Commentary on Political Economy

Thursday 19 August 2021


 As you know, how powerful an economy is does not depend on inventing a technology, but on USING it! The intensity of use depends on the formation of the workforce... The invention and adaptations of "techniques" come from that, from the technical preparation of the workforce.

The result is befuddled valuations across the market where online forums and social trading determine valuations far more than estimates of future cash flows.

The meme-stock asset class’ new frontrunner is South Australian minerals explorer turned deep-tech quantum computing hopeful Archer Materials. It climbed 21 per cent on Monday to a record $2.88 on a valuation of $655 million.


MY OH MY! Where are the "watchdogs"? Not watching, and lost all their teeth...

It's SO hard to disagree with the Murdoch press this time. Dont know if yiu're aware, an obvious detail is that summer is the time when the Taliban come down from the mountains to fight - for obvious (must one spell this out?) "meteorological" reasons. But obviously no one told the ageing Biden this! Or was it just the insane symbolism of leaving by September 11? A dysfunctional government and society go hand in hand. I hope the fresh focus on the Asia Pacific goes a touch more smoothly!

History can rhyme because humans forget. Western states and what is left of their 'publics' have forgotten the power of terror. Dictatorships from Hitler's to Mao's did not have to do much to rule because they let terror do the ruling for them. The Taliban are ferocious. The West holds the Charter of Human Rights in its right hand and a gentleman's agreement in its left. The outcome in Afghanistan was obvious to all discerning Afghanis: sooner or later, the terrorists would exhaust those Westerners who could not summon the ruthlessness to exterminate them, as they deserved.

This report from Bret Stephens shows in a few truly devastating lines what happens to a great power when scoundrels (Macbeth/Trump) and ageing weaklings (Lear/Biden) are put in charge. (Macbeth and Lear are kings in separate Shakespearean tragedies.) It boggles the imagination that the US can't find better presidential candidates than the likes of Obama or Harris or, God forbid! that Taiwanese rat Paul Yang! Dear oh dear!... and then has to settle for septuagenarians, Hillary, Donald or Joe...

Frederick W. Kagan, the writer of this piece, is the son of Donald Kagan, the author of one of the greatest historical studies, The Peloponnesian War.

Wwweelll! What do you know?! Even Paul Krugman is having second thoughts about how to measure inflation! (Hint: core inflation is as vapid as transitory inflation.) Krugman still fails to tackle the much bigger problem of asset prices, but this can do for now.

Scathing comment from Paul Kelly.

Note the reference to George Packer, whose piece in The Atlantic I linked in the Brothers Line. Unfortunately, the same diagnosis of “fractured” society can be levelled at most Western countries. We need to stop the dilution of Western values due in large part to (a) large immigration from alien if not inimical cultures (Afghanistan is one!) and (b) the connivance of strata of the “global” Western bourgeoisie with transgressive minority movements (homosexual, transgender, ethnic minorities, feminists) that fragment social cohesion and tear at the social fabric.

Of course, the “global” bourgeoisie needs the cover of identity politics to distract from its cataclysmic stripping of the planet’s resources. Joe Aston’s column in the AFR about the abominable crimes perpetrated by Twiggy Forrest in the environmental sphere, and his contemptible hypocrisy, is an award-deserving devastating exposé of this “green washing woke capitalism”. Here is the link:

Note in this piece that even the most optimistic analysts and economists are at best ambivalent about the contribution of AI to productivity… which was my point to begin.

My point is…that it is pointless to call an activity “technological” unless it improves productivity, and significantly at that. Otherwise, such activity is at best “administrative” or, even worse, “artistic”…

VERY IMPORTANT! You can see here how Blundell-Wignall's reasoning is on exactly the same lines as mine: Big Tech can expand either in productive development or, which is happening in the West, in the easy exploitation and "habituation"of consumer habits through a monopoly on illicitly acquired data.

"The second issue goes the other way. What does China want to be? A country swinging towards what you do in your leisure time (consolidating online payments, shopping, and social media), or the global winner in technology and productivity growth?

Alibaba/Ant built an integrated ecosystem with cross-sharing information economies: Alipay (payments app), MYbank (online banking), Huabei (a digital credit wallet for shoppers), JieBei (mobile phone-based lending), Yu’e Bao (a money market fund), Tmall (online retail) and others.

They are moving into the sharp upswing phase of the tech S-curve, helped by US and other acquisitions abroad. The same goes for Tencent, which owns WeChat, WeChat Pay, and WeBank (offering money market funds, SME loans and micro-credit).

Fintech with shopping, finance and social media is proceeding at a rapid and potentially disruptive pace, really bypassing the CCP and is highly popular with Chinese people. It’s a sort of economic democratisation. Who knows where that ultimately may lead! It’s no doubt a factor in the crackdown.

But there is an even bigger CCP concern that can be seen in the objectives of the latest five-year plan concerning hegemony in technology.

Regulators have piled pressure on Jack Ma, the founder of e-commerce group Alibaba and his business empire.


China’s despots wrestle with tech dilemma

The Nobel prize-winning economist James Tobin once suspected: “We are throwing more and more of our resources, including the cream of our youth, into activities that generate high private reward disproportionate to their social productivity.

“I suspect the immense power of the computer is being harnessed ... not to do the same transactions more economically, but to balloon the quantity and variety of financial exchanges.”

Alibaba founder Jack Ma has been reined in by the state.


China threatens its own future by stifling its tech giants

This very thought seems to be at the heart of President Xi Jinping’s crackdown on parts of the tech economy: not chips, robotics, computer-assisted design and high-tech manufacturing (and what those companies do abroad). But the rapid growth of the leisure-oriented, consumer-facing social networking shopping and payments ecosystems of China’s big tech/fintech companies.

Jack Ma live streams a conference in January after he resurfaced from a mysterious disappearance.


Xi Jinping reels in his tech titans

The bottom line for China is deciding which approach lays the biggest golden egg: the CCP winning more of the tax spoils versus keeping the lid on leisure-oriented innovation and economic democratisation, while attracting the best minds to the technology of making things that matter most in the battle for economic hegemony.

My money is on the latter."

This story from the Post has to be read to be believed! Please don’t read it: I only link it in case you find the “argument” so incredible that… you don’t believe me! 

In a nutshell, this addled nigger (it’s the least insult I can manage with scum like this)maintains that one’s admission of humiliation is actually…hubris! Excessive pride! So, you should never feel proud…just to ensure you can never…not just BE humiliated…but even FEEL humiliated! 

The sheer self-abasement of some portions of the American polity are simply beyond comprehension, not just belief! According to these people, it is better to curl up in a corner and die than even to attempt to live!… Well…

The most charitable thing you may say is that this lady is an irredeemable dill. But then, WHAT ABOUT THE POST EDITORS WHO ALLOW THIS SORDID DROSS TO BE PUBLISHED? (Why do I bother subscribing to the Post? Mostly, because it’s cheap and they have the best e-paper app; truly a delight. Secondly, there are lots of other articles and columns that are obviously much better.)

In the snippet from the John Howard interview I lined earlier a detail struck me about his acuteness not just in politics but also in sociology. The ex PM makes a subtle yet sharp distinction between (political and idological) division or opposition (as in the Labor Opposition) and social “fragmentation”. He states, with enviable insight, that Australia is now less “divided” but much more “fragmented” - indeed, I would add modestly that the social fragmentation induces less political divisions for the precise reason that a fragmented society (ethnically and by “identity politics”) does not even know how to be divided or opposed! A fragmented society is just a mess! And that is what we are in right now…

I left out what Howard said about fragmentation:

"Howard stands accused by his adversaries of being a divisive leader and as having created the politics which has left a legacy of bitter partisanship. But he is unfazed and doesn’t accept this description of the state of politics.

“Actually, I think things were more polarised in the decades of the ’50s, ’60s and ’70s. The ideological divide was very deep, overhung by the Vietnam War, the sacking of the Whitlam government. There was deep partisanship then. I don’t think the debates are as bitter now. The expression I would use to describe the state of politics now is ‘fragmented’.”

From the pages of history: John Howard secured a historic fourth term in office for the coalition. The sweeping victory, which included a boost in the Senate, gave the government strength to revive its stalled reform agenda.  

Howard says that fragmentation is apparent in the growth in the numbers on the crossbenches in Parliament, which “is a thoroughly bad development”. He says it reflects the collapse of political party membership and the decline of political parties being organisations that represent broad-based community interests.

“The language of factions has entered the culture of the Liberal Party much more strongly than it used to. I think it is just a major trend in all political parties. People don’t join organisations the way they used to.

“As a result, political parties’ rank and file membership is less representative of the people who normally vote for them. So the potential for control by groups or factions is greater. Social media has reinforced our alienation from groups. It is a very different political culture.”

Here is the link:

Ooops...sorry...try again

Xi Jinping calls for wealth redistribution and clampdown on high income

China’s tech tycoons have been under pressure since Jack Ma’s Ant Group IPO was cancelled last yea

Journalists watch a screen showing China’s president Xi Jinping delivering a speech during the opening of the Boao Forum for Asia in Apri

Xi Jinping has expanded a campaign targeting China’s tech sector to focus on inequality and other social problems © AFP via Getty Image


August 18, 2021 5:26 am by Tom Mitchell in Singapore and Sun Yu in Beijin

President Xi Jinping has called for stronger “regulation of high incomes” in the latest sign that a 10-month campaign targeting China’s largest technology companies was rapidly expanding to encompass broader social goals

State media reported that a meeting of the Chinese Communist party’s Central Financial and Economic Affairs Commission on Tuesday, chaired by Xi, had emphasised the need to “regulate excessively high incomes and encourage high-income groups and enterprises to return more to society

The committee added that while the party had allowed some people and regions to “get rich first” in the early decades of China’s reform and opening period, it was now prioritising “common prosperity for all

China’s richest entrepreneurs have been under increasing pressure since November, when the planned $37bn initial public offering of Jack Ma’s Ant Group, which would have been the largest ever, was cancelled after the internet tycoon criticised the country’s financial regulato

More recently, ride-hailing company Didi Chuxing was chastised by officials after it ignored their warnings to postpone a $4.4bn listing in the US. Strict new regulations targeting China’s booming tutoring industry, which Xi has repeatedly criticised, also sparked a sharp sell-off in New York-listed Chinese companie

The financial and economic affairs committee, which usually focuses on macroeconomic and financial policies, alluded to the education crackdown, saying that China must create “more inclusive and fair conditions for people to improve their education levels


China’s nanny state: why Xi is cracking down on gaming and private tutor

It was the first meeting publicly chaired by Xi since late July. Party leaders traditionally retreat to the seaside resort of Beidaihe in early August for policy deliberations, although there has been no official confirmation of the annual retreat in recent weeks

“Stagnant consumption data has made clear that it’s urgent to increase people’s incomes and focus more on distribution fairness,” said Wang Jun at the China Center for International Economic Exchanges, a Beijing think-tan

One Chinese entrepreneur said the renewed emphasis on inequality and other social problems, coupled with the recent crackdowns on Didi and education companies, had sent a clear signal to the private secto

“It sends a very strong message to every company,” said the entrepreneur, who asked not to be identified. “The party wants to have a stronger say in your business and they want you to be more obedient

In late April, three state entities took a 1 per cent stake and board seat at a Beijing-based subsidiary of ByteDance, the group that controls TikTok and other popular short video app

The stake, first reported by The Information, has raised speculation that the Chinese government might push for “golden shares” and board representation at other tech companies, especially at the parent leve

The head of a large private charity said that pressure on the private sector had led to “a big jump in corporate donations

“It is high time the authorities address the income gap,” the charity executive said. “But most donations go to government-backed charity groups with little oversight"

Well, this only proves me right, but it's too late for me to move to China...hahaha..

I agree with George Packer: Joe Biden will go down in infamy for betraying at least those Afghanistan who helped the West. The only extenuating circumstance? He’s an old man who should never have got there in the first place. The US and the West are teetering on the verge of geopolitical collapse:

"The chaotic scenes at the airport, with Afghans hanging from a U.S. military plane and two falling from the sky to their deaths, will be the indelible images of this debacle. They are the echo of 9/11, with people falling from the sky, that Mr. Biden didn’t anticipate when he chose the 20th anniversary of 9/11 as his withdrawal deadline."

But the President was dishonest in framing the U.S. mission merely as fighting in another country’s “civil war.” The U.S. didn’t remain in Afghanistan for 20 years to send women to school or to “nation build.” The core mission was to prevent the country from again becoming a terrorist safe haven. The Taliban’s victory will now attract thousands of young jihadists from around the world, and they will have Americans and the U.S. homeland in their sights.

Mr. Biden said he would maintain a “counterterrorism over-the-horizon capability” to strike camps in Afghanistan, but that will be much harder from the distance of the Persian Gulf. This is a far bigger risk than he lets on, as U.S. intelligence agencies know.

Mr. Biden was also dishonest in framing his Afghan decision as a false choice between total withdrawal and sending tens of thousands of troops again. He knows his own advisers, military and civilian, believed they could support the Afghan military with no more than a few thousand troops to supply air power and intelligence.

He also knows the U.S. hasn’t had a single casualty in more than a year in Afghanistan. Even if Mr. Biden was set on withdrawal, he could have done it based on conditions that would have given the Taliban more incentive to negotiate with the government.

Mr. Biden claimed that Afghan leaders Ashraf Ghani and Abdullah Abdullah had refused his advice to negotiate with the Taliban. That is false. They had been negotiating with the Taliban for months, under enormous pressure from the Trump Administration. The problem is that the Taliban had no incentive to negotiate in good faith when it knew the U.S. was leaving and would be able to take its chances on a military victory.

Like all good liberal internationalists, Mr. Biden thinks you can achieve a diplomatic outcome by diplomacy alone. Mr. Biden’s claim that the U.S. will continue to support the Afghan people and stand for human rights and the women of Afghanistan is the same kind of internationalist twaddle. The Taliban is taking the women of Afghanistan back to the Dark Ages, and the “international community” will do nothing to stop it. Mr. Biden’s words of “support” will be cold comfort when the Taliban knocks on the doors of women who worked in the Afghan government."

We had hoped that Mr. Biden would accept some responsibility and explain how he would fix this mess. He did none of that, making it clear that he himself is the main architect of this needless American surrender. It does not bode well for the rest of his Presidency.

The world has seen a President portraying surrender as an act of political courage, and retreat as strategic wisdom. As we write this, the world’s rogues are looking for ways to give him a chance to deliver a similar speech about other parts of the world.

Tom Friedman in the NYT has put his finger on what I find most aggrieving in the entire debacle:

"As for the Biden team, it is hard to imagine a worse morning after for it in Kabul. Its failure to create a proper security perimeter and transition process, in which Afghans who risked their lives to work with us these past two decades could be assured of a safe removal to America — not to mention an orderly exit for foreign diplomats, human rights activists and aid workers — is appalling and inexplicable."

Ryan Crocker, Barack Obama’s ambassador to Afghanistan: “I’m left with some grave questions in my mind about [Mr. Biden’s] ability to lead our nation as commander in chief. To have read this so wrong—or, even worse, to have understood what was likely to happen and not care.”

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