Author: VD

The math of trade war

As I predicted, China responds in a measured and mostly symbolic manner, with 128 tariffs affecting less than 2 percent of US exports to China:

China is ‘firing back’ after US announces tariffs on steel and aluminum. The world’s second-largest economy has responded to President Donald Trump’s controversial trade tariffs.

China’s commerce ministry proposed a list of 128 U.S. products as potential retaliation targets, according to a statement on its website posted Friday morning.

The U.S. goods, which had an import value of $3 billion in 2017, include wine, fresh fruit, dried fruit and nuts, steel pipes, modified ethanol, and ginseng, the ministry said. Those products could see a 15 percent duty, while a 25 percent tariff could be imposed on U.S. pork and recycled aluminium goods, according to the statement.

The statement did not go into greater detail. U.S. agricultural products, particularly soybeans, have been flagged as the biggest area of potential retaliation by Chinese President Xi Jinping’s administration.

Just to keep it simple and understand the most extreme scenario, let’s pretend that these tariffs will be enough to completely kill the US ability to export these goods to China. That is $3 billion removed from GDP that represents 1.7 percent of US exports to China and 0.00148 percent of total US exports. Against that, let’s pretend that the US tariffs were sufficient to entirely shut down the Chinese ability to sell the $60 billion in goods that are affected by them in the USA.

The net means the US economy just grew by $57 billion. A bit more if the domestic goods are more expensive.

See how this works? And notice how the media never explains any of this, or even bothers to try to work out the price elasticity of the tariff-affected products.

Excerpt: Wardogs Inc. #1

From the reviews:

  • The Mercs in this book are hardcore, amoral, just in it for the money. Vivid battles and political intrigue. Well written. The book compares well to David Drake’s Hammer’s Slammers, the original book on Sci Fi Mercs. This takes place in the world of Quantum Mortis, where you have super advanced technology, in a universe that resembles city states. And with a fight going on with AI’s. This is a mercenary company, publicly traded with stock options, in that universe. I guess a future version of Black Water.
  • This is what I call military science fiction. I could tell from the first two lines that this book was going to be worth the read! The opening was very strong. 
  • I loved the story and the characters it was non-stop action from beginning to end. I’m hoping to see many more Wardog stories. If you like Drake, Ringo, Carr, or Stirling you should enjoy this book.
  • Very enjoyable. Hopefully more to come in the series soon. Being told from the point of view of a wardog really puts the reader in the action.

An excerpt from Wardogs Inc. #1: Battlesuit Bastards

Four hours later I found myself on a clunky unmarked VTOL aircraft along with the rest of the platoon, heading to parts unknown. The pilot and copilot were in civilian clothes, as were the two guys in cargo. One of them looked familiar but I couldn’t place him. You see a lotta stiffs in this business.

The sun was setting as I looked down over the countryside. We’d been told we had a special bonus contract, but I had no idea what it was. We’d been given heavy rifles, loaded up with armor-piecing rounds, suited up in armor, then sent up the ramp into this shuddering deathtrap of a low-tech flying machine.

After seeing no explanations were forthcoming, I leaned my head back and shut my eyes, exhaustion overcoming my curiosity.

I awakened to Park shaking my shoulder. We were landing. There was a rough bump, then a settling of struts, then the crew popped the doors. I unstrapped, jumped up, and followed the platoon out into the darkness. I pulled on my goggles and looked around. We were in a stretch of tall rolling grass near a highway. Judging by the thermal signatures, we were probably the only people for miles, though I couldn’t see over all the hills. Not even an all-night diner, just empty grassland.

When we were all out and some cargo had been dumped by the crew, the helo took off and left us. In the middle of nowhere.

All eyes were now on Jock.

The sergeant cleared his throat and addressed us. “As you all know by now, you’re on a special mission of utmost importance. We’re out here to–”

“Kill the prince,” a Wardog interrupted. Someone else whistled.

“That crazy Ulimbese general sent us here to kill the prince!”

“Shut up, Cole,” Jock said.

“Yessir,” the man said.

“Bad manners aside, though,” Jock shrugged, “that is our objective.”

There were murmurs around the group. We were mercs. It wasn’t like we wouldn’t shank an enemy in the dark. The emperor must’ve felt the same way and we were the shank. But this was stone cold.

“You will, of course, receive the appropriate bonuses,” Jock said. “Now, we’ve seen the prince and his men. We’ve also seen their vehicles. That’s why we’re here. Right now their convoy is being tracked by drone.” He paused and took out his tablet. “Based on their progress thus far, they’ll be here within the hour.”

He pointed to a bend in the road, “We’re going to set up an ambush in the road here, but as of right now, there is a civilian vehicle on the road roughly ten minutes ahead of the convoy, so we’ll wait for that to pass, then we’ll create an L-shaped ambush just past that bend, with a machine gun team in the road with two teams of our guys in a row along the creek bed. The convoy will enter the kill zone, at which point the machine gun team will commence firing, then the long leg of the L takes them out.”

“Sir, no RPGs?” asked Goodman.

Jock shook his head. “No RPGs this time. Our client requires a decent photo of the deceased, not a splatter painting. Now, I want a fire team a quarter kilometer before the L, right where the hill peaks, in case they manage to turn around or get nervous. This team will also act as our spotters.

“A quarter kilometer beyond the L, I want another machine gun team, just in case they follow SOP and mash the gas and somehow get through our first ambush. We’ll have eight men in the grass keeping rifles along the long leg of the L. You have likely already noted the rifle upgrades, as well as the armor-piercing rounds. No one gets out alive.”

“Understood,” we chorused, then went to establish our positions.

I was between Goodman and Four-eyes. “Hey Falkland,” Goodman said to me. “How come we don’t just have some guys in the road pretending to be a road crew? Hard-hats and a barricade and all that. Maybe a flare. We could get them to slow down, then pow!”

“I dunno,” I said.

“Well, I do,” Four-eyes said. “You do that and they’ll know something is up. Guys that do security for important people would smell that old trick a kilometer away. A group of military-age guys hanging around a barrier in the middle of nowhere in the middle of the night? Might as well put up a billboard that says ‘free assassinations ahead.’”

“Oh. That makes sense,” Goodman nodded. “I never got to do this kind of cloak and dagger stuff before.”

“Stick around,” I said. “We also do windows.”

Bomber Bolton for NSA

I am pleased to announce that, effective 4/9/18, @AmbJohnBolton will be my new National Security Advisor. I am very thankful for the service of General H.R. McMaster who has done an outstanding job & will always remain my friend. 
– Donald Trump

Looks like the neocons may be coming back. But, as always, whenever Trump is at the center of the activity, don’t rush to judgment. Given what is going on behind the scenes, this may have nothing to do with Bolton’s “first strike on North Korea and bomb Iran” lunacy.

Then again, that was only three years ago. On the third hand, McMaster was also an aggressive hawk who wanted war with both North Korea and Russia. So, this may be a lateral move.

Hello, fellow Catholics

Now we have a pretty good idea what the response to being pushed out of the circles of power of the Democratic Party will be, at least on the (D) side. They’re going to run (((Hispanic))) and (((Asian))) candidates.

Los Angeles Mayor Eric Garcetti (D) will stoke speculation that he is considering running for president in 2020 when he makes several stops across Iowa next month.

Garcetti will travel to the Quad Cities in April to deliver a keynote address at the Scott County Democrats’ annual Red, White and Blue Dinner, his political spokesman said.

Later, he will make stops in Altoona, at a Carpenters Union training facility, and Des Moines, where he will take a tour with Mayor Frank Cownie (D). Garcetti will also stop in Waterloo, where his wife Amy has family.

In a statement, Garcetti spokesman Yusef Robb strongly hinted that the second-term Democratic mayor would begin pitching himself in the first-in-the-nation caucus state as an anti-Washington solution.

Don’t be surprised if Garcetti shows up in 2019 with a warchest that will blow away Kamala, Biden, and any other would-be candidates. The only thing that prevents me from identifying him as the Democrats’ candidate for 2020 right now is that it is too soon to tell if he is willing to take the risk of being steamrolled by Trumpslide 2020 or if he’s merely positioning for a 2024 run. My initial take is that he will go all-in for 2020 if the Democrats overperform in the mid-term elections, but he may be taking a card out of the Bill Clinton playbook regardless of how they do.

Why is a mere mayor on the presidential radar? Because, with a name like Garcetti, he might sound like an Italian Catholic, but he’s not.

His mother, Sukey Roth, is of Russian Jewish descent. His maternal grandfather, Harry Roth, who founded the clothing brand Louis Roth & Co., was a Jewish immigrant from Russia. It has also been reported that Garcetti’s family is of Litvak descent.

An anti-Washington solution indeed.

Benny gets bitch-slapped

It’s no secret to the readers here that Ben Shapiro has absolutely no idea what he’s talking about when it comes to economics. That’s why it’s amusing to see Spencer Morrison kicking him around so easily. The Littlest Chickenhawk knows he’s not in my league, which is why he ran away from debates with me twice, but he clearly didn’t realize the full extent of his ignorance or he would have kept his mouth shut rather than getting steamrolled on the issue of trade and tariffs.

Morrison addresses Shapiro’s inept response to him in a second article that really needs to be read in its entirety to appreciate its contemptuous nature:

Shapiro begins with two rather embarrassing mistakes. First, he misstates the name of this publication. Second, he commits a call to authority fallacy—precisely the error I accused him of last week. Shapiro writes:

The reality is that my arguments on free trade have been supported by every major free market economist in history . . .

This is a tautology: of course most “free market” (read: Austrian School) economists support free trade—just as most American School economists support tariffs, or most labor economists support unions. Does the fact that most Marxist economists support socialism prove that socialism works? No. This is sophistry.

Shapiro is also a hypocrite: did he not make his name by ignoring the so-called “97 percent of climate scientists” who believe climate change is anthropogenic, or the (I imagine) 100 percent of gender studies professors who think biological sex and gender identity are different? Why is Shapiro so willing to ignore “experts” on climate change or feminism, yet treat them like (false) gods when it comes to economics? Shapiro would be wise to remain ever-skeptical, and heed the aphorism: Take not the merchant at his word, but trust only by the skin of his fruit.

Finally, Shapiro says the articles I cited “do not mention tariffs,” and they are therefore irrelevant. This is like saying a paper on Elizabethan England, that never mentions Shakespeare, is irrelevant to studying Shakespeare—really? This is the difference between scholarship and parroting: my sources lend support to a novel conclusion, while Shapiro clearly googled “path-dependency” and cited the first book he could find—a case study of Microsoft.

While the book does discuss path-dependency, it does so explicitly within the context of a single industry, and makes no claim that the findings should be applied between industries. There is a big difference between supporting Microsoft relative to Apple or Google, and supporting America’s entire IT industry relative to foreign competitors. These are different debates, and the nuance is clearly lost on Shapiro….

Shapiro acknowledges that not all industries are of equal value when it comes to economic growth; economic growth depends upon technological development; growth is non-linear in that certain individuals (or industries) generate most of it.

Wait a minute! Shapiro just said that we “cannot tell which sectors will be the most profitable.” Which Ben do we believe? This is a perfect example of domain-specific knowledge in action. When Ben Shapiro has his “businessman” thinking-cap on, he acknowledges that you can tell which industries are most likely to generate economic growth—he even gives us an example. Yet when he has his “economist” thinking-cap on, he denies this categorically. This is what happens when you parrot sources without evaluating them for yourself.

Now that last sentence looks a little familiar, does it not? Perhaps it is merely a coincidence, two parallel observations. Or perhaps not….

Anyhow, it’s obvious that Benny was too busy playing the violin and copying Human Events for his weekly WND column to ever play computer games, or he would understand the basic concept of path dependency that every turn-based Civ or RTS player has had to master. The little guy somehow managed to graduate cum laude from Harvard Law School without ever reaching the level of knowledge possessed by the average computer gamer.

Shut up, Creepy Joe

At least when Donald Trump talked about grabbing women, they were actually adult women:

Former Vice President Joe Biden said he would “beat the hell out of” President Donald Trump if they were in high school over his crude comments about women.

“When a guy who ended up becoming our national leader said, ‘I can grab a woman anywhere and she likes it’ and then said, ‘I made a mistake,’” Biden said Tuesday of Trump, according to video of the remarks posted on Facebook by the University of Miami College Democrats.

“They asked me would I like to debate this gentleman, and I said no. I said, ‘If we were in high school, I’d take him behind the gym and beat the hell out of him,’” said Biden, getting laughter and applause from the crowd at the University of Miami.

And Trump didn’t do it on camera either. But Creepy Uncle Joe doesn’t just grab women. He totally creeps on them, especially if they’re little girls.

I hope Joe Biden is the Democratic nominee. We already saw how effectively the God-Emperor used the rhetorical term “Crooked Hillary”. Imagine how much mileage he’d get out of “Creepy Joe”.

Infogalactic update

We made some major changes to the Infogalactic structure yesterday. While most of the work is interior stuff that will not be readily apparent to the user, we have significantly expanded our storage and processing capabilities while reducing our monthly burn rate by about one-third. This means that we are running about twice as fast and about 2.7 times more efficiently than before, while giving us considerably more control over our backend.

What this means, as you will see, is that our search time has been cut in half again. Just copy and paste :i vox day into the search bar of Brave and you will see what I mean.

Thanks very much to the Burn Unit, who continue to keep Infogalactic moving forward. And you should not fail to note that the Planetary Knowledge Core is actively updating itself, as even recent events such as March Madness 2018 are already documented online.

Mailvox: Stupid cons and Smoot-Hawley

Sean asks about an old conservative trade chestnut:

The Conservatives on talk radio keep screaming about Smoot-Hawley. Those tarriffs if I remember right, the prevailing wisdom made the depression worse. What is the counter argument to that and how does it apply to what is going on now? Just curious. I have a hard time grasping arguments, and I know Vox is right but I would just like to better understand why the Levin’s are wrong.

I really do not understand why conservatives insist on continuing to pay attention to ignorant and deceitful posers like (((Ben Shapiro))) and (((Mark Levin))). These guys simply do not know what they are talking about and it is absolutely and eminently clear to everyone who does that they neither know the basic facts involved nor understand the core conceptual issues that make those facts important.

Every single talking head who makes any reference whatsoever to Smoot-Hawley is a poser and a fraud who knows nothing about economics or economic history. This is basically a variant of the “Um, Ricardo?” pseudo-rebuttal to an argument for tariffs or other forms of protectionism. It is proof that the speaker has heard about the subject, but doesn’t actually know the subject at all.

The point is so trivial that I dealt with it in a single paragraph in The Return of the Great Depression ten years ago and haven’t seen the need to mention it again since.

For many years, it was supposed that the Smoot-Hawley tariff of 1930 played a major role in the economic contraction of the Great Depression. As more economists are gradually coming to realize, this was unlikely to have been the case for several reasons. First, the 15.5 percent annual decline in exports from 1929 to 1933 was less precipitous than the pre-tariff 18.3 percent decline from 1920 to 1922. Second, because the amount of imports also fell, the net effect of the $328 million reduction in the balance of trade on the economy amounted to only 0.3 percent of 1929 GDP. Third, the balance of trade turned negative and by 1940 had increased to nearly ten times the size of the 1929 positive balance while the economy was growing.

Unless Levin is concocting some new and highly improbable mathematical scenario based on chaos theory and the Smoot-Hawley butterfly, he’s flat-out wrong. To put it in more simple terms, there was nowhere nearly enough international trade taking place at the time to cause or account for the Great Depression. Whoever originally came up with that idea didn’t know what they were talking about and didn’t understand economics. And neither does anyone who still takes the ridiculous idea seriously.

The reason the Great Depression happened was the same reason that the financial crisis of 2008 happened. Everyone was overleveraged and the total amount of money being borrowed collapsed. That is why an average of 1,287 banks failed every year from 1930 to 1933. The historical credit collapse had vastly more impact on the economy than a smaller annual decline in exports than had been experienced seven years before as a result of the Fordney–McCumber tariff act.

That suspicious impartiality

It’s rather remarkable that the journalists attempting to attack the credibility of Russia Today don’t realize what they are implicitly admitting about the BBC, Sky TV, CNN, and other Western media organizations:

Staffed in London mainly by Western journalists, a cursory viewing of RT might suggest a respectable international broadcaster in the mould of the BBC, Sky and CNN. It broadcasts daily, a mix of news bulletins, talk shows — on which many peers and MPs, including Mr Corbyn, have appeared — and documentaries.

Its viewing figures in the UK are minuscule (560,000 people tune into RT at some time during the week, compared with 6.1 million for Sky and 10.4 million for BBC News), but its output is amplified by YouTube channels and social media feeds which cater for an audience of ‘metrosexuals and bums’, according to one rival Russian channel.

And while it is true that many stories are delivered impartially, this selective impartiality appears to be a strategic ploy. According to Ben Nimmo of the Atlantic Council, an American international affairs think-tank: ‘[RT’s] job in quiet times is to build up an audience, so it can propagandise to them in crises. You must not confuse RT with bona fide journalism: not all its output is propaganda, but its purpose is.’

Whenever Russia interests are at stake — as in Ukraine, Crimea and Syria — it pumps out programmes, videos and tweets that almost invariably toe the Moscow line.

How terrible of them to reliably be impartial on most issues, only to stick to a narrative on matters important to Russia. This is very different from the BBC, Sky TV, and CNN, where “bona fide journalism” means all propaganda all the time.

The purpose of all media is propaganda. It is all rhetoric. It is intended to persuade, not to simply inform. The big difference is that Russia Today doesn’t feel any need to constantly uphold the neoliberal world order’s narrative all the time.

Voxiversity 003

The third Voxiversity video is now live! This is another short video, and one that conclusively disproves the oft-heard assertion that trade wars are always bad for the economy.

Episode Three: Trade War: What is it good for?

We will be following this up shortly with a bonus fourth episode thanks to CGTN graciously granting permission for me to upload an edited version of the appearance on Dialogue that is referenced here. If you are interested in supporting us making more of these videos, consider becoming a Voxiversity backer. Some initial comments:

  • Vox Day hits it out of the park again.
  • Awesome Video – they just keep getting better!! I will be sharing this with everyone. 
  • These just keep getting better, especially in terms of production quality. Happy to be a monthly Voxiversity support. Keep em coming!
  • The learning curve here is working far, far beyond any reasonable expectations. I know you are uncomfortable in front of the camera, but this video is absolutely fantastic. Your collaborator has figured out how to work around whatever deficiencies you may feel you have and is making your point for you marvelously. 
  • I am impressed how much these improved since the first one, primarily on the audio side. Good stuff.
You should find that a link to this will serve as an effective rebuttal to anyone who is running around shrieking about Smoot-Hawley, David Ricardo, and how Trump’s tariffs are inevitably going to lead to a trade war that will lead to a second Great Depression.

I think this is my favorite comment so far: I almost feel sorry for the free traders…