America under Old Joe is, to say the least, not headed in the right direction, and 88 percent of the country agrees. Not even one-fifth of Democrats can muster the guts to say things are going well. The economy is shaky, inflation is out of control, the streets are in chaos, and America has hopped from fighting one disastrous war to funding another. We need not belabor points that you, dear reader, already know.
But believe it or not, America’s situation isn’t as disastrous as it appears. To illustrate, let us briefly travel nine thousand miles away.
In a move worthy of Portland, Oregon, in early 2021 Sri Lanka’s government announced an immediate and total ban on using chemical fertilizers or insecticides for agriculture. Essentially, the country was told to go 100% organic by government decree.
The result: Famine. Yields fell dramatically, and a country that once easily fed itself now cannot. Even worse, economic dislocation of the ban means that now, even with the ban hastily reversed, many farmers didn’t even bother planting this year. Now, the country is officially bankrupt, and on the verge of total collapse.
??Sri Lanka has banned the sale of gasoline to ordinary people. Military personnel with guns appeared at gas stations. Watch Sri Lanka. A plan is being implemented there, which will then be carried out in other countries. It will be easier to prepare.⚠️⚠️ pic.twitter.com/85VxueMbqe
— puritan (@puritan_777) July 4, 2022
So, why does it matter that a mid-sized middle-income country on the other side of the world is melting down from an overdose of liberalism? Because, as it happens, a lot of countries are melting down right now. That’s bad for their people, and we wish them the best. But at the same time, there’s a welcome takeaway for the residents of Biden’s America.
Instead of despair, 2022 is a time of optimism. Because as bad as the Biden Bunch are goofing things up, the rest of the world might be messing things up even worse. And thanks to that, instead of the Biden era marking the country’s permanent eclipse, America will get a chance to recover. Even in 2024, it will be possible to dream of making America great again.
To prove the point, let’s embark on a short world tour.
When 2020 came to a close, it seemed like a year that in retrospect would mark the point where China decisively passed the United States both as a superpower and as the country others around the world would look to emulate.
But two years later, instead of looking brilliant, China’s strategy for combating coronavirus looks ridiculous and borderline suicidal. In April, we profiled the insane restrictions Chinese authorities were imposing on the city of Shanghai.
Three months later, China still shows no sign of mellowing out. Two weeks ago, Beijing Communist Party chief Cai Qi issued a statement implying that the country’s zero-Covid measures could last an additional five years. After the statements caused consternation, Chinese officials scrambled to scrub any trace of the statement from the Chinese Internet. But even if the news is getting censored, the reality is clear: China is still hooked on zero COVID:
A highly transmissible Omicron subvariant, which is already dominant in Britain and the US, has sent parts of the ancient Chinese city of Xi’an, home to 13 million, into a seven-day lockdown.
Businesses, schools and restaurants in Xi’an will close for one week, officials said on Tuesday, after the Chinese city logged a handful of Covid-19 cases. The capital city of Shaanxi province has reported 18 cases since Saturday in a cluster driven by the fast-spreading Omicron variant, according to official notices.
Some residents in the “high-risk areas” were told to stay at home.
This isn’t just silly. All this Covid fear is delivering a body blow to the constant economic growth the CCP relies on for its legitimacy. According to China’s own numbers, GDP growth for the second quarter was an anemic 1.5%, well below the 7-10% growth it averaged a decade ago. But according to analysts looking closely at the country’s economic data, China’s economy may even have contracted in the second quarter.
“There is no plausible story that GDP growth should be positive in the second quarter,” said Logan Wright, head of China markets research at Rhodium Group. “The downturn in household consumption is very significant within both the official retail sales data and other proxies. And the property sector remains a significant drag.”
The evidence from alternative indicators is overwhelming of an ongoing slump in the economy. Travel data shows passenger trips taken on China’s roads were mostly below last year’s levels into July, according to transport figures analyzed by TS Lombard. The number of domestic flights in the quarter was down 62% from the same period last year, according to data provider Variflight.
How about Europe? Believe it or not, Europe’s economic mess is even worse than America’s. In 2020 and 2021, America had higher inflation than Europe, but now roles have flipped: So far this year European inflation has averaged about 12% compared to about 9% in the U.S., and Eurozone inflation is expected to keep rising. For the first time in nearly twenty years, the Euro is nearly at parity with the U.S. dollar. The British pound, meanwhile, is the weakest it has been against the dollar since the 1980s (barring a brief hiccup in the earliest days of Covid).
In Germany, the government has pursued the insane dual priorities of cutting greenhouse gas emissions and shutting down its nuclear power plants. Now, following the disruptions of the Ukraine war, Germany has a net trade deficit for the first time in thirty years. And if Germany decides to join a European embargo of Russian gas (or if Russia cuts off exports), a new report predicts German GDP will shrink a staggering 12%, a worse hit than that caused by Covid lockdowns.
In Germany and across Europe, the rush toward “green” energy is instead becoming a rush toward “no energy.” In Germany, electricity prices are roughly four times as high as they were a year ago, and that’s before the onset of winter taxes gas reserves.
In the neighboring Netherlands, the government has basically declared war on its own agricultural sector, announcing strict fertilizer limits explicitly intended to drive farmers out of business:
The ruling coalition wants to cut emissions of pollutants, predominantly nitrogen oxide and ammonia, by 50% nationwide by 2030. Ministers call the proposal an “unavoidable transition” that aims to improve air, land and water quality.
They warn that farmers will have to adapt or face the prospect of shuttering their businesses.
“The honest message … is that not all farmers can continue their business,” and those who do will likely have to farm differently, the government said in a statement this month as it unveiled emission reduction targets.
It might be tempting to dismiss as an irrelevant distraction from a minor industry. But that would be wrong. Despite its tiny size, the Netherlands’ ultra-productive farms make it the world’s second-biggest food exporter. Now, the government seems determined to kill the industry, just as global food pressures are rising. To their credit, some 40,000 Dutch farmers have turned out for Canada trucker-style protests against the new measures, paralyzing the country:
Holland towards total paralysis. Tens of thousands of Dutch farmers block distribution centers and roads everywhere. Citizens stand in solidarity with the protests. In the video the situation in Zwolle. pic.twitter.com/RTDm9tacyJ
— RadioGenova (@RadioGenova) July 4, 2022
Slide over to Ukraine, and while America may be idiotically financing the entire cost of a war that never had to happen in the first place, on the plus side, it’s not Russia. Vladimir Putin’s government may be spending about $900 million every day on the war, which over one year would amount to nearly a quarter of its GDP. Ignoring any moralizing on the war or its causes and focuses solely on cost-benefit analysis, and the outlook is grim: When all is said and done, Russia may spend hundreds of billions of dollars, and lose tens of thousands of its most economically productive citizens, to gobble up lands that will be substantially devastated and depopulated. Even if that works out for Russia in the long run, it may take decades to do so.
In Latin America, Colombia just elected its first left-wing government, elevating ex-guerilla Gustavo Petro to the presidency. Brazil seems sure to follow suit by returning Luiz Inácio Lula da Silva to office.
In South Africa, the country once very-optimistically folded into the “BRICS” abbreviation of rising powers, the country continues to lurch from one crisis to the next. One year ago it was devastating riots that killed hundreds. This year it’s the worst electricity crisis in decades, with blackouts for up to six hours a day. The Eastern Cape is a matter of weeks away from a possible “Day Zero” where water runs out. And since South Africa remains proudly the world’s first nation built on Critical Race Theory, don’t expect the perpetual crisis carousel to ever stop.
While potential rivals around the world falter, America has another saving grace that is working to its great advantage right now: Federalism. As bad as the Biden government is determined to make things, it simply doesn’t have the power that it would have in most other countries. In the U.S., states are sovereign. They can set their own Covid policies, their own crime policies, and their own business policies. New York, Chicago, and California may be determined to commit suicide, but Florida and Texas are not obliged to follow them off the cliff. And sure enough, a huge economic gap has opened between America’s most Covid-obsessed states and the rest.
Since February 2020, the month before the pandemic began, the share of all U.S. jobs located in red states has grown by more than half a percentage point, according to an analysis of Labor Department data by the Brookings Institution think tank. Red states have added 341,000 jobs over that time, while blue states were still short 1.3 million jobs as of May.
Several major companies have recently announced moves of their headquarters from blue to red states. Hedge-fund company Citadel said recently it would move its headquarters from Chicago to Miami, and Caterpillar Inc. plans to move from Illinois to Texas.
To track each state’s progress toward normal since the pandemic began, Moody’s Analytics developed an index of 13 metrics, including the value of goods and services produced, employment, retail sales and new-home listings. Eleven of the 15 states with the highest readings through mid-June were red. Eight of the bottom 10 were blue. [WSJ]
So, is America winning? No, not at all. But America isn’t losing as hard as it could. Two centuries ago, various wits enjoyed saying that “a special Providence watches over children, drunkards, and the United States.” Whether this country deserves it or not, that Providence is still apparently still watching.