I will be the first to admit I find Noah Smith at the same time insightful as well as slightly inciteful. He can surprise you with a fact and logic-supported thesis that changes your mind, and he can be surprisingly blind spotted elsewhere.
At his best he is brilliant even though at times I couldn’t be further from his point of view. I think this makes him a great follow—someone I can learn a lot from yet someone I’m not afraid to question.
Here are three examples of him really delivering with each case a strong dose of counter conventional wisdom.
Financially speaking, wealth equals the market value of assets (net of liabilities). But economically speaking, wealth — or what economists call “capital” — is all of the actual durable stuff that we use to produce all the things that we want. It’s the actual houses, office buildings, roads, water pipes, machine tools, cars, trucks, trains, planes, boats, tractors, harvesters, construction machinery, computers, software, and so on. And it’s also the business organizations, the technological know-how, the corporate brands, the relationships, the education and skills, and all the other intangible assets that go into production. It’s anything that’s both durable and productive — anything that lasts for a significant time after you create it, and which can be used to produce useful goods and services.
So if the human race really decided to collectively live off of its wealth, what would that mean? It wouldn’t mean simply selling all of the capital assets to new human owners for lower prices — that would raise some cash for the people who did the selling, but at the end of the day the human race as a whole would have the exact same machines and buildings and corporate brands as before the sale.
Could humans just stop working for a while and live off of their capital assets? No. Sure, some introductory econ textbooks might model capital assets as “seed corn” that you can choose to either eat or plant, but real physical capital isn’t like corn. You can’t eat a machine tool, an office building, or an airplane. If everyone just stopped working completely, the human race would be extinct in a matter of weeks, wealth or no wealth.
Second up he explains why Democrats should not rock the vote. Strong voter turnout is a benefit to Republicans by and large—a complete reversal of the well-established, political strategic wisdom.
For decades, Democrats have fought to increase voter turnout – believing that their candidates and issues would prevail if more people would get out to the polls. That math no longer pencils out. Republicans have become the party that benefits from high voter turnout, and Democrats the party that benefits if marginal voters stay home.
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It’s not just lower propensity voters skew Republican, there’s also more self identified Republicans than Democrats now according to Gallup. For decades, that fact self-identified Democrats outnumbered Republicans was one of the reasons people believed increased turnout would benefit Dems. That’s no longer the case.
Third up is an example of him being quite insightful even though I disagree with his premise somewhat that American should be tougher on China. That isn’t what his message is, though. He takes that as a given, which is fine and probably accurate considering the fact that most American voters share that view. His argument is that both Trump and Harris should be expect to fail in this regard and Trump might end up the softer of the two.
The CCW continues with this well-supported contention: Biden was tougher than Trump on China.
Joe Biden and his administration have been very tough on China — tougher even than Donald Trump was in his first term. Under Biden, the U.S. didn’t yet manage to resuscitate its defense-industrial base, but it strengthened its cooperation with Asian allies, increased military aid and arms sales to Taiwan, built new bases in the Philippines, encouraged American companies to relocate out of China, unleashed highly effective export controls on China’s chip industry, began to build up its domestic manufacturing industries, and acted swiftly to block a tide of Chinese exports from swamping U.S. industry.
On his main point:
For Trump, the big danger is that he won’t have anything to prove.
Remember the phrase “Only Nixon could go to China”? When Richard Nixon opened relations with Mao’s China in the early 1970s, he was able to do so because his unimpeachable credentials as an anti-communist gave him the political credibility to make overtures to a communist regime without being seen as an anti-American sellout. The perception of Nixon as a hawk allowed him to be a dove in substance.
Similarly, the public perception is that Trump is the ultimate China hawk. In fact, he did plenty to earn this perception in his first term. He tossed out the old policy of “engagement” and started a trade war. He implemented some export controls, made an attempt to root out Chinese espionage, tried to ban TikTok, and blamed China for Covid. This earned Trump a huge amount of cred as a guy who would stand up to China.
But precisely because he has this cred, Trump might be able to pull a 180 in his second term with few political consequences. If he drops export controls, withdraws support for Taiwan, snubs Asian allies, nullifies the TikTok divestment effort, and fails to reinforce America’s military posture in Asia, it’s possible that the American people will still think he’s a China hawk, because…well, just because he’s Trump. In ten years, we might find ourselves coining the expression “Only Trump could sell out to China.”
As it has been already, it will continue to be very interesting watching the respective supporters of Trump and Harris zig and zag to try to keep up with where their candidate is at the moment. This is especially the case for Trump’s followers. Watch the pivots from “China bad. Very, very bad!” to “We need to focus on how the left is destroying our country. China’s problems are for their people to handle. We are [insert made up statistic] finally beating China on trade. The left hates the second “A” in MAGA….”
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