The Mountain and the Molehill

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The best thing about 2020 is that if you don’t know where your close friends, family and colleagues stand on something, now you do.

The worst thing about 2020 is that if you don’t know where your close friends, family and colleagues stand on something, now you do.

There isn’t any avoiding it when you’ve been stuck in tight quarters with some of those people every day of the week for four months. It probably doesn’t help that being distanced from everyone else leads to spurts of collective oversharing on social media, either. Or that more than a few of y’all have become a bit too comfortable with day-drinking on a Tuesday. I know, I know, it’s very European.

But if you came into this hellscape of a year yearning to know just what your vaguely-gesturing-in-the-direction-of-racism high school classmate or your aggressively anti-everything-in-society-that-actually-works niece thought about every damned thing that might happen, well, then 2020 is coming up roses for you, my friend.

Less so for the rest of us, I fear.

For my part? Most of my friends and nearly all of my extended family are conservative. My uncle is a minor conservative celebrity on Twitter and thinks he has remained mostly anonymous. I know what your dog looks like, Uncle Dave, and also your pool looks really lovely. I’m conservative, too, or at least I was when that term was still defined by a desire to defend institutions that have survived hundreds or thousands of years from the majority’s occasional flights of passion. I’ve heard a lot from people who think about the world like I do this year, and I’m charitable enough to presume that only a portion of what I’ve heard was motivated by the now-ubiquitous 11:30 AM take-out frozen margarita.

Fellow conservatives, I suspect we don’t agree on as much as we usually do right now. For instance, I think that the militarization of police goes beyond a race-related problem to an issue for all freedom-loving peoples who would see the government fear them and not the reverse. I think that racism is absolutely embedded in some of our institutions, even if I cringe as much as you every time I hear it described in the postmodern terms invented on university campuses to create further division. I think protests are energizing and fiercely American, and that would-be anarchists trying to take over their agenda doesn’t make the authentic expressions of resistance less valuable or important. And yes, I think missionary-promoted narratives are working hard to skew your takes on these issues, and I’m pretty sure they’re trying to do the same thing to me.

AND I know why most of you are uncomfortable expressing support for Black Lives Matter and some of the ongoing protests. For most of you (alas, not all), I know it has literally nothing to do with the narrative that national media desperately want to promote about you. I understand.

I know that you struggle signing on to protests that in too many cases have devolved into or been accompanied by violence and vandalism. I know why the “defund police” message sits very badly with you, and turns you off completely to anything else that person has to say.

It is because you cherish a belief in the rule of law.

I know why you believe that the protests are being driven by – or at the very least have been co-opted by – organizers whose goal is to subvert capitalism. It’s not hard to know given that many of them literally say as much, whether through stated policies or signs. I know why a movement that doesn’t adequately police the destruction of private property and the ruining of livelihoods by a group of its participants, no matter how small, isn’t one you feel you can sign up for.

It is because you believe that capitalism works. That without it the American Dream doesn’t work.

And I think you are right. On both counts. But I know something else, too. I know that whatever threat these divisive elements co-opting an important social movement pose to our cherished values, at a national level it is a molehill.

If it is the threat to capitalism that concerns you, let me ease your mind; its end will not be at the hands of a 24-year old ukelele-strumming Oberlin grad with a man bun and a “capitalism kills” sign.

If it is the threat to the rule of law that concerns you, let me give you peace; it will not perish from this Earth by the will of a mustachioed software engineer in a $120 t-shirt and paintball mask who busts the windows of small businesses because something something equality, then goes home to unironically post a meme comparing himself to the soldiers who stormed the beaches of Normandy on his $3,000 MacBook Pro.

If it is the threat to either of those things that concerns you – and it should – then I implore you: Pay attention to what is happening right now at the intersection of political power, financial markets and corporate power. Because this, friends, THIS is a mountain. We needn’t be hyperbolic. Capitalism will survive this. So will the rule of law. But if there is a threat to either, you won’t find it on the streets of Seattle or Portland.

You will find it here.


Trump Says U.S. Should Get Slice of TikTok Sale Price [WSJ]


Trump Says U.S. Should Get Slice of TikTok Sale Price, Wall Street Journal (8/3/2020)

If you aren’t plugged into financial markets, you probably haven’t seen that much about this story yet. A bit of background is in order.

TikTok is a social application developer. Their main product is an ultra-short-form video sharing app for mobile devices. If you have kids, they probably have it on their phones. It is owned by a Chinese company. It collects a lot of identifying information about its user base, more than 2/3 of which is between the ages of 13 and 24. It says it doesn’t share that information with the Chinese government, which you are free to believe if you want. It says it never will, which you are free to believe if you are illiterate. Whether TikTok’s parent regularly shares your kid’s keystroke data with the CCP or not today, don’t delude yourself – by Chinese law we are never more than a single phone call from a party official away from exactly that.

It is also true that TikTok has become a part of the escalating disputes conjured to serve the domestic political interests of the CCP and US government alike. Various government agencies, including the US Army, have banned its use. Some corporations have, too. In early July, the Trump administration began to publicly float the idea of banning TikTok in the United States. On July 31st, it announced that unless TikTok’s Chinese parent company divested 100% of TikTok, its operations in the United States could be banned by executive order. Shortly thereafter, in a conversation with the White House press pool on Air Force One, President Trump was less equivocal. TikTok would be banned and it would not be sold to a US corporation.

Source: David Cloud via Maggie Haberman

A day later, President Trump met with Microsoft CEO Satya Nadella and changed his tune. It would be OK if Microsoft bought TikTok from its Chinese parent company. If it did, however, the treasury would have to receive a payment. And then he set a deal deadline.

Let us recap.

  1. The President of the United States threatened the use of executive power to unilaterally ban a foreign company from the distribution of a product in the United States.
  2. He then met with the CEO of one of the two biggest US-based public companies to negotiate permission to acquire the company distributing that product.
  3. He then demanded a payment to the US government to facilitate the approval of such a transaction.

The rule of law we cherish hasn’t anything to do with the overaggressive enforcement and policing of laws. It means a system in which permissible activities under the law are clear and unequivocal to all. It means a system in which the adjudication of conflicts with those laws is conducted without favor or prejudice against any party. It means a nation in which citizens, investors and businesspeople need have no fear that the outcomes of their behaviors will be subject to the arbitrary determinations of a single individual. The rule of law is the answer to the rule of man.

The capitalist system we cherish is about a belief in markets, the superior power of a collection of individuals expressing their preferences to arrive at the correct prices and values of things, against, say, the beliefs of a small group of ‘experts’, or worse, ‘politicians’, or even worse than that, ‘academics’. It is about a belief that the flow of rewards to capital creates a relationship between risk and reward that produces society-supporting growth. Is it the belief that the system does the best job possible – if often imperfect – of achieving that while providing competitive incentives to reward and attract labor.

That US corporations must now consider their actions based on how they believe they will align with the person and preferences of the president in order to conduct business is a basic betrayal of the rule of law. That we have now established a precedent to enforce or not enforce regulations or orders based entirely on whether a citizen or corporation pays a financial tribute to the US treasury is a brazen betrayal of the rule of law. That the ability to pursue corporate actions and investments is now not determined by the forces of competition but by which institutions can secure an audience with the king and most afford to pay it tribute is a shameless and destructive betrayal of the capitalist system.

The Microsoft / TikTok affair is a betrayal of both the rule of law and the capitalist system on a scale that dwarfs anything being done by the cosplayers in the Pacific Northwest that dominate the conservative news cycle right now.

And yeah, when those people scream “fascism”, what they are usually referring to is “a bunch of policies I don’t really like.” Sure. But fascism IS a thing. And while fascist governments vary wildly in economic models, all share one trait: they rely on the use of arbitrary executive power to coerce or incentivize powerful corporate institutions into obedience and alignment with the aims of a political party or individual.

Fellow conservatives who care deeply about the rule of law and quality-of-life improving miracle of capitalism, now is our time to howl.

How about we focus on the mountain instead of the molehill?

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Mark Kahn
Mark Kahn
1 month ago

As always, smart stuff, smartly written. My only quibble is that, while I agree “the street” won’t bring down the rule of law or capitalism directly, by moving the narrative and the political positions and platform of the mainstream democrats (oh, say, like I’m-for-breaking-the-filibuster-now Biden), “the street” is having a much bigger philosophical impact than the visible stuff it does. Ideas that were fringe are now mainstream and the totally crazy ones are only fringe now. Oh, and the mainstream democratic ones of the Clinton era – they now get you cancelled.

As to Trump and TikTok, if the republicans have any core values left, they will rise up and denounce that with everything they have as you are spot on – it is the rule of man, not the rule of law. But remember, it is also the next step of Elizabeth Warren’s (and Obama’s) “you didn’t build that,” which is just an intellectual (and less-obviously-direct) way of laying the ground work for stealing private property/businesses and cooping for the government the value of your work and ownership rights. Trump is smash mouth; the democrats use white-paper cover, but both want the same thing – a big cut of the private sector’s action.

cartoox
cartoox
1 month ago
Reply to  Mark Kahn

“Trump is smash mouth; the democrats use white-paper cover, but both want the same thing – a big cut of the private sector’s action” . – absolutely right !

Simons Chase
Simons Chase
1 month ago

“Today the US central bank is like the modern Siberia for financial assets that do not adhere to the central planners’ idea of price. The Soviets sent intellectuals and artists to remote parts of Siberia when their beliefs conflicted with Marxist ideology. Similarly, the forced settlement of assets within the confines of the Central Bank is nothing more than internal exile based on criteria arbitrarily decided upon by a central committee of unelected people who probably have a political agenda. They will tell you it’s all for the good of the people, and the quieting of the sensory organs of capitalism is consistent with the mood of the gods.” Back In The USSR

Veronica Shelford
Veronica Shelford
1 month ago

Yup. Beautifully put, as always, Rusty. I am reminded of some of Orlov’s descriptions of the collapse of the USSR in the 90s – when the rule of law broke down, mafia-style bosses took over. They provided a brutal and extremely self-serving form of order to replace that (ok, flawed, but still broad-based) rule of law. This is gradually being repaired (by Russian standards if not “western”) but it’s a slow and difficult process. I hope the west can either stop the process or repair it, but it’s been going on for quite awhile now, under “white paper cover”, as Mark said, and now “Smash Mouth” has it in hand. Howl on, friends…

Lawrence Pusateri
Lawrence Pusateri
1 month ago

As always well written Rusty – I do indeed love your work. I wish I had it in me to be outraged this was the next logical step and a long time coming. I was outraged when the banks were forced to take loans and pay interest to the Fed’s so none of us would really know who was in trouble. I was outraged when the bond holders at GM had half of their claims taken away and given to the UAW as a reward for their support in the 2008 election. I was outraged when all semblance of price discovery was removed from IG credit markets. I was outraged when our first amendment rights to worship and assemble were trampled by a bunch of Governors ,while those same rights were respected , by the same Governors when “their constituents” were the ones doing the assembling—-and even looting and rioting in a consequence free environment. Last week an armed militia came to Louisville (about 250) and their leader publicly said that if the AG of our state did not do what they wanted —they will return in 4 weeks and “burn this mother fucker down” I was outraged that none of the local media or leaders saw this as a terroristic threat. So Trump wants Microsoft to pay the Govt for a deal he’s gonna approve while Amazon pays nothing while making billions —-should it outrage me —-yes it should, but I’m too tired. Roger Waters said – “it’s just… Read more »

Nicholas Allen
Nicholas Allen
1 month ago

Great analysis Rusty. I’m curious, what was it like writing this piece? Are you still self-identifying as a conservative to the point where it was an extremely uncomfortable exercise, or was it a little more gleeful? See “I can tolerate anything but the outgroup” if you haven’t already, for an example.

If you’re like me, then you’re a little more gray tribe than red tribe, and there wasn’t much discomfort involved in your argument.

Steve_Soukup
Steve_Soukup
1 month ago
Reply to  Rusty Guinn

You’re not alone, Rusty. This is a profoundly uncomfortable moment for many of us.

Thanks for this.

Eric
Eric
1 month ago

People think I’m being histrionic when I make this comparison – but issues of naked extortion and corrupt quid pro quo’s aside (for just a moment, I’ll circle back….as if there were things more important than that mountain…) — The forced divestment of TikTok looks to me like the nationalization of oil companies in the 20th century by former colonies. So two things: 1) Semiconductors as “spice” (uhhh obviously Ben Hunt’s construction) — information and computation as the new “oil” for the Information Age seems to hold-up well here, our data is a resource we don’t want exploited by hostile, extractive, mercantilist powers. 2) Just as the nationalized oil companies became the chief wellsprings of corruption and government looting in those countries, the room for corruption in the government-backed appropriation of corporations (and manipulation of the free activities of domestic corporations) appears to be obvious. The assaults on the rule of law and capitalism — our potential slide into kleptocratic fascism-lite — will look different now than they did in the past. Here specifically, the looming political-economic abomination looks like a combination of left-wing nationalist-populism (“take back control of our resources!”) and good ol’ neo-fascism/mafia-statism (“corporations can do what they like, as long as it is within the bounds of the interests of our nation, and as long as they do the state a favor when called-upon.”) I realize my descriptions of those two systems was not the most verbally elegant, so think: our government has the seed of modern… Read more »

tromares
tromares
1 month ago

Focus? We all know what a Karen is. How about an Otto (Kevin Kline – A Fish Called Wanda)? “Can your run that middle part past me again?”. I have taken to calling this World War Zzzzzzzzz ( with apologies to MB). Overall cognitive function of general population way off and that makes for low hanging fruit for those that would do us harm.

Philip
Philip
1 month ago

I wish I could remember where I read this, but the source is long forgotten.

A man rode on a commuter train and encountered two groups of teens. Group one was thuggish, gang-like. They seemed menacing to people his age. Group two was clearly upper class, private school types, who were acerbic and sarcastic to everyone. They denigrated people they encountered, but never threatened anyone physically.

The man concluded that group two was to be feared the most because their privilege would give them more influence and a wider impact on society. He called them the most dangerous teens in America.

Your article reminds me that story. Those teenagers grew up.

Peter
Peter
1 month ago

Excellent note Rusty.
Once again, ET helps me to think

Barry Rose
Barry Rose
1 month ago

Thanks Rusty – I greatly appreciate what you and Ben do for the pack. Sometimes it is almost paralyzing, the sheer quantity of information that I have to filter for consumption. You both do a great job at muting the voices down to what is important, and I look forward to every essay.

Charles Deister
Charles Deister
1 month ago

Greetings from the People’s Republic of Oregon where you can have pot delivered to your home but aren’t allowed to pump your own gasoline.

Your analysis on the TikTok affair was interesting. It reminds me of how “moral hazard” continues to be subverted. Using any app or social media service means you’re giving its owners the right to use your data in all kinds of ways that you may or may not like. But you accepted this when downloaded it and started using it. If you didn’t think about this first you are naïve. If you allowed your child to do this on their phone with TikTok, you certainly didn’t think through the potential risks. But you have no right to be outraged or alarmed.

The outrage therefore is humorous. Americans are alarmed at how a Chinese-owned app might use their data. Duh. The solution is not to pervert market forces to remedy the situation. The solution is to either choose not to use TikTok or use a competing service that isn’t Chinese-owned. And if there isn’t one that is Chinese-owned, maybe this would give impetus to an American company to start a competing product that doesn’t risk users’ data being shared by the Chinese authorities. Isn’t that how markets are supposed to work? And if there’s no market demand for a TikTok competitor and you don’t want to risk your data being abused by the Chinese State, then you can choose not to use the product. 

Eric
Eric
1 month ago

I believe this is an area of tension between opposition to “nudging” and general principles of harm reduction. Pure Libertarianism has a hard time dealing with the power of corporations, which may *also* be restricting the liberty of individuals in addition to the state.

I think that, essentially, it’s proven that many people will choose things that are harmful to themselves – to the point of being harmful to society as a whole because corporations make addictive products. We have an entire ecosystem of services, laws, and institutions that try to ameliorate the massive social harm caused by drug addiction. Using social media does not rise to the level a drug addiction, I don’t think, but in the same way the harms that arise from their use become socialized. If you believe that “the right to swing your fist ends where the next man’s nose begins,” then products like TikTok blur the boundary between fist and nose.

I’m not sure there is a simple or systematic solution to this problem that is completely consistent with principles of individual liberty, but to just say that you should allow market forces to deal with the problem is to cede the health of the community to foreign actors or corporations, in my opinion.

Davis Rushing
Davis Rushing
1 month ago

Rusty – Wonderful. I’ve spent much of the past month arguing with family about political issues and have been branded as a leftist because I don’t support Trump, as if its a binary issue and as if he’s in any way conservative. Ultimately I’ve realized Trumpism and “conservative media” is a religion. Sadly, it’s not in service to political ideals but ad revenue. However, I hold out hope that wisdom and reason will prevail. As such, I’ve sent this piece to a few of those family members. Keep up the great work!

Tom Theriault
Tom Theriault
1 month ago

Hi me again. I am referencing both articles; Deep Sociopathy and The Mountain and the Molehill as a “Data Point”… I am not intelligent enough yet, maybe another life, to put these issues into a data set of numbers but if there is anybody out there who is capable of doing it; I’m curious, would it follow “Benford’s Law”? A volcanologist applied volcano’s around the globe to “Benford’s Law” and these volcano’s followed the curve. Speaking to the volcanologist, he wasn’t surprised saying that you must always look for the simplest answers. And when asked he said that it is just earth maintaining balance. Not exerting any more power than necessary to maintain this natural force. So I am curious, these issues around the globe, if graphed, would they follow “Benford’s Law”. If “Yes” do we need to worry ? If “No” then I think we would have valid reason to worry.

When social media was graphed, the “Bots” were instantly identified 🙂

Tom

Charles Deister
Charles Deister
1 month ago

Eric – I appreciate that perspective. I had not considered that and it’s food for thought. I’m not a social media user so it’s all a bit foreign to me. Although, this might be considered social media.

Eric
Eric
1 month ago

I think some people would disagree strongly with my characterization of social media as in the same league, harm-wise, as drugs – and some people would say: the way to deal with ALL of these problems is to enable a *truly* free market, so I can’t really answer all critiques. But, as I said, I think there is a difficult tension between free market choices and protecting the community as a whole.

This forum is like addiction-resistant social media: no “likes” for a quick dopamine hit, no “share” function on comments to prove your favor with the authors to others. Just (hopefully) respectful engagement centered around ideas or genuine expressions of enjoyment and gratitude toward the authors’ works.

Responses like this mean the world to me on the internet, since it can be so tough to respect a stranger with a different viewpoint.

Thank you

Adam
Adam
1 month ago

All republics end in dictatorship. Fasten your seatbelt.

BostonDad
BostonDad
1 month ago

terrific write-up.
I would add for many of those who are still outraged by the protests. Keep in mind – the youth, when they REALLY care about something, are usually right.

equality in the 1960’s
Anti-Vietnam in the 1970’s
Anti-Apartheid in the 1980’s
Anti-polluters in the 1990’s.
Anti-Banks 2000’s

And now they are going after “capitalism”. Are they right again? I’d argue, to a large extent, they are. No, not that all profits are bad, and billionaires shouldn’t exist.
But instead – look at the cronyism we have seen – that Ben and Rusty keep highlighting. The spread in inequality is not exactly a plus for the capitalism side of the ledger . . .

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