Year: 2023

A Decade of War

Germany is prepared to support Ukraine through 2032, even if that means fighting to the very last Ukrainian.

Germany is not daunted by the prospect of a protracted conflict between Russia and Ukraine, and will back Kiev for the next decade, Brigadier General Christian Freuding has said. He added that Berlin is seeking to ensure that Ukraine retakes all the territory within its 1991 borders.

Appearing at the Yalta European Strategy (YES) forum on Sunday, Freuding was asked whether Germany was prepared to support Ukraine if the hostilities with Russia ended up becoming a “long war” spanning several more years. The German military official replied by saying it was unrealistic to expect the conflict to end in the near future.

Freuding went on to claim that “we’ve got the support of our parliament… for our military support for our Ukrainian friends up to the year 2032.”

At the current rate of economic contraction and casualties, another nine years of proxy war with Russia will see Germany’s economy further devastated and virtually every Ukrainian male between the ages of 15 and 70 dead. Especially when Russia is quite clearly prepared for an extended war against NATO and the USA.

Russian President Vladimir Putin on Tuesday indicated he was bracing for a long war in Ukraine, saying that Kyiv could use any ceasefire to rearm and that Washington would continue to see Russia as an enemy no matter who won the 2024 U.S. election.

Speaking for several hours at an economic forum in Russia’s Pacific port city of Vladivostok, Putin said Ukraine’s counteroffensive against Russian forces had so far failed and the Ukrainian army had sustained heavy losses of 71,000 men in the attacks. Only when Ukraine was exhausted when it came to men, equipment and ammunition would it talk peace, he said in reply to questions from a Russian television presenter acting as a moderator.

Russia controls about 18% of Ukrainian territory, including Crimea which it annexed in 2014, and a swathe of eastern and southern Ukraine which it seized after invading Ukraine on Feb. 24 last year in what it called a special military operation.

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Genius Trumps Expertise

There are two important business lessons here in this story about the success of a humble kitchen tool:

Richard Grace, inventor of one of the greatest tools the kitchen has ever seen, neither knows how to cook nor cares to learn. In the mid-’90s, he set out to make a wood-carving rasper and ended up with a culinary masterpiece called the Microplane: a cheese-grating, citrus-zesting, nutmeg-dusting revelation that today costs as little as $12 on Amazon. He’s an inventor in the truest spirit of the word, someone who treats ideation as a profession, not a calling. He doesn’t speak in buzzwords and has never hosted a TED Talk. He simply makes things and finds uses for them later.

Lorraine, a baker with an affinity for Armenian orange cake, wasn’t happy with her old kitchen grater. So she slid her husband’s Microplane over an orange. She was so astounded by the results, she had the description of the product changed in the store catalog to include its effectiveness at this seemingly niche kitchen task. This is how the story, “Test Kitchen; A Gift for the Cook, or Carpenter,” published by The New York Times four years later, began.

Before the Microplane brass could blink, they had become a kitchenware company — whether they liked it or not. Penned by Amanda Hesser, who later cofounded the award-winning food publication Food52, this 516-word story was to become Microplane’s crossing of the Rubicon, from carpentry to culinary.

“After the Times article, basically everybody who sells anything contacted us,” Arivett told me. “Williams Sonoma; Bed, Bath & Beyond; Sur La Table — everybody. It was almost too much to keep up with.”

Before the Microplane brass could blink, they had become a kitchenware company — whether they liked it or not. Within the first month following the article’s publication, the brand saw its kitchen customers eclipse its woodworking customers ten times over. Microplane, the wood rasp, sold between $300,000 and $400,000 a year; by 2002, Microplane, the kitchen gadget, did that in a month.

Then came an even bigger boom, one fueled by the power of the original kitchen influencers: celebrity chefs. Martha Stewart, Ina Garten, Rachel Ray and virtually anyone that mattered used a Microplane on their shows, calling it out by name for their audience. Julia Child liked the product so much, it earned a permanent spot hanging on the wall of her kitchen, which was later replicated at the Smithsonian. And Oprah’s personal chef, Art Smith, once called it “the most coveted tool in chefdom.”

But for all the brilliance of the original invention and the Grace family business savvy, they still weren’t sure what they were selling. “None of us were cooks,” Chris said when I asked him if the Grace family was culinarily inclined.

Lesson One: The experts know what has been done before. That’s what makes them experts. However, they do not know what is possible nor are they usually psychologically inclined to explore the various possibilities and tangents related to their knowledge. So, if you’re doing something new, do not permit yourself to be guided solely by their expertise. This is something we’ve been learning with regards to the bindery operation.

Lesson Two: Don’t be married to your business plan. I would bet that less than one-third of the most successful companies are actually successful doing what they initially started out to do. For example, Castalia intended to avoid doing print editions and focus on selling ebooks through Amazon. My favorite example, however, is the Connecticut Leather Company, which started out making leather goods in 1932, and later began producing plastic wading pools, which led to it making children’s plush toys, and eventually, the home video game system called Colecovision.

Of course, Coleco offers another lesson, which is the danger of success. Despite average sales of one million Colecovisions a year for six years, the company that started in and survived the Great Depression collapsed in 1988 after digging a hole for itself with its attempt to produce its own computer.

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Desperately Seeking Allies

The US appears to have made at least a modest amount of headway in signing up Vietnam for its Asian NATO after Biden’s recent visit:

Vietnam and the US have agreed to dramatically upgrade their bilateral relations and strengthen defense cooperation, while hailing several major deals worth billions of dollars. The announcement comes amid strained relations between both Hanoi and Washington with China.

In a statement released on Monday following a meeting between US President Joe Biden and Vietnamese leader Nguyen Phu Trong, the White House said that the two countries elevated their relations to ‘Comprehensive Strategic Partnership’ status, the highest tier in Hanoi’s hierarchy of bilateral ties, “for the purposes of peace, cooperation, and sustainable development.”

On security, the US and Vietnamese leaders welcomed “further cooperation in defense industry and defense trade in accordance with each side’s conditions,” according to the statement. In addition, the US said that it “is committed to continuing to assist Vietnam to develop its self-reliant defense capabilities.”

Vietnam is more than happy to acquire some outside assistance, and certainly, the Vietnamese diaspora in the USA makes the rapprochement easier in some ways. However, there is no way that the Vietnamese are going to sign themselves up as a Ukrainian-style proxy army in service to the West.

Also, it is the Vietnamese, and not the Chinese, that the other Asian nations have historically feared. As Lew Kwan Yew described it, they are regarded as “the Prussians of Asia” and fundamentally more warlike and aggressive than their neighbors. China, for all its power and population, is generally not feared because the Middle Kingdom has historically been uninterested in anything outside its borders. Even the limited Chinese invasion of Vietnamese-occupied Cambodia in the 1970s was instigated at the repeated request of the other Asian nations, led by Singapore.

The Chinese are not particularly concerned, but neither are they confused about Washington’s intentions.

“Let’s be honest, if there were no China-US tensions, Washington wouldn’t be so interested and have such strong intentions of upgrading its ties with Vietnam to this level,” Lü Xiang, a US studies research fellow at the Chinese Academy of Social Sciences, told the Global Times on Monday.

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The Two Faces of Economics

Michael Hudson explains the difference between Western neoliberal economics based on prices and debt, and historical economics based on actual production of goods and services.

Economics is not really a science as it’s taught. It’s a lobbying effort by the finance, insurance, and the real estate sector: the FIRE sector. It’s a lobbying effort by the parts of the economy that don’t produce goods and services, that only collect income without playing any productive role at all. Empty prices – that is price without any underlying value. And that is being promoted as economic growth.

And basically, it’s as if economics is like a criminal case in court where you have two opposing attorneys.The 19th century attorneys were prosecutors for the landlord class. They said, “Why should we have to pay the heirs of the warlords who conquered England and France to collect ground rents without producing anything? What possible function do they play? Why should we have to pay banks money for creating interest for creating credit that actually the governments can simply create their own money, or at least create credit for a productive purpose? And why do we permit monopolies, most of which were created by the government to sell off to creditors because it couldn’t afford to pay them their debt, why do we have to do anything of that? We don’t need it. Let’s get rid of the rentier sector.”The rentier sector being landlords, and bankers and monopolists.

Well, by the end of the 19th century, the rentiers fought back. And they developed what a defense attorney would do in a trial. They said, “There’s a whole different reality. There is no such thing as unearned income. There is no such thing as economic rent. Everybody deserves what they have. The landlord produces a valuable service in renting out the land and the housing and deciding who to rent to. And the bankers make a wonderful service when they charge interest. And especially when they charge a penalty fee because that helps make people pay their debts on time and that’s essential for productivity. So of course, we charge penalty fees as part of the gross domestic product. And monopolies are also part of the GDP, because after all, the monopolist is simply creating an orderly market.”

So, the problem is that instead of economic students getting both sides of the prosecution and the defense of the rentier economy, they’re only getting one side of the picture. They’re getting the defense of the rentiers, not the classical economics. And that’s why in graduate economic courses they no longer teach the history of economic thought. They no longer teach economic history. Because if you had the history of economic thought, you’d know that contrary to what Margaret Thatcher said, there is an alternative, that things don’t have to be this way.

There is a reason why China is growing so rapidly, and the American economy is being squeezed tighter and tighter. And that’s because its basically using its revenue to create new means of production and create a broader environment.

It’s true that it provides education freely, instead of charging $50,000 a year, which is what people have to pay in New York. But if you would say what if we credit China with every person with a degree of having paid $50,000 a year, obviously, that would be much bigger.

It’s true that the Chinese people do not have to pay $4,500 a month rent, which is the average rent here in New York City. Does that really make them poor? Or does paying the $4,500 a month rent that increases America’s GDP, actually turn out to be an economic burden?

This is why the Great Bifurcation between The Empire That Never Ended and the growing BRICS movement was both inevitable and unavoidable. The masters of the shell game can only keep winning as long as the suckers keep playing. But Russia has been kicked out of the game, China refuses to play the game except on its own terms, and their resultant success is encouraging dozens of other nations to stop playing the game.

Call it what you will, but Samuelsonian or Neo-Keynesian economics have always been nonsensical; so too is Friedmanite monetarism, because it is impossible to meaningfully quantify anything in a metric that is so readily expanded at will. One can only base social policies on “economic growth” so long before the reliance upon a myth results in insane and deleterious consequences.

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Exercise Your Skepticism

Nassim Nicholas Taleb on the importance of exercising skepticism, from an interview with Tim Ferriss:

Nassim Nicholas Taleb: I noticed a lot of people are skeptical, particularly conspiracy theorists, they’re skeptical of small things, but not about big ones. So they get taken for a ride. Find me a conspiracy theorist or find me someone who’s naturally skeptical of all things and I’ll show you a turkey. So I wanted to find people who are fundamentally skeptic, being skeptic about important things, not about small things, because —

Tim Ferriss: What would be an example of a big thing that they would be skeptical of?

Nassim Nicholas Taleb: A big thing like — let me give you an example. I wrote a paper, it never ended up in a book, on the stock market and religion. It’s called “The Bishop and the Economist.” And I said that those who are skeptical about the existence of God or the non-existence of God, that are skeptical about religious matters, typically tend to be complete suckers when it comes to stocks. They believe in a stock market, or believe in some kind of pseudo-scientific theory on whatever it is, they believe in, but they don’t believe in religion. And the reverse, and people who are religious typically they’re harder. And there’s some, I don’t have research on that. There’s a guy called [inaudible], I think, who did some studies about skepticism, people go to religion about affairs, skepticism where it matters. And I wrote about it, I think in The Black Swan, skepticism where it matters. And I noticed that a lot of these big skeptics were not skeptical of God and things you can’t do anything about. They were skeptical of the charlatan. They are skeptical of things, of someone trying to take advantage of you. That’s where you exercise your skepticism.

I could not agree more. It’s a pity, nay, I daresay it is a tragedy, that NN Taleb was not more skeptical about the vaxx. But perhaps that was a big thing.

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Conservatardery

Why does anyone continue to pay any attention to mainstream media conservatives? It puzzles me. Very nearly to a man – or woman – they failed the most basic test of analytical capability of the last decade as they fell for what was quintessentially a globalist and government program of the very sort they nominally oppose.

Megyn Kelly, a veteran journalist and podcaster, said Wednesday that she deeply regrets getting the COVID-19 vaccine because she believes she may have suffered a vaccine injury. Ms. Kelly said that she regrets getting vaccinated and then boosted, saying she doesn’t think it was necessary—and that a doctor told her that an autoimmune condition she developed after getting the shot may be related to the vaccine.

“I regret getting the vaccine even though I’m a 52-year-old woman because I don’t think I needed it,” Ms. Kelly said during a Sept. 6 episode of her podcast “The Megyn Kelly Show.”

“I think I would have been fine. I had got COVID many times, and it was well past when the vaccine was doing what it was supposed to be doing,” she added. “For the first time, I tested positive for an autoimmune issue at my annual physical. And I went to the best rheumatologist in New York, and I asked her, do you think this could have to do with the fact that I got the damn booster and then got COVID within three weeks? And she said yes. Yes. I wasn’t the only one she’d seen that with,” Ms. Kelly said.

Her current vaccine regret stands in contrast to remarks she made in April 2021, when she said she had “zero qualms” about getting the shot.

“Am getting the [Johnson & Johnson] vaccine this [weekend]. Have zero qualms [because] have spent a life immersed in a media obsessed with fear-mongering that is often irresponsible and untrue. Do what your doctor tells you to do and ignore everyone else,” she said in a post on X, formerly Twitter.

While it’s good that she’s telling the truth about her negative consequences, what about this provides you with evidence that her opinion about anything is to be taken seriously, let alone valued, in any way? Why would you ever watch a show, or listen to a podcast, or read a book, in order to learn what Ms Kelly thinks about anything? The same goes for every single other vaccinated conservative media figure. It wasn’t rocket science.

To the extent that “conservatism” stands for anything, it is supposed to stand against big government programs intruding on the lives of the citizens. And yet, there are few government programs bigger in scope or more intrusive than the various aspects of the Covid-19 program, from acquiring respirators to lockdowns to vaccines and vaccine mandates. But all it took was a wildly unconvincing health scare to convince conservatives to abandon their nominal core principle.

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