Making the Best of Trump

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I have offered the below comment here:

I am not an expert on Trump nor on his economics in particular. I am disgusted, though, by the way he is treated by German politicians, the media and a German public totally void of critical thinking and absolutely in thrall with the canon of political correctness dictated by politics and the media.

It is eery to experience the degree of Gleichschaltung (the bringing into line of all minds in the country) concerning Trump in Germany. Trump-bashing is a social convention in this country, like saying "good morning". It is frightful to live in a country that is incapable of seeing anything good in the top man of our most important ally, or apply a differentiating mode of perception instead of resorting at the mention of his name to foaming hatred.

The perception of Trump in Germany, like the perception of environmental (and many other) issues, being void of rationality is of a purely religious vein. The last sentence concludes a long preamble to the hypothesis that I had originally in mind when deciding to write this comment:

Trump seems to have remobilised the lower strata, who have long since been betrayed by the neoliberalised left. At the same time, Trump is putting a pronounced emphasis on the national interest, thereby restrengthening the importance of the nation state in the public mind, which is being deceived by the left's irresponsible flirt with a stateless world (the EU is a clear example that supranational constructions work as effectively as the national state only when the supranational becomes a fully fledged national state, which the EU is incapable of becoming, and hence chronically dysfunctional).

The social democratic paradigm is indispensably centred on the strong and sovereign nation state as the only means to guarantee full employment, a benign balance between capital and labour and the protection of society's vulnerable strata. Whatever one thinks of Trumps policies in particular, he could well be triggering impulses that add momentum to a resuscitated social democracy, much like he has given vital impulses to the role of government in protecting scientific freedom and establishing checks on a politicised, government-dominated "science".

Lastly, Trump has got balls, if you pardon my French. He is the only politician in the leading nations of the West who is not afraid to have an own opinion and defend it against the Zeitgeist, thus breaking the shackles of political correctness (that creeping form of ideological totalitarianism so loved by the post-social-democratic left).

Trumps courage and independence of mind has unleashed an intellectual civil war in the US, which I thoroughly welcome because it is reducing political apathy, reinvigorating pluralism and democracy. Political competition is the essence of freedom.

In Germany we have not seen genuine political competition between the major political forces and parties under the sorry reign of Merkel. I hope the impulses sent by Trump will reach our sleeping political order and the broad population and convince them that uncritical reliance on the political class is a bad idea, although it had seemed otherwise, when by a kind of political Minsky effect (stability creating instability) decades of responsible social democratic politics in post-war Germany had gradually enticed the people to turn into mere political consumers rather than critical participants in the political dialogue.

Always worth listening to:

See also Awakening from the Stony Sleep.

Substituting Social Democracy with a Neoliberal EU

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Continued from here.

I have replied to Nick Johnson here, writing:

I agree with your views expressed in the first two paragraphs of your reply, but I contest the proposition that there is free trade within Europe or between Europe and other parts of the world.

Also, I have no reason to look at EU-induced regulations as a net benefit, and to the extent that these regulations and European trade policy are of a benign and beneficial character, they can be achieved by other arrangements that do not presuppose a political nightmare that drains the continent of democracy and substitutes the age of social democracy (which sought to balance the power of capital and labour) with a neoliberal order that forces Europe into a procyclical and growth-inhibiting posture that causes great misery among Europeans, especially among the more vulnerable strata that the Left used to be concerned about before it shed its social democratic stance and turned neoliberal and regressive in many other ways.

Tesla — We Shall See

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Another case of Ökoverblödung, the dumbing down of intelligent people by unconditional faith in delusions triggered by green buzz words?

Tesla is a house of cards built to clean out "the greater green fool". It has never been oriented toward its shareholders, and even if it were financially more sound than I think the company is, it would not stand a chance in the face of similar but much better and more up-to-date products coming from experienced car makers, like Porsche.

We’ve already seen the mass exodus of senior Tesla executives. When they say they “want to spend time with their family,” it really means they “want to spend less time in prison.” Next, we have the first whistle-blowers—there will be MANY more. Currently there are at least 3 different ones feeding information to journalists. Using past frauds as a guide, once we get to this point of the media cycle, the fraud usually unravels pretty fast.  Given the perilous state of Tesla’s finances, they are in urgent need of new capital. The question is; who would want to invest new capital when Tesla is now admitting to knowingly selling cars without testing the brakes in order to hit some arbitrary one week production target? When a company admits that it will sacrifice vehicle quality and even risk killing its customers to win a twitter feud and start a short squeeze, regulators must step in. The question is; what else has Tesla done illegally to hit its targets? We know that Tesla long ago passed over the ethical threshold of selling faulty products that have killed people—what other allegations will soon come to light? Elon Musk demanded that Tesla stop testing brakes on June 26. Doug Field, chief engineer, resigned on June 27. Is this a coincidence? Of course not—Doug Field doesn’t want to be responsible for killing people. I think Tuesday’s article will speed up the pace of Tesla’s bankruptcy quite dramatically and I purchased some shorter dated puts after reading it.

Tesla is the fluke stock-promote that found a way to address society’s fascination with ‘green technology’ and the ‘next Steve Jobs.’ Elon Musk eagerly stepped into the role of mad scientist and investors gave him a free pass. It now increasingly seems that everything he’s done for the past few years was simply designed to keep the share price up, keep the dream alive and raise more capital - as opposed to creating shareholder value. Along the way, customer safety has been ignored in order to hit production targets and appease the stock market. In addition to not testing brakes, a recent whistle-blower has accused Tesla of installing over 700 dangerously defective batteries into Model 3 vehicles.

I suspect there will be many more allegations as whistle-blowers come out of the woodwork. It really is the Theranos of auto makers. I suspect it will all end soon. Theranos and Enron both collapsed within 90 days of the journalists getting up to speed. The reporters now know the right questions to ask and Tesla will be out of cash by the time they are all answered.

The source.

Automated Home Construction

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I feel that home construction and road works are woefully unproductive, being among the laggards of our hugely efficient economies.

Ping Pong

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Enjoy.

Is There Such a Thing as Free Trade?

 

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This article in mind, I have responded with the below comment:

Thank you for this excellent synopsis. I am a newcomer to trade theory. My judgement is insecure. Bear this in mind when I blurt out these hypotheses: the notion of free trade is predicated on the assumption that the neoclassic/neoliberal model of the economy is useful — which perversely is what the so-called left has come to believe with ardour. For my part, I think the neoclassic model is not good enough to tell us much that is true of the economy from a macroeconomic perspective. 

So, theoretically, there may not be anything like free trade. Notably, the assumptions underlying Ricardo’s defence of free trade based on comparative advantage are simply not fulfilled in the real world. So, we seem to have a false theory about something that does not exist. For more see here:

http://socialdemocracy21stcentury.blogspot.com/2016/07/the-cult-of-free-trade-in-nutshell.html

Practically, there may also be no such thing as free trade. In reality, cross-border transactions are fraught with special arrangements, tariffs, quotas, discriminating specifications, you name it.

Many speak about free trade, including the economically ignorant public and the so-called left, but only few look at the concrete trade policies of countries. I have come across research that suggests the EU applies a grater number of tariffs and higher tariffs than the US. I am sure both countries place a good deal of bureaucratic barbed wire along their trading borders. Just recently I have professionally come across the fact that China has considerably higher tariffs in certain industrial sectors that I had been concerned with than Europe and the US.

If what I am saying is not complete nonsense, then the thrust of your post would appear even more significant. Trade is too important not to manage it properly. Whether looking at the issue from the point of view of a developed country or a LDC, we should discard ideological stereotypes of the pro- and contra-free trade kind and face the fact that trade is typically managed trade, not free trade, and try to understand what reasons — and what good reasons — countries have to manage their trade and how well they manage it in reality.

To that purpose it seems advisable to get as concrete in one’s research as possible. One ought to look at the exact tariffs and other trade policies of the EU, for instance. I guess, if we were to start with the EU’s agricultural trade policies, we should very quickly get a sense of the gap between the rhetoric of free trade and the reality of massive protectionism and intervention.

To sum up: both for theoretical as well as practical reasons “free trade” may be little more than an ideological chimera.

Once one gets practically involved in trade, it turns out that foreign trade like domestic trade and the simplest market interactions (like buying tomatoes at a farmer’s market) are permeated with regulations, hurdles, dos and don’ts, subsidies and other forms of preferential treatment etc.

Let us not look for free trade, let us look for the way in which people manage trade and discern how to do just that in an efficient and hopefully mutually agreeable way.

Just a Test

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Just testing my mobile hot spot. Seems to work well.

Fair Trade?

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An interesting take from a man who as an executive of the automobile industry has been facing for decades unfair trade practices from countries that pretend to favour free trade. We have seen in previous posts (here and here and here) that in reality there is no such thing as free trade. Trade tends to be managed, with its terms hopefully negotiated in a mutually acceptable way.  It is, therefore, absolutely legitimate to try to make managed trade reflect considerations of substantial national interest. 

It seems more advisable to recognise that each country has specific interests it wants to see woven into the conditions under which trade takes place, rather than playing the untruthful game of "free trade".

Libertarians Against Liberty

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This article on historian Nancy MacLean's new book struck me as highly interesting as it addresses one of my major themes—liberty—, giving it a paradoxical spin. 

MacLean argues that policies advocated by libertarians actually destroy liberty.

Her argument goes like this: While looking at Public Choice (Buchanan, Tullock et al,) in particular, she contends more generally with regard to neoliberalism that its agenda of libertarian policy recommendations supports the interests of a minority of benefactors, enhances their share of benefits and extends their dominance in society at the expense of the larger population. 

Quite in tune with her claim that the libertarian-leaning attitude seeks ideological dominance over society, she observes efforts to extend 

the principles of the market rationality to areas outside conventional limits of the economy.

Notably Law. Public Choice then is a further initiative to couch all aspects of the public discourse in terms suggesting that the market mechanism is the motor that drives the Good Society.

Accordingly, the overall aim is to redefine all aspects of the social universe in a manner that is consistent with the idea that society's optimal shape is arrived at by giving free reign to market forces.

This is indeed the core message of libertarianism. If people can be convinced of its veracity, it will be the easier to implement the hidden agenda of those instrumentalising the libertarian paradigm for their egotistical and anti-social purposes.

MacLean views the radical right as a group of “true believers” in freedom, an idea they associate with market freedom, aiming to remove public services and replace them with privatized schools and prisons that respond [to] the market, not voters within a democracy. In doing so, MacLean argues that the radical right will eventually reduce freedom for the majority while privileging the propertied minority. The more power the propertied minority has, the less democratic society becomes. The ultimate target of the radical right, which has gained control of the modern Republican Party, is to change American society to privilege capitalism over democracy even more than it does now.

(My emphasis).

Interestingly, my flirt with libertarianism quickly collapsed when I was preparing a presentation on Public Choice. On studying the subject more deeply, I began to sense that the paradigm of a Good Society shaped by markets (a) descriptively left out and (b) prescriptively disallowed too many processes that effectively shape or should be allowed or encouraged to shape society.  

As for (a), I recognised that political action is involved in any transaction, process or institution associated with market activities; concerning (b), I realised that political competition and hence pluralism and democracy are the indispensable core of liberty. To restrict or weaken them is inimical to liberty.

So, in my way, I came to the author's conclusion that libertarian-leaning efforts

... to produce a society that was governed by the market, not by democracy ...

were destructive of liberty, and that the libertarian-leaning were undermining liberty by

... protecting capitalism from democracy ...

(All quotes are taken from the above article.)

A Question of Linguistic Correctness

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I was not sure whether it is correct English to have an inanimate object or an abstraction "see" something, as in: 

The year 1952 saw the company decline.

I found it difficult to articulate my question and it took quite some time for me to chance on an example that seems to support my intuition: 

According to data from a United Nations report released this July, this year saw a historic decline in global poverty.

(Source.) 

In this case, my intuition was accurate. The problem remains however that a good intuition may miss a nuance that makes the difference, turning the word or phrase into an oddity and falsehood.

The phrase that made me research the issue was something like: "... his career ... saw him advance from engineer to executive ..."

The result of my search tends to support the thesis that for me it is important to be able to articulate clearly what my question is.