Biden as President

My last few blog posts have been critical of Biden, but I am glad he won.  Trump was a terrible President, but his strong point was that he represented and stood up for the cultural ideas that are espoused by many ordinary, middle class people.  He is the ultimate illustration of the problem highlighted by the book “What’s the Matter with Kansas?”  Many people vote against their economic interests because they believe cultural interests are more important.  In Trump’s case it is even more surprising because he is a bad cultural icon.  He is course, crude, immoral, impolite, selfish, stupid, and the list goes on and on.  However, regular old white people see themselves under attack from all sides, and Trump is someone who is willing to take on the hatred from American intellectuals and minorities.  That one trait got him elected and it almost got him re-elected.  The Democrats were smart to change the voting laws right before the election to make it easier to vote.  Democrats could get apathetic, uninterested blacks to make the minimal effort to vote by mail for Biden, and it worked.  This Denver Post article illustrates the two approaches to voting requirements, although it clearly comes down on the side of making voting as easy as possible.   

Trump has incorrectly claimed that there was something illegal about the mail-in vote, but the states involved had made it legal.  It probably did cost him the election, but the state Democratic politicians and judges did it legally.  Easier voting favors Democrats.  The Republicans used the 2010 census to gerrymander their states to favor Republicans.  Each side is looking for advantages.  There are arguments on both sides.  When the US was founded, in most states only white adult male property owners could vote.  They wanted to restrict voting to responsible people who had a stake in their country.  Today, the Democrats have completely different priorities from the nation’s founders. 

Anyway, Biden is a much more normal President and good for the country.  He is being pushed by the progressive wing of his party to do a lot of questionable things, questionable because they have never been done before and they are very expensive.  But the Republicans are in a position to block most of them, or to tone them down.  Infrastructure repair is needed, but it needs to be limited, and paying for it right after huge payments for the covid pandemic if bad timing.  It’s good that interest rates are so low now, making it reasonable for the government to borrow money. 

Biden is a welcome change from Trump on foreign policy issues.  Trump tended to alienate our allies and pander to our enemies.  Trump messed up relations with Europe and North Korea, among others.  His China and Russia policies could have been more nuanced.  Biden is currently facing tough decisions on Afghanistan and Israel-Palestine, but he is approaching them rationally and intelligently. 

Biden’s reassuring, comforting tone is another welcome change from the Trump’s often strident, mocking, confrontational approach.  This offsets my concerns that Biden will take the country too far left.  That may be the trade-off for having a more traditional President.  Let’s give Biden a chance. 

Praying for a miracle: Argentina’s debts

From a newsletter from the Econmist magazine

Alberto Fernández, Argentina’s beleaguered president, kicks off his European tour this week. He will meet the leaders of France, Italy, Portugal and Spain to beg for more time to repay Argentina’s enormous debts. The country, led by an increasingly unpopular Mr Fernández, owes $2.4bn to the Paris Club, a group of government lenders, and a record $45bn to the International Monetary Fund. Mr Fernández argues that the debt is unpayable in current conditions—ie, the pandemic. To help his case he is seeking support from his country’s most hallowed son, Pope Francis. Argentina’s economy minister, Martín Guzmán, will also visit the Vatican, to lobby Kristalina Georgieva, the IMF’s chief, before they both attend a seminar with the pope. The politicians are nervous ahead of Argentina’s monthly inflation figure, released on Thursday, which is forecast to show inflation heading towards 50% this year. That’s almost double the government’s target, and another headache for Mr Fernández.

Crypto Coins as Assets

The trouble with cryptocurrency like bitcoin is that it is relatively easy to create new currencies.  The most obvious current example is the dogecoin that Elon Musk has been promoting.  Bitcoin is a potential store of value because there will be a limited number made, a total of 21 million.  However, it is possible using the blockchain security system and other algorithms to develop a new cyber currency with similar or different characteristics. 

Bitcoin was originally developed to serve as a currency to pay for commercial transactions.  The blockchain process makes it relatively easy to make payments.  It appeals to dishonest actors (like drug dealers and hackers who hold data for ransom) because it is hard to trace.  But I don’t see anything particularly unique about bitcoin compared to any other cyber currency, except that the transfer mechanisms are in place and have worked for several years.  Some other organization – a country, a bank, a credit card company – could develop a new cyber currency that might have more political or financial weight behind it, and thus might pass bitcoin as the preferred cyber currency. 

One problem for countries might be that a cyber currency would be harder to inflate.  The Federal Reserve can just print dollar bills (physically or virtually), but it might not be able to make new cyber coins, depending on how the coin algorithm is designed.  If a country mandated that everyone had to accept the new cyber coin, that would certainly make it displace bitcoin as a form of payment. 

As a result, I do not see that bitcoin is an asset that will retain its value indefinitely, like gold.  There are other precious metals like silver, platinum, maybe copper, but they are also physically limited, and their value is determined to some extent by how much physically exists, plus or minus whatever speculative fever surrounds them at any given time.  Bitcoin might be more like gold if it had some intrinsic value, for example, if it were a store of energy that could light a house for year.  But currently, as a store of value, it is not even being used as a means of exchange.  Its skyrocketing value actually makes it a source of currency deflation; no one will spend a bitcoin today if it will buy twice as much tomorrow.  People will not spend them; they will save them.  This tends to be a drain on economic activity, which weakens the economy.  

Old Pictures

 Here is a link to some old pictures from my days in the Foreign Service.