This past quarter I went on a Hal Hartley binge—interesting director. I also read Chateaubriand’s autobiography (1300 pages, up to 1815), which I loved. Saw the Succession TV series, which has all the strengths and weaknesses of other “quality” TV series. Works best as a black comedy—can be cringeworthy when the writers start taking themselves seriously.

2023:Q3 films

Newer Films:

Lynch/Oz  (US)  3.9  So far, this is my favorite film of the 2020s.  Six essays exploring links between The Wizard of Oz and the films of David Lynch (and to some extent cinema more broadly.)  Five of the six are outstanding—and deeply enjoyable.  This increased my already sky high view of both Oz and Lynch.  See it on the big screen.

Close to Vermeer  (Dutch)   3.5  As a documentary, this is merely good.  But the images of Vermeer’s painting are the best I’ve ever seen on film—perhaps even better than in real life.  I wish they’d spent more time lingering over each masterpiece.

Barbie  (US)  3.3  Pretty if you like pink.  Amusing at times.  A good film, but I’m not the intended viewer—the humor is dumbed down for the teenage audience. I kept looking at my watch.  (BTW, Amazon charges $25 for a rental.  A Chinese station shows it for free.)

MI: Dead Reckoning  (US)  3.0   The actors have gotten old, the ideas are old, and I’m too old for this sort of film.  (Tom Cruise has lost his charisma—his face seems bloated from plastic surgery, or botox, or old age.)  Everything was derivative.  The handcuffed couple was done better in The 39 Steps.  The car chase was done better in Bullet.  A rogue AI was done better in 2001.  A runaway train was done better in The General.  Mysterious Venice at night was done better in Don’t Look Now.  A terrorized submarine crew was done better in Das Boot.  Defusing a bomb was done better in Goldfinger (and even better in A Small Locked Room.)  It’s a film by committee.

This was my first time in a 4DX theatre.  Imagine the worst thunderstorm you ever flew through on an airplane, and then stretch that out for 3 hours.  The seats were continually jerking this way and that, and wind and water spray added to the effect. I can only imagine what sort of experience will be added to viewers of XXX movies in the year 2123.  Sensory immersion seems sort of like 3-D films—a good idea that somehow doesn’t work out in reality.

Older Films:

Taste of Cherry  (Iran, 1997, CC)  3.9   My all-time favorite Iranian film (and there’s a lot of great competition.)  The 1990s was the golden age for the sort of film that initially seems devoid of a clear narrative, but in some hard to discern way end up being far more engrossing than standard Hollywood fare.  These films typically came out of non-Western countries such as Iran, China, Taiwan, Turkey and Mexico.

Onibaba  (Japan, 1964, CC)  3.9  The riches of mid-century Japanese cinema seem almost inexhaustible.  No matter how many films you’ve seen, there’s always another masterpiece to be discovered.  William Friedkin was asked to name his all time favorite films and this one was first on his list.  Yes, Friedkin and I probably overrate Onibaba, but it’s such a pleasure to be reminded of the frisson I used to experience at the cinema.

Letter Never Sent  (Russia , 1960, CC)  3.9  I liked this even more than the director’s more famous “Cranes are Flying”.  Great B&W cinematography.  Made the same year as Psycho, L’Avventura, The Apartment, Peeping Tom, Breathless, La Dolce Vita, When a Woman Ascends the Stairs, Late Autumn, The Naked Island, The Bad Sleep Well, Purple Noon.  Every month a new masterpiece.

Pigs and Battleships  (Japan, 1961, CC)  3.8  As with Martin Scorcese, Imamura has a great feel for small-time hoodlums.  But Imamura is more sarcastic, and has a more flamboyant visual style. And there’s no Catholicism lurking in the background.  Life is what it is—only the strong survive.

The Graduate  (US, 1967, CC)  3.8  It’s easy to recall the great dialogue and the excellent soundtrack, but I had forgotten just how good the visuals were.  Criterion had a print that looked as good as the day it premiered, and Mike Nichols created a number of really striking images.  Is this the film that best captures the feel of the 1960s?

Oldboy   (Korea, 2003)  3.8  This is the film that best epitomizes the way Korean movies frequently dial up the intensity level to an eleven.  Rewatching Oldboy after 20 years, I found the style every bit as powerful as the first time, but the surprises were no longer as shocking and the extreme violence was quite unpleasant to watch.

Floating Weeds  (Japan, 1959, CC)  3.7  Ozu remade the 1934 version, entitled The Story of Floating Weeds.

Z  (French/Greek, 1969, CC)  3.7  This film had a big impact on me back in 1969.  After 54 years it’s easy to spot the flaws, but it remains a powerful and highly influential film.  (With a more subtle and thoughtful director it could have been a 4.0 film.)  Essential viewing for anyone who wishes to understand the sociology of fascism.  In 1969, Greece, Spain and Portugal were still ruled by quasi-fascist regimes.  A few years later they were all democracies.  The symbol “Z” has gone from an emblem of hope in 1969 to a symbol of Russian fascism in 2023.  What a sad time we live in.

Dersu Uzala   (Russia/Japan, 1975, CC)  3.7  Kurosawa is viewed as the most “Western” of the great Japanese directors, and perhaps that’s why he was able to make a successful Russian film.  The first half is brilliant—the second half is merely good. Unfortunately, as with many 1970s color films, the print is in need of restoration. 

Black River   (Japan, 1957, CC)  3.7  There’s a lot to appreciate in this Kobayashi film, including the engrossing portrayal of post-war Japanese life near a US military base.  Some excellent B&W cinematography.  Great final scene.

Henry Fool  (US, 1997, CC)  3.7   Excellent independent film from the 1990s.

Meanwhile   (US, 2011, CC)  3.7   A beautiful exercise in minimalism.  Hartley is one of our most intelligent directors

Lola  (France, 1961, CC)  3.6  In Demy’s film the characters seem to float though life in a sort of dream, both pleasant and sad.  Why can’t Anglo-Saxon directors refrain from judging everyone in such a tiresome manner?

Saturday Fiction  (China, 2019, CC)  3.6  I understand why this film got mixed reviews, but I found the positives to be so strong that I didn’t much care about the confusing plot.  As usual, Gong Li is superb (and the other actors are excellent.)  The B&W cinematography is gorgeous.  Because we often get foreign films with a long delay, we miss the “golden ages” until they are over.  The period around 2018-19 brought us Ash is the Purest White, Long Day’s Journey Into Night, An Elephant Sitting Still, Wild Goose Lake, and this film.  What else did I miss?

Suzhou River   (China, 2000, CC)  3.6   Basically a Chinese version of Vertigo.  Interesting to see how grungy Shanghai looked back in 2000.

Ghost World  (US, 2001, CC)  3.6  I gather that this was not popular at the box office but I loved the performance of the lead actress (Thora Birch), which explains my high rating.  Brought back memories of when I was an anti-social adolescent.  Also features a very young Scarlett Johansson. Otherwise, the film is nothing special.

Desperately Seeking Susan  (US, 1985, CC)  3.6  After 38 years, this film is still quite entertaining.  The title is perfect and Madonna is surprisingly good.  Features my favorite comedian in a small role—too small.

Something Wild  (US, 1986, CC)  3.6  It seems like the 1980s was the decade for films about dangerous women.  Great soundtrack.

Germany, Year Zero  (Germany, 1948, CC)  3.6  Great film title.  In German, but actually directed by Rossellini.  Not a great film, but an exceedingly interesting document.

Jewel Robbery   (US, 1932, CC)  3.6  Not quite as sophisticated as Trouble in Paradise, but this 67 minute pre-code gem is brisk, clever and charming.

Judex  (France , 1963, CC)  3.6  This delightful one-of-a-kind film is a mixture of silent cinema, surrealism and The Avengers (which to me means the 1960s TV series.)  I never knew that car headlights once had candles inside.

Fay Grim/Ned Rifle  (US, 2006 and 2014, CC)  3.5  These two films are sequels to Henry Fool, and don’t really make sense as standalone films.  Fay Grim has great energy and creativity, but is all style and no substance.  Ned Kelly is better, mostly due to the wonderful performance of Audrey Plaza.

Flirt  (US, 1995, CC)  Another good Hal Hartley film.  Reminded me a bit of Hou Hsiao-hsien’s Three Times.

The 30 Greatest Films   (Youtube)  3.5  Don’t focus on his choices; focus on what he has to say about each film.  Not exactly my list, but a very good one.

I find it impossible to think of the 30 greatest films—there are too many classics.  Better to try to determine the best film in each genre.  Here’s my feeble attempt:

Best family drama:  Tokyo Story

Best sci-fi:  2001: A Space Odyssey

Best war film:  Apocalypse Now

Best animation:  Spirited Away

Best crime epic:  Godfather I/II

Best romantic story:  In the Mood for Love

Best mystery:  Vertigo

Best western:  The Searchers

Best fantasy epic:  Lord of the Rings

Best silent drama:  Sunrise

Best silent comedy:  City Lights

Best black comedy:  Dr. Strangelove

Best physical comedy:  Playtime  (or The General?)

Best romantic comedy:  ??????  (Way too many!)

Best costume drama:  Barry Lyndon

Best historical film:  Andrei Rublev

Best crime film:  Rashoman

Best musical:  Singin’ in the Rain

Best surrealism:  Mulholland Drive

Best action film:  The Seven Samurai

Best noir:  ???????  (way too many!)

Best theatre film:  The Red Shoes

Best children’s film:  The Wizard of Oz

Best fairy tale: La Belle et la Bete

Best existential film:  L’Avventura

Best psychological drama:  Persona

Best biopic:  Citizen Kane (or 8 1/2?)

Best horror film:  The Shining  (or Psycho?)

Best ghost story:  Ugetsu Monogarari  (or Uncle Boonmee?)

Best conversation:  My Dinner With Andre

Best puppet film:  Street of Crocodiles

Best documentary:  The Gate of Heavenly Peace

Best TV series:  Twin Peaks

What am I missing?

One Way Passage  (US, 1932, CC)  3.5   An early sound film that has some of the purity of a great silent films.  Like Jewel Robbery, it stars William Powell and Kay Francis.  This tragic romance also clocks in at 67 minutes—could Hollywood produce that sort of film today?

The Intruder  (France, 2004, CC)  3.5  I can certainly see why people rated this Claire Denis film much higher; it exhibits the technical skill of a 3.9 film.  But just as its main character lacks a heart, at least on first viewing this film seems to lack the sort of unifying thread that would make it more than a series of well-designed scenes.  It’s fine for a film to be elusive, or to be non-liner, or to focus on a character that is unappealing and hard to read.  But all at once?

On the other had, perhaps on a second viewing it would turn out to be a masterpiece.

Anatomy of a Murder  (US, 1959, CC)  3.5  It’s interesting to think about how this sort of film has changed over time.  Today it would have more complexity, more surprises, more sleaze, less humor, and a less jazzy score.  Modern audiences might find this 2 hour and 40 minute courtroom drama to move at too leisurely a pace.  Great jazz soundtrack.

Stray Dogs  (Iran/Afghanistan, 2004)  3.5  Perhaps a bit too sentimental, but I really enjoyed this film about homeless Afghan children.  The Iranians are masters of films about young kids.

What’s Up, Doc  (US, 1972, CC)  3.4  Very entertaining screwball comedy, despite that fact that the acting is mostly mediocre (apart from Barbara Streisand, who is quite charming.)

Frances Ha  (US, 2013, CC)  3.4 One of those films where you are supposed to laugh because you recognize certain modern cultural trends. For fans of Woody Allen films.

It Always Rains on Sunday  (UK, 1947, CC)  3.4  This enjoyable British noir concludes with an outstanding chase sequence.

The Thief of Baghdad  (UK, 1940, CC)  3.4  This sort of film would have been quite  impressive in 1940.  Today, it’s merely charming.  Michael Powell directed a small part of the film, but it’s basically an Alexander Korda project.

Confidentially Yours  (France, 1983, CC)  3.4  Truffaut’s comic thriller is light as a feather and people expecting a serious noir will be disappointed.  But for the most part it’s pleasant entertainment with lots of appealing B&W images, although at 110 minutes in length it drags a bit toward the end.

Japanese Girls at the Harbor  (Japan, 1933, CC)  3.4 This late silent film is marred by some excessive moralizing.  But as with so many Japanese films, the visual style is quite attractive.  Japanese viewers probably saw this film in a different way from westerners like me.  The actors look Japanese, but are actually supposed to be of mixed race.  Thus even the title is a bit ambiguous.

Surviving Desire   (US, 1992, CC)  3.4   In this film and in Trust you see Hal Hartley beginning to develop his style.

Trust  (US, 1990, CC)   3.3  A relatively early Hal Hartley film.  Many of his early films are black comedies.

Something From Nothing:  The Art of Rap  (US. 2012, CC)  3.3  This documentary is aimed at people who (unlike me) already understand rap music.

Harlan County, USA  (US, 1976, CC)  3.3  This documentary of a coal mining strike is much too long, but it does provide a fascinating look at a period of time when the Appalachian region was like a third world country.  It’s been only 50 years, but 1973 now seems like ancient history.

I Am Waiting  (Japan, 1957, CC)  3.3  Easy to overlook as the acting is nothing special.  But this Japanese noir has a sneaky appeal. 

A Hard Day’s Night  (UK, 1964, CC)  3.2  It’s been almost 60 years since I first saw this film.  It’s charming in places, but it drags on too long despite coming in at less than 90 minutes.  The members of the Beatles try their best, but they are not natural actors.  Lester’s stylistic innovations no longer seem as interesting as they must have appeared back in 1964.

Splendor in the Grass  (US, 1961, CC)  3.2  You can see flashes of the social revolution that would hit the world in a few years. As usual, Hollywood had high school students played by actors in their 20s—Natalie Woods was 23 and Warren Beatty was 24 (and in his first film.)

Simple Men  (US, 1992, CC)  3.2  Hal Hartley films keep recycling certain names (Ned Rifle) and places (Lindenhurst.)

The Book of Life  (US, 1998,  CC)  3.2  I like the way Hartley made a bunch of films that came in right around an hour.  Why aren’t there more feature films of this length?

Something Wild  (US, 1961, CC)  3.2  After 62 years, you can still date these old films almost to the year, without even checking. I’m willing to forgive all the implausibility because it’s fascinating to see the underbelly of NYC back in 1961.  LOL at people who think real wages haven’t risen since the 1960s. 

Kuroneko (Black Cat)   (Japan, 1968, CC)  3.2  Same director as Onibaba, but nowhere near as good.  Some nice B&W images.

Making Mr. Right   (US, 1987, CC)  3.2  Susan Seidelman’s follow-up to Desperately Seeking Susan falls well short of the previous film.

Hopscotch  (US, 1980, CC)  3.2 Pleasant spy film, but mostly a 90 minute wait to find out the punch line.

Tulpan  (Kazakhstan, 2008)  3.2  A charming comedy that is a painless way of learning about the lifestyle of people you might otherwise never meet. 

The Woman in Question  (UK, 1950, CC)  3.1   This British noir is structured like Rashoman, but it’s nowhere near as good.

Fifth Avenue Girl  (US, 1939, CC)  3.0  Walter Connelly always seemed to play an endearing millionaire in these 1930s screwball comedies.  This one is well below average, but still worth watching.

Green for Danger  (UK, 1946, CC)  3.0  One of those cosy British murder mysteries.  Picks up a bit in the second half with a humorous Scotland Yard detective.  Screenplay by the guy that did The Lady Vanishes (although this film is far inferior.)

Blithe Spirit  (UK, 1945, CC)  3.0  Margaret Rutherford is an amusing medium, but otherwise this Noel Coward play (direct by David Lean) is disappointingly bland.

Keep Rolling   (HK, 2020, CC)  3.0   Documentary about the Hong Kong director Ann Hui.

The Unbelievable Truth  (US, 1989, CC)  3.0  Hal Hartley’s first feature film is uneven, but shows promise.

Intimidation  (Japan, 1960, CC)  2.9  So-so film noir.

Love Unto Waste  (Hong Kong, 1986, CC)  2.8  Talent unto waste.   The film wastes the talents of a young Chow Yun-fat and an even younger Tony Leung.  The theme of young people drifting through life was done far more effectively a few years later in the films of Wong Kar-wai, Hou Hsiao-hsien and Edward Yang. 

Hardcore  (US, 1978, CC)  2.6  Not a good film, but it’s interesting to take a peek at America’s anxieties during the late 1970s.  Why do people always suggest that Hollywood is left wing?

The Goddess (US, 1957, CC)   2.5  On rare occasions, melodrama can be effective.  This was not one of those occasions.

Weekend  (France, 1967, CC)  2.2  Only a supreme talent can make a film this bad.  The slapstick has been done far times better by Tati.  Long tracking shots have been done far better by Tarkovsky and Reygadas.  The political satire ranges from lame to pathetic.  At times the film shows great intelligence—but mostly wasted to no effect.

The Economist has an article discussing how recent Japanese history provides some useful lessons for China. There are correct that Japan is a cautionary tale, but unfortunately they draw the wrong lessons:

And Mr Koo is himself keen to emphasize one “huge” difference between the two countries. When Japan was falling into a balance-sheet recession, nobody in the country had a name for the problem or an idea of how to fight it. Today, he says, many Chinese economists are studying his ideas.

His prescription is straightforward. If households and firms will not borrow and spend even at low interest rates, then the government will have to do so instead. Fiscal deficits must offset the financial surpluses of the private sector until their balance-sheets are fully repaired. If Xi Jinping, China’s ruler, gets the right advice, he can fix the problem in 20 minutes, Mr Koo has quipped.

Unfortunately, Chinese officials have so far been slow to react. The country’s budget deficit, broadly defined to include various kinds of local-government borrowing, has tightened this year, worsening the downturn. The central government has room to borrow more, but seems reluctant to do so, preferring to keep its powder dry. This is a mistake. If the government spends late, it will probably have to spend more. It is ironic that China risks slipping into a prolonged recession not because the private sector is intent on cleaning up its finances, but because the central government is unwilling to get its own balance-sheet dirty enough.

In other words, they are calling for China to make the same mistake the US has made in recent years, a reckless and irresponsible increase in fiscal deficits.

Japan ran huge budget deficits during the period from 1994 to 2012, partly under the influence of Western economists. The policy was a spectacular failure, with Japan seeing perhaps the weakest growth in aggregate demand ever seen over two decades, at least in a developed modern economy. By the end of 2012, Japan’s nominal GDP was actually lower than in early 1994:

When Prime Minister Abe took over at the beginning of 2013, he rejected this failed Keynesian advice, and switched to monetary stimulus. Over the following 21 11 years, Japan’s NGDP has risen by nearly 20%. Even that is too low—Abe should have switched to NGDP level targeting—but it’s a vast improvement over what came before. And fiscal policy actually became more contractionary, with several large increases in the national sales tax. Growth in the national debt slowed sharply.

Japan also has notable supply side problems. A country with such a high level of education and social cohesion should have a per capita GDP close to that of Germany or the Netherlands, not Spain or Italy. Thus monetary policy won’t solve all of Japan’s problems.

Similarly, China has some supply side problems, especially a high degree of investment in wasteful projects such as spectacular bridges in remote Guizhou province (which has 1/2 of the world’s tallest bridges). Those resources need to be redirected into more productive uses, such as high tech investments and consumption.

But if China does slip into a situation where there is a demand shortfall, the solution is not fiscal stimulus. Rather they need a “whatever it takes” approach to using monetary policy to sustain adequate growth in NGDP. Once the aggregate demand problem is fixed, it’s easier to address supply side issues.

PS. There is no such thing as balance-sheet recessions. Bad balance sheets are often the result of a bad monetary policy that sharply slows NGDP growth, leading to financial distress. When there are balance sheet problems, the natural interest rate often declines. If the central bank is targeting interest rates, this will cause an unintentional tightening of monetary policy. What looks like the cause of the recession (bad balance sheets) is more often the symptom. The underlying cause is bad monetary policy that leads to too little growth in NGDP.

Even when the balance sheet problems are unrelated to slowing NGDP growth (as is arguably the case in China), monetary policy still needs to adjust in order to prevent the decline in the natural interest rate from spilling over into a broader decline in aggregate demand.

PPS. In per capita terms, the post-2012 revival of NGDP growth was even more impressive.

This National Review headline caught my eye:

Joe Biden Made the Worst Vice-Presidential Pick of the Last 50 Years

Obama’s pick was even worse.

Unless I’m becoming senile (very possible), a recent Bloomberg article is total nonsense:

The Land of the Rising Sun experienced its largest decline in population last year, or more than 500,000 annually to 125.4 million, and residents are living longer than 84 years on average (fourth among 240 countries). And yet, the No. 3 economy had the most significant per capita increase in gross domestic product between 2013 and 2022 in local currency terms. That 62% appreciation to 4.72 million yen ($32,000) as the size of its society shrank 2% easily surpassed the US (16% with a 6% rise in population), Canada (45% and 12%), UK (48% and 5%) Germany (32% and 5%), France (33% and 3%) and Italy (30% and -1%), according to data compiled by Bloomberg.

What???? Those figures don’t seem even close to being accurate. US per capita nominal GDP growth has vastly exceeded growth in Japan. What am I missing here?

(Even if you used real GDP, the figures would be nonsense. But the article says “local currency terms”.)

PS. Is this the same Bloomberg unit that told us last October there was a 100% chance of a US recession within 12 months?

A US recession is effectively certain in the next 12 months in new Bloomberg Economics model projections . . . with the 12-month estimate of a downturn by October 2023 hitting 100%, up from 65% for the comparable period in the previous update.

This is all good stuff:

I would suggest six misconceptions that purveyed a great deal of the current
economic debate.

First, it is supposed that the idea of economic policy is to maximize the
creation of jobs rather than to maximize the availability of goods at low
cost to consumers and firms. Both the officials responsible for competition
policy and those responsible for international trade have explicitly rejected
economic efficiency as a central guide for economic policy. This, I would
suggest, is a costly and consequential error. . . .

The second misconception is that these have not been good decades. For
the American economy in international perspective. I first got to know my
friend Ted Truman well when he was long into his career as the head of
the Federal Reserve’s International Economic Section. and I was a new
undersecretary of the Treasury for international Affairs. We were involved
in making various long term economic projections for the world.

None of them would have believed that US GDP as a share of global GDP
would have remained robust for the entirety of the next generation. And if
we had been told how spectacularly China was going to do over the next
30 years, we would have been that much more pessimistic. We could not
have imagined that the share of US wealth reflected heavily in the stock
market would have been far higher a generation later than it was at that
time. . . .

Third, the world has fared very well. Relative to the time when I was chief
economist of the World Bank at the beginning of the 1990s, child
mortality rates are less than half of what they were then. Literacy rates are
more than twice what they were then. Poverty rates, terms of extreme
poverty are less than 40% of what they were then.

And in some ways most fundamental and important, this month, we
celebrate the 78th anniversary of a situation where there has been no direct
war between major powers. You cannot find a period of 78 years since
Christ was born when that was the case. So, the idea that we’ve been doing
it all wrong is, I would suggest, a substantial misconception.

Fourth, the problems that we have are not due to trade liberalization. The
single most misleading idea that has moved from academic economic
research into the popular domain is the concept of the China shock
associated with China’s accession to the WTO. To start with, that
agreement did not change one iota of US policy permitting Chinese goods
to be sold in US markets.

The principle that China would be the beneficiary of most favored nation
treatment and get the same benefits that other countries did had been well
established years before. It was ritually reaffirmed annually by the
Congress. Yes, China’s tremendous economic progress did lead to far
more sale of goods in the United States. But it is hard to imagine a less
credible approach to the problem. The adding up all the losers from the
imports without taking any account of the jobs created and the economic
impacts of the goods we sold to China.

Of the lower cost inputs we received because of imports from China. Of
the enhanced real wages and associated with greater spending caused by
those lower prices. And the lower capital costs associated with the inflows
of capital that we received from China. When those calculations have been
done, as they’ve now been done by Rob Feenstra and several other teams
of economists, they show that, in fact, as with NAFTA, the net benefit to
the US economy has been substantial.

The fifth misconception is that domestic industrialization and some kind
of renaissance of manufacturing is somehow the central issue for US
prosperity going forward. This is simply not a realistic idea. In 1970,
about 20% of US workers were engaged in production work in
manufacturing. Today, that number is about 6%.

That number has trended downwards in countries like the United States
that have tended to run trade deficits. It has also trended downwards
rapidly in countries like Germany that have run manufacturing, export,
mercantilist oriented economic strategies and not at very different rates. It
is a consequence of the same set of phenomena that led to declining shares
of workers in agriculture over time.

Rapid productivity growth, relatively inelastic demand, rapidly declining
relative prices created abundance without substantial and with declining
levels of employment. And there is nothing in the coming robotic
revolution to suggest that these trends are likely to do anything other than
accelerate going forward. I would note that the president of Ford has
judged that it requires about 40% less labor input in a Ford factory to
make an electric car as to make a traditional car. . . .

Finally, I would suggest that substantial and accumulating deficits and
debts are a substantial threat to national security and national power
contrary to what is often believed in what sometimes seems like a post
budget constraint era of economic thinking. . . . [Our] budget prospects are vastly worse than they were at the time of the Clinton administration’s successful budget actions and substantially worse than they were at the time of the Simpson-Bowles efforts. The budget deficits a decade out comfortably in double digits now seems as a share of GDP now seem a reasonable projection with primary deficits quite likely in the 5% of GDP range.

This is without the assumption of the need for vast mobilization for
meeting contingencies, military or non-military. And I think it is
reasonable to ask the question. How long can or will the world’s greatest
debtor be able to maintain its position as the world’s greatest power.

The Q&A has more good stuff. Here he discusses recent anti-China hysteria:

I think we need to proceed with very considerable care. I’m also very alarmed anytime you have a dynamic where on any issue, it’s only safe to be on half the spectrum of views for an individual. You are at risk of the outcome, moving a very, very long distance. The reason why the grade point average at Harvard University is now above 3.7. Think about it. . . .

No one with ambition wants to be in the dovish half of those talking about policy directed towards China. And that creates a potentially very, very dangerous dynamic. So, I don’t think we can ignore the national security issues posed by China at all, but roughly speaking, whenever somebody talks about jobs in Ohio, at the same time they’re talking about the national security threat from China, and as an important benefit of the national security policy, I get pretty nervous.

I don’t mind being on the dovish half on China.

And this is also excellent:

I’m inclined to think that if climate change is a central problem, we should
want climate change technologies produced as inexpensively as possible.
My view, which I’ve been expressing for some years, that has become
more fashionable in the last few months, at least in some part of it, is that
people, historians will look back on American views of the Soviet Union
in 1960, American views of Japan in 1990 and American views of China
in 2020 in quite similar ways as maximum alarm just at the moment of
maximum mean reversion for the economy in question.

And I think we have to think very hard about, in the context of that
possibility, what the right strategies are and strategies that are about
maximum pressure can also be strategies that provoke maximally sharp
responses. Every time I hear somebody talk about Britain in the 1930 with
an emerging threat, I’m led to think about the antecedents to Pearl Harbor
in terms of Japanese perception.

Exactly.

HT: David Levey