Streetwise Professor

I seldom read the FT anymore–with a few exceptions, it is unreadable. I never read the FT opinion pieces any more–they are unreadable, without exception.  But the photo on this FT tweet brought me up short, and compelled me to click through to the article: my relatives! Really: my mother’s grandmother’s family were Hatfields, and cousins of the famous/notorious West Virginia feud family in the picture.

The article is an attempt–kind of–to explain to superior Brits those “barking mad” Americans and their “distinctly American attitudes towards guns and family.”  Note the sneering title: America has a gun “fixation.”

The article (by the FT’s chief editorial writer, Robert Armstrong) is largely correct in its history: American attitudes towards guns are deeply rooted in history.  Irritatingly, Armstrong’s attitude is condescending and dismissive: he clearly considers this to be a barbarous atavism.

Armstrong’s take is also quite superficial, and misses something that I have pointed out in a previous post: namely, that among many Americans, the right to bear arms is the most tangible badge of individual liberty and autonomy.  Slaves are disarmed: free men answerable only to God can arm themselves. For those who value individual freedom above all, guns have an importance that post-modern people like Armstrong who do not value personal liberty so highly, and whose values are more collectivist, not only cannot really grasp, but recoil from in horror.

A couple of remarks.  The first is that while Armstrong bewails “America’s destructive gun culture,” which he claims causes the “grisly status quo,” he utterly fails to acknowledge that the toll of gun violence today is actually quite low in the precincts where “gun culture” is most deeply rooted. Indeed, the vast bulk of gun deaths in the US occurs miles away–geographically and culturally–from the hollers of the Tug River Valley where Devil Anse once roamed, and other locales where “gun culture” is the norm. This objective fact poses insuperable logical obstacles for Armstrong and his lot, because it flies in the face of his assertion that there is a link between the gun culture in Jacksonian America and the “grisly” toll of gun deaths in the US: Mingo County ain’t Fuller Park or Englewood.  If it’s a culture issue, it’s thug culture, not gun culture.

This is a major reason–arguably the primary reason–why the gun debate in the US is so intractable: “I’m not the one shooting anybody. Why should I give up my guns because of someone else’s criminality or insanity?” And this is at root a deeply philosophical divide that pits people like Armstrong against those he believes to be atavists.  It is a divide between a belief in individual responsibility and accountability vs. a collectivist mindset.

This relates to the second point. I find it deeply ironic that post-Trump the Armstrongs of the world have warned of the impending descent of authoritarianism on America all the while decrying the resurgence of the benighted Jacksonians that still inhabit the less refined corners of America–whom they also largely blame for Trump’s victory. Well, hate to break it to you, Bob, but these people are the most ardent anti-authoritarians in the US. This anti-authoritarianism goes hand-in-hand with the emphasis on the primacy of personal liberty which drives the “gun culture.”

This goes back a long way in history. My branch of the Hatfields were Whiskey Rebels in Washington County, PA, and decamped from there for points west after the U.S. Army crushed the rebellion in 1791. The Whiskey Rebellion was an archetypal battle between the anti-authoritarian and elite elements in American society that echoes in today’s struggle over guns.

What animates the resistance (and yes, this is a real resistance, not the faux virtue signalling Hillary Meets Hollywood “Resistance”) that rallies around the gun issue is an instinctive anti-authoritarianism.  It is a resistance to the the “soft despotism” that de Toqueville presciently perceived at the height of the Jacksonian Era:

Thus, After having thus successively taken each member of the community in its powerful grasp and fashioned him at will, the supreme power then extends its arm over the whole community. It covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, and guided; men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd.

I have always thought that servitude of the regular, quiet, and gentle kind which I have just described might be combined more easily than is commonly believed with some of the outward forms of freedom, and that it might even establish itself under the wing of the sovereignty of the people.

Our contemporaries are constantly excited by two conflicting passions: they want to be led, and they wish to remain free. As they cannot destroy either the one or the other of these contrary propensities, they strive to satisfy them both at once. They devise a sole, tutelary, and all-powerful form of government, but elected by the people. They combine the principle of centralization and that of popular sovereignty; this gives them a respite: they console themselves for being in tutelage by the reflection that they have chosen their own guardians. Every man allows himself to be put in leading-strings, because he sees that it is not a person or a class of persons, but the people at large who hold the end of his chain.

By this system the people shake off their state of dependence just long enough to select their master and then relapse into it again. A great many persons at the present day are quite contented with this sort of compromise between administrative despotism and the sovereignty of the people; and they think they have done enough for the protection of individual freedom when they have surrendered it to the power of the nation at large. This does not satisfy me: the nature of him I am to obey signifies less to me than the fact of extorted obedience. I do not deny, however, that a constitution of this kind appears to me to be infinitely preferable to one which, after having concentrated all the powers of government, should vest them in the hands of an irresponsible person or body of persons. Of all the forms that democratic despotism could assume, the latter would assuredly be the worst.

When the sovereign is elective, or narrowly watched by a legislature which is really elective and independent, the oppression that he exercises over individuals is sometimes greater, but it is always less degrading; because every man, when he is oppressed and disarmed, may still imagine that, while he yields obedience, it is to himself he yields it, and that it is to one of his own inclinations that all the rest give way. In like manner, I can understand that when the sovereign represents the nation and is dependent upon the people, the rights and the power of which every citizen is deprived serve not only the head of the state, but the state itself; and that private persons derive some return from the sacrifice of their independence which they have made to the public.

It’s the better thans who presume that the country will be a better place if they lead and the great unwashed defer to their superior wisdom and virtue vs. those who don’t want to be led by anybody and who think that the presumed leaders are self-impressed asses, and often malign ones at that.

This is why Parkland has been even more polarizing than other mass shootings in the US–it is a stark example of elite failure at every level.  Armstrong notes this at the outset of his piece:

“None of the events in Parkland have taught me to trust others to protect my family. And certainly none of the events in Parkland have built my trust in government.” That is David French, of the National Review, who is in my view the smartest of the American gun rights advocates. French sees America’s last mass shooting — in Parkland, Florida — as born of incompetence and cowardice. The FBI was tipped off and did nothing. Local law enforcement knew the shooter was dangerous and did nothing. The armed officer at the school waited outside, listening to gunshots, as the rampage went on.

So for French, the massacre shows why gun rights are important, not why they should be curtailed. The government cannot be counted on to protect your family. It is up to you.

Armstrong fails utterly to confront the fact of “incompetence and cowardice.” It is undeniable that it occurred. The question is: was it was a fluke or systemic? That matters–but rather than meeting this crucial issue head on, he merely dismisses it in a conclusory fashion by saying he “rejects French’s view.” A rejection based on neither argument nor evidence, and therefore worth nothing.

What it comes down to is that the gun issue is only the most highly charged manifestation of the deeper conflict that de Toqueville identified the year before the Alamo between the supporters of soft despotism (which is often not that soft) and those who “wish to remain free.”  So yes, this is a conflict with deep historical roots.  But that does not mean that the conflict is anything like Armstrong describes it, between primitive atavists and enlightened moderns. Unless, however, you believe that individual liberty is an atavism unfit for modern times.

And if you are one of those people, you should realize–though you probably don’t–that it is precisely that attitude which galvanizes the intense opposition against you on guns.

I’m back.  Unfortunately, the SWP database became corrupted somehow. Probably not intentionally malicious, but who knows? Regardless, it is what it is.

Alas, it looks like everything post-10 January, 2018 is gone from the database, although it is on the Wayback Machine. I’ll try to restore the content from there via copy & paste when time permits.  Fortunately, the 12 years(!) of material that preceded the Lost Posts was recovered and recovered.

Apologies, and thanks for checking back in.

Overall, I have found the Trump administration’s economic policies to be favorable.  The tax bill was pretty good, even though it was worse than the administration’s original proposal.  The chipping away at the encrustation of regulation has been highly beneficial.

But there was always a sword of Damocles hanging by a thread over our heads: protectionism. Heretofore, that sword has remained dangling, but last week the hair broke (perhaps by Trump’s hair-trigger temper) when he announced plans to impose substantial tariffs on imported steel and aluminum.

This is egregiously bad policy, even on its own terms. Like all tariffs, these will impose far greater costs on consumers than they will generate benefits for producers.  Since steel and aluminum are intermediate goods, the first consumers are manufacturers that use the metals.  The cost will be borne in the form of lower output from these firms, lower employment and wages in the consuming industries, and higher prices for the final goods.

These tariffs are a failure on their own terms, and demonstrate Trump’s economic ignorance. Trump wants to bolster American manufacturing: these tariffs will harm US manufacturing overall, even though they benefit relatively small subsectors thereof.   This is because US manufacturing is a big consumer of these materials.  As an example, Trump touts the American energy revolution and promotes American energy exports.  Well, the energy business is a huge consumer of steel in particular, in everything from pipelines to rigs to drill pipe to storage tanks to oil refineries to LNG liquefaction plants.  By helping one shrunken sector of the US economy, Trump is imposing substantial harm on a growing one–and one that he touts, no less.

A common retort to criticisms like mine is that the trade playing field is unfair, and that countries like China in particular advantage domestic producers at the expense of foreigners.  Well, they do that in many sectors, but even though that is inefficient, it redounds to the benefit of other sectors in the US economy: for example, subsidizing aluminum benefits US auto manufacturers, who increasingly utilize aluminum (in part to achieve compliance with self-inflicted regulatory harms, namely CAFE standards).

What is little understood is that a tax on imports is a tax on trade: it reduces both imports and exports.  Similarly, subsidizing exports increases trade–including exports by the country importing the subsidized good.

This is true over the long run: in the short run capital flows adjust as well as trade flows.  For example, Chinese subsidies can lead to an increased US trade deficit (Chinese trade surplus), which means that the Chinese accumulate US dollar claims–pieces of paper (or, more accurately, electronic book entries).  Then one of two things happens.  Either the dollar claims prove worthless, or the Chinese spend the dollars on US goods.  So we either get goods in exchange for worthless pieces of paper (or electronic records), or we export goods later.

If retaliatory measures like Trump’s tariffs could result in some bargain or accommodation that levels the playing field, then perhaps the benefit would exceed the cost (although ironically much of the overall benefit will redound to those who tip the playing field, because they bear the brunt of the cost of doing so). The track record on this is hardly encouraging, however. I predict that the likelihood is that Trump’s actions will not materially reduce imbalances in the trade playing field, and that as a result they will be highly detrimental to the US economy–including the sectors which Trump claims to champion.

When Trump was a candidate, I was highly critical of his views on trade, e.g.:

Perhaps to give him more intellectual credit than he deserves, Trump is a died-in-the-wool mercantilist who believes trade is a zero sum game, and who favors protectionism and beggar-thy-neighbor currency policies. He talks like it is the late-80s, and Japan is still an economic juggernaut that will overwhelm the US, completely overlooking the fact that Japan’s crypto-mercantilist policies gifted it a 25 year long lost decade, and that neo-mercantilist China is on the brink of the same fate. If it is lucky.

and:

What is bizarre is that the sin of “giving our industrial markets to the Japanese” was somewhat dated by 1999, but Trump pounds on that theme today, when it is well past its sell date. Decades past. Just yesterday, in  Greenville, SC, he said something to the effect that “the Japanese are up here [holding his hand over his head] and we are down here [holding his hand by his knee].” Fact: Japanese per capita GDP is $36K, and US per capital GDP is exactly 50 percent higher, at $54K. But facts don’t matter. The image of Japanese domination (now accompanied by the image of Chinese domination) resonates intensely among Jacksonians.

I was hoping that he would not act on these impulses, or that he would be constrained from doing so. No such luck. Impulsive ignorance has won out.

Talleyrand famously said of the Bourbons: “They had learned nothing, and forgotten nothing.” That thought came to mind in reading more about Putin’s speech.  He has obviously not forgotten a single slight, perceived or real, from the west, ever.  But he obviously learned nothing from the demise of the USSR, which was economically ruined attempting to compete in military power with a far more economically vibrant and productive rival–the west generally, and the US in particular. If anything, the economic gap has widened since the Cold War.  Indeed, this is especially the case in most military production: the hollowing out of the Russian military-industrial complex is manifest, and the loss of skilled labor in particular has been severe.  The USSR was unable to compete in an arms race, and Russia is in an even worse position to do so.

Yet Putin is announcing a new arms race.

Perhaps this is why Putin’s speech focused on nuclear weapons.  It is the one area in which Russia is competitive, and may actually have some advantages.

But the enemy (and Putin definitely perceives the US to be an enemy) gets a vote too, and Putin cannot unilaterally limit the locus of competition to nuclear weapons.  The US is likely to respond to a more truculent Russia with some new nuclear weapons (e.g., air-launched cruise missiles), but also by expanding conventional forces, and by innovating in technologies that Russia cannot hope to compete in.

This is a sobering thought though–or if you look at it a little differently, one that might get you to hit the bourbon. If nukes are the only tool in Russia’s kit, the likelihood of use becomes higher.

The FT ran a long profile of Igor Sechin today.

Nothing in the piece should be news to those who have followed my coverage of his escapades over the years. (I still miss the mullet!)

There are some interesting numbers in the piece that do speak volumes.  Such as Rosneft’s market cap–$65 billion. (ExxonMobil–$324b. Shell–$266b.) The number of employees–almost 300,000. (ExxonMobil–73,500.  Shell–92,000.)  The fact that Rosneft paid $55b for TNK BP–and still has a market cap of only $65b.

Rosneft is a Frankenstein’s monster that has been stitched together over the years from stolen body parts.  Igor is therefore a fitting name for its CEO.

The old caricature of the Soviet Union–which like most caricatures merely exaggerated a fundamental reality–was that it was “Upper Volta with missiles.”  In his State of the State address today, Vladimir Putin gave ample proof that the caricature applies to contemporary (I won’t say “modern”) Russia as well.

The most memorable part of Putin’s speech was a growling, defiant boast–complete with animation–that Russia had introduced new nuclear missiles that could not be defeated by missile defenses.  He also brandished new cruise missiles (which seem to breach the INF treaty, despite previous Russian claims to the contrary) and a submersible drone carrying a massive nuclear warhead.

The rest of his speech was boilerplate about promising to halve Russia’s impoverished population (an implicit acknowledgement that it had grown in his most recent term), and raising expenditures on infrastructure and health care (which has also suffered greatly in recent years).  Lost in the rhetoric was the Russia has stagnated economically under his rule.  The country is a caught in a double trap: the middle income trap and the resource economy trap.  Further, Putin has no real prospect of escaping either, let alone both.

The speech reveals, I think, that Putin understands all this.  Frankly, he realizes that the only reason Russia matters now is its nuclear arsenal, and the widespread belief that it is willing to use it.  He further realizes that this reality will only grow in the remainder of his political life, as Russia falls further and further behind economically.  So he brandishes his missiles, and mouths platitudes about economic development.  Upper Volta with missiles–and nuclear sub drones!–indeed.

As such, the speech gives a clear foreshadowing of what is in store for post-re-election. International pugnacity combined with domestic political and economic Potemkin villages. The Putin Hamster Wheel keeps spinning.