Commentary on Political Economy

Saturday 29 October 2022


Rationalisierung and Capitalism – Roscher, Menger, Weber


In his first major work on the methodology of the social sciences published in 1902, Max Weber addresses “the logical problems of political economy” intrinsic in the work of his great predecessors of the German Historical School of Economics, Wilhelm Roscher and Karl Knies, and joins the controversy over the “methodological debate” [Methodenstreit] that his two former masters had engaged with another of their pupils, Carl Menger, over the scientific status or less of Political Economy as against History as the foundation of the study of the economic activity of human societies. Ostensibly, the Methodenstreit revolved around the evident apory that arises whenever we try to extract “laws” or scientific rules from historical events such as, for instance, the social production of goods and services – what is broadly known as economics. Like all objects of human knowledge, our generalisations about them can never exactly reproduce their objects: as Joan Robinson famously put it, a one-to-one map of reality does not exist – and if it did, it would be of no use. Weber certainly accepted the relevance of this Fichtean hiatus irrationalis, that is, of the human impossibility to reconcile reason and reality. But, against Roscher and Knies, and in favour of Carl Menger and his Neoclassical theory of marginal utility, he insisted that the Historical Method could not, as an epistemological orientation, yield the kind of approximative scientific Resultate needed for the guidance of social policy, in economics as in many other spheres of social life.

The difficulty with Weber’s reasoning is that the prescription or setting of the methods required for the determination of “laws, rules and regularities” regarding social activity require the dialectical, discursive consensus of those elements of society affected by the drawing of those very “laws, rules and regularities”! Differently put, given that the object of economic science or of political economy aiming to be scientific is to maximise the welfare of society, it stands to reason that any and every scientific claim on their behalf must be scientifically linked to that welfare as a dependent variable of those scientifically-guided principles. The difficulty arises from the obvious reality that welfare itself cannot be determined scientifically or empirically or quantitatively for the unassailable reason that the definition of welfare depends entirely on social and political standards and values and needs amenable only to discursive or consensual decisions on the part of the society concerned – and most certainly not on scientifically objective methods and measures. This is why Roscher refers to the “new and distinct science of Political Economy” as dependent on an “Idealistic Method” – one founded on axiomatic mathematical calculations incompatible with the empirical sociological fact-finding of the Historical Method. What is “idealistic”, as Roscher labels it, about the “scientific method” of economics and of political economy is precisely the fact that their attempts to make welfare mathematically and quantitatively “calculable” can only end up distorting the very notion of welfare – economic and otherwise! The theoretical crux of what came to be known as the Methodenstreit between the German Historical School headed by Roscher and the budding science of Neoclassical Economics based on the theory of marginal utility initiated by his devout student Carl Menger is all here. Of course, Roscher does not explicitly challenge the scientificity of “the Idealistic Method” in terms of the untenability of any claim to the measurability or calculability of welfare. Nor does he offer any proper critique of political economy and its extravagant claims to be able to quantify and calculate welfare whether in terms of causality (as Menger contended initially)or more restrainedly in terms of means and ends (as most other Neoclassical economists established thereafter).

Nevertheless, it is evident that what for Roscher is “idealistic” about political economy (Classical or Neoclassical) is precisely its “formalism”, the incompatibility of the methodical quantitative monetary calculation of welfare and the intrinsically and ineluctably political character of welfare itself. One of two things: either welfare, which is the sole defining object and content (the “Wesen und Inhalt”, as Schumpeter categorised it in his homonymous first work) of economics, is quantifiable – and in that case economics turns into engineering, and is therefore no longer “a distinct science”, losing thus its very raison d’etre; or else it is not so quantifiable because it depends on social values and goals – and in that case economics ceases to be a science and turns into a political activity, it turns into policy. It is signally this formal “contemplative” – hence “idealistic” – character of political economy that Roscher attacks quite justifiably. Economics as the study of production of goods and services for the satisfaction of social needs can be quantified only on condition that the weights and tools and methods of such quantification or calculation as well as the “welfare” intended to be their objective are politically agreed upon by the members of society. Yet this is precisely what the “new, distinct science of Political Economy” emphatically denies! For its exponents and promotors, Neoclassical Political Economy, to the extent that it relates to the maximisation of social welfare, is a science of exchange (General Equilibrium) based on universal human needs and wants – marginal utility – and a science of choice based on the optimal allocation of scarce resources, irrespective of other extraneous considerations such as cultural and moral values that are wholly irrelevant to their satisfaction.

Both Roscher’s German Historical School and its Neoclassical counterpart headed by Menger were obliquely aware of the conflicting political goals and interests upon which their opposing theories were founded. Yet neither theoretician had sufficient critical insight to recognize the practical and political origins of their diatribe.

Here is Roscher:

The isolation of the theory of Political Economy is peculiar to our own day. In more remote times, we find this study confounded with the other moral sciences, of which it was an integral part. When the genius of Adam Smith gave it its distinct character, he did not desire to separate it from those branches of knowledge without which it could only remain a bleached plant from the absence of the sunlight of ethics…

We may allow those who make Political Economy simply a piece of arithmetic to ignore these retrospective studies and their importance; for mathematics has little to do with history. But it is otherwise with the life of nations. These would discover whence they come, in order to learn whither they are tending. (W. Roscher, “Preliminary Essay on the Historical Method”, PPE, p.25)

For Roscher, political economy cannot theorise the economic activity of human societies by reducing the complex social relations involved to “simply a piece of arithmetic”, that is, to abstract, formal mathematical rules – to formulae - that have no substantive content in terms of the needs and wants of those societies – needs and wants that cannot be reduced to quantifiable entities and variables because they contain “the sunlight of ethics” without which those social relations – yes, even the “social relations of production” – have and make very little sense. Even the founder of Political Economy, Adam Smith, Roscher insists, had warned that the market equilibrium schemata he had theorised in The Wealth of Nations had to be richly supplemented by his adroit qualifications in The Theory of Moral Sentiments. Again, what Roscher fails to see here is that, in reality if not in intention, Smith’s general market equilibrium schemata traced in The Wealth did not so much describe human society but rather they prescribed the institutional shape and order that a society had to follow if it wished to become a capitalist market society. The mathematical or “arithmetic” scheme of Classical Political Economy was ab initio a “project”, a prescription, a guide, for the establishment of a capitalist marketplace society capable of being reduced to measurable entities, not a photograph or portrait of an eternal, immutable social reality. Regardless of whether or not Political Economy claimed to describe an invariant human nature, in reality its “laws of economics” reflected simply the power and violence of the bourgeoisie in reducing living labour to dead abstract, and therefore measurable, labour.

For his part, and from the opposing viewpoint of Political Economy, Menger can detect the ideological bases of Roscher’s Historical Method, in the guise of its predecessor in Savigny’s Historical School of Law; but he fails to observe the far more ideological refoundation of social structures by the capitalist bourgeoisie supplanting the old aristocratic absolutist feudal social order and mode of production. Here is Menger:

It [Savigny’s Historical School of Law] concluded that the desire for a reform of social and political conditions aroused in all Europe by the French Revolution really meant a failure to


recognize the nature of law, state and society and their "organic origin." It concluded that the "subconscious wisdom" which is manifested in the political institutions which come about organically stands high above meddlesome human wisdom. It concluded that the pioneers of reform ideas accordingly would do less well to trust their own insight and energy than to leave the re-shaping of society to the "historical process of development." And it espoused other such conservative basic principles highly useful to the ruling interests 20 (Investigations, p.91)

Menger is right to indict the vested interests of the German Junker or landed aristocracy behind the promotion of “organic”, autochthonous economic practices and social values championed by the various German Historical Schools. At the same time, however, he fails to remove the ideological veil of his own “science of economics”, the theory of marginal utility, which only served to hide the project of domination of the bourgeoisie over all of society.

Of course, by failing to address the epochal implications of the violent generalisation of commodity production and exchange operated by the rapid and seemingly unstoppable spread of capitalist industry and enterprise, Roscher’s objection to the scientific claims of Neoclassical Theory on behalf of his “Historical Method” were destined to be defeated by the insurgent “Idealistic Method” espoused and developed by the capitalist bourgeoisie and its ideologues. The Methodenstreit entirely elides this crucial point: it deflects the essential political conflict between the two standpoints into a sterile debate on the correct “scientific method” to be applied to capitalist industry and enterprise. Roscher and his German Historical School never perceived that however invalid the claims of Neoclassical Theory were from a proper historical and anthropological scientific standpoint, it would be the very violent political imposition of a mode of production and social system founded on the measurement and “calculability” of human living labour in monetary terms that would seal the imminent triumph of both capitalist industry and of its ideological rationalisation in Neoclassical Political Economy espoused by Carl Menger and the Austrian School that he founded. Tersely put, it may be said that the rationalisation of capitalism – its scientistic justification – had to pass through the Rationalisierung of human living labour by means of the violent imposition of the “labour market” – the transmutation of living labour into dead abstract labour on which the “exact calculation”(Weber’s “exakte Kalkulation”)  of monetary profit occurs in capitalist industry.

Wednesday 26 October 2022

The ‘Anti-Navy’ the U.S. Needs Against the Chinese Military

The U.S. is set to be weakest when the People’s Liberation Army aims to be strongest.

By Mike Gallagher

Oct. 25, 2022 6:14 pm ET

As Xi Jinping secured a third term as general secretary of the Chinese Communist Party, U.S. foreign policy entered a window of maximum danger. In a speech to the 20th Party Congress, Mr. Xi made clear that unification with Taiwan “must” and “can, without doubt, be realized.”

Secretary of State Antony Blinken admitted that Mr. Xi is moving on a “much faster timeline” to take Taiwan, and Chief of Naval Operations Michael Gilday said he couldn’t rule out an invasion in 2022 or 2023. Domestically, Mr. Xi’s problems—a structural economic slowdown, skyrocketing household debt, and the demographic buzzsaw of the largest group of retirees in human history—will all get worse in the 2030s.

At the same time, Mr. Xi faces an American military that is growing weaker within the decade. As the Heritage Foundation’s recently released 2023 Index of U.S. Military Strength makes clear, because of inadequate budgets, truncated modernization and degraded readiness, the U.S. military is set to be weakest when the People’s Liberation Army aims to be strongest. The report, which for the first time rated the overall state of the U.S. military as “weak,” rated the Navy and Air Force—the two priority forces in the Indo-Pacific—as “weak” and “very weak,” respectively.

Rather than gambling the fate of the free world on Mr. Xi’s restraint, we must learn the lessons from Ukraine and put American hard power in Mr. Xi’s path before it is too late. Long-term investments to rebuild American military superiority in general, and maritime superiority in particular, are critical. But the reality is we won’t be able to build the Navy the nation needs within the next five years.

What we can do now is build an anti-navy—asymmetric forces and weapons designed to target the Chinese Navy, deny control of the seas surrounding Taiwan, and prevent the PLA’s amphibious forces from gaining a lodgment on the island.

The first step in assembling this anti-navy is to build up long-range ground-launched conventional missiles in three rings across the Pacific: (1) the First Island Chain, (2) the Second Island Chain plus the Central Pacific islands, and (3) the outer edges of the theater, including Alaska, Hawaii, and Australia.

As a new report from the Center for Strategic and Budgetary Assessments argues, in the first ring we need shorter-range antiship and air-defense missiles such as the Naval Strike Missile, Long-Range Anti-Ship Missile and SM-6. These weapons would be operated by the Army and Marine Corps, especially in the Southern Japanese and Northern Philippine Islands. Wherever possible, the weapons should be containerized to confuse Chinese targeting.

In the second ring, we need extended-range Maritime Strike Tomahawks and other intermediate-range missiles. In the third ring we need longer-range intermediate missiles with advanced energetic materials in places like Alaska and Australia’s Northern Territory.

The point is that the PLA Rocket Force (China’s anti-navy) has fielded low-cost weapons to keep American ships out of the fight and target American forces concentrated in a few, fixed locations. We must use this logic against China, building an anti-navy that can sink PLA ships and amphibious landing craft at port, in the Taiwan Strait and on Taiwan’s beaches. Long-Range Anti-Ship Missiles cost only about $4 million a unit but could destroy Chinese ships that cost the PLA hundreds of millions of dollars to build. For once, U.S. forces would be on the right side of the cost equation.

The second step in building an anti-navy is to stockpile munitions before the shooting starts. At current rates, it could take two years to boost Javelin production from 2,100 to 4,000 missiles annually. In many cases Chinese companies are the sole source or a primary supplier of key materials used in our missiles. To fix this, the Pentagon should stop buying minimum sustaining rates of critical munitions and start maxing out the capacity of active production lines through multiyear procurement contracts. Drawing on the lessons of Operation Warp Speed, we can modernize the Defense Production Act and use it to provide direct project financing, automatic fast-tracking of permits, and investments in defense workforce training.

The third step is to turn the talk about arming Taiwan to the teeth into reality. This starts with moving Taiwan to the front of the Foreign Military Sales line and clearing the backlog of $14 billion in FMS items that have been approved but not delivered. Congress can go further by providing direct financial assistance to Taiwan and giving the Pentagon the same drawdown authority to provide defense supplies directly to Taiwan that it already has with Ukraine. Rather than demilitarizing hundreds of Harpoon missiles or putting them into deep storage, for instance, the Pentagon could use a Taiwan drawdown authority, make any necessary modernizations and certifications, and send these missiles, along with launchers, to Taiwan.

These steps can deter war within the window of maximum danger. If Republicans gain control of Congress, preventing the same deterrence failure we saw in Ukraine from playing out in Taiwan must be our top priority.

Congress needs to bend the Pentagon bureaucracy, in service of a defense strategy that prioritizes hard power. Doing so demands we understand the paradox of deterrence: that to avoid war, you must convince your adversary that you are both capable and willing to wage war.

If we ignore the hard lessons about hard power that we have learned in Ukraine, if we succumb to the utopian path of disarmament, and if we allow the fear of escalation to dominate our decisions, we will feed Mr. Xi’s appetite for conquest and invite war. By choosing to put an anti-navy in Mr. Xi’s path, we can deter war in the short term and buy time to build a Navy that defeats communism over the long term.

Mr. Gallagher, a Republican, represents Wisconsin’s Eighth Congressional District.

WSJ Opinion: The U.S. Military’s Growing Weakness


WSJ Opinion: The U.S. Military’s Growing Weakness

WSJ Opinion: The U.S. Military’s Growing Weakness

Play video: WSJ Opinion: The U.S. Military’s Growing Weakness

Review and Outlook: The Heritage Foundation's latest 'Index of U.S. Military Strength' warns of declining power in the U.S. Navy and Air Force. Images: Department of Defence/Heritage Foundation Composite: Mark Kelly

Appeared in the October 26, 2022, print edition as 'The ‘Anti-Navy’ the U.S. Needs Against China'.

Tuesday 25 October 2022

Putin Is Onto Us

Oct. 25, 2022

By Thomas L. Friedman

Opinion Columnist

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As the Russian Army continues to falter in Ukraine, the world is worrying that Vladimir Putin could use a tactical nuclear weapon. Maybe — but for now, I think Putin is assembling a different weapon. It’s an oil and gas bomb that he’s fusing right before our eyes and with our inadvertent help — and he could easily detonate it this winter.

If he does, it could send prices of home heating oil and gasoline into the stratosphere. The political fallout, Putin surely hopes, will divide the Western alliance and prompt many countries — including ours, where both MAGA Republicans and progressives are expressing concerns about the spiraling cost of the Ukraine conflict — to seek a dirty deal with the man in the Kremlin, pronto.

In short: Putin is now fighting a ground war to break through Ukraine’s lines and a two-front energy war to break Ukraine’s will and that of its allies. He’s trying to smash Ukraine’s electricity system to ensure a long, cold winter there while putting himself in position (in ways that I’ll explain) to drive up energy costs for all of Ukraine’s allies. And because we — America and the West — do not have an energy strategy in place to dampen the impact of Putin’s energy bomb, this is a frightening prospect.

When it comes to energy, we want five things at once that are incompatible — and Putin is onto us:

1. We want to decarbonize our economy as fast as we can to mitigate the very real dangers of climate change.

2. We want the cheapest possible gasoline and heating oil prices so we can drive our cars as fast and as much as we want — and never have to put on a sweater indoors or do anything to conserve energy.

3. We want to tell the petrodictators in Iran, Venezuela and Saudi Arabia to take a hike.

4. We want to be able to treat U.S. oil and gas companies as pariahs and dinosaurs that should pump us out of this current oil crisis and then go off in the woods and die and let solar and wind take over.

5. Oh, and we don’t want any new oil and gas pipelines or wind and solar transmission lines to spoil our backyards.

I understand why people want all five — now. I want all five! But they involve trade-offs, which too few of us want to acknowledge or debate. In an energy war like the one we’re in now, you need to be clear about your goals and priorities. As a country, and as a Western alliance, we have no ladder of priorities on energy, just competing aspirations and magical thinking that we can have it all.

If we persist in that, we are going to be in for a world of hurt if Putin drops the energy bomb that I think he’s assembling for Christmas. Here’s what I think is his strategy: It starts with getting the United States to draw down its Strategic Petroleum Reserve. It is a huge stock of crude oil stored in giant caverns that we can draw on in an emergency to offset any cutoff in our domestic production or imports. Last Wednesday, President Biden announced the release of 15 million more barrels from the reserve in December, completing a plan he laid out earlier to release a total of 180 million barrels in an effort to keep gasoline prices at the pump as low as possible — in advance of the midterm elections. (He didn’t say the last part. He didn’t need to.)

According to a report in The Washington Post, the reserve contained “405.1 million barrels as of Oct. 14. That’s about 57 percent of its maximum authorized storage capacity of 714 million barrels.”

I sympathize with the president. People were really hurting from $5- and $6-a-gallon gasoline. But using the reserve — which was designed to cushion us in the face of a sudden shut-off in domestic or global production — to shave a dime or a quarter off a gallon of gasoline before elections is a dicey business, even if the president has a plan for refilling it in the coming months.

Putin wants America to use up as much of its Strategic Petroleum Reserve cushion now — just like the way the Germans gave up on nuclear energy and he got them addicted to Russia’s cheap natural gas. Then, when Russian gas was cut off because of the Ukraine war, German homes and factories had to frantically cut back and scramble for more expensive alternatives.

Next, Putin is watching the European Union gear up for a ban on seaborne imports of crude oil from Russia, starting Dec. 5. This embargo — along with Germany and Poland’s move to stop pipeline imports — should cover roughly 90 percent of the European Union’s current oil imports from Russia.

As a recent report from the Center for Strategic and International Studies in Washington, D.C., noted, “Crucially, the sanctions also ban E.U. companies from providing shipping insurance, brokering services or financing for oil exports from Russia to third countries.”

The U.S. Treasury and European Union believe that without that insurance, the number of customers for Russian oil will shrink dramatically, so they are telling the Russians that they can get the insurance for their oil tankers from the few Western insurance companies that dominate the industry only if they lower the price of their crude oil exports to a level set by the Europeans and the United States.

My sources in the oil industry tell me they seriously doubt this Western price fixing will work. Russia’s OPEC Plus partner Saudi Arabia is certainly not interested in seeing such a buyers’ price-fixing precedent set. Moreover, international oil trading is full of shady characters — does the name Marc Rich ring a bell? — who thrive on market distortions. Oil tankers carry transponders that track their locations. But tankers engaged in shady activities will turn their transponders off and reappear days after they’ve made a ship-to-ship transfer or will transfer their cargo into storage tanks somewhere in Asia for re-export, in effect laundering their Russian oil. Oil in just one very large tanker can be worth roughly $250 million, so the incentives are enormous.

Now add one more dodgy player to the mix: China. It has all kinds of long-term, fixed-price contracts to import liquefied natural gas from the Middle East at roughly $100 a barrel of oil equivalent. But because President Xi Jinping’s crazy approach to containing Covid — in recent months some 300 million citizens have been under full or partial lockdown — China’s economy has slowed considerably, as has its gas consumption. As a result, an oil industry source tells me, China has been taking some of the L.N.G. sold to it on those fixed-price contracts for domestic use and reselling it to Europe and other gas-starved countries for $300 a barrel of oil equivalent.

Now that Xi has locked in his third term as general secretary of the Communist Party, many expect that he will ease up on his lockdowns. If China goes back to anything near its normal gas consumption and stops re-exporting its excess, the global gas market will become even more scarily tight.

Last, as I noted, Putin is trying to destroy Ukraine’s ability to generate electricity. Today more than one million Ukrainians are without power, and as one Ukrainian lawmaker tweeted last week, “Total darkness and cold are coming.”

So add all of this up and then suppose, come December, Putin announces he is halting all Russian oil and gas exports for 30 or 60 days to countries supporting Ukraine, rather than submit to the European Union’s fixing of his oil price. He could afford that for a short while. That would be Putin’s energy bomb and Christmas present to the West. In this tight market, oil could go to $200 a barrel, with a commensurate rise in the price of natural gas. We’re talking $10 to $12 a gallon at the pump in the United States.

The beauty for Putin of an energy bomb is that unlike setting off a nuclear bomb — which would unite the whole world against him — setting off an oil price bomb would divide the West from Ukraine.

Obviously, I am just guessing that this is what Putin is up to, and if the world goes into recession, it could take energy prices down with it. But we would be wise to have a real counterstrategy in place, especially because, while some in Europe have managed to stock up on natural gas for this winter, rebuilding those stocks for 2023 without Russian gas and with China returning to normal could be very costly.

If Biden wants America to be the arsenal of democracy to protect us and our democratic allies — and not leave us begging Saudi Arabia, Russia, Venezuela or Iran to produce more oil and gas — we need a robust energy arsenal as much as a military one. Because we are in an energy war! Biden needs to make a major speech, making clear that for the foreseeable future, we need more of every kind of energy we have. American oil and gas investors need to know that as long as they produce in the cleanest way possible, invest in carbon capture and ensure that any new pipelines they build will be compatible with transporting hydrogen — probably the best clean fuel coming down the road in the next decade — they have a welcome place in America’s energy future, alongside the solar, wind, hydro and other clean energy producers that Biden has heroically boosted through his climate legislation.

I know. This is not ideal. This is not where I hoped we would be in 2022. But this is where we are, and anything else really is magical thinking — and the one person who will not be fooled by it is Vladimir Putin.

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Thomas L. Friedman is the foreign affairs Op-Ed columnist. He joined the paper in 1981, and has won three Pulitzer Prizes. He is the author of seven books, including “From Beirut to Jerusalem,” which won the National Book Award. @tomfriedman • Facebook

A version of this article appears in print on Oct. 26, 2022, Section A, Page 24 of the New York edition with the headline: When It Comes to Energy, Putin Is Onto Us.



Take all these bitches and impale their severed heads! They are the SCUM and the scourge of humanity.

Liberal Democrats withdraw letter to Biden that urged him to rethink Ukraine strategy

Rep. Pramila Jayapal (D-Wash.), chair of the House Progressive Caucus. (J. Scott Applewhite/AP)
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The Congressional Progressive Caucus has rescinded a letter, signed by 30 House liberals and sent to the White House on Monday, that urged President Biden to negotiate directly with Russia to bring an end to the war in Ukraine.

The withdrawal comes a day after the letter, led by Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.), triggered fierce pushback from many Democrats. The retraction was also a stunning misstep for a prominent House liberal who has expressed interest in seeking a leadership position in the party.

In the wake of the letter’s release, Democrats and Ukrainian officials argued that it was unrealistic to negotiate with Russian President Vladimir Putin. Those officials also worried the letter could create more pressure on Biden as he tries to sustain domestic support for the war effort, at a time when the region is heading into a potentially difficult winter and Republicans are threatening to cut aid to Ukraine if they retake Congress.

On Tuesday, Jayapal said the letter had been drafted several months ago and “released by staff without vetting.” She also sought to distance Democrats from recent comments by House Minority Leader Kevin McCarthy (R-Calif.), who suggested that a GOP-led House would not support additional aid to Ukraine.

“As Chair of the Caucus, I accept responsibility for this,” Jayapal said in a statement. “The proximity of these statements created the unfortunate appearance that Democrats, who have strongly and unanimously supported and voted for every package of military, strategic, and economic assistance to the Ukrainian people, are somehow aligned with Republicans who seek to pull the plug on American support for President Zelensky and the Ukrainian forces.”

Democrats were not made aware that the letter would be issued Monday, including those who had signed the letter over the summer, according to three congressional aides who spoke on the condition of anonymity to speak frankly about private discussions.

Many blamed Jayapal for the misstep, with several aides saying they believed this could tarnish her chances of winning a spot in Democratic leadership. This year, the congresswoman made preliminary calls to her colleagues about running for a leadership position, leaving the impression among some members that she would challenge Rep. Katherine M. Clark (D-Mass.), who is also a member of the progressive caucus, for a presumed No. 2 spot in the party.

Several of the letter’s signatories had earlier retracted their support for the letter. Late Monday, Rep. Mark Pocan (D-Wis.) seemed to commiserate with someone critical of the letter on Twitter.

“Hear you. First, this was written in July & I have no idea why it went out now. Bad timing,” Pocan tweeted.

“Timing in diplomacy is everything,” Rep. Sara Jacobs (D-Calif.), one of the letter’s other signatories, tweeted Tuesday morning. “I signed this letter on June 30, but a lot has changed since then. I wouldn’t sign it today. We have to continue supporting Ukraine economically and militarily to give them the leverage they need to end this war.”

One person close to the progressive caucus, who spoke on the condition of anonymity to discuss private conversations, said it was strange to publicly release a letter with only 30 signatures out of the 220 Democrats in the House.

In the original letter to the White House, dated Oct. 24 and first reported by The Washington Post, the lawmakers called on Biden to pursue a “proactive diplomatic push, redoubling efforts to seek a realistic framework for a cease fire.”

The liberal Democrats noted that the war’s disastrous consequences are increasingly felt far beyond Ukraine, including elevated food and gas prices in the United States and spikes in the price of wheat, fertilizer and fuel that have created global food shortages, not to mention the danger of a nuclear attack by Moscow.

The letter was signed by some of the best-known and most outspoken liberal Democrats in Congress, including Reps. Jamie Raskin (Md.), Alexandria Ocasio-Cortez (N.Y.), Cori Bush (Mo.), Ro Khanna (Calif.) and Ilhan Omar (Minn.). Its release came as House Speaker Nancy Pelosi (D-Calif.) spoke Monday at an international summit on Russia’s aggression against Ukraine, where she downplayed the possibility that U.S. aid to Ukraine would end if Republicans took the House.

“I believe that the support for Ukraine and the people of Ukraine … will not stop,” Pelosi said, adding that “support for Ukraine is bipartisan, it is bicameral.”

In remarks Tuesday in Zagreb, Croatia, Pelosi was even more forceful.

“All of us here pledged to stand with Ukraine and with the Ukrainian people, recognizing their courage — in Crimea, in other territories that [Russian President Vladimir Putin] has attempted to illegally annex and across the country — until victory is won. And that is what we will do, until victory is won,” she said.


China economy will not overtake US until 2060, if ever

As he embarks on a third term, Xi Jinping’s goal is to make China a mid-level developed country in the next decade, which implies the economy will need to expand at around 5 per cent a year.

But underlying trends – bad demographics, heavy debt and declining productivity growth – suggest the country’s overall growth potential is about half that rate.

The implications of China growing at 2.5 per cent have yet to be fully digested anywhere, including Beijing. For one thing, assuming the US grows at 1.5 per cent, with similar rates of inflation and a stable exchange rate, China would not overtake America as the world’s largest economy until 2060, if ever.

Growth in the long term depends on more workers using more capital, and using it more efficiently (productivity). China, with a shrinking population and declining productivity growth, has been growing by injecting more capital into the economy at an unsustainable rate.

China is now a middle-income country, a stage when many economies start to slow given the higher base. Its per capita income is $US12,500 ($19,745), one-fifth that of the US. There are 38 advanced economies today, and all of them grew past the $US12,500 income level in the decades after World War II – most gradually.

Only 19 grew at 2.5 per cent or faster for the next 10 years, and did so with a boost from more workers; on average the working age population grew at 1.2 per cent a year. Only two (Lithuania and Latvia) had a shrinking workforce.

China is an outlier. It would be the first large middle-income country to sustain 2.5 per cent gross domestic product growth despite working-age population decline, which began in 2015. And in China, this decline is precipitous, on track to contract at an annual rate of nearly 0.5 per cent in the coming decades.

Then there’s the debt. In the 19 countries that sustained 2.5 per cent growth after reaching China’s current income level, debt (including government, households and businesses) averaged 170 per cent of GDP. None had debts nearly as high as China’s.

Before the 2008 crisis, China’s debts held steady at about 150 per cent of GDP; afterwards it began pumping out credit to boost growth, and debts spiked to 220 per cent of GDP by 2015. Debt binges normally lead to a sharp slowdown, and China’s economy did decelerate in the 2010s, but only from 10 per cent to 6 per cent – less dramatically than past patterns would predict.

Total debt is up to 275 per cent of GDP, and much of it funded investment in the property bubble.

China avoided a deeper slowdown thanks to a tech sector boom and, more importantly, by issuing more debt. Total debt is up to 275 per cent of GDP, and much of it funded investment in the property bubble, where all too much of it went to waste.

Though capital – largely property investment – helped pump up GDP growth, productivity growth fell by half to 0.7 per cent last decade. The efficiency of capital collapsed. China now has to invest $US8 to generate $US1 of GDP growth, twice the level a decade ago, and the worst of any major economy.

In this situation, 2.5 per cent growth will be an achievement. Sustaining basic productivity growth of 0.7 per cent will barely offset population decline. To hit 5 per cent GDP growth, China would need capital growth rates near those of the 2010s.

Most of that money went into physical infrastructure: roads, bridges and housing. Given the scale of the housing bust, it’s likely overall capital growth will fall back to about 2.5 per cent.

Of course, the consensus is that China can achieve whatever target the government sets, but consensus forecasts have fallen short of recognising the pace of China’s slowdown in recent years, including this one, when growth is likely to fall below 3 per cent. Around 2010, many prominent forecasters thought China’s economy was going to overtake the US’ in nominal terms by 2020.

By 2014, some economists were claiming China already was the world’s largest economy in terms of purchasing power parity – a construct based on theoretical currency values with no meaning in the real world. These theoreticians argued that the yuan was grossly undervalued and bound to appreciate against the dollar, revealing the dominance of China’s economy.

Instead, the Chinese currency depreciated, and its economy is still a third smaller than the US’s in nominal terms. If anything, 2.5 per cent is an optimistic forecast that plays down the risks to growth, including growing tensions between China and its major trade partners, growing government interference in the most productive private sector – technology – and mounting concerns about the debt load.

China at 2.5 per cent growth has major implications for its ambitions as an economic, diplomatic and military superpower. A lesser China is more likely than the world yet realises.

The writer is chair of Rockefeller International.

Monday 24 October 2022

Il porto di Amburgo verso la Cina di Xi: Olaf Scholz ora è sotto accusa

di Paolo Valentino

24 ott 2022

Il governo tedesco è diviso: autorizzare o no l’acquisto del 35% di uno dei terminal del porto di Amburgo, «infrastruttura di interesse nazionale»? Il Cancelliere, già sindaco della città, è a favore. Contrari i ministri di Interni e Difesa

La strada che porta all’inferno è lastricata di buone intenzioni. Quella scelta dalla Germania per andarci è lastricata di accordi economici. Non sembra servita a molto la lezione geopolitica subita dalla Russia, a cui nel corso degli ultimi trent’anni Berlino si era legata mani e piedi per il suo approvvigionamento energetico. Una dipendenza a senso unico e pagata a caro prezzo negli ultimi nove mesi, dopo l’inizio della guerra in Ucraina, quando il metano è diventato un’arma contundente nelle mani di Vladimir Putin.

Ora la Germania rischia di commettere gli stessi errori con la Cina. Un contrasto profondo divide il governo federale, posto di fronte al dilemma se autorizzare o meno l’acquisto da parte del gruppo cinese Cosco del 35% di Tollerort, il più piccolo dei quattro terminal per container del porto di Amburgo. La spaccatura vede da un lato il cancelliere Scholz, che di Amburgo è stato borgomastro ed è favorevole a dare il via libera, dall’altro ben sei ministeri competenti che si oppongono alla vendita di un’«infrastruttura critica» a Pechino. Significativo è che oltre da Esteri ed Economia (guidati dai Verdi) e da Trasporti e Giustizia, a guida liberale, i no vengano anche da Interni e Difesa, entrambi diretti da ministre della Spd, il partito di Scholz.

La storia è iniziata un anno fa, quando la Hhla, la società che gestisce lo scalo anseatico, si impegnò a vendere a Cosco per 65 miliardi di euro una quota della struttura, con l’idea di farne «hub privilegiato» per le merci movimentate dal conglomerato asiatico. Dodici mesi dopo, l’operazione attende ancora il parere dell’autorità federale, che ha tempo fino al 31 ottobre.

Verdi e liberali stanno facendo forti pressioni su Scholz perché blocchi l’accordo, mettendo in guardia dai rischi. «Non dovremmo ripetere gli stessi errori del passato, rendendoci dipendenti da Paesi che un giorno potrebbero ricattarci», ha detto il ministro dell’Economia e vicecancelliere, Robert Habeck, memore della recente esperienza con la Russia, che sul territorio federale possedeva e operava infrastrutture come depositi di gas e raffinerie di petrolio, ora confiscate. Ancora più esplicito il ministro liberale della Giustizia, Marco Buschmann: «Nessuna infrastruttura critica tedesca deve cadere sotto il controllo del governo cinese».

Il fronte dei contrari, di cui è parte anche la Commissione europea che in primavera aveva dato parere negativo sull’operazione, fa notare che Cosco non è un’impresa qualunque solo a caccia di profitti. È in realtà una perla del capitalismo di Stato cinese, punta di diamante delle ambizioni globali di Pechino e strumento principale nella realizzazione della Via della Seta Marittima, con cui la Cina vuole diventare la superpotenza dei trasporti commerciali via mare. Già oggi Cosco è per volume di merci il secondo più grande operatore mondiale del settore.

Gli argomenti di chi è favorevole sono piuttosto difensivi. Venerdì a Bruxelles, il cancelliere Scholz ha spiegato che «si tratterebbe solo della partecipazione a un singolo terminal, sul modello di quanto avviene in altri porti dell’Europa occidentale». Cosco — azionista di maggioranza dei porti di Zeebrugge in Belgio, del Pireo in Grecia e di Valencia in Spagna — possiede altre quote minoritarie in quelli di Rotterdam, Anversa, Bilbao e Vado Ligure. Secondo il borgomastro di Amburgo Peter Tschentscher, molto legato a Scholz, rifiutare l’accordo equivarrebbe a «penalizzare economicamente Amburgo nei confronti di Rotterdam e Anversa». In ogni caso, aggiunge il sindaco, il controllo rimarrebbe nelle mani della Hhla. Secondo molti osservatori, Scholz non vuole fare un torto al suo successore e protegé.

Ma il problema della Germania con Pechino è molto più grande della vicenda del porto di Amburgo. La sola strategia seguita negli ultimi 20 anni dai governi tedeschi verso la Cina è stata infatti quella di assicurare profitti alle loro imprese. Ora Olaf Scholz ha affidato alla ministra degli Esteri Annalena Baerbock il compito di sviluppare un nuovo pensiero strategico, basato sul principio che la Germania non possa dipendere esistenzialmente da Paesi che non condividono i suoi valori. Peccato che, nell’attesa, è business as usual. Ai primi di novembre, infatti, Scholz sarà il primo leader occidentale a visitare la Cina dalla fine della pandemia, incontrando di persona Xi Jinping. Occorre precisarlo? Il cancelliere si porterà dietro uno stuolo nutrito di imprenditori tedeschi, pronti a firmare contratti e protocolli d’intesa. L’Europa sarà lontana. Certi vizi sembrano inguaribili.


Of Catholics and Chinese Communists

The Vatican renews its bad deal with Beijing that ignores human-rights and religious abuses.

 Even as Xi Jinping was being crowned as China’s unchallenged dictator, the Vatican said Saturday it has renewed its agreement with the Chinese Communist Party. This is the second renewal since the deal was brokered in 2018, though there’s little progress on religious freedom to show for it. Its main contribution has been to mute Vatican criticism of human-rights abuses, from the genocide of the Muslim Uyghurs to the political prosecution of Cardinal Joseph Zen in Hong Kong.

The deal gives Beijing a say in the appointment of Catholic bishops, but it’s telling that its terms are secret. A handful of mostly pro-Beijing bishops have been appointed. But the National Catholic Register reports that 36 of China’s 98 dioceses lack a bishop.


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All this comes as China insists that priests and bishops serve the interests of the ruling and atheistic Communist Party. Yet Pope Francis, who is so critical of the U.S. and capitalism, is silent on China. This is a return to the Vatican’s failed Ostpolitik of the 1960s and 1970s, when Rome muted criticism of the Soviet Union and its East European satellites.

Cardinal Pietro Parolin, who as secretary of state is the most powerful man in the Vatican after Pope Francis, has acknowledged limited progress from the deal but last month on Italian TV said it is imperative to assume Beijing’s “good faith.” The use of “faith” in that sentence is appalling since China’s Communists repudiate all religious faith. China has also done nothing to merit this presumption.

In the history of the papacy, perhaps nothing was as thrilling—even for non-Catholics—as the election in 1978 of a Polish pope from behind the Iron Curtain. “Be not afraid,” Pope John Paul II would tell believers, and he set the example by morally challenging regimes such as the Soviet Union and using his papacy to bring the plight of the forgotten and persecuted to the world’s attention.

The current Vatican’s motto is: be afraid. Pope Francis has given the Chinese Communist Party a free pass on its inhumane behavior, and in so doing he has compromised the moral authority of the Catholic church.


A shock to the global system from UK’s gilt market ‘episode’

The UK’s great gift to the world through its very British omnicrisis of the past month – beyond the comedy value and schadenfreude – is to provide a useful reminder that in markets, things can fall apart quickly with grim real-world consequences.

Some politicians have sought to blame the wild scenes in sterling and, more importantly, in gilts on global factors as if the toxic ‘‘mini’’ budget played only a bit part. This notion is for the birds.

But one thread of this thinking does make sense, which is that the market impact of former chancellor Kwasi Kwarteng’s doomed fiscal plans was faster and deeper than it otherwise needed to be. This was for two reasons.

One is that bond markets are creaking at the seams under the pressure of rapid interest rate rises and soaring inflation. The other is leverage, which has flourished in the long era of low, dull interest rates but can backfire quickly when the environment changes.

In the case of the ‘‘mini’’ budget – now presumably a ‘‘nano’’ budget since many of its key elements got scrubbed – bond investors found the fiscal plans so objectionable, and so cavalier in their presentation, that prices fell unusually fast.

That was bad enough. Where it went really wrong, though, is that this sell-off stumbled on to a landmine stuffed with derivatives – the strategies employed by pension funds to hedge against inflation and interest rate risk.

No one had ever thought to stress-test these boringly named liability-driven investment (LDI) strategies for a scenario where gilt yields add a full percentage point in a day, because why would you? That had never happened before.

Well, now it has, and we can see how this pushed the entire gilt market to the edge.

So, could this happen again anywhere else? To paraphrase, the answer from Bank of America is, ‘‘well, duh, obviously’’.

‘‘Of course something will break, what else did you expect?’’ wrote Athanasios Vamvakidis and Adarsh Sinha at the bank. To their mind, all this hand-wringing over what else could go wrong in the style of UK LDI is wide of the mark. ‘‘Something has already broken,’’ they wrote. ‘‘Inflation.’’

The scary thing is that like LDI, other innocuous-sounding products that made perfect sense while interest rates were low are tucked away in unpredictable places. Now that interest rates are rising fast in response to sky-high inflation, more of these landmines are at risk of going off.

This is an increasingly pressing concern. Max Kettner, chief multi-asset strategist at HSBC, noted that one of the key reasons why 2023 might turn out to be just as challenging as 2022 for investors is the risk that, as he put it, ‘‘something breaks’’.

‘‘Given the record amount of tightening of financial conditions, the risk of an accident in financial markets has greatly increased,’’ he wrote.

‘‘Whether it’s the recent turmoil in the UK, the relentless weakening of the yen, deteriorating liquidity on credit and even rates markets, defaults in emerging markets, or indeed something we’re completely missing the list has become longer in recent months.’’

Trying to pinpoint what could unravel is a fool’s errand. The whole point of shocks is that you don’t expect them or know where they come from. The good news is that authorities have sat up and taken notice.

Sir Jon Cunliffe, the Bank of England’s deputy governor for financial stability, noted this week that the ‘‘episode in the gilt market’’ had sharpened the focus on the need to monitor and regulate non-bank financial institutions.

Elsewhere, nobody wants a repeat of the horror show in the UK on their turf. In the Netherlands, which has a retirement system with some similarities to the UK’s, authorities have urged pension funds to consider boosting holdings of liquid assets in case of a UK-style shock.

And fund managers are now considering risks that a few months ago would have been considered fanciful. What if, for whatever reason, the US Treasuries market one day flips out like gilts did? Price moves in the US have, after all, been alarmingly large and abrupt of late.

What would happen to Asian investors if the Bank of Japan abandoned its bond-buying policy and yields there exploded higher? Which other bits of the shadow banking system are primed for an implosion?

The problem is that it may be too late to defuse the risks.

‘‘The time was when central banks were easing policies aggressively in the previous decades of the low inflation era, to reach an inflation target beyond their reach,’’ BofA said. ‘‘Instead, an economy with asset price bubbles was created, addicted to zero interest rates, ample liquidity and the [support of] central banks.’’

August institutions like the Bank for International Settlements warned repeatedly about the dangers of hidden leverage, it added.

‘‘In this context, why were UK pension funds allowed to get into such super-leveraged investments to begin with?’’ It is a good but pointless question. What matters now is being alert, and checking assumptions.

The government bond markets that underpin derivatives and other asset prices globally simply do not behave like they used to.

Saturday 22 October 2022

No, Capitalism and the Internet Will Not Free China’s People

By Ai Weiwei

Mr. Ai is an artist and author who was imprisoned by the Chinese government.

Communist Party rule of China has been punctuated by one mass public campaign after another, each designed to commandeer Chinese minds in service of the state.

There was the Great Leap Forward, the industrial reform campaign begun in 1958 that precipitated a devastating famine; the political witch hunts of the 1966-76 Cultural Revolution, which nearly tore China apart; and many more, some more damaging than others, and each targeting some political, social or economic imperative of the day. Their cumulative effect is one of the Communist Party’s greatest achievements: a near-perfect symbiosis between dictatorial government and subservient population.

The government’s nearly three-year-old zero-Covid campaign may be the worst of all.

It’s an affront to science and common sense, yet — reminiscent of the mindlessness of the Cultural Revolution — officials and citizens around the country go to ridiculous lengths to execute it. Entire cities are shut down even for small outbreaks, and coronavirus tests are conducted on fish and other food products, cars, even construction materials. It has brought chaos and suffering for China’s people, who have been repeatedly locked down, been detained for missing coronavirus tests and lost jobs or businesses. When Chengdu, a city of 21 million people, was locked down in September, residents were blocked from leaving their flats even when an earthquake struck.

Past campaigns of mass control have come and gone, but this one will have lasting consequences thanks to its most insidious aspect: the surveillance technology rolled out nationwide to suppress Covid but which allows citizens to be tracked by authorities, their movements circumscribed. Government officials used this system to restrict the movements of people who wanted to take part in a protest in central China in June. Those officials were later punished, but the fact remains that the government now has a system that Mao Zedong could only have dreamed of, powered by data and algorithms, to monitor and control the people.

The West has been wrong about China. It was long assumed that capitalism, the emergence of a middle class and the internet would cause China to eventually adopt Western political ideas. But these ideas cannot even begin to take root because the Communist Party has never allowed the intellectual soil needed for them to germinate. And it never will.

Chinese minds have in fact never truly been free. China has been a largely united, centralized state for most of the past 2,000 years, and similar ethics and a similar relationship between ruler and ruled have endured throughout. No fundamental change is possible; China’s lowly people are expected to merely obey.

When the Communist Party seized state power in 1949, hope for a new era flickered briefly. My father, Ai Qing, then one of China’s leading poets, had already enthusiastically joined the party. But Mao shrewdly capitalized on China’s ancient power dynamic, enshrining the party as the new unquestioned ruler. Like many intellectuals, my father soon came under attack during Mao’s repeated political campaigns to root out those who dared think independently. China’s spiritual, intellectual and cultural life withered.

In 1957 — the year I was born — Mao launched the Anti-Rightist Campaign. My father was branded a rightist, subjected to fierce public attacks, and we were driven to internal exile in a bleak corner of the remote Xinjiang region. Some of his peers committed suicide.

He came under attack yet again during the Cultural Revolution, paraded through the streets in a dunce cap to public gatherings where abuse was hurled at him. He came home one night, exhausted, his face black after someone at a political rally dumped a pot of ink over his head. In an example of the helplessness and resignation of China’s people, he suggested that we just imagine that grim place had always been our home, accept our lot in life and get on with it. China’s people still live under this mentality of surrender today.

When I ran afoul of authorities in 2011 after criticizing the government, the police threatened me with an “ugly death” and said they would tell all of China about the absurd allegations they leveled, like tax evasion, to discredit me. I asked if China’s people would believe their lies. Ninety percent will, an officer told me. In China, where all “truth” comes from the party, he may have been right. Three years later, at an art exhibition in Shanghai, pressure from local government officials led to the abrupt removal of my name from a list of exhibitors. Not one of the Chinese artists whose work was on display, many of whom knew me well, came forward to defend me.

Things have only worsened in the past decade. Authorities have smothered remaining traces of independent thought, decimated Chinese civil society and cast a chill over academia, media, culture and business.

To be fair, individual thought and expression are constrained in Western democracies, too. Political correctness forces people to hold in what they truly believe and parrot empty slogans to superficially comply with prevailing narratives. And Western engagement with China has been driven by the pursuit of profit rather than values. Western leaders criticize Communist Party violations of human rights, free speech and spiritual freedom, but long have continued to do business with Beijing. U.S. hypocrisy about independent thought is evident in its approach to the WikiLeaks founder Julian Assange, who stands for freedom of information but whom the U.S. government is prosecuting.

Millions of Chinese take pride in modern China’s growing wealth and power. But this feeling of well-being is a mirage conjured by superficial material gain, constant propaganda about the decline of the West and suppression of intellectual freedom. China is in fact decaying morally under the influence of the party. In 2011, a 2-year-old girl was run over by two vehicles in southern China and left bleeding in a street. Eighteen people passed by without doing anything, some even swerving aside to avoid her. Don’t think, don’t get involved, just keep walking. The girl later died.

Freedom relies on courage and sustained risk-taking. But a vast majority of China’s people feel that resistance, even at the philosophical level, is impossible, and that personal survival depends on compliance. They are reduced to an anxious servility, lining up like sheep in long lines for their coronavirus tests, or scrambling for food before sudden lockdowns.

Freedom and individuality can never be completely suppressed. And no country, no matter how strong it appears, can truly prosper without diversity of opinion. But there is no hope for fundamental change in my country while the Communist Party is in power.


The Three Blunders of Joe Biden

By Ross Douthat

Opinion Columnist

If the Democrats end up losing both the House and the Senate, an outcome that looks more likely than it did a month ago, there will be nothing particularly shocking about the result. The incumbent president’s party almost always suffers losses in the midterms, the Democrats entered 2022 with thin majorities and a not-that-favorable Senate map, and the Western world is dealing with a war-driven energy crunch that’s generally rough on incumbent parties, both liberal and conservative. (Just ask poor Liz Truss.)

But as an exculpating narrative for the Biden administration, this goes only so far. Some races will inevitably be settled on the margins, control of the Senate may be as well, and on the margins there’s always something a president could have done differently to yield a better political result.

President Biden’s case is no exception: The burdens of the midterms have been heavier for Democrats than they needed to be because of three notable failures, three specific courses that his White House set.

The first fateful course began, as Matthew Continetti noted recently in The Washington Free Beacon, in the initial days of the administration, when Biden made critical decisions on energy and immigration that his party’s activists demanded: for environmentalists, a moratorium on new oil-and-gas leases on public lands and, for immigration advocates, a partial rollback of key Trump administration border policies.

What followed, in both arenas, was a crisis: first a surge of migration to the southern border, then the surge in gas prices driven by Vladimir Putin’s invasion of Ukraine.

There is endless debate about how much the initial Biden policy shifts contributed to the twin crises; a reasonable bet is that his immigration moves did help inspire the migration surge, while his oil-lease policy will affect the price of gas in 2024 but didn’t change much in the current crunch.

But crucially, both policy shifts framed these crises, however unintentionally, as things the Biden administration sought — more illegal immigration and higher gas prices, just what liberals always want! And then instead of a dramatic attempt at reframing, prioritizing domestic energy and border enforcement, the Biden White House fiddled with optics and looked for temporary fixes: handing Kamala Harris the border portfolio, turning the dials on the strategic petroleum reserve and generally confirming the public’s existing bias that if you want a party to take immigration enforcement and oil production seriously, you should vote Republican.

The second key failure also belongs to the administration’s early days. In February 2021, when congressional Democrats were preparing a $1.9 trillion stimulus, a group of Republican senators counteroffered with a roughly $600 billion proposal. Flush with overconfidence, the White House spurned the offer and pushed three times as much money into the economy on a party-line vote.

What followed was what a few dissenting center-left economists, led by Larry Summers, had predicted: the worst acceleration of inflation in decades, almost certainly exacerbated by the sheer scale of the relief bill. Whereas had Biden taken the Republicans up on their proposal or even simply counteroffered and begun negotiations, he could have started his administration off on the bipartisan footing his campaign had promised while‌ hedging against the inflationary dangers that ultimately arrived.

The third failure is likewise a failure to hedge and triangulate, but this time on culture rather than economic policy. Part of Biden’s appeal as a candidate was his longstanding record as a social moderate — an old-school, center-left Catholic rather than a zealous progressive.

His presidency has offered multiple opportunities to actually inhabit the moderate persona. On transgender issues, for instance, the increasing qualms of European countries about puberty blockers offered potential cover for Biden to call for greater caution around the use of medical interventions for gender-dysphoric teenagers. Instead, his White House has chosen to effectively deny that any real debate exists, positioning the administration to the left of Sweden.

Then there is the Dobbs decision, whose unpopularity turned abortion into a likely political winner for Democrats — provided, that is, that they could cast themselves as moderates and Republicans as zealots.

Biden could have led that effort, presenting positions he himself held in the past — support for Roe v. Wade but also for late-term restrictions and the Hyde Amendment — as the natural national consensus, against the pro-life absolutism of first-trimester bans. Instead, he’s receded and left Democratic candidates carrying the activist line that absolutely no restrictions are permissible, an unpopular position perfectly designed to squander the party’s post-Roe advantage.

The question in the last case, and to some extent with all these issues, is whether a more moderate or triangulating Biden could have held his coalition together.

But this question too often becomes an excuse for taking polarization and 50-50 politics for granted. A strong president, by definition, should be able to pull his party toward the center when politics demands it. So if Biden feels he can’t do that, it suggests that he’s internalized his own weakness and accepted in advance what probably awaits the Democrats next month: defeat.