must resort to duress. The explanation for their authoritarianism is not hard to find if you study their ideology. It could never convince anyone beyond a zealous minority because its ideas are strange beyond measure…The social justice movement appears to be concerned about racism but it does not understand that true racists work hard at being racists. White supremacists notice every black and brown face. Antisemites compile lists of Jews in politics and the media. Racists are like snobs: they are always on duty, always finding reasons to justify their superiority and contempt. You can only believe that the unconscious biases of ‘white progressives cause the most daily damage to people of colour’ if you choose to minimise actual racists.”

Why it matters: “As is becoming clear, a free society cannot remain free if it attempts to implement this ideology. Everywhere employers are told they must not only educate staff but they must fire real and imagined wrongdoers. The old principle of trade unionism that employees should be protected from the boss has been forgotten. Indeed, the least discussed aspect of the social justice movement is that it can flourish because trade unions appear in terminal decline in the US and UK. Rather than being contested, the dictatorial power of the employer to dismiss is embraced, most notably in liberal-left institutions… You might not care what academics and students think. But ideas seep out of the lecture hall and students join the elite. There is nothing new in today’s radicals becoming tomorrow’s establishment. Their willingness to reject the core principle of Enlightenment liberalism and the scientific method that arguing without constraint is the best way to advance humanity, however, remains novel and well worth fighting.”

Odds and Ends

How an ancient Roman snack bar recently unearthed in Pompeii reveals the street food popular in the year 79 AD…

How a Swedish extreme hiking team came to adopt the Peruvian stray dog that joined their squad…

How the COVID-19 pandemic created breadlines at churches in Rome across the street from empty restaurants…

How the St. Paul, Minnesota maker of the Nut Goodie and Salted Nut candy bars became beloved by crafter brewers across the nation…

Scientists describe a “bizarre” new dinosaur species discovered in Brazil possessing a mane of fur down its back and four rod-like structures on its shoulders…

Music of the Month

“evermore,” the title track from Taylor Swift’s second surprise album of 2020.

“Goodbye & Good Riddance to Bad Luck,” from AC/DC’s 1990 album The Razor’s Edge.

“If I Was The Priest,” off Bruce Springsteen’s latest record Letter to You.