Love in the Time of Corona, The Good, The Bad and The Corrupt, and China/US Trade with World

On Sunday afternoon at the gym as I looked up from the bike to the bank of televisions above, all but one was talking about the death of Kobe Bryant, his daughter and the seven other unlucky souls (one TV incessantly played Law and Order reruns*). It did not matter whether the channel was on ESPN, CNN, MSNBC, or even Fox News, everyone was fixated on Kobe. Perhaps that was to be expected but what was interesting was they were all covering the story in the same way—a tragedy, obviously, but all with reverence for Kobe Bryant and respect for his many basketball accomplishments. As a lifelong Seattle Supersonic fan, I almost always rooted against Kobe on the court and was occasionally troubled by his off court behavior such as the credible allegations of rape against him in 2003. But in death, Kobe appears to have done what no one else has—temporarily united the country, as usually when I look at the gym’s TVs they are all covering completely different worlds–Fox, MSNBC and CNN were identical.** Plus, in listening and reading about Kobe in recent days it appears he learned and grew from his past transgressions and acted in some ways to atone for them,*** including in his stellar support of women’s basketball. And so we find ourselves finally, belatedly cheering for him, a man who continued to learn and improve, which is better than most of us do. And we root for China to behave better in possible epidemics, boo corruption around the world and take a timeout to compare China and America’s trade with the world. It’s this week’s International Need to Know, taking last minute clutch shots on international information and data.*At this point we suspect the Law and Order universe is part of Scientology or some other cult, what else could explain its ubiquitousness?

**By Tuesday, the gym TVs had returned to their regularly scheduled programming of covering separate universes

***Though perhaps the woman in Colorado may understandably not be satisfied

Without further ado, here’s what you need to know.

Love in the Time of Corona

The woman we were meeting with, after shaking our hand, began coughing and sneezing, and now we hope our flu shot really worked. But while it is true, as health authorities remind us, that currently the regular old flu is currently killing far more people, the corona virus we warned readers about way back on January 9th is nothing to, uh, sneeze at. That’s partly because China’s honesty with information is a bit like the woman we met with—we’d prefer they’d been more upfront about the problem before shaking the world’s hands.  In the initial stages of the emergence of the virus, China was more interested in controlling the spread of information than the spread of the virus. For nearly a month after it was clear there was a new virus and that it could be transmitted person-to-person, China worked to prevent such information getting to its own citizens (though it appears on January 8 they did inform WHO). Probably due to pressure from China, WHO did not initially assess the risk as “high” but rather as only “moderate.” They continue to prevent Taiwan’s participation with WHO. This is a good illustration of the challenge we discuss in our upcoming book of China’s interest in transforming the international world order into one with Chinese characteristics. Now the heavy government pendulum of China has swung towards ruthlessly controlling movements of people to abate the spread of the virus. Perhaps this is the right course of action, and certainly it is an open question of how prepared the U.S. is for such a disease outbreak, but China’s infusing global organizations the world relies on with their authoritarian culture, is a trend the world needs to recognize and address.

The Good, The Bad and The Corrupt

Last week while you were buying the last N95 mask left on the shelf and switching channels from the impeachment hearings, Transparency International released their 2019 report on corruption around the world. Their index rates countries on their perceived level of public sector corruption on a scale of 0 to 100 with 100 being squeaky clean and 0 as corrupt as a White House impeachment lawyer. Europe was the least corrupt region according to their rankings and Sub-Saharan African the most corrupt. 22 countries have improved their scores since 2012 and 21 countries have gotten worse, including Canada and the United States. The three countries which improved the most are Greece, Guyana and Estonia. Scan the top and bottom ten below for the cleanest and dirtiest countries.

China Vs. U.S. Trade With World

In our forthcoming book about how China has changed and how the U.S. and world should address this, we note the extraordinary success of China’s economy, and how important it is to the world economy. Visual Capitalist illustrates this with a graphic showing how the U.S. was the main trading partner to the world in 1980 and today China is. They note that “…before 2000, the U.S. was at the helm of global trade, as over 80% of countries traded with the U.S. more than they did with China. By 2018, that number had dropped sharply to just 30%, as China swiftly took top position in 128 of 190 countries.”  Trade is also a much larger component of world GDP today at 59 percent compared to 1980 when it accounted for only 20 percent of GDP. When grappling with concerns about the authoritarian nature of China and its interest in infusing the previous international rule-of-law order into one with Chinese characteristics, any strategy must understand China’s economic power and influence.

What the ASEAN Elite Think, South Africa is Poorer, and No Free Finnish Lunch

As we stood on the platform awaiting the AirTrain to take us from JFK into Manhattan, a Metro Transit Cop asked us where we were headed. We got to talking and it was clear from his accent, his friendly but straightforward gruff attitude, his frequent use of “whaddyagonnado” that he was an old school New Yorker, the kind we remember from our youth visiting our family, staying with our grandparents on the Lower Eastside. The transit cop, Frank, was born in Little Italy back when it was big but soon his family moved to Bensonhurst in Brooklyn. Today he lives in Queens and his house which he bought in 2004 is now worth over a million dollars. He said he bought it so his now 18-year-old son can still live in New York when he is older. Because, Frank told us, New York City is unaffordable now. He despaired of today’s inequality and that people like him and his Dominican-born wife now often have to live in the far-flung suburbs. We, if not exactly despairing, lament this too. We tremendously enjoyed our short weekend in NYC but the five boroughs are no longer the creativity-generating, culture-bending hive they once were. New York needs to reform its land use policies so it can start building and the Franks of the world can again live side by side with the wealthy and poor in a teeming morass of innovation. Whaddyagonna do but examine what the elites of Southeast Asia are thinking, lament South Africa’s getting poorer, and ponder Finland’s transportation decisions. It’s this week’s International Need to Know, your unimpeachable source of global data and information.

Without further ado, here’s what you need to know.

What the ASEAN Elite Think

If we chatted with the movers and shakers of Seattle, we undoubtedly would get a different answer on what are the important issues facing the city and how they felt the city was doing than if we talked to a random group of people at Denny’s. J.J’s Bar and Grill or the Dollar Store. But this demographic is important, because, well, they are moving and they are shaking all of us aroiund. Which is why we read with interest the results of a survey by Singapore’s ASEAN Studies Centre of professionals from business, government and media throughout Southeast Asia. The top three concerns of these professionals are in order domestic political instability, economic downturn and climate change. They are also increasingly worried about China’s influence in the world. A little over 60 percent of these respondents had little or no confidence in China to do the right thing. Of those who responded that China is the most influential economic power in the world (and most did respond that way), 72 percent are worried about its expanding influence. Of those respondents who deem China the most influential country politically and strategically, 85 percent were concerned about China’s rising influence. Interestingly, “Japan is the most trusted major power among Southeast Asians, with 61.2 percent of the respondents expressing confidence in Japan to ‘do the right thing’ to provide global public goods.” The world is a very different place than it was three years ago.

South Africa Getting Poorer

Last week, we reported that all but nine countries in the world are richer today than they were in 1950. But what about more recently? Most countries economies have grown since 2014, but unfortunately South Africa is not one of them. In 2012, South Africa’s total GDP was US$396 billion but now is only US$ 370 billion. GDP per capita is down since 2014 when it was US$7582 and today is US$7433. South Africa is getting poorer over the mid-term, a relatively unusual experience. It has been two decades since we were last in South Africa so we’re no experts but it’s obvious South Africa’s leadership is not getting the job done. South Africa’s infrastructure is much more developed than other African nations—they should be able to take advantage of manufacturing moving from China and other parts of Asia as other African countries are. Let’s hope they get things turned around soon.

No Free Finnish Lunch

A friend pointed us to an article describing how Finland is declining to make public transport free. It’s one of our favorite articles of 2020 so far. First, of all, we hate the phrase “making transport free,” or any service free such as those arguing for free colleges. Nothing is free, you are merely changing which people are paying for it. In the case of public transport, a government is spreading the cost to the larger public if they don’t charge the users of the service. This may, or may not, be a good idea, but it should not be sold as free transportation. At any rate, although nearby Talllinn, Estonia no longer charges users for public transport, Finland will continue to. Why? Their research indicates that “free transport systems offer no significant reduction in personal vehicular traffic, and its impact on cutting transport emissions has been limited.” This is because, according to the research, those who shift to public transport when the charge is eliminated are pedestrians and cyclists. They stop walking and cycling short distances and start taking buses and trams. Car drivers, because it saves them time, continue to drive. FinnTech research is important to learn from.

2020 Better than 1950, Ethiopia Update, and Vietnam’s Continued Rise

One of the more troubling aspects of our times is the fetish against the free press, including too often by the current U.S. President. So we are only offering constructive criticism not attacking the media when we write that Reuters owes its readers an explanation for its Wednesday, January 8 (Seattle Times) article reporting that a “Canadian security source” asserted the Ukraine airliner was not shot down by a missile but instead was a matter of technical issues. Reuters reporter, David Ljunggren, claimed this source thought “there was some evidence one of the plane’s engines had overheated.” Shortly, thereafter, Reuters followed up with another article stating, “Five security sources—three Americans, one European and one Canadian—told Reuters the initial assessment of Western intelligence agencies was that the plane had suffered a technical malfunction and had not been brought down by a missile.” We understand initial information is often wrong but anyone with half a brain knew from the beginning that mechanical problems were not the cause of the crash. Even our quarter size, non-aerospace, non-Iran expert brain knew this article was BS that very night (our “security sources,” i.e. our spouse, can confirm this). So the question is who were these “intelligence” and “security” sources? Were they really in a position to know? Were they feeding Reuters false information on purpose? Did Reuters stop to think how illogical the assertion was that the plane exploded and then crashed due to mechanical failure? Reuters owes its readers a forensics accounting of how they got this article so wrong. Their reporting was rebroadcast throughout the night and even the next morning by everyone from NPR to other distinguished publications with potentially troubling ramifications for Boeing and others. As Tom Cruise yelled in A Few Good Men, we want answers…and in this case we can handle the truth. And we present the truth to you today on world GDP growth since 1950, an update on a still underrated country and the continued success of Vietnam. It’s this week’s International Need to Know, the first quarter Houston Texans, the second quarter Kansas City Chiefs of international news and data.

We would be remiss if we did not note the passing of another New Orleans music icon last week—5th Ward Weebie. A rapper, and major foundation of the New Orleans Bounce scene (a form of hip hop, where twerking originated). He is featured in Trombone Shorty’s Buckjump. RIP. (Mailchimp is having troubles loading videos so we can only link to Buckjump)

Without further ado, here’s what you need to know.

2020 is Better Than 1950

In our upcoming speech on globalization and inequality, one of the points we make is the world is much better today than it was 70 years ago. Inequality is a challenge but as we work to fix that problem we shouldn’t destroy what helped the world succeed the last 70 years. To that point, Our World in Data graphically shows this in the chart below (click on the chart to enlarge and see each country better). What it shows is that the average person in the world today is now 4.4 times richer than they were in 1950. Almost every country in the world is wealthier today than in 1950 with nine countries now 15 times wealthier than they were 70 years ago. Unfortunately, nine countries are poorer today than they were in 1950. Any guesses who they are? But shifting back to the winners, Taiwan, which recently re-elected their President, had an income of $1400 in 1950. Today, Taiwanese are among the richest in the world. We will have more to say about Taiwan in our upcoming book about China and the U.S. Stay tuned!

Somewhat Underrated Country Update

Since Prime Minister Abiy Ahmed won the Nobel Prize, I suppose we can’t call Ethiopia the most underrated country in the world, but it is still somewhat underrated. For example, did you know Ethiopia had the second highest rate of GDP growth last year? Yep, Ethiopia grew at 10.6 percent in 2019, just behind Nauru* and continued a 13 year run of high rates of economic growth. But it is not all rosy news. Ethiopia’s inflation rate reached 19 percent in 2019, much higher than previous years. Its unemployment rate has also increased significantly in recent years, and its exports have slowed. These headwinds are why the World Bank is predicting Ethiopia will only grow at 6.3 percent in 2020. We shall see. In the meantime, the reformist minded Abiy is still planning on elections for this May and June. This coming year could be a pivotal one for our underrated country.

*Who knew there was a country called Nauru? Did C.S. Lewis make this up? Talk about underrated. 

Vietnam’s Continued Rise

We head back to Vietnam in a month and a half, and as always, are looking forward to it. No country has gained more from the U.S. – China trade war than Vietnam. In fact, as you see in the chart below, no country received more manufacturing foreign investment than Vietnam since 2014. On our trip to Vietnam last year we saw some of this investment up close, including a shoe factory that moved there from China in 2015. GDP in Vietnam grew at 7 percent in 2019 and the country is likely to see strong growth this year too. Our biggest fear for Vietnam is Trump will discover it and start imposing tariffs on goods coming from there. For anyone who cares about trying to reform China, this would be one of the most short-sighted policies possible. Which is why we worry it will happen. In the meantime, Vietnam’s strong economy is also illustrated by the number of foreign retailers interested in entering the market or expanding their presence there. Japanese and Korean retailers such as Uniqlo and Lotte both have big plans there. That’s another data point, perhaps even more significant than GDP, of Vietnam’s success. It remains one of the four most important countries in the world, as we explain in our upcoming book.

Did Globalization Cause Inequality, Spiting Our Nuclear Noses with Coal, and Don’t Forget to Worry About This

In a meeting on Tuesday, the woman across from us noted all the distressing news in the world from strife with Iran, Australia on fire, India’s citizenship law, Taron Egerton beating out Eddie Murphy and Leonardo DiCaprio for best actor in a musical or comedy at the Golden Globes* and asked me to give her some optimism. We thought about it a moment and though the world has definitely improved in many ways since 2010, we couldn’t offer too much other than CO2 emissions were down in the U.S. by 2.2% last year. The last few years have admittedly been troubling. The world feels a bit like a friend or celebrity who appeared to have everything–a good family, growing wealth, lots of friends–who suddenly commits suicide. Sure they had challenges and no life is perfect, but it’s difficult to understand their choice. Perhaps we need to set up a suicide hotline for world leaders where they can be talked down from the precipice. While we register our 888 number we answer the question of whether globalization caused inequality, worry about Germany’s nuclear decision and raise concern about a mysterious virus in China. It’s this week’s International Need to Know, the Lambeau Field of international information and data.

*What? You weren’t outraged?

Without further ado, here’s what you need to know.

Did Globalization Cause Inequality

We have been asked to speak at a conference next week on the topic of globalization, international trade and inequality. In ten minutes. That seems as almost impossible a task as explaining it in 200 words here. We would need at least 11 minutes or 300 words to do it adequately. Inequality has gone up in the United States and many other places around the world. But did trade and globalization cause this? Trade has been slowing down over the last three or four years and yet inequality continues to rise in the U.S. China caused localized job losses in the U.S. ten years ago but overall there was a net job gain and the “China Shock” ended over a decade ago and yet inequality continued to rise. Plus, manufacturing jobs have decreased all over the world at roughly the same rate (see first chart below) but inequality did not rise in all these countries that saw manufacturing job losses (see second chart). In fact, inequality is higher in China, the alleged culprit of U.S. inequality problems, than it is in the U.S. Likely a variety of domestic policies affect inequality more than international factors. Globalization may have played some part in a rise of inequality in certain parts of the world, but it was likely minor. As with all complicated effects, there are likely many overlapping causes.

Spiting Our Nuclear Noses with Coal

This story is inspired by one of our loyal readers who has expressed skepticism over some of our clean energy posts. This reader has noted the importance of nuclear energy in their skepticism of wind and solar. We have previously noted our conflicted feelings about nuclear energy—we like it does not emit climate change gases but worry about the radioactive waste. However, Germany is learning about the challenging trade-offs of ditching nuclear energy, which they did after the Fukishima accident. A new paper asserts that “the phase-out of nuclear power comes with an annual cost to Germany of roughly $12 billion per year” and that “Over 70% of this cost is due to the 1,100 excess deaths per year resulting from the local air pollution emitted by the coal-fired power plants operating in place of the shutdown nuclear plants.” There are risks to nuclear power but there are also bad consequences for ditching this energy source for coal. Being reflexively anti-nuclear may feel good but is not necessarily good.

Don’t Forget To Worry About This!

We’re concerned that people do not have enough to worry about in 2020—the year has started out too calmly. So as you repose calm, cool and collected without a worry in the world, we provide this public service to remind you of the mysterious flu in Wuhan, China. As we write, nearly 60 people have been infected with a mysterious viral pneumonia. It is not SARS say researchers who have also eliminated as a cause bird flu, regular flu and a variety of other viruses. That’s the good news. The bad news is researchers don’t know what it is, which in some ways seems worse than if it were SARS or some virus for which we at least have some knowledge. The disease has spread to Hong Kong which is a short high-speed train ride away from Wuhan. Hong Kong, of course, was devastated by SARS and already some Hong Kongers can be seen wearing masks—this time to guard against viruses rather than tear gas. China, after an initial hesitant response, has been relatively open about this new disease. This is important since millions of Chinese are about to start traveling for the annual new year’s holiday, and thus easily transporting and transmitting the disease. Okay, you can now go back to resting and relaxing or worrying about the Middle East if that’s your jam.

Earth is Greener, We Are In Your Debt, and Yukimuri the Drone Dog

For reasons we don’t entirely understand, our gym plays old Law and Order episodes on the TV continuously. Last week while on a stationary bike we glanced up at the TV and two cops were sitting in their car, one of them reading a News of the World or some such tabloid with a lurid, over the top headline. The TV cop seemed half interested in the tabloid and half in whatever his partner was saying.  As we pedaled faster, it occurred to us that today’s world is one big tabloid writ large thanks to the Internet. Where once we were exposed to headlines only occasionally, perhaps while standing in line at the grocery store, now we are bombarded with outlandish claims, titillating tales and bombastic news at all times of the day, throughout the weeks, months and years. Through social media and other platforms, everybody is a National Enquirer headline writer nowadays, as well as a Weekly World reader, whether we want to be or not. There are not more crazy things happening today than in the past, we’re just seeing them more often and this vast trove of dubious information passes across our gaze magnitudes more often. What this means for law and order we are not certain but we do know the earth is greener than it was twenty years ago, there is much more debt around the world and we will never grow tired of Japan’s drone dog mascot. It’s this week’s International Need to Know, whose new year’s resolution is never to make 2020 hindsight jokes this year.

Without further ado, here’s what you need to know.

The Earth is Greener

As 2019 departed, the year-end summations in the news tended to emphasize all the bad trends and events of last year so what better way to start 2020 then to remind us that many things are getting better, including the greening of the earth by the two most populous countries—China and India. Yes, according to a new analysis of satellite data by NASA, “the world is literally a greener place than it was 20 years ago.” There are more trees and plants covering the planet than there were in 2000 thanks to tree planting policies in China and agricultural efforts in India. In fact, India and China are using the same amount of land to grow food but production is way up as is total green leaf area. NASA says there is an important lesson to be learned from all of this: “Once people realize there’s a problem, they tend to fix it. In the 70s and 80s in India and China, the situation around vegetation loss wasn’t good; in the 90s, people realized it; and today things have improved.” China and India have all kinds of problems and are making serious mistakes in a number of spheres, but they have done some good things too. Let’s hope they continue to learn lessons, as must we all.

We Are In Your Debt

Yes there are more plants and trees than 20 years ago but there is also more debt. A graphic from Visual Capitalist shows the United States has the largest percent of debt worldwide at 31 percent, followed by Japan (17%) and China (nearly 10%). China’s debt is likely undercounted in this graphic but even undercounted Chinese debt has grown two trillion in the last few years. Regionally, Asia accounts for the largest percentage of world debt, followed by North America. Forgetting percentages for a moment, the total debt increase over the last twenty years is immense, some of which may have been warranted due to climbing out of the Great Recession (and yet debt keeps going up whether an economy is strong or not—it’s as if Keynes has gone on a 24-7 bender).  In 2000, worldwide debt was estimated at around $20 trillion. Today, it’s up to $69 trillion so debt has tripled in 20 years. If plants and trees had tripled in that time frame, we’d have less of a climate change crisis. More green trees less red debt?

Yukimuri the Drone Dog!

But enough for worries this week (there will be plenty of time for that the rest of 2020), let’s get back to good news and that means the revelation of Yukimuru the Drone Dog. Americans love dogs. British love dogs. Everyone loves dogs. But perhaps only the Japanese would create a drone dog mascot. Via the remarkable @MondoMascots, a Twitter account which tracks Japanese mascots, we learned of Yukimuru, a drone mascot created by the town of Uji in the Kansai region of Japan. According to Nextweb.com, the drone dog is named after “an actual historic dog named Yukimaru, the companion of imperial Prince Shotoku, who ruled from 574-622 and created Japan’s first political constitution.” Unlike Black Mirror’s drone dogs, this one is cute and represents democracy not dystopia.

【FLYING DOG DRONE】Yukimaru Skywalker Takes a Stroll – The World’s First Character Mascot Drone!(?)

Watch the Video
49,721 views