You are browsing the archive for 2018 December.

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U.S.-Sino Relations at 40: How to Deal with China While Avoiding War

December 31, 2018 in Economics

By Doug Bandow

Doug Bandow

Richard Nixon famously “went to China” in 1971,
ending the hostile silence between the two governments. But Jimmy
Carter completed the bilateral relationship, formally recognizing
the People’s Republic of China (PRC). Official relations were
established on January 1, 1979.

The move was controversial, at least to conservatives who backed
the Republic of China (ROC), Chiang Kai-shek’s rump state
located on the island of Taiwan. The ROC matched the PRC in
claiming to be the legitimate government of all China, but without
the slightest chance of fulfilling that ambition. After the Nixon
trip, Taipei lost not only its seat on the United Nations Security
Council but also its membership in the UN. Numerous nations
switched their recognition to Beijing. America’s 1979 flip
left only a gaggle of smaller states behind Taiwan, many of which
have since defected.​

Even a decade or so later, when I first visited the mainland,
the PRC still was markedly poor. Even in Beijing and Shanghai, the
roads were filled with bicycles and scooters. There were some new
buildings, but no one would imagine Beijing challenging America for
global leadership. The “China threat,” as it were,
seemed very modest.

January 1st marks the
40th anniversary of U.S.-China ties. What happens next?

Fast forward to January 1, 2019. The United States remains ahead
economically, but using purchasing power parity instead of exchange
rates puts Beijing in first place. The PRC still lags America in
military spending but is number two in the world. Even before
President Donald Trump’s misdirected global assault on free
trade, China was the world’s greatest trading nation, far
outdistancing America in Asia. Beijing is using its economic clout
to gain political influence through the “Belt and Road”
infrastructure investment program.

The good news is that hundreds of millions of people have
escaped immiserating poverty. The Chinese also are largely free to
work, marry, travel, study, and much more. The deadening personal
uniformity and political conformity under the “Red
Emperor” is gone. The Chinese people enjoy a degree of
individual autonomy and liberty unknown to most of their
ancestors.

However, the bad news is extremely bad. Although the Trump
administration can be faulted for its tariff tactics, the PRC has
manipulated trade and investment rules, stolen intellectual
property, targeted foreign firms, and forced technology transfers.
Such practices are ever less tolerable as China grows wealthier and
more assertive.​

Worse, Beijing appears to be racing back to its ignoble past. Xi
has eliminated the two-term limit on the PRC president—a
limit that was imposed to discourage the rise of another Mao. Under
Xi censorship has been intensified, Western contacts have been
limited, dissent has been targeted, human rights have been
restricted, …read more

Source: OP-EDS

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Make a Year-End Gift to Cato

December 31, 2018 in Economics

By Cato Institute

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Cato relies on tax-deductible contributions from generous Sponsors who share our commitment to a free and prosperous society. When you support the Cato Institute, you are more than a contributor—you are a valued colleague. As our colleague, you’ll be sent the latest Cato publications, reports, and invitations to special Cato events.

We hope you’ll consider making a year-end gift to reinforce our mission. Thank you for your support and best wishes for a safe and happy holiday season!


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    Source: CATO HEADLINES

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Make a Year-End Gift to Cato

December 31, 2018 in Economics

By Cato Institute

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Source: CATO HEADLINES

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The Euro: How a Common Currency Helped Europe Achieve Peace

December 28, 2018 in History

By Erin Blakemore

It could have been a disaster: runs on banks, uncashed checks, confusion at the counter. But by all accounts, the European Union’s switchover from a rainbow of different currencies to a single currency, the euro, was so orderly it was downright dull.

“The boring thing about the euro is that everything is working so well,” a German retailer told the New York Times in late January 2002, a few weeks after 8.1 billion euro notes flooded the market.

The transition may have been quick and quiet. But the road to a common European currency was a bumpy ride from economic confusion to eventual unity. Here’s a brief history of the money that has come to define the hopes of the European Union.

The currencies of the 15 EU-member countries over their flag and a 1 EURO coin.

A vision of peace led to the first economic union in Europe

It all began with the Treaty of Paris, a 1951 treaty negotiated in the aftermath of World War II. Officials at the time worried that hyperinflation and economic instability similar to that experienced by Germany after World War I might ensue. So European nations decided to band together not just to stabilize their economies, but minimize the chance of another devastating war.

In 1951, the treaty established the European Coal and Steel Community, which united steel and coal production in France, West Germany, Belgium, Luxembourg, and the Netherlands. Since France and Germany had long been enemies, it was thought that pooling the production of two materials essential to waging war would essentially make fighting one another impossible. It also created a common market for those commodities, kicking off the slow movement toward a common currency that would follow over the next half-century.

In 1957, the Treaty of Rome created the European Economic Community, a common market which gradually eliminated customs and other trade barriers between the six nations. In 1967, both groups merged with the European Atomic Energy Committee to form the Commission of the European Communities, which was joined by other European nations throughout the years.

Economic volatility made currency reform more important than ever

Europe was peaceful, and the currency of its various nations stable, for now. Common market countries grew more prosperous over the 1950s and early 1960. But the late 1960s threatened that newfound prosperity when international currency began to experience large swings in value. …read more

Source: HISTORY

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Population Growth Leads to Abundant Resources

December 28, 2018 in Economics

By Gale L. Pooley, Marian L. Tupy

Gale L. Pooley and Marian L. Tupy

In recent weeks, oil has been moving below $50 a barrel — owing partly to concerns of oversupply and partly to concerns over a slowing global economy. Petroleum has helped to fuel the global economy for over a century, and its relative abundance today contradicts the doomsayers who feared “peak oil” in the past. Cheap oil is also a problem for the environmentalists, who fear that an oversupply of fossil fuels will undermine the global transition to green energy.

Yet petroleum is not special. Resources in general have become cheaper in inflation-adjusted terms — as well as relative to the cost of labor — over the last four decades. That’s all the more remarkable considering that the world’s population has massively expanded over the same time period.

Resource depletion has been a hotly debated topic since the publication of Paul Ehrlich’s The Population Bomb in 1968. The Stanford University biologist warned that population growth would result in the exhaustion of resources and a global catastrophe. “Since natural resources are finite,” he noted some years later, “consumption obviously must ‘inevitably lead to depletion and scarcity’ … Petroleum is a textbook example of such a resource.”

[pullquote]From petroleum to metals, commodities are cheaper than ever.[/pullquote]

The late University of Maryland economist Julian Simon disagreed. In his 1981 book The Ultimate Resource, Simon argued that humans were intelligent beings, capable of innovating their way out of shortages. And so we have. Fracking, to give just one example, has enabled us to tap previously inaccessible oil reserves, thus turning the United States into a fossil-fuel super-power.

Our findings in a recently published paper confirm Simon’s thesis. We revisited the debate by looking at 50 foundational commodities covering energy, food, materials, and metals. Between 1980 and 2017, the real price of commodities fell by 36 percent on average.

Also, due to productivity gains, the price of labor increases faster than inflation. Commodities that took 60 minutes of work to buy in 1980 took only 21 minutes of work to buy in 2017. Put differently, the time-price of commodities fell by 64.7 percent.

We also measured the sensitivity of resource availability to population growth. Between 1980 and 2017, the world’s population increased by 69 percent and time-price of commodities fell by 64.7 percent. That means that the time-price of commodities declined by 0.934 percent for every 1 percent increase in the world’s population.

Moreover, we created the …read more

Source: OP-EDS

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Brexiteers Must Stop Bashing Economists If They Want to Defeat Corbyn

December 28, 2018 in Economics

By Ryan Bourne

Ryan Bourne

One of the things I’m most uncomfortable about as a supporter of Brexit is my fellow travellers dismissing economists’ pronouncements out of hand. On everything from the impact of potential GDP benefits of non-EU trade deals, to immigration, right through to the short-term impact of voting to leave, Brexiteers have downplayed economic reports that are politically inconvenient.

To be clear, many have been worthy of challenge and critical analysis. Professions can be prone to groupthink, and on Brexit economists have not covered themselves in glory.

They were right to state that the uncertainty of voting to leave would prove a drag on economic growth. But they were hopelessly wrong in implying the effect would be so large it would result in recession and rising unemployment.

They are correct that net additional trade barriers would make the economy less productive. Yet the most dire long-term scenario analysis is often predicated on assumptions that EU exit only has costs and no gross benefits. This an absurd proposition given what we know about certain EU regulations and tariffs, as well as future global growth patterns.

So, yes, highlighting poor assumptions, or suggesting revisions to modeling methods, is perfectly legitimate. Let’s have those debates. It is reasonable too to use historical examples — such as the fact that the majority of UK academic economists favored joining the euro — to dismiss pure appeals to the authority of the majority.

But rather than doing this, my pro-Brexit comrades sometimes slip into a lazy “wrong then, wrong now” meme. The implication being that all uncomfortable economic opinions can be disregarded on the basis that a majority of economists once called something else incorrectly.

This is obviously absurd as a matter of logic. Economists, including Her Majesty’s Treasury, are regularly accused of “crying wolf” about the short-term economic impact of voting leave on the labour market, for example. But the political lesson of Aesop’s “Boy Who Cried Wolf” fable is not just that those who lie or mistakenly warn of impending danger are less likely to be trusted. The moral of the story comes from the fact that in the end the wolf turns up when the villagers no longer have faith in the boy’s warnings. There’s no happy ending: the sheep are eaten.

The lessons to heed are two-fold. First, government institutions and professional economists have a duty not to fall prey to motivated reasoning, or to “sex up” the likely outcomes …read more

Source: OP-EDS

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Meet the Oldest Living U.S. Veteran

December 28, 2018 in History

By Jesse Greenspan

At age 112, World War II veteran Richard Overton still enjoyed his whiskey and cigars.

For his first 107 years, Richard Overton lived in relative anonymity. A World War II veteran who fought in the Pacific, he could usually be found post-retirement on the porch of his Austin, Texas, home, smoking cigars and chatting up his extensive circle of family and friends. Then, in 2013, he visited Washington, D.C., and was referred to in the media as the oldest living U.S. veteran. (In actuality, that would not become true until 2016.)

Suddenly, Overton was an in-demand celebrity. Texas Governor Rick Perry showed up at his door bearing whiskey. President Barack Obama invited him to the White House. The San Antonio Spurs gave him a number 110 jersey (his age at the time) and brought him onto the court for a standing ovation. And he became a staple at Austin civic events, such as the annual Veterans Day parade.

Meanwhile, strangers began sending him cigars in the mail, calling him on the phone, or coming by the house to thank him for his military service. “He’s very social,” says Volma Overton Jr., 69, his second cousin once removed, who visited Overton daily. “He’ll spend time talking to everybody and shaking everybody’s hand.”

Under doctor’s orders, his relatives limited his porch time so that he didn’t overextend himself. Yet they acknowledge he thrived on the fame. “He kind of lives off all that,” Volma Overton Jr. said in 2016. “He knows that he has this attention and status around the world.”

In addition to being the oldest U.S. veteran, Overton was also thought to be the oldest living male in the United States. Though dependent on 24-hour home care, friends and family say his mind remained sharp. At the age of 111, he still walked, and took no regular medication stronger than aspirin. Overton has credited “God and cigars” for his longevity, telling HISTORY in 2016 he still smoked about 12 a day, but that he never inhaled.

Richard Overton smoking a cigar with a few neighborhood friends Donna Shorts and Martin Wilford in Austin, Texas, 2015.

America’s oldest veteran had hardscrabble origins. Descended from slaves who toiled on the Nashville, Tennessee, plantation of Judge John Overton (a close friend to President Andrew Jackson), his newly freed ancestors moved en masse from Tennessee to Texas following the Civil War. Around four decades later, on …read more

Source: HISTORY

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The Biggest Historical Milestones and Anniversaries of 2019

December 27, 2018 in History

By Becky Little


A few of the 116th Congress members-elects during a group photo on the East Front Plaza of the US Capitol in Washington, DC.

There will be a record number of women in Congress.

When the 116th Congress begins on January 3, it will have a record-breaking —won’t set sail until 2022, if at all. But in the meantime, tourists with a cool extra $105,129 will get the chance to tour the first Titanic. The first commercial diving tours of the Titanic wreckage begin June 26.

The summer of ‘69 turns 50.

This summer will mark the 50-year anniversary for a lot of significant events in 1969. They include: when gay and trans customers at the Stonewall Inn fought back against a police raid on June 28; when three Americans walked on the moon for the first time on July 20; and when Charles Manson’s cult shockingly murdered seven people in California in early August.

There was also the Woodstock Music Festival, where half a million young people gathered to listen to Richie Havens, Santana, Sly & the Family Stone, Jimi Hendrix and more on August 15 and 18. Years later, the summer would inspire the title to Bryan Adams’ 1984 hit song about teenage longing, even though Adams himself was actually only 9 years old during the “Summer of ‘69.”


Colorized photo titled “Into the Jaws of Death,” photographed by Robert F Sargent, of the United States Army First Infantry Division disembarking from a landing craft onto Omaha Beach during the Normandy Landings on D Day.

The world remembers the liberation of Normandy.

June 6, 1944 was the beginning of the end for Adolf Hitler and his Nazis. That day, Allied troops stormed the French beaches of Normandy and liberated it from Nazi control. One of the reasons D-Day was so successful was because the Allies ran a misinformation campaign to confuse the Nazis about their next moves. This year marks the 75th anniversary of that fateful day.

Historic Jamestown reflects on its contradictions.

In the summer of 1619, the Jamestown settlement established the first representative government for white men in the British American colonies. That same summer, Africans arrived in the Virginia Colony for the first time to live under unequal and different law and orders. In 2019, the Jamestown Settlement is commemorating these and other significant events that happened 400 year ago.

…read more

Source: HISTORY

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NATO Partisans Started a New Cold War with Russia

December 27, 2018 in Economics

By Ted Galen Carpenter

Ted Galen Carpenter

When historians examine the first few decades of the so-called
post-Cold War era, they are likely to marvel at the clumsy and
provocative policies that the United States and its NATO allies
pursued toward Russia. Perceptive historians will conclude that a
multitude of insensitive actions by those governments poisoned
relations with Moscow, and by the latter years of the Obama
administration, led to the onset of a new cold war. During the
Trump administration, matters grew even worse, and that cold war
threatened to turn hot.

Since the history of our era is still being written, we have an
opportunity to avoid such a cataclysmic outcome. However, the
behavior of America’s political, policy, and media elites in
response to the latest parochial quarrel between Russia and Ukraine
regarding the
Kerch Strait
suggests that they learned nothing from their
previous blunders. Worse, they seem determined to intensify an
already counterproductive, hardline policy toward Moscow.

U.S. leaders managed to get relations with Russia wrong just a
few years after the dissolution of the Soviet Union at the end of
1991. One of the few officials to capture the nature of the West’s
bungling and how it fomented tensions was Robert Gates, who served
as secretary of defense during the final years of George W. Bush’s
administration and the first years of Barack Obama’s. In his
surprisingly
candid memoirs
, Duty: Memoirs of a Secretary at War,
Gates recalls his report to Bush following the 2007 Munich Security
Council, at which Russian President Vladimir Putin vented about
Western security transgressions, including the planned deployment
of a missile defense system in Central Europe.

“When I reported to the president my take on the Munich
conference, I shared my belief that from 1993 onward, the West, and
particularly the United States, had badly underestimated the
magnitude of the Russian humiliation in losing the Cold War …
.” Yet even that blunt assessment given to Bush did not fully
capture Gates’s views on the issue. “What I didn’t tell the
president was that I believed the relationship with Russia had been
badly mismanaged after [George H. W.] Bush left office in 1993.
Getting Gorbachev to acquiesce to a unified Germany as a member of
NATO had been a huge accomplishment. But moving so quickly after
the collapse of the Soviet Union to incorporate so many of its
formerly subjugated states into NATO was a mistake.”

Specific U.S. actions were ill-considered as well, in Gates’s
view. “U.S. agreements with the Romanian and Bulgarian governments
to rotate troops through bases in those countries was a needless
provocation.”

His list of foolish or arrogant Western actions went on. Citing
NATO’s …read more

Source: OP-EDS

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7 Brutal Ways Sailors Were Punished Beyond 'Bread and Water'

December 26, 2018 in History

By Becky Little


In 2019, the U.S. Navy will finally stop allowing officers to punish sailors by limiting their meals to bread and water. The Navy adopted this punishment in its early days from the British Royal Navy and continued using it long after the Royal Navy stopped using it in 1891. Recently, one U.S. skipper imposed the punishment so often for minor offenses that his ship earned the nickname “U.S.S. Bread and Water.”

A modern version of this punishment might mean three days in the brig with nothing to eat with bread and water. A couple centuries ago, it might have meant 30 days shackled in the brig with only those two provisions. Though it seems cruel and unusual today, naval ships once viewed bread-and-water punishment as more humane compared to the other traditional penalties sailors faced at sea.

Mast-heading

For minor infractions, a sailor might have to climb the mast and stay there for a set period of time in the cold wind. This could be quite uncomfortable and isolating, but was also known as the best time for a sailor to get a little reading done.

Caning

Worse than mast-heading was caning, a punishment in which you hit a sailor across his backside with a solid cane. Yet like bread-and-water punishments, caning was once a less serious consequence for misbehavior on the high seas.

In fact, caning was mostly a punishment for minors in the 19th and early 20th centuries, a time when boys as young as 12 could join the British Royal Navy. Offenders received six to 12 strokes with a thick three-and-a-half-foot cane; sometimes in private, sometimes in front of the other boys on the ship.

Birching

A boy might be caned for minor offenses, like skipping out on roll call. But if committed a more serious offense, his punishment could be a public birching. This usually meant 12 to 24 strokes with a bundle of birch sticks.

“These instruments of correction were usually hung up in the steam of the ship’s galley to make them supple enough to have knots tied in them, though there are also reports of birches being soaked in vinegar or saltwater before being used,” writes Christopher McKee in Sober Men and True: Sailor Lives in the Royal Navy, 1900-1945.

Flogging

Still, neither caning nor birching compared to flogging, a common adult punishment that could kill a man. Until the …read more

Source: HISTORY