Category: News

The media standoff in Australia

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Facebook shut off news access for Australian users on Wednesday. It’s part of an ongoing brawl over proposed legislation that would create a statutory code for bargaining between news organisations and large technology platforms like Facebook or Google. You can read more about it here or here.

Some initial thoughts:

  • This seems like an misstep for Facebook, especially since Google signed an 11th-hour deal with major news publishers to avoid anything so drastic. It is taking a combative stance against a national government, in an environment where there is already concern about Facebook’s influence. “Large corporation threatening nation-state” is a bad look.

    Who has more to lose? For the Australian government, backing down means giving in to a foreign company – not even a foreign power. For Facebook, acquiescing sets a precedent that regulators in other countries could emulate. I suspect Facebook will try and cut a deal here they can use in other regions.
  • The lady doth protest too much, methinks. As much as Facebook repeats that it is just a mere platform, we now have an incontrovertible demonstration of its power; it put up barriers to news for millions of people with the click of a button.

    The words that come to mind when I think about Facebook are no longer “innovative,” “social network,” “founder-in-t-shirt,” “cringy posts,” or “newsfeed,” instead they’re “fake,” “malign,” “opaque,’ “behemoth.”
  • In the short-term, it might have the consequence of hurting smaller publishers who rely on Facebook to reach audiences. Larger news organisations can still expect traffic through their website.

Trump is performing better than the headlines suggest

Trump has now been acquitted in his second impeachment trial, notching up yet another “first.” Had you scanned the headlines of the New York Times or the Financial Times, you could be forgiven for feeling a modicum of satisfaction amidst the disappointment; Trump got off, but the Republican Party is breaking with him; Trump got off, but his name has been tarnished for good; Trump got off, but is fading into irrelevance in (the surely very tacky) Mar-a-Lago.

The story is a little different if you scroll down.

74% of Republican voters want to see him continue in politics. Only 54% of Americans want him out of politics. I stress only because Trump is, on paper, specifically the paper the NYT is printed on, the most disreputable and tarnished President in recent history.

What about the political establishment, his fellow-travelers? Only seven out of the fifty Senate Republicans voted with Democrats against Trump. Of those seven, three do not have to stand for election for five years, two are retiring, and two – Mitt Romney and Lisa Murkowski – have long built names as the (only) Republican Senators who dare to criticize Trump. Bill Cassidy from Louisiana, one of the seven, has already been censured by Louisiana’s Republican Party.

Much has been made of Mitch McConnell’s statement: “There is no question that president Trump is practically and morally responsible for provoking the events of that day.” A statement he made after having voted to acquit Trump.

All this despite having been banned from Twitter for weeks.

Has Trump’s brand been damaged? Among Democrats and Moderates, yes. Among his base, which encompasses a majority of the Republican Party, probably not.

Are Republicans divided over his future influence? Perhaps in private. For now though, most establishment Republicans have been remarkably reticent to criticize the Teflon Don.

Trump will be the defining question for right-wing politics in the US until at least the mid-terms in 2022. There are a spectrum of possibilities from party moderates neutralising his influence, to Trump retaining control, including a messy collapse into years of internecine war. I suspect Trump will hold the reigns in the short-term. The winner-takes-all electoral system incentivizes party unity, and makes the threat of Trump running as a third-party candidate existential. This will make the mid-term elections in 2022 a litmus test for each faction. I suspect moderates will look for mistakes and failures in the 2022 mid-terms as evidence to try and neutralise him prior to 2024.

Would that we did not have to care about the parochial divisions of an outlandish political party in the United States. Yet, this group has the power to stymie everything from action on climate change, to relief for one of the world’s worst humanitarian disasters.

China’s growing cultural muscle

I tend to discuss China’s growing assertiveness with reference its economy or foreign policy. It’s a pity, because China’s increasingly muscular cultural scene is illuminating. If you want to understand the trajectory of China over the next few decades, it’s vital to observe the stories China tells about itself.

Check out this trailer for the new film ‘The Eight Hundred.’ It is a dramatization of the Battle of Shanghai, a particularly bloody siege in the Second Sino-Japanese war – part of what we would call the Pacific Theatre of World War 2.

A few points to reflect on:

  • The Second World War may be the most dramatized war in modern cinematic history. Were these films your primary source about the war, you would presume its centre of gravity lay somewhere between Omaha Beach and a blitzed out London. The Eastern front, and to an even greater extent, the Chinese theater, are rarely mentioned; I suspect there are more blockbuster films about the American civil war than both combined. One benefit of a thriving film industry in China is that new historical stories will be told.
  • These stories will increasingly be filtered through a nationalistic lens. The FT reports that China’s media regulator required changes to the film, because the troops that fought in the battle were from the Nationalist Kuomintang army. The Nationalists would later fight (and lose) a civil war against the Communists, before retreating to Taiwan.

    Nationalistic depictions of war are not unheard of in Hollywood today (American Sniper was a particularly egregious example), but more often than not, contemporary war films emphasise moral ambiguity, despair, and the senselessness of violence. Based on the trailer, ‘The Eight Hundred’ is more Horace than Owen with regard to: dulce et deocrum est pro patria mori. The trailer ends with the following line:

    “To my dear wife YuZhi, when our kids grow up, they shall join the army to avenge their father. To devote themselves to their country. So that our descendants won’t suffer anymore humiliation.“

Is Green Quantitative Easing on the horizon?

Many forces are pushing central banks to change how they operate: low inflation; hesitant fiscal policy; climate change; anemic growth; financial instability. Low inflation claimed the first scalp, when it led the Federal Reserve to switch to an average inflation targeting regime. Climate change may be the next.

The FT reports that:

This is a big deal, even if it might sound like gibberish at first.

Right now, to stimulate the economy, central banks print money (it’s slightly more complicated) to buy government and corporate bonds from the private sector. The idea is that this lowers bond yields, which lowers interest rates, and moves money into other parts of the economy. In theory, interest rates for governments and corporations fall, and lending should increase to businesses and consumers, stimulating the economy. This is Quantitative Easing.

Today, central banks do this without taking the environment into account. A corporate bond from Shell is the same as a corporate bond Vestas (they make wind turbines). For several years now, people have been saying that central banks should use Quantitative Easing in an environmentally conscious way. This mean that, when it buys a corporate bond from Shell, it should acknowledge that Shell is a polluter. When it buys a corporate bond from Vestas, it should acknowledge that Vestas is not a polluter. It could do so by charging a premium for example.

This has been fiercely resisted to date. The fact that the head of the French central bank, who has a seat on the ECB’s Governing Council, is in favour, speaks to how much the consensus is changing.

Please do read the whole thing

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Does carbon pricing work in practice?

Not according to a new meta-analysis out from Jessica Green in Environmental Research:

Carbon pricing has been hailed as an essential component of any sensible climate policy. Internalize the externalities, the logic goes, and polluters will change their behavior. The theory is elegant, but has carbon pricing worked in practice? Despite a voluminous literature on the topic, there are surprisingly few works that conduct an ex-post analysis, examining how carbon pricing has actually performed. This paper provides a meta-review of ex-post quantitative evaluations of carbon pricing policies around the world since 1990. Four findings stand out. First, though carbon pricing has dominated many political discussions of climate change, only 37 studies assess the actual effects of the policy on emissions reductions, and the vast majority of these are focused on Europe. Second, the majority of studies suggest that the aggregate reductions from carbon pricing on emissions are limited – generally between 0% and 2% per year. However, there is considerable variation across sectors. Third, in general, carbon taxes perform better than emissions trading schemes (ETSs). Finally, studies of the EU-ETS, the oldest emissions trading scheme, indicate limited average annual reductions – ranging from 0% to 1.5% per annum. For comparison, the IPCC states that emissions must fall by 45% below 2010 levels by 2030 in order to limit warming to 1.5 degrees Celsius – the goal set by the Paris Agreement (IPCC 2018). Overall, the evidence indicates that carbon pricing has a limited impact on emissions.

Geopolitics and the energy transition

From today’s big read in the FT:

But is the geopolitics of energy really about energy?

To link geopolitics and conflict to a particular material thing is to miss the point a little. There is not a fixed set of objects we fight over, such that the sudden super-abundance of one reduces conflict as a whole. Humans have fought wars over salt and spices, cotton and coal. Better shipping routes to the spice islands, or alternatives to coal did not eliminate conflict so much as displace it elsewhere. Tensions arise over the valuable, the scarce, the unevenly distributed (and much else). A geopolitics of carrots is possible should they meet those conditions.

Instead we should be asking, what things and places meets those conditions in a world where energy is super-abundant. What do societies with an abundance of energy make, do, and look like? What will they care about, be willing to risk lives and treasure for? One thing missing from the article is services. Geopolitical thinking is still deeply attached to the material world, but we need to understand how increasingly digital (dematerialised?) and service driven societies change traditional geopolitics (if at all)?

The article outlines some of the new(ish) commodities that will power the renewable revolution, like cobalt and copper. This in turn will shift the geography of geopolitics, perhaps the corridors of electricity transmission will replace the sea-lanes transporting oil (and perhaps I was overhasty in criticizing those who think Eurasia is the future of geopolitics).

Well worth reading!

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