Author: wrongologist

Monday Wake Up Call – Cambridge Analytica Edition

The Daily Escape:

Massachusetts stream after March Nor’easter – 2018 photo by Karen Randall

The New York Times and The Observer each reported on Sunday about Cambridge Analytica’s use of Facebook (FB) personal information for about 50 million users. The data were acquired by an external researcher who claimed to be collecting it for academic purposes.

Those data were subsequently passed by the researcher to Cambridge Analytica (CA), who used it to help the Trump campaign develop very accurate psychographic profiles on each FB user. They also built a powerful software program to influence choices at the ballot box, targeting them with personalized political messages. CA then helped create websites and FB posts specifically designed to appeal to those users who followed the information, and then the most effective messages were used to either get them to vote, or to stay home.

The Observer said that the 50 million profiles represented about a quarter of potential US voters.

Cambridge Analytica was at the time, managed by Steve Bannon, and remains owned and financed by Robert Mercer. In June 2016, the Trump campaign hired Cambridge Analytica to take over its data operations. The WSJ reported on Friday that Robert Mueller has requested that Cambridge Analytica turn over internal documents as part of its investigation.

Some detail on the FB data: In 2015, a University of Cambridge researcher Aleksandr Kogan harvested data on millions of Americans by getting them to use his FB research app, “thisisyourdigitallife,” which offered a personality prediction, and was billed on FB as “a research app used by psychologists.”

Kogan then passed the data to Christopher Wylie of Eunoia Technologies, who used the personal information to create psychological and political profiles, and then target them with political ads designed to work with their particular psychological makeup.

We know about this because Wylie just came forward to the Observer, which broke the story. The Observer reports that Wylie: (edits and brackets by Wrongo)

Was the gay Canadian vegan who somehow ended up creating ‘Steve Bannon’s psychological warfare mindfuck tool’… [And they quote him saying] we ‘broke’ Facebook…

Cambridge Analytica also was used in the Brexit election campaign on the side of the “Leave” faction. And, The Hill reports that CA met with the Russian oil firm, Lukoil, three times in 2014 and 2015. Lukoil was apparently interested in how data could be used to target US voters.

When this story broke, Facebook banned Cambridge Analytica from advertising on its platform. But, The Guardian reports that Facebook had known about this misuse of its data for two years, doing nothing about it. Facebook acknowledges that the data were obtained legally, but that this use violates its policies

Until now, Wrongo has been agnostic about foreign meddling in the 2016 election. But finally, this may be where the Mueller investigation is heading: Collaboration by the Trump campaign (through Cambridge Analytica) and Russian operatives on the development and deployment of these robustly targeted digital advertisements. This becomes clearer since the Guardian reports that Kogan, the data gatherer, was also working for a St. Petersburg university while he was working for Cambridge and running his app. The Guardian also implies that he had funding from the Russian government.

This is at the center of everything. Russia, Facebook, Trump, Mercer, Bannon, Brexit. All of these threads run through Cambridge Analytica.

And we shouldn’t ignore FB’s culpability. They contracted with the app developer. They transferred large amounts of data to Kogan for specific purposes. FB had the opportunity and obligation to oversee and enforce that contract, and they seem to have failed to do so.

If this happened only in the US, we might not have even heard about it. Luckily for the American public, part of this arrangement appears to be subject to EU data protection rules, so more of the story will come out.

This shows why the US badly needs a data privacy and data protection regime similar to Europe’s.

It’s time to WAKE UP America! We have to get sharp! We need to dig deeper. To go beyond headlines, and develop a real understanding of the issues confronting our Republic.

Otherwise, we can be bullshitted or manipulated, and our democracy will be lost.

To help you wake up, here is English singer, Lily Allen doing her 2009 song “The Fear”:

Sample Lyrics:

I don’t know what’s right and what’s real anymore

And I don’t know how I’m meant to feel anymore

And when do you think it will all become clear?

‘Cause I’m being taken over by the fear

Those who read the Wrongologist in email can view the video here.

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Sunday Cartoon Blogging – March 18, 2018

What is most interesting about the #Enough movement is that it is well-disciplined, and deadly serious. These kids aren’t just looking for a chance to cut school. They realize what’s at stake: not just their lives, but the future of the country. Most of them will be old enough to vote in 2020.

When you think about high school kids marching, the Parkland kids are from FL, many WI kids marched, and Democrat Conor Lamb just won in a PA district gerrymandered to be very red. Total Electoral College votes if these three states switched from red to blue: 59. In other words, #Enough:

Dem surprise win in PA gets standard Trump response:

GOP debrief on PA rounds up all the usual suspects:

United’s problems transporting dogs makes Romney look good:

Steven Hawking enters the worm hole:

White House alums seem to be ok:

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Saturday Soother – March 17, 2018

The Daily Escape:

Mt Kilimanjaro – March 2018 photo by Peter Madonia

The #enough movement is about school kids protesting school violence. America watched this week as thousands of high school kids left their classrooms. Some wanted their government to do more to end gun violence, some simply wanted to show solidarity with 17 dead Florida kids.

These children may not be able to vote yet, but they’re learning how to make themselves heard. Let’s hope they grow up and vote, because we are living in a country where many, including most Republicans in Congress, think that universal health care is tyranny, but dead school children are part of the cost of freedom.

They think that access to medical treatment is a privilege you earn based on what’s in your wallet. Meanwhile, they defend the right of virtually anyone over 18 to own an AR-15.

And in New Milford, here in Litchfield County CT, there was a big dust-up over the town’s walk out. A group of parents hired an attorney to tell the school district that they were not happy that the kids got to participate in the national student walkout. Their lawyer wrote to the school district, saying:

My clients have asked me to notify you that this event violates state law, on the basis that state and local public funds are being used improperly to advocate for a political issue and to influence how voters will vote. Because it violates state law, we demand that the New Milford Public School District’s Superintendent and Board of Education immediately cancel the event, and rescind any association or prior involvement in it.

Since the event is over, it’s doubtful that it can be canceled. They also emailed Breitbart: (editing and brackets by Wrongo)

…the parents – who wish to remain anonymous – argue [that] the decision involves issues concerning adherence to law and policy, the manipulation of minors, the misuse of tax dollars, and indoctrination and political activism during school hours.

These parents think their kids are being manipulated. They surely must realize how difficult it is to manipulate one teenager, much less to simultaneously manipulate hundreds of thousands of them all across America.

George Soros just isn’t that powerful.

The #enough movement is somewhat reminiscent of the Vietnam-era marches, which included high school and college kids spontaneously standing in public places protesting something that was a legitimate threat to their physical safety. The primary concern of students back then was being killed.

It is also the primary concern of these kids today.

Back in New Milford, solidly Trump country, a few anonymous parents obviously want to micromanage their kids’ experiences and to politicize them. Here is a Facebook page quote by a student at NM High School:

Any student who wanted to go to the gym did, and those who chose not to participate were not forced to. A few students gave speeches, one of which contained a list of the names of the victims of the Parkland shooting. With each name a bell was rung and a moment of silence was given. A memorial for the innocent lives that were lost. The other speeches focused on being positive and spreading kindness; one given from a student who used to live in Parkland and who was very personally affected by this tragedy. Students and teachers alike listened and felt for the losses. It was a powerful and beautiful movement for all who watched. There was NO mention of guns in any way.

These kids didn’t leave the building! But, despite knowing this, these anonymous parents hired a lawyer to intimidate the school district, and politicize the intentions of high school kids. The parents then involved Breitbart, a right wing rag. They wanted to highjack the message of these kids, turning it into yet another right wing, Second Amendment moment.

As Paul Simon said: “A man hears what he wants to hear, and disregards the rest”.

This really makes Wrongo feel like we all need a soothing experience. To help with that, Wrongo suggests brewing a cup of Al-Durrar Single Farmer Lot coffee from Yemen, ($45/4 oz.) imported and roasted by Port of Mokha coffee. Wrongo heard about this on the PBS News Hour. It is a very interesting story.

Now, take your cup, and settle into your most comfortable chair to listen to “Sicilian Blue” by Hiromi Uehara, a Japanese jazz composer and pianist. Her work is a perfect blend of emotion and control. Here, she is performing live at the Jazz in Marciac (France) Festival in August, 2010:

https://www.youtube.com/watch?v=G7xAbT4jzD8

Those who read the Wrongologist in email can view the video here.

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What Lessons Can Dems Take From Conor Lamb’s PA Victory?

The Daily Escape:

Lambs are carried by a donkey in a side-saddle carrier, moving to their summer feeding grounds, Lombardy Italy – 2018 photo by Elspeth Kinneir. Lamb riding on a donkey. A metaphor for how Conor Lamb was carried to victory in PA?

This week, at least, the Lamb carried the donkey in PA. The LA Times thinks that Conor Lamb’s victory is due to the failure of the GOP’s tax cuts to mean much on the ground in PA:

The most dangerous outcome for Republicans in Tuesday’s special House election was not the prospect of a Democrat taking over one of their seats. It was the shrugging off by voters of the party’s biggest legislative achievement: the tax cut measure that Republicans hoped would be their major campaign message as they head toward a turbulent midterm election.

More:

Though the popularity of Trump’s tax plan has grown since it was passed last year, it stalled as an election issue in Pennsylvania, leading Republicans to shift away from it late in the campaign in search of another topic to energize supporters of state legislator Rick Saccone.

If Republicans can’t run on their $Trillion tax cut, they may be well and truly screwed. Some right wing outlets are saying that Lamb is really a Republican sheep in Democrat’s clothing, but that’s simply political spin. Let’s take a look at Lamb’s positions.

He took a few Republican positions:

  • Opposed to House Minority Leader Nancy Pelosi becoming Speaker
  • Supported gun ownership
  • Supported Trump’s tariffs

He was a Democrat on others:

  • Opposed to the Trump tax cuts
  • Supported Obamacare
  • Supported labor unions

On abortion, Lamb was Obama-like: Personally opposed, but wants it to be safe and legal.

His positions resonated. Public Policy Polling’s exit polling indicated that health care was another top priority issue to voters in his district. And that voters believed Lamb’s views were more in step with theirs, saying Lamb better reflected their views by 7 points (45% to 38%) over Saccone. It didn’t hurt that voters in this heavily Republican district disapproved of the Republican efforts to repeal the Affordable Care Act by 14 points (53% to 39%).

Tax cuts were the Republican’s early message in the district, but Business Insider reports that ads mentioning the tax law by Saccone’s campaign dropped from nearly 70% of all messages in the first two weeks of February, to less than 1% by early March.

Is the Lamb strategy for victory a road map for Democrats? The NYT thinks so. They report that Lamb has given the Democrats a road map for Trump country.

Wrongo disagrees. Each congressional district has its own issues that will energize its voters. What works in one will not necessarily work in all. Perhaps Conor Lamb’s strategy would work in borderline red districts, or in purple areas. But what may be a winning argument in PA wouldn’t work on the ground in LA.

National Democrats wisely chose to keep a largely low profile in this election, except for visits by Joe Biden, who many consider a local. The GOP did not stay away. Trump, Pence, and Donald Jr. all visited the district. Towards the end of campaigning, the GOP even tried saying that Lamb was “not one of us”.

That failed, because Lamb is clearly a local. His family is well-known. He’s part of a local Democratic dynasty. And after college and then the Marines, he came back to become a federal prosecutor.

When we think about broad messages that will resonate everywhere, it should be that Trump ran as a populist, driving what Nancy Tourneau has called “the politics of resentment”.

But Trump has governed just like any conventional conservative Republican.

That may explain why Democrats who were willing to roll the dice with him in 2016 didn’t respond to messages about the GOP’s tax cuts in the PA-18 election.

Maybe, people feel they gave Trump a chance, and now, they’re saying that they didn’t like the results.

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Trump’s Cabinet Moves Signal Danger Ahead

The Daily Escape:

Impalas sharing a drink – Via

A few additional thoughts about the falling dominoes in Trump’s cabinet that were triggered by Tillerson’s firing. There are rumors that Gary Cohn will be replaced by Larry Kudlow, and that National Security Advisor HR McMaster may be replaced by John Bolton.

So, think about the new line-up. Kudlow is economic czar. CIA Director Pompeo becomes Secretary of State. Gina Haspel, who oversaw the secret CIA torture prisons in Thailand is promoted to Director of the CIA, and John Bolton turns up as National Security Advisor. These people, along with Nikki Haley at the UN, who this week threatened another cruise missile attack inside Syria, are among the worst possible choices for their respective jobs.

Unless we exhume and reinstate Dick Cheney and Donald Rumsfeld.

Wrongo had direct experience with Kudlow during the Reagan administration, when Kudlow was associate director for economics and planning in the Office of Management and Budget (OMB) under David Stockman. Wrongo was at the big NY bank, and was lobbying for approval of a new line of business that was a stretch under the Glass-Steagall regulations at the time. In our one meeting, Kudlow was a pompous asshat. He lectured us about “trickle-down” economics, and how the country was in the midst of a conservative cultural revolution led by St. Ronnie.

We couldn’t get away from him fast enough. BTW, we did get the exception to the regulations, without any help from Kudlow. Perhaps it is useful to remember that Kudlow has no training in economics, although he plays one on TV. Also, he was fired from Bear Stearns for his $100,000 per month cocaine habit. And that’s in 1994 dollars. Real economist Brad DeLong says appointing Kudlow is like appointing William Shatner commander of the 7th Fleet.

If all of these moves come to pass, Trump will be surrounded only by true believers. Any Generals that are left, except for Mattis at Defense, may act as if they are true believers, as well.

Think of these moves as the first step in a new neo-con takeover of our national security strategy:

  • There will be no normalization of our relations with Russia
  • There will be a confrontation with Iran
  • The effort to destabilize Syria will continue
  • China will be confronted, first on trade, and second, on their growing regional aspirations
  • Nothing will come from any discussions with North Korea

Trump’s neocon cabinet now will have the means both to support Israel’s ambitions in the Middle East, as well as their own desire for Washington’s military hegemony in the world. They will use the “Russian threat” as a justification of more defense spending and even more militaristic actions abroad.

This is an extremely dangerous agenda. Russia’s new weapons as announced by Putin last week seem to suggest that they may have some military superiority over the US. Certainly, that may embolden China and Iran to move closer to the Russians.

If the administration persists in making charges and threats against Russia, Iran, and China, those nations must eventually react. They may become allied militarily, anticipating a possible war against the current US regime.

If, as Haley has threatened, the US were to again strike Syria, Russia has to choose whether to let it pass (as it did when Trump fired 50 cruise missiles previously), or to respond. If the US misjudges its attack, and Russia responds with actions that kill US military personnel, then the US regime faces the same choice, to let it pass, or not.

Any time we (or the Russians) are forced to consider retaliation, there is a clear cost to not retaliating, as well as a strong inclination to not just turn the other cheek.

Trump’s new cabinet line-up can lead us into a profoundly dangerous situation.

And it will be driven by a tiny minority: A neocon cabinet. Plus the Israelis who ardently desire the US to take on Iran. And elements of the US military/security complex, who feel we must be the biggest, baddest asshats in town.

We are sitting in the middle of the most reckless behavior in modern history.

Where are the voices against this?

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Tillerson Replaced By Pompeo

The Daily Escape:

South Africa – 2012 photo by Wrongo. (Or it might be another member of the administration heading for the door)

Rex Tillerson is updating his resume and Mike Pompeo is adding to his. NPR reminds us that Pompeo already had an outstanding resume:

He graduated at the top of his class at West Point. He served as a tank officer in Europe. He went to Harvard Law School. He was a corporate lawyer who launched a successful aerospace business. He got elected to Congress as a Tea Party Republican from Kansas in 2010. For more than a year, he has run the CIA.

Now, assuming he gets confirmed by the Senate, he can add Secretary of State (SoS) at the top of the page. The LA Times reports that the Senate Foreign Relations Committee expects to hold confirmation hearings on Pompeo’s nomination as SoS next month, and he should win bipartisan support. In January 2017, the full Senate confirmed him as CIA director by a vote of 66 to 32.

Here’s what we know about Pompeo. NPR quotes Ian Bremmer, of the Eurasia Group:

Pompeo is very much a hard-liner on issues of national security, broadly…He’s smart, but he’s also quite bombastic, and that plays well with Trump. But that doesn’t necessarily support a balanced national security policy.

Pompeo recently said that the US would not soften its stance on North Korea ahead of planned talks between North Korean leader Kim Jong-un and Trump. Pompeo has previously suggested he favors regime change in North Korea, although he has backed off that recently, suggesting that diplomatic and economic pressure could help resolve the nuclear crisis.

Pompeo is a harsh critic of the nuclear deal with Iran.

Colonel Pat Lang at Sic Semper Tyrannis gives some additional background on Pompeo’s experience at West Point, noting that: (brackets by Wrongo)

He concentrated his study there in Mechanical Engineering and graduated first in his class. By the time he graduated the war in VN [Vietnam] was over. He served just enough time to repay his service debt to the army, then resigned his commission to go to law school. So, he never served in combat. War is an abstraction to him. In other words, this is probably a game for Pompeo, a power game played on a global map board.

Lang also noted that Pompeo holds both hard line anti-Iranian views and has unshakable sympathy for Israel. We can only guess whether Tillerson played a role in restraining Trump’s poorer angels, and whether Pompeo will support them. Lang feels that Tillerson’s ouster leaves General Mattis at the Defense Department as the only adult in the room, and that it makes a conflict with Russia in Syria much more likely.

Wrongo had almost no opinion of Tillerson, except that his global deal-making gave him an interesting perspective on how to get things done as SoS. Tillerson seemed to be a moderate on Iran, so Pompeo seems worse on that score. Tillerson was also more likely to call out Russia than are Trump or Pompeo. Mostly, Tillerson seemed directionless, other than having a vague commitment to cutting back the State Department’s overheads. Perhaps whatever direction he tried to establish was countered by his boss.

Some who voted for Trump thought they were getting a CEO who knew how to run a business. One way you can tell whether a company is managed well is by how high their turnover is.

Or, by how well they handle money.

Or, how they stay on message.

Or, how individuals are empowered to do their jobs, without micro-management.

Trump doesn’t celebrate steady progress, he likes churn.

So, churn is what we have.

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Utilities Face Declining Demand for Electricity

The Daily Escape:

Mt Baker, WA – 2018 photo by np2fast. The two smaller peaks on the right are Colfax and Lincoln.

We are late to the story, but Bloomberg had a report in April, 2017 that electric power consumption in the US has been stalled for the last 10 years. Since the dawn of the electric light bulb, electricity demand grew in a direct relationship to the growth in GDP, but that relationship no longer holds. Here is a chart showing the divergence:

The white line is US GDP, indexed to 1997. GDP in 2016 was 151% of what it was in 1997, while the blue line, representing US electricity sales, is only at 118% of 1997.

Why? It is a combination of greater energy efficiency, offshoring of heavy industry, and both commercial customers and homeowners generating their own power. Demand for power from utilities is flat, and most forecasts expect it to remain that way.

Flat demand for electricity has big implications for the utility industry. They need to forecast demand for electricity about 20 years ahead, because they invest in large and capital-intensive infrastructure like power plants and transmission lines, costing billions of dollars so they can offer Business Utilities as well as household utilities. The utility wants to be sure that facilities they invest in will produce profits for many years to come. This is why it is important that the utility industry adapts in order to stay competitive by offering cheaper Energy Plans for customers.

But, investor-owned utilities (IOUs), which provide electricity for more than half of Americans, need to make money for their investors. They can’t make money selling electricity; monopoly regulations forbid that. Instead, they make money by earning a rate of return on investments in electric power plants and infrastructure. And with stagnant demand, there’s no value in new investment. And a drop in investment means a drop in profit. So, the IOUs are treading water as their revenues decline.

We are in a new normal. There is pressure from falling power prices, due largely to increased usage of natural gas and renewables to produce power. Wholesale power prices are down 70% percent from 2007, but little of those cost savings have been passed on to consumers.

We should see what’s going on as a good thing, says David Roberts at Vox:

For both economic and environmental reasons, it is good that US power demand has decoupled from GDP growth. As long as we’re getting the energy services we need, we want overall demand to decline. It saves money, reduces pollution, and avoids the need for expensive infrastructure.

More from Roberts:

Only when the utility model fundamentally changes — when utilities begin to see themselves primarily as architects and managers of high-efficiency, low-emissions, multidirectional electricity systems rather than just investors in infrastructure growth — can utilities turn in earnest to the kind of planning they need to be doing.

The electricity sector comprised of many providers such as Amigo Energy and others, understands where things are headed: Coal is dying out. Renewables are coming on strong. Distributed energy and sophisticated grid controls are providing increased efficiency. Natural gas may or may not be a long-term answer. Roberts shows how the Trump administration is out of step:

Trump’s love of coal, steel, pollution, and other such manly 19th century pursuits is an anachronism and a curio, but it is having little influence on the thinking and plans of electricity-sector professionals.

So, we have a strategic US industry in transition. They are now stiffing their customers, who have nowhere to go. They are not helped by an administration that is focused on an ideological response guaranteed to make the electric power industry’s efforts to find a better economic model much, much harder to achieve.

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Monday Cartoon Blogging – March 12, 2018

Wrongo and Ms. Oh So Right have safely returned to the Mansion of Wrong after our week in warmer climes. The timing of our travel was perfect! We were away during the two nor’easters that dumped 18” of snow on the Mansion, and we are back before the next snow on Tuesday. Here is a picture of sunrise on the day we pulled out of our FL rental:

On to cartoons. Trump will try to show North Korea’s Kim the art of the deal without using his hands:

This, by a right-wing cartoonist, makes Trump look like he knows something about tariffs. That’s untrue:

Trump baffles some of the base, but others get the picture:

The GOP is still in denial about Trump’s steel tariffs:

Jefferson Beauregard Sessions redefines the “Golden Door” of American immigration:

Trump’s decision to again allow importation of elephant parts shows his character:

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Saturday Soother – March 10, 2018

(The northeast is digging out from two nor’easters, with another possible on Monday or Tuesday. The Wrong family will return from FL into the middle of all that on Sunday. Sunday Cartoon Blogging will be published on Monday, March 12th)

The Daily Escape:

Harbin Opera House, winter. Harbin, China – 2015 photo by Iwan Baan

Trump and North Korea’s Kim Jong-un have stopped trading insults and seem to be willing to meet face-to-face, sometime in May. No sitting American president has ever met a North Korean leader, and Trump has repeatedly vowed that he would not commit the error of his predecessors: Being drawn into a protracted negotiation in which North Korea extracted concessions from the US, but held on to key elements of its nuclear program.

The setup is this: Trump says “they are only talking because we threatened them.” Kim says “they are only talking because we have nukes.”

Both leaders bring their unique orthodoxy to the negotiating table.

It’s pretty clear that South Korea’s President Moon Jae-in, has been doing a lot of work behind the scenes to help bring this about. It is unclear whether it has been with, or without, the blessing of Washington.

We know for sure that Mike Pence had nothing to do with it.

In Wrongo’s experience, the South Koreans are very skillful negotiators, and Trump must expect that the North Koreans are as well. In particular, the North Koreans have proved to be quite skillful in the past at subverting the very deals that they have agreed to and signed with the West.

Is Kim Jong-un really willing to give up his nuclear program for a deal from a man whose proven to be an unreliable negotiating partner with his allies, much less his adversaries? If something seems too good to be true, then it probably isn’t. If talks fail, both will have made their going-in position, that the other side can’t be trusted, justify their desire for a belligerent show of force going forward. They may both think there is nothing to lose by meeting.

If Trump can somehow defuse the threat from North Korea, he should get all of the credit that this achievement deserves. But, it really seems that these two are unlikely to achieve very much. Still, only the most cynical would say we shouldn’t “give peace a chance”, no matter how slim the odds of success may be.

So, there’s a calming diplomatic note at the end of the week. Time to continue the soothing for the weekend. To help with that, grind up some Panama Hacienda La Esmeralda coffee beans ($45/8 oz.) from Portland, OR-based Heart Roasters. Then brew a cup, noticing its notes of orange, vanilla, honey, and jasmine. With Heart’s Coffee, the company says it is easy to get the brewed coffee’s tasting notes. Soon, you’ll be saying things like, “I really taste the vanilla notes”.

Now, settle back in a comfy chair and listen to Bach’s “Toccata and Fugue in D Minor”, performed by Karl Richter in 1969 on the 1766 Riepp organ at Ottobeuren Monastery, Germany. You will notice that Richter is playing from memory. An assistant is there to pull out the stops, as the piece requires too much with hands and feet to also pull stops without interrupting the music. You should watch the video simply to see Richter’s footwork:

Some may know the music as the opening title sequence from the 1975 movie, “Rollerball”. The film is set in 2018. The world is governed by global corporations, with entities such as the Energy Corporation, a global energy monopoly based in Houston. The corporations control access to all transport, luxury, housing, communication, and food. Rollerball is a game, and Rollerball teams represent cities, and are owned by the global corporations. The Energy Corporation, describes Rollerball as having a “distinct social purpose”: To show the futility of individual effort.

Think you see some parallels to the real 2018?

Those who read the Wrongologist in email can view the video here.

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Steel Tariffs Against China Make Sense

The Daily Escape:

Winter Morning, Moscow Oblast, Russia – 2018 photo by kostya8. Good luck to those in New England today!

“Shortly, the public will be unable to reason or think for themselves. They’ll only be able to parrot the information they’ve been given on the previous night’s news” – Zbigniew Brzezinski

Did Wrongo ever tell you about meeting Zbig? We had lunch together in the officer’s dining room at the big NY bank that Wrongo was with, sometime in the early 1980’s. It must have been a real comedown for him, lunching with an international department strategic planner, after serving four presidents. We focused on the (then) current state of the Asian economies, but his eyes scanned the room, looking (maybe hoping) for a better deal than simply talking to a young vice president.

Zbig’s quote is on the money. It is America today: We don’t figure things out, because everyone is an expert. Today, anyone you meet already knows everything. They’ve taken a quick look at Wikipedia, and they know that their opinions are worth as much as any expert.

If average people can be experts, why is Trump’s effort to do a better deal on trade so off the mark?

His proposed steel and aluminum tariffs are levied against all producers. The table below from a 2016 Duke University study, shows production by country. You can see the extent to which China is an outlier:

Note that the US is fourth on the list. Take a look at where Canada ranks. It’s hard to see Canada as a strategic risk to US military needs, but since Trump plans to deploy a blanket steel tariff, everyone suffers, at least until the retaliation begins. The Duke study makes the point:

The global steel sector is once again in a state of overcapacity. The sector, predominantly fueled by China’s expansion since 2000, has grown to over 2,300 million metric tons (MT) while only needing 1,500 MT to meet global demand. The result is a global steel sector at unviable profit levels and an influx of cheap steel in the global trading system adversely affecting companies, workers, and the global trading regime.

Both George W. Bush and Barack Obama applied steel tariffs. Bush imposed broad tariffs of up to 30% on steel imports in 2002. His tariff was supposed to last three years, but was withdrawn after the World Trade Organization (WTO) ruled against them. In 2016, the Obama administration imposed duties on some Chinese steel imports by more than 500%, on Chinese cold-rolled steel, which is used to make appliances, cars and electric motors. Subsequently, Chinese imports to the US dropped by almost two-thirds. China now ranks as the 11th largest exporter of steel to the US.

WaPo notes that Chinese steel accounts for about 6% of US steel imports, but China’s capacity is eight times that of the next biggest producer, Japan. Clearly, its Chinese capacity that must be addressed.

On Tuesday, the European Commission announced it had renewed tariffs on Chinese steel imports, some as high as 71.9%, saying producers in France, Spain and Sweden face a continued risk of imports from China at unfairly low prices. The Commission concluded that Chinese producers had significant spare capacity. This was likely to lead to large-scale imports into the European Union at dumped prices if the measures were lifted.

And even though China’s share of the EU market for stainless steel seamless pipes and tubes has hovered around 2% since 2013, Brussels had no problem with pursuing what it thought was a fair remedy, despite the possibility of blowback.

Ironically, that’s similar to what Trump says he wants to do. Similar, but far from the same.

Trump’s plan hits all global steel producers, not just China, which, as the chart above shows, produces 52% of the world’s supply. So instead of confronting only China, we will face blowback from everyone.

OTOH, the politics of Trump’s tariffs may play out differently than the economics. The economics suggest they are a loser. According to a January Bureau of Labor Statistics report, about 377,000 Americans work in metal manufacturing jobs that could be protected by these tariffs.

That’s a lot of votes in the Rust Belt. And the steel company CEO’s will also see bigger bonuses.

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