Friday, May 27, 2022




Is America the Real Victim of Anti-Russia Sanctions?

Remember the claims that Russia’s economy was more or less irrelevant, merely the equivalent of a small, not very impressive European country? “Putin, who has an economy the size of Italy,” Sen. Lindsey Graham, R-S.C., said in 2014 after the invasion of Crimea, “[is] playing a poker game with a pair of twos and winning.” Of increasing Russian diplomatic and geopolitical influence in Europe, the Middle East, and East Asia, The Economist asked in 2019, “How did a country with an economy the size of Spain … achieve all this?”

Seldom has the West so grossly misjudged an economy’s global significance. French economist Jacques Sapir, a renowned specialist of the Russian economy who teaches at the Moscow and Paris schools of economics, explained recently that the war in Ukraine has “made us realize that the Russian economy is considerably more important than what we thought.” For Sapir, one big reason for this miscalculation is exchange rates. If you compare Russia’s gross domestic product (GDP) by simply converting it from rubles into U.S. dollars, you indeed get an economy the size of Spain’s.

But such a comparison makes no sense without adjusting for purchasing power parity (PPP), which accounts for productivity and standards of living, and thus per capita welfare and resource use. Indeed, PPP is the measure favored by most international institutions, from the IMF to the OECD. And when you measure Russia’s GDP based on PPP, it’s clear that Russia’s economy is actually more like the size of Germany’s, about $4.4 trillion for Russia versus $4.6 trillion for Germany. From the size of a small and somewhat ailing European economy to the biggest economy in Europe and one of the largest in the world—not a negligible difference.

Sapir also encourages us to ask, “What is the share of the service sector versus the share of the commodities and industrial sector?” To him, the service sector today is grossly overvalued compared with the industrial sector and commodities like oil, gas, copper, and agricultural products. If we reduce the proportional importance of services in the global economy, Sapir says that “Russia’s economy is vastly larger than that of Germany and represents probably 5% or 6% of the world economy,” more like Japan than Spain.

This makes intuitive sense. When push comes to shove, we know there is more value in providing people with the things they really need to survive like food and energy than there is in intangible things like entertainment or financial services. When a company like Netflix has a price-earnings ratio three times higher than that of Nestlé, the world’s largest food company, it’s more likely than not a reflection of market froth than of physical reality. Netflix is a great service, but as long as an estimated 800 million people in the world remain undernourished, Nestlé is still going to provide more value.

All of which is to say that the current crisis in Ukraine has helpfully clarified how much we’ve taken for granted the “antiquated” side of modern economies like industry and commodities—prices for which have surged this year—and perhaps overvalued services and “tech,” whose value has recently crashed.

The size and importance of Russia’s economy is further distorted by ignoring global trade flows, in which Sapir estimates that Russia “may account for maybe as much as 15%.” While Russia is not the largest producer of oil in the world, for example, it has been the largest exporter of it, ahead even of Saudi Arabia. The same is true for many other essential products such as wheat—the world’s most important food crop, with Russia controlling about 19.5% of global exports—nickel (20.4%), semi-finished iron (18.8%), platinum (16.6%), and frozen fishes (11.2%).

Such commanding importance in the production of so many essential commodities means that Russia, like few other countries on the planet, is in many respects a linchpin of the globalized production chain. Unlike “maximum sanctions” on a country like Iran or Venezuela, attempting to cut the Russian link has meant and will likely continue to mean a dramatic reorganization of the global economy.

Now that President Joe Biden has publicly renounced America’s decades-old policy of “strategic ambiguity” with regard to Taiwan, it’s worth thinking about what China’s economy looks like when we remove the same blinkers with which we’d always viewed Russia. If we consider the Chinese economy based on exchange rates—by simply converting China’s GDP from Chinese yuan to U.S. dollars—it is valued at about $17.7 trillion (as of 2021), compared to $23 trillion for the United States and $17 trillion for the European Union.

But if we adjust for PPP, we see that the Chinese economy reached almost $27.21 trillion in 2021, compared with $20.5 trillion for the EU and $23 trillion for the United States. In terms of PPP, in fact, China’s economy overtook America’s back as much as six years ago.

And what if we reduce the proportional importance of the service sector relative to industry and commodities? Services account for approximately 53.3% of China’s GDP, even less than in Russia (56.7%). If we roughly apply Sapir’s ratio of doubling the valuation of the nonservice sector to China, we may have to consider that in a very real and relevant way, the Chinese economy accounts for something like 25%-30% of the global economy on a PPP basis, rather than the current estimates of 18%-19%.

That would put the combined Chinese and Russian economies at about 30%-35% of the global economy (again, adjusting for PPP and the overvaluation of the service sector)—a behemoth and likely unsustainable challenge for a trans-Atlantic community that looks increasingly focused on using maximalist economic sanctions to punish bad actors and achieve desired policy outcomes. That challenge becomes even more daunting when we consider that the service sector accounts for roughly 77% of the U.S. economy and 70% of the EU’s—suggesting a potentially significant degree of overvaluation in Western economic heft, and far more parity in relative economic power with China and Russia.

How much does any of this hairsplitting matter? For one, the war in Ukraine and tensions in the Pacific look to be accelerating a division of the world into Cold War-like political and economic blocs. But whereas the West accounted for over 50% of global GDP at the beginning of the Cold War—with the United States dominating global manufacturing and running huge annual trade surpluses—the West looks to be in a weaker if more entrenched position of power today, and its major adversaries stronger in certain ways than the communist bloc was in 1948.

Before we enthusiastically embrace a new Iron Curtain, therefore, it’s worth pausing to consider how many countries in the world will voluntarily place themselves on our side. The countries of what we consider “the West” will—for ideological and historical reasons, in addition to economic and military enmeshment—undoubtedly remain relatively united. But the West only accounts for about 13% of the world’s population, with China and Russia together making up about 20%. That leaves about two-thirds of humanity “nonaligned,” a position that most of them would like to maintain. If we force them to choose a side, we may be surprised by many of the results.

A tally of the countries participating in current sanctions on Russia, in fact, makes it hard to say whether a new Iron Curtain is being drawn around our adversaries or around the West itself. Countries and nominal U.S. allies as significant as India and Saudi Arabia have been particularly vocal in their refusal to take sides in the conflict in Ukraine.

One telling barometer for this dynamic is oil. With Western oil sanctions on the world’s largest oil exporter, prices have predictably skyrocketed, rising from around $75 a barrel at the beginning of the year up to over $110 today. But countries that have refused to participate in sanctions are now taking advantage of the opportunity to negotiate for Russian energy deliveries at steep discounts. If Russia is still able to sell oil around the world, countries like India are able to negotiate for below-market prices, and Western consumers are being hammered with inflated prices, who is really being sanctioned?

A similar principle applies to the weaponization of the U.S. dollar and the Western financial system in general: If non-Western countries are increasingly told that access to dollars and transaction systems like SWIFT are conditional on policies made in Washington that may not necessarily be in their own self-interest, the result may be a de-dollarization of the global economy, not a strengthening of the Western order.

None of this is to say that the brutal invasion of Ukraine has been anything less than an atrocity, and that extraordinary measures may indeed be called for in order to counter Russian expansionism and its implications for global peace and stability. But it’s possible that the West, in a fit of self-righteousness and a need to satisfy various domestic demands, may be diving headlong into a future in which the global South and many others besides feel increasingly pressured to make a choice they don’t want to have to make, and which may leave the West more isolated than ever before in modern times.

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Georgia voters expose the 'Jim Crow' smear as a lie

by Jeff Jacoby

WHEN REPUBLICAN legislators in Georgia last year passed S.B. 202, a law overhauling the state's election procedures, Governor Brian Kemp made a prediction: "This new law," he said as he signed the bill, "will expand voting access in the Peach State."
He was right.

Turnout in Georgia's primary election this month set new records, with more than 857,000 ballots cast during the three-week early voting period that ended on Friday. That was not only three times the number of early votes recorded in 2018, as The Washington Post noted, but higher even than the tally during the 2020 presidential election. Pointing with pride to the impressive results, Georgia Secretary of State Brad Raffensperger said the election law adopted last year was "coming through with straight A's."

According to liberals and Democrats — who repeatedly and angrily described the Georgia law as a bigoted, antidemocratic obscenity — none of this was supposed to happen.

Just hours after Kemp signed the bill in March 2021, President Biden slammed it as "an atrocity," "pernicious" and "un-American" and "a blatant attack on the Constitution." In a subsequent speech, he excoriated Georgia for its "vicious anti-voting law," which he called part of "the most dangerous threat to voting and the integrity of free and fair elections in our history" — nothing less than a "21st century Jim Crow assault" on the right of every American to vote.

Again and again and again, that's how the Georgia law was described — as a racist scheme to suppress Black votes and revive the evils of the Jim Crow era. Republicans were endlessly accused of deliberately choking off the early voting options that were especially popular with Black Georgians. "As America embraces early voting, GOP hurries to restrict it," one CNN story was headlined. In a Washington Post column, Kathleen Parker drew a link between Georgia's new rules and the grisly 1964 murders of civil rights workers James Chaney, Andrew Goodman, and Michael Schwerner in Mississippi. One of the young men had been found with "red clay in his lungs and clenched in his fist, indicating he was probably still alive when buried," Parker wrote. The "red-clay legislators" in Georgia who passed S.B. 202, she observed, were using more subtle means "to diminish minority turnout."

Major League Baseball — egged on by the president, who labeled the elections law "Jim Crow on steroids" — relocated the 2021 All-Star Game from Atlanta to Denver. Two Georgia-headquartered behemoths, Coca-Cola and Delta, issued statements blasting the new law. When Home Depot, another Atlanta-based corporation, declined to pile on, Black church officials urged a boycott of the company.

Yet all along, it was the racial demagoguery about the Georgia law, not the law itself, that was obscene and immoral. You wouldn't know it from the rhetoric about "Jim Crow," but Black voter turnout has been rising steadily for years, even in Republican-dominated states with voter ID requirements. In 2018, according to an analysis by the Pew Research Center, "all major racial and ethnic groups saw historic jumps in voter turnout."

In Georgia specifically, Black voters over the past quarter-century have become an ever-larger share of the electorate.

In 1996, the year Bill Clinton was reelected, there were 930,000 registered Black voters in Georgia, of whom 497,000, or 53 percent, cast ballots in the November election. By November 2020, all those numbers had jumped: There were 2.3 million registered Black voters, of whom nearly 1.4 million, or about 60 percent, cast ballots. In the face of such unambiguous evidence that Black Georgians are active and committed voters, the Democratic smear about "Jim Crow on steroids" was disgraceful partisan rabble-rousing.

The thunder of lies about S.B. 202 led some voters to expect the worst. The Washington Post spoke with Patsy Reid, a 70-year-old African-American retiree from Spalding County who, given the "reports of voter suppression against people of color in Georgia," said she was surprised by how easy it was to cast her ballot in the Democratic primary.

"I had heard that they were going to try to deter us in any way possible because of the fact that we didn't go Republican on the last election, when Trump didn't win," she told a reporter. "To go in there and vote as easily as I did and to be treated with the respect that I knew I deserved as an American citizen — I was really thrown back."

There was no voter suppression, no Jim Crow, no "red-clay" assault on Black civil rights. Patsy Reid is one more Georgia voter who knows that now.

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Get Woke, Go Broke: State Farm Exec Makes Panicked Promise as Trans Support Blows Up in Company's Face

Facing an uproar for its support of the transgender agenda, State Farm Insurance says it is dropping its alliance with a transgender group that wanted to supply indoctrination materials aimed at children to schools and libraries.

State Farm had said it would support a group called GenderCool, which was targeting children as young as 5 with books titled “Being Transgender,” “Being Inclusive” and “Being Non-Binary.”

On Monday, the conservative group Consumers’ Research responded with a video titled “Like a Creepy Neighbor.”

“State Farm tells us they’re a good neighbor,” the narrator begins. “But would a good neighbor target five-year-olds for conversations about sexual identity? That’s what State Farm is doing.”

On Tuesday, State Farm surrendered.

State Farm spokesman Roszell Gadson told The Washington Post that the partnership ended after it had “been the subject of news and customer inquiries.”

“Conversations about gender and identity should happen at home with parents,” Gadson said in a statement. “We don’t support required curriculum in schools on this topic. We support organizations providing resources for parents to have these conversations. We no longer support the program allowing for distribution of books in schools.”

“As a result, we have made the decision we will no longer be affiliated with the organization,” the company said on its website.

According to a report from RedState, Rand Harbert, State Farm executive vice president and chief agency, sales and marketing officer, sent out a voice message to agents and others about the book project.

The outlet, citing a transcript it obtained, reported that Harbert said, “First and foremost, I want you to hear directly from me that we made a mistake with our involvement in this program — and we’re sorry. As soon as we fully understood the issue Monday morning, the first decision we made was to cease our involvement with this organization.

“Let me be clear, our position is that conversations with children about gender and identity need to happen at home.”

Harbert then made it appear as though State Farm was not fully aware of to whom it was giving money and what would be done with the cash.

“As much as we would like to be aware of every program and involved in every decision, it’s simply not possible as most of these gifts are small. In this case, it was $40,000,” Harbert said, according to RedState.

“However, we recognize even small decisions can have a big impact, and we’re taking the necessary steps, so nothing like this happens again,” he said

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Australian supermarket chain: Caring for some but not for others

They just love sexual abnormality

Coles sacked the last of its unvaccinated staff at the beginning of this year, long after state mandates fell and other industries began allowing the so-called mavericks of the workforce back into the office. The move, along with other supermarket giants, saw thousands of Australians unceremoniously dumped, many of them single mothers or from struggling households.

‘Shop safe at Coles’ is something that looks good printed in big letters across double-page ads to those still suffering from anxiety hangovers. Just don’t ask too many questions about the health logic, given unvaccinated people can shop in the store, but not stand behind the counter.

Speaking of corporate virtue signalling.

The same company turned around this week and announced it would be offering its trans and gender-diverse employees ten extra days of paid leave for the purpose of ‘gender affirmation’. ‘Affirmation’ is a hazy term that Coles describes as ‘any process’ that relates to the act of gender affirmation including surgical, social, legal, or medical action. Leave could be granted for anything from an appointment with a lawyer through to full surgery.

Gender Affirmation Leave was timed to coincide with the International Day Against Homophobia, Biphobia, Intersexism, and Transphobia – one of the dozens of days and months dedicated to a sexual preference or pronouns.

Coles Chief Legal and Safety Officer, David Brewster, (who also serves as the Chair of the Pride Steering Committee), released a statement.

‘We know that we have at least 900 team members who identify as transgender or gender diverse. We need to have proper policy and education in this area so there is clear guidance around taking leave for this important transition in their life.’

Coles attached a long and bizarre ‘gender affirming’ statement that seems a little over the top for employment that largely involves stacking shelves and pushing trolleys. Its headings include ‘encouraging you to be your authentic self’ and ‘developing our Pride Team member network’ – which doesn’t sound like something employers should concern themselves with.

This move, described as ‘way ahead of politicians’ (add to that logic, reason, and fairness) is meant to be an action against ‘trans hate’. 2022 has transitioned into a world where an employer who is not constantly, publicly, and (preferably financially) ‘affirming’ an employee they must, by default, hate them. For most of human history, workers preferred their employers to keep their noses out of any private medical business.

‘You’ll be supported as the gender with which you identify, wear the clothes or uniform of your affirmed gender, use the toilets and change rooms of your affirmed gender and be referred to by the name of your affirmed gender too,’ read a statement, issued by Coles.

The statement leans heavily toward sentiments of anti-discrimination and equity – which is fine, one is simply left to wonder where this emotionally sensitive Coles hurt-feelings committee was when it was ruthlessly sacking unvaccinated staff who simply wanted to keep their jobs and their body autonomy at the same time. Coles went one step further, attempting to impose its vaccination policies on unrelated suppliers, contractors, partners, and anyone working onsite.

And no. If you’re an employee with a non-gender related medical or emotional issue, you’ll have to plan ahead and sacrifice some of your holiday leave when you run out of the standard state-sanctioned medical allotment. No one is going to give you a Woke Virtue point for a hip replacement.

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My other blogs. Main ones below:

http://dissectleft.blogspot.com (DISSECTING LEFTISM)

http://edwatch.blogspot.com (EDUCATION WATCH)

http://antigreen.blogspot.com (GREENIE WATCH)

http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)

http://snorphty.blogspot.com/ (TONGUE-TIED)

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