Tag Archives: defense policy

Policing the World

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Progressive-Democratic Party Presidential candidate and Congresswoman Tulsi Gabbard (D, HI) had an interesting campaign advertisement op-ed in Tuesday’s Wall Street Journal.  One campaign promise she made in it jumped out at me.

A Gabbard presidency would mean the end of trying to police the world….

Who does Gabbard think would police the world if we don’t? Can she really believe that a police-less world would be benign, or that our enemies won’t divide up the policing among themselves explicitly for their benefit and just as explicitly for our detriment?  Or that their squabbling among themselves over the spoils won’t spill over into serious regional or even global conflict?

PRC Personal Savings Rate

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James Areddy had an extensive article on this in a recent Wall Street Journal.  It seems that the personal savings rate of People’s Republic of China’s citizens peaked around 2010 and has been trailing off ever since.  Areddy posited a number of reasons for this, and why it’s likely to continue.  Chief among them is the usual suspect of an increasingly less poor, if not increasingly prosperous, population wishing to live better rather than save more.  Another major reason seems to be the PRC’s one-child policy, lately relaxed legally, but not socially.  With fewer kids in the family, there’s less reason for parents to save against those kids’ future.

I see another reason, though, for the continuation of the fall-off in savings rate, and that continuation running to disastrously low levels, from a national economic perspective.  This is the aging of the PRC’s population.

That aging is driven by a couple of things. One is that folks get old before they die (duh), and today’s PRC population being healthier than yesterday’s, these folks are living longer.  The bookend to this is the shrinking—across generations—of the population of working age citizens.  This stems from that one-child policy, emplaced explicitly to shrink a population that had severe trouble feeding and housing itself and from the continued social lack of desire for more than one child in a family, and from the desire to live better materially today, now that folks are better off (or at least not so bad off).

With fewer folks working relatively to aging and retiring, this means there’ll be less public money to pay for old folks’ retirement (and retired) needs, so the old folks will need to spend their savings even faster than might be the case otherwise.

Another feedback loop likely is inflation.  This will accelerate the fall-off in personal savings. This inflation will be driven by that same shrinking labor force, this time reducing production output—the availability of goods and services—even as spending increases across all age demographics: a classic case of (relatively) too many yuan chasing (relatively) too few goods.

Leverage

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Since so many American businesses—Apple, Alphabet, the NBA, to name a few—put their individual fiscal game ahead of American values, especially regarding Hong Kong and its citizens ongoing struggle for their own liberties (which just happen to lie at the core of our values), here are some thoughts on the fiscal value of Hong Kong to the People’s Republic of China.

Since 1997, mainland Chinese companies have raised $335 billion by floating in Hong Kong, tapping a broader range of shareholders than they could onshore.
…since the Hong Kong dollar is pegged to its US equivalent, and the city has no capital controls, a listing there can generate hard currency for foreign takeovers and investments. It would be harder to use a Shanghai stock sale for the same goal.

And [emphasis added]

For global investors, Shanghai and Shenzhen have become more accessible. But investors typically prefer Hong Kong’s legal protections, and they have other concerns about mainland markets, including the difficulties of moving money out.

And

Hong Kong is by far the largest offshore center for bond sales by Chinese firms. Companies can borrow for longer than they can onshore and, crucially, can raise funds in hard currency….

And

Hong Kong serves as the main offshore hub for yuan loans, bonds, and trading.

Interestingly [emphasis added],

When it comes to dollar bonds, big state-backed banks and industrial companies even prefer to sell these in Hong Kong…. US deals would be overseen by American regulators and would require greater disclosure.

And

Hong Kong is a preferred location for Chinese and international financiers or business people to conduct transactions because it has a Western-style legal and regulatory system that is seen as fair and nonpolitical.

In sum,

…Hong Kong stands out from its mainland rivals for its rule of law, competent regulators, low taxes, free movement of capital, and use of English.
Neither Shanghai nor [the People’s Republic of] China’s free-trade zones “can really compete with what Hong Kong is and does….”
…
Hong Kong is still [the People’s Republic of] China’s financial window on the world, and the rest of the world’s financial window on [the PRC].

RTWT; there’s more.

Sadly, too many of our major corporations don’t have the moral underpinnings to exercise that leverage.  Apple’s Tim Cook would rather the prestige of sitting as Chairman of a major university in Beijing.  Alphabet would rather work on censorable search engines for the PRC and help develop AI tools for the PRC’s government and People’s Liberation Army than it would work with our own defense establishment on such tools or refuse to support PRC censorship.  And we’ve seen, just in last couple of weeks, how the NBA as a whole, and its individual team staffs and players think their pocket books are more important than the rights of others.

Warren’s Assault on Hydrocarbons

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Progressive-Democratic Party Presidential candidate and Senator Elizabeth Warren (D, MA) want so ban new leases for oil and gas drilling offshore and on Federal lands, and she wants to ban fracking altogether. This assault on our national energy underpinnings would have far-reaching negative outcomes.

  • domestic natural-gas prices would jump to somewhere between $9 and $15 per million BTUs from last Friday’s $2.32
  • oil would rise to the $80-to-$85 range and could run to $150 during market shocks from last Friday’s $53.78
  • entire oil-field service companies would become obsolete
  • pipeline owners would suffer without replenishment, as existing wells peter out

Think how such price increases for basic transportation and such job losses would hammer “the little guy” that Warren pretends to so want to protect from Evil Big Business.

And some far-reaching positive outcomes: for Canada, Russia, and OPEC.

  • Canadian shale drillers
  • big global operators for which higher energy prices would offset losses on US assets.
  • Russia: our ability to free our friends and allies from dependence on Russian oil and gas
  • Russia and OPEC: the potential for political and economic dominance by these two from their enhanced ability to commit energy blackmail (both of which have demonstrated histories of engaging in such blackmail)—sources of market shocks

Here is a core part of Warren’s foreign policy.

Courage Under Fire

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Republic of China’s President Tsai Ing-wen, against the background of the People’s Republic of China President Xi Jinping’s abuse of Hong Kong citizens through his Hong Kong police, his functional abrogation of the solemnly agreed treaty with Great Britain governing the handover of Hong Kong to the PRC, and his parallel functional reneging on his government’s “one country, two systems” pretense vis-à-vis that city, has spoken against the PRC’s pretense of that toward her nation.

That framework, she noted, has brought Hong Kong to the brink of disorder.

Speaking from the presidential office building in the center of Taipei, Tsai accused China of using that same program to threaten Taiwan’s “regional peace and stability.”

Tsai went on:

We must stand up in defense. Rejection of “one country, two systems” is the biggest consensus among Taiwan’s 23 million people across parties and positions.
Over 70 years, we’ve endured all sorts of severe challenges, and not only do none of these challenges knock us down, they make us stronger and more resolute. One offensive after another, they’ve not made Taiwanese people yield.

This comes in the face of increasing international isolation inflicted on the RoC by the PRC.

Would that some American athletes and athletic associations had the same courage, especially given their far greater relative power and their complete safety from PRC actions.