Deglobalization, Costs, and Inflation

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There is considerable angst developing in response to the developing move toward economic deglobalization. That angst is centered on the risk of inflation as nations move away from the Ricardian concept of nations focusing their economies on what their own population does best and/or has the best access to necessary resources, and importing from other nations that which the importer might need or want but that those other nations might produce more efficiently and cheaply. The Ricardian concept holds, correctly, that such specialization leads to lower costs overall for all nations and all consumers while yielding the greatest prosperity for all nations and their populations.

The angst is well enough described by Yuka Hayashi in her Sunday Wall Street Journal article.

…tariffs and “Buy American” procurement rules, businesses moving production back to the US where it will be less vulnerable to those policies, and depressed immigration inflows.
“The reorganization and shortening of supply chains…will have a cost that will be passed down to the vendors and ultimately to consumers,” says Dana Peterson, chief economist for Conference Board, an independent research group supported by large US businesses.

And

Studies have shown that globalization has influenced US prices. Kristin Forbes, a Massachusetts Institute of Technology economist, has found that those parts of the consumer-price index influenced by global factors, such as commodity prices, currency fluctuations and global value chains, drove half the changes in the index between 2015 and 2017, up from about 25% in the early 1990s. Economists Robert Johnson of the University of Notre Dame and Diego Comin of Dartmouth found in a 2020 paper that international trade had the effect of reducing US consumer prices by an annual 0.1 to 0.4 percentage point between 1997 and 2018.

And

Deglobalization gained impetus with the global financial crisis of 2008…. It might be adding to current high inflation….

All of that is certainly true, and deglobalization is, not might be, contributing to high inflation, but none of that makes deglobalization, of necessity, an unvarnished bad.

Ricardo’s ideas work only in an idealized world where all the nations are, if not friendly with each other, at least have no enmity among each other. In the real world that does not obtain, and some nations are enemies of others. Within that, some nations might hold resources that their enemy nation(s) might need, and other nations might produce useful, even critical, goods that their enemy nation(s) cannot produce as efficiently or cheaply.

It is against that real world backdrop that a fluid balancing of economic globalization and deglobalization occurs.

Deglobalization certainly can be carried too far, but some deglobalization is necessary from a national security perspective: we need to identify the industries and materials that are critical to our national defense and to our economy and then develop wholly domestic supply chains for them that extend from dirt in the ground to final product at its usage destination. These supply chains don’t need to be—shouldn’t be—our sole source for those resources, intermediate products, or final products, but it’s a Critical Item to have one or two such for each industry and material from which we can expand should an enemy try to cut us off.

That will increase price levels for those items and for related, substitutable, items, but that’s a necessary price to pay for our security—especially compared to the price we’ll pay if we’re cut off completely by an enemy nation, as the PRC already has tried to do with its rare earths production near monopoly.

Loopholes

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The usually solid editors over at The Wall Street Journal had a piece last Friday regarding, in their terms, a bizarre loophole for Oklahoma criminals.

It seems that Supreme Court Justice Neil Gorsuch wrote a majority opinion in McGirt v Oklahoma that held that since the Federal government—Congress—has never actually dissolved the nation’s treaty with the Creek Nation, Oklahoma’s

authority to prosecute crimes involving Native American perpetrators and victims has vanished in nearly half of Oklahoma.

Because that’s the expanse of the Creek Nation’s reservation under that treaty.

Their editorial then listed a number of cases that fell out of McGirt that allowed a number of negligent persons and outright criminals get away with their crimes because the events involved Native Americans over whom the State has no jurisdiction to prosecute or no standing to protect.

The editors’ overwrought headline, How to Get Away With Manslaughter, then was bookended with a cynically emotional finale:

The Supreme Court should look these cases in the face. Is this justice, Justice Gorsuch?

The Editors’ ire is justified, but it’s aimed in the wrong direction.

All any Federal judge, Justices included, can do under our Constitution (vis., Art I, Sect 1) and their oaths of office, is to apply the law, including our supreme Law of the Land, as they are written. They cannot, in particular, adjust either, nor can they manufacture from the bench laws that plug loopholes in laws.

The loophole the Editors decry here, as any loophole in any law, can only be plugged statutorily, and only Congress can make law that does so.

The items listed, and many others to come, indeed aggregate into a vast and serious failure to perform. However, the failure is Congress’, and it’s on Congress to correct it. Judges cannot, and especially, Justices cannot.

A Florida State Guard

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It seems that Florida Governor Ron DeSantis (R) has requested some $3.5 million to fund reestablishment of the Florida State Guard,

a civilian volunteer force that will assist the National Guard in state-specific emergencies[.]

The Governor’s press release went on:

The establishment of the Florida State Guard will further support those emergency response efforts in the event of a hurricane, natural disasters and other state emergencies. The $3.5 million to establish the Florida State Guard will enable civilians to be trained in the best emergency response techniques.

Florida’s State Guard would number all of 200 civilians, and as with all State Guards, will be under the control of the Governor and cannot be Federalized—cannot be called up by the President. DeSantis expanded on his press release:

We want to make sure that we have the flexibility and the ability needed to respond to events in our state in the most effective way possible. That will require us to have access and be able to use support in ways that are not encumbered by the federal government or don’t require federal government

The Leftist news outlets have gone hysterical about this move. CNN‘s now leading pundit following the temporary hiatus of Chris Cuomo had the typical response:

So… y’all know this is fascisty bananas, right…?

Because, of course.

It’s “fascisty bananas” to have a civilian force beholden only to the State government for being mustered in prompt response to State and local disasters like hurricanes, floods, and the like.

It’s “fascisty bananas” for 23 States in our nation to have such State Guards for such purposes.

Indeed, when Katrina struck Louisiana, the Texas State Guard, in an especially “faschisty bananas” move, immediately set up shelters for and distributed food to Louisiana refugees from the hurricane’s destruction.

When the bad storm comes and hours count, the Federal responses will be only days away. But it’s “fascisty bananas” to use first First Responders inside those days.

Some Key Moments

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From the oral arguments regarding the Dobbs v. Jackson Women’s Health case currently before the Supreme Court. And my responses to them. Because you know I don’t lack for hubris.

Perhaps the most famous example of overturned precedent was the 1954 Brown v Board of Education ruling, which reversed Plessy v Ferguson….

Well, there was another, preceding case—the Supreme Court’s ruling on Dred Scott v Sandford, which needed a Civil War to overturn because the Justices on the Taney Court and later lacked the integrity, the morals, the courage to overturn the ruling on their own.

And from CJ Roberts,

If we look at it from today’s perspective, it’s going to be a long list of cases that we’re going to say were wrongly decided.

If those rulings were wrongly decided at the outset, of course they should be reversed. Wrong doesn’t become right through the hoariness of age.

If the conditions of those rulings no longer exist, of course they should be reversed. The convenience of the Court isn’t relevant to any of that.

Additionally, Stewart gave Roberts a way out by saying Roberts’ examples are settled.

And,

“What would you say to the argument that has been made many times by people who are pro-choice and pro-life, that the line really doesn’t make any sense—that it is, as Justice Blackman himself described it, arbitrary?” Alito asked Rikelman.
Alito noted that while a woman may still want to terminate a pregnancy after viability, a “fetus has an interest in having a life” both before and after.
Rikelman replied[,] “It is principled because in ordering the interests at stake, the court had to set a line between conception and birth.”

Rikelman evaded Alito’s question. The baby always has an interest—the primary interest in the ordering of interests—in its own life.

Finally,

…a Supreme Court that has undergone enormous changes and currently sits at a 6-3 conservative majority.

No, it doesn’t. At best it sits at a 5-3-1 majority.

A Union Strikes

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Buzzfeed News has been struck by the union that organized many of its workers.

“BuzzFeed won’t budge on critical issues like wages—all while preparing to go public and make executives even richer,” the union said… “There is no BuzzFeed News without us, and we’re walking out today to remind management of that fact,” the union said.

Another way of saying the same thing, without changing a minim of meaning is this:

“The union won’t budge on critical issues like wages—all while the company is preparing to go public and make the company and its employees even more prosperous. There is no BuzzFeed News without us, and we’re walking out today to remind management of that fact and to pay the vig. Be too bad if something was to happen to that nice company.”