Month: April 2019

Quote of the Day

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Dennis Prager, quoting and expanding on Bret Stephens’s explanation of how the New York Times could come to publish an obviously anti-Jewish cartoon:

“The reason is the almost torrential criticism of Israel and the mainstreaming of anti-Zionism, including by this paper, which has become so common that people have been desensitized to its inherent bigotry. So long as anti-Semitic arguments or images are framed, however speciously, as commentary about Israel, there will be a tendency to view them as a form of political opinion, not ethnic prejudice. But as I noted in a Sunday Review essay in February, anti-Zionism is all but indistinguishable from anti-Semitism in practice and often in intent, however much progressives try to deny this.”
 
Exactly right. As I wrote in “Why the Jews? The Reason for Anti-Semitism” 40 years before Stephens wrote his column, there is no difference between anti-Zionism and anti-Semitism. Of course, one can criticize Israel, just as one can criticize any country, but that is not anti-Zionism. Anti-Zionism is not criticism of Israel. It is a hatred of Israel — a hatred greater than that of any other country and a delegitimization of Zionism, the movement to reestablish the Jewish national home. Imagine someone who argued that the establishment of the Italian state — Italy — was illegitimate and who hated Italy more than any other country in the world yet claimed that he was in no way anti-Italian, as he had Italian friends and loved Italian culture. No one would believe such an absurdity.

Seth Barrett Tillman: Why Obama and Clinton Described the Sri Lankan Victims as “Easter Worshippers” and not as “Christians”: A Friendly Amendment for Dennis Prager

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Why do senior politicians across the Western world systematically engage in this and other similar sorts of newspeak? Here, I suggest, Obama and Clinton (and their peers) believe millions of otherwise ordinary American citizens are deplorables. They believe that if they were to discuss the reality of world events with their fellow citizens, and do so without dissembling, then any number of our fellow citizens would organize communal violence, mayhem, and murder—on a mass scale.

Read the entire post.

Anecdotes: The Gas Station Guy

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During bike rides I sometimes stop for refreshment at a particular gas station/convenience store. It is a busy station at a busy intersection – very convenient. The station is usually attended by one of two late-middle-aged taciturn Indian guys. I assume they are related to each other. One of them barely acknowledges me. The second one was like that too until maybe a year ago but now greets me warmly. The second guy is the topic of this post.

At some point I noticed that the second guy sometimes makes errors, generally favoring himself, in ringing up the snacks I buy. Several times he’s shortchanged me by small amounts. Of course he corrects the errors when I point them out. One weekend I realized that I had paid ~$6 for two items that were priced at around $2 each. It was too late to do anything, but the same thing happened again a week or two later and I called him on it. Ah, another mistake – he corrected the charge.

This morning I experienced the most refined version of his game yet. I hadn’t eaten breakfast so I took a piece of cake, a bottle of Gatorade and a small bag of mixed nuts to the register. The total should have been around $6 but it rang up at more than $8. I paid with a credit card and asked for a receipt – he doesn’t give a receipt unless you ask – and mentioned that the total seemed high. He said that the price included two bottles of Gatorade in a two-for-$4 deal and that I should take my second bottle. Why did he wait to tell me this until I requested a receipt? I walked back to the Gatorade rack and the price was listed as $2.67 each, as I remembered. I said that I wanted just one bottle of Gatorade as I had no way to carry a second bottle. Very quickly he refunded, in cash and without further prompting, my $2 overpayment. Slick. I wonder how much he takes in over time through overcharges that customers don’t notice. It’s a busy store.

The upshot is that I stopped at the gas station again later, on my way back, and bought another Gatorade. The gas station guy greeted me warmly and said that if I had paid for two Gatorades earlier I could be picking up the second one now and saving $1.34. I thanked him for his consideration.

President Trump’s ‘Xanatos Gambit’ Trade Policy

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I’ve written previously in my column “President Trump’s ‘Xanatos Gambit’ Government Shutdown” of President Trump’s tendency for building political strategy trees were every possible outcome is to his advantage. (See the “Xanatos Gambit” strategy tree example in the figure below)

 

https://static.tvtropes.org/pmwiki/pub/images/XanatosGambitDiagram_7509.jpg

This is a decision diagram example of a “Xanatos Gambit.“ Source: https://tvtropes.org/pmwiki/pmwiki.php/Main/XanatosGambit

It very much looks like President Trump has done the same thing with the Democrats and “China lobby” GOP Senators with the post-NAFTA US-Canada-Mexico (USMCA AKA “You Smack-A”) trade agreement and the US economy.

THE US ECONOMY, NAFTA & USMACA

The key thing you need to understand regards NAFTA and American manufacturing is that NAFTA was geared to allow the “China lobby” of multinational corporations to use Canada and Mexico as an “international arbitrage opportunity” for Chinese slave labor wage manufactured goods to be assembled at Canadian and Mexican production facilities and avoid American tariffs.

Multinational corporations exploiting this “international arbitrage opportunity” was “The Great Sucking Sound” that Ross Perot talked about which killed the US domestic refined metals industry and hollowed out middle class manufacturing jobs in the American economy.

President Trump’s USMCA removes that “international arbitrage opportunity” via original 75% North American manufacturing content requirements for metals and intermediate manufacturing goods as well as a Mexican minimum wage rules on the order of $15 an hour for automotive parts assembly.

In response the “China lobby” has been paying large campaign contributions to both House Democrats and “free trade” GOP Senators to try and keep NAFTA, as well running info-war spots everywhere in the corporate media and “movement conservative” publications/media outlets about the benefits of “free trade.”  This has resulted in public statements by Speaker Pelosi that the House does not intend to vote for USMCA.

This is where Pres. Trump’s ‘Xanatos Gambit’ strategy tree kicks in via a macroeconomic and trade policy manipulation of the very simple economic equation of gross domestic product:

GDP = US ECONOMIC ACTIVITY + EXPORTS + FOREIGN INVESTMENT – IMPORTS – EXTERNAL INVESTMENT

The American economy just grew 3.2% in the 1st quarter of 2019.  It would have grown another 0.3% but for the 30-odd day federal government shut down.  The “markets” were expecting 2.5% GDP growth.  The huge half-percent GDP “miss” boiled down to:

1. The USA exported more.

2. The USA imported less and

3. There was more external foreign investment than expected.

All three were the result of a combination of Trump administration policies on oil/LNG fracking, tax & regulatory cuts and trade/tariffs.

First point, the USA will be a net energy exporter — of oil, natural gas & coal combined — in 2020 if it isn’t one already.

Some rough numbers:  In 2012 US oil production was ~8 million barrels a day, all for domestic consumption, and in 2019 it is 12.6 million with some exports.  Today’s US oil consumption is 20 million barrels a day.  That increase in oil production that has reduced imports of oil by a net of 4.6 million barrels a day has also been accompanied by the displacement of coal and oil in both electrical production and manufacturing by cheaper natural gas, thus freeing both the coal and oil not used to be exported. This combined economic change since 2012 alone is worth a 1% increase in GDP growth a year compared to 2012.

Second, the Trump administration’s systematic and sustained attack on Obama era federal regulatory growth is reducing business compliance costs particularly in the energy sector for new infrastructure projects.  These are the “anti-green” actions the Democrats accuse the Trump administration of.

Third, the Trump administration/GOP tax bill, in addition to increasing spending power for the middle class, has had a huge -YUGE- reduction in capital gains taxes and a one-time break in repatriating overseas capital holdings. This has made America a much more attractive place to hold and invest money.  Particularly for energy companies like Exxon, which are dropping this foreign capital inflow into the Permian basin for oil and natural gas fracking and energy export infrastructure from the Permian to the Gulf Coast.

Finally, in terms of trade and tariffs, President Trump’s tariffs on Chinese steel and aluminum combined with the business implications of USMCA rules have made further investment in Canadian automotive plants a net loss position.  American metal content is now economically competitive for energy sector infrastructure and automobile parts such that US Steel among others are reopening US metal plants.

Taken together every part of the GDP equation has been directly affected by the Trump administration macroeconomic policies to get that 3.2% GDP number.

This is where the Xanatos Gambit for USMCA arrives.

Things will be worse for the China lobby without a vote on USMCA than with one.

Short form:

NAFTA is dead regardless of any action or inaction by the House.  All the House and Senate can do is not vote on USMCA.  The legislative branch cannot revive a NAFTA trade agreement the federal executive has withdrawn from.

This means without a signed USMCA trade deal Pres.Trump can — and will — lay on even more tariffs on the multinational corporations playing price arbitrage in Mexico and Canada between Chinese and American manufacturing.

While such trade sanctions can reduce the American economy like a tax increase, when we are likely at close to 4% economic growth in late 2019 to early 2020 from the accumulated investment in energy projects bringing defacto energy independence, a 3.5% economic growth rate with tariffs is still pretty good.

And when the House refuses to vote in USMCA, NAFTA still dies.

Pres. Trump can and will lay on new massive new anti-Chinese tariffs on Canadian and Mexican front companies for China without USMCA rules.  This will be massively popular in the Midwest in an election year and will hurt the income streams of the multi-nationals supporting the Pelosi Dems and McConnell RINOs.

From Trump’s point of view, What’s not to like about America’s manufacturing base employing the Midwestern white working class growing while the “international arbitrage opportunity” of China’s slave labor economy contracts?