Lessons from the Massachusetts Defeat

EXTRACTS: "Cyberspace Administration of China (CAC) decreed that generative AI content must “embody core socialist values and must not contain any content that subverts state power, advocates the overthrow of the socialist system, incites splitting the country or undermines national unity.' ” .... "This implies that the harder the CAC tries to control ChatGPT content, the smaller the resulting output of chatbot-generated Chinese intelligence will be – yet another constraint on the AI intellectual revolution in China. Unsurprisingly, the early returns on China’s generative-AI efforts have been disappointing."

EXTRACTS: "Cognitive dissonance occurs when one’s beliefs and actions conflict with each other." .... "This conflict might constrain people from acquiring new information that will increase the existing dissonance" .... "if someone commits wholeheartedly to Trump, they may well experience dissonance as they watch the news from that Manhattan courthouse. But they don’t necessarily stop supporting him. Instead, they might seek yet more information about the “deep state” and how it is persecuting Trump, or preach more about his positive attributes and the witch hunt against him." .... " If so, we can expect to see more conspiracy theories and more proselytising from the hardcore supporters going into 2024 and beyond. Donald Trump may not be finished just yet."

EXTRACT: "....the US possesses advantages in developing large language models (LLMs). It benefits from close business-university collaboration, lubricated by a deep-pocketed venture-capital industry. It is no coincidence that ChatGPT came out of the US, and out of Greater Silicon Valley in particular." .... "Developing countries would seem to be at a significant disadvantage in this AI arms race and are at risk of losing their competitive advantage: abundant low-cost labor. Yet AI also holds out the promise of benefits for these countries." .... " however, economic development depends on human development – that is, on the accumulation of human capital. Where developing countries lack the resources, financial and otherwise, to increase significantly their spending on traditional modes of education, AI holds out hope for providing what is missing."

EXTRACT: "The past decade has not been kind to neoliberalism. With 40 years of deregulation, financialization, and globalization having failed to deliver prosperity for anyone but the rich, the United States and other Western liberal democracies have seemingly moved on from the neoliberal experiment and re-embraced industrial policy. But the economic paradigm that underpinned Thatcherism, Reaganomics, and the Washington Consensus is alive and well in at least one place: the pages of the Economist."

EXTRACT: "Yet there is an important twist for the US: a chronic shortfall of domestic saving casts the economic consequences of conflict with China in a very different light. In 2022, net US saving – the depreciation-adjusted saving of households, businesses, and the government sector – fell to just 1.6% of national income, far below the longer-term 5.8% average from 1960 to 2020. Lacking in saving and wanting to invest and grow, the US takes full advantage of the dollar’s “exorbitant privilege” as the world’s dominant reserve currency and freely imports surplus saving from abroad, running a massive current-account and multilateral trade deficit to attract foreign capital."

EXTRACT: "Although the EU will have gained more internal stability, its basic character will have changed. Security will be a central concern for the foreseeable future. The EU will have to start thinking of itself as a geopolitical power and as a defense community working closely with NATO. Its identity will no longer be defined mainly by its economic community, its common market, or its customs union. The bloc has already accepted Ukraine as a candidate for future membership, and that decision was driven almost entirely by geopolitical considerations (as was also the case, previously, with Turkey and the West Balkan states)."

EXTRACT: "As I have long warned, central banks ..... will likely wimp out (by curtailing monetary-policy normalization) to avoid a self-reinforcing economic and financial meltdown, .... "

EXTRACT: "Netanyahu is simply unfit to be prime minister of Israel. He is a liar, a schemer and a fraud. If he has an ounce of integrity left in him, he should resign and save the country instead of stopping short of nothing, however evil, to save his skin."

EXTRACTS: "Though Mao Zedong viewed himself as Joseph Stalin’s peer, leading the world’s peasant communists as Stalin led its proletarians, behind closed doors Stalin reportedly called Mao a “caveman Marxist” and a “talentless partisan.” " ----- "Stalin’s behavior enraged Mao." ---- "When ..... Khrushchev, took over as Soviet premier following Stalin’s death in 1953, Mao paid back for Stalin’s disdain – and then some. On his return from his trip to Beijing in 1958, Khrushchev talked incessantly about how unpleasant his experience had been." ---- "Even if Xi did not have the upper hand before Russian President Vladimir Putin launched his war of choice in Ukraine, he certainly has it now..." --- "So, when Xi arrived in Moscow ..... he carried himself with an air of superiority, whereas Putin’s expressions appeared strained."

EXTRACT: "The spectacular collapse of Silicon Valley Bank (SVB) – the second-largest bank failure in US history – has evoked memories of the 2008 collapse of Lehman Brothers, which sparked the worst economic crisis since the Great Depression. But the current situation is, at least for Germans and other Europeans, more reminiscent of the “founder’s crash” (Gründerkrach) of 1873. Then, as now, an era of cheap credit had fueled a tech boom and then triggered a banking crisis. In those days, the startups were in railroads, electronics, and chemistry, but there were also a large number of financial startups rising with the tide. In both cases, the crisis was rooted in bad accounting rules that turned the financial system into a playground for gamblers."

EXTRACT: "Putin is desperate for a ceasefire, but he does not want to admit it. Chinese President Xi Jinping is in the same boat. But US President Joe Biden is unlikely to jump at this seeming opportunity to negotiate a ceasefire, because he has pledged that the US will not negotiate behind Zelensky’s back. -- The countries of the former Soviet empire, eager to assert their independence, can hardly wait for the Russian army to be crushed in Ukraine. At that point, Putin’s dream of a renewed Russian empire will disintegrate and cease to pose a threat to Europe. -- The defeat of Russian imperialism will have far-reaching consequences for the rest of the world. It will bring huge relief to open societies and create tremendous problems for closed ones."

EXTRACT: "Fifty years ago, a war broke out in the Middle East which resulted in a global oil embargo.... " ---- " Many historical accounts suggest the decade of global inflation and recession that characterises the 1970s stemmed from this “oil shock”. But this narrative is misleading – and half a century later, in the midst of strikingly similar global conditions, needs revisiting." ----- "In early 2023, the global financial picture feels disconcertingly similar to 50 years ago. Inflation and the cost of living have both risen steeply, and a war and related energy supply problems have been widely labelled as a key reason for this pain." ---- "In their public statements, central bank leaders have blamed this on a long (and movable) list of factors – most prominently, Vladimir Putin’s decision to send Russian troops to fight against Ukrainian armed forces. Anything, indeed, but central bank policy." ---- "Yet as Figure 1 shows, inflation had already been increasing in the US and Europe long before Putin gave the order to move his troops across the border – indeed, as far back as 2020."

EXTRACT: "The United States is in the midst of a book-banning frenzy. According to PEN America, 1,648 books were prohibited in public schools across the country between July 2021 and June 2022. That number is expected to increase this year as conservative politicians and organizations step up efforts to censor works dealing with sexual and racial identity."

EXTRACT: "As was the case before World War I, it is tempting to minimize the risk of a major conflict. After all, today’s globalized, interconnected world has too much at stake to risk a seismic unraveling. That argument is painfully familiar. It is the same one made in the early twentieth century, when the first wave of globalization was at its peak. It seemed compelling to many right up to June 28, 1914."

EXTRACT: "Another front has opened in the global rise of populist authoritarianism. With their efforts to weaken Israel’s independent judiciary, Prime Minister Binyamin Netanyahu and his corrupt coalition of Messianic fascists and ultra-Orthodox allies are determined to translate their anti-democratic rhetoric into authoritarian policy."

EXTRACT: "One year on from the start of a military operation that Moscow was expected to win easily, there are increasing signs of anger, frustration and resistance from ordinary Russian soldiers. These are important reminders that these men are not mindless pawns who will do Putin’s bidding under any circumstances."

EXTRACT: "Over the past few days, more details have emerged about the alleged Russian plot in Moldova. Apparently, well-trained and well-equipped foreign agents were meant to infiltrate the ongoing protests, then instigate and carry out violent attacks against state institutions, take hostages and replace the current government. This may seem far-fetched, but is it? Yesterday, Moldova denied entry to Serbian soccer fans who had planned to support their team, FK Partizan Belgrade, in a Europa Conference League match against the Transnistrian side Sheriff Tiraspol. ---- " ..... there is a history of Serbian football hooligans being involved in paramilitary activities, including war crimes committed by the notorious Arkan Tigers during the war in Bosnia in the early 1990s. Moreover, Russia attempted to overthrow the Montenegrin government in October 2016, just ahead of the country’s Nato accession the following year, in a plot eerily prescient of what was allegedly planned recently in Moldova.

EXTRACT: "As the British novelist L.P. Hartley once wrote, the past is “a foreign country: they do things differently there.” Alas, this does not mean that we necessarily do things better now. But to understand that lesson, we have to follow Santayana’s advice, and study history very carefully.."

EXTRACT: "Others who have left Russia include tens of thousands of the country’s excellent computer scientists, whom the armament industry desperately needs. In fact, so many Russians have emigrated to neighboring countries that Armenia expects its 2022 GDP growth to come in at a whopping 13%. Unlike oil fields, this is capital that Putin cannot nationalize or seize."

EXTRACTS: "Under these circumstances, Ukraine’s allies are right to scale up their military assistance, including by providing battle tanks. The goal is for Ukraine to prevail against its aggressor. But we cannot wish for that end without giving Ukraine the means to achieve it. The alternative is a prolonged war of attrition, leading to more deaths in Ukraine, greater insecurity for Europe, and continued suffering around the world (owing to Russia’s weaponization of energy and food supplies)." ---- "And make no mistake: the sanctions are working. Russian oil is selling at a $40 discount to Brent, and its daily energy revenues are expected to fall from around €800 million to €500 million after our latest measures kick in this month. The war is costing the Kremlin dearly, and these costs will only rise the longer it lasts."