I often hear people say, “Some people are so blinded by their opposition to Hitler that they are unwilling to admit that Hitler was right about vegetarianism.”

I’m a very paranoid person, who also happens to be pretty strongly anti-Hitler. So when I hear people making this criticism, I automatically assume they are talking about me.

Therefore, just to be clear, I do “admit” that Hitler was right about vegetarianism.

Happy now?

David Beckworth directed me to a presentation by Steve Ambler, recommending a policy of NGDPLT. (It was a part of the Bank of Canada’s 5-year review.) Ambler did an excellent job, and one highlight for me was his mention of the Mercatus-funded NGDP futures market:

The first discussant was Nick Rowe, who is one of the very few economists I would pay to go listen to. Nick has convinced me that monetary policy is 1% current concrete steps and 99% signaling about the expected future path of policy. He did a very nice job explaining how current spending depends on futures expected monetary policy, which is why we need a regime that stabilizes future expected spending (NGDP). I like how Nick used the “automatic stabilizers” concept, an idea more commonly linked to fiscal policy.

The economy would be doing a bit better right now if the public could be convinced that NGDP at the end of 2021 would be about 8% higher than NGDP at the end of 2019.

Inflation targeting doesn’t do as well, as inflation is less closely correlated with things we actually care about, such as output gaps.

In the most recent ChinaTalk episode, Jordan Schneider asks Adam Tooze about the cold war between the US and China:

Jordan: It’s interesting thinking about the extreme Republican take on U.S.- China relations, how it almost echoes the clock running out on the U.S. We have to shut down Huawei, we have to take down SMIC, because time is absolutely not on our side.

Adam: The answer to this apocalyptic thinking, which in the case of folks like Pompeo who belong to the evangelical faction around the Trump administration, they really do have a kind of end times possibility in their kind of cosmology. That’s a dangerous thought pattern. Apparently, Peter Navarro sincerely believes that there is the possibility of a shooting war with China as a realistic prospect over the next couple of decades. That’s dangerous stuff, because the job is not to refuse a relative decline, because that’s necessary and legitimate and inevitable. The question is to code it as something other than end times. . . .

This sort of apocalyptic thinking of a history that’s going to end with some sort of big bang, or some terrible ghastly discreditable whimper, rather than just facing up to reality in which the world is different and America’s position is not what it was in 1945. Which is not after all the end of the world.

The worry for me is more about the American side than it is about China. This is in no way to diminish the aggression that Beijing is clearly displaying, it’s determination to resolve the “Hong Kong problem,” and its very earnest commitment to finding a new solution for Taiwan in the foreseeable future. This isn’t to underestimate the seriousness of that intent on their part. But I don’t think it’s driven by the insistent ticking clock kind of logic.

As you’d expect, the entire interview of Adam Tooze is interesting.

Update: Gordon directed me to the latest issue of Politico:

WITH 40 DAYS LEFT until Election Day, it seems as though the United States is well on its way to becoming a banana republic.

I must be highly contagious. It seems like whenever I develop some sort of “hysterical” reaction to current events, the mainstream media follows along a few years later.

People have asked me how I define “banana republic”. So I’ll do that in this post. Before doing so, I have to explain a really basic point that should be obvious. But it’s 2020, and the internet has turned us into a nation of morons. So I have to spell it out. This post is my definition of banana republics, not a description of Trump. So don’t say “But Trump doesn’t do that” Or, “but that’s what the Democrats do”. Heck, some of the items on my list, such as government data manipulation, don’t apply to either party in the US.

I have to say this because in 2020 I can do something as innocuous as complain about how the US responded to Covid-19 and Trumpistas will immediately assume I’ve attacked their Dear Leader.

By the way, this sort of misreading is itself evidence of being a banana republic. I doubt whether when some Swiss guy complains about some problem in Switzerland that the listener automatically assumes it’s a direct attack on the Prime Minister. But they probably do in Venezuela.

This is obviously just a partial list:

1. Actual fake news in the media, and false accusations of fake news by politicians. Weird conspiracy theories.

2. The cult of the “man on horseback”, who rides into the capital to rid it of corruption.

3. Highly corrupt governments, especially governments elected on anti-corruption platforms.

4. Packing the Supreme Court with loyalists.

5. Attempts to end term limits for the current president, or to replace the president with his spouse to evade term limits. (Not having term limits at all is not evidence of being a banana republic.)

6. Corrupt police and violent vigilantes.

7. A strong president and subservient Congress.

8. No trust in election fairness. (This is perhaps the most distinctive characteristic of BRism)

9. Presidents blame foreigners for domestic economic problems.

10. Frequent impeachment attempts.

11. Opponents are demonized, electorate is highly polarized.

12. Schools teach propaganda.

13. President’s family members become important policymakers.

14. Governments spend money like there’s no tomorrow. The national debt soars. High inflation.

15. New governments routinely prosecute members of the previous administration.

16. Unwritten rules and norms of civic culture erode away; politics becomes the law of the jungle.

17. Presidents demand loyalty from other government officials, including law enforcement.

18. Statist economic policies that favor cronies of the president.

19. Voters focus on personalities, not policies.

20. The government manipulates economic data to look good.

In the previous post I mentioned that Ben Thompson was highly critical of the TikTok deal. Here’s Jordan Schneider:

The current deal does not solve any of the concerns I initially had about TikTok’s US operations.

TikTok’s sort of sale to Oracle + Walmart doesn’t do anything to address algorithmic manipulation of political content, access to American’s data, or content moderation. . .

It used to be nice to think that in the 21st century, American crony capitalism was limited to small-time stuff like the occasional hundred grand in a Congressman’s freezer. . . .

Thanks to the Trump administration’s behavior, US diplomats trying to preach clean government won’t face “quizzical looks,” they’ll face belly laughs.

TechCrunch has a scathing essay by Danny Crichton describing the beginning of the end of American exceptionalism. It’s entitled:

Gangster capitalism and the American theft of Chinese innovation

Here are a few excerpts:

It used to be “easy” to tell the American and Chinese economies apart. One was innovative, one made clones. One was a free market while the other demanded payments to a political party and its leadership, a corrupt wealth generating scam that by some estimates has netted top leaders billions of dollars. One kept the talent borders porous acting as a magnet for the world’s top brains while the other interviewed you in a backroom at the airport before imprisoning you on sedition charges (okay, that might have been both). . . .

Hell, we’re apparently demanding a $5 billion tax payment from ByteDance, which the president says will fund patriotic education for youth. The president says a lot of things of course, but at least the $5 billion price point has been confirmed by Oracle in its press release over night (what the tax revenue will actually be used for is anyone’s guess). If you followed the recent Hong Kong protests for a long time, you will remember that patriotic youth education was some of the original tinder for those demonstrations back in 2012. . . . .

Dozens of smart, brilliant entrepreneurs aren’t even trying to migrate, instead rightfully seeing their home markets as more open to innovation and technological progress than the vaunted superpower. The frontier is closed here, and it has moved elsewhere.

So what are we left with here in the U.S. and increasingly Europe? A narrow-minded policy of blocking external tech innovation to ensure that our sclerotic and entrenched incumbents don’t have to compete with the best in the world. If that isn’t a recipe for economic disaster, I don’t know what is.

But hey: at least the youth will be patriotic.

And this, from Jeff Bezos’s newspaper:

Last summer, President Trump asked for an investigation into the contract over concerns that the contract requirements had been tailored for Amazon. Newly installed Defense Secretary Mark T. Esper then launched his own “review” of the department’s approach. The Pentagon then awarded JEDI to Microsoft, prompting a lawsuit from Amazon.

In its bid protest, Amazon alleged that Trump’s interest in the JEDI contract was motivated by his antipathy toward Amazon founder Jeff Bezos, who also owns The Washington Post. Bezos, who bought The Post in 2013, does not weigh in on The Post’s coverage decisions, the news organization’s leaders have said.

But there was an “investigation”, so clearly there is nothing to see here:

An in-depth investigation from the Defense Department’s inspector general found no evidence that key decision-makers in the Pentagon were acting on Trump’s orders when they gave the contract to Microsoft. But the investigation failed to answer important questions about the White House’s role and influence because the White House refused to make key officials available for questioning.

I’m sure the key officials were too busy to answer questions.