Keeping up with the FITs, 7/19
Curtis Yarvin on the culture war; Lee Bressler and Noah Smith on the direction of the economy; Noah Smith on the Zeihan economy
try thinking of your culture and society as a battered wife.
Your job, when you are a battered wife, is to get out of the situation.
Pointer from Brian Chau. When I see Mencius Moldbug using the same metaphor I did last week, I assume that I went too far. I definitely suffered a net loss of subscribers. He goes on,
Winning a battle in the culture war—as in today’s Current Thing, the repeal of Roe v. Wade—is not like leaving your abusive husband. It is certainly not like finding a new husband. No—it is like hitting your husband back.
Which he says is a bad strategy. You’re just going to get hit again.
He postulates that ordinary people want to neither rule others nor be ruled. Progressives want to rule. This is a difficult asymmetry to address. I am not at all convinced that Moldbug has the solution.
Equity prices have crumbled. Trillions in market value have been wiped out. Don’t forget cryptocurrencies, which have plummeted, wiping out another $2 trillion of wealth. This is massively disinflationary. It will weigh on economic activity as people feel poorer and don’t want to spend money.
The S&P 500 at the pre-COVID peak: 3380
On December 31, 2020: 3756
July 12, 2022 (around the time of Lee’s post): 3820
It has only “crumbled” relative to the big run-up in 2021.
Paper wealth is still much higher than it was before the pandemic. There still is room for prices to rise further. When job gains are close to 400,000 a month, it is too early to call a recession.
If inflation is not under control, then, as Noah Smith points out, interest rates may need to go up further. Noah Smith writes,
It’s a strange time for the U.S. economy. Growth is low and quite possibly negative and consumer spending is slowing, but employment is high and still surging, violating a long-standing pattern known as Okun’s Law that says that growth and employment should move more-or-less in lockstep. On the price side of things, we’re seeing disinflationary pressure, as commodity prices fall and supply chain snarls work themselves out.
I’ll admit that this is a very difficult economy to comprehend. Maybe the economic indicators that I follow are not so helpful right now, because we are transitioning some production away from foreign sources. We may be rotating away from commodity inflation and toward wage inflation. We may see slow growth in spending, which indicates a recession, along with a very tight labor market, which indicates a boom.
the world is probably entering an era of intense geopolitical competition, the likes of which haven’t been seen at least since the 1970s and probably since the 1930s. And that competition has the potential to provide a legitimating mission for the reintroduction of the kind of large-scale economic planning that many people have been looking for since 2008. We may not be able to prevent the new era of conflict, but in some ways we can take advantage of it — and in any case, we must do what needs to be done.
So there will be two blows to the economy. First, the blow predicted by Zeihan, which is a breakup of globalization into geopolitical blocs. Second, the blow described by Randolph Bourne as “war is the health of the state.” But Smith sees a Higgsian ratchet up of government control as an opportunity, not a threat.
I have no idea why Noah Smith gets as much attention as he does from smart people. I find him banal, partisan and completely predictable. A NYT intellectual.
As for Yarvin, his observation seems to boil down to the old saw that the left plays offense and the right plays defense. That's asymmetrical, obviously. Rufo has changed that for CRT and LGBTQ in schools, going on the offensive with a conservative cause. Unfortunately it seems like structurally the right has to wait till the left goes too far in order to fight back. In the long run then, we will always be lurching leftwards, with an occasional (transitory?) conservative correction.
Curtis also thought that China had a good COVID strategy and blamed people who resisted as being a bunch of wreckers.
Once Curtis finds a particular hammer, everything is a nail.
While it's true that the right should seek bigger victories and not settle for small ones, victory comes to those accustomed to winning victories.