ללא מחבר No Author

Edward Snowden: How Your Cell Phone Spies on You

Paul Krugman on Tariffs: “Oops!”

Gary North – October 30, 2019

Paul Krugman is the best-known Keynesian economist in the United States. He won the Nobel Prize. He has a regular column in The New York Times.

Recently, he wrote an article for Bloomberg. Because Bloomberg has a paywall, the public normally could not get access to Krugman’s most recent article. So, his admission of a blunder 25 years ago would not be not available to the general public. The headline declares: What Economists (Including Me) Got Wrong About Globalization. The subhead explains: “The models that scholars used to measure the impact of exports from developing countries in the 1990’s underestimated the effect on jobs and inequality.”

The good news is this: MSN has reproduced the article here. I get to have some fun at his expense. I get to explain his thinking. But before I analyze his article, I want to review the basics of the economic and philosophical case in favor of free trade.

THE LOGIC OF FREE TRADE

The case for free trade across borders is conceptually identical to the case for free trade inside borders. I want to make this point clear from the beginning.

Let us say that two men, Brown and Smith, trade with each other. Each of them specializes in a particular form of production. Each of them finds that it is more profitable for him to specialize than to be a generalist. Through the agency of the free market, the two men can exchange money with each other, and each of them gets more money by specializing in production. There is nothing radical about this concept. It goes back to Adam Smith and The Wealth of Nations (1776).

There is a third man, Jones. He specializes in the production of goods that Brown specializes in. But he is out of the running. His prices are too high. The quality of his products is too low. Smith doesn’t consider buying anything from Jones.

Because Smith, Brown, and Jones live inside the same geographical borders, there is nothing that Jones can do about the fact that he doesn’t sell anything to Smith. Anyway, there is nothing with respect to barriers at a border. There is no border. He can find other ways for the government to intervene in order to restrict Brown’s ability to sell to Smith, but he cannot do anything about it with respect to a border.

Jones’ inability to sell to Smith does not get counted in any government-funded survey. He has been out of the running for so long that his lack of income due to his inability to sell anything to Smith is not counted by the government or anybody else. Jones is what we call an also-ran. He is a loser in the competitive marketplace. He needs to go into another line of work. Or maybe he has to find customers who have not heard about the tremendous advantages of buying from Brown.

A fourth man then comes along, bringing an offer to Smith. His name is Wong. He lives in China. There are invisible legal barriers between Wong and Smith: two national borders. These borders, in and of themselves, do not favor either Wong or Smith. Yet.

Smith finds that Wong’s products are even better than Brown’s. So, he stops buying from Brown. He decides that he prefers to trade with Wong.

Brown is now out of the running. He loses money. Because he used to make money by selling to Smith, this reduction in income is counted by the government in its statistics-gathering. But the statisticians still ignore Jones, who was never in the running.

Brown is outraged by Wong. He had a good deal going by selling to Smith. He doesn’t think he can sell to any of Wong’s peers in China. But he sees an opportunity. If he gets together with Jones, the two of them can pressure the government to erect tariff barriers (sales taxes) that increase the costs of Wong’s goods inside the United States. Brown thinks to himself: “That’ll teach that gook a lesson.” But, understanding the terrible dangers of hate speech these days, he keeps his thought to himself.

After the tariffs are imposed by the government, Wong is a loser. He doesn’t sell as many goods to Smith as he did before. This means he cannot get access to as many dollars — his profits from selling to Smith. That means he cannot buy as many goods from somebody in the United States who is exporting goods to China.

The statistics will now indicate that Brown is making money again. Things will look much better statistically for Brown. Jones, still a loser, won’t make any money selling to Smith. He hoped he might, but he won’t. But maybe he can sell to somebody else who has not heard of Brown, and who will not be able to afford anything sold by Wong.

The case for free trade is the case for freedom. The case for free trade is the right of anybody to offer his goods and services for sale to anybody else. Here is the logic of the free market, which is a gigantic auction: “high bid wins.” This is the logic of free-market economics. It has to do with individuals making decisions about whether to exchange goods and services with each other.

An invisible barrier known as a national border has nothing to do with the logic of free trade.

TARIFFS ARE LIKE DIRT ROADS

Whenever barriers exist between traders, such as poor transportation facilities, this keeps people poorer than they would otherwise have been if the transportation facilities were better. When the transportation problems are overcome by new technologies, some people will get richer because they can trade with each other. But some of those people who previously prospered as a result of the poor transportation facilities will now lose market share. Their goods and services no longer meet the standards of those local individuals who now decide to buy from somebody far down the newly paved road.

Would any economist in his right mind worry about the loss of revenue that is sustained by a few local sellers because the previously dirt road is now paved? I hope not.

Unfortunately, Keynesian economists and supporters of tariffs do not understand the logic of economics. They do not understand that lowering a tariff barrier has the same effects as paving a road between two towns that previously had not traded much. Similarly, they do not understand that raising tariffs has exactly the same effects as dropping bombs on paved highways.

Tariffs reduce trade. Tariffs reduce liberty. Tariffs reduce the net income of people who previously had traded with each other.

Whenever somebody tells you that it is a good idea to raise tariffs, think of somebody who tells you that it would be a good idea for the federal government to send out bombers to drop bombs on America’s highways.

KRUGMAN’S BELATED ADMISSION

It is now time to analyze Paul Krugman’s semi-mea culpa.

Concerns about adverse effects from globalization aren’t new. As U.S. income inequality began rising in the 1980’s, many commentators were quick to link this new phenomenon to another new phenomenon: the rise of manufactured exports from newly industrializing economies.

Economists took these concerns seriously. Standard models of international trade say that trade can have large effects on income distribution: A famous 1941 paper showed how trading with a labor-abundant economy can reduce wages, even if national income grows.

And so during the 1990’s, a number of economists, myself included, tried to figure out how much the changing trade landscape was contributing to rising inequality. They generally concluded that the effect was relatively modest and not the central factor in the widening income gap. So academic interest in the possible adverse effects of trade, while it never went away, waned.

Let me put this in language that I hope you will understand. I return to my metaphor of bombing paved highways. I need to revise Krugman’s statements slightly. I want to take them from the 1990’s back to the 1950’s. I will also shift from tariffs to roads.

Concerns about adverse effects from paving roads aren’t new. As U.S. income inequality began rising in the 1940’s, many commentators were quick to link this new phenomenon to another new phenomenon: the rise of manufactured exports from newly industrializing towns down the road.

Economists took these concerns seriously. Standard models of paved highways say that trade can have large effects on income distribution: A famous 1941 paper showed how trading with a labor-abundant town can reduce wages, even if regional income grows.

And so during the 1950’s, a number of economists, myself included, tried to figure out how much the paved roads were contributing to rising inequality. They generally concluded that the effect was relatively modest and not the central factor in the widening income gap. So academic interest in the possible adverse effects of paved roads, while it never went away, waned.

Are you beginning to get the picture? Yet if Krugman were to read this article, I seriously doubt that he would get the picture. That is because he thinks in terms of aggregates, not individuals. He does not start with individual freedom of exchange. He starts with statistical aggregates based on statistics collected by force by the United States government. So do his Keynesian peers.

Continue reading…

From Gary North, here.

הרב בצאל אריאל: משמעות ההבדלים בין החלוקה היהודית ובין החלוקה הנוצרית בתנ”ך

Oct 25, 2019

החלוקה של פרקי התנ”ך המקובלת היום נעשתה ע”י נוצרים לפני כ-1000 שנה, הרבה שנים אחרי החלוקה של חז”ל.

החלוקה הנוצרית היתה מגמתית כדי לדחוף את האג’נדה ההוצרית להראות שהקב”ה עזב את היהודים בגלל דרגתם הרוחנית הירודה, כפי שרואים בהרבה דוגמאות.

לכן חשוב להתרגל ולהתחיל תהליך של חזרה לחלוקה החז”לית המקורית בלימוד שלנו בתנ”ך.

(כו’ תשרי תש”פ – 25/10/2019)

מאתר יוטיוב, כאן.

Is It Time for the Jews to Leave Europe?

For half a century, memories of the Holocaust limited anti-Semitism on the Continent. That period has ended—the recent fatal attacks in Paris and Copenhagen are merely the latest examples of rising violence against Jews. Renewed vitriol among right-wing fascists and new threats from radicalized Islamists have created a crisis, confronting Jews with an agonizing choice.

JEFFREY GOLDBERG

APRIL 2015 ISSUE

 “All comes from the Jew; all returns to the Jew.”

— Édouard Drumont (1844–1917), founder of the Anti-Semitic League of France

1. The Scourge of Our Time

The French philosopher Alain Finkielkraut, the son of Holocaust survivors, is an accomplished, even gifted, pessimist. To his disciples, he is a Jewish Zola, accusing France’s bien-pensant intellectual class of complicity in its own suicide. To his foes, he is a reactionary whose nostalgia for a fairy-tale French past is induced by an irrational fear of Muslims. Finkielkraut’s cast of mind is generally dark, but when we met in Paris in early January, two days after the Charlie Hebdo massacre, he was positively grim.

“My French identity is reinforced by the very large number of people who openly declare, often now with violence, their hostility to French values and culture,” he said. “I live in a strange place. There is so much guilt and so much worry.” We were seated at a table in his apartment, near the Luxembourg Gardens. I had come to discuss with him the precarious future of French Jewry, but, as the hunt for the Charlie Hebdo killers seemed to be reaching its conclusion, we had become fixated on the television.

Finkielkraut sees himself as an alienated man of the left. He says he loathes both radical Islamism and its most ferocious French critic, Marine Le Pen, the leader of France’s extreme right-wing—and once openly anti-Semitic—National Front party. But he has lately come to find radical Islamism to be a more immediate, even existential, threat to France than the National Front. “I don’t trust Le Pen. I think there is real violence in her,” he told me. “But she is so successful because there actually is a problem of Islam in France, and until now she has been the only one to dare say it.”

Suddenly, there was news: a kosher supermarket in Porte de Vincennes, in eastern Paris, had come under attack. “Of course,” Finkielkraut said. “The Jews.” Even before anti-Semitic riots broke out in France last summer, Finkielkraut had become preoccupied with the well-being of France’s Jews.

We knew nothing about this new attack—except that we already knew everything. “People don’t defend the Jews as we expected to be defended,” he said. “It would be easier for the left to defend the Jews if the attackers were white and rightists.”

I asked him a very old Jewish question: Do you have a bag packed?

“We should not leave,” he said, “but maybe for our children or grandchildren there will be no choice.”

Reports suggested that a number of people were dead at the market. I said goodbye, and took the Métro to Porte de Vincennes. Stations near the market were closed, so I walked through neighborhoods crowded with police. Sirens echoed through the streets. Teenagers gathered by the barricades, taking selfies. No one had much information. One young man, however, said of the victims, “It’s just the Feuj.” Feuj, an inversion of Juif—“Jew”—is often used as a slur.

I located an acquaintance, a man who volunteers with the Jewish Community Security Service, a national organization founded after a synagogue bombing in 1980, to protect Jewish institutions from anti-Semitic attack. “Supermarkets now,” he said bleakly. We made our way closer to the forward police line, and heard volleys of gunfire. The police had raided the market; the suspect, Amedy Coulibaly, we soon heard, was dead. So were four Jews he had murdered. They had been shopping for the Sabbath when he entered the market and started shooting.

I asked Finkielkraut a very old Jewish question: Do you have a bag packed?

France’s 475,000 Jews represent less than 1 percent of the country’s population. Yet last year, according to the French Interior Ministry, 51 percent of all racist attacks targeted Jews. The statistics in other countries, including Great Britain, are similarly dismal. In 2014, Jews in Europe were murdered, raped, beaten, stalked, chased, harassed, spat on, and insulted for being Jewish. Sale Juif—“dirty Jew”—rang in the streets, as did “Death to the Jews,” and “Jews to the gas.”

The epithet dirty Jew, Zola wrote in “J’Accuse …!,” was the “scourge of our time.” “J’Accuse …!” was published in 1898.

The resurgence of anti-semitism in Europe is not—or should not be—a surprise. One of the least surprising phenomena in the history of civilization, in fact, is the persistence of anti-Semitism in Europe, which has been the wellspring of Judeophobia for 1,000 years. The Church itself functioned as the centrifuge of anti-Semitism from the time it rebelled against its mother religion until the middle of the 20th century. As Jonathan Sacks, the former chief rabbi of Great Britain, has observed, Europe has added to the global lexicon of bigotry such terms as Inquisition, blood libel, auto‑da‑fé, ghetto, pogrom, and Holocaust. Europe has blamed the Jews for an encyclopedia of sins. The Church blamed the Jews for killing Jesus; Voltaire blamed the Jews for inventing Christianity. In the febrile minds of anti-Semites, Jews were usurers and well-poisoners and spreaders of disease. Jews were the creators of both communism and capitalism; they were clannish but also cosmopolitan; cowardly and warmongering; self-righteous moralists and defilers of culture. Ideologues and demagogues of many permutations have understood the Jews to be a singularly malevolent force standing between the world and its perfection.

Despite this history of sorrow, Jews spent long periods living unmolested in Europe. And even amid the expulsions and persecutions and pogroms, Jewish culture prospered. Rabbis and sages produced texts and wrote liturgical poems that are still used today. Emancipation and enlightenment opened the broader culture to Jews, who came to prominence in politics, philosophy, the arts, and science—Chagall and Kafka, Einstein and Freud, Lévi-Strauss and Durkheim. An entire civilization flourished in Yiddish.

Hitler destroyed most everything. But the story Europeans tell themselves—or told themselves, until the proof became too obvious to ignore—is that Judenhass, the hatred of Jews, ended when Berlin fell 70 years ago.

Events of the past 15 years suggest otherwise.

We are witnessing today the denouement of an unusual epoch in European life, the age of the post-Holocaust Jewish dispensation.

When the survivors of the Shoah emerged from the camps, and from hiding places in cities and forests across Europe, they were met on occasion by pogroms. (In Poland, for instance, some Christians were unhappy to see their former Jewish neighbors return home, and so arranged their deaths.) But over time, Europe managed to absorb the small number of Jewish survivors who chose to remain. A Jewish community even grew in West Germany. At the same time, the countries of Western Europe embraced the cause of the young and besieged state of Israel.

The Shoah served for a while as a sort of inoculation against the return of overt Jew-hatred—but the effects of the inoculation, it is becoming clear, are wearing off. What was once impermissible is again imaginable. Memories of 6 million Jewish dead fade, and guilt becomes burdensome. (In The Eternal Anti-Semite, the writer Henryk Broder popularized the notion that “the Germans will never forgive the Jews for Auschwitz.”) Israel is coming to be understood not as a small country in a difficult spot whose leaders, especially lately, have (in my opinion) been making shortsighted and potentially disastrous decisions, but as a source of cosmological evil—the Jew of nations.

An argument made with increasing frequency—motivated, perhaps, by some perverse impulse toward psychological displacement—calls Israel the spiritual and political heir of the Third Reich, rendering the Jews as Nazis. (Some in Europe and the Middle East take this line of thought to an even more extreme conclusion: “Those who condemn Hitler day and night have surpassed Hitler in barbarism,” the president of Turkey, Recep Tayyip Erdoğan, said last year of Israel.)

Continue reading…

From The Atlantic, here.