Tag Archives: China

Chinese billionaires keep disappearing with facebook twitter’s help. Alibaba’s Jack Ma is the latest.

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Jack Ma, disappeared billionaire owner of Alibaba.

Every 25 years or so, for the past 1500 years China gets a new dictator who rounds up the rich and famous for loyalty trials, imprisonment. and worse. This was true of Li Ping following Tianamin Square, and Mao Zedong who killed some 75 million as part of his 10,000 flowers, great leap purges. The current dictator, Jenping Xi. Like, has been rounding up anyone he worries about, and that’s basically anyone he might worry about. The latest is Jack Ma, the founder of Alibaba, China’s version of e-bay and Amazon. Until his disappearance, he was the richest person in China.

Ma had not been seen in public since October 2020, when he and two top lieutenants of Alibaba were called to meet with regulators. He reappeared months later in a 40 second video (some say a hostage video) to say he is more rested now, and that he is positive that China’s regulators do not stifle innovation. As typical for China, there is no information about his whereabouts. What’s novel is that US media companies are involved helping Xi to trace potential opposition and keep questions out of the press. This includes Google, Twitter, and Facebook, as well as US media outlets.

71st Cannes Film Festival - Screening of the film "Ash Is Purest White" (Jiang hu er nv) in competition - Red Carpet Arrivals - Cannes, France, May 11, 2018. Fan Bingbing poses.
China’s biggest starlet, Fan Bingbing, vanished from sight and the internet for months. She may have said something critical, but has reappeared and recanted it.

In the past the news and social media would have been full of negative comments about China, and Ma’s detention , both from within and without. Now there is hardly anything and what little there is, is mildly positive about Xi. For three months there have been no e-mail or published tweets or Facebook posts from Ma or his lieutenants. Similarly, there is no room for negative speculation within China, and little within the US. The company’s planned IPO was cancelled, one that could have been the richest in history, but this fact got virtually no press, not in China, not in the US. Regulators cancelled it just two days before the start of trading. You’d expect screams from inside and outside China; instead, the story has been covered only briefly by CNN and the Financial Times, generally putting a pro-China spin on it. They stress the importance of regulations and avoiding monopolies, and don’t mention that Alibaba competes with Amazon, e-bay and Walmart. The expectation is that Ma and his higher-ups will be found guilty of monopoly trading and abuse of power. Under Xi, these crimes that have sent corporate leaders to prison for 12 to 20 years.

Ren Zhiqiang, missing billionaire, sentenced to 18 years.

Consider the fate of Ren Zhiqiang, the 69 year old chairman of Huayuan property conglomerate. It was one of the largest property groups in China, but Ren vanished in March 2020 after being heard to have complained about how the government was handling COVID-19. He was expelled from the communist party, and in September 2020 sentenced to 18 years in jail for “taking bribes and abuses of power.” There was hardly a trial, and as with Jack Ma, Facebook and Twitter helped the party silence Ren and his supporters. The result is that he had no recourse to the court of public opinion. About a month later, Facebook and Twitter did the same to Donald Trump, banning him for life from Facebook, Twitter. All other platforms joined, these included Snap and Reddit. As in China they also banned his main lieutenants and his main supporters, including the my-pillow man. The internet services also closed (deplatformed) Parler, the only competing web-service that allowed Trump and his supporters to post.

It can help to have public outcry, as Xi found after he disappeared China’s most popular movie starlet, Fan Bingbing in July 2018. Fan is a star of Chinese TV and movies and appears in Iron Man II and X-Men. As with Ma and Ren, Facebook and Twitter removed all posts, comments, questions, and complaints about Fan, releasing only the official statement that she was under investigation and taking a break. Unlike Ren, Fan reappeared a year later, April 2019 with no official charges filed. Nor has there been any official report. She has apologized for misdoings. and is supposed to have paid some $150 million, but she’s free. My guess is that the pressure of 100 million Chinese fans is what helped Ms Fan to un-vanish.

Chairman of Anbang Insurance Group Wu Xiaohui attends the China Development Forum in Beijing, China
Had Wu Xiaohui, former chairman of Anbang Insurance Group, and owner to the Waldorf Astoria.

A less positive outcome is when there is no outcry. When Wu Xiaohui, chairman of the Anbang Insurance Group, and the owner of New York’s Waldorf Astoria hotel vanished for two years. When he reappeared, he faced a quiet trial that sentenced him to 18 years in prison. The usual charges: fraud and abuse of power. Wu’s mother claimed she had no access to her son for those two years. Anbang, once one of the largest insurers in China, was taken over by its insurance regulator who has applied to liquidate the company. Why liquidate? Probably because it’s the easiest way to remove potential Wu loyalists.

In the US, there are some claims that Facebook, Twitter, Reditt and a few other companies have too much control of public discourse. Others claim that these companies exercise too little control. These companies claim the right to silence opinion they consider untrue, or inflammatory, and they have been allowed to deplatform their competition. Congress is moving to be in charge of who they silence. I’ve found they don’t like pro-Israel sentiments. While they don’t put words in my mouth, I don’t like it that they take words out of my mouth. As a result, I’ve cut back on my use of these platforms.

Jack Ma reappeared after 3 months in this 40 second video, shot from an unknown location. To me, it looks like a hostage video, “I’m well and being well treated …” Biden has argued that now is the time to move closer to China.

As I write this, Trump is impeached for the second time. The charge is inflammatory speech. Like with abuse of power, there is no way to prove you didn’t do it, especially after the internet giants silence you and anyone stupid enough to support you. Among Biden’s first acts is to undo Trump dictates that kept China from providing the technology underlying the US power and water system. Clearly Biden feels it is important that China should have a hand in this. I surely am not going to suggest that the bribes Biden is supposed to have received from China played any role. I will say that, when I ran for water commission, one of my goals was to help make the water system more resistant to cyber attack.

Dr. Robert E. Buxbaum. February 8, 2021. As an update, I see that Jimmy Li was arrested. He’s the founder of Hong-Kong’s most popular newspaper, Apple daily. No comment in the US, or from the Vatican. Li is Catholic, and the Vatican used to chime in when prominent Catholics were arrested.

China keeps building coal-fired plants so we can close ours.

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Part of the mandate to the 2020 election was to join with Europe and the rest of the western world in agreeing to stop the use of coal. It’s a low cost way to generate energy. Of course we still like to buy things, and we’ve largely turned to China, a country that still burns coal, and thus makes things cheap. The net result of this shift to Chinese goods is that China keeps building coal-fired plants while we shut ours. As it happens, China is worse than the US in terms of CO2 per output, but at least when China pollutes, we don’t see the smoke directly, and we don’t see their new coal plants at all. So we feel better buying things from China than from the US. Besides, slave labor is cheap.

From th eEconomist, December 2020.

Buying Chinese goods is good for the importers, and for the non-manufacturing consumer, at least in the short term. It has the effect of exporting jobs though, and eventually we have to support the displaced workers. It also means we don’t keep up our manufacturing technology. Long term, that affects innovation, and that starts to displace other industries. Antibiotic production has already left the US and along with it semiconductors. Still, we feel good about it since the Chinese don’t let us see the slave labor camps. We do get to see the haze of the pollution.

The Chinese expect this pattern to continue. China is building new coal-fired plants at a furious rate. Presently China has most of the world’s coal-fired power plants. Mostly these are only 4 to 12 years old, far younger than our forty year old plants China plans to build more, and keeps encouraging us to shut down ours. Even 10 years ago, China lead the world in CO2 output. And their fraction of the CO2 keeps climbing.

China is popular with the press. In part, I expect, that’s because they pay the international experts. lAlso, writers and editors are consumers industrial products, but not manufacturers. Consumers benefit from slave labor, or maybe not, but displaced American workers certainly suffer. Also, of course, the news requires pictures and personal stories to keep viewer interest. If you can’t get pictures of young protesters, like Grey Thunberg, you can get an interesting story. Our Chinese pollution is out of sight, and not in the press.

Robert Buxbaum, January 6, 2021. BTW, if we wanted preserve jobs and stop CO2 pollution, we’d go nuclear.

COVID E. Asian death rate is 1/100th the Western rate.

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COVID-19 has a decided racial preference for Western blood, killing Americans and Europeans at more than ten times the rate of people in Japan, China, Hong Kong, Taiwan, Korea, or Vietnam. The chart below shows the COVID-19 death rate per million population in several significant countries countries. The US and Belgium is seen to be more than 100 times worse than China or Hong Kong, etc., based on data from http://www.worldometers.info. IN the figure, the death-rate rank of each country is shown on the left, next to the country name.

For clarity, I didn’t include all the countries of Europe, but note that European countries are the majority of the top ten in terms of deaths per million. Belgium is number one with over 1,400. That is somewhat over 0.14% of the population has died of COVID-19 so far.

Peru has the highest COVID-19 death rate in South America at over 1000 per million, 0.1%. The US rate is similar, 0.082%. These are shockingly high numbers despite our best efforts to stop the disease by mandating masks, closing schools, and generally closing our economies. Meanwhile, in China and Japan, the economies are open and the total death rate is only about 1/100 that of Europe or the Americas. Any health numbers from China are suspect, but here I tend to believe it. Their rates are very similar to those in Hong Kong and Taiwan. At 3 per million, China’s death rate is 1/400 th the rate of the US, and Taiwan’s is lower.

This is not for lack of good healthcare systems in Europe, or lack of preparation. As of December 1-10, Germany, a country of 80 million, is seeing a COVID death rate of 388 per day. Japan, a country of 120 million, sees about 20. These are modern countries with good record keeping; Germany is locked down and Japan is open.

The question is why, and the answer seems to be genetics. A British study of the genetics of people who got the disease particularly severely found a few genes responsible, among these, TYK2. “It is part of the system that makes your immune cells more angry, and more inflammatory,” explained Dr Kenneth Baillie, a consultant in medicine at the Royal Infirmary in Edinburgh, who led the Genomicc project. He’s theory is that versions of this gene can allow the virus to put your immune response “into overdrive, putting patients at risk of damaging lung inflammation.” If his explanation is right, a class of anti-inflammatory drugs could work. (I’d already mentioned data suggesting that a baby aspirin or two seems helpful).

As reported in Nature this week, another gene that causes problems is IFNAR2. IFNAR2 is linked to release of interferon, which helps to kick-start the immune system as soon as an infection is detected.

It could be accidental that Asians are just lucky interns of not having the gene variations that make this disease deadly. Alternately, it could be that the disease is was engineered (in China?) and released either as a bio-attack, or by accident. Or it could be a combination. Whatever the cause of the disease, that east Asians should be spared this way is really weird.

Suggesting that this is not biowarfare is the observation that, in San Francisco, the Asian, per case fatality rate is as high as for white people or higher. One problem with this argument is that there is a difference between death rate per confirmed case and death rate per million population. It is possible that, for one reason or another Chinese people in San Francisco do not seek to be tested until they are at death’s door. Such things were seen in Iran and North Korea, for example. It pushed up the per-case death rate to 100%. Another possibility is that the high death rates in the west reflect disease mutation, or perhaps eastern exposure to a non-deadly variant of COVID that never made it west. If this is the case, it would be just as odd as any other explanation of a100x difference in death rates. Maybe I’m being paranoid here, but as the saying goes, even paranoids have enemies.

I think it’s worth noting this strange statistical pattern, even if I have no clear explanation. My advice: take vitamin D and a baby aspirin; and get a pneumonia shot,. I plan to take the vaccine when it’s offered. If a home test becomes available, I’d use that too. Stay safe folks. Whatever the source, this disease is a killer.

Robert Buxbaum, December 16, 2020.

Great mistakes: Sultan Mohammed II steals from a Mongol

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There are small errors and great mistakes. I’d previously written about the mistakes that caused Britain to lose America — e.g. General Tarleton burning churches because he thought the sermons were anti monarchist. They were, but if he thought they were anti monarchist before burning the church, they were far more so after… He’d misjudged the American character, something that I think the Democrats are doing today with BLM. Another example was the British attack on Bunker Hill. They spent the lives of 600 soldiers, won a hill they didn’t need, and lost the colony. It’s a mistake we would make reputedly in Vietnam.

Another one of the larger of mistakes of history – and one that changed hsotry massively was made by Mohammad II, ruler of Persia and eastern Islam, from Turkey to Kazakhstan, Uzbekistan, and Afghanistan. He had an army of 100,000 and ruled from the walled city of Samarkand. Mohammed’s uncle, Inalchuq, served as a governor in Kazakhstan. With an army of 40-50,000, he ruled from the walled city of Otrar. A Mongol leader named Temujin contacted them asking to trade. Mohammed II ignored the request, but his uncle accepted it. Temujin ruled a poor, distant community of perhaps 100,000, and boasted a motley horse army of perhaps 10,000. But, what Mohammad II didn’t appreciate, was that these Mongol horsemen were uncommonly warlike, and that Temujin, also known as Genghis Kahn, was an uncommonly talented leader.

Gate of the mighty, walled city of Otrar. It’s now a ghost town.

Temujin was not someone to insult. He had laid waste to northern China, and defeated an army of over 1 million, because of an insult. The Chinese emperor had demanded Temujin come to Peking with a grift, then bow low and pledge allegiance. That is he wanted Temujin ,to Kowtow, a request that emperors had made to every tribal leader for centuries, but Temujin took it as an insult. He defeated the Chinese army and killed a good fraction of China’s population. Using methods that are discussed in Mongol literature, but are almost unknown in the west, or highly perverted, as in Mulan. I’ve written in speculation of one aspect of Mongol success here. Another aspect was psychological: Genghis Kahn was able to co-opt the Chinese army, and get them to fight for him. It’s a useful skill.

Now Temujin, Genghis Kahn, was writing to the leaders of eastern Islam asking to trade along the silk road. Inalchuq offered safe passage, and in 1218, the first trade caravan arrived with 100 laden camels and 450 men including an ambassador. Inalchuq did what sultans before him had done: He executed most of the men, sold the rest as slaves, and took the goods, selling them in markets of Bukhara. Mohammed II and his uncle were sure that Temujin would do nothing, he was 2000 miles away, but Temujin sent another peace delegation. This time 3 men direct to Mohmmed II asking for his goods back and for the punishment of those responsible. Mohammad II killed the lead ambassador, blinded one of the others, and had the face of the third disfigured. A year later, 1219, Genghis Kahn showed up in Otrar with siege engines.

Otrar held out for 5 months, falling when a traitor opened the gates and defected with part of the army. The Mongols took the city and let most people live, though he killed Inalchq and his army, as well as the defectors.. Genghis Kahn figured he could not trust a soldier who defects this way. Inalchq was killed by having molten silver poured into his eyes and ears.

Death of Sultan Mohammed II, Picture from the History of Rashad Al-Din.

Genghis then went after Mohammed II, but first defeated the Assassin sect. Mohammed had the sense to run. It didn’t save him, but it did buy him some years of life. When caught, Genghis locked him in a prison fed him gold coins. He is supposed to have explained that, had Mohammad II not hoarded gold, but shared it with his soldiers, they would have fought for him as Genghis’s soldiers had. It’s not a message we like to hear today because it’s practical, but not very charitable. Then again, Genghis Kahn was nothing if not practical.

The Mongols brought many innovations: paper, stirrups, the blast furnace, the number zero, “islamic numerals” (they’re really Mongol /Tibetan numerals), the compass, the printing press, the triangular plow, gun powder, and a new way in war (The Germans called it ‘Blitz Kreig’). I find that schools don’t teach much about Genghis Kahn or our debt to the Mongols, nor do they properly contextualize these innovations as means for a small nation to dominate many larger ones. Perhaps that’s because we find the whole idea of management disturbing, or it’s embarrassing. Western scholars used to write like we invented these things. There are several histories of the Mongols, one was written by Rashid Al-Din (Aladin), vizier over all Persia, the person responsible for renaming it Iran. He wrote an illustrated history of the world, particularly of the Mongols, called Jāmiʿ al-Tawārīkh (“Compendium of Chronicles”). I suspect it would be worthwhile reading but like much of Mongol literature, it is not available in any local library, nor is it referred to by most histories. Another Mongol history, also not available in libraries, is called the Secret History of the Mongols. This was likely written for and by Genghis’s third son, Ogedei, to describe for his children and grandchildren the true story of the early years, the conquests, his father’s and his management methods (some fairly brutal) and as a review of what Ogedei thought worked and what did not. It sounds like an honest book, worthwhile book — the sort modern readers would rather forget exists.

Rashid Al-Din (Aladin), Vizier of Persia. He renamed Persia Iran, and wrote a history of the world from the Mongol perspective. Known as a fictional character, or not at all today.

In general, I find our scholars would like to ignore the more unpleasant lessons of history, including that family matters, and that people like honor over kowtowing, and that they get surly if they’re not rewarded,. Much of our society is built by warriors for the purpose of destruction, as in this engineering joke. We are now in the process of destroying statues of warriors because we find they were often non-nice people who often did not-nice things, or held not-nice views. That’s the way it is with warriors, especially the successful ones. While I’m not a fan of having statues to bums, I think that ignoring successful warriors is worse than honoring them. I discuss the dilemma of military statues here. Without statues to important wars and warriors, modern leaders might repeat the mistake of Mohammed II, or Bunker hill , or of Mohammed IV, or of the Chinese emperor.

Robert Buxbaum, September 20, 2020. I’ve come to wonder if Mohammed II would have fared better if he didn’t steal from the Mongols. He would likely have put off the attack as he learned more about them, and they learned more about him. When the war came, as likely it would, he might have had gun powder, paper, the compass, and the stirrup. Then again, war might have come immediately. The proud Polish officers who collaborated/ surrendered to the Soviet Russians, were quickly murdered in the Katyn forest.

Package postage from China: 70¢ for 2 oz.

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The minimum US postage rate to send a 1 oz to 8 oz package across the street is $8.30. This is the price for any size package going in “zone 1”. That is, to a nearby, instate address. It costs more to send a package to nearby states or across the country, zones 2,3,4,5,6,7, 8 You don’t get shipping updates or delivery confirmation unless you pay more. By comparison the US post office charges no more than $1.50 to Chinese companies to deliver packages of up to 4.4 lbs (2 kg) and they get shipping and delivery confirmation thrown in free. The high US rates are, in part, because the post office is losing money to subsidize postage from China.

On the internet folks are amazed at how cheap things are shipped from China (I copied this post from this Forbes article)

US producers can not compete on the sale of small items, in part, because we subsidize the shipping costs. Go to Amazon or e-Bay and you can buy from China packaged items shipped by air for a total price of $1 or so. That includes the price of the item, the shipping cost, and some profit for Amazon or eBay. A US supplier could not sell this cheap even if it were a box of air. The low shipping costs result from a poorly negotiated postage deal of 2011 between us (Obama’s negotiator) and the Chinese. Until 2021, we are committed to deliver a package of 50g or less, (2 oz) for 5 Chinese Yuan, or 70¢ at the current exchange rate of 14¢/NCY. Additional ounces are billed at 35¢ up to 4.4 lbs; use the following table of prices and apply the dollar to CNY conversion. We threw in tracking services and an e-mail confirmation for free, in part because China was poor, and we were rich. Also, the deal was pushed by e-Bay and Amazon, two big supporters of Obama’s presidency.

US suppliers cannot compete.

Adding insult to injury, Obama raised the de minimis amount for billing tariffs from the normal $100 to $800 making almost all purchases from China duty free. Obama made some complaints about unfair trade, and about the counterfeits and knockoffs but no major enforcement. In 2012 and 2014, the Obama administration signed similar postage deals with Korea, Hong Kong, and the EU. The Germans applauded as it allows them to ship goods to the US for far less than the cost of us shipping to Germany. The US post office loses money on this and makes up for it by charging us more for domestic mail.

The Washington Post praised Obama on these deals claiming that they benefitted US customer and promoted democracy. Of course, the Washington Post is owned by Amazon’s main stock holder, Jeff Bezos– someone who benefits very much by the deal. He is among the relatively few people and organizations that own the media outlets. The Post loses money on newspaper sales but benefits the owners by the propaganda value of the stories, a situation also found with Al Jazeera and the emir of Qatar.

Trump has informed China that these special rates will end when the treaty runs out in January 1, 2021. A per-package ship fee will be $3.00 for a one ounce package, with 11¢ per additional once. This is less than the domestic rate, but far higher than the current 35¢ for 1 oz. I’d probably have raised their postage even more, but this is an election year, and Biden may well reverse any deal Trump signs.

Robert Buxbaum, July 14, 2020. Though I’m appalled by this postage deal, I just bought a 50 lb kayak from China, $99.99 including shipping. The prices are too low to pass up.

COVID-19 is worse than SARS, especially for China.

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The corona virus, COVID-19 is already a lot worse than SARS, and it’s likely to get even worse. As of today, there are 78,993 known cases and 2,444 deaths. By comparison, from the first appearance of SARS about December 1 2002, there have been a total of 8439 cases and 813 deaths. It seems the first COVID-19 patient was also about December 1, but the COVID-19 infection moved much faster. Both are viral infections, but it seems the COVID virus is infectious for more days, including days when the patient is asymptomatic. Quarantine is being used to stop COVID-19; it was successful with SARS. As shown below, by July 2003 SARS had stopped, essentially. I don’t think COVID-19 will stop so easily.

The process of SARS, worldwide; a dramatic rise and it’s over by July 2003. Source: Int J Health Geogr. 2004; 3: 2. Published online 2004 Jan 28. doi: 10.1186/1476-072X-3-2.

We see that COVID-19 started in November, like SARS, but we already have 10 times more cases than the SARS total, and 150 times more than we had at this time during the SARS epidemic. If the disease stops in July, as with SARS, we should expect to see about a total of 150 times the current number of cases: about 12 million cases by July 2020. Assuming a death rate of 2.5%, that suggests 1/4 million dead. This is a best case scenario, and it’s not good. It’s about as bad as the Hong Kong flu pandemic of 1968-69, a pandemic that killed 60,000 approximately in the US, and which remains with us, somewhat today. By the summer of 69, the spreading rate R° (R-naught) fell below 1 for and the disease began to die out, a process I discussed previously regarding measles and the atom bomb, but the disease re-emerged, less infectious the next winter and the next. A good quarantine is essential to make this best option happen, but I don’t believe the Chinese have a good-enough quarantine.

Several things suggest that the Chinese will not be able to stop this disease, and thus that the spread of COVID-19 will be worse than that of the HK flu and much worse than SARS. For one, both those disease centered in Hong Kong, a free, modern country, with resources to spend, and a willingness to trust its citizens. In fighting SARS, HK passed out germ masks — as many as anyone needed, and posted maps of infection showing places where you can go safely and where you should only go with caution. China is a closed, autocratic country, and it has not treated quarantine this way. Little information is available, and there are not enough masks. The few good masks in China go to the police. Health workers are dying. China has rounded up anyone who talks about the disease, or who they think may have the disease. These infected people are locked up with the uninfected in giant dorms, see below. In rooms like this, most of the uninfected will become infected. And, since the disease is deadly, many people try to hide their exposure to avoid being rounded up. In over 80% of COVID cases the symptoms are mild, and somewhat over 1% are asymptomatic, so a lot of people will be able to hide. The more people do this, the poorer the chance that the quarantine will work. Given this, I believe that over 10% of Hubei province is already infected, some 1.5 million people, not the 79,000 that China reports.

Wuhan quarantine “living room”. It’s guaranteed to spread the disease as much as it protects the neighbors.

Also making me think that quarantine will not work as well here as with SARS, there is a big difference in R°, the transmission rate. SARS infected some 2000 people over the first 120 days, Dec. 1 to April 1. Assuming a typical infection time of 15 days, that’s 8 cycles. We calculate R° for this stage as the 8th root of 2000, 8√2000 = 2.58. This is, more or less the number in the literature, and it is not that far above 1. To be successful, the SARS quarantine had to reduce the person’s contacts by a factor of 3. With COVID-19, it’s clear that the transmission rate is higher. Assuming the first case was December 1, we see that there were 73,437 cases in only 80. R° is calculated as the 5 1/3 root of 73,437. Based on this, R° = 8.17. It will take a far higher level of quarantine to decrease R° below 1. The only good news here is that COVID-19 appears to be less deadly than SARS. Based on Chinese numbers the death rate appears to be about 2000/73,437, or about 3%, varying with age (see table), but these numbers are overly high. I believe there are a lot more cases. Meanwhile the death rate for SARS was over 9%. For most people infected with COVID-19, the symptoms are mild, like a cold; for another 18% it’s like the flu. A better estimate for the death rate of COVID-19 is 0.5-1%, less deadly than the Spanish flu of 1918. The death rate on the Diamond Princess was 3/600 = 0.5%, with 24% infected.

The elderly are particularly vulnerable. It’s not clear why.

Backing up my value of R°, consider the case of the first Briton to contact the disease. As reported by CNN, he got it at conference in Singapore in late January. He left the conference, asymptomatic on January 24, and spent the next 4 days at a French ski resort where he infected one person, a child. On January 28, he flew to England where he infected 8 more before checking himself into a hospital with mild symptoms. That’s nine people infected over 3 weeks. We can expect that schools, factories, and prisons will be even more hospitable to transmission since everyone sits together and eats together. As a worst case extrapolation, assume that 20% of the world population gets this disease. That’s 1.5 billion people including 70 million Americans. A 1% death rate suggests we’ll see 700,000 US deaths, and 15 million world-wide this year. That’s almost as bad as the Spanish flu of 1918. I don’t think things will be that bad, but it might be. The again, it could be worse.

If COVID-19 follows the 1918 flu model, the disease will go into semi-remission in the summer, and will re-emerge in the fall to kill another few hundred thousand Americans in the next fall and winter, and the next after that. Woodrow Wilson got the Spanish Flu in the fall of 1918, after it had passed through much of the US, and it nearly killed him. COVID-19 could continue to rampage every year until a sufficient fraction of the population is immune or a vaccine is developed. In this scenario, quarantine will have no long-term effect. My sense is that quarantine and vaccine will work enough in the US to reduce the effect of COVID-19 to that of the Hong Kong flu (1968), so that the death rate will be only 0.1 – 0.2%. In this scenario, the one I think most likely, the US will experience some 100,000 deaths, that is 0.15% of 20% of the population, mostly among the elderly. Without good quarantine or vaccines, China will lose at least 1% of 20% = about 3 million people. In terms of economics, I expect a slowdown in the US and a major problem in China, North Korea, and related closed societies.

Robert Buxbaum, February 18, 2020. (Updated, Feb. 23, I raised the US death totals, and lowered the totals for China).

China worse than the US in CO2 per output

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CO2 per year, 1965-2017, China and developed world

CO2 output per year, 1965-2017, China and developed world

For the last decade at least, China has been the industrial  manufacturer to the world. If not for Chinese shoes, the US would go barefoot. if not for Chinese electronics, Americans would be without iPhones, laptops, and TVs. China still trails the US and Europe in banking, software, movies and the like, but relying on China for manufactured goods is a dangerous position for the free world economically, and it’s not much better in terms of pollution.

China is among the world’s worst polluters. It burns coal for power to an extent that the air quality of China’s major cities would be unacceptable most everywhere else. On most days, it is thick with a yellow and grey haze. By 1969 China had passed the US and the European union in terms of CO2 production. And, as 2017, they produce nearly three times as much CO2 as the USA, four times more than the entire European Union. While China claims an interest in changing, the amount of pollution China’s CO2 output is still growing while ours and the EU’s is decreasing.

Manufacturing in the US, China, EU, Japan, Korea. Source: World Bank.

Manufacturing in the US, China, Germany, Japan, Korea. Source: World Bank.

China’s pollution would not be so bad if it were an efficient manufacturer, but there is a lot to suggest that it is not. China produces 50% more industrial goods than the US, but employs far more man hours, and generates more than three times the  CO2. Even in a fairly developed industry like steel, the US uses fewer man hours per ton and generates less CO2. I’m thus drawn to conclude that US companies off-load work to China mainly to get around US labor and pollution laws. Alternately, they off-load manufacture to gain entry to the Chinese market, a market that is otherwise closed to them. When US companies do this, they benefit the corporate managers and owners, but not the US worker. 

The hope (expectation) is that president Trump’s tariffs on Chinese goods will decrease the wage advantage of manufacturing in China, and will decrease the amount of US goods manufactured there. Some of that production, I expect, will move to the US, some will remain in China, and will be imported at a higher price-point. I expect a net decrease in CO2 as the US appears to be the more efficient producer, and because fewer ships will be crossing the Pacific bringing Chinese goods to the US. I expect some increase in tax revenue to the US, and some price inflation as well, as importers pass along the increased cost of Chinese goods. Overall, I think this is an acceptable trade-off, but what do I know.

Robert Buxbaum, November 29, 2018

Trump, tariffs, and the national debt

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My previous post was about US foreign policy, Obama’s and Trumps. This one is about Trump’s domestic policy as I see it. The main thing I see, the pattern is that I think he’s trying to do is pay down the national debt while increasing employment. So far unemployment is down, but borrowing is not. I suspect that a major reason for the low unemployment is that Americans (particularly black Americans) are taking jobs that used to be held by Mexicans. As for US borrowing, it’s still bad. For his first budget, Trump, like all other recent politicians caved to the forces that favor borrow and spend than to pay back. In this century, only Wm. McKinley, Theodore Roosevelt, Taft, Harding, and Coolidge managed to pay down the national debt. But only one man, Andrew Jackson, managed to pay it off completely. Jackson’s picture hangs in the pride of place in the Trump white house, something that I find significant. I suspect that Trump’s tariffs and spats are intended to pay down the debt without raising unemployment, or weakening the military. Andrew Jackson is his idea of “Make America Great Again.”

All recent presidents have raised the national debt. Trump claims he will shrink it.

All recent presidents have raised the national debt. Trump data to April 20, 2018.

As the graph above shows, if Trump plan is to pay down the debt, he is not succeeding. Trump is overspending — at a somewhat slower rate than other recent presidents, but in 1 1/4 year he’s increased the debt by 6.3%, about $1220 B. He’s saved a few billion by reduced payments to the UN, and to the EU for climate studies, and he’s asking NATO to pay more for Europe’s defense, but he’ll have to do a lot more, and the rest of the world is already unhappy with him.

Many US economists — Keynesians – are not happy with him for another reason. They claim that debt is good, and that borrowing increases employment. As proof they note that FDR borrowed and spent heavily though the 1930s,and we got out of the depression. Other economists point out that it took longer in the US to get out of the depression than in many other countries. More recently, under Jimmy Carter, deficit spending created a combination of high inflation and high unemployment, “stagflation,” suggesting that Keynes should be modified to “Neo Keynesians” who claim you can overspend if you don’t outspend the GDP growth rate. Sorry to say, even in these terms, Obama and GW Bush overspent badly, as did Reagan before them (see graph below). Obama raised the debt from 65% of the GDP to its current 105%, and GW Bush raised it from 50% of GDP to 65%. This borrowing did not increase employment, or raise the standard of living for most Americans, though several at the top became fabulously wealthy. As Alan Greenspan noted, “If national borrowing was a path to wealth, Zimbabwe would be the richest country on earth.” I’m more of a hard money man, as Greenspan was, inclined to think that a balanced budget is good, and that tariffs are good too.

Ratio of US government debt to GDP

Ratio of US government debt to GDP

As of June 1, 2018, Trump has imposed ~20% tariffs on five items: wood, steel, aluminum, washing machines, and solar panels. Combined, these items constitute 4.1% of our imports, $130 B/ year. Taxed at 20%, the US will collect $25 B/year. it’s a step, but I suspect that Trump knows that, if tariffs are to wipe out all of our deficit, he’ll have to impose a lot more, about 40% on all of our imports ($3,100 B/year). Trump may yet do this, and may yet cut spending, and put a lot more America to work. My sense is that this is his aim.

The next step in the Trump MAGA plan involves adding another $35B to the list of items being taxed; that’s about 1.1% of US imports (5.2% total). In response, our trade-partners have complained to the press and to the world court, and have imposed their own tariffs — so far on about $100 B of US products, mostly food items, like bourbon and cheese, chosen to hit Republicans in politically – sensitive states: Tennessee and Wisconsin. Canada now taxes US cheese at over 100%. It’s an effort to embarrass Trump and get Democrats elected in 2018. If these tactics don’t work, Trump will impose another round, e.g. on foreign-made cars and motorcycles. I’d also expect him to cut NATO funding unilaterally, too, as a counter-slap to the EU.

US unemployment by race

US unemployment by race, data to May 2018.

Speaking of Keynesian economists, Nobel Laureate economist, Paul Krugman of the New York Times has been predicting severe job losses, and a permanent stock collapse since 2016, and especially following Trump’s election. Virtually every week he announces that the end is near, and every month the economy looks better. But he’s not deterred, and neither are most economists. In a survey of nearly 100 economists by Reuters, 80% said that Trump’s policies will hurt the U.S. economy, and the rest said there would be little or no effect.[1] . So far it looks like they are all wrong. Unemployment is at record lows, particularly for African-Americans (see chart above); we’re adding new jobs at the rate of 200,000 new jobs per month, nearly 0.8% of the population per year. Inflation is a modest 2.3%, GDP growth is excellent, at 3.2% (or an incredible 4.5%). All we need now is a sensible immigration policy plus some healthcare reform, a modified social security tax, and for the economy to stay this way for another 5-10 years. It’s unlikely, but that’s the plan.

Robert Buxbaum, July 5, 2018. I’d hoped to see the employment and deficit numbers for June by now, but it’s not out. I’ve also argued that free trade is half right, as there is a benefit to workers, And there is a certain greatness that comes from paying your bills. Today, the EU offered to lower some auto tariffs if Trump does not move forward.

New Chinese emperor, will famine not follow

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For most of its 2300 year history, the Chinese empire has rattled between strong leaders who brought famine, and weak leaders who brought temporary reprieve. Mao, a strong leader, killed his associates plus over 100 million by his “great leap forward” famine. Since then, 30+ years, we’ve had some weaker leaders, semi-democracy, and some personal wealth, plus the occasional massacre, e.g. at Tiananmen square, and a growing demographic problem. And now a new strongman is establishing himself with hopes of solving China’s problems. I hope for the best, but fear the repeat of the worse parts of Chinese history.

Two weeks ago, Chairman Xi amended the Chinese constitution to make himself emperor for life, essentially. He’s already in charge of the government, the party, and the military. Yesterday (Tuesday), he consolidated his power further by replacing the head of the banks. The legal system is, in theory, is the last independent part of government, but there is hardly any legal system in the sense of a balance of power. If history is any guide, “Emperor” Xi will weaken the courts further before the year is out. He will also likely remove many or all of his close associates and relatives. It is not for nothing that Nero, Stalin, and Mao killed their relatives and friends — generally for “corruption” following a show trial.

China's Imperial past is never is quite out of sight. Picture from the Economist.

China’s past is never is quite out of sight. Picture from the Economist.

Xi might be different, but he faces a looming demographic problem that makes it likely he will follow the president of the stronger emperors. China’s growth was fueled in part by a one child policy. Left behind is an aging, rural population with no children to take care of the elderly. As top-down societies do not tolerate “useless workers,” I can expect a killing famine within the next 10 years. This would shed the rural burden while providing a warning to potential critics. “Burn the chicken to scare the monkey,” is a Chinese Imperial aphorism. Besides, who needs dirt farmers when we have modern machines.

Lazy beds (feannagan) use only half the soil are for planting. The English experts were sure this was inefficient and land-wasting. Plowing was imposed on Ireland, and famine followed

“Lazy beds” of potatoes were used in Ireland for a century until experts forced their abandonment in the mid 1800s. The experts saw the beds, and the Irish as lazy, inefficient, and land-wasting. Famine followed.

Currently about 40% of the country is rural, about 560 million people spread out over a country the size of Canada or the US. The rest, 60% or 830 million, live concentrated in a few cities. The cities are rich, industrial, and young. The countryside is old, agricultural and poor, salaries are about 1/3 those of the cities. The countryside holds about 2/3 of those over 65, about 100 million elderly with no social safety net. The demographic imbalance is likely to become worse — a lot worse — within the next decade.

What is likely to happen, I fear, is that the party leaders — all of whom live in the cities — will decide that the countryside is full of non-productive, uneducated whiners. They will demand that more food should be produced, and will help them achieve this by misguided science and severe punishments. Mao’s experts, like Stalin’s and Queen Victoria’s, demanded unachievable quotas and academic-based advice that neither the leaders nor the academics had ever tried to make work. Mao’s experts told peasants to kill the birds that were stealing their grain. It worked for a while until the insects multiplied. As for the quotas, the party took grain as if the quotas were being met. If the peasants starved, they starved.

I expect that China’s experts will propose machine-based modern agriculture, perhaps imported from the US or Israel: Whatever is in style at the time. The expert attitude exists everywhere to this day, and the results are always the same. See potato famine picture above. When the famine comes, the old will request food and healthcare, but the city leaders will provide none, or just opioids as they did to ailing Elvis. When the complaining stops the doctor is happy.

China's population pyramid as of 2016. Notice the bulge of 40-55 year olds.

China’s population pyramid as of 2016. Notice the bulge of 40-55 year olds. Note too that there are millions more males (blue) than females (pink).

In single leader societies, newspapers do not report bad news. Rather, they like to show happy, well-fed peasants singing the leaders’ praise. When there’s a riot too big to ignore, rioters are presented as lazy malcontents and counter-revolutionaries. Sympathizers are sent to work in the fields. American academia will sing the praises of the autocratic leader, or will be silent. We never see the peasants, but often see the experts. And we live in a society where newspapers report only the bad, and where we only believe when there pictures. No pictures, no story. As with Stalin’s Gulags, Mao’s famine, or North Korea today, there are likely to be few pictures released to the press. Eventually, a census will reveal that tens of million aged have vanished, and we’ll have to guess where they went.

I can expect China to continue its military buildup over the next decade. The military will be necessary to put down riots, and keep young men occupied, and to protect China from foreign intervention. China will especially need to protect its ill-gotten, new oil-assets. Oil is needed if China is to replace its farmers with machines. It will be a challenge for a wise American leader to avoid being drawn into war with China, while protecting some of our interests: Taiwan, Hong Kong, etc. As with Theodore Roosevelt, he should offer support and non-biassed mediation. Is Trump up to this?  Hu Knows?

Robert Buxbaum, March 21, 2018. The above might be Xi-nephobia, Then again, this just in: Chairman Xi announces that Taiwan will face punishment if it attempts to break free. Doesn’t sound good.

Global warming’s 19 year pause

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Global temperatures measured from the antarctic ice showing stable, cyclic chaos and self-similarity.

Global temperatures measured from the antarctic ice shows stable chaos and self-similarity.

The global climate is, as best I can tell, chaotic with 100,000 year ice-age cycles punctuated by smaller cycles of 1000 years, 100 years, etc. On the ice-age time scale shown at left, the temperature rise of the last century looks insignificant and very welcome; warm seems better than cold in my eyes. But the press and academic community has focused on the evils of warmth — global warming. They point out that temperatures have risen 1 1/2 °C since the little ice age of the early 1600s, and that 1/2 °C of this has occurred since 1900. Al Gore won a Nobel prize for his assertion that the rate of rise had accelerated to 4°C per century — a “hockey-stick change” caused by industrial CO2. This change was expected to bring disaster by 2015: The arctic was supposed to be ice-free, and Manhattan was expected to sink. I’ve posted a “Good Morning America” clip from 2008 highlighting this “inconvenient truth”.

Our 19 1/2 year global warming pause; plot from Andrew Watts with Al Gore's prediction shown in red. During the time shown, the atmospheric CO2 content has gone up by about 25%, but the prediction has not come to pass.

Our 19 1/2 year global warming pause; plot from Andrew Watts with Al Gore’s prediction shown in red. So far, the prediction has not come to pass.

As it happens, not only hasn’t global warming accelerated, it seems to have paused. There have been no significant temperature changes since late 1997, as shown.  The main explanations are clouds and solar variation: variations that the Obama administration claims will end any day now. The problem, as I see it, is that climate is fundamentally chaotic, and thus unpredictable except on the very long, ice-age, timescale. It will thus always make fools of those who predict.

This is not to say that pollution is good, or that CO2 is, but it suggests our models and remedies are flawed. The CO2 content of the air has increased 25% over the past 19 years. It now mostly comes from China and India, countries that enthusiastically endorse having us reduce our output. My thinking is that lowering US production will, in no way, protect us from the dire predictions below.

Despite pressure from China and India, the US pulled out of the Paris climate accord last month. It now seems several other countries will pull out as well.

Robert Buxbaum, July 27, 2017. I’ve also written about how the global warming of the mid 1800s lead us to have the president’s Resolute desk.