Im-Politic: More Support for the Lab Leak Theory – From China

Tags

Anthony S. Fauci, CCP Virus, China, coronavirus, COVID 19, gain-of-function research, George Fu Gao, Im-Politic, Kristian Andersen, lab leak, National Institute of Allergy and Infectious Diseases, National Institutes of Health, natural origin, wet markets, Wuhan Institute of Virology

Imagine if a close friend of Dr. Anthony S. Fauci, the recently retired U.S. medical official who spearheaded the nation’s fight against the CCP Virus pandemic, just made public comments undercutting a pandemic proposition pushed long and hard by Fauci – along with many American apologists for Beijing (Or were they simply Trump-ly deranged scolds determined to beat what they saw as the former’s xenophobic penchant for blaming foreign countries for…anything? Or both?)?

This belief, of course, is that this this devastating disease originated in a wild animal and not from a virology lab in China with a terrifyingly casual – but evidently typical Chinese attitude – toward preventing accidental pathogen release.

Imagine further that this friend of Fauci – whose initial response to the “lab leak theory” was to use his power in the American research community to slime as “conspiracy thinking” any suggestion that the Chinese regime’s recklessness loosed the virus on humanity – was an eminent virologist himself.

And finally, imagine that this Fauci friend had until last year been not only a leading medical authority, but essentially Fauci’s Chinese counterpart.

That would be a development you’d think would supercharge U.S. government and other international pressure on China to come clean on the virus’ origin, and thereby help identify crucial steps needed to reduce the odds of another possibly preventable medical disaster engulfing the globe.

And that’s exactly what happened Friday in London at an international conference. Dr. George Fu Gao, former head of Beijing’s Center for Disease Control and Prevention, told attendees that there was still “no evidence” showing which animal the virus supposedly came from.

Gao’s full statement: “Even now, people think some animals are the host or reservoir. Cut a long story short, there is no evidence which animals (were) where the virus comes (from).”

As known by those who have followed the virus origins debate closely, Gao’s remark is nothing unusual per se. Finding conclusive evidence along these lines is difficult because it typically requires finding the pathogen in specimens caught in the wild – which are carrying the disease before they’ve had any contact with possible human sources. In fact, despite searching for decades, scientists still haven’t identified the natural “reservoir host” of the ebola virus.

But Gao’s view matters a lot because just a month ago, a report was published that many “natural origins” proponents claimed all but clinched the case that the CCP Virus first jumped to humans from raccoon dogs that were sold at a “wet market” in the city of Wuhan. That is, no Chinese lab was involved.

Interestingly, one of the report’s lead authors was Dr. Kristian Anderson of the reknowned Scripps Research Institute, who in early 2020 worked closely with Fauci and other specialists to (in his words) “disprove any type of lab theory” (italics in original), and who had been the recipient of big grants from Fauci’s agency.

A close reading of the findings (good summaries can be found in the above-linked Atlantic and New York Times articles) makes clear that they don’t clinch the case at all. For example, although the Chinese-collected samples from the Wuhan market did contain mostly genetic material testing positive for the virus that matched the raccoon dog genome – the evidence that so excited the natural origins supporters. But infected human samples were found as well. Moreover, the Chinese researchers who collected the samples used at least some test kits designed to filter out human material (which sure sounds consistent with a lab leak cover-up campaign), though it’s not certain how effectively they did achieved this goal.

To be clear, Gao has not endorsed the lab leak theory. In fact, in principle, his remarks could dovetail with the Chinese regime’s claim that the virus came to the People’s Republic from abroad. (Beijing, ironically, doesn’t endorse the natural origins theory because it’s embarrassed by the minimal-at-best hygienic conditions at the wet markets.)

But Gao’s comments are important because he undoubtedly recognizes that, since no one outside China (except some apologists?) takes seriously the foreign-origin claims, any development that undercuts the natural origins theory ipso facto strengthens the only remaining alternative – the lab leak theory. And therefore it would strengthen the case not only for Chinese responsibility, but for Chinese government responsibility.

In turn, if Chinese government responsibility is so distinctly possible, it raises the question of why Fauci worked so hard to discredit it. And one answer is supported by abundant evidence: that very soon after the virus’ severity became clear, Fauci realized that his own agency had funded the kind of research (known as “gain of function”) dangerous enough to create novel and indeed unprecedently deadly pathogens at the Chinese government-operated lab in Wuhan that had already come under scrutiny as the virus’ possible origin point. (See, e.g., my post here.)

This doesn’t mean that Fauci’s American and Chinese grantees at the Wuhan Institute of Virology accidentally created the bug that became SARS-Cov-2 (the scientific name for the CCP Virus). That charge seems implausible. (At least, that’s what been stated by the U.S. National Institutes of Health, and even though it’s the parent agency of Fauci’s National Institute of Allergy and Infectious Diseases, and therefore was responsible for funding Wuhan research, too, I haven’t yet seen a convincing refutation.)

But at that early stage, neither Fauci nor anyone else could know that for sure. And clearly even once that allegation was disposed of, any solid reason to think that Fauci had funded dangerous work in China – especially given that country’s slipshod lab safety record – would have indicated judgement appalling enough to justify his firing.

Before long, Fauci will be appearing before Congressional committees investigating these and other controversial aspects of his record in the fight against the virus. Here’s hoping some lawmaker asks him if he thinks his friend George Gao is a lab leak conspiracy-monger, too.   

 

 

Advertisement

Im-Politic: How to Deal with TikTok

Tags

censorship, China, Constitution, First Amendment, freedom of speech, Im-Politic, national security, privacy, social media, spying, TikTok

Extra! Extra! I think I’ve come up with solutions to a major China-related conundrum facing U.S. policymakers: How to prevent the wildly popular social media app TikTok from endangering America’s national security and the privacy of individual Americans (often with ominous national security implications) without violating Constitutional protections for speech.

Actually, it’s several solutions. First, it’s vital to remember that

>TikTok – like all entities in China – is ultimately an agent of the Chinese regime;

>it’s already been caught spying on American journalists and sending the information back to China; and

>it’s also already been caught engaging in news and information (including censorship) practices that serve Beijing’s interests. (For evidence for these last two claims, see links in this post from a pundit who’s by no means a China hawk.)

That’s why President Biden banned its presence on federal government-issued devices, and why no one has raised any First Amendment objections. The federal government clearly has the right even in peacetime to ensure that its workforce does nothing to expose itself to blackmail to foreign counterparts or transmit (however innocently) material that could serve foreign government interests. It’s doubly important to put these protections in place before U.S.-China security-related tensions rise further, and certainly before the two countries come to blows over Taiwan or some other dispute.

But this TikTok ban needs to be broadened to include all devices used by U.S. government employees even in private capacities, and to all devices used in any capacity by federal contractors and their employees. After all, no one has a right to work for or to do business with Washington. Those who wish to continue using TikTok would be entirely free to do so, but would need to find jobs and business elsewhere. Any security- and privacy-minded American state or municipal government should be entitled to take the same steps.

As for the use of TikTok in other capacities by private citizens, this entity should be required to run on the app a continuous crawl text stating that it’s a Chinese dictatorship controlled entity; that it’s passed sensitive and possibly compromising personal information to that government, and that the information it makes available is regularly skewed to reflect Beijing’s views and further its objectives. It seems reasonable that these caveats would persuade any thinking adult to switch to other platforms for their entertainment and whatever else they use TikTok for, and begin sharply curbing or at least monitoring their kids’ usage.

I’ve already recommended that all other foreign government materials that can be accessed in the United States be clearly and continuously (in the case of broadcasts or internet content) labeled as such, and these mandatory warnings can be tailored to suit the foreign government in question. (E.g., materials from allied governments would be less detailed than those from China or North Korea or Iran – or Russia.)

But if you’re not satisfied with these measures, here’s another way to justify banning TikTok from the U.S. market in one fell swoop: Authorizing the President to kick out any government-owned or related media or social media entity from any country that has displayed a pattern of endangering U.S. military forces

This way, not only can China be dealt with in a fashion consistent with the First Amendment before the outbreak of a full-scale shooting conflict that would obviously require censoring enemy-state material (its pilots have buzzed U.S. military aircraft flying over international waters several times), but also rogue states like Iran (see, e.g., here) and Russia (see, e.g., here). After all, why give demonstrably hostile foreign regimes any access to what Americans hear and see even if an official state of war doesn’t yet exist? 

Champions of civil liberties (and I count myself as one) are right to worry about government abusing all manner of actual and proposed   national security-related curbs on Americans’ freedoms.  But the above ideas contain plenty of highly specific guard rails based on concrete,  measurable criteria.  TikTok and China have already met every single one of these tests for all of the above limitations, and indeed that set by the  “U.S. forces” yardstick.  In fact, the case against them, based on these commonsensical standards, is so overwhelming that any reasonable person has to wonder why authorized TikTok use still remains so widespread.     

(What’s Left of) Our Economy: Better Wholesale U.S. Inflation but Consumers May Never Notice

Tags

consumer inflation, core PPI, cost of living, CPI, Federal Reserve, inflation, interest rates, monetary policy, PPI, Producer Price Index, producer prices, wholesale inflation, wholesale prices, {What's Left of) Our Economy

Today’s official report on U.S. producer price inflation could teach an important lesson on why prices move up and down in various circumstances.

Because the Producer Price Index (PPI) measures the costs of various inputs businesses sell to other business customers, it can often signal where consumer prices are going – especially when these costs go up. After all, when the goods and services bought by businesses go up, they feel understandable pressure to compensate by raising the prices they charge their customers – including individuals and households.

But as RealityChek regulars know, businesses can’t always pass on higher costs to their final customers. That’s because these customers don’t always feel that they can afford to pay higher prices (except, to a great extent, for essentials). So if demand isn’t strong enough, higher producer, or wholesale, prices don’t always translate into higher consumer prices, and the businesses serving consumers often need to suffer lower revenues and/or profits.

To complicate matters further, when business’ costs go down, there’s no inherent reason for businesses to lower the prices they charge their final customers – especially if demand remains strong enough. Unless they’re chasing market share? Or unless anyone thinks that they regularly, or even ever, like to give their customers price breaks just for the heck of it?

So since consumer demand remains strong – as made clear just yesterday by the official U.S. consumer inflation report for February – my sense is that the new PPI data don’t have much predictive power when it comes to living costs.

That’s a shame, since those wholesale prices results are pretty good in and of themselves. Headline PPI actually fell on month in February, by 0.15 percent – the best such result since last July’s 0.28 percent dip. Moreover, January’s torrid initially reported increase of 0.66 percent (the worst such result since last June’s 0.91 percent jump) has been revised down to a rise of 0.34 percent.

The unusually good monthly number for February could simply reflect some mean reversion from January. (That downward revised figure is still the highest since last June.) Indeed, that terrible June result was followed by the July 0.28 percent decrease. But let’s stay glass-half-full types for now.

Core producer price inflation cooled nicely on month in February, too. This measure (which strips out food, energy, and trade services prices supposedly because they’re volatile for reasons having little to do with the economy’s fundamental inflation prone-ness), pegged sequential wholesale price increases at 0.21 percent.

That figure was well off January’s 0.50 percent – the worst since last March’s 0.91 percent. And it in turn was revised down from the initially reported 0.59 percent. Some mean reversion could be at work here, too, but since last June (as has not been the case for headline PPI), core PPI has been pretty range-bound between 0.20 and 0.29 percent.

Not even taking baseline effects into account undermine the February wholesale inflation results fatally. On an annual basis, headline PPI in February climbed by 4.59 percent. That was the best such result since March, 2021’s 4.08 percent, and a big decrease from January’s data (which were revised down from 6.03 percent to 5.71 percent.

In addition, the February figure comes off headline PPI of 10.56 percent between the two previous Februarys. Those back-to-back results still indicate that businesses that sell mainly to other businesses still believe they have plenty of pricing power – especially given that the baseline figure for March, 2021 was a rock bottom 0.34 percent due to the steep CCP Virus-induced economic downturn. But the big difference between the sets of January and February, 2023 numbers also signal that this confidence has been dented.

Even better, January’s 5.71 percent headline wholesale price inflation followed a 10.18 percent increase during the previous Januarys. A decrease in the 2023 figures considerably bigger than the increase in the 2022 figures also points to wholesale inflation losing not trivial steam.

The annual core PPI story isn’t quite so good, but contains some encouraging news. The February advance of 4.44 percent was only a bit down from January’s 4.45 percent. But it was the lowest such rate since March, 2021’s 3.15 percent, and the January figure was revised down from 4.53 percent.

Baseline analysis, however, shows that pricing power in the economy’s core sectors remains ample. The January and February annual core PPI results followed previous annual increases of 6.89 percent and 6.75 percent, respectively. So they didn’t duplicate the heartening headline PPI pattern of 2023 annual PPI falling faster than its 2022 counterparts.

Moreover, back in March, 2021, when annual core PPI was running at 3.15 percent, the baseline figure for the previous March’s was just 0.10 percent. That is, there was almost no core PPI inflation – because of the sharp CCP Virus-induced slump. So it’s obviously too soon to declare victory over this kind of price increase.

But although this fairly good PPI report may tell us little or even nothing about future inflation, it will affect the nation’s cost of living in one significant if indirect way:  Like yesterday’s consumer price report, it was probably good enough to enable the Federal Reserve to slow or pause its anti-inflation interest rate hikes and other monetary policy moves in order to contain the new banking crisis while claiming that such chickening out won’t send price increases spiraling still higher.  At least not yet right away.   

Our So-Called Foreign Policy: On Chinese Spying and Dual Loyalties

Tags

academics, Biden administration, China, China Initiative, Chinese Americans, civil liberties, DOJ, dual loyalty, espionage, FBI, German-Americans, higher education, immigrants, Israel, Italian-Americans, Japanese internment, Japanese-Americans, Jews, Justice Department, Our So-Called Foreign Policy, profiling, spying, students, The New York Times, World War II, Yudhijit Bhattacharjee

As an American Jew, I’m extremely aware of the dangers of accusing members of various U.S. identity groups with ancestry from or associated with foreign countries of “dual loyalties.” The worst example of the injustices that can result was the World War II-era internment policy – which punished legal immigrants and even American citizens simply based on the assumption that anyone of Japanese descent could be spying for a wartime enemy.

(German- and Italian-Americans came under suspicion, too, but were placed in camps much more selectively than Japanese-Americans.)

Especially in the U.S. context, the dual loyalty charges levelled against Jews has come from those who claim that when they lobby for or just favor pro-Israel policies, they’re prioritizing the interests of the Jewish State over those of the United States. (For some typical – and unusual – recent examples see here.)

More recently, individuals of Chinese descent living in America have come under the microscope due to concerns about wide-ranging spying campaigns conducted by the People’s Republic. And because the targets have ranged from U.S. citizens to legal immigrants to Chinese nationals resident here as students and on various academic exchange programs, critics have claimed that racial profiling and dual loyalty overreach have marked the responses of American law enforcement agencies.

Indeed, these charges – along with contentions that valuable scientific progress is at risk – have been so persuasive to the Biden administration that last February, it shut down a Justice Department program begun during the Trump years to cope with the alleged threat.

But as a New York Times Magazins article today has made clear, despite the dangers of broad-brush approaches, something like the Justice Department’s disbanded “China Initiative” is absolutely necessary to safeguard U.S. national security adequately.

As explained in this detailed Times report on the FBI’s China-related counter-espionage work (and it’s worth quoting in full):

“…China has sought to exploit the huge numbers of people of Chinese origin who have settled in the West. The Ministry of State Security, along with other Chinese government-backed organizations, spends considerable effort recruiting spies from this diaspora. Chinese students and faculty members at American universities are a major target, as are employees at American corporations. The Chinese leadership ‘made the declaration early on that all Chinese belong to China, no matter what country they were born or living’ in, James Gaylord, a retired counterintelligence agent with the F.B.I., told me. ‘They started making appeals to Chinese Americans saying there’s no conflict between you being American and sharing information with us. We’re not a threat. We just want to be able to compete and make the Chinese people proud. You’re Chinese, and therefore you must want to see the Chinese nation prosper.’

“Stripped of its context and underlying intent, that message can carry a powerful resonance for Chinese Americans and expatriates keen to contribute to nation-building back home. Not all can foresee that their willingness to help China could lead them to break American laws.”

Keep in mind, moreover, that Times reporter Yudjhijit Bhattacharjee is by no means unsympathetic to the profiling and dual loyalty issues, as he wrote in the very next sentence,

“An even more troubling consequence of China’s exploitation of people it regards as Chinese is that it can lead to the undue scrutiny of employees in American industry and academia, subjecting them to unfair suspicions of disloyalty toward the United States.”

But however – genuinely – troubling they are, if you’re worried about Chinese spying and national security, and you acknowledge that much of Beijing’s strategy is based on an attempt to blur the distinction between Chinese nationals and Chinese-Americans, and that the latter can be all too susceptible to these appeals, what’s the alternative to casting a wide net? Pretending that there’s nothing to see here?

Which brings up another disturbing finding of Bhattacharjee’s: The claim of one FBI agent he interviewed that “When… agents go out to talk to companies and universities about the threat…skeptical listeners ask for the evidence that proves the theft of trade secrets is part of a campaign directed by China’s government.”

Given unmistakable evidence of decades of massive Chinese theft of U.S. and other foreign intellectual property, China’s systematic disregard for other long agreed-on global trade rules it’s promised to respect, and its increasingly hostile and expansionist foreign policies, what aside from willful ignorance – or on the part of universities, a naive faith that even a regime so repressive and belligerent would never dream of corrupting the global March of Science – could explain this skepticism?

Obviously no country with what I called yesterday a healthy sense of self-preservation could possibly base its China counter-espionage policies on such assumptions. Nor could any country with inevitably limited national security resources and a consequent need to set priorities.

So even though critics of the China Initiative were right in pointing out that some of those it had prosecuted have been acquitted, and even though that danger of overreach is always present, the Biden administration was seriously mistaken in not only closing down the China Initiative but sanctimoniously declaring that it’s completely scrapping any practices smacking of “standards based on race or ethnicity.”

And if China Initiative critics want to boost the odds of counter-espionage campaigns choosing their targets accurately, they might try getting their own heads out of the sand by helping the government less reluctantly and scrutinizing their own China ties with more realistically and vigiliantly.

Making News: Podcast Now On-Line of National Radio Interview on the Spy Balloon and China Decoupling

Tags

CBS Eye on the World with John Batchelor, China, China spy balloon, decoupling, espionage, Gordon G. Chang, investment, Making News, spy balloon, spying, surveillance, Trade

I’m pleased to announce that the podcast of my interview last night on John Batchelor’s nationally syndicated radio show is now on-line.

Click here for a timely discussion – with co-host Gordon G. Chang – on how the spy balloon incident is giving companies in the United States and all over the world still more good reasons to reduce their ties with China.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Those Stubborn Facts: Maybe It’s Not Systemic Racism?

Tags

law enforcement, Memphis, police, police misconduct, police reform, policing, racism, systemic racism, Those Stubborn Facts, training, Tyre Nichols

Number of hours of training needed on average to become a U.S. police officer today: 652

 

Number of hours of training needed on average to receive a U.S. plumbing license today: 3,500

 

(Source: “US police receive less training than plumbers,” by Federica Cocco and Oliver Hawkins, Financial Times, February 2, 2023, US police receive less training than plumbers | Financial Times (ft.com) )

Our So-Called Foreign Policy: Totally Unhinged Establishment Thinking on Taiwan

Tags

Asia-Pacific, China, East Asia, foreign policy establishment, Indo-Pacific, investment, Our So-Called Foreign Policy, semiconductors, Seth Cropsey, Taiwan, tech, The Wall Street Journal, Trade

Because semiconductors are already central to America’s security and prosperity and will only become more important with each passing day, wouldn’t it be great if the United States wasn’t so dependent on Taiwan for supplies – especially of cutting-edge chips – given that the island is located just 100 miles from China?

According to Seth Cropsey, one of America’s most respected military experts and a former national security official, the answer is “No” – because if the United States became much more self-sufficient in semiconductor manufacturing, it wouldn’t have to care so much about…Taiwan.

His January 26 Wall Street Journal article is a wonderful example of a syndrome I’ve long written about (most recently here in the Taiwan context) – the tendency of the U.S. foreign policy establishment, and too many U.S. leaders who have listened to its members’ advice, to use foreign policy measures to solve problems much better dealt with through domestic policy moves whenever possible.

The advantages of using domestic policy should be screamingly obvious. As I’ve also previously pointed out (most recently at length here), American policymakers will almost always have much more control over developments within our borders than without. And when it comes to Taiwan-like situations, rebuilding the nation’s capacity to manufacture semiconductors per se carries absolutely no risk of war with a nuclear-armed China.

What’s particularly bizarre about this Cropsey op-ed is that he completely overlooks two eminently reasonable arguments for concentrating tightly on Taiwan’s security, at least for the time being. The first is one I strongly agree with – regaining the semiconductor prowess the United States needs will take many years. So until then, it’s imperative – and in fact in my opinion vital – that America take whatever steps are needed to prevent China from taking over Taiwan, which it regards as a renegade province that it’s vowed to reabsorb by force if necessary. After all, it should be easy to see how Beijing either could win access to Taiwan’s crucial, world-leading production technology, or deny the United States (and the rest of the world) access to the huge volumes of chips that Taiwan’s factories turn out.

The second argument absent from his column – and which I don’t agree with – is that irrespective of the semiconductors, if China gained control over Taiwan, it would take a huge step toward becoming the kingpin of East Asia, perhaps the world’s most economically dynamic regions, and limit or cut off U.S. access to crucial markets and sea lanes.

I disagree for two reasons. First, leaving the semiconductors out of the picture, the chronic and huge trade deficits run up by the United States with the region show that doing business with East Asia has been a longtime major net loser for America’s domestic economy. Second, and also putting semiconductors aside, East Asia has relied for so long on amassing trade surpluses, especially with the United States, to achieve adequate growth that its countries (including China) simply can’t afford such decoupling.

As I just made clear, opponents of my position can cite valid concerns. But Cropsey never mentions them. Instead, he’s simply worried that the Biden administration’s focus on rebuilding America’s own semiconductor manufacturing mean that Washington “looks to be playing for time—not time to rearm and prepare for a fight, but to reduce Taiwan’s importance to the U.S.” and that this would harm U.S. interests because “An America that no longer needs Taiwanese semiconductors [would be able to]abandon its old friend.”

I admire Taiwan’s economic, technological, and political achievements as much as anyone. But even overlooking the enormous extent to which Taiwan’s massive investments in China’s technology industries (just like America’s) have shortsightedly helped create and magnify the very threat the island faces, the idea that honoring a friendship only for its own sake is remotely as important as minimizing the odds of a nuclear war is just loony. And nothing exempifies the nature of too much American foreign policy discussion for decades as well as a major newspaper’s belief that such arguments deserve to be taken seriously.

(What’s Left of) Our Economy: New Official Manufacturing Output Figures Add to Recessionary Gloom

Tags

aerospace, aircraft, aircraft parts, appliances, automotive, computer and electronics products, electrical components, electrical equipment, Federal Reserve, furniture, inflation-adjusted growth, machinery, manufacturing, medical supplies, pharmaceuticals, plastics and rubber products, printing, real growth, semiconductors, transportation equipment, wood products, {What's Left of) Our Economy

Yesterday’s Federal Reserve report on U.S. manufacturing production (taking the story through November) tells me that domestic industry’s inflation-adjusted output is rolling over into contraction – and not just because it fell last month for the first time since June. As I’ll spotlight below, it was also disturbing to see multi-month worsts in industries where such output has been remarkably stable lately, and sequential drops in some other sectors that were the biggest since the peak of the CCP Virus pandemic’s hit to the economy in April, 2020.

Production in real terms by U.S.-based manufacturers sagged by 0.62 percent sequentially last month – the first negative read since June’s 0.73 percent drop. Oddly, though, revisions of recent months’ results were slightly to the upside, although hardly stellar.

Still, as a result, since February, 2020, just before the pandemic struck the U.S. economy in force, such manufacturing production is up by 3.07 percent, versus the 3.76 percent calculable last month.

November’s manufacturing output losses were so broad-based that only four of the twenty broad industrial subsectors tracked by the Fed registered any sequential growth at all. They were:

>wood products, which grew by 3.59 percent in price-adjusted terms despite the continuing troubles of the housing industry. Indeed, that was the best such result since March, 2021’s 3.71 percent. But the November increase came after an October decrease of a downwardly revised 3.58 percent that was wood products’ worst month since constant dollar production plunged by 11.02 percent in April, 2020. wave. Other revisions were overall negative, too, but the November pop means that after-inflation wood products output is now up by 0.20 percent since immediately pre-pandemic-y February, 2020, versus being 2.67 percent below calculable last month:

>printing and related support activities, which enjoyed its second straight sequential real output improvement after difficult summer and fall. The sector’s 1.58 percent advance in November followed one of an upwardly revised 2.75 percent in October that was the best such figure since February’s 3.13 percent jump. Other revisions were mixed on balance but the recent growth spurt has brought the industry’s price-adjusted output to within 7.92 percent of its February, 2020 levels versus the 9.37 percent calculable last month; 

>aerospace and miscellaneous transportation equipment, which produced constant dollar production growth of 1.15 percent. Slightly positive revisions helped the sector push its post-February, 2020 output expansion to 26.37 percent in real terms, versus the 26.29 percent> calculable last month; and

>computer and electronics products, where inflation-production production was 0.53 percent higher in November than in October. Yet decidedly negative revisions helped push this diverse category’s real expansion since February, 2020 down to 5.70 percent, versus the 6.32 percent calculable last month.

The biggest November losers among the great majority of broad manufacturing sub-sectors seeing drooping after-inflation production were:

>automotive, whose volatility has shaped so much of manufacturing’s recent fortunes. November’s constant dollar output sank on month by 2.84 percent, the worst such result since February’s 3.81 percent tumble. Revisions were mixed but inflation-adjusted production of vehicles and parts is now 0.46 percent lower since just before the CCP Virus struck in force, versus being 3.18 percent higher as of last month.

>electrical equipment appliances and components, where output slipped 2.41 percent in November. – another post-April, 2020 worst. In addition, an initially reported October increase of 1.92 percent, which was the best such result since February’s 2.29 percent, was downgraded to 0.68 percent. Other revisions were negative as well, which dragged down this diverse sector’s after-inflation growth since February, 2020 all the way down to 2.83 percent, versus the 7.07 percent calculable last month;

>furniture, which experienced a 2.02 percent real output decrease that represented its worst such result since February, 2021’s 2.77 percent. Revisions were negative overall, and in real output terms the furniture industry is now 7.31 percent smaller than in immediately pre-pandemic-y February, 2020 versus the 4.80 percent calculable last month; and

>plastics and rubber products, whose 1.84 percent price-adjusted output slip was another worst since the 18.63 percent nosedive in peak pandemic-y April, 2020. Along with mixed revisions, the November drop depressed real plastics and rubber products output to 0.66 percent below February, 2020 levels versus having been 1.18 percent above as of last month.

The machinery sector is a major bellwether for the rest of domestic U.S. manufacturing and the entire economy because its products are so widely used. In November, its real output dipped for the first time (by 0.23 percent) since June’s 1.94 percent fall-off. Revisions were slightly negative, and inflation-adjusted production of machinery is now 7.53 percent greater than just before the CCP Virus’ arrival in force in February, 2020, versus 8.31 percent calculable last month.

The shortage-plagued semiconductor industry has also been key to domestic manufacturing’s fortunes, and will be receiving mammoth subsidies soon due to Congress’ passage of legislation aimed at boosting its American footprint. So November’s 0.39 percent real output expansion is good news, especially since it was the first increase since June’s 0.79 percent. Revisions were mixed, leaving constant dollar semiconductor output up 12.40 percent since February, 2020, versus the 12.16 percent calculable last month.

Since the pandemic struck, RealityChek has been paying special attention to several other manufacturing sectors that have either been especially hard hit by the pandemic, or that have been especially important in fighting it. Overall, they experienced downbeat Novembers in terms of production.

The exception was aircraft and parts, whose companies were hit so hard by the CCP Virus-related curbs on travel. In November, these companies boosted their after-inflation output by another 1.85 percent. Moreover, October’s initially reported gain of 2.51 percent was upgraded to one of 2.59 percent (the best such performance since April’s 3.01 percent). Other revisions were negative, but inflation-adjusted output in this sector is now 35.82 percent higher than just prior to the pandemic’s arrival in force, versus the 34.14 percent calculable last month.

The pharmaceutical and medicines industry (including vaccine makers) saw real production down by 0.16 percent, the first decline since June’s 0.50 percent. But revisions were positive enough (especially for October) to bring this sector’s real output 18.11 percent above February, 2020’s levels versus the 16.71 percent calculable last month.

Inflation-adjusted production slid by 1.55 percent after inflation for the medical equipment and supplies firms that turn out so many products used to fight the virus. This drop was another instance of a worst such result since peak pandemic-y April, 2020 (15.08 percent). Revisions were mixed, and real output in these industries is still up 13.23 since just before the pandemic. But as of last month, this figure was 15.75 percent.

It’s of course entirely possible that these dreary November manufacturing output results are blips, and that the sector will keep shrugging off bearish predictions. But with U.S. growth seemingly certain to slow down markedly at the least, and global growth already weak, it’s difficult to understand how domestic industry escapes these undertows.

Making News: Back on National Radio Tonight on Apple and China, & a New Podcast On-Line

Tags

Apple, CBS Eye on the World with John Batchelor, CCP Virus, China, coronavirus, COVID 19, decoupling, Employment, friend-shoring, Jobs, Making News, Market Wrap with Moe Ansari, recession, subsidized private sector, supply chains, Zero Covid, Zero Covid protests

I’m pleased to announce that I’m scheduled to be back tonight to the nationally syndicated “CBS Eye on the World with John Batchelor.” Our subject – an update to Saturday’s report on Apple’s potentially game-changing decision to move production out of China at a faster pace. 

I don’t know yet when the pre-recorded segment will be broadcast but John’s show is on between 9 PM and midnight EST, the entire program is always compelling, and you can listen live at links like this. As always, moreover, I’ll post a link to the podcast as soon as one’s available.

Speaking of podcasts, the recording is now on-line of yesterday’s interview on the also-nationally syndicated “Market Wrap with Moe Ansari.” The segment focused on my post yesterday on the worsening quality of many of America’s newly created jobs, the political and economic impact of Chinese protests against the regime’s Zero Covid policy, and the latest signs of an impending U.S. recession.

To listen, click here, and scroll down a bit till you see my name on the left.  The segment begins at about the 21:30 mark.

And keep on checking in with RealityChek for news of upcoming media appearances and other developments.

Those Stubborn Facts: NATO Chief Pushes Hopium on Members’ Defense Spending

Tags

defense spending, national security, NATO, North Atlantic treaty Organization, Those Stubborn Facts

“NATO allies may decide to aim to spend more on defence than their current target of 2% of national output when they meet for their next summit in Vilnius in July 2023, the chief of the alliance said on Monday.”

– Reuters, November 21,2022

 

Number of NATO members that have met the target today: 8 of 30

Date the target was set: 2006

 

(“NATO allies may lift target to spend 2% of output on defence – Stoltenberg,” by While Europeans learn energy frugality, Reuters.com, November 21, 2022, https://www.reuters.com/business/aerospace-defense/nato-allies-may-lift-target-spend-2-output-defence-stoltenberg-2022-11-21/ and “Majority of NATO Nations Fail to Spend 2 Percent GDP Guideline for Defense,” by Jake Thomas, Newsweek, March 31,2022, Majority of NATO Nations Fail to Spend 2 Percent GDP Guideline for Defense (newsweek.com))