Visualizing 200 Years Of Systems Of Government

Visualizing 200 Years Of Systems Of Government

Authored by Jeff Desjardins via VisualCapitalist.com,

Centuries ago, most of our ancestors were living under a different political paradigm.

Although democracy was starting to show signs of growth in some parts of the world, it was more of an idea, rather than an established or accepted system of government.

Even at the start of the 19th century, for example, it’s estimated that the vast majority of the global population — roughly 84% of all people — still lived under in autocratic regimes or colonies that lacked the authority to self-govern their own affairs.

The Evolution of Rule

Today’s set of charts look at global governance, and how it’s evolved over the last two centuries of human history.

Leveraging data from the widely-used Polity IV data set on political regimes, as well as the work done by economist Max Roser through Our World in Data, we’ve plotted an empirical view of how people are governed.

Specifically, our charts break down the global population by how they are governed (in absolute terms), as well as by the relative share of population living under those same systems of government (percentage terms).

Classifying Systems of Government

The Polity IV data series defines a state’s level of democracy by ranking it on several metrics, such as competitive and open elections, political participation, and checks on authority.

Polity scores are on a -10 to +10 scale, where the lower end (-10 to -6) corresponds with autocracies and the upper end (+6 to +10) corresponds to democracies. Below are five types of government that can be derived from the scale, and that are shown in the visualization.

  1. Colony
    A territory under the political control of another country, and/or occupied by settlers from that country.
    Examples:  Gibraltar,  Guam,  French Polynesia

  2. Autocracy
    A single person (the autocrat) possesses supreme and absolute power.
    Examples:  China,  Saudi Arabia,  North Korea

  3. Closed Anocracy
    An anocracy is loosely defined as a regime that mixes democratic and autocratic features. In a closed anocracy, political competitors are drawn only from an elite and well-connected pool.
    Examples:  Thailand,  Morocco,  Singapore

  4. Open Anocracy
    Similar to a closed anocracy, an open anocracy draws political competitors from beyond elite groups.
    Examples:  Russia,  Malaysia,  Bangladesh

  5. Democracy
    Citizens exercise power by voting for their leaders in elections.
    Examples:  United States,  Germany,  India

A Long-Term Trend in Question

In the early 19th century, less than 1% of the global population could be found in democracies.

In more recent decades, however, the dominoes have fallen ⁠— and today, it’s estimated that 56% of the world population lives in societies that can be considered democratic, at least according to the Polity IV data series highlighted above.

While there are questions regarding a recent decline in freedom around the world, it’s worth considering that democratic governance is still a relatively new tradition within a much broader historical context.

Will the long-term trend of democracy prevail, or are the more recent indications of populism a sign of reversion?


Tyler Durden

Tue, 09/10/2019 – 19:05

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Netanyahu Vows To Annex Parts Of West Bank If Re-Elected; Claims “Coordination” With US

Netanyahu Vows To Annex Parts Of West Bank If Re-Elected; Claims “Coordination” With US

Prime Minister Benjamin Netanyahu continues his long track record of attempting to out-hawk all political opponents, announcing on Tuesday his intention of annexing parts of the West Bank, including the Jordan Valley, if re-elected

“I will not do anything without getting a clear mandate from the public, and so the citizens of Israel, I ask you for a clear mandate to do this,” Netanyahu said while campaigning ahead of the September 17 election. “This is a historic opportunity to apply sovereignty to communities in Judea and Samaria.”

During the unveiling of his provocative plan, which he said would be accomplished in coordination with the US, he pointed to a map of the Jordan Valley, claiming also Israel could bring its sovereignty over the land but without annexing “a single Palestinian”

PM Netanyahu promised Tuesday to make the Jordan Valley a sovereign part of Israel if he’s re-elected. Image via JTA.org

“There is a unique and once-in-a-lifetime opportunity to do something with broad consensus and bring safe permanent borders to the State of Israel. This will ensure that Judea and Samaria do not become Gaza, and that Kfar Saba, Netanya and Tel Aviv will not become like communities along the border of Gaza,” he said.

Annexing the Jordan Valley is reportedly consistent with the Trump administration’s grand plan for Mideast peace. “There is no change in the United States policy at this time,” the White House said in a statement. “We will release our vision for peace after the Israeli election and work to determine the best path forward to bring long-sought security, opportunity and stability to the region.”

However, it’s likely that the result of such a plan as Israeli annexation of West Bank settlements would end in anything but “peace” and “stability”. 

Netanyahu in his speech noted that he would wait to initiate such an ambitious plan until after Trump’s “Deal of the Century” is revealed. But the Israeli prime minister – who is seeking election to a record fifth term this month – spoke as if the White House was on board with his vision. 

“I request a mandate to apply Jewish sovereignty to all communities, and I intend to do so in coordination with the United States,” he said.

Meanwhile, The Jerusalem Post quoted a Palestinian official who said any Israeli attempt at realizing Netanyahu’s plan would without question be a “declaration of war”


Tyler Durden

Tue, 09/10/2019 – 18:45

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Thanks To Tech Totalitarians, US Already Has A China-Style “Social Credit System”

Thanks To Tech Totalitarians, US Already Has A China-Style “Social Credit System”

Authored by James Kirkpatrick via VDare.com,

While protesters in Hong Kong fly American flags and rip down security cameras, an even more insidious Chinese-style “social credit” system is solidifying in the United States [Hong Kong Protesters Wave U.S. Flags, Urge Trump to Take Actionby Owen Franks, Bloomberg, August 31, 2019]. The Trump Administration is considering an alliance with Big Tech to determine who is allowed to own guns [Power Up: White House ponders new proposal to identify links between mental health and violenceby Jacqueline Alemany, Washington Post, August 22, 2019]. The Main Stream Media wields more power than the state itself, blithely doxing private citizens it wants to destroy because of their political views. Finally, the mysterious purge (and equally mysterious re-establishment) of some Dissident Right YouTube accounts shows that political debate is being managed from the top-down. Every American can have his job, constitutional rights, and reputation destroyed by a power structure that is completely unaccountable–and it’s being imposed on us in the name of “freedom.”

Sadly, President Donald Trump seems oblivious to this attack. He’s failed to defend those who defended him. He instead filled his administration with enemies eager to smear him in tell-all books [John Kelly told Trump his memoir would wait unless attackedby Caitlin Yilek, Washington Examiner, September 4, 2019].

He’s now taking this self-defeating principle outside his administration. Though Google and other Big Tech companies will do everything they can to prevent his re-election, President Trump is mulling partnering with them to gather data on “risk factors” in order to prevent mass shootings. This reportedly includes using data from “Apple Watches, Fitbits, Amazon Echo, and Google Home” [White House considers new project seeking links between mental health and violent behaviorby Jacqueline Alemany, Washington Post, August 22, 2019].

Only the most naïve can believe that private data or recorded conversations won’t be weaponized against patriots. After all, an email, Facebook comment, or old tweet can already get you fired from your job–even a government job. Leif Olson’s rehiring may not have been a true victory against “cancel culture,” but we shouldn’t lose sight of the casual cruelty that motivated the attack in the first place. Hurting people, rather than informing people, seems to be the only motivation of MSM journofa.

We’ll never know the story behind Jeffrey Epstein or what motivated the mass shooter in Las Vegas (remember that?). But journofa won’t rest until they’ve doxed every Gamestop employee and pizza deliveryman who went to Charlottesville!

Another example: “dozens” of Customs and Border Protection officers may lose employment or suffer lesser penalties after their comments in a private Facebook group were leaked [Customs and Border Protection moving to fire and discipline dozens of agents for Facebook postsby Anna Giaritelli, Washington Examiner, September 5, 2019]. An unnamed “senior CBP official” proclaims that this isn’t enough because they need to “change the culture” of the service.

But meanwhile, a recent video shows dozens of illegals casually walking around an incomplete border fence—just the latest example of the total collapse of border security [Video shows dozens of families walk illegally around border fence and into the United Statesby Simon Veazy, Epoch Times, September 2, 2019].

There has also been yet another attack against an immigration law enforcement facility, this time with a woman allegedly throwing a lit Molotov cocktail [Molotov cocktail toss in Florida is latest attack against DHS facility: reportby Danielle Wallace, Fox News, August 31, 2019].

It’s hard to imagine a more perfect example of anarcho-tyranny than a government incapable of protecting its own border or facilities but eager to punish those expected to accomplish an impossible mission.

Of course, there’s a rationale why speech must now be policed—to stop “radicalization.” The YouTube purge did not come out of nowhere. The MSM has been relentlessly campaigning against YouTube supposedly “radicalizing” people [YouTube recommendation algorithm audit uncovers paths to radicalizationby Khari Johnson, VentureBeat, August 28, 2019].

But what journofa really mean by “radicalized” is “voting in a way we don’t like.” This explains the strange American focus on Brazil and President Jair Bolsonaro [How YouTube Contributed to Radicalization in Brazilby Nancy LeTourneau, Washington Monthly, August 14, 2019].

The implicit premise, gradually becoming more explicitly voiced by journofa and tech oligarchs, is that only certain people should be permitted to speak. This is also why so many journalists responded like someone had committed lèse-majesté when President Trump’s allies began scrutinizing their social media accounts. They truly believe they should be beyond criticism and should oversee what we say, write, and hear.

What’s particularly terrible about this situation is how arbitrary and random it is. “Radicalization” is in the eye of the beholder. To an Obama voter in 2004, something like “Drag Queen Story Hour” would be a ridiculous fever dream from the Christian Coalition. Today, opposing it will get you labeled a bigot [Crowds rally for Drag Queen Story Hour: ‘It just shows how far we’ve come,’ by Marcella Corona, Reno Gazette-Journal, July 20, 2019]. If you oppose it too energetically, it might spark a hit piece and that’s your job.

Words and symbols can also be labeled “hateful” retroactively. A month ago, “kritarchy” was an objective term that referred to “rule by judges.” Today, it’s an anti-Semitic slur because journalists simply declared it so.

In Utah, an interracial couple who brought a Betsy Ross flag to a soccer game was threatened with ejection. The stadium management said the flag was a symbol of “hatred, divisiveness and/or intolerance, whether intentional or otherwise” [Controversy erupts over Betsy Ross flag at RSL soccer gameby Lauren Steinbrecher, Fox 13, August 29, 2019]. Yet nobody thought this until Colin Kaepernick declared it so because of its “connection to an era of slavery”–which, of course, could be said about anything related to the Founding.

The System’s arbitrary nature makes it even more dangerous. Already, websites have been stripped of payment processors or access to PayPal (VDARE among them) after attacks by journalists and “nonprofits” like the Southern Poverty Law Center and the Anti-Defamation League. The loss of a YouTube account can mean the end of a creator’s career. Some individuals have been banned from Airbnb or Uber or have lost their personal PayPal accounts, not because of any violation of terms of service, but because of an unknown ideological test. This is the equivalent of the gas company cutting off any California residents who voted for Proposition 187.

Don’t laugh—it’s coming.

You just don’t know what will be decreed offensive–or for that matter, beyond criticism–a year from now. You don’t know if your YouTube account will be banned or not because the terms of service are meaningless. If you lose your PayPal, your bank account, your web domain, or some other necessity, there’s no appeal and there’s no objective standard.

The cuckservative cop-out “Build your own platform” has turned into “build your own web hosting,” “build your own servers,” and “build your own banking system.”

Will this end with “build your own country”?

The obvious implication: if dangerous individuals must be depersoned and “radicalizing” videos banned, ordinary people cannot be trusted with political power either. They shouldn’t be allowed to vote because they’re too easily manipulated. It would be more honest to simply let the corporate heads of Facebook, Google, and Twitter pick the next president (with the heads of the SPLC and the ADL given power to veto).

Yet that would make what’s happening too obvious. The ritual of voting gives the System the veneer of legitimacy–even though, as Ann Coulter points out, what we vote for bears no resemblance to the policies we actually get.

“Authoritarian” political systems have one key virtue compared the American system: They don’t disguise who has control. We know that Vladimir Putin in Russia and Xi Jinping in China are, if not fully sovereign, at least operating at the nexus of political power.

In contrast, President Trump does not seem to run his own administration, let alone the country. Instead, the power to shape opinion, to make and end careers, and to command who is and isn’t accountable to the law lies in the hands of tech oligarchs, far-left journalists, and wealthy “nonprofits.” It is effective precisely because it eschews the symbols of power for the reality. Its tyranny is even more insidious for that reason.

I’m tired of hearing warnings about Silicon Valley’s upcoming Social Credit system. [Uh-oh: Silicon Valley is building a Chinese-style social credit system, by Mike Elgan, FastCompany, August 26, 2019] I’m already living under it.

It’s almost enough to make one wish for a Politburo. At least the people in Hong Kong know what to tear down.


Tyler Durden

Tue, 09/10/2019 – 18:25

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Canada’s Trudeau Expected To Kick Off Federal Election Campaign Wednesday

Canada’s Trudeau Expected To Kick Off Federal Election Campaign Wednesday

Now that the controversy over Prime Minister Justin Trudeau’s attempt to interfere in an investigation of a Quebec-based engineer firm has finally died down, the PM is expected to kick off federal elections on Wednesday, the Globe and Mail reports, citing sources from within Trudeau’s Liberal Party.

Trudeau will visit Governor-General Julie Payette at Ottawa’s Rideau Hall on Wednesday morning to ask that she dissolve Parliament and launch the official campaign season. Per Canada’s fixed-date election law, federal elections will be held on Oct. 21.

According to the CBC, Trudeau will visit the governor general at 10 am ET.

Trudeau and his rivals have rallies planned for Wednesday to mark the kick-off of campaign season. Trudeau is expected to hold a rally shortly after the campaign launch. Afterwards, Trudeau will board the Liberal Party’s plane to start campaigning around the country.

Conservative leader Andrew Scheer will hold a “rally-style” event in Trois-Rivieres, Quebec on Wednesday morning shortly after Parliament is dissolved. Then he will make his way to the Ontario riding of Vaghan-Woodbridge.

Canada’s New Democratic Party soft-launched its campaign on Sunday with a rally in Toronto. NDP leader Jagmeet Singh will travel to London, Ontario on Wednesday before spending the week criss-crossing Greater Toronto and Southwestern Ontario in his new campaign bus.

Green Party leader Elizabeth May will launch her campaign in British Columbia, her home province (both Green MPs represent districts on Vancouver Island).

Scheer and Singh will be fighting their first campaigns as party leaders.

Trudeau is launching campaign season one day before the first debate in Toronto, where every party leader will participate except for Trudeau, who is still uneasy about the scandal that nearly toppled his administration earlier this year.

The Liberals, who control the government, have 177 MPs in the 338-seat Canadian House of Commons. Conservatives have 95 MPs, while the NDP has 39 MPs. Meanwhile, there are 10 Bloc Québécois MPs, 2 Green MPs, and 1 People’s Party of Canada MP, one Co-operative Commonwealth Federation MP, 8 independents and 5 vacant seats.

Trudeau’s Liberals will be seeking a second four-year mandate. During the campaign, they’re expected to tout the party’s accomplishments on reducing child poverty and creating jobs, while hoping to sidestep criticism over the SNC-Lavalin ethics scandal.

The most recent CBC poll shows Liberals and Conservatives neck-and-neck at 34% each.


Tyler Durden

Tue, 09/10/2019 – 18:05

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Once Again, Climate Warriors Rescued From Their Ship Trapped In Polar Ice

Once Again, Climate Warriors Rescued From Their Ship Trapped In Polar Ice

Authored by Thomas Lifson via The American Thinker,

Warmists never learn!

The conviction that global warming is melting ice in the polar regions has once again led climate warriors into danger and the need for rescue.  The MS Malmo, a Swedish-registered ship, was just rescued after being trapped in ice, and its passengers airlifted to safety.  Get a load of what it was doing, via Maritime Bulletin (emphasis added):

Arctic tours ship MS MALMO with 16 passengers on board got stuck in ice on Sep 3 off Longyearbyen, Svalbard Archipelago, halfway between Norway and North Pole. The ship is on Arctic tour with Climate Change documentary film team, and tourists, concerned with Climate Change and melting Arctic ice.

 All 16 Climate Change warriors were evacuated by helicopter in challenging conditions, all are safe. 7 crew remains on board, waiting for Coast Guard ship assistance.

MS Malmo in warm waters in 2012 (photo credit: ArildV).

Haven’t we heard of something like this before?  

Oh, yeah – I wrote this five and a half years ago:

Warmist dupes and true believers in the media are having a very hard time with the hilarious spectacle of a ship of literal fools who were so deluded by the warmist cult as to believe it was safe to venture into the Antarctic waters in a vessel that was not an icebreaker. The “scientific expedition” was intended to document the comparative paucity of ice in the area first explored by Douglas Mawson a century ago.

As nearly everyone connected to the media on the planet now knows, the Spirit of Mawson voyage, as the organizers dubbed their chartered Russian ship the MV Akademik Shokalskiy, became stuck in ice and needed rescue. Adding to the comedy, the Chinese icebreaker that rescued them is now itself stuck in the ice that was supposed to be melting.


Tyler Durden

Tue, 09/10/2019 – 17:45

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Trump Says Tariffs Are Driving American Businesses Out of China. Actually, 87 Percent Plan To Stay.

As it has become increasingly obvious that the costs of the trade war are falling on American consumers and businesses, President Donald Trump and his supporters have taken to arguing that even if Americans are being hurt, China is being hurt worse.

Usually, this takes the form of a claim that businesses are fleeing China to avoid the costs of the tariffs.

But like many other claims made by the Trump White House regarding the trade war, this one appears to be false—or at least way overstated. Foreign investment in China has not declined since the start of the trade war, according to Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics (PIIE), a trade-focused think tank. In fact, the growth of foreign investment in China has increased by about 3 percent on an annualized basis—about the same rate as in the years before the trade war started—since mid-2018 when Trump put the first round of tariffs on Chinese imports.

“Despite U.S. tariffs on China’s exports to the United States, it appears, at least so far, that multinational firms, including those based in the United States, continue to find China an attractive environment for new investment,” writes Lardy in a post published Tuesday on the PIIE blog. “Thus, Trump’s claim that an exodus of foreign firms will force China to capitulate to US demands to settle the trade war is wishful thinking at best.”

Lardy’s findings track with what the U.S.-China Business Council, an industry group that represents companies doing business in both countries, reported in August. In a survey of its members, the group found that 87 percent had not moved out of China and did not have any plans to do so. That was down from 90 percent in a similar survey conducted a year earlier, but that slight decrease is a far cry from the Trump administration’s claims that China is hemorrhaging businesses.

To the extent that businesses are trying to relocate supply chains outside of China, the main beneficiaries are countries like Vietnam and Mexico—not the United States. And such relocations were already ongoing before the trade war, according to A.T. Kearney, a manufacturing and trade consulting firm whose annual “Reshoring Index” measures domestic manufacturing of consumer goods against imports of the same products from 14 lower-cost countries in Asia. Vietnam’s exports to the United States have doubled since 2013, for example, but the rate of growth skyrocketed during the first quarter of 2019.

Relocating out of China is a costly and complicated process—one that many businesses may be hesitant to undertake when there is so little certainty about trade policy. For American companies doing business in China, it probably makes more sense to just absorb (or pass along to consumers) the costs of the tariffs and hope things get better soon.

“If a manufacturer has to source different parts from different countries, that’s not just as simple as picking up the phone and saying ‘do you have this part and can you send me 500 of them,'” John Kirchner, executive director of congressional and public affairs for the U.S. Chamber of Commerce, explained last month. “It’s a long, expensive process for employers and businesses to change up their supply chains.”

And it’s a process that makes even less sense for American businesses that are actively engaged in making products for Chinese consumers. As Lardy has pointed out, “a large share of foreign firms in China, especially U.S. firms, are there primarily to produce goods to sell on China’s still rapidly growing domestic market.”

Once again, it turns out that international economics are more complicated—and more difficult to design—than the president seems to think.

Then again, Trump does appear to understand that on some level. After all, if the tariffs were having their desired impact, he wouldn’t have to “hereby order” American companies to stop doing business with China.

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Britain Furious Iran Tanker Broke ‘Promise’ Not To Sell Its Oil To Syria

Britain Furious Iran Tanker Broke ‘Promise’ Not To Sell Its Oil To Syria

Britain has slammed Iran for what it says is a breach in assurances regarding the previously detained Grace 1/Adrian Darya 1 tanker. Specifically a condition of the vessel’s release from UK/Gibraltar captivity last month was that it would not offload its 2.1 million barrels of Iranian oil to Syria in violation of EU sanctions. 

But the UK can do little beyond merely issuing a formal complaint to the United Nations, which it plans to do next month, according to Reuters. London was also reported to have summoned Iran’s ambassador on Tuesday to condemn the move

Image via EPA-EFE

“Iran has shown complete disregard for its own assurances over Adrian Darya 1,” foreign minister Dominic Raab said in a statement. “This sale of oil to (Syrian President Bashar al-Assad’s) brutal regime is part of a pattern of behavior by the Government of Iran designed to disrupt regional security.”

The diplomatic row comes days after over the weekend Iran’s foreign ministry confirmed the tanker had unloaded its valuable cargo, estimated at $130 million in crude, “on the Mediterranean coast,” according to state media. Just prior the Iranian tanker was observed within a few nautical miles of Syria’s coast via satellite images. 

“Iran’s actions represent an unacceptable violation of international norms,” the UK statement said.

However, we should point out it’s also not within “international norms” – indeed it’s unprecedented – for Royal Marines to raid a foreign vessel in international waters at the bidding of Washington, which is precisely what happen when the tanker was detained in the first place. 

Currently, Tehran is rumored to be preparing the release the British-flagged Stena Impero, captured in the Strait of Hormuz on July 19 in retaliation for Britain’s prior capture of the Grace 1 off Gibraltar on July 4.

British-flagged Stena Impero, via Mizan News Agency/ Reuters

Iranian officials were quoted early this week on state TV as saying the British vessel is “undergoing the last legal procedures” and will hopefully be released “in the near future.”

It remains that though the UK will make its fury known through diplomatic channels, it doesn’t have any chips to play, and the reality is its initial military seizure of the Grace 1 has clearly backfired


Tyler Durden

Tue, 09/10/2019 – 17:25

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Not-So-Shocking Poll: Americans Hate The Government Almost As Much As They Hate Big Pharma

Not-So-Shocking Poll: Americans Hate The Government Almost As Much As They Hate Big Pharma

Authored by Mac Slavo via SHTFplan.com,

In a new and not shocking poll, Americans said they hate the government almost as much as they hate big pharma. Considering both are in each other’s back pocket, that makes complete sense and no one should be surprised by this.

America hates big pharma and the government.  No surprise there. But the pharmaceutical industry is hated slightly more. It ranked last in favorability among Americans, according to a new poll conducted by Gallup. This year marked the lowest net positivity rating (the difference between people who say they like the industry and those who dislike the industry) that the pharmaceutical industry has had since Gallup started polling in 2001.

 Big Pharma’s -31 net positivity rating was so low, only a handful of industries had been ranked lower. Other hated sectors include the federal government, and oil and gas companies

America’s distaste for the scandal-plagued pharmaceutical industry isn’t without reason. Earlier this year, Congress grilled pharma leaders for the high cost of prescription drugs. An Oklahoma judge recently ordered Johnson & Johnson pay $572 million for its role in the opioid epidemic. Novartis and other major pharma companies stopped developing life-saving medicine for lack of profit. –Middle Town Press

The federal government had been last or tied last on Gallup’s poll since 2011. This year, it ranks as the second least favorable industry. They were close to as hated as Big Pharma with a net positivity rating of -27.  With the increasing levels of authoritarian controls and demands for people to give up their liberty and freedom in exchange for a police state, it really shouldn’t come as a surprise.  Humans were not meant to be slaves and those in the United States may slowly be waking up to the reality they’ve found themselves in.

Hopefully, the government and industries that it protects, such as Big Pharma will never recover and only see their rating drop. It’s easier to enslave people when they are addicted to drugs and that addiction fuels Big Pharma’s profits. It’s a neverending circle of profits for Big Pharma and death and enslavement for everyone else.


Tyler Durden

Tue, 09/10/2019 – 17:05

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Trump Says Tariffs Are Driving American Businesses Out of China. Actually, 87 Percent Plan To Stay.

As it has become increasingly obvious that the costs of the trade war are falling on American consumers and businesses, President Donald Trump and his supporters have taken to arguing that even if Americans are being hurt, China is being hurt worse.

Usually, this takes the form of a claim that businesses are fleeing China to avoid the costs of the tariffs.

But like many other claims made by the Trump White House regarding the trade war, this one appears to be false—or at least way overstated. Foreign investment in China has not declined since the start of the trade war, according to Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics (PIIE), a trade-focused think tank. In fact, the growth of foreign investment in China has increased by about 3 percent on an annualized basis—about the same rate as in the years before the trade war started—since mid-2018 when Trump put the first round of tariffs on Chinese imports.

“Despite U.S. tariffs on China’s exports to the United States, it appears, at least so far, that multinational firms, including those based in the United States, continue to find China an attractive environment for new investment,” writes Lardy in a post published Tuesday on the PIIE blog. “Thus, Trump’s claim that an exodus of foreign firms will force China to capitulate to US demands to settle the trade war is wishful thinking at best.”

Lardy’s findings track with what the U.S.-China Business Council, an industry group that represents companies doing business in both countries, reported in August. In a survey of its members, the group found that 87 percent had not moved out of China and did not have any plans to do so. That was down from 90 percent in a similar survey conducted a year earlier, but that slight decrease is a far cry from the Trump administration’s claims that China is hemorrhaging businesses.

To the extent that businesses are trying to relocate supply chains outside of China, the main beneficiaries are countries like Vietnam and Mexico—not the United States. And such relocations were already ongoing before the trade war, according to A.T. Kearney, a manufacturing and trade consulting firm whose annual “Reshoring Index” measures domestic manufacturing of consumer goods against imports of the same products from 14 lower-cost countries in Asia. Vietnam’s exports to the United States have doubled since 2013, for example, but the rate of growth skyrocketed during the first quarter of 2019.

Relocating out of China is a costly and complicated process—one that many businesses may be hesitant to undertake when there is so little certainty about trade policy. For American companies doing business in China, it probably makes more sense to just absorb (or pass along to consumers) the costs of the tariffs and hope things get better soon.

“If a manufacturer has to source different parts from different countries, that’s not just as simple as picking up the phone and saying ‘do you have this part and can you send me 500 of them,'” John Kirchner, executive director of congressional and public affairs for the U.S. Chamber of Commerce, explained last month. “It’s a long, expensive process for employers and businesses to change up their supply chains.”

And it’s a process that makes even less sense for American businesses that are actively engaged in making products for Chinese consumers. As Lardy has pointed out, “a large share of foreign firms in China, especially U.S. firms, are there primarily to produce goods to sell on China’s still rapidly growing domestic market.”

Once again, it turns out that international economics are more complicated—and more difficult to design—than the president seems to think.

Then again, Trump does appear to understand that on some level. After all, if the tariffs were having their desired impact, he wouldn’t have to “hereby order” American companies to stop doing business with China.

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Jamie Dimon On The End Of Trading: “The Battle Is More In The Tech World Than In Having Brilliant Traders”

Jamie Dimon On The End Of Trading: “The Battle Is More In The Tech World Than In Having Brilliant Traders”

The world of trading, as generations of traders knew it, is over, and it took a timestamp from Jamie Dimon to make it official: “The battle is more in the tech world at this point than in having brilliant traders.”

And so, in a world in which being a better trader – i.e. outsmarting everyone else – no longer matters as the market is now hopelessly broken by central banks, and instead just speed and the ability to frontrun orderflow is relevant, it is no surprise that JPMorgan was reserved in its Q3 revenue outlook, which while set to rise 10% in Q3 – only due to a base effect – will continue the recent trend of disappointing trading revenue

“We’re not jumping for joy,” JPM CEO Jamie Dimon said Tuesday during an investor conference in New York, quoted by Bloomberg. The 10% gain is only possible because Q3 2018 was very weak; on a sequential basis, the Q3 2019 revenue will be a decline of about 10% versus the already disappointing second quarter, Dimon said.

Other banks are set to be even worse: Citi’s trading revenue is set to drop this quarter amid the brief bout of volatility that gripped markets in August, CFO Mark Mason said Monday; Bank of America’s fixed-income trading revenue will likely be down “a little bit,” while equities trading has done well, COO Tom Montag said.

Over the past decade, Wall Street trading desks have transformed into deserted ghost towns, struggling to keep up with their electronic peers amid an unprecedented shift to cheaper, more efficient passive investing; at the same time struggles among hedge funds and moves to cheaper electronic trading have made banks’ securities units less profitable. According to Bloomberg, the five biggest U.S. banks saw a collective $5 billion drop in trading revenue in the first half of the year after an 8% slide in the second quarter and a 14% decline in the first three months of the year.

This is just the start: according to Dimon, margins will continue to drop across the financial sector as more trades move to electronic platforms, and as “trading” as we once knew it, is no more.


Tyler Durden

Tue, 09/10/2019 – 16:45

via ZeroHedge News https://ift.tt/34Dd5WH Tyler Durden