Catching Up With Rapid Change

Has it only been a little over a week? So many solidly held assumptions turned on their heads. The vaunted Russian military would make short work of the corrupt Ukrainians. We gave them some arms showing our compassion. Of course, not nearly what we could’ve, but they’d lose them in a short Russian victory. We could all wring our hands and then go back to our lives. 

The always anti-war left, the never interfere abroad libertarians, and the “America First” conservatives echoed Nevile Chamberlain in their dismay of involvement in a “quarrel in a faraway country between people whom we know nothing.” Chamberlain’s appeasement was over the Sudeten in Checkoslovia. A less than a two-hour flight from his London. The world is much smaller now. 

Supposedly intelligent people believed Ukraine was out to conquer Russia. Many agreed with Fox News’s Tucker Carlson and others it was our fault because we decided to extend NATO to so many ex-Russian-dominated Eastern Europe countries. By desiring to join them, Ukraine threatens Russia’s existence. It seems so quaint now. 

The only one threatened was Putin. A prosperous capitalist Ukraine on Russia’s doorstep would illustrate his failures. The same threat Taiwan presents to China’s Xi. Even with China’s progress, the island’s per capita income is double the mainland.

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Job Description

From packages taken from the doorstep to luxury stores hit by gangs, crime is taking on a life of its own. Even the Fox Christmas tree burnt down. Our greatest cities suffering from lawlessness and filth no longer are tourist draws—many experiencing out-migration. The situation only seems to be getting worse.

How did we get to this point? We have to ask how we have departed from civilized norms. To understand the problem, we must revisit what we expect from our elected governments—at a minimum, going about our business without fear for our person or property. Walking down the street or opening for business shouldn’t be an act of foolhardy courage. We pay taxes to enforce the laws allowing civilized society.

In my series “The Long Journey to More,” I observed the only way to get an increase from present circumstances was to take it from someone else, trade for it, or innovate. As we innovate and trade our way to “More,” the idea of taking it from others should become unacceptable. Our military and law enforcement must keep predators from taking what we value.

Limited food, clothing, and shelter meant getting from others before they got from you for most of human history. The strong subjugated those weaker and left most at subsistence. The powerful got “more” and fought to preserve what they had and to extend their sway over others.

The Vikings used their versatile ships to both raid and trade. In an earlier time, they were an example of how things worked. In our era where more people live well above subsistence every day, the tolerance for those preying on others should be diminishing. Instead, we appear heading in the opposite direction.

When we have all sorts of programs to feed, clothe and shelter those in need, what if anything justifies anyone taking from someone else? If government programs weren’t enough, we have a multitude of charities providing aid. One would have to work hard to starve to death. Only exceptional circumstances result in malnourishment. Never in history have we had more support for the unfortunate, yet we find the news now dominated by lawlessness.

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Are We Becoming the USSR?

Artificial Sun" nuclear fusion reactor
Artificial Sun” nuclear fusion reactor

1.5% wind and solar, 2.6% Hydro, and 1.7% nuclear are the amounts of the world’s energy consumption these sources provided in 2019. The other 94% came from fossil fuels. Yet, much of the advanced world is setting limits and goals for certain products and actions for the future. Japan plans to stop the sale of new gasoline-powered cars by 2035. This plan is similar to moves by California and several European nations. By the mid-2030s, if you want a new car, you’ll only be able to buy an electric one.

This program sounds like part of a government 15-year plan. A significant industry will have to revamp its products in a specific time frame or else. Wow, a time-specific government-directed industrial plan. Can we all sing a chorus of “Back in the USSR?” In my series “The Long Journey To More,” I expressed the feeling capitalistic countries would out-perform China or any other totalitarian state. Greater flexibility would fuel a growing efficiency-innovation gap. A totalitarian government would double down on planning until it ended up as a closed society such as North Korea or collapse like the Soviet Union.

This assertion assumed we would avoid top-down planning. The actions we are doing in climate change move us away from a supportive government allowing competing solutions. Ordering us to buy only electric new autos sets up a bias towards existing technologies. The objective is less carbon. Most people agree excess carbon in the atmosphere is contributing to global warming. All things being equal, people choose cleaner carbon-free energy sources. At present, Wind or Solar have it politically over carbon-emitting production. Unfortunately, the wind doesn’t always blow, and the sun doesn’t always shine. Nuclear is reliable but under cost and regulatory constraints. With the new administration, new fossil fuel use will be difficult and discouraged.

Now we are looking forward to millions upon millions of motor vehicles needing a plugin. The additional electricity will have to come from somewhere. Irrational fear raising costs blocks nuclear. Governments are increasingly are limiting or making it difficult to increase fossil fuel use.With realities after 2035, industries have no choice but to make significant capital spending plans utilizing Solar and wind.

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Cold War II

We were asked if we’re slipping into a new cold war. Our answer is you haven’t been paying attention, it’s already started. It probably started even longer ago, but when Xi was named President for life, it was inevitable. Anytime you have a president for life or anything close to it, the situation already is off the rails. You just don’t get liberalization with the rule of law when you can’t change the people at the top. What you get increasing repression. As we’ve pointed out in our “More” series, top-down one-party states are inherently inefficient as the elite substitute their judgment for that of free markets and the choices of free people. As they fall further behind, the people become restive, and the rulers have to make a choice between ceding power or crushing dissent. Too often, the latter wins out. So it appears with China. 

Given the actual state of things, what should we be doing? Decouple as soon and as thoroughly as we can without upending our and the world’s economy. That was the beauty of the Trans-Pacific Partnership (TPP). While increasing free trade among the members and protecting intellectual property rights, it makes it more expensive to make or buy in China. Unless China changed its ways, it would become increasingly isolated. This would’ve given everyone time to adjust without sudden dislocation. Unfortunately, the Trump administration dumped TPP and instead levied stiff tariffs. This is causing pain on both sides without isolating China. Evidently, the Trump administration thinks we can continue to have linked economies with just some adjustments. That wouldn’t have worked with the old Soviet Union, and it won’t work with China.

You only have to look at two of the recent happenings to two of our prominent business institutions, the NBA and Disney. Each fearing a loss of Chinese profits has bent their American Principles into a pretzel. Given our ideals, is there any reason not to know where Americans should come down on freedom. Houston Rockets general manager knew Daryl Morey and twitted his support for the people of Hong Kong. China had an immediate meltdown and used full force to bend the NBA to its will. Disney under similar pressure made changes to content to please China. In both cases, these entities initially chose profits over integrity. In doing so, they have lost any moral authority to speak out on anything at home or abroad. Unless you’re willing to pay the price of speaking up against injustice everywhere, you can’t really speak out anywhere. Nobody needs to listen to hypocrites.

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The World Has Lots More” Now What? Steps to Take

The point of this series is to make clear how the world has changed for the better since innovation and trade have taken off to provide increasing amounts of “More”, while the old standby of taking it from others ultimately results in “Less.” The problem is we either have to commit to adapting to a changing world with greater flexibility and efficiency or get caught in the downward spiral of government-directed economies invariably get snared. More government direction and you go down the road to “less.” The leaders promise “More” and maybe initially deliver by taking it from some and giving it to supporters, but ultimately they can’t adapt quickly enough and fall behind. The people get restless. The leaders grow fearful and clamp down on dissent. Maybe, aggressive foreign ventures are taken to distract from the leader’s failures. Sanctions for these actions or human right violations follow adding to the economic distress. The country is forced out of normal trade as unreliable in any supply chains. The economic situation gets even worse and the leaders have to be even more repressive. On and on it goes. Unfortunately, this is the history of every modern top-down government. If we wish to avoid this horrible fate we need to take certain steps:

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