Archive for December 2nd, 2018

THE CHINA STRATEGY

Sunday, December 2nd, 2018

A short history: Suppose you live in a poor town where there’s very little business and few jobs that don’t pay much, and a rich man comes in and builds a factory that makes expensive products, ships them all over the world, and hires as many townspeople as he can at high wages.

Soon your town will prosper, the restaurants will boom and new ones will open, and people will start up little factories of their own.

Well, the USA is the rich man, and China is the poor town. They invited our manufacturers in on a promise of cheap labor and raw materials, and our factories moved over there by the thousands. Soon, the Chinese left their bicycles at the dumps and drove cars, they built their own factories and soon everyone was back to work and making more money than they ever had before.

But there’s a problem with all this, and that is that the Chinese government is evil. Instead of being grateful for our trade arrangement and wanting to be good friends, they see their new wealth and development as the means to conquering the world. They even talk about doing so by the year 2050. In the meantime, they’ve become steadily more aggressive, threatening not only the USA, which made their wealth possible, but all their neighbors as well.

Okay, that’s the short history. Now, here comes President Donald Trump, and in two years he’s reversed the course of China’s economic advance. Their military advance will surely follow, since that sort of research, development and manufacturing is extremely expensive.

By the simple expedient of starting a Trade War with China and placing a tariff on most of their exported goods to us, Pres. Trump has caused an economic recession in China while boosting our economy at the same time. China is already at the point where, if the tariffs go from the current 10% up to a threatened 25% and on even more goods, the Chinese economy will utterly collapse.

Right now, the USA still relies on a lot of Chinese exports and the 10% tariff has done some harm to our economy in some areas, although the overall change is for the better. Increasing the tariffs to 25% will cause a lot of howls and anguish among many companies here because they’ll suffer losses, and our economy will take a hit.

Because of this, Pres. Trump would rather not do it, and has secured major concessions from China in exchange for not raising the tariffs. China now has 90 days to make good on their concessions or face economic disaster. Pres. Xi wasn’t elected by the people, he was elected by his peer group much the same as new Popes are elected, and he can be deposed by them. Being deposed from office in China can be fatal, and Xi is now between a rock and a hard place. He has to save the Chinese economy without giving up their dream of world conquest and I don’t think Pres. Trump has that possibility in mind for China.

Here’s what I think is going to happen. The Chinese are very patient people, and they’re caught in Trump’s trap. Over the next 90 days they’re going to try to cheat any way possible, but will accept the inevitable and keep to the deals they make and wait to conquer the world another time. This is not likely.
OR, they fail to meet their promises. This is more likely, and what Pres. Trump has done is prevented a stock market crash before Christmas, while giving him 3 months to prepare American businesses and consumers for the hit our economy will take when he imposes the 25% tariffs on China. We will swiftly recover as our entrepreneurial system steps up to replace what China no longer provides. China, however, will not.

Pres. Trump hasn’t stopped China’s plan to rule the world, he’s just putting it on hold, but with luck, for a very long time.

ON A SIDE NOTE, Holding off increasing the tariffs until after Christmas means that there will be no job layoffs of workers here or decline in our stock market, at least until March. The 90 day “truce” itself pleases the mega-businesses like Walmart which make their money from Chinese imports, and gives them reason to think that Pres. Trump will not impose the 25% tariffs. This both takes pressure off of him and increases his support, and benefits our economy. In the meantime, any concessions the Chinese make will also improve our economy without benefiting the Chinese. Altogether a simple and brilliant strategy.

ARTICLE 13, EU INTERNET CENSORSHIP

Sunday, December 2nd, 2018

Ernesto, in Brazil, emailed me this morning about “Article 13”, “Filternet”, an EU bill just introduced that would censor all Internet content for copyrighted material. Direct from the European Socialist Union, here comes the Censorship of the Mega Companies! You really should watch this short video, its very enlightening.
https://www.youtube.com/watch?v=89ZkydX0FPw

Thank you, Ernesto. This is good stuff to share.

My response back to Ernesto, which he asked me to post here:

Good morning, Ernesto
I watched that video. Hard to say if that Internet copyright law will pass or not. Google, Facebook, Youtube and others could lose a lot of money if it does, and they might join the fight against it. Anyway, I think it’s too soon to panic, because….

For one, the social media sites already are censoring content, and that censorship is increasing as they become more active politically. Driving out content that they politically disagree with also drives away viewers, so less ads are viewed, reducing their income. And, as they become increasingly political, they will become more competitive with each other. I expect to see “wars” start soon between Facebook and the others, where they start attacking each other’s content and policies and suing each other in courts, and all this will do is drive away even more people. Look to see one or more brand new Social Media startups that are open and aren’t political.

For another, Social Media is popular but is not the Internet. They’re only a part of it. Big news sites are going to fight against that law, and if it passes, they’ll stop allowing their content to be viewed on Europe’s Internet to avoid all the fees and potential copyright infringement fines. Even BBC is going to be hit by this and BBC is paid for by the UK government, which will be another reason not to pass the law.

Forcing servers to scan all content for copyright infringement before allowing anything to be uploaded to a user’s screen is going to dramatically slow down everything. Those scans will take a lot of time, because the amount of copyrighted material is vast. The electrical power consumption and the huge amount of equipment necessary to scan millions of simultaneous link uploads alone makes this entire proposal nearly impossible to achieve. The only way to work it is to scan for a specific, limited list of words and names, and that will result in as many uploads being censored and cancelled as it would those allowed to proceed, and will still take a lot of time and slow everything way down.

Ultimately, if this really bad and poorly thought out law does get passed, the economic cost will kill it, anyway. So much money will be lost because of censored attempts to purchase goods online, the billions of advertisements that were never seen, never charged for, which will result in tens of thousands of websites shutting down for lack of revenue, and all those businesses whose ads were never seen, that counted on them being seen in order to stay in business, will start going out of business and suing the government for their losses.

No, on thinking it over, it might be a good thing if this law does pass, because it’s failure will be so costly and spectacular that it’ll be a cold day in Hell before they ever try anything like that again. Everyone would be against any further government efforts to censor the Internet.