The La Follette School will host its third La Follette Forum, funded by the Kohl Initiative and the Center for European Studies, on Wednesday, May 4, 2022. With guest speakers Adam Posen (Peterson IIE), Catherine Rampell (WaPo), Paul Blustein (formerly WSJ, WaPo), Oriana Skylar Mastro (Stanford), Jamelle Bouie (NYT), Daniel Ziblatt (Harvard), and discussion by UW faculty.
This event, organized by Mark Copelovitch, will convene experts from academia, journalism, private industry, and public policy to address three of the most serious challenges confronting the U.S. in decades:
- The COVID-19 pandemic, economic crises, and the threats they pose to the future of American prosperity
- The rise of China and the challenge it poses to the world order and the future of global American power and leadership
- The rise of authoritarianism and the threat it poses to the future of American democracy
Schedule:
9:15 – 10:45 a.m. Session 1: Prosperity
Crises, Debt & the Future of American Economic Policy
11:00 a.m. – 1 p.m. Lunch and Breakout Discussions
1:15 – 2:45 p.m. Session 2: Power
The Rise of China & the Future of American Foreign Policy
3 – 4:30 p.m. Session 3: Democracy
The Authoritarian Challenge & the Future of American Democracy
Website/registration, link.
https://www.globaltimes.cn/page/202204/1259967.shtml
April 21, 2022
Israeli publisher telling stories of China in Hebrew
Living the dream
An artistically designed blackboard written with “Ni hao,” which means “Hello” in Chinese, welcomes every guest to Pierre Lavi’s home in Jerusalem.
Next to it, on the cabinet, was the certificate and trophy that Lavi received in 2020 as one of the 15 prize winners of the 14th Special Book Award of China.
As an Israeli publisher, Lavi has been devoting himself to translating Chinese books into Hebrew since 2016. The subjects range from China’s development and economic policies, to poems, novels and academic textbooks.
Lavi began reading books about China as a boy in the 1970s when cultural exchanges between China and Israel were still scarce. Through the books, he became increasingly fascinated by the oriental country steeped in history.
The lack of more China-relevant books in Hebrew turned out to be a catalyst for his professional exploration in adulthood. After writing several books in his early years, he set up the Lavi Publishing House in 2019 to extend and deepen his connections with China in book pages.
“Establishing ties with China in this way has fulfilled my childhood dream,” he said.
Now in his late 50s, the modern China Lavi is witnessing is completely different from what he learned about in his younger days from books. In 2019, he visited Chengdu, capital city of Sichuan Province in Southwest China, where he tried the exotic hot pot and saw adorable pandas for the first time.
Besides the cultural symbols, Lavi said he was more amazed by the modern infrastructure, convenient public services, and rapid development of science and technology even in a landlocked Chinese city. It was then that the Israeli publisher realized the real imperative of strongly promoting the mutual understanding between the two peoples.
“My philosophy is that culture, especially books, is an important bridge between people. You may not be able to speak each other’s language or understand each other’s culture, but reading can bridge this gap,” Lavi told the Xinhua News Agency….
https://english.news.cn/20220412/9d1f3d60814a473da66fa9ca5dd8e99c/c.html
April 12, 2022
How Xi offers solution to ensuring global food security
By Zhao Wencai
BEIJING — Global food security has long been a matter of concern for Chinese President Xi Jinping, who has on multiple occasions urged concrete actions and public awareness in ensuring food security for all humanity.
In a Special Address at the 2022 World Economic Forum Virtual Session in January, Xi pointed out that “difficulties are mounting in food security … and other areas important to people’s livelihoods,” stressing that “we need to bridge the development divide and revitalize global development.”
Addressing the general debate of the 76th session of the United Nations General Assembly in September 2021, Xi proposed the Global Development Initiative (GDI) and called on the international community to strengthen cooperation in such areas as poverty alleviation and food security.
In a congratulatory letter to the International Conference on Food Loss and Waste held in September 2021, Xi said food security is a fundamental issue concerning the existence of humanity and reducing food loss is an important way to ensure food security.
In the letter, Xi expressed the hope that all parties would work together and jointly implement the United Nations 2030 Agenda for Sustainable Development, and make contributions to the elimination of famine and poverty, global food security and the building of a community with a shared future for humanity.
Under Xi’s leadership, China, having successfully eliminated absolute poverty within its borders, has been making contributions to global efforts to address food shortage and alleviate poverty….
“In today’s Papua New Guinea, the particular breed of grass cultivated by Chinese scientists and recommended by President Xi two decades ago has lift tens of thousands of local people out of poverty.”
This is the Chinese equivalent of Putin pretending to make major decisions on national television. It’s propaganda. “Let’s make this place a park!”
Hunger among poor nations outside of China has been plummeting for decades, by the way. The answer is development. Socialism with Chinese characteristics makes the process slower, not faster.
http://www.news.cn/english/2021-11/22/c_1310326275.htm
November 22, 2021
Xi Jinping and China’s “magic grass”
BEIJING — In today’s Papua New Guinea, a particular breed of grass from China recommended by President Xi Jinping two decades ago is flourishing on the exotic soil.
By 2018 when Xi visited this Pacific country, the grass was helping lift 30,000 local people out of poverty.
Juncao, which literally means “mushroom” and “grass,” can be used, as its name suggests, to grow edible mushrooms, as livestock feed or as a green barrier to stop desertification.
As noted by the UN, its real power comes from how these activities contribute to broader social issues such as poverty eradication, clean energy, and other targets listed in the UN’s 2030 Agenda for Sustainable Development.
It is no wonder that this plant cultivated by Chinese scientists is often called “magic grass.” However, it would have never been introduced to the world without the support of President Xi.
In the mid-1980s, when Xi started working in Fujian Province, he dedicated considerable energy to rural development and poverty alleviation.
At that time, mushroom farming was booming in the countryside, and it was lucrative. In a vicious cycle, farmers, felling trees en masse for fungi substrate, were causing deforestation, which caused economic stagnation. A potential solution, the future president of China discovered, could be found in a research underway in Fujian on a group of wild grasses….
https://fred.stlouisfed.org/graph/?g=K9It
August 4, 2014
Real per capita Gross Domestic Product for China and Papua New Guinea, 1977-2020
(Percent change)
https://fred.stlouisfed.org/graph/?g=K9Iw
August 4, 2014
Real per capita Gross Domestic Product for China and Papua New Guinea, 1977-2020
(Indexed to 1977)
https://fred.stlouisfed.org/graph/?g=Fabn
August 4, 2014
Real per capita Gross Domestic Product for China, India, Brazil, Mexico and South Africa, 1977-2020
(Percent change)
https://fred.stlouisfed.org/graph/?g=Fabr
August 4, 2014
Real per capita Gross Domestic Product for China, India, Brazil, Mexico and South Africa, 1977-2020
(Indexed to 1977)
Adam Posen is on record, as of late January, saying the White House should work to lower public expectations of what can be done about inflation, because it has little power to do anything else. This, says Posen, would allow the Fed more flexibility, and the Fed is the only game in town when to comes to inflation:
https://www.washingtonpost.com/us-policy/2022/01/26/inflation-white-house-experts/
Posen had limited space, so he may have something more substantive to offer the UW forum. I certainly hope so. The general public doesn’t often know much about Fed policy making. The White House has a lot on its plate at the calmest of times, and the plate is overflowing right now. Posen says the best use of White House resources is to play second fiddle in the mugs game of shaping public perception of Fed policy. By the way, isn’t the Peterson Institute in the business of educating the public?
At about the same time, Posen takes aim at fiscal expansion in the first half of 2021, saying “If there had not been the bottlenecks and labor market shortages, it might not have mattered as much. But it did.”
https://www.nytimes.com/2022/01/22/business/economy/inflation-biden-pandemic.html
Nothing about the faster pace of recovery in the U.S. than in other parts of the world, which is the trade-off. I have also been unable to find anything from Posen like Jason Furman’s point, made in the same article, that the U.S. love affair with cars (trucks and SUVs, actually) accounts for a large part of the core inflation differential with other developed economies.
Nor can I find anything from Posen about global effects, outside the control of U.S. policy makers, even though Kristin Forbes (MIT) notes that about half of U.S. inflation is the result of global factors.
Posen is a Peterson guy, and that means opposition to transfers to housholds. What the U.S. did in response to Covid was to provide transfers to households more like what is routinely available on other rich countries. Peterson has long pushed the view that our lesser transfers are too much.
I will be interested to see if Posen has anything more productive to say than “deal with oublic perception.” I will be interested to see if he thinks getting the economy back on its feet quickly was not worth the cost of some part of the inflation we are now experiencing.
“Posen is a Peterson guy, and that means opposition to transfers to housholds. What the U.S. did in response to Covid was to provide transfers to households more like what is routinely available on other rich countries. Peterson has long pushed the view that our lesser transfers are too much.”
US transfers during Covid were massive. Are they really just catching up to routine transfers in other countries? I doubt it very much but would like to see some numbers.
“I will be interested to see if he thinks getting the economy back on its feet quickly was not worth the cost of some part of the inflation we are now experiencing.”
I think you’re reading too much into the fact that it’s Posen from PIIE. The economy was already getting back onto its feet quickly. Transfers helped reduce unnecessary misery (extended UI specifically). But last time I checked, Americans absolutely hate inflation. There is a tradeoff you are not acknowledging but maybe he will.
“There is a tradeoff you are not acknowledging but maybe he will.”
Maybe you missed this: “Nothing about the faster pace of recovery in the U.S. than in other parts of the world, which is the trade-off.”
So, a little context – Something like half of the pick-up in inflation is from global effects. Federal Reserve members were at the time saying inflation was likely to be transitory. We did not know that Russia would be adding to inflation by invading Ukraine. By official estimates, the output gap had some way to go to being closed in the period in question. And (as Menzie pointed out in a recent comment) the inflation differential between the U.S. and Europe is not statistically significant. Given this context, Posen finds fault with government transfers aimed at mitigating the harm done by a pandemic which was still busily limiting growth.
In that context, what I can find Posen saying is “too much spending.” Posen has drawn a paycheck from the Peterson Institute for roughly 30 years. Pete Peterson, when alive, devoted a great deal of money through the Institute to the cause of cutting social benefits and cutting corporate taxes:
https://www.huffpost.com/entry/peter-peterson-foundation-half-billion-social-security-cuts_n_1517805
You may be complacent at the possibility that the head of the Peterson Institute will continue the Institute’s campaign against the middle class. I will waitgo see whethenthis leopard has changed its spots.
You know, if you pressed me, (and yeah, I am a little bit too lazy to look it up right now) I can’t say 100% that Simon Johnson has been “pro” government transfers or “redistribution”. But I don’t recall Simon Johnson speaking out against that (and I read alot of him back in the old Baselinescenario blog days. Simon Johnson has predominantly struck me as “pro” middle class, and giving the disadvantaged in America an “assist” or more avenues for upward mobility. Simon Johnson was pretty high ranking at Peterson at one time as I recall. Now that doesn’t mean I am an ecstatic fan of the Peterson institute. And I’ll even give you you may have a point on Posen, but I don’t think that just because a person works at Peterson, means they have “sold out” to the powers that be, or are singing from their employer’s required hymnal.
https://www.project-syndicate.org/commentary/economic-regime-change-in-america-by-simon-johnson-2019-12
That’s a different tradeoff. As I said, and as the data will show, the recovery was already happening very quickly. Much of the speed of the recovery was the depth of the fall in the US, not (in my view otherwise necessary) government spending. Timing is also important. Government support late in the game (spring 2021) is less useful than in the heat of the moment (summer 2020). And there is good evidence of job market overheating in the US, which Menzie Chinn has posted about and Paul Krugman has commented on — which is not due to international factors. The economy is overheated, and it is entirely reasonable to suggest that too much fiscal support played a role. (Though you could say, as I do, that overshooting on fiscal policy is OK so long as you have a hawkish fed, which I suppose is where Posen and I depart might in theory.)
I don’t get my news from HuffPo. Conspiracy theories are less interesting than good economics coming from different perspectives. Adam Posen is not Stephen Moore. He isn’t even Glenn Hubbard.
And, what Moses says about Simon Johnson, who is not quite an MIT economist but might as well be.
weimar!
Anonymous,
Are you comparing Madison to Weimar? Well, Weimar was the hometown of Germany’s greatest philosopher, Goethe. That is setting a high bar for Madison. But I note that this forum is happening at Monona Terrace, a place designed partly by Frank Lloyd Wright. There are some pretty smart people at this conference. Good comparison, Anonymous!
meh!
dissimilation
Anonymous,
“meh”? Really?
Oh, I get it. You thought you were briliiantly and insightfully invoking the Weimar Republic rather than praising Madison. Sorry, but an 8.5% inflation rate is not remotely near hyperinflation, although you may be right that if we get Trump back in we may well end up with a fascist regime under the thumb of the mass murderer, V.V. Putin. Yes, there is a danger, one you seem to be encouraging by your apparent support for both of those characters.
Are you now or have ever been a supporter of fascism, Anonymous? It sure looks like it.
did they rebuild sterling hall to same standards used to rebuild weimar after ww ii?
Anonymous,
I was never in Weimar before WW II, but the place looks pretty nice these days. I have visited there.
Aa for Sterling Hall, well they replaced the bombed-out hole with brick that is a slightly brighter yellow than the older brick around it, although that was over a half century ago, and the new brick has faded so much that by now it is hard to see the line at the boundary of the formerly bombed-out hole.
Funny you should ask, so relevant here. Maybe JohnH can weigh in with what Robert M. LaFollette would have thought of the bombing of Sterling Hall. I know his grandson Bronson was not particularly a fan of that particular action.
“weimar!”
Are you lamenting or are you excited?
Posen and Rampel looks suspiciously “he said/she said.” Hope that’s not the plan.
macroduck: No, the plan is for Posen & Rampell to speak and Mike and me to respond (and add our own two bits).
Much better. Good.
I realize Covid is now passé, but there is a new variant in circulation:
https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html
BA2.12.1 is apparently more contagious than BA2, but otherwise, not much is known. If the classic evolutionary course is followed, more contagious and less deadly (among those of child-bearing age) is likely, but there is no guarantee. This variant may be home-grown in the U.S.
Some bot-like commenters may pretend they know more, but they don’t.
been around nh for weeks, nothing to report.
but nh changed the way the hospitalizations are reported.
i see no reason to worry in my circles.
There’s that pretense of knowledge we’ve come to expect.
epistemology….
Anonymous,
You live in New Hampshire but are abysmally ignorant of the US? I think you are lying, and that you are a Moscow-based Putin bot troll.
The main issue for new (sub-) variants is whether the vaccine and/or exposure/infection with previous variants are (somewhat) protective. Omicron 1 got so big because infection with earlier variants was not much protective and the vaccines were mostly protective against severe disease. So pretty much everybody (vaccinated or previously infected) had the ability to transmit Omicron – although only the idiots (and immunusuppresed people) got severely ill from it.
“So pretty much everybody (vaccinated or previously infected) had the ability to transmit Omicron”
True, but that was true before – it’s a matter of extent. New variants’ contagiousness are less controlled by previous infection (protection lasts only a few weeks if I recall correctly) and vaccine (infection rates are higher and incubation periods are longer).
“Adam Posen is on record, as of late January, saying the White House should work to lower public expectations of what can be done about inflation, because it has little power to do anything else. This, says Posen, would allow the Fed more flexibility, and the Fed is the only game in town when to comes to inflation.”
Nothing the White House can do without the Fed? How about something very simple like taxing the rich. Or cutting prescription drug prices.
Two items that are very popular with voters. Even popular with Joe Manchin. Both would reduce inflation. Why aren’t Democrats doing it? Both can be accomplished by a reconciliation bill with only 50 senate votes.
And how about repealing the Trump tariffs. Doesn’t even require congress, just a stroke of Biden’s pen.
The public is right to be angry about inflation when Democrats won’t even make the minimal effort to show they care. Sitting on their hands and waiting on the Fed to raise interest rates to cause a recession is pathetically passive.
Wish I could disagree. Democrats have been pretty good at passing major legislation, given the Senate split and narrow margin in the House, but have dropped the ball on those two issues.
In the same article in which Posen recommends a PR effort to lower expectations, William Spriggs says tax the rich. Arnab Datta, Skanda Amarnath and Alex Williams recommend controlling health care costs.
You have just listed not only some good policies but also what could be a winning platform for the Democrats in 2022. Why the party leaders cannot put this together is beyond me.
The GOP decide not to have a platform at all. It was just too likely to divide and leave some party members unhappy. I am inclined to go with a “mother and apple pie” platform with absolutely no details.
On cutting drug prices the problem in the Dems is Kyrsten Sinema, apparently totally in the palm of Big Pharma, and they need everybody on board.
Minor correction: Catherine Rampell is with the Washington Post, not the New York Times. I think she is quite sharp.
Barkley Rosser: Apologies, my mistake – fixed now.
Back when NYT had a superb Economics section, which they let lapse, Rampell was part of it. Uwe Reinhardt was regularly featured. This was really kind of in the days I consider the “golden era” of blogging. Before major publications started poaching some of the better blog writers. I assume they just weren’t getting enough advertising revenue. Maybe they thought with 4-5 economics columnists it got redundant. But I kinda miss it, it was called Economix.
https://webcache.googleusercontent.com/search?q=cache:PM9e_d5My3UJ:https://economix.blogs.nytimes.com/category/economix+&cd=2&hl=en&ct=clnk&gl=us&client=safari
Eventually they ruin and dumb down everything don’t they??
Moses, FYI:
https://www.politico.com/news/2022/04/21/justice-department-sandy-hook-families-question-infowars-bankruptcy-00027079
You know how I feel about it already, but I’ll say it for the sense of clarity. I hope the courts hear Ha Nguyen’s and Jason Ruff’s contentions. I hope they take his earnings years into the future. He didn’t even pour salt into an open wound, he took a dull kitchen knife and shoved it into an open wound. Some of those families were literally stalked by Jones’ fans as he incited them. Sick
The world is increasingly becoming wealthier, but the US has decreased from 40% to 24% of the world’s economy. China has made up the difference. This is good because the US is contributing less toward the total growth of global warming factors, right?
https://www.visualcapitalist.com/u-s-share-of-global-economy-over-time/
We get you abhor sound climate change policy are the standard MAGA totally self centered fool but this attempt to tell us the US is getting less wealthy is beyond stupid. The US share of world population is 5% while China’s is 20% and yet we have 1/4 of the world’s wealth and China has only 16%. I would ask you to do the simple arithmetic on what this implies for wealth per capita but that would overwhelm your limited little brain.
The graph also shows US wealth is steadily rising. Yes the rest of the world is rising even faster. Now if you understood the basic Solow long-term growth model (I know you do not even get 2 plus 2 but hey). you might be able to articulate the convergence hypothesis. Take a shot at this as this should be a laugh riot for the rest of us.
“sound climate change policy”…….
recondite!
Wait, wait – Bruce Hall cannot read his own graph:
‘The world is increasingly becoming wealthier’
The graph says it was referring to GDP (an income flow) and not wealth (an asset stock). OK – we know Bruce Hall does not know the difference even if this distinction is a very basic economic concept. Bruce is indeed THAT INCREDIBLY STUPID.
BTW most informed people would tell us that China’s GDP has been growing faster than our because they tend to have higher savings rates (ours was reduced by Reagan/Bush43/Trump tax cuts for the rich) and technology transfers. You know – the basic elements of the Solow growth model, something Bruce Hall has never bothered to grasp.
Lucy, so your interpretation of continuously increasing GDP is that the world is getting poorer??? Come on, man!
But things could be getting worse this year: https://www.yahoo.com/finance/news/companies-beginning-panic-experts-china-110000241.html
Problems at ports mean rising costs for companies and increasing inflation for U.S. consumers, experts say.
“Companies are beginning to panic. The downstream impact is coming, and it’ll be heavy.” John Bree, the chief risk officer at Supply Wisdom, said. “The latest China lockdowns combined with the Russia-Ukraine war is too heavy a burden. The global chaos is going to further exacerbate disruption and take inflation to a new level.”
Bree’s statement is backed up by recent reports from investment banks, which are also warning of the economic impacts of China’s lockdowns. Bank of America analysts led by Ethan Harris said in a note to clients on Friday that it’s yet “another adverse supply shock for the global economy” that will weaken growth and extend the period of high inflation.
And Dylan Alperin, head of professional services at the supply chain software firm Keelvar, noted that transportation costs make up 7.7% of global GDP, which means delays at ports typically lead to rising inflation.
“The freight cost for a single container from China to the U.S. went from $5,900 last year to $15,764 today,” Alperin said. The impact of those price increases alone could significantly drive inflation up globally, he added.
Dawn Tiura, CEO of the Sourcing Industry Group (SIG), an association of sourcing and procurement professionals, said that she also suspects that China’s lockdowns will lead to higher inflation.
“Our supply chains are so interconnected and they’ve become fragile that a single issue in one place will affect consumers around the globe,” Tiura said.
And Jim Bureau, the CEO of Jaggaer, a global commerce and procurement technology company, noted that many U.S. manufacturers source raw materials and components from Chinese suppliers, which could lead to shortages of critical electronics and machinery components.
That, again for Lucy’s sake, is why have often commented that JIT inventory has significant downsides when conditions are not “normal”. Traditional inventory management purchased stock for inventory in advance of production needs and that included reserve stock for disruptions or unexpected demand. Once you get into a prolonged period of supply disruption, it’s very hard to make up that lost inventory and production until the logistics are resolved or new sources of supply are found.
Additionally, there are dire forecasts of food shortages for later this year. Old Uncle Joe said that on March 25. Not big shortages in the US, perhaps, but a real risk of higher inflation. Okay, Lucy, go ahead and tell me that a higher unit price for a commodity is not inflation while citing the IPCC.
Lucy, so your interpretation of continuously increasing GDP is that the world is getting poorer???
Is this how you think blatantly lying about what I wrote is engaging in an honest conversation – then you are even more pathetic than I gave you credit for. Maybe you think you winning a debate one pathetic lie after another but you are just proving you are the most pathetic troll ever. Move along with your intellectual garbage as EVERYONE here knows you are the dumbest and most dishonest troll ever.
Wow – you tick off a host of short term issues in a discussion of long-term growth. How incredibly dumb can you get?
Look if you spent half the time reading actual economics that you spend with these worthless chirps you might master Econ 101.
BTW – you might qualify for Obamacare to treat your ADD.
That’s some ignorant trolling, Bruce. If you were in my class, I’d calmly and cheerfully embarrass you in front of your peers.
Bruce does a nice job of embarrassing himself on a daily basis. Now his peers turn out to be your usual MAGA hat wearing morons who probably think his dishonest chirping is brilliant analysis. They are indeed THAT DUMB.
A great tutorial on convergence entitled China and the Solow Model:
https://twentycentparadigms.blogspot.com/2015/09/china-and-solow-model.html
Not that Bruce Hall will bother to read this discussion. Even if he did – it is WAY over his MAGA topped head.
Lucy,
Why do you think “the US is getting less wealthy”? The US is not getting less wealthy, it’s just that the rest of the world is increasing its wealth faster than the US. China is already the leading polluter in the world and consumes the most coal in the world. Of course, you knew all that. You just wanted to made a snide remark. Fail!
But things may not be so rosy for large portions of the world this fall:
Rockefeller Foundation President Rajiv Shah called for debt relief and emergency aid to poorer nations to avert a “massive, immediate food crisis” emerging in poorer nations following Russia’s invasion of Ukraine.
The war has put at risk exports of wheat, corn, sunflower oil and other foods from Russia and Ukraine that account for more than 10% of all calories traded globally, driving up food prices in low-income countries that are already reeling from pandemic damage to their economies.
The U.S. should lead efforts to “fully fund” the United Nations World Food Programme and pre-position emergency food supplies in countries expected to face food shortages in the next six months, Shah, a former U.S. Agency for International Development administrator during the Obama administration, said in an interview on Bloomberg Television’s “Balance of Power With David Westin.”
Of course, since China is now a very wealthy nation, it should share some of that fund, don’t you agree? And what about the EU? Why should those nations get a free ride? And certainly those rich Arab nations should be contributing … a lot.
“Why do you think “the US is getting less wealthy”? The US is not getting less wealthy, it’s just that the rest of the world is increasing its wealth faster than the US.”
Did you flunk preK reading or what? First wealth and income are different concepts dumbass. Like I said. And real per capita income in the US is rising and is SIX TIMES that of China. And I offered up the basics of the classic Solow model which explains something call convergence. READ and learn before one more of your annoying ilttle dumbass chirps.
Look Brucie boy – we know you are stupid. We know you lie 24/7. We get you refuse to learn the basics. And you actually think some guy with a girls name is going to date you? This is why you have such a lonely useful little life.
“consumes the most coal in the world. Of course, you knew all that. You just wanted to made a snide remark.”
Asking you to do coal consumption in per capita terms is a snide remark? This is WHY you are the dumbest troll ever. You do not even try to have an informed discussion based on simple real world concepts.
Look dude – I should hope you find your new boyfriend on some internet site but quite frankly you have stained this blog far too much with your pathetically stupid chirping.
AFTER I asked the chirping moron named Bruce Hall to note the convergence hypothesis would predict that China’s real income per capita would rise faster than ours. AFTER I noted how the low US national savings rate (due in part to GOP tax cuts for the rich) makes this even more dramatic. AFTER I noted the role of technology transfers. AFTER I asked the Village Idiot Bruce Hall to talk about GDP not wealth. AFTER I was the one that noted his own stupid chart showed US GDP continued to rise, we get this incredibly dumb chirping.
Look we all know Bruce Hall is a total waste of time as he never tries to learn a damn thing or to have an informed honest discussion. Not that I’m for banning people on blogs but why on earth does this total waste of time serial moron bother to prove to us over and over – Bruce Hall is STUPID.
Bruce,
Actually something that would really help would be if the Ukrainians can sink the rest of the vessels blockading the port of Odesa, which is preventing them from exporting their wheat, potash, sunflower oil, etcs.
Hey I recommended this action a few days ago. I guess Bruce Hall was too busy with his incessant chirping and lying to have noticed.
But you do realize that Bruce Hall works in the Kremlin was one of Putin’s pet poodles.
mines….
Robert M LaFollete “supported some of President Woodrow Wilson’s policies, but he broke with the president over foreign policy. During World War I, La Follette was one of the most outspoken opponents of the administration’s domestic and international policies.
https://en.wikipedia.org/wiki/Robert_M._La_Follette
I wonder if the speakers will note LaFollette’s opposition to WWI. Presumably LaFollette would have also opposed all the pointless and futile wars waged over the last 70 years by the United States in the name of freedom, democracy, a human rights in the last 70 years. I suspect that he would also have valued the role of dissent in a democracy, since many of his German-speaking constituents suffered persecution during WWI through no fault of their own.
How would LaFollette have regarded the enormous, bloated military budgets that have not been audited in recent memory?
LaFollette may have been a rare person indeed – a progressive Republican. But dude – if you think Wilson started WWI – like damn you are so wrong. It is like you blame Biden for Putin’s war crimes. Oh wait – you have. Never mind.
In 1916 Woodrow Wilson campaigned against involvement in WWI, then promptly betrayed his supporters and declared war.
It was probably the last time that entering a war was an issue where voters were consulted. The only other time in recent memory was when Nixon “had a plan” to end the Vietnam War. Of course, he lied and just doubled down.
For most of the last century, American propaganda and “yellow journalism” have successfully sold war and bloated military budgets to voters. Glenn Greenwald discusses this in an excellent piece: “ Western Dissent from US/NATO Policy on Ukraine is Small, Yet the Censorship Campaign is Extreme
Preventing populations from asking who benefits from a protracted proxy war, and who pays the price, is paramount. A closed propaganda system achieves that.” https://greenwald.substack.com/p/western-dissent-from-usnato-policy?s=r
You can live in conspiracy theory land all you want, but the fact is that Russia invaded Ukraine. It’s up to the rest of the world to help. You can complain about how corporation-y it is all you want.
Now Putin blames the UK for this invasion of Ukraine:
https://www.msn.com/en-gb/news/world/russia-warns-britain-for-provoking-ukraine/ar-AAWCs1e?ocid=uxbndlbing
This is Putin’s usual BS – start a war by invading a nation and then blame those being attack for everything as after all they decided to defend themselves. And of course JohnH is doing all he can to promote this incredible dishonesty.
https://en.wikipedia.org/wiki/Robert_M._La_Follette
Thanks: makes for an excellent life outline.
JohnH,
Yeah, he probably would have opposed the large US military budget and also many of the wars US fought, certainly the Vietnam one. As it is, I knew his grandson, Bronson LaFollette, who served as Attorney General of Wisconsin for quite a long time. He was opposed to the Vietnam War. So was Doug LaFollette, who was elected as Secretary of State of Wisconsin in `1976 and is still in that position. I never met him, but hope he will get reelected to his position, despite his advancing age.
A lot of people protested against the Vietnam War. I asked JohnH if he did and apparently he did not.
Most people were appalled at the Sterling Hall bombing. . I asked Pgl if he was and apparently he was not.
Going back to 1970? OK – I hear you applauded Nixon’s soldiers who committed the Kent Stat massacre.
“AndrewG
April 25, 2022 at 10:13 am
You can live in conspiracy theory land all you want, but the fact is that Russia invaded Ukraine. It’s up to the rest of the world to help. You can complain about how corporation-y it is all you want.”
Andrew is 100% correct here. You are supporting Putin’s genocide with this little soap box chirping of yours. And anyone who supports genocide the way you too has no soul.
“I asked Pgl if he was and apparently he was not.”
Cute but of course you never did such a thing. Way to win a debate Johnny boy – lie and lie and lie some more. Hey dude – look around. EVERYONE here has figured you out and none of them believes a word you write.
https://www.imf.org/en/Publications/WEO/weo-database/2022/April/weo-report?c=223,924,132,134,534,536,158,922,112,111,&s=PPPPC,&sy=2007&ey=2021&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1
April 15, 2022
Per capita Gross Domestic Product, 2021
Brazil ( 16,161) *
China ( 19,260)
France ( 51,364)
Germany ( 58,378)
India ( 7,341)
Indonesia ( 13,099)
Japan ( 44,739)
Russia ( 30,850)
United Kingdom ( 50,388)
United States ( 69,231)
* Data are expressed in US dollars adjusted for purchasing power parities (PPPs), which provide a means of comparing spending between countries on a common base. PPPs are the rates of currency conversion that equalise the cost of a given “basket” of goods and services in different countries.
And Bruce Hall thinks China has a higher income per capita than the US. Thanks for bringing us back to the real world.
https://www.imf.org/en/Publications/WEO/weo-database/2022/April/weo-report?c=223,924,132,134,532,534,536,158,546,922,112,111,&s=PPPGDP,&sy=2007&ey=2021&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1
April 15, 2022
Gross Domestic Product based on purchasing-power-parity (PPP) valuation * for Brazil, China, France, Germany, Hong Kong, India, Indonesia, Japan, Macao, Russia, United Kingdom and United States, 2007-2021
2021
Brazil ( 3,436)
China ( 27,744)
France ( 3,362)
Germany ( 4,857)
India ( 10,219)
Indonesia ( 3,566)
Japan ( 5,615)
Russia ( 4,490)
United Kingdom ( 3,403)
United States ( 22,998)
* Data are expressed in US dollars adjusted for purchasing power parities (PPPs), which provide a means of comparing spending between countries on a common base. PPPs are the rates of currency conversion that equalise the cost of a given “basket” of goods and services in different countries.
https://fred.stlouisfed.org/graph/?g=HAKs
August 4, 2014
Real per capita Gross Domestic Product for China, Germany, India, Japan and United States, 1977-2020
(Percent change)
https://fred.stlouisfed.org/graph/?g=HAKv
August 4, 2014
Real per capita Gross Domestic Product for China, Germany, India, Japan and United States, 1977-2020
(Indexed to 1977)
https://www.nytimes.com/2021/05/23/world/asia/yuan-longping-dead.html
May 23, 2021
Yuan Longping, Plant Scientist Who Helped Curb Famine
His development of high-yield rice hybrids in the 1970s led to steeply rising harvests in Asia and Africa and made him a national hero in China, credited with saving countless lives.
By Keith Bradsher and Chris Buckley
SHANGHAI — Yuan Longping, a Chinese plant scientist whose breakthroughs in developing high-yield hybrid strains of rice helped to alleviate famine and poverty across much of Asia and Africa, died on Saturday in Changsha, China. He was 90.
The cause was multiple organ failure, China’s main state-run newspaper, People’s Daily, reported. An earlier report from an official news service in Hunan Province, of which Changsha is the capital, said Mr. Yuan had been increasingly unwell since a fall in March during a visit to a rice-breeding research site.
Mr. Yuan’s research made him a national hero and a symbol of dogged scientific pursuit in China. His death triggered messages of grief across the country, where Mr. Yuan — slight, elfin-featured and wizened in old age — was a celebrity. Hundreds left flowers at the funeral home where his body was being kept.
Mr. Yuan made two major discoveries in hybrid rice cultivation, said Jauhar Ali, the senior scientist for hybrid rice breeding at the International Rice Research Institute in Los Baños, the Philippines. Those discoveries, in the early 1970s — together with breakthroughs in wheat cultivation in the ’50s and ’60s by Norman Borlaug, an American plant scientist — helped create the Green Revolution of steeply rising harvests and an end to famine in most of the world.
Mr. Borlaug, who was awarded the Nobel Peace Prize in 1970, died in 2009. Mr. Yuan’s research arguably had effects at least as broad, since rice is the main grain for half the world’s population and wheat for a third.
By 1970, Mr. Yuan was growing frustrated with his halting progress in creating more productive rice crops. He hit upon a shift in strategy: Search for wild varieties across remote areas of China for more promising genetic material.
A breakthrough came when Mr. Yuan’s team found a stretch of wild rice near a rail line on Hainan Island, in southernmost China. The following year, Mr. Yuan separately published a research paper in China that explained how genetic material from wild rice could be transferred into commercial strains.
Once the wild rice’s genetic material was added, the world’s heavily inbred commercial rice strains could be hybridized with ease to produce big gains in crop output….
https://news.cgtn.com/news/2020-10-15/Saline-soil-rice-breed-breaks-yield-record-in-E-China-UC9FzSpQdi/index.html
October 15, 2020
Saline soil rice breed breaks yield record in E China
A team of Chinese agronomists led by Yuan Longping, dubbed the “father of hybrid rice,” has set a record in rice output grown on saline-alkali soil in east China’s Jiangsu Province.
The rice breed, developed by Yuan’s team, achieved a yield of 802.9 kg per mu on average, or 12.04 tonnes per hectare, in three plots of saline soil in Rudong County in east China’s Jiangsu province.
It is a record output for rice grown on saline soil in China, said Fang Fuping, a researcher with the China National Rice Research Institute.
Yuan’s team had successfully developed varieties of saline-alkali tolerant rice in 2017 with the previous highest yield reaching 620.95 kg per mu.
China has about 100 million hectares of saline-alkali soil, of which about one-fifth could be ameliorated to arable soil.
This is what the news sounded like in the Soviet Union.
https://www.msn.com/en-us/news/world/the-ukrainians-keep-blowing-up-russian-command-posts-and-killing-generals/ar-AAWwyV0?ocid=msedgntp&cvid=5f44d5fd46144a1798ccfc6e364136f9
Ukrainian forces have taken out 31 Russian command and communications centers killing 10 of their generals. How incompetent are Putin’s pigs anyway?
“How incompetent are Putin’s pigs anyway?”
Russian ground and air forces seem to be quite incompetent. The more interesting question is why? In 2014 the Russian were able to produce with drones and artillery a very impressive result which really spooked western observers. Why are the Russians not able to reproduce some of this?
Because Ukraine forces are better equipped and certainly better motivated than rebellious Syrians and the Kurds?? (I hesitate to say this because I know the Kurdish people, including Kurdish women, are hellishly excellent soldiers). Because Russian soldiers are asking themselves “why the hell are we doing this??” I suspect there are other answers here which we the public have not figured out yet, but may know later.
“Because Ukraine forces are better equipped and certainly better motivated than rebellious Syrians and the Kurds??
Do you understand that the 2014 incident actually happened in Ukraine? That the Russians used a ombination of drones and artillery to inflict high losses? That they are not able to reproduce that in 2022?
One part of the answer is of course that the Ukrainians avoid now some mistake of 2014 after training by US and UK forces, but that is only a partial answer as many fights are still very stationary in 2022….
http://www.dupuyinstitute.org/blog/2017/03/29/the-russian-artillery-strike-that-spooked-the-u-s-army/
ANOTHER comment where UlenRussky makes comments protective and complimentary of Russia. But don’t worry folks, Barkely Rosser, JMU carnival clown, the man who vehemently stated there would be no Russian war attack on the north border of Ukraine, says UlenRussky is as German as sauerkraut, so we go that one all solved.
BTW, I dare say most Germans written English is way better than we are reading from UlenRussky, but maybe because I have some German blood, I am biased?? Those who are well versed in the differences in public and higher education between Russia and Germany can let me know.
what would walter cronkite say?
body count!
For whatever it is worth I have just seen two separate reports. One says that 21,800 Russian troops have been killed and the other thst 22,300 Ukrainian troops have been killed. Of course, many thousands of Ukrainian civilians have also been killed while I think the number of Russian civilians killed is minimal, if any at all. In terms of military body count, looks pretty even, although I am unaware of any Ukrainian generals getting killed while apparently 10 Russian ones have been..
“One says that 21,800 Russian troops have been killed and the other thst 22,300 Ukrainian troops have been killed. ”
That sounds strange. With 20k KIAs you would habe around 60k WIAs, i.e. 40% of the Russian forces would have been lost. There is no evidence for this high number. 20k losses (KIA, WIA) would be IMHO a better guess, but still on the hig side.
UK could be assumed to be a “reasonable” number. They had a report today of 15,000 Russians killed in action. As long as it’s not Kopits level of laughability, I think it’s better to underestimate these kind of numbers. Or have the error go to the downside.
https://www.theguardian.com/world/live/2022/apr/25/russia-ukraine-war-us-pledges-return-of-diplomats-to-ukraine-after-blinken-visit-russian-oil-depot-on-fire-near-border-live?page=with:block-6266cb148f08182fbec20aa2#block-6266cb148f08182fbec20aa2
The numbers I saw were that 20k KIA, another 40k in WIA, captured, deserted. Could the Russian be down 60,000 troops? Yes, I think so. The Russians were absolutely crushed in the north and have been able to achieve almost nothing in the south. Listen to some of the intercepted calls on YouTube. You get the sense that the Russians have been really beaten up, at least in places.
https://www.youtube.com/results?search_query=sbu+calls+intercepted
JerseyBuffoonKopits
And the more losses Russian soldiers take, the more it makes your children’s board-game solution of selling off pieces of Eastern Europe to Putin look as dumb as we all know you to be.
I am absolutely comfortable with the proposal I made. It was, by an order of magnitude, better than what has or will transpire in Ukraine.
In that piece, I also wrote this:
Successfully invading Ukraine, therefore, requires either speed to conclusion or passivity from NATO and, most importantly, the United States. Like it or not, Russia cannot move without US acquiescence, not unless Putin is willing to risk unmitigated disaster.
Spot on, as it turned out.
https://www.americanthinker.com/articles/2022/02/it_is_possible_for_putin_to_get_crimea_without_force.html
One of the things that happens in a kleptocracy is that the money allocated to build and maintain the military is being stolen. It appears that a lot of communication with the Russian troops are done on lines that are easy to track. The Russian army is very top-down so a lot of commands and questions are exchanged between command centers and units. Ukraine has been brilliant at identifying and exploiting the weaknesses of the Russian military.
https://www.newsweek.com/trump-touts-his-intelligence-ohio-rally-now-they-dont-call-me-stupid-1700405
Former President Donald Trump attempted to tout his own intelligence at a rally in Ohio on Saturday, claiming that people no longer call him “stupid” after he passed a cognitive test in 2018. Speaking at an event in Delaware County, Ohio, the former president told his supporters that he did not like being called stupid and that he wanted to prove his capabilities. He referenced having a conversation with Texas GOP Representative Ronny Jackson, who served as Trump’s White House physician, in which he asked if there was a “test” he could take. “I said to doc Ronny…I don’t like when people call me stupid. I have a great heritage. An uncle who is a great, great genius. A father who is a genius. I don’t like to be called stupid,” Trump said. “Is there a test or something I can take to prove to these radical left maniacs I am much smarter than them? And he said, ‘Sir, there is a test. It’s called an X test.'” The test that Trump is referring to is called the Montreal Cognitive Assessment (MOCA). The assessment is not a test of IQ, but is instead designed to detect whether a person has cognitive impairments, such as dementia or memory loss. Jackson administered him the test in 2018 and said he scored 100 percent. However, experts noted that MOCA gave no indication of Trump’s actual intelligence. Several of the test questions appear simple, such as asking the person to draw a clock showing a specific time in order to gage for signs of cognitive difficulty, Newsweek previously noted.
Trump’s own words prove he is VERY stupid. Passing a test related to cognitive impairments is even something Bruce Hall could do (maybe) and we have seen his incessant chirps, which I guess should give Trump some comfort. As incredibly stupid as Trump is – he is a LOT smarter than Bruce Hall.
It’s not the stupidity, however copious, that gets me. It’s the insecurity. He is the most insecure politician I can think of.
Obama once quipped that a young Donald was disappointed that the number of people attending his birthday party was very small. He does have a thing about crowd size for sure.
So, to return to oil.
WTI and Brent are down this morning, suggesting fears of oil sanctions on Russia are ebbing for the moment. The incentive to store oil is similar to its level before the war, ergo, the market does not either see or anticipate exceptional tightness in oil markets at present.
At current prices and the EIA’s expected Russian oil production forecast for 2022, Russian crude oil and product export revenues will be up about $50 bn on the 2015-2021 average, but about $50 bn below the no-war counter-factual. By my estimates, sanctions-busting intermediaries like Indian and Chinese refiners, not to mention the likes of Shell, Vitol and Trafigura, look to make an $80 bn windfall profit on the difference between Brent and Urals prices, today at about $35 / barrel.
Steven,
Price fell further later in the day, with WTI now below $100. Buzz on several sites is that the main driver of this current decline is mostly driven by fears about the Chinese lockdown due to Covid. Obviously assumptions are being made about Russian production are in there. It does seem that while Russia will be getting some of its oil out, there is a reduction in production and exports, which it looks you agree with, given your $50 billion lower earnings compared to the “countefactual.” It is not obvious who will end up getting the various windfalls that appear to be floating around in all this.
Gee world demand for oil has something to do with market prices! Who knew?! Stevie seems to think they only thing that drives the world market place for oil is how much Russia gets to export. Which begs the question – why on earth should any of us take what Stevie has to say seriously?
In the short term, oil prices can be determined by factors other than underlying fundamentals. Risk premia also matter, as does the demand for financial products like oil futures. Perceptions about relative, future tightness of the market can influence the term structure of the futures curve. Right now, oil prices are more volatile than fundamentals alone would suggest.
Of course you completely ignore fundamentals. Sort of like your hysteria over housing prices which you claimed months ago were about to plummet.
The windfalls are going to the traders and refiners, ie, Vitol, Trafigura, Shell, Bharat Petroleum, among others. There will also be a black market springing up entrepreneurially, as the profit on a single tanker load can be $40 million. A team of two can book a tanker, about the same as chartering a private jet, There are plenty of ship brokers. If you can get access to the crude. (And, gee, who provides that access?)
“The windfalls are going to the traders and refiners, ie, Vitol, Trafigura, Shell, Bharat Petroleum, among others.”
Once again you make a claim without a shred of evidence. Now if you have the recent financials for Vitol – let us know since it is a privately held company. Sorry to doubt you there Stevie boy but making a statement like that without the financials is simply lying in my book.
Bharat Petroleum Corporation Limited may have refinery and trading operations but it is also an Indian government owned oil exploration and production company. I know because I bothered to check their latest Annual Report. I would hope you would know they publish Annual Reports – right? Here is a little hint – reading it can tell you a lot about a company’s operations and financials. Yea I know the other trolls here are incapable of reviewing such information but don’t you sell yourself as some sort of expert consultant when it comes to the oil market.
Here you go: Bharat and Trafigura and the discount, all in one article.
https://www.reuters.com/world/india/india-bpcl-buys-2-million-barrels-russian-urals-may-loading-sources-2022-04-06/
Steven Kopits
April 26, 2022 at 3:09 pm
This troll FINALLY provides something. But one transaction? Are you effing kidding me? Sorry dude – I’ll stick to the overall financials.
Steven Kopits
April 26, 2022 at 3:09 pm
So troll extraordinare Princeton Steve finally give us a link to what’s going on with respect to Royal Dutch Shell but he pulled a Bruce Hall and forgot to READ his own link, which showed this company was incurring yuuuge losses. How dumb are you Stevie? DAMN!
Annual report? For 2022? Little early for that. The arbitrage only opening up in late February.
Trafigura also publishes Annual Reports. Here is their informative report for 2021:
https://www.trafigura.com/media/3286/2021_trafigura_annual_report.pdf
Royal Dutch Shell files with http://www.sec.gov so one can check out their business and financials since consultant Princeton Steve is too lazy to do so.
Shell’s cynical Latvian Blend: https://frontierindia.com/shell-to-buy-russian-oil-blend-latvian-to-circumvent-sanctions-stares-at-5-billion-loss/
You can see on this graph that the Brent Urals discount really opens up after Feb. 17th
https://www.neste.com/investors/market-data/urals-brent-price-difference#1dc995e6
It would not feature in a 2021 Annual Report. Moreover, a segment can have large trading gains without necessarily moving the entire financials of a large company. Bonuses, however, are often tied to the performance of the specific group or team.
I stand by my statement.
Btw, there are reports that Russian production is down 1 mbpd. Not clear how that is translating into exports at the moment (a shortfall can be covered by inventory draws for a while).
There are reports? By whom? Link please? I thought Dr. Chinn told us to document claims like these. Not that we distrust you but you have a long history of making statements that turned out to be false.
Quite literally from the Washington Post.
The lights are dimming over the Russian oil industry – literally. The Kremlin is doing its best to conceal the full impact of formal and informal energy sanctions after its invasion of Ukraine. But Moscow can’t hide from the satellites above Siberia that measure the amount of light its oilfields emit as unwanted gas is burned, or flared: The higher the production, the more flaring and the more light – and vice versa. The flaring data, combined with anecdotal information from traders and leaks of official Russian statistics, suggest that eight weeks into the war, Moscow is finally succumbing to the impact of government-imposed penalties and companies’ self-sanctions. On average, Russian oil output is down 10% from its pre-war level.
Russia’s pre-war oil production was 11.3 mpbd; 10% of that is 1.1 mbpd.
https://www.washingtonpost.com/business/energy/the-second-wave-of-the-russian-oil-shock-is-starting/2022/04/21/c6f8b680-c140-11ec-b5df-1fba61a66c75_story.html
Your Google skills are so atrophied that you cannot even find a straight-forward article on the Washington Post?
Also, these oil prices are popping around quite a bit. The market lacks confidence in any given direction. WTI now back up over $100.
Oil prices are volatile? Damn dude – they have always been volatile. And you claim to be an expert on oil markets??????
Oil price volatility can be measured by the standard deviation around the mean for a sample. For example, we can compare the volatility of WTI front month for the period of the war, Feb. 24 to April 19, i(the available data) and compare that against the same period in previous years to determine whether we have been seeing unusual volatility.
And we have.
Since the start of the war, one standard deviation in the price of front month WTI has been $7.63. This SD was, of course, higher in 2020 because that period encompasses the beginning of the pandemic when oil prices cratered. For the same period that year, the SD was a whopping $12.04. But otherwise, Feb-April 2020 was historically anomalous by a wide margin compared to the same period in previous years.
If we exclude 2020 from consideration, then the average SD for 2012-2021 was $2.29, compared to $7.63 since the start of the war. For these years, the maximum SD was $3.11 in 2015 and the minimum was $1.91 in 2019. Thus, we can say that volatility since the start of the war in the price of WTI is twice the maximum volatility of the same period in the prior ten years, and three times the average volatility (excluding 2020), measured in dollar terms, which is the measure to which I was referring.
We can, however, consider the same volatility in percentage terms, which compensates for the relatively high price of oil since the start of the war. Here once again, volatility is highest in 2022, with the SD in percentage terms 7.3% of the mean for the period versus 3.8% for the same period in the preceding ten years (less 2020). The max for this period was 6.9% and 6.3% in 2017 and 2016 respectively. Thus, the percentage volatility was pretty close in 2016 and 2017, but still below the relative volatility since the start of the war.
By any measure, I think I can reasonably support the statement that “oil prices are popping around quite a bit.”
Gathering and analyzing this data is a ten minute exercise from readily available public sources, which you yourself could have and should have completed, given the vast amount of time you seem to have available to comment on Econbrowser.
I had also been asked the difference between Lutz, Jim and me. Lutz and Jim are not daily in the data. I know about volatility because I check oil prices several times a day and I have a good sense of where prices could or should be. I don’t need to run statistics to know that oil prices are unusually volatile. Jim and Lutz may come to know that, but likely only ex-post when they sit down to analyze a larger data set, should the occasion arise. This is not to denigrate their work in any respect. Lutz’s work is always thought-provoking and statistically compelling, and Jim for me is a kind of paragon of what a good economist should be. Nevertheless, their focus is different from mine, and therefore our respective contributions show different strengths and weaknesses.
Steven,
It certainly looks pretty clear that oil prices have been highly volatile since the war started. I am not aware of Jim at least making any major comments on this, but I doubt he would disagree with that claim.
Pretty clearly Russian production is down. The precise number on that looks fuzzier than the 1.1 mpbd estimate, which is also probably part of why the prices are so volatile, which also reflects the extreme lack of clarity on how the war will go, how far cutbacks in EU Russian oil purchases will go, and what will happen with lockdowns in China and thus demand from there.
Even less clear is who is or will end up with the various windfall profits that are popping up here and there in the global system.
By no means did I intend to criticize Lutz or Jim, nor suggest that we somehow hold contrary views on the matter. I am not aware, nor would I expect, Jim or Lutz to have weighed in on this matter since. The point was to illustrate the difference between someone who is in the data every day versus analysts who review some specific aspects of the markets from time to time.
As for volumes, I think the drop in Russian production of around 1 mbpd is likely correct.
How fast and how far Russian production will fall is speculative. I do not know that there has ever been a precedent to the soft oil sanctions we are seeing in Russia.
We can, however, say a few things:
1. Russian revenues are likely far more stable than Russian oil production, since the drop in volume is likely to be largely compensated by a rise in oil prices.
2. Falling Russian oil sales are primarily bad for importing countries like Germany, Japan and, first among equals, China. China now imports 2/3 of its oil consumption and looks highly vulnerable to an oil shock. (Xi and the Communist Party have risks galore just now.)
3. An oil shock is likely if Russian output falls 3-4 mbpd. Less than that, and we might see a slowdown. Somewhere above a loss of 3 mbpd, the global economy is headed for recession. Right now, I am planning with a 2.3 mbpd decline to year end, but that and a token will be you a ride uptown on the subway, as the saying goes. Figure Brent at $140 / barrel is the threshold for an oil shock on a global level.
4. The US is immune to an oil shock on paper as we are ostensibly energy independent in oil. We’ve seen this play out before. US oil consumption declined from June 2011 to December 2012 — 18 months — without the US falling into recession, something which is historically unprecedented in modern times. By contrast, Europe fell into a steep recession during this period — Q4 2011 through Q1 2013. Why them and not us? US oil production was growing rapidly during this period, reducing the need for the US to rebalance its current account deficit wrt oil. That should be true again today, but the coasts will suck pond water while the mid-continent buys Ferraris.
5. Falling Russian oil production is bad for Democrats, as it implies high oil prices, with the impact felt principally in Democratic strongholds on the coasts.
6. There is a far better way to do all this. Of course.
The windfall can only end up in two places. Obviously, it is not going to the producer, since a Urals contract implies physical delivery of crude for those who want to hold it to term.
Therefore, the margin must fall to an intermediary, either a trader or a refiner / retailer, unless you believe that Russian crude is refined to cheaper product at the pump. So either the Trafiguras or Shells of world bank the buck, leaving aside bribes which may have to be paid along the line and the risks associated with sanctions-busting .
Menzie, you should create a blog post about the purchase of Ferraris by the mid-continent. I mean, seriously?!?!?!?!?! Bbwahahahaha. Either that or new post to poop on Steven Kopits in order to boost your ego.