2021 and beyond

Each year for more than a decade I’ve written a New Year’s letter, sharing some of the highlights of the previous year and projecting the future for my family and myself. We don’t, however, need to be reminded of the “highlights” of 2020, nor do we need platitudinous projections about 2021. Instead a wider view might serve as we sit on the verge of another year.

Having just finished reading “You Can’t Go Home Again” by Thomas Wolfe, I am struck by Wolfe’s optimism about the human race. In breaking with the editor who helped him launch his career, Wolfe identified the editor’s fatalism as the factor that necessitated their severance. Is that what it comes down to––are there two kinds of people: those who are optimistic and those who are pessimistic?

Wolfe’s novel covers the late 1920s and 1930s. He spent some time in Germany––a country whose culture he loved from afar only to discover in person the dark underbelly of hatred and evil that infected so many. That did not, however, discourage him in viewing America as a place of hope and inspiration.

Let’s examine the past century. Each of you can decide where you stand: optimist or pessimist.

The First World War is not a happy place to begin our journey. Millions of lives were lost unnecessarily as a result of rulers’ (misplaced) priorities and generals’ limited visions. The war was followed, we have recently been reminded, by a plague that added a toll of millions to the war’s devastation.

Then came a brief respite in the 1920s. Things were looking up. People put the war and pandemic behind them rejoicing in peace, with song and dance. Germany was unable to participate in the economic revival, however, as its economy had been saddled with enormous debt, although few saw the inevitable negative consequences of the terms of the peace settlement.

The end of the 1920s brought a new tragedy––a stock market crash followed by a long depression. Dire economic conditions worldwide did not come to an end until after another world war taxed humanity’s capacity for sacrifice.

It wasn’t until the end of the Second World War that the West discovered the depths of Hitler’s war on the Jewish people, in part because warnings and reports out of Europe had been ignored.

At the end of that war we again sought a lifestyle of hope. The economy grew allowing people to buy homes and cars. Colleges expanded admissions and optimism reigned as health care discoveries promised an end of long-feared diseases. The Korean conflict was a slight blemish on this period of hopefulness.

The 1960s reminded us of how far we had to go to live up to our ideals. The decade began with Blacks in the South seeking a redress of grievances and resulted in legislative civil rights victories although at the cost of sacrificed lives––Dr. King’s and both Kennedy’s.

Did we foresee how divided our society would become coming into the 1970s? We protested America’s role in Vietnam––some people not wanting to get involved in overseas struggles; others siding with Vietnam as one of the world’s poorest nations, ignoring the Soviet Union’s plan to convert poor nations to its ideology.

That was the beginning of a division that besets our country today.

Instead of progress, half of our country views the past half-century as a set-back, as a time when demands for equality were ignored or given lip-service. They believe their opponents (“White people!”) cheat at the game of life and that the disadvantaged need more breaks than the ones they’re already given. They also view the United States’ as a negative force on the world’s economic, environmental and cultural stages.

Those who identify as optimists see two hundred twenty-five years of progress towards the ideals of the American Revolution. They deny human perfectibility is achievable and reject government-imposed controls over thought and private life. They are opposed by those who are impatient for our society to achieve ideals that echo those of the Socialists and Communists––human perfection; an end to differences between men and women, rewarding of past victims of discrimination, and a government more involved in the outcomes of each individual’s fortune, rewarding those who don’t succeed on their own with services and wealth they feel they deserve simply by existing. They believe the rich can be taxed out of existence with no consequences. They believe that resources are limitless and therefore can be given away to anyone who arrives on our shores with open arms.

The electoral platform of the Democrat Party echoes the agendas of the Soviet Union of the 20th century and today’s Communist China. Communists in those countries applaud for it helps them advance their agenda. The Left blames the West for the disparities between peoples and promises that socialist policies can fix those disparities. Americans who endorse that scenario ignore the Socialist/Communist track record––the necessity of government top-down control, punishing individuals who fail to go along with the program by confiscating their property and imprisoning those who speak out too vociferously.

Conservatives rely on the inherent goodness of most people who they believe if left to their own devices will act fairly and honestly. They know laws and rules are necessary but seek to minimize restrictions in the belief that the outcomes are better when not imposed.

The liberal media tells the stories of people who have been harmed by capitalism and racial discrimination while the conservative media tells the stories of those who overcame disadvantages to make something of their lives and enrich the country. Both narratives have merit. Telling only one side does a disservice to the nation.

Americans will have to decide during the next several years which political philosophy they want to adopt. Some will blame the inevitable failure of the Biden/Harris Democrats’ agenda on Republicans and will seek stricter measures to prevent them from interfering, including packing the Supreme Court and revising the Constitution. Others will recognize that Democrat Party’s version of Socialism/Communism––enforced government equality––is worse than a dead end. It’s the precursor of running the economy into the ground and turning opponents into political prisoners. I hope I’ll be around to see which side will win out.

Mark my words: Inflation is coming

Mark Levin recently debated Arthur Laffer, the well-known supply side economist, as to whether inflation would be an outcome of the shutdown of the American economy. Laffer didn’t think so; Levin predicted it would be a problem and he’s right. The reasons are simple to understand. In economics, price is a function of supply and demand. Gold is rare; people want it; the price is high.

Why will the American economy suffer from inflation? The answer is simple. Conditions resulting in a supply problem for many products and services are already evident.

* Meat producers are having to destroy both mature and young cattle and pigs because shutting down restaurants and institutional purchasers has depressed demand. The impact will result in higher meat prices when restaurants reopen, as it will take months before producers are able to gear up. Some farmers may go out of business as a result of the lack of a market for their livestock. That too will affect supply.

* Farmers are having to let produce go unharvested due to decreased demand, but more important in the future is likely to be a lack of labor––a function of several factors that will remain in place even after the virus restrictions are lifted. Prices of products from other countries will also go up as they will be battling the same problems we’ll be facing.

* Restaurants are being asked to reduce seating when they reopen. That will result in higher prices as food prices will be higher and restaurants will need to earn more per customer to cover expenses.

* Products sourced from China are very likely to cost more for a variety of reasons including the fact that Chinese factories will need to make up for lost sales during the pandemic.

* The U.S. is looking to move production of medical equipment and pharmaceuticals out of China back to their home countries to prevent a reoccurrence of supply problems that arose at the beginning stages of the crisis. Given the cost of labor is higher in the U.S., products for everything from hand sanitizers to ventilators to pharmaceuticals will be higher than in the past.

* All other products produced overseas, such as clothing, will be higher as a result of the impact on suppliers––some will have been bankrupt, while others will need to raise prices to catch up.

* Labor prices in the U.S. will be higher in many industries as people will be trying to catch up for lost income.

* Governments may have to raise taxes and fees to avoid reducing services.

Higher prices in some cases will be temporary, but high prices has an affect like a tidal wave. When the price of labor, products and services increase, the user of those products must also raise prices. I don’t know what percentage of manufacturing equipment is made in China or other low-wage countries, but if hammers, lithium-ion batteries and robots cost more, those costs will have to be passed along to consumers.

Complicating this is the fact that consumers impacted by the shutdown will have less money to spend. Having lower sales, sellers must raise prices to achieve the income they need to stay in business.

Get ready, folks. Inflation is on its way. Sorry, Mr. Laffer. Your curve won’t solve this problem.

 

Letter to the (Albany) Times Union re: the Paris Accord

The following letter appeared (slightly edited) in the Albany Times Union Thursday, June 15.

The Times Union ignores reality in its response to President Trump’s withdrawal of the U.S. from the Paris Climate Accord (“Mr. Trump Defies Reality,” 6/2/2017).

Instead of accepting the president’s rationale as stated in his press conference, the TU makes up its own motive: climate denial. Instead of trying to refute the president’s arguments that the Paris Accord would be harmful to the American economy costing us tens of thousands of jobs and increasing energy costs to the average householder by thousands of dollars annually, the TU is worried that our withdrawal will hurt our image and “good name,” lead scientists to leave the country, and harm our economic competitiveness.

The TU ignores the reality that the U.S. is the world leader in environmental stewardship and that our businesses are committed to the best practices to reduce pollution and conserve energy and resources.

The President’s withdrawing from Paris was not accompanied by a plan to change any of that. To the contrary. What led Mr. Trump to withdraw was that Paris would be bad for the U.S. Not only does it fail to accomplish the goal of reducing green-house gases significantly but it allows polluters like China and India to keep polluting while forcing the U.S. to pay.

Like NATO, where the member nations assume the U.S.––like Daddy Warbucks––is ready to finance their every request, Paris was written on the assumption that the U.S. needs to be punished for being the world’s most prosperous and powerful nation. The reality is it’s time for the rest of the world to step up to the plate and show us their commitment to the environment. We’re already doing our share.

Two Must Reads to Understand International Politics in a Trump Presidency

People spending their limited energy trying to reverse the election results or demonize Donald Trump in hopes he will fail and be impeached are missing a huge opportunity to understand what lies ahead of the U.S. on the world stage.

Two brilliant articles provide insightful analysis of the implications of Trump’s victory for those with the ability to remain dispassionate and advance their personal comprehension of where things stand internationally and what needs to be done.

Start with Ruthie Blum’s “Why Abbas does not emulate Sadat,” which can be found at http://www.israelhayom.com/site/newsletter_opinion.php?id=17707&r=1.

The title doesn’t do justice to the column which reviews past peace negotiations and explains why any hope that the leader of the “Palestinians” will negotiate a peace deal with Israel is a pipe dream.

Next read the lengthy, but brilliant analysis of the current world order based on Henry Kissinger’s recent book (World Order, 2014) and his own reading of U.S. history by Niall Ferguson, entitled “Donald Trump’s New World Order,” which can be found here: http://www.the-american-interest.com/2016/11/21/donald-trumps-new-world-order/.

Ferguson lays out a potential path for Donald Trump’s administration to re-balance the world order reversing the disastrous policies of Barack Obama and taking a Teddy Roosevelt-like approach, based on existing realities and actual power alignments rather than wishful interpretations.

 

You don’t have to agree with every point made by Blum or Ferguson to come away with a greater understanding of where things stand in the world and the positions a Trump administration might take to bring restore America’s role as the number one superpower on the world stage.