Ecuador
New President Daniel Noboa has started things off with a huge focus on law and order in response to the rise of organized crime in recent years (“The murder rate quadrupled from 2018 to 2022, while last year became the most violent yet with 7,500 homicides in the country of about 18 million people.”) . He has begun by announcing a referendum on new policies dealing with crime:
The referendum would seek approval from voters on lengthening prison sentences for serious crimes like homicide and arms trafficking, among others, as well for Ecuador's military to eradicate international criminal groups operating in the country, according to Noboa's letter to the court.
Noboa has also now announced the construction of two new maximum security prisons, with a not-exactly subtle nod to Bukele’s policies over in El Salvador:
He said the buildings would be exactly the same as a prison built by El Salvador President Nayib Bukele, who has led a controversial crackdown on gangs in his Central American country.
"The prisons will allow for the division, proper isolation of people," said the 36-year-old Noboa, who took office in November, speaking in a radio interview.
"For all the Bukele lovers, it is an identical prison," to those he has built, added Noboa.
To make even more room, Noboa says they will also deport over a thousand foreigners in prison back to the surrounding countries they came from (no word on those receiving countries feel about it). By design the new prisons will be on the coast, far away from the heart of the worst of the violence, in hopes it will make it harder for gangs to liberate their members.
Speaking of which, the leader of the notorious Los Choneros cartel was just liberated from prison by his fellow gang members. People are freaking out, probably understandably, and Noboa has declared a 60 day state of emergency for the leader to be found. Having only just come out of a prolonged state of emergency under Noboa’s predecessor Lasso, apparently it’s a state Ecuadorians must get used to. Given that the previous state of emergency gave the military powers of internal law enforcement, I guess it makes the whole referendum a little redundant.
The cartels have responded in kind with major prison uprisings holding over 130 prison staff hostage and ghastly footage of them breaking into a news broadcasting station and holding the staff hostage on live TV. President Noboa has now declared they are at war with the cartels and have detained hundreds of alleged gang members. It's been a really crazy few days.
How does the IRA affect Pharma rearch and development?
When we covered the Inflation Reduction Act a year ago some people expressed worries that the Medicare price setting provisions would discourage pharma research and development. Scott makes such a case in this old post. Yesterday the House Energy and Commerce Oversight and Investigation Subcommittee held a hearing to examine just that question titled “At What Cost: Oversight of How the IRA's Price Setting Scheme Means Fewer Cures for Patients" (The Republicans run the House so they get to narrative-set here). Normally EC in general and this subcommittee can be counted on to be fairly bipartisan but the focus was on a partisan bill, so there was a lot of calling the price setting “a mafia-style shakedown” vs rants about corporate greed and so forth. Anyway, I’ve tried to break it down into what I think were the relevant sections.
How does it work?
There are two broad categories of drugs, small molecules and biologics. The IRA offers patent protection periods of nine years for small molecules and thirteen years for biologics. After that Medicare basically gets to set the price; if companies refuse to negotiate / accept then they can be taxed on gross receipts starting at 65% and going up to 95%. There are is an “orphan drug” exclusions for drugs targeting under 200,000 people to ideally avoid reducing investment in rare diseases.The only drugs that will be targeted are the top ten most expensive drugs covered by Medicare, which generally means costing a minimum of $400 million annually.
This is projected to save Americans about $100 billion over the next ten years.
Right now only the first ten drugs are being targeted for negotiation, so we’re still very much in the beginning stages of understanding how this will work.
Will it Reduce Innovation?
This is really the main question and I didn’t feel like it was satisfactorily answered, but ultimately I wasn’t convinced that it will.
The basic idea is since after your patent period you’ll make way less profit, people will invest less. But, of course, you still get around a decade of being able to raise the price as high as the market can bear and all the profits that come with that. As was pointed out, the ten drugs being targeted right now have made between $15 and $57 billion each, so investors certainly got their nut. America is the only country to not negotiate prices and drug companies have median net earnings twice as high as non-drug companies, so needless to say they make quite a bit more profit than is normally needed to sustain an industry.
The Republican aligned witnesses say there have been 24 announcements of drug companies saying they are discontinuing research in certain categories. They were unclear what their sources were for a lot of claims (one guy said he did an internal poll in his company) but I managed to connect one claim to a consulting company called Vital Transformations that claims “Had the IRA been in place beginning in 2014, we estimate the reductions in revenue on the impacted drugs to be up to 40%. Because of this, between 24 and 49 therapies currently available today would most likely not have come to market and therefore not available for patients and their providers”.
The Democrat aligned witnesses point out that drug companies discontinue certain drugs all the time and it doesn’t mean it’s related to the IRA, even if it’s politically convenient for them to say so. They cite a Congressional Budget Office study (I’m more inclined to trust this than the Vital Transformations pdf tbh) that concluded drug innovation would only fall by 1% over thirty years. Brookings Institute seems to agree that the discrete announcements of drug discontinuations are not reflected in overall industry trends:
For the first form of investment, pandemic-era spending on the development of vaccines and therapeutics to address COVID-19 resulted in record investment in R&D in 2021 that remained essentially flat in 2022. In the first quarter of 2023, major pharmaceutical manufacturers such as Pfizer, GSK, Sanofi, Bayer, Gilead, AstraZeneca, and Novartis noted increases in their R&D spending, and little in the way of specific concerns were noted that the new price negotiation program would inhibit their company’s growth or investment in new therapies.
More recently, second quarter earnings calls by major publicly traded pharmaceutical companies describe continued positive projections for future earnings and product development. Most companies note that they are carefully assessing the implications of the prescription drug provisions of the IRA, yet they consistently express optimistic views about their longer-term future. For example, Novartis announced that expected future growth allow them to initiate an up-to $15 billion share buyback, while maintaining the flexibility for continued strategic bolt-on acquisition deals. Likewise, Johnson and Johnson completed a $8.5 billion share repurchase in the first half of 2023, and its CEO expressed excitement about future innovation and confidence in the near term and longer-term performance of the firm. Similar sentiments were echoed by GSK, Bristol Myers Squibb, and AbbVie.
Will it reduce research in rare diseases?
The IRA has its “orphan exemption” for drugs that apply for rare diseases that affect small (<200,000) numbers of people. However, you can only apply to one rare disease to be eligible, if you have a drug for a common condition that later gets tweaked to target a rare disease, you don’t qualify, nor if you have a drug that treats multiple rare conditions. Some critics suggested this would reduce investment in multiple rare drug therapies. The category of drugs that target multiple rare diseases is small (about 7% of a random sample) and rarely gets anywhere near the threshold of sales that would qualify you to be a top ten drug targeted by the IRA - anything under $200 million is automatically exempt and your average hovers realistically around $400 million.
Which raises the question: why do we even have the orphan exemption at all when we’re by definition only talking about blockbuster drugs? In this study, the drugs that would qualify for the orphan exemption were similarly profitable as qualifying drugs for common diseases, which is kind of the only result you would expect.
Will it delay the release of drugs, specifically rare cancer drugs?
This was a specific claim because the CEO of Roche Genetech said he would delay the release of an ovarian drug because it would lose out more under the IRA. The counter-argument was basically the same as before about drugs being discontinued all the time, and decisions about whether to bring a drug to market or not are usually made years in advance for broader market reasons. The moment you get a patent your years of exclusivity are ticking away, so no one would choose to lose all private and public sales on an-already finished drug specifically because of expected reduced public profits thirteen years later. If anything the introduction of a limited time window for max profits would encourage companies to release drugs faster to take advantage of that window. In general the incentive also remains to do research in rare cancers because you need to pass a lower threshold of efficacy to get a drug approved.
Why would we expect R&D to be first on the chopping block?
One witness also pointed out that because pharma spends only 10-20% on R&D and 20-30% on marketing, plus have pretty gonzo stock buybacks, etc, it’s not clear that a reduction of profits would have to come from income. I’m not sure about marketing - presumably they’re already spending an amount they think brings in more sales and funds the business. However, the witness also cited that the five biggest pharma companies spent $13 billion more on shareholder compensation than they did on R&D, which is much less obviously connected to direct business success. As mentioned above, drug companies have median net earnings double non-drug companies, so there is still likely more than enough to still handsomely award investors. Also, in a time where they will be making less on existing drugs, if anything it makes more sense to invest in new drug lines.
Why the thirteen year vs nine year difference?
One witness was just hellbent on talking about how small molecules were discriminated against by the four year gap in patent protection, to the point where he would just insert it no matter what he was being asked. You can read the argument written out here. They replied by quoting “the industry” (the pharma industry, I guess?) saying that Biologics are more capital intensive, take longer to research, produce, and bring to market, and have overall higher risk, so it makes sense to give them more incentive. I’m not sure how the witness’ predictions square with the fact that small molecules mergers and acquisitions triple in the year following the IRA vs the year preceding it, or that current forecasts than investment in small molecules is expected to double by 2031.
Do Americans or Europeans have better access to drugs?
Democrats pointed out that according to the Kaiser Foundation 1 in 4 Americans say they struggle to afford drugs, and 3 in 10 Americans report not taking prescriptions because they couldn’t afford them. Pretty bleak!
Republicans responded by referencing a Wall Street Journal article arguing that medicine approval is faster in the US and citing a study that said:
According to the Galen Institute, 89% of new medicines introduced between 2011 and 2018 were available in the U.S. compared to 62% in Germany, 48% in France and 40% in Ireland.
It’s worth debating that if you have a greater share of drugs on the market, but a larger portion of your population can’t afford them, it’s not totally clear who has better access.
How much does the government drive innovation?
Democrats pointed out that according to one study, almost all drugs (99.4%) approved in the last decade had NIH funding at some point in the process. Generally this means NIH handles the early, riskiest research, “de-risking” the field for private investment afterwards. Another 24% of drugs had NIH funding during late stage trials. ” Given that taxpayers are playing a large role in the R&D itself, they claim it seems improper to also expect taxpayers to pay sky high rates for the finished product. Since Republicans are proposing cutting the NIH budget by $2 billion, democrats accused them of not actually caring that much about innovation and mostly being schills for pharmaceutical lobbyists.
(continued from OP)
The Dutch Empire
The Netherlands is the strongest example of America forcing an empire into actually decolonizing. Why? Because the Netherlands is our greatest foe and must be destroyed at all costs we were fighting a prestige battle in southeast, first against Japan and then later against both the Soviet Union and the PRC, and support for decolonization was the currency that purchased regional alliances. Public opinion on Dutch repression had soured everywhere as well, within the American public and even within the other major colonial empires, and after the Indonesian nationalists crushed a communist rebellion they cemented their reputation as a potential anti-communist bulwark within the region. The Netherlands having outlived its usefulness and dragging down public opinion everywhere, America threatened to cut off Marshall Plan funds unless the Netherlands agreed to decolonization. America allowed the Dutch to keep West New Guinea for another little while and eventually encouraged them to pull out of there as well. Don’t worry though, we coup’d Indonesia’s anti-colonial leader shortly after and helped them genocide all the leftists.
Suriname negotiated directly with the Dutch for their independence; America was not involved.
The Belgium Empire
Rwanda, Burundi, and the DRC all achieved independence without American intervention. See below comment for more detail on the DRC.
The Portuguese Empire
In 1944 the US agreed to respect Portugal’s sovereignty over its colonial possessions in Africa and even restore its control over East Timor in exchange for gaining a military base on the Azores. Following the war Harry “I have always been an anti-colonialist” Truman, focused on Soviet containment, greenlit Portugal into the Marshall Plan and NATO and “never regarded the existence of the Portuguese colonial empire as an obstacle to the establishment and maintenance of good relations with Lisbon”. When India tried to kick Portugal out of its remaining enclaves, the Eisenhower Admin formally recognized those territories as Portuguese “provinces”.
As Soviet expansion in Africa spread, and the Portuguese repression of the Angolan rebellion grew to be an international embarrassment, the Kennedy Administration stopped selling them weapons, started voting in favor of unsuccessful UN Resolutions for Portugal to “consider” reforms in Angola, and started offering support to the UPA (later the FLNA) (notably, in their fight not against Portugal, but against the Communist Soviet backed MPLA).
This was short lived, however, during the Cuban Missile Crisis America tracked Soviet submarine movements using the Azores base, which further cemented its importance. Shortly Kennedy reversed course, allowed weapons shipments to be sold to Salazar in 62 and 63, barred American officials from communicating with Angolan rebels, and even sent Portugal aid packages. The US moving forward abstained in UN resolutions or voted in Portugal’s favor. Little changed with LBJ; under Nixon’s “Tar Baby Option” of not opposing the white minority governments in Southern Africa, a treaty was concluded in 1971 reestablishing American support for Portugal and supplying generous grants, loans, free military advisory officials and new weapons sales (against the will of Congress).
The Empire eventually ended in 74 not because of the US but the Carnation Revolution, in no small part driven by a population sick of being taxed and conscripted for colonial wars. The US was not involved in the coup and rather looked upon it warily as the possible beginnings of a Communist state. In the wake of the revolution “the United States, unlike the UN and the majority of Western European governments, did not exert significant pressure for rapid decolonization,” and even encouraged a two year transition period rather than the immediate independence demanded.
The Spanish Empire
The Americas won their independence from Spain with no intervention on the part of the US (who promptly took a bunch of Mexico’s newly independent territory). America fought against Spain in the 1898 war to “liberate” its colonies, and then just colonized them ourselves and ruled over them from afar for decades to come, often brutally suppressing their attempts at independence. We also later separately conquered and occupied for decades the former Spanish colonies of Nicaragua and the Dominican Republic, and otherwise coup’d any anti-colonial leader we didn’t like and frequently supported brutal dictators that would be our own puppets. In my opinion all this is near fatal to the idea that America opposed colonialism because we ideologically identified with the victims; we literally just were a colonial power ourselves.
Conclusion
Tl;dr There are two things America can’t stand in this world: anti-colonial leaders trying to deny our hegemony, and the Dutch.
America played the primary role in decolonizing Indonesia (including West New Guinea), may have played an important but uncertain role in Egyptian independence, and advocated half heartedly and unsuccessfully for the decolonization of the Portuguese Empire and British India, but mostly tolerated or supported both Empires. In situations where America supported decolonization, it looked much less driven by ideological dogmatism or anticolonial sentiment than by a desire to maintain a good reputation among other countries that could drift to the USSR and China. More frequently America continued to sustain diplomatic relations and military support for colonial empires and their successor states long after public opinon in Europe and the rest of the world had turned on them. The overwhelming majority of colonies earned their independence without American intervention but due to factors like sustained counterinsurgency, being too costly to maintain, dwindling public support, and dwindling benefit to the metropole. In other areas America literally just colonized countries ourselves.
It's worth noting that Nixon and LBJ were still really exceptional politicians in their own day and age as well, most people were nowhere near that competent. LBJ in particular was a generational talent who completely revitalized the way the Senate was run. Before he took charge as Majority Leader, if you read newspapers at the time the criticisms of the mid-century Senate sound very similar to the way we describe them today: ancient, sclerotic, committees full of people with scant domain experience; an institution overall incapable of getting anything done.
I've wanted to read Nixonland for a long time but I remember Scott saying he would do a review on it, so I held off, but I think that must have been years ago by now. Would be really interested in hearing a review from you.
Soriek
3mo ago
Ecuador
In the wake of the escape of a major cartel leader, accompanied by violent prison uprisings and a staff of newscasters being taken hostage on live TV, President Daniel Noboa has declared war on the cartels. A state of emergency has been stretched across the country and more than 1000 alleged gang members have been arrested. The cartels have responded in kind; a prosecutor investigating them was just assassinated right before i posted this even. Noboa has been not subtle at all that he’s hoping to copy El Salvador’s Bukele, so this is Bukele watchers’ opportunity to see what this looks like in a different country (assuming Noboa himself isn’t crooked, which is a big if).
My guess is: substantially different. Ecuador is much bigger than El Salvador, both geographically and in terms of population, and the bad guys don’t all tattoo their gang membership right on their face. More to the point, MS-13’s brutality I think causes people to overestimate their capacity. In reality, they’re basically a highly murderous but relatively small time, impoverished extortion racket. They go up to a civilian or store or whatever and demand protection money. Fighting a transnational cartel is a completely different thing. The gangs in Ecuador are vastly better financed and armed, and we have only to look at Colombia to get a quick comparison of what it looks like trying to fight that with every variety of tough on crime policy there is. On the other hand, the cartels are very recently established in Ecuador, so maybe they don’t have the same kind of systematic, built up entrenchment of the criminal world.
Soriek
5mo ago
Argentina
Javier Milei surprised the world not just by winning the Argentinian election, but by beating Economy Minister Sergio Massa by a commanding 12 points. I assume this now means he is assuredly the first elected anarchist-capitalist head of state in history. While the world has been paying more and more attention to his antics in the past month, the last few days have seen a wave of “who the heck is this guy?” Pictures of his cosplay past have come up alongside his juicier quotes, and photos of his fans wearing Chainsaw Man face masks at his rally.
So what happens now? I don’t think anyone knows but in my opinion, probably not much? Milei has a minority in Congress, which means he doesn’t have a mandate to push any of his incredibly ambitious reforms through. Libertad Avanza will work together with some members of Juntos por el Cambio, the center right party that endorsed him after the runoff, but many of their members have said they have no interest dealing with Melei at all. Even with all of their seats together (LA 35 + JxC 31) they would only have a two seat majority in the Chamber of Deputies. And it seems very unlikely they’ll be able to get anywhere near that much support from JxC.
He has promised to privatize as much of the Federal Branch as he can, which supposedly excludes the sizable Health and Education Ministries because they apparently operate at the provincial level. What remains at the federal level will be shrunk from 18 down to 8. Does he have the power to do all this without input from the legislative branch? It’s not really clear to me. Interested to hear if anyone else understands the situation better.
In a weird way this really is about communism vs capitalism, radical vs liberal, left vs center.
My understanding is the recent ancestors of the present Israelis bought the land from willing sellers fair and square
Contemporary Palestinian land ownership and sales were much closer to feudalism than capitalism (and early Israel much closer to socialism, fwiw). The landlords who were selling Palestinian land, often living in places as far flung as Beirut or Damascus, had themselves only the feeblest of legitimate claims to the property, having only recently acquired it through a crappy Land Reform bill that disenfranchised the peasantry.
The registration process itself was open to manipulation. Land collectively owned by village residents was registered in the name of a single landowner, with merchants and local Ottoman administrators registering large stretches of land in their own name. The result was land that became the legal property of people who may have never lived there, while locals, even those who had lived on the land for generations, became tenants of absentee owners.
The Palestinian peasantry themselves never recognized those claims and in many cases were entirely unaware of who exactly had even claimed their land:
The Ottoman Land Code of 1858 "brought about the appropriation by the influential and rich families of Beirut, Damascus, and to a lesser extent Jerusalem and Jaffa and other sub-district capitals, of vast tracts of land in Syria and Palestine and their registration in the name of these families in the land registers"....
In the 1930s, most of the land was bought from landowners. Of the land that the Jews bought, 52.6% were bought from non-Palestinian landowners, 24.6% from Palestinian landowners, 13.4% from government, churches, and foreign companies, and only 9.4% from fellaheen (farmers).
Of course, direct sales were but a small part of the Palestinian land that was ultimately acquired by Israel anyway.
Ethiopia & Somalia
Most people here likely know, but Somalia is a divided country. The northern, formerly British administered section is a breakaway state that has been functionally independent since the Somali Democratic Republic collapsed in 91. Nobody recognizes Somaliland, and Somalia proper claims the whole territory, but really only governs the fractious and unstable southern part, formerly administered by the Italians. Somaliland is much more functional and has no interest in reuniting with its anarchic former partner, but any country making direct diplomatic or trade deals with Somaliland is highly controversial, especially in Africa where many other nation states also have secessionist groups or provinces.
So imagine the outrage now that Ethiopia has signed a memorandum of understanding recognizing Somaliland and giving them a stake in an Ethiopia airline if the latter country grants them use of one of the Somali ports and military bases. Obviously this is a little dicey for Ethiopia considering they are always dealing with secessionist groups, including with ethnic Somalis in their eastern Ogaden region. However, the deal fulfills their longstanding goal of regaining their landlocked country a path to the ocean, lost after the secession of Eritrea. Abiy has been talking about the whole path to the ocean thing for a while and his neighbors interpreted it as him signaling willingness to invade them to gain that path, so honestly this is probably the best possible outcome.
However, Somalia is of course furious about it and has categorically rejected the deal (isn’t there somebody you forgot to ask?) Ethiopia has not exactly been building good will with its neighbors lately, recently failing to establish a deal on water use over their GERD dam with Egypt and Sudan, so it’ll be interesting to see what the coming months bring.
Soriek
8mo ago
The CCP famously even spared and converted the last Emperor of China, who was widely considered to have gladly sold out his countrymen to the Japanese (and so was not merely hated for being a monarch).
In fairness, this was less about their philosophy on forgiveness (his wife, the empress, died in a CCP prison) and a very large part to do with them learning from the backlash the Bolsheviks experieced after killing the Romanovs.
There are some incredible, SNL-skit worthy scenes of Puyi trying to reintegrate to normal life and going to get an ID from the local government office that go somewhat like:
Bored DMV-esque Employee: Name?
Puyi: Yaozhi
Employee: Former occupation?
Puyi: Uhhh Emperor of the Celestial Kingdom of China
Employee: Haha no seriously though
Soriek
3mo ago
North Korea
Kim Jong Un says he no longer wants to reunify with South Korea:
North Korean leader Kim Jong Un said his country would no longer pursue reconciliation with South Korea and called for rewriting the North’s constitution to eliminate the idea of shared statehood between the war-divided countries, state media said Tuesday.
The historic step to discard a decades-long pursuit of a peaceful unification, which was based on a sense of national homogeneity shared by both Koreas, comes amid heightened tensions where the pace of both Kim’s weapons development and the South’s military exercises with the United States have intensified in a tit-for-tat.
Not that all that much progress was happening towards reunification before, but still I guess its newsworthy.
North Korea has also sent its Foreign Minister Choe Son Hui to Russia to meet with Russian Foreign Minister Sergei Lavrov. In the west this has raised suspicions on North Korea provided more weaponry for Russia in the Ukraine conflict.
Argentina
Milei has rapidly kicked into high gear, firing 5000 employees hired last year and signing a massive deregulation package via a “Decree of Necessity and Urgency”. The DNU contains 300 separate reforms on regulations and initiates the privatization of several government ministries, here’s a taste:
Prepare all state-owned companies to be privatized
Authorize the shareholder control of Aerolineas Argentinas to be partly or completely transferred to private parties
Deregulate satellite Internet services to allow SpaceX’s Starlink to operate in Argentina
Eliminate price controls on prepaid healthcare plans
Eliminate the monopoly of tourism agencies to deregulate the sector
Repeal the current Rent Law that limits price increases in a bid to normalize the real estate market
Repeal the current Land Law that limits ownership of land by foreigners in a bid to promote investments
Scrap the current Supply Law that allows the government to set minimum and maximum prices and profit margins for goods and services of private companies
Eliminate the Economy Ministry’s price observatory to “avoid the persecution of companies”
He's also proposed some other interesting, less libertarian ideas, like a cap and trade system, and has left the welfare system much less touched than everything else (he actually doubled payments, though my understanding is this will make them more or less the same following the recent devaluation). There are apparently some questions about whether the massive DNU is even legal, but it’ll only be overturned in both chambers of Congress vote to reject it, though stuff can and will also be challenged in courts. Since Milei’s own party is a small minority, his ability to push any legislation through Congress depends on almost all of the center right Juntos por el Cambio working together with him. Many of them have reservations botyh about him and about this omnibus, so between the legal battles and legislative holdouts it’s far from given that this will become actual policy. The IMF is apparently into it though, so if passed maybe it would raise the chances they’ll give Argentina another loan, probably necessary if they actually want to dollarize.
Milei had promised retaliation against protests that interfered with traffic, but fortunately the protests seem to have happened without major clash between law enforcement and civilians. Now that Milei has unveiled more sweeping measures, unions are discussing nationwide strikes.
Soriek
6mo ago
Yemen
Imagine declaring war on a sovereign nation and no one even notices. This is much the experience of the Houthis, who declared war on Israel Tuesday and started firing missiles to widespread same-day coverage from media behemoths such as amwaj.media, Indiatimes, and Greek City Times. This might seem like a bit of a joke (and probably largely is) given that the Houthis are a marginal fighting force and also over 1000 miles away from Israel, but they do actually have ballistic missiles capable of reaching that far. In fact, the Israeli Arrow air defense system claims to have already intercepted missiles they believe to have come from Yemen.
Regardless of Yemen’s own power level, this mostly feels a little unsettling as it's another domino leaning towards a larger regional war, though the Houthis should be understood as part of the same Iranian proxy network that includes Hamas and Hezbollah, which is different than a more traditional sovereign nation getting involved. Also interesting are the implications for Saudi Arabia, which has been normalizing relations with both Israel and the Houthis (and kind of sort of Iran) and is now in a crappy position for both:
Yemen has enjoyed more than a year of relative calm amid a U.N.-led peace push. Saudi Arabia has been holding talks with the Houthis in a bid to exit the war, as Riyadh focuses on economic priorities at home.
But Houthi missile and drone attacks on Israel have increased the risks of conflict for Saudi Arabia.
The most direct flight path for any drone or missile launched from Yemen passes over western Saudi Arabia near the Red Sea before flying over Jordan and into Israel.
The Saudi government communications office did not respond to a request for comment on the kingdom's concerns over Houthi attacks.
I believe this would also be the first time in US history the House will have removed a Speaker with a motion to vacate.
I was looking it up and I guess this is only the third time a motion to vacate ever happened in history. The last time was kind of similar to this, the right flank, led by Mark Meadows, rebelling against John Boehner in 2015. It was unsuccessful but he ended up resigning anyway.
The first time was in 1910 and the Speaker filed a Motion to Vacate against himself. Basically he was daring unruly representatives to challenge him publicly, and ultimately they fell in line. Couldn't be farther from our present situation.
Soriek
11mo ago
I’m surprised you couldn’t find any, I think some twenty-five people got pushed onto tracks in NYC last year with several casualties. There was also the widely publicized mass shooting last spring, which somehow everyone survived but is exactly the kind of “unstable person trying to kill people” story that sticks in people’s head.
Odds are still very low, but normal people don’t pull out the calculator and reason probabilistically when a crazy person starts yelling at them. Being trapped in an enclosed space with an aggressive, unstable person is pretty scary for most people, especially if they haven’t had years of exposure to combat situations like yourself.
Has anyone read Garrett Jones’ “The Culture Transplant” yet? (I haven’t)
I don’t read Scott’s actual blogposts much anymore, but I do read the links, and wanted to discuss Cato Institute Researcher Alex Nowratesh’s recent reviews of the book (1,2). They’re both just blogposts and not overly long so I’d recommend reading them, but I'll summarize the main points.
Jones argues that the “deep roots” of a culture determine economic growth, and that immigrant groups take those roots with them and thus shape the economies they travel to. Deep roots can be measured by SAT*, or “the length of time they have lived under a state (S), lived with settled agricultural (A), and their level of technology at a point in the past (T), [this formula] well predicts their GDP today". (“T" has an * because it’s more important and thus given more weight). However, there’s a lot of ways the deep roots position doesn't predict the things we would expect.
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“As Bryan Caplan pointed out, there are three big outliers in the deep roots literature: China, India, and the United States. China and India should be much richer, and the United States should be poorer. Three outliers usually aren’t an issue, except these are the three most populous countries in the world.” How useful is the SAT* model if it fully fails to account for a third of the planet?
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This is particularly bizarre when it comes to the United States, which is in the middle of SAT* rankings despite also being the richest country in the world. This suggests that the US would reap significant economic benefits from pulling in immigrants from countries much less developed and educated, such as Bangladesh, Vietnam, and Russia.
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Jones tries to salvage these three outliers by bringing up the importance of institutions, which is fair to say. But if Jones is arguing that the deep roots of immigrant culture shape institutions for the better or the worse, then if they can change institutions for the better at any time this is a huge point against his position: “Does China’s liberalization after the 1970s prove that deep roots were right all along, or does China’s current regression [to economic planning] show it was wrong?” Likewise, several European countries (Germany, Italy, Portugal, Spain) fairly suddenly adopted authoritarian regimes with statist economies then a few decades later turned into democracies with significantly liberalized economies, during periods where they did not experience much immigration. Things can change fast!
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We see the same difficulties when we observe Chinese immigrant groups abroad. Hong Kong and Singapore both have significantly less trust than mainland China (trust is one of Jones’ most important measures for how immigrants should impact culture and growth) but are of course both vastly richer. Hong Kong has near complete Chinese population dominance (96%), just like China, such that the effect of their deep roots should really be what defines their institutions, but instead Hong Kong is much richer than China. Singapore has less Chinese people (75%) than Hong Kong, but has a GDP per capita 76% higher! This is despite the fact that Singapore has a whopping foreign born percentage of 47%, and that their immigration has overwhelmingly come from countries with lower SAT* (which corresponded Singapore’s famous huge increase in growth).
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There are other odd ways the SAT* expectations don’t seem to add up. A deep roots paper Jones uses for building his theory calculates that an immigrant from China (high SAT*) would have a very slight negative impact on Britain whereas an immigrant from Sub-Saharan Africa (lowest SAT*) would have a slight positive impact. Likewise, Jones claims immigrants from Italy and Spain ruined the economy of Argentina, but both groups came from countries with higher SAT* than Argentina.
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Extending from this, one popular argument (I think I heard first from Bryan Caplan) was that immigrants might bring economic growth, but also vote for socialist economics which would cripple long run growth. But in Argentina, recent research suggests that the labor movement Jones credits with tanking the economy was not primarily a matter of immigration, but was driven more strongly by native urban workers. Nowratesh also points out that despite popular accusations of disproportionate immigrant participation in the early twentieth century American socialist movement (as measured by foreign language socialist magazines), “the greatest electoral success of the socialist party prior to World War I were in states like Nevada, Oklahoma, Montana, and Arizona - ethnically homogenous states with few foreign born residents”. Likewise, Jones himself has argued elsewhere that the rise of western dirigisme (Brexit, Trump, Le Pen, etc), were backlashes against immigrants by native voters. All of these suggest the major examples of statism were driven by natives, and immigrant predilection towards socialism shouldn’t be our concern - we can still reap economic growth as long as we don’t pick bad policies ourselves.
I’ll add my own objections:
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In the latter 1800s anglo-saxons in nonconformist sects were much more common in the economically interventionist Republican party, and ethnic white immigrant Catholics and Lutherans were much more common in the laissez faire democrat party. By the New Deal, those political parties continued to draw on majorities of those same ethnic groups, but they had switched policies, such that the Republicans were less economically interventionists and the immigrant-flush New Deal Democrats were extremely interventionist. Shouldn’t deep roots suggest more consistency in policy preferences?
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England remained overwhelmingly native British until relatively recently, yet went from a significantly laissez faire economy to an incredibly statist one, then back and forth again. You can argue that the larger, earlier transition from the 1800s to the 1900s was a matter of expanding voting rights, but the transition from mid-century labor dominance to Thatcherism to Brexit all happened with a fully enfranchised population.
In conc: if the percentage of high performing ethnic groups or SAT* does not actually reliably correspond to economic growth, and if ethno-cultural groups can change their policy preferences and institutions immensely in short spans of time, doesn’t this all point to a world where deep roots and immigration matter far less than your institutions?
Nowratesh also offers broader critiques about Jones missing relevant literature, mostly encompassing studies that hurt his thesis but also a few that agree with him. Nowratesh also points out that Jones depends a lot on measures of “trust”, but substantive research into building economic models for how trust actually impacts the economy is generally lacking. Not having read any of the literature, or Jones’ book, I can’t really offer much opinion or analysis here, but interested to hear from others who have. I don’t actually have a particularly strong opinion on immigration one way or the other.
Soriek
3mo ago
Taiwan
Taiwan held their latest election on Saturday with China’s presence breathing down the nation’s neck. The ruling Democrat Progressive Party was running on the strongest pro-independence platform whereas the KMT (successor of the form Chiang Kai-Shek dictatorship ruling party) ran on conciliating with China and the Taiwanese Peoples Party (TPP) ran on ignoring the China issue and focusing on Taiwan (previously Foxconn billionaire owner Terry Gou was running an independent campaign on really conciliating with China, but he dropped out). Despite China repeatedly saying they would consider a DPP victory provocative, voters handed the Democrats their third victory in a row. This will elevate current Vice President Lai Ching-te to the Presidency.
However, they will lack a majority in Congress and in fact will only have 51 seats to KMT’s 52. The really interesting result was the previously marginal Taiwanese People’s Party actually doubling its share of the vote from the 2020 election all the way up to 26.45%, drawn mostly from the youth vote, which will earn the party 8 seats in the legislature. Needless to say DPP will have to work together with at least some members of TPP to get anything done, which isn’t a bad thing. TPP won’t likely have any interest in DPP’s pro independence agenda, but a lot of that it rhetorical anyway - the DPP hasn’t made any serious moves in the previous two terms to move towards independence in any real way.
The real question will be how China reacts. They were apparently futzing around and removing preferential tariffs from Taiwanese goods as the voting drew nearer, so more trade war-esque saber rattling is conceivable, along with the same song and dance they do of flying jets around to get everyone worked up. The other country China has been inching closer to conflict with, the Philippines, wished President Ching-Te a public congratulations, which of course has also infuriated China.
Soriek
4mo ago
Yemen and the Red Sea
The Houthis have kept up their fight against Israel and managed to actually inconvenience everyone. Consistent attacks in the Red Sea have made merchant ships cautious about the shipping route, and have even encouraged vessels to take vastly longer routes all the way around the African coast. The costs for everything being shipped have, unfortunately, risen accordingly for consumers:
Keuhne+Nagel, a global logistics giant, said Wednesday that 103 container ships have diverted around Africa, a figure it expects to increase. Some oil tanker owners have also insisted on options in their charters to avoid the southern Red Sea, while BP Plc and Equinor ASA have also shied away from the area.
The combined market capitalization of the firms within the Solactive Global Shipping Index rose to almost $190 billion on Wednesday. On Dec. 12 it stood at $166.2 billion.
It isn’t entirely obvious that this is really going to boost profits for shipping companies however:
For shipping owners, the development both gives and takes away: Clients will be forced to pay up for higher rates, but shippers will also have to absorb higher fuel costs. Tanker and liquid petroleum gas shippers look best placed since capacity utilization is tight and trouble at another major canal—the one in Panama—has already given them a huge boost in bargaining power.
Brent oil prices rose around 1% on Tuesday, according to Refinitiv data. Shares of A.P. Moller-Maersk, a top global container shipper, were down over 3%. Shares of Dorian LPG, a major LPG shipper, were up nearly 2%.
The United States has of course taken this very seriously and vowed to protect any ships that need to move through the Suez canal, and have quickly assembled a multinational force to try to combat the situation:
On Monday, the Pentagon said it was establishing a security operation to protect seaborne traffic from ballistic missiles and drone attacks launched by the Houthi groups in Yemen. The effort, called Operation Prosperity Guardian, will include the U.K., Bahrain, France, Norway and other countries.
US warships have already been sent in, but so far it doesn’t seem to have arrested the trend of merchant vessels diverting their routes, so maybe it isn’t enough security for them. On the other hand, energy markets have not responded drastically, largely due to existing surpluses muting the urgency of the situation somewhat:
Oil and refined-product flows have more than halved from September levels, according to commodities-data firm Kpler. LNG traders and shipbrokers said Wednesday that more tankers carrying the supercooled fuel were diverting to avoid the Red Sea…
But thus far the response of energy markets to the disruption has been muted compared with dramatic moves in prices sparked by some other past outbreaks of violence in the Middle East.
Benchmark Brent crude futures edged up 1.3%, surpassing $80 a barrel for the first time since late November and extending gains over the past week to 8%. Natural-gas futures rose 1.9% in the U.S. to $2.54 per million British thermal units, and 3.8% in northwest Europe to 33.80 euros a megawatt-hour…
One reason for the muted response to the dramatic situation, say traders and analysts, is that crude and gas markets happen to be swimming in surplus supplies, dulling the effect of longer journey times. The U.S., Guyana and Brazil are all pumping record volumes of oil, the International Energy Agency said this month, while Iranian exports of crude have surged this year.
And although more than 8% of the world’s oil supplies have shuttled through the Red Sea on average so far this year, the stretch of water is less of a chokepoint than the Strait of Hormuz to the east. The attacks have clustered around Bab el-Mandeb, at the southern end of the Red Sea.
FWIW we did find a ton of chemical weapons, if not nukes:
In all, American troops secretly reported finding roughly 5,000 chemical warheads, shells or aviation bombs, according to interviews with dozens of participants, Iraqi and American officials, and heavily redacted intelligence documents obtained under the Freedom of Information Act.
Not that this was a surprise. Part of why our intelligence said Iraq had chemical weapons was because we knew they did, since we had exported them a bunch of chem precursors, missile fab equipment, and instructions on how to use them during the Iraq-Iran War. Why didn't we make more noise about it after the invasion, I'm not sure. Maybe it just looked bad on us, no nukes and a bunch of American soldiers injured from weapons that practically had Made in America stickers on them.
Soriek
3mo ago
Guatemala
After many months of tricks to keep anti-corruption President Elect Bernaldo Arévalo from taking office, including fully suspending his political party, the man has finally entered the National Palace. It took up till the last minute, a nine hour last legislative holdout from the establishment that reportedly involved such high level strategies as literally blocking the Congressional floor with a chain. I’ve mentioned it before but Arévalo is the son of Juan José Arévalo Bermejo, Guatemala’s first democratically elected leader, so for him to finally take the stage against an increasingly brazenly anti-democratic establishment has symbolic significance.
So, now that he’s here, what next? He wants to fight crime, pursue antitrust policies, lower drug prices, clean up the waterways (which are estimated to be over 90% polluted), control migration to keep the US (which backed him throughout all of the attempts to disqualify him) happy, and of course fight corruption. Much of this will be very difficult with a legislative minority, but there’s at least some stuff he can do on his flagship anti-corruption agenda via the executive office itself:
The opposition to Arévalo was so intense because he promised to continue the unfinished business of the CICIG anti-corruption commission, shuttered after it revealed graft at a massive scale, implicating everyone from politicians and business elites to unions to religious and university leaders…
Arévalo’s ability to effect structural change will hinge on three key fronts: reforms of the government contracting system at the heart of a slew of corruption scandals; the recovery of the Attorney General’s Office; and nominations to the high courts.
Contracting reforms may offer Arévalo the best chance to deliver concrete quality-of-life improvements. If he manages to make spending more transparent and more efficient, especially on infrastructure and health, the public will see better roads and more medicines on hospital shelves before the year is out. Greater private investment may also pour into the country.
The other two fronts are thornier. The Attorney General’s Office is controlled by Consuelo Porras, sanctioned by the U.S. for “significant corruption.” (She denies wrongdoing.) Her second tenure as Attorney General (2022-26) has produced a stream of decisions that have undermined anti-corruption investigations. Guatemala’s Odebrecht prosecutions are a case study of impunity; the prosecutors who sent corrupt officials to jail were themselves imprisoned or forced to leave the country.
Arévalo does not have the constitutional authority to remove her but insists he will ask her to resign immediately. He may succeed by starving her of resources. If she does resign, Arévalo will likely have to pick her replacement from the other five candidates approved by a commission in 2022, a list that includes relatively clean choices.
Meanwhile, the court system is scheduled for major changes in 2024, on the order of 250 new judicial appointments, including all 13 Supreme Court seats. This is a major opportunity for reform, but nominations come from the National Lawyers’ Guild, itself beset by corruption allegations, and must go through Congress.
The guys who authored the paper testified before a maximally hostile Congress last week. I was ready for them to get torn apart and surprisingly it left me less convinced of the criticisms against them.
The pangolin thing, as covered by the Public Substack and other places I've seen it repeated, seems to be misframed. The scientists never claimed that it was the actual origin of Covid; they explicitly says it's a different virus, just similar in structure. The argument is that no one (including any of the lab leak proponents, to my knowledge) seems to think the pangolin coronavirus variant, 600 miles away from the Wuhan lab, was also man-made, which raises the odds that a virus very similar to Covid-19 could arise naturally.
The distance in time between the scientists saying they weren't certain about how something like the Receptor Binding Domain in Covid-19 could manifest in nature, and them changing their minds and publicly supporting a natural origin theory, wasn't an abrupt turn around of a few days, as alleged, but rather forty five days. During that timeframe the pangolin samples with similar RBDs were discovered, raising odds that this kind of thing could be naturally evolved. In contrast, the site being studied in the EcoHealth proposal was genuinely different than that in Covid-19.
Beyond that, the main thrust of their argument is that the first samples were found in the Hanan market and the first cases in the area surrounding the market, not in the areas surrounding the Wuhan Virology Center. As far as I know nobody has contradicted this, though I don't really follow it and could be wrong.
I think the concerns about how the process was politicized, especially by bueaucrats worried about conflict with China, are still valid - welcome to government though. Claims of a vast Orwellian conspiracy on part of our neoliberal overlords I think are a little unconvincing given that our government has also argued that it probably was a lab leak. In fact, right now six agencies have weighed in and none agree - the DOE and FBI think a lab leak was most plausible, four other agencies plus the NSC suspect natural origins. Almost all of them have framed their results with "low confidence," but you can pick whichever result you like and still say the government agrees with you.
I personally consider the lab leak somewhere between possible and likely, but don't really care where Covid came from. Even if it was caused by research conducted by China and America, the two most powerful countries on earth are obviously not going to pay any kind of penalty.
Roughly a month after hammering out the Windsor Agreement to settle Northern Irish trade, the United Kingdom has also finally joined the Trans-Pacific Partnership. What a bizarre trajectory the nation has travelled through from Brexit back to fulfilling David Cameron's hopes of joining the Asian multilateral trade deal.
British Prime Minister Rishi Sunak announced the move early Friday, hailing it as a historic move that could help lift economic growth in the country by £1.8 billion ($2.2 billion) in the long run.
“The bloc is home to more 500 million people and will be worth 15% of global GDP once the UK joins,” Sunak’s office said.
The CPTPP is a free trade agreement with 11 members: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. It succeeded the Trans-Pacific Partnership after the United States withdrew under former President Donald Trump in 2017 . . .
As a member, more than 99% of UK exports to those 11 countries will now be eligible for tariff-free trade. That includes major exports, such as cheese, cars, chocolate, machinery, gin and whisky.
In the year through September 2022, the United Kingdom exported £60.5 billion ($75 billion) worth of goods to CPTPP countries, Sunak’s office said in a statement.
Dairy farmers, for example, sent £23.9 million ($29.6 million) worth of products such as cheese and butter to Canada, Chile, Japan and Mexico last year, and were set to “benefit from lower tariffs,” it added.
The deal also aims to lift red tape for British businesses, which will no longer be required to set up local offices or be residents of the pact’s member countries to provide services there.
Services made up a huge chunk — 43% — of overall UK trade with CPTPP members last year, according to Sunak’s office.
Unfortunately I don't know enough about the deal to say much intelligent, but was hoping people could share what they think the implications the new deal will entail.
Soriek
3mo ago
Argentina
There was a huge general strike on Wednesday against Milei’s reforms featuring tens of thousands of workers, some sources claiming as many as a hundred thousand, and it lasted for 12 hours:
The stoppage began at midday, and banks, gas stations, public administration, public health officials and trash collection were operating on a limited basis. Airports remained open, although state-owned airline Aerolineas Argentinas canceled 267 flights and rescheduled others, disrupting travel plans for more than 17,000 passengers.
Public transportation workers went on strike at 7 p.m. in Buenos Aires and surrounding areas, but had operated normally during the daytime to facilitate protesters’ access to and from the plaza in front of Congress.
By Wednesday afternoon, tens of thousands of protesters had flooded in. Héctor Daer, CGT’s secretary general, told the crowd from atop a stage that Milei’s decree “destroys individual rights of workers, collective rights and seeks to eliminate the possibility of union action at a time in which we have great inequality in society.”
As best as I can tell it seems to have gone okay, no economic calamity of police brutality that jumps out in the papers, but you can definitely expect more if any of his reforms make it through Congress. Speaking of which, Milei’s omnibus bill made it out of their equivalent of a congressional committee, which was its first hurdle, so it can now be voted on. But many members of JxC have reservations over different sections. Milei has moderated on a few details, including postponing the privatization of the state oil company YPF (this was a a campaign pledged of his but on polls privatization of the State Owned Enterprises in general is very unpopular, so many a reasonable point to moderate on). His dueling executive decree is tied up with like a bazillion lawsuits rn so that’s not moving any quicker than the legislative process.
Soriek
3mo ago
Iraq
Well, we’ve all been following Iranian militias firing on American servicemen and vice versa in Iraq. Now everyone is getting in on the fun. Iran has launched airstrikes on Iraq and Syria The situation has strangely reversed a bit with Iran now retaliating against the ISIS terrorist attack that killed over a hundred of their civilians by launching airstrikes: “at what it claimed were Israeli “spy headquarters” near the U.S. Consulate in the northern Iraqi city of Irbil, and at targets linked to the extremist group Islamic State in northern Syria.” The latter target of course being in retaliation for the ISIS -claimed terrorist attack that killed over a hundred Iranian civilians.
Turkey decided to get into the action too by…also bombing Iraq and Syria, though they’re strafing for Kurdish militias in retaliation for the Kurdish PKK attack on a Turkish base last month. Iraq is understandably not thrilled about any of this (how does Syria feel? Who’s to say?), recalling their ambassador from Iran and calling their attacks an infringement upon Iraqi sovereignty. Presumably they’re not thrilled with Turkey either but they never had any kind of working relationship before (this is not Turkey’s first random attacks into Iraqi soil).
Basically all the cool kids are launching attacks in Iraq, a country that is really only marginally connected to the actual Israeli-Palestinian war by virtue of the fact that the different powers all have some degree of presence here as well. Rough hand to draw.
Japan
Japan’s longtime dominant Liberal Democratic Party has been caught in a scandal where politicians were receiving kickbacks from fundraisers. Some of this was already known and the party responded by updating their previously unreported funds, but recently it was revealed that Shinzo Abe’s faction1 has been doing this for years. The size of this scandal is apparently enormous; the LDP’s popularity is at a staggering 17%, remarkable considering they have basically run the country with few interruptions since World War 2.
Prime Minister Kishida is apparently considering replacing “all” of the Abe faction who currently enjoy ministerial posts. This would include “Matsuno, the top government spokesman [Chief Cabinet Secretary], and Nishimura [he Minister of Economy, Trade and Industry,]...two other ministers, five senior vice ministers and six parliamentary vice ministers from Abe's faction…Tsuyoshi Takagi, who is currently the LDP's chief of Diet affairs…LDP policy chief Koichi Hagiuda and Hiroshige Seko, secretary general of the party in the House of Councillors”
It sounds like a lot, but it might not be enough - quite a few people have called for Kishida himself to step down (for his responsibility as the Executive; Kishida is not in the Abe faction). Formally he doesn’t have to call an election till 2025 but he could be voted out by his own party if the public mood is bad enough. Japan is notorious for sacking PMs at the drop of the hat (I think only Italy has them beat for most leaders since WW2) but Kishida has proven prickly and survived several scandals that would have ousted other PMs.
1The LDP is made up of five (arguably six) different “factions,” or cliques, that are somewhat tied together on policy and somewhat by the personality and influence of the leaders of those cliques. During the Abe era his own faction was a mix of nationalists and people who thought (often correctly) they could ride his coattails to influence. Kishida’s is the same for the more liberal/pacifist wing of the party.
How do we assess how much of the Gazan population supports Hamas, or at least this conflict?
They won their only election with 44% of the vote and haven’t held any since. I keep hearing people say they hold supermajority support but the most recent polls I see, conducted on 500 people, show a more mixed bag:
Even the 57% positive opinion may be an overestimate, given that other polls show 75% of Gazans are afraid to criticize Hamas.
I have no idea how credible these polls are, or where other people’s numbers about supermajority support come from, this is mostly an open question.
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