Those Stubborn Facts: A World Awash in Debt

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bubble, China, debt, economy, Those Stubborn Facts, United States

Number of countries (including the U.S. and China) whose total debt

was more than three times greater than the size of their economies,

mid-1990s: None

 

Number of countries (including the U.S. and China) whose total debt

is more than three times greater than the size of their economies,

now: 25

 

(Source: “Ten economic trends that could define 2022,” by Ruchir Sharma, Financial Times, January 3, 2022, https://www.ft.com/content/432d78ee-6163-402e-8950-d961b4b1312b)

Im-Politic: It’s Time for Them to Go

Tags

Anthony S. Fauci, Biden adminstration, CCP Virus, CDC, Centers for Disease Control and Prevention, children, coronavirus, COVID 19, Fauci, FDA, Food and Drug Administration, hospitalization, hospitalizations, Im-Politic, Mary T. Bassett, misinformation, New York State, pediatric vaccination, public health, Rochelle Walensky, schools, testing, vaccinations, vaccine mandates, vaccines, Wuhan virus

As the New Year brings Americans their third calendar year of coping with the CCP Virus, it’s abundantly clear that there’s no such thing as a firing offense when it comes to the nation’s leading public health authorities. And it’s been evident in not one but two cases over the last week alone.

Case number one involves Dr. Anthony S. Fauci, President Biden’s chief medical adviser. Fauci should already be in near-boiling legal water over the likelihood that he lied to Congress in denying that the National Institute of Alergy and Infectious Diseases (NIAID) never funded dangerous gain-of-function virus-related research in China. Now he’s just (unwittingly) admitted that he’s been guilty of pandemic-related fear-mongering of the first order on the vital issue of safeguarding children’s well-being.

Fauci has long warned about the dangers posed to minors by the virus and linked vaccination of pupils (along with mask requirements for them) to the goal of keeping schools safely opened. And he’s focused not only on pediatric infection numbers, but on hospitalization rates – widely considered a far more serious matter because they supposedly reveal the incidence of serious and potentially fatal infections. As he argued on NBC News‘ “Meet the Press” on August 8:

“There are a lot of children now – all you need to do is do a survey of the pediatric hospitals throughout the country, and you’re seeing a considerable number of young people who are not only infected but who are seriously ill….the numbers compared to the elderly are less, but that’s a false comparison. These kids are getting sick. We’ve really got to make sure we protect them.”

The alarmist nature of his comments should have been clear from the start, as, for example, that week, according to the CCP Virus data tracker maintained by the U.S. Centers for Disease Control and Prevention (CDC), the virus-related rate of new hospital admissions for Americans under 17 averaged about 0.14 per 100,000 – which comes to an absolute number of about 100 total hospitalizations among the 73.1 million in that age group as of the latest U.S. Census Bureau figures.

But as I’ve explained, by that time, a national healthcare leader like Fauci should have been aware of the big problem with the hospitalization data in general – they rarely distinguished between patients who were hospitalized because of the virus, and patients hospitalized for other reasons who happened to test positive for the pathogen once admitted. In other words, many “Covid-related hospitalizations” have had nothing to do with Covid.

Here’s how one expert has explained the problem:

“[I]f you look at the children are hospitalized many of them are hospitalized with COVID as opposed to because of COVID. What we mean by that is that if a child goes in the hospital they automatically get tested for COVID and they get counted as a COVID hospitalized individual, when in fact they may go in for a broken leg or appendicitis or something like that.”

“So it’s over counting the number of children who are ‘hospitalized’ with COVID as opposed to because of COVID.”

This expert’s name? Anthony Fauci. But he didn’t make the admission until last week – when total national “Covid-related hospitalizations” for kids still numbered in the low hundreds.

Yet bizarrely, Fauci still favors vaccination for this highly secure demographic cohort, in line with the equally bizarre authorization from the U.S. Food and Drug Administration (FDA) and recommendation from the CDC.  And this even though the jabs for five-to-fifteen years olds are approved only on an “emergency basis”; even though the evidence used seems to consist of a single trial of some 3,100 children; and even though – unlike far more vulnerable older Americans – these vaccine recipients will mostly have many decades from now for any side effects to emerge.

So on the grounds of spreading virus misinformation alone, Fauci should be gone.

Speaking of pediatric hospitalizations and misinformation, it’s also time to sack new New York State Health Commissioner Mary T. Bassett as well. Also last Monday, touting the imperative of pediatric vaccinations, she declared, “Many people continue to think that children do not become infected with COVID. This is not true. Children become infected with COVID and some will become hospitalized. The vaccination coverage remains too low. We need to get child vaccinations up, particularly in the 5-to-11-year-old age group.”

At this time, New York State had recorded 184 child covid hospitalizations (out of a total under-18 population of 4.18 million, according to the latest Census Bureau data). But alarmism wasn’t the worst of Bassett’s offenses. Instead, it was this jaw-dropping admission: 

“The numbers we gave on pediatric admissions weren’t intended to make it seem that children were having an epidemic of infection. These were small numbers that we reported in our health alert. That was based on 50 hospitalizations, and I’ve now given you some larger numbers, but they’re still small numbers. It really is to motivate pediatricians and families to seek the protection of vaccination.”

Lying to the public isn’t a criminal offense – and probably shouldn’t be.  But it sure should be a firing offense. 

According to CDC Director Rochelle Walensky, who should be facing big job security questions herself due to the nation’s crying shortage of CCP Virus testing capability despite the Biden administration’s backing for sweeping vaccine mandates, her agency’s controversial decision last week on isolation for indivduals with asymptomatic cases stemmed partly from the “relatively low rates of isolation for all of this pandemic. Some science has demonstrated less than a third of people are isolating when they need to.”  Given Americans’ truth-challenged public health officials, reluctance to follow their advice and instructions is easy to understand.            

 

(What’s Left of) Our Economy: Can Crypto Narrow the U.S. Racial Wealth Gap?

Tags

African Americans, bitcoin, blacks, cryptocurrencies, digital currencies, finance, Hispanics, inequality, investing, investment, Latinos, personal finance, racial wealth gap, wealth, wealth gap, whites, {What's Left of) Our Economy

Shares of Americans who say they’re “familiar” with

cryptocurrencies:

 

Whites: 37 percent

Hispanics: 49 percent

Blacks: 50 percent

 

Shares of Americans reporting owning cryptos:

Whites: 11 percent

Hispanics: 17 percent

Blacks: 23 percent

 

(Source: “Black, Latino, LGBTQ investors see crypto investments like bitcoin as ‘a new path’ to wealth and equity,” by Charisse Jones and Jessica Menton, USA TODAY, August 13, 2021, https://www.usatoday.com/story/money/2021/08/13/crypto-seen-path-equity-black-latino-and-lgbtq-investors/5431122001/?gnt-cfr=1)

Im-Politic: Latinos Flocking to a (Still Trump-ian) Republican Party

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Axios-Ipsos Poll, Biden, Democrats, Donald Trump, election 2016, election 2020, election 2022, election 2024, exit polls, Glenn Youngkin, Hispanics, Im-Politic, Immigration, Latinos, NPR-Marist Poll, Pew Research Center, polls, public opinion, Republicans, The Wall Street Journal, Virginia governor's race

Remember all those those charges that former President Donald Trump made clear from the very beginning of his 2016 presidential campaign that he was an anti-Latino bigot, and the predictions that any political success he enjoyed would doom Republican chances of winning support from this increasingly important group of voters?

Apparently, many Latino voters themselves don’t. Or they’ve concluded that Trump and now dominant Republican views on sensible controls on immigration matter less to them than views on other issues. Or that they actually like Trump and the Republicans on some combination of these subjects – including immigration. Or that maybe the Republican positions aren’t terrific, but that what the Democrats have stood for lately is a non-starter.

That’s the message being sent lately by several recent polls on Latino political views that could decisively shape American politics for the foreseeable future.

First, though, some context. There’s little doubt now that four years of Trump-ism wound up boosting the former President’s support among Latinos, now further shrinking it. In 2016, Trump won 28 percent of their presidential vote. In 2020, this figure had grown to 32 percent according to the eixt polls. (This subsequent study pegs his 2020 total at 38 percent.)  And of course, in some key states, the exit polls showed, his 2020 performance was far better – notably Florida (46 percent) and Texas (41 percent). So the racism and xenophobia charges were showing signs of flopping while throughout Trump’s term in office.

Even so, the results of a Wall Street Journal survey conducted in the second half of November came as a major shock. They showed that if Trump was running for the White House against President Biden today, he’d lose by only 44 percent to 43 percent among Latino voters. And they said they’d be even split at 37 percent in their votes for Democratic and Republican Congressional candidates.

As noted in this analysis, the poll’s sample size was very small, so serious doubts in its accuracy are justified. But similar results have been reported elsewhere. Yesterday, notably, National Public Radio and Marist College released a survey showing that just 33 percent of Latino adults approved of President Biden’s performance in office, versus 65 percent who disapproved. These Biden Latino numbers were worse than his ratings from American adults as a whole (41 percent approving and 55 percent disapproving).

Moreover, only 11 percent of Latino adults “strongly approved” of Mr. Biden’s presidency so far, versus 17 percent of U.S. adults overall, and when it came to strong disapproval, 52 percent of Latinos marked that column compared with 44 percent of the total national adult population.

Nor does the evidence stop there that the longer Mr. Biden has been in office, the less Latinos like his perfomance. As this Washington Post column reminds, “In late May, Biden’s job approval among Hispanics averaged 60 percent, with a net approval margin of 32, a bit larger than his vote margin the prior year.”

Biden backers and Democrats can point to a new Axios-Ipsos survey reporting that “The Democratic Party enjoyed huge advantages over the Republican Party when Latino respondents were asked which party represents or cares about …..” But after that ellipsis comes the finding that “those advantages evaporated when it came to the economy and crime.”

Democrats own a clear edge among Latinos on one major issue, though: the CCP Virus pandemic. According to the Axios-Ipsos results “respondents were much more likely to say Democrats were doing a good job of handling COVID-19 as a health challenge — 37% to 11% for Republicans, with another 17% saying both are doing a good job.” 

But Axios-Ipsos has been a major outlier lately, as made clear in this analysis that looks not only at this year’s polls but the Virginia gubernatorial election, which saw victorious Republican candidate Glenn Youngkin actually win the state’s Latino vote.  The conventional wisdom seems to hold that Youngkin prevailed in large measure because he held Trump at arm’s length. But in light of all the other survey results, maybe that’s wishful Mainstream Media thinking?      

It’s still a long way even to the 2022 Congressional elections, much less the 2024 presidential race. But unless the President and his party can turn their sagging fortunes around, it looks like they’re rapidly running out of time with Latinos – who are increasingly flocking to a Republican Party still strongly influenced by Donald Trump.  

(What’s Left of) Our Economy: Are Apple Products “Designed in California…& Extorted by China?”

Tags

Apple Inc., Breitbart.com, China, Donald Trump, economics, forced technology transfer, free trade, globalization, infotech, John Carney, national security, privacy, surveillance, tech, TheInformation.com, Tim Cook, Trade, {What's Left of) Our Economy

You have to give Tim Cook credit for sheer gall, at least if a recent report is true (as it appears to be, since it he hasn’t yet denied it). There was the Apple, Inc. CEO in 2018, at a forum in Beijing no less, in effect warning former President Donald Trump to ditch his plans to impose America’s first ever serious tariffs on Chinese goods, largely because “What I’ve seen over my lifetime is that countries that embrace openness, that embrace trade, that embrace diversity are the countries that do exceptional — and the countries that don’t, don’t.”

And not two years before, according to this account, Cook had promised China that over the next five years, the infotech giant would make a $275 billion effort to strengthen the People’s Republic’s technology and manufacturing base if China’s thug regime would back off a major crackdown it had launched on the company’s massive Chinese operations.

Moreover, as made clear in the December 7 article in TheInformation.com, Cook’s commitments not only have inevitably and massively affected U.S. and China trade and broader economic flows, and will continue to do so going forward. They’re likely to endanger America’s national security. After all, Cook, for reasons having squadoosh to do with free trade or free markets or economic fundamentals, evidently pledged to

>invest “many billions of dollars more” than what the company was already spending annually in China: in part on building new research and development centers”;

>help Chinese manufacturers develop “the most advanced manufacturing technologies” and “support the training of high-quality Chinese talents”;

>collaborate on technology with Chinese universities and directly invest in Chinese tech companies”; and

>collaborate on technology with Chinese universities and directly invest in Chinese tech companies”;

>use more components from Chinese suppliers in its devices”; and 

>give business to Chinese software firms”.

Since every economic and academic entity in China is ultimately under the thumb of the Chinese government, Cook’s submission to Beijng’s pressure has made enormous amounts of resources and knowhow available to a Chinese regime that has challenged American security interests in East Asia and around the world, and that powerfully threatens Washington’s ability to protect Americans’ privacy and political freedoms through its increasingly impressive hacking and other surveillance capabilities (including via the wildly popular TikTok video-sharing app).

In the worst (but ever more plausible) case, in a future conflict with Beijing, Chinese weapons that kill U.S servicemen could be partly and/or indirectly financed and developed by Apple – and, as I’ve made clear, e.g., here and here, by the numerous other U.S. companies that have fueled China’s tech and therefore military prowess.

But also crucial to point out – the deal signed by Cook (far from the only target of China’s successful campaigns of forced tech and manufacturing production transfer over a period stretching back decades), also challenges a core idea of free trade theory in a way first pointed out by friend John Carney of Breitbart.com.

As Carney wrote more than two years ago, economists and others who were crticizing Trump’s tariffs were making an especially important mistake. They were assuming “that all of the goods that are imported from China are made there because China is the lowest cost manufacturer of those goods. If that were true, moving production out of China would necessarily increase costs of production and reduce efficiency.”

But as he proceeded to remind, China couldn’t be such a paragon of manufacturing value. If it were, why would Beijing have been relying for so long on such a wide variety of “mercantilist tactics to attract and retain manufacturing business from global businesses, including requiring companies to manufacture goods in China in order to access its domestic markets and imposing steep tariffs on imports for foreign-made goods”?

In fact, Carney continued, “China’s policies…impose what economists call ‘deadweight losses’ on the global economy by preventing companies from moving their supply chains to cheaper sources.” And tariffs can serve as an essential counter-weight. 

Apple is nothing if not public relations-obsessed, and several years ago responded to public concern about all its production in the People’s Republic with an ad campaign stressing that its products are “designed in California.”  At least for accuracy’s sake, the company should now add “and extorted by China.”  And the news should greatly energize Washington’s efforts to stop U.S. companies from strengthening and enriching this burgoning menace.               

(What’s Left of) Our Economy: U.S. Trade Figures Still on a (CCP Virus) Roller Coaster

Tags

Biden, CCP Virus, China, consumers, coronavirus, COVID 19, Donald Trump, exports, Federal Reserve, goods trade, imports, Janet Yellen, manufacturing, non-oil goods deficit, recovery, stimulus, supply chains, tariffs, Trade, trade deficit, Wuhan virus, {What's Left of) Our Economy

Just as September’s official U.S. trade figures revealed numerous records and multi-month or year highs and lows (mainly of the bad kind), today’s October release reported its share of startling results – but mainly of the good kind. One black spot deserves mention right away, though – the country’s manufacturng trade deficit passed the $1 trillion mark for the fourth straight year. And we still have two data months left in 2021.

Still, the all-time monthly bests and similar extraordinary readings from October were nonetheless impressive. And combined with the September statistics, they make clear that the CCP Virus and government efforts to fight it are far from done distorting the U.S. and world economies. 

The chief records set were:

>Combined goods and services exports of $223.63 billion, which beat May, 2018’s previous record of $216.09 billion by 3.49 percent. Moreover, the 8.14 percent sequential improvement was the biggest since June, 2020’s 8.69 percent – which came during the strong national and global economic recoveries from the first wave of the CCP Virus and the short but sharp depression it caused.

>Total imports of $290.75 billion, which edged outthe previous month’s record of $288.23 billion by 1.06 percent.

>Goods exports, where the $158.73 billion figure exceeded the former record of $149.92 billion set in August by 5.87 percent. And the monthly increase of 11.07 percent was the biggest since March’s 10.18 percent.

>Goods imports of 242.67 billion, also the second straight all-time high, and a level that topped September’s $240.89 billion by 0.74 percent.

Another all-time best and worst came in non-oil goods trade. As known by RealityChek regulars, these trade flows deserve special attention, because they consist of exports and imports whose levels are significantly affected by trade agreements and other U.S. trade policy decisions (unlike trade in oil and services, where liberalization efforts are still at early stages at best).

The best? Non-oil goods exports climbed to an all-time high, with their $138.82 billion total standing 5.87 percent higher than the previous record of $131.12 billion set in August. Moreover, their monthly growth of 9.57 percent was the biggest such advance since the 10.65 percent increase of July, 2020 – also during that recovery from the first CCP Virus-related downturns.

The worst? Non-oil goods imports set their second straight record, coming in at $242.67 billion, or 0.74 percent higher than the September total of $240.89 billion.

And finally, when it comes to new records, imports of advanced technology products (ATP). Their $51.54 billion level also was a second straight, and surpassed September’s $50.50 billion by 2.06 percent.

But multi-month and even multi-year highs and lows abounded in the October trade report:

>The overall deficit plummeted from the record (and upwardly revised) $81.44 billion figure for September to $67.12 billion. The monthly total was the lowest since April’s $66.15 billion, and the sequential drop of 17.58 percent the greatest since April, 2015’s 18.16 percent.

>Similarly, in October, the goods deficit hit its lowest level ($83.95 billion) since November’s $86.23 billion, and the month-to-month decline of 14.33 percent (from September’s record $97.98 billion, was the biggest such drop since the 20.79 percent nosedive of February, 2009 – when the Great Recession following the global financial crisis was in its depths.

>The 11.40 percent monthly decrease in the non-oil goods deficit (the steepest fall-off since April, 2015’s 13.76 percent), brought this trade gap to its lowest level ($82.99 billion) since last November’s $85.73 billion.

October’s trade report contained some eye-popping numbers in U.S.-China goods trade, too.

>Goods exports to the People’s Republic shot up from $10.91 billion to a new record of $16.64 billion. Further, not only did this figure top the previous best (October, 2020’s $14.77 billion). But the 52.46 percent sequential jump was the biggest since the 71.04 percent recorded back in November, 1996 – when much smaller trade numbers made big percentage improvements much easier to generate.

>In addition, the U.S. goods trade deficit with China of $31.40 billion was the lowest since July’s $28.65 billion read, while the 13.99 percent monthly improvement was the biggest since the 25.19 percent figure reported for March, 2020 – when China had still shut down much of its economy due to the pandemic.

The China data also show that U.S. trade with the People’s Republic continue to perform better than U.S. trade in non-oil goods – the best global proxy for U.S. goods trade with China – and as a result, that the Trump (now Trump-Biden?) tariffs continue to work well.

For example, that 13.99 percent sequential narrowing of the U.S. goods trade gap with China in October was faster than the comparable 11.40 improvement in the non-oil goods deficit. That 52.46 percent monthly increase in goods exports to China, moreover, was nearly ten times greater than the 5.87 percent rise in non-oil goods exports.

The 1.30 percent increase in U.S. goods imports from China was nearly twice as fast as the 0.74 percent increase in America’s non-oil goods imports, but both absolute increases are modest.

And on a year-to-date basis, the U.S. goods deficit with China is still up less (13.67 percent) than the non-oil goods shortfall (16.73 percent).

On the down side, the U.S. manufacturing deficit did decline in October – by 3.32 percent, from a record $118.75 billion to $114.81 billion. But it remained astronomical by any reasonable standard.

Manufacturing exports improved on month by a healthy 10.99 percent, from $92.58 billion to $102.75 billion. But although manufacturing imports climbed by a much slower pace (2.95 percent, from $211.33 billion to $217.56 billion), they’re still more than twice as great.

Year-to-date, the 18.78 percent advance in manufacturing exports and the 19.56 percent rise in manufacturing imports has resulted in that trillion-dollar-plus manufacturing deficit ($1.083 trillion, to be precise). As of October, moreover, it’s running 18.26 percent ahead of last year’s pace.

The outlook for America’s trade flows? I’m still pretty sure that the deficits will keep rising in the near term – mainly because overall economic growth, and therefore consuming and importing are expected to stay so strong.  Longer term, though, uncertainties are still noteworthy and arguably could frustrate forecasts even more. 

After all, it’s still not clear how America’s and other governments will respond to the new Omicron variant ofthe virus (or whatever other strains come down the pike).

There’s the seemingly likely ebbing of the fiscal stimulus that’s boosted savings, and therefore purchasing and importing power, for the entire population during the pandemic period. Continued high inflation could start depressing consumer spending on its own – although less government stimulus all else equal should start restraining prices at some point.

Additionally, don’t forget the Federal Reserve, which has been prompted by faster-than-expected price increases to reduce the bond-buying program that’s provided another massive source of economic stimulus.  Is Treasury Secretary Janet Yellen right to be confident that consumer demand will stay strong nonetheless?  Beats me. 

Finally, it’s encouraging to read various claims that the global supply chain crisis is easing (e.g., here). But even if progress on this front continues and accelerates, new geopolitical threats to global commerce have emerged – especially rising tensions between China on the one hand, and the United States and most of China’s neighbors on the other, over the future of Taiwan and whether it gets decided peacefully.     

Since America’s economic growth is expected to be torrid in the final three months of this year (including, of course, October), I suspect that, despite all these questions and complications, the next few months of trade figures will worsen considerably (as I wrote last month). But the farther down the road I look, the cloudier my crystal ball gets

(What’s Left of) Our Economy: New U.S. Inflation Numbers Show New U.S. Inflation Momentum

Tags

Biden administration, Commerce Department, consumer price index, core inflation, CPI, Federal Reserve, inflation, Labor Department, monetary policy, PCE, personal consumption, supply chains, transitory, {What's Left of) Our Economy

Claims made by Federal Reserve leaders and the Biden administration (along with Yours Truly) that current lofty levels of U.S. inflation are transitory took another hit this morning with the Commerce Department’s release of the October figures for the Personal Consumption Exepnditures (PCE) price indices.

For some reason, these data don’t get the same attention as the Labor Department’s Consumer Price Index (CPI), but they should, since they’re the Fed’s inflation gauge of choice, and the Fed’s power to control inflation (or not) through monetary so profoundly influences the cost of credit, and therefore how fast or slowly the economy grows.

And the new PCE numbers show that between September and October, monthly and yearly price increases regained momentum that had previously showed signs of waning. Let’s go the statistics lists (an economist’s version of “Let’s go to the videotape”). First, the year’s monthly percentage changes in overalll PCE inflation:

Jan.             0.3

Feb.            0.3

March         0.6

April           0.6

May            0.5

June            0.5

July            0.4

Aug.           0.4

Sept.           0.4

Oct.            0.6

Moreover, not only is the October increase back to the previous peaks in March and April, but the August and September results were each revised up from 0.3 percent.

As you can see from the next list, the same kind of pick up can be seen in overall PCE inflation rates on a year-on-year basis. And these percentage canges are more important than the monthly changes because they measure the trend over a longer period of time, and also smooth out the kind of fluctuations that can pop up for random reasons in the short term. Just FYI, the July result was revised down from 4.2 percent.

Jan.              1.4

Feb.             1.6

March          2.5

April            3.6

May             4.0

June             4.0

July              4.1

Aug.             4.2

Sept.             4.4

Oct.              5.0

The monthly core inflation figures strip out food and energy prices – because they can be volatile for reasons like weather, and foreign oil cartels, that have nothing to do with the economy’s underlying proneness to price increases (or decreases). They’ve been somewhat lower in absolute terms than the overall PCE monthly increases. In October, moreover, though they doubled over the September rate, they’re still lower than the price rises recorded in spring and early summer. But that doubling snapped a five-month streak of stabilization or declines. Here are these percentage changes.

Jan.              0.2

Feb.             0.1

March         0.4

April           0.6

May            0.6

June            0.5

July             0.3

Aug.            0.3

Sept.           0.2

Oct.            0.4

As for the year-on-year core percentage changes, they’ve arguably been worse momentum-wise than their monthly counterparts because they’d shown no signs of decline through September. Now they’ve become worse still with the jump to 4.1 percent in October (the biggest such surge in decades). And September’s rate has been revised up from 3.6 percent.

Jan.             1.5

Feb.            1.5

March        2.0

April          3.1

May           3.5

June           3.5

July            3.6

Aug.          3.6

Sept.          3.7

Oct.           4.1

My gut still tells me that current inflation will be transitory – and in some meaningful sense, not because “nothing lasts forever except death and taxes.” That’s because the CCP Virus-era economy is still so downright weird, and because its disruptions – along with the current severity of the disease – are bound to at least calm down at some point in the foreseeable future.

But the new numbers revealing new inflation momentum are telling the opposite story, and their importance is all the more impressive for basically matching the trends shown by the CPI figures. So the burden of proof on inflation’s future has definitely shifted to the shoulders of the transitory-istas.

Following Up: The Latest on the Virus and the Border

Tags

Biden border crisis, Border Crisis, CCP Virus, coronavirus, COVID 19, Following Up, hospitalizations, Immigration, migrants, mortality, Open Borders, public health, The New York Times, The Washington Post, Wuhan virus

This past Saturday, I upbraided New York Times editorial writers for claiming that the CCP Virus pandemic had eased enough to justify admitting into the country more illegal aliens who may be carriers and therefore spreaders of the disease. The basis for my criticism was data from the Times itself indicating that the pandemic wasn’t easing any more – and strongly suggesting that the paper’s Open Borders-like immigration policy stances had become extreme enough to rationalize worsening already serious dangers to public health.

Five days later, it’s clear that, although the paper still has a lot to answer for publishing this piece (like its insistence that there was never a compelling public health rationale for putting such virus-related immigration restrictions into effect), my use of the word “indicating” to describe the virus’ status was well chosen. For the latest figures paint an oddly contadictory picture of the pandemic threat.

When I wrote the November 13 post, nearly a week’s worth of statistics on virus deaths showed them on the upswing again after the seven-day averages (7DA) had been falling – often by double-digits percent per day – since late-September. But on November 9, they began rising again, and two days later the figure was again approaching double digits: 9.72 percent. By Friday, the 12^th, however, they’d started retreating again, and yesterday were down an encouraging 12.74 percent. So by that metric (which isn’t perfect), the situation is looking reasonably good. (My source, as usual, is The Washington Post‘s very user-friendly virus tracking feature.)

The same, however, can’t be said for virus-related hospitalization rates. These numbers aren’t pefect, either (see here for a good explanation why), but they’re probably the best available for gauging progress against the virus. Moreover, they tend to prefigure death rates (because hospitalized patients don’t die right away). But although they started trending down according to the 7DA numbers starting on September 6, that decline began slowing in late October, and the 7DA for daily new hospitalizations went back into growth territory last Friday. By this metric, therefore, a return of tough virus times may lie ahead. So does the return of winter.

This impressive case for pessimism doesn’t mean that I’ve changed my opposition to indiscriminate anti-CCP Virus policies like current mask and vaccine mandates, let alone sweeping shutdowns and lockdowns. But it also reenforces the case for preventing the situation facing Americans from becoming worse still – including by protecting the country from illegal migrants whose health status will always be at best uncertain (because of weak public health and record-keeping systems in most sending countries). That is, unless, like The New York Times, you think American and their health should come last when making immigration policy.

Our So-Called Foreign Policy: Shocking New Findings on How Corporate America Keeps Strengthening China’s Military

Tags

AI, artificial intelligence, Biden adminisration, Center for Security and Emerging Technology, China, export controls, Georgetown University, innovation, Intel, investment, national security, Nvidia, Orbcomm, Our So-Called Foreign Policy, semiconductors, Silicon Valley, software, tech, venture capital, Xilinx

Recent weeks have seen an impressive burst of new information about how U.S.-owned businesses are fueling the technological and military strength of China, a country whose armed forces American soldiers, sailors, and airmen and women could be fighting on the battlefield before too long.

The first source of this information comes from Georgetown University’s Center for Security and Emerging Technology (CSET) in an October report called Harnessed Lightning: How the Chinese Military is Adopting Artificial Intelligence.

The study focuses on China’s own efforts to develop artificial intelligence (AI) capabilities and incorporate them into its military operations and systems, and goes into fascinating detail about how much money is spent on these efforts, and how many Chinese entities of all kinds are involved in the campaign. The authors also make clear – just in case it wasn’t screamingly obvious already – how widespread these applications can be, and their incredible potential to revolutionize warfare and hand victory to the power possessing the best knowhow.

But as one of the team explained in a summary magazine article two days ago:

“Our research also highlights that U.S. companies are inadvertently powering Chinese military advances in AI. The overwhelming majority of advanced computer chips at the heart of China’s military AI systems are designed by U.S. firms like Intel, NVIDIA and Xilinx, and manufactured in Taiwan. We found that suppliers actually depicted NVIDIA-branded processors in photos of their products, providing clear evidence of the role U.S. technology plays in powering China’s advances. One company, which won a contract to supply chips for the PLA Strategic Support Force, even bought the domain ‘nvidiagpu.com.'”

Moreover, much more than simply semiconductors are involved. So is machine-learning and intelligent text-processing software, along with systems for “real-time monitoring” of “millions of global shipping and related users” with the help of 108 satellites from the American company Orbcomm.

My only objection: It’s inconceivable that these U.S. firms don’t fully understand the national security implications of their activities. The report itself notes that

“Because most institutions that supply AI-related equipment are new and not subject to end-use controls, the Chinese military is frequently able to access or acquire technology from abroad, including from the United States. Some Chinese suppliers make a business out of sourcing foreign data or components and reselling them to sanctioned Chinese defense companies or PLA [People’s Liberation Army] units.”

But the U.S. businesses must be aware that any of their products sold to any Chinese entity are going to be made available to the Chinese military simply because that’s the way China has operated since the Communists have been running the place. So this rationale can be easily laughed off.

The same cynical reaction is justified for claims that U.S.-owned firms don’t know that the capital they’re steering into the Chinese tech sector will also benefit the Chinese military. And these capital flows are both impressive and coming both from finance companies and from the huge semiconductor manufacturer Intel – which is hoping to receive billions in U.S. government subsidies and tax breaks to help restore its competitiveness in microchip production largely (of course) to bolster national security.

As reported by The Wall Street Journal this morning, Intel is “is among the active investors, backing a Chinese company now called Primarius Technologies Co., which specializes in chip-design tools that U.S. companies currently lead in making.” RealityChek regulars, moreover, know that Intel has been investing in other defense-related Chinese entities for years.

Not that American investment firms aren’t also doing their part to strengthen China’s tech prowess and therefore military capability and potential. Including the Intel deal, the Journal found, American companies “participated in 58 investment deals in China’s semiconductor industry from 2017 through 2020, more than double the number from the prior four years….”

And on top of these transactions, according to the Journal, “the China-based affiliates of Silicon Valley venture firms Sequoia Capital, Lightspeed Venture Partners, Matrix Partners and Redpoint Ventures have made at least 67 investments in Chinese chip-sector companies since the start of 2020….” In all, the sums involve run into the billions.

And in case you still doubt that these U.S. firms fully understand how valuable their investments are to a country that’s increasingly hostile to America, the Journal article quotes the head of one of these Chinese recipients as saying that his operation is working with the Chinese regime and other partners “to help our country get rid of its dependence on foreign high-performance chips.” Since the United States is still ahead in this sector, a China that no longer relies on American high tech products is going to be a China that’s caught up – and possibly grabbed the lead.

What’s the U.S. government doing about this dangerously unacceptable situation? It’s true that Washington has long maintained a system of export controls aimed at preventing China and other worrisome countries access to critical, militarily relevant goods and knowhow. But as the CSET study documents, this system is being completely overwhelmed – in part because of sorely inadequate funding and staffing, and in part because it’s never switched from a case-by-case approach to the kind of much broader denial strategy that’s clearly needed for a systemic threat like that posed by China.

There’s legislation in the works to plug some of the holes, and according to the Journal, the Biden administration seems supportive. Let’s just hope that the government gets its act together sometime before weapons powered by American technology and funded by American investors start killing American servicemen and women somewhere in East Asia.

BTW, thanks to friend Bill Holstein for calling my attention to these two items. 

 

(What’s Left of) Our Economy: An October Classic for U.S. Manufacturing Jobs

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aircraft, aircraft engines, aircraft parts, automotive, Boeing, CCP Virus, chemicals, computer and electronics products, coronavirus, COVID 19, fabricated metals products, Jobs, machinery, manufacturing, non-farm jobs, personal protective equipment, pharmaceuticals, plastics and rubber products, printing, private sector, surgical equipment, vaccines, Wuhan virus, {What's Left of) Our Economy

As good as the October U.S. jobs numbers and revisions released this morning were, the manufacturing results were even better. Industry didn’t regain its status as the nation’s post-CCP Virus employment leader, but it managed to narrow the gap with the private sector and the entire non-farm sector (the U.S. government’s definition of the American employment universe, which also includes government jobs) even though those super-categories turned in sparkling performances themselves.

Domestic manufacturers grew their payrolls by 60,000 on month in October – the strongest sequential gain since the 342,000 rocket ride recorded in June, 2020, when the entire economy’s reopening from the CCP Virus’ initial wave and related economic curbs and consumer caution was in full swing.

Moreover, September’s initially reported 26,000 employment increase was upgraded to 31,000, and August’s downwardly revised 31,000 advance was revised all the way back up to 49,000.

As a result, U.S.-based manufacturing has now regained 1.115 million (80.50 percent) of the 1.385 million jobs it lost during the economy’s virus-induced low point of March and April, 2020. As of last month’s jobs report, its recovery rate was 76.17 percent.

The private sector’s jobs recovery rate rose from 81.74 percent as of the previous jobs release to the 84.57 percent reported today, and the non-farm economy’s recovery rate climbed from 78.78 percent to 81.20 percent. So manufacturing’s momentum picked up faster in October.

Industry’s recent record is all the more impressive considering that its CCP Virus jobs crash during the spring of 2020 (when its employment dropped by 10.82 percent) was smaller than that of the private sector (16.46 percent) or the non-farm sector (17.18 percent).

Put differently, since February, 2020 (the last full pre-pandemic data month), manufacturing’s share of non-farm jobs has risen from 8.39 percent to 8.45 percent (up from 8.43 percent reported in the previous jobs release), and its share of private sector jobs is up from 9.87 percent to 9.91 percent (the same number calculable from that previous release).

Unlike manufacturing’s September’s results, its October monthly jobs increase was highly concentrated in the automotive sector. That complex’s 27,700 sequential payroll improvement equalled 46.7 percent of industry’s 60,000 total. Moreover, the total vehicle and parts job losses of 6,300 reported for September are now judged to be only 5,600.

Interestingly, this job growth is consistent with recent signs that automakers have been learning to manage their way through a semiconductor shortage that’s still continuing. (See, e.g., here and here.)

Other big October manufacturing jobs winners among the major sectors broken out in the official jobs releases) were fabricated metals products (5,800), which keeps hiring strongly despite the continuation of metals tariffs that were supposed to be crippling; chemicals (5,600); printing and related support activites, another big jobs creator lately (4,200); computer and electronics products (3,500); and plastics and rubber products (3,000).

Only three broad manufacturing sectors shed workers seqentially in October – nonmetallic mineral products, furniture, and miscellaneous durable goods – and the losses were small in each case.

Machinery employment deserves special attention because its products are used so widely throughout both manufacturing and big non-manufacturing industries (like construction and agriculture), so its meager 200 October jobs gain was surprising and disappointing. But its robust initially reported 6,300 employment increase is now estimated at 6,500, and August’s results were revised up a second time – from 2,600 to 4,300.

As always, the most detailed employment data for pandemic-related industries is one month behind those in the broader categories, but their September job creation was encouraging overall.

Hiring in surgical appliances and supplies (the sector containing personal protective equipment and similar goods) rebounded by 900 in September, offsetting the news that August’s 2,500 jobs loss was revised down to 2,600. With July’s 900 increase remaining unrevised, the sector’s employment is now up 7.79 percent since February, 2020 – that last full pre-pandemic data month – compared with the 7.03 percent calculable from the previous jobs report.

September was a better jobs month than August in the overall pharmaceuticals and medicines industry, too. The August sequential employment decline of 400 remained unrevised, but payrolls rose by 1,500 in September. July’s upwardly revised jobs gain stayed at 500, leaving the sector’s employment now 5.11 percent higher than in February, 2020 – better than the 4.62 percent calculable last month.

U.S. aerospace giant Boeing isn’t yet out of the woods when it comes to manufacturing and safety problems, and as a result, American aircraft production employment took another hit in September, falling by 500. The net losses of 1,400 previously reported for August and July were unrevised, and the aircraft workforce is now 8.24 percent smaller than in February, 2020 – as opposed to the 8.04 percent shrinkage calculable last month.

But the jobs pictures for the stuff that makes up aircraft got better. Engines and engines parts makers hired 600 on net in September – their best monthly total since the same increase recorded last September. August’s previously reported job loss of 600 is now pegged at 500 and July’s downgraded employment increase remained at 300. The sector’s jobs total is still down by 13.79 percent since February, 2020, but that’s qn improvement over the 14.04 percent calculable a month ago.

Non-engine aircraft parts and equipment jobs were up 900 on month in September. You’d have to go back to June, 2019 to find a performance that good. But employment levels at these companies are still off by 15.82 percent since February, 2020 – just slightly better than he 16.17 percent loss calculable last month.

Not to sound pollyanish, but it’s now tough to identify significant headwinds that could hold manufacturing back from continued noteworthy employment gains. U.S. economic growth looks set to speed up. The CCP Virus may have begun retreating for good. And, strangely, because manufacturing workers have been quitting jobs at skyrocketing, record-shattering rates, their employers also have record-shattering numbers of positions to fill. (See the U.S. Labor Department’s interactive data bases for jobs turnover for the eye-popping specifics.) Even a soaring manufacturing trade deficit doesn’t seem to be making a difference.

Clearly, there’s a lot of pandemic-related distortion still going on. But for the time being, I can’t help but expect that more excellent manufacturing hiring numbers lie ahead.