Brief comment on North Korea

May 24th, 2018

So the summit is off for the moment. No one knows what’s really going on, though in our view the Bolton comments were unhelpful. The change was quick and dramatic from Kim’s meeting with South Korea, freeing prisoners and so forth, and then getting all frosty. There are many possible explanations. Maybe Kim was facing a revolt among his senior military people. Maybe Iran said they’d finance new nuclear facilities in NK in the wake of US tearing up the Iran deal. Who knows? Certainly not the talking heads on TV. Longer term it appears to us that China would like a nuke free Korean peninsula, and if that is true, we believe Xi will make it happen. Stay tuned.

Right up there

May 24th, 2018

We think our previous post, SpyGate, ObamaGate or whatever, is right up there among our favorites, focusing on patterns that coalesce into a story (in this case a story that has been the same for around 2 decades). We also very much like the sharia deficiencies one (which Saudi Arabia lately has been seeming to acknowledge as true), and one of our all-time favorites, about how our amazing tech progress of the last hundred years has produced the ungrateful nincompoops of today.

We’ve entered an eerie time in the country, where a scandal 10x to 100x worse than Watergate is given a pass — guys like Roger Simon and Andy McCarthy have excellent facts and logic, but not much attention is paid by the mainstream media.

What is needed for Mr. Green Jeans to wake up Grandfather Clock to a scandal that makes the 1950’s look like heaven on earth? Evidently the MSM are missing in action for all of this. Oh well.

Would that be Spectre or Smersh, Mr. Bond?

May 23rd, 2018

So far Spygate is, without a doubt, the worst James Bond movie ever made, and that includes the dreadful original Casino Royale that we endured watching.

It has all become blindingly obvious what happened. The lowlifes running the CIA, the FBI, and acting as DNI were also running an Obama / Chicago Style scheme to keep the White House in Democrat hands. The closest that things got to Russia is that one of these guys voted for a Commie President in a US election.

The whole thing was a fraud from Day One, which dates back to 2011, when the US intel community vastly expanded its surveillance authority. (Hmmm, did they spy on Romney back then? Answer: yes, if they had thought it would do them some good in 2012, since empowering that was one purpose of the 2011 changes.) We love that Susan Rice beautifully revealing CYA email from Inauguration Day 2017 stating that Obama wanted everything done “by the book.” That’s pretty close to a signed confession in itself.

So why Russia? The most obvious answer is that the thugs needed to cloak their sleazy activities with some foreign policy cover in order to be cool under the rules that they put in place in 2011.

And how do we know it was a complete scam? Well, as the invaluable Sharyl Attkisson points out, “secret surveillance was conducted on no fewer than seven Trump associates: chief strategist Stephen Bannon; lawyer Michael Cohen; national security adviser Lt. Gen. Michael Flynn; adviser and son-in-law Jared Kushner; campaign chairman Paul Manafort; and campaign foreign policy advisers Carter Page and George Papadopoulos.” Talk about overkill.

But even then, we’re understating it. Clapper said on TV that they were actually helping Trump with surveillance because of those nasty Ruskies. (1) If that were so, why didn’t they let Trump in on this info. (2) If Putin was as bad as all that, how could the US thugs possibly know that he wouldn’t play both sides, and thus 7 Clinton campaign workers should have been surveilled………or maybe at least one.

And how do we know this is Chicago Style at work? The pattern is obvious. Obama only got to the Senate in 2004 because both his opponent in the primary, and then his opponent in the general election, were both hit with perfectly timed scandals that worked to his benefit and came from the sudden release of non-public information. Gosh, how can such a thing happen? Well, for starters, Obama lost a 2000 primary election and he was not about to let that happen twice — hence Chicago Style surveillance was put in place.

So that’s pretty much the story, and Spygate could improve if at the end of the movie some of the nice people above were issued orange jumpsuits.

Interesting numbers, even those we disagree with

May 22nd, 2018


China, not the U.S., is the world’s largest economy. Though the U.S. is still tops when measured at market-exchange rates, China is about 20 percent larger after adjusting for the lower cost of goods and services there. The latter metric is what really counts, both in terms of standards of living and, probably, in terms of military purchasing power.

With four times as many people as the U.S., it makes sense that China would eventually have a larger economy; it’s unlikely that any industrialized country — including the U.S. — can maintain a fourfold productivity advantage over another forever. For China, just being bigger than the U.S. is a pretty low bar. But that leaves the question of just how dominant China will eventually be in the world economy.

Chinese gross domestic product growth now is holding steady at about 6.5 percent. Supposing for the sake of illustration that the rest of the world grows at 3 percent, a 6.5 percent growth rate would mean that China would constitute a quarter of the world economy by 2029 — just 11 years from now — and 40 percent of the world economy by 2050

By the 2060s, within the lifetime of today’s teenagers, China would account for more economic activity than the rest of the human race combined.

In comparison, the U.S. share of world GDP never reached 40 percent even at the end of World War II, and was usually less than 25 percent during the 20th century. In other words, China is almost certain to become more economically important than the U.S. was during the past century.

But it’s very hard to maintain a 6.5 percent growth rate for four decades straight. As recently as 2011, in fact, China’s GDP grew almost 10 percent, a rate it had exceeded a number of times during the prior two decades. There are reasons to believe that a further slowdown is in the offing. Despite headlines proclaiming China’s remarkable advances in industry after industry, the country is bumping up against some fundamental constraints.

In 2013, China specialists Damien Ma and William Adams wrote a very prescient book entitled “In Line Behind a Billion People: How Scarcity Will Define China’s Ascent in the Next Decade.” Ma and Adams lay out many of the constraints China will have to face during the coming decades — scarcities of food, resources, housing and potentially of political unity as well. Already, events seem to be bearing out their predictions.

China’s most important scarcity will be warm bodies. Though the one-child policy has been replaced with a two-child policy, fertility rates remain well below the replacement level. Already, as the result of decades of population repression, the number of working-age people in the world’s largest country has begun to shrink.

The total number of Chinese people between the ages of 15 and 60 began to fall all the way back in 2012, and decreased by an estimated 5. 48 million in 2017. Some forecasts have the working-age population falling by almost a quarter by midcentury. That’s assuming that fertility rates don’t fall even further, as they might if China follows the same pattern as its neighbors, South Korea and Taiwan. A smaller country means a smaller total GDP, and it also means rapid population aging. Fewer workers supporting more retirees, and an older, less productive workforce mean slower growth, as countries such as Japan have discovered.

In addition, China may no longer be able to get a growth boost from urbanization. When people live close together in cities it increases productivity, since it’s easier for them to exchange goods and services. For decades, millions upon millions of Chinese people flowed from farms and small towns into the country’s big cities. But there are signs that this process is coming to an end.

Part of China’s slowing urbanization is due to low fertility and the emptying out of agricultural regions. But part of it is due to policy. Beijing and Shanghai have moved to reduce their populations, and Beijing has violently expelled many migrant workers. If displaced urbanites move to mid-tier cities, the economic damage could be limited, but if they return to live in small towns, it could act as a brake on growth.

A third constraint is energy. China is still very reliant on coal power, but thanks to environmental concerns, supply bottlenecks and simple lack of resources, the country’s coal consumption has been falling since about 2013. Coal will hopefully be replaced with cheap solar power, and the country will be able to improve energy efficiency, so lack of coal won’t send the economy grinding to a halt, but it will take time and money to make these changes.

These are China’s biggest constraints, but not the only ones. The country’s businesses have relied on a flood of cheap capital from state-owned banks, but that flow may trickle off as more capital is misallocated. The country’s lack of freedom and highly intrusive surveillance state may deter talented people from working there or achieving their full potential. Dependence on food imports also will continue to be a problem. Finally, China’s ability to get technological advancement on the cheap, by stealing or reverse-engineering technologies from more developed countries, will dry up as the country runs out of ideas to grab, ending the era of easy catch-up growth.


China says it has landed long-range bombers for the first time on an island in the South China Sea, the latest in a series of maneuvers putting Beijing at odds with its neighbors and Washington over China’s growing military presence around disputed islands.

The People’s Liberation Army Air Force (PLAAF) announced on Friday it successfully organized the takeoff and landing of several bombers, including the nuclear-capable H-6K, on an unspecified island. The PLA claimed the mission was a part of China’s aim to achieve a broader regional reach, quicker mobilization, and greater strike capabilities.

“The islands in the South China Sea are China’s territory,” Chinese Foreign Ministry spokesperson Lu Kang said in a statement Monday. “The relevant military activities are normal trainings and other parties shouldn’t over-interpret them.

“As for the so-called militarization mentioned by the US, what we do is fundamentally different from the US sending its military aircraft and warships from thousands of miles away to this region and posing a threat to other countries.”

“Though the U.S. is still tops when measured at market-exchange rates, China is about 20 percent larger after adjusting for the lower cost of goods and services there. The latter metric is what really counts, both in terms of standards of living and, probably, in terms of military purchasing power.” Well, OK, but PPP has large limits.

Somber bonus: idiots perhaps, but one way or another, they are getting paid for this nonsense.

This and that

May 21st, 2018

Good piece of course by VDH on the current awfulness. Two different postures towards Israel and Iran (here and here) – take your pick. (More Iran grossness here.) And just a little funny stuff. Little update: we also note this Wretchard piece which mentions that Rice email, which is so, like, sixth grade or maybe even fifth grade. It’s actually very funny to think about.

Both sides now

May 20th, 2018

As usual, we listened to Ian Masters and his guests on our jog. For the first time, we came to appreciate their genuine belief in Russia collusion. After all, wouldn’t both sides do whatever it took to win, assuming they thought they could get away with it? And indeed, via Lifson and Greenwald, we learn that the nastiness has been bi-partisan and of long standing. Things might change a bit if some very senior miscreants wound up in jail, but that hasn’t happened, except for an event or two in a long time.

Bonus brain damage: Sharyl Attkisson has a detailed timeline that might make you dizzy.

Other reading

May 20th, 2018

Freud, Lippmann – these are pieces about the long decline of American culture, though we disagree because we think that things were pretty much ok until the 60’s. Neo-Neo has a good piece on the current mess. The Alinsky factor. And Sollozzo, or maybe another Turk.

20,000,000,000,000,000,000,000 planets and thus…

May 19th, 2018

As we were just saying, there are quite a few planets in the galaxies we know about so far. And thus — aliens! But not the naughty kind.

Suddenly a staccato burst split the air

May 19th, 2018

There are many interesting reads today, but we’ll begin with this very dense piece at ZeroHedge. The title of this post arises from a commenter who said that this whole mess is beginning to sound like a Robert Ludlum novel with all the FBI, MI6, CIA etc. mess and intrigue. We’ve read a number of those Ludlum books and don’t remember much except every few pages there’d a a new Boom!, Bang!, or staccatto burst. We can’t keep up with all this.

Mini-fun bonus: a new book about the president.

China’s naval plans

May 19th, 2018

From page 63 of this:

From a naval perspective, the Chinese People’s Liberation Army Navy (PLAN) is pursuing a mix of high-end and low-end ships and submarines. This strategy would allow the PLAN to spread out across the vast Pacific Ocean in sufficient numbers to locate and interdict U.S. ships. At the high end, China is investing in aircraft carriers, nuclear-powered fast-attack submarines and large surface combatants equipped with advanced radars, surface-to-air missiles (SAMs) and surface-to-surface missiles…Backed by a growing arsenal of longer-range and more sophisticated air and missile weapons, the Chinese navy will have a highly capable and numerically larger maritime force by the middle of the next decade. If this situation comes to fruition, it could make the projection of U.S. naval power cost prohibitive in the western Pacific, undermining the credibility of our alliance commitments.

Given my estimate that the future size of the PLA Navy will be about 550 warships and submarines by 2030 – twice the size of today’s U.S. Navy, it is clear the U.S. Navy is at great risk of not being adequately sized or outfitted to meet our national security commitments in the Indo-Pacific, let alone around the globe. Therefore, to accomplish all of the above missions, to provide a credible deterrent against PRC hegemony and to be able to fight and win wars at sea, the U.S. Navy must get bigger.

As I stated at the beginning of this paper, I am an intelligence officer, not a U.S. Navy force structure expert, but the evidence that a strategic gap between the U.S. Navy and PLA Navy is on the verge of exploding over the next decade and a half is overwhelming. As such, it seems clear to me that to keep even a modicum of parity with the Chinese, the U.S. Navy will require more than 355 ships.

Interesting reading. Why on earth should anyone think that China doesn’t want, at a minimum, regional hegemony over everything in the South China Sea’s area? HT: PJ

Mini-bonus: the media beclown themselves daily.

Tourism, current account, and forex reserves

May 18th, 2018


China was a leading culprit in global economic imbalances. Whether blame was ascribed to its undervalued yuan or its frugal people, the problem seemed clear. China was selling a lot abroad and buying too little back. One data-point summed this up: its current account surplus reached 10% of GDP in 2007, well above the level that is generally seen as reasonable. Far less attention has been paid to its steady decline since then. In the first quarter of 2018 China ran a current-account deficit, its first since joining the World Trade Organisation in 2001.

China still exports many more goods than it imports, to the tune of nearly $500bn annually. But its share of global exports appears to have peaked. At the same time its trade deficit in services is getting bigger, largely thanks to all its tourists venturing abroad. At bottom, a current-account balance is the difference between a country’s investment and savings. When China had a big surplus, its savings, at 50% of GDP

If China’s current-account deficits become more frequent, it will have to run down its foreign assets or borrow more from abroad to pay for its consumption. Should its external liabilities—that is, money it owes the rest of the world—increase rapidly, that might signal greater financial vulnerability. But as long as the increase is moderate, it could actually help China by boosting the yuan’s global profile.

China’s forex reserves stopped growing a long time ago, and are way down now. We still think that 2% GDP growth forecast is nutty, however.

Hadn’t noticed this before

May 18th, 2018

As you know, we have a very active soundtrack of music often playing in the background. It’s very eclectic and features everything from the Brahms string quartets to, at this moment, Ahab the Arab. Jeesh! It’s probably playing because we’ve been pursuing a business venture like another fellow went after a whale. In any event, we’re mentioning this because of Scott Johnson’s reflections on John Lennon on Mother’s Day. We had never thought about how sad many of the songs he wrote were. Oh well, we have now.

Soundtrack update: Puffing Billy; Let’s ride with the family down the street, through the courtesy of Fred’s 2 feet; so long, small fry. A better time in many ways.

Wrong song

May 17th, 2018

So the FBI crooks called their criminal secret plan to get rid of Trump Crossfire Hurricane, eh? Wrong song. It should be — very, very appropriately — Sympathy for the Devil, about which we’ve written several times, currently asking if the young today could even understand the historical references. Answer: no way. Bonus: Camille Paglia’s thoughts from a long time ago.

As Spock would say, fascinating

May 17th, 2018

The Atlantic channels Spock:

the technological advance that most altered the course of modern history was the invention of the printing press in the 15th century, which allowed the search for empirical knowledge to supplant liturgical doctrine, and the Age of Reason to gradually supersede the Age of Religion. Individual insight and scientific knowledge replaced faith as the principal criterion of human consciousness. Information was stored and systematized in expanding libraries. The Age of Reason originated the thoughts and actions that shaped the contemporary world order.

But that order is now in upheaval amid a new, even more sweeping technological revolution whose consequences we have failed to fully reckon with, and whose culmination may be a world relying on machines powered by data and algorithms and ungoverned by ethical or philosophical norms…at a conference on transatlantic issues, the subject of artificial intelligence appeared on the agenda. I was on the verge of skipping that session—it lay outside my usual concerns—but the beginning of the presentation held me in my seat.

The speaker described the workings of a computer program that would soon challenge international champions in the game Go. I was amazed that a computer could master Go, which is more complex than chess. In it, each player deploys 180 or 181 pieces (depending on which color he or she chooses), placed alternately on an initially empty board; victory goes to the side that, by making better strategic decisions, immobilizes his or her opponent by more effectively controlling territory.

The speaker insisted that this ability could not be preprogrammed. His machine, he said, learned to master Go by training itself through practice. Given Go’s basic rules, the computer played innumerable games against itself, learning from its mistakes and refining its algorithms accordingly. In the process, it exceeded the skills of its human mentors. And indeed, in the months following the speech, an AI program named AlphaGo would decisively defeat the world’s greatest Go players.

As I listened to the speaker celebrate this technical progress, my experience as a historian and occasional practicing statesman gave me pause. What would be the impact on history of self-learning machines — machines that acquired knowledge by processes particular to themselves, and applied that knowledge to ends for which there may be no category of human understanding? Would these machines learn to communicate with one another? How would choices be made among emerging options? Was it possible that human history might go the way of the Incas, faced with a Spanish culture incomprehensible and even awe-inspiring to them?

The most unusual thing about the piece is that the author is 94 years old. So that’s what the humans are up to here. But there are an awful lot of heres. The universe has 200 billion galaxies, maybe more, and the Milky Way alone has 100 billion planets. (Our family had a 1963 galaxie convertible, which as far as we know, stayed on earth; we enjoy the Milky Way, but prefer Snickers.)

So there are something like 20,000,000,000,000,000,000,000 planets, give or take. So if a mere one in a billion planets is habitable, that’s 20,000,000,000,000 planets that may have life on them. (Our math may be off by a few zeroes but what the heck?) So there are quite a few space aliens, enough to easily inhabit the outer limits. No doubt quite a few of these space aliens have already visited earth. If you doubt that, consult Scott Johnson.

In any event, we don’t have any specific thoughts on AI, except that we thought we saw evidence of it over fifty years ago.


May 16th, 2018

We’re not going to comment on North Korea now. Let’s wait and see what happens. Having said that, a little paranoia would not be unusual in NK. Bonuses: this is a very long piece and it takes some study to figure it all out. On the other hand, this doesn’t take a lot of concentration to figure out the message.

Some bonus entertainment things from Nick Danger, Third Eye, and our soundtrack: how about the time we shouted out at the beginning of a college screening of some movie “It’s his sled.” Or the time C,S,N, or Y intoned prior to some song in a concert we attended, “here’s one you’ll never hear on AM radio” (it peaked at 14 BTW). Toad was good, but we got bored (duh) at a Hendrix concert.

Today’s chuckle

May 15th, 2018


China’s growth will slow to 2% by the end of the next decade from 6.9% last year, a London-based research firm has predicted, painting a gloomy picture for the world’s second biggest economy. The report presents an unusually bearish view on the future of China’s $12 trillion economy and casts doubt on its growth model at a time when a growing number of institutions – including the International Monetary Fund – are agreeing with Beijing’s assertion that the country will continue to report steady, albeit slightly slower, expansion.

The country has reported almost uninterrupted strong growth in the last four decades, evolving from an economic backwater to a global powerhouse. It recorded the first acceleration in seven years with annual growth of 6.9% in 2017, accounting for nearly one-third of global growth.

China’s expansion last year outpaced most developed countries – such as 2.3% in the United States and the euro zone – but was slightly lower than India’s 7.1%. Beijing does not expect a sharp deceleration. Cai Fang, vice-president of the Chinese Academy of Social Sciences, a prominent government think tank, told the South China Morning Post in March that economic growth was expected to remain above 3% through 2050.

So China’s economy grew 13x in the last twenty years but will come to a near standstill shortly. Ok then. And that’s not the only chuckle for zim and zir.

Beware of those parading their moral superiority

May 14th, 2018

John Kelly said some sensible things, and of course was belittled, ridiculed, and called a fool and a liar. As standards continue to decline in US education, why the faux or perhaps real outrage? We’ve formulated a thesis recently (duh!) that those preening their moral superiority are pretty much the opposite of what they claim. We linked to Thomas Sowell on a related matter, and that seems to be what’s happening. As always, we go back to the iPod thing and the fact that the youthful consumers of wealth and great longevity today are in major portion fools who have never created a job, invented anything, or otherwise contributed to their historically aberrant good fortune. Guilt breeds blame, or something like that. (Final point: what plane does the Gorina fly on?)

China 2025

May 14th, 2018


Chinese economic policy still reverts to a planned model. The meticulous planning extends to China’s own economic expansion aims, something in evidence in the “Made in China 2025″ strategy paper. Presented in 2015, that document lists 10 key areas in which China intends to become a world leader by 2025. The scope of ambition is huge; aerospace, industrial robots and software, high-speed trains, electromobility, the modernization of power grids, medical tech, semi-conductors — it’s all in there.

Many of these industries are ones in which the Germans have led for years. Beijing is working hard on building an Industry 4.0 vision to rival Germany’s. But unlike in Europe’s economic powerhouse, China’s digitization drive is being led by the state rather than coming organically. And every two years, the decisions of the Chinese leaders are put to the test and re-adjusted if necessary.

In several sectors — telecommunications, high-speed trains, power generation — China is already well on the way to achieving its 2025 goals. “China is well on the way to becoming one of the world’s leading manufacturers of robotics and alternative powertrain vehicles,” says Jaqueline Ives from the Mercator Institute for China Studies (MERICS) in Berlin. “The problem areas are industrial software and the semiconductor industry.”

Many of these industries are ones in which the Germans have led for years. Beijing is working hard on building an Industry 4.0 vision to rival Germany’s. But unlike in Europe’s economic powerhouse, China’s digitization drive is being led by the state rather than coming organically. And every two years, the decisions of the Chinese leaders are put to the test and re-adjusted if necessary.

In their attempts to establish a world-leading semiconductor industry, the Chinese are experiencing strong resistance from the US, particularly with regard to planned acquisitions of American chip companies. In April, the US imposed a seven-year ban on US companies supplying components to Chinese telecommunications firm ZTE.

In addition, recent takeover attempts have failed, such as the $146-billion (€122-billion) bid from Singapore-controlled Broadcom to take over US chip giant Qualcomm. US President Donald Trump banned the sale himself, saying US national security interests were threatened by such a large scale technology transfer to Asia. Meanwhile, Broadcom’s corporate headquarters have relocated back to the USA.

The semiconductors example illustrates just how carefully China is planning things. Via the state-controlled “China Integrated Circuit Industry Investment Fund,” the government hopes to provide an additional €25 billion in 2018 to help Chinese companies buy high-tech chip companies around the world, according to Bloomberg.

Re ZTE via NYT: President Trump tweeted on Sunday that he was working with his Chinese counterpart, Xi Jinping, to prevent the collapse of the Chinese electronics giant ZTE, which shut down major operations after being sanctioned by the United States Department of Commerce last month. “Too many jobs in China lost,” Mr. Trump wrote. “Commerce Department has been instructed to get it done!”


May 14th, 2018

Thomas Sowell.

Be afraid, be very afraid

May 14th, 2018


I only met John Bolton once, back in the President Bush days when “neo-cons” strode the world assuring us that our hearts should rest at ease with the United States as the world’s policeman. I remember three reactions: first, that he held some very unhinged views of what is going on in Asia in general, and China in particular. Second, someone with such strongly held fanaticisms is scary. And third, thank goodness he does not have practical power in Washington. Now he sits at Donald Trump’s elbow, alongside the similarly scary Peter Navarro, author of Death by China, and I barely dare think in any detail about what is going to happen next.