5 min read

Absolute power

Xi Jinping has secured absolute power; how should marijuana be taxed; we love clicking on titles featuring anger, fear and sadness; and what might drive Putin to nuclear war?
Absolute power

1—Absolute power

China's 79-year-old former President, Hu Jintao, was unceremoniously escorted out of the 20th Party Congress on Friday, officially because "he was not feeling well during the session". Here's the full video:

China commentator Bill Bishop was "very sceptical" that Hu was being purged, given he was shown in a positive light by the CCTV Evening news report. If he was being purged, it's unlikely the propaganda machine would have shown him at all. But:

"No matter what the cause, this scene was humiliating, and the image of Hu Jintao being led out is a perfect symbol of Xi's absolute decimation of the 'Communist Youth League' faction."

Yesterday Xi Jinping sealed a third term as President, securing himself absolute power by stacking the Politburo Standing Committee with close allies. Li Keqiang, the current Premier, and other pro-reformers such as Wang Yang and Liu He, are no longer a part of the leadership group. Neither is Hu Chunhua, "the most senior leader on the Central Committee without close links to Xi... [and] the one member on the body who has experience as vice premier, which had been a prerequisite for nearly every premier".

China is now as close to a dictatorship as it has been since Mao Zedong's rule.

You can read Bill Bishop's full take here (~3 minute read).

2—Taxing marijuana

It may not be legal in Australia – personal use is decriminalised in some jurisdictions and it's medicinally available countrywide – but with the rest of the world at or moving toward cannabis legalisation, at some point Australia's various governments might follow suit, if for no other reason than to plug revenue gaps as the long-term decline in smoking rates hits the budget bottom line. But that's easier said than done, and if the government wants to collect revenue from it, there are lots of models from which to choose:

"Nineteen states have enacted marijuana taxes, although five of them (Connecticut, New York, Rhode Island, Vermont, and Virginia) have not yet actually collected any revenue from them. But there is no common model. Some states impose the tax as a percentage of the purchase price; some based on the weight of the product sold; and some based on the potency of the product. Some use more than one of these approaches."

That's from Timothy Taylor, who helpfully summarised a new report looking at the pros and cons of cannabis taxes. The optimal tax depends on the policy goals:

"One goal is raising tax revenue, which will tend to imply that the state desires high total sales. Another goal is offsetting the cost of externalities from legalising marijuana use, like social costs of driving under the influence, which involve discouraging overuse in certain situations. Yet another goal is discouraging the use of extremely potent products, which is also aimed at both social harms and potential harms to the user."

You can read Taylor's full summary here (~3 minute read).

3—Clickbait's favourite emotions

Pop song lyrics have also become significantly more negative.

4—Nuclear war?

Under what circumstances would Russia use nuclear weapons? That was the question posed in two recent articles by Swift Centre and Douglas London, with Swift Centre asking its team ("a panel of highly experienced and accurate forecasters") a series of questions in an attempt to assign a probability to the threat:

"We wanted to assess how likely it is that a nuclear bomb might be used in the war. As well as that, we wanted to know what factors might increase the chance of that happening — if Ukraine continues its advance, or if NATO gets more involved, will that increase or reduce the likelihood of a nuclear attack?"

The aggregate forecast for a nuclear weapon be detonated in Europe before 30 April 2023 was 9%, an "extraordinarily high risk for a (just-over)-six-month period". In terms of what might trigger Putin, the forecasters:

"[C]learly associate major losses in Russian-controlled territory with a higher chance of nuclear escalation. Ukrainian recapture of cities in the Kherson and Zaporizhia Oblasts, for instance, may coincide with increasingly desperate responses from Russia."

Separately, Douglas London asked people "to remember three fundamentals that guide Putin's decision-making":

  1. he is the product of the 1970's and 1980's KGB and stood witness in then-East Germany in 1991, when the world as he knew it ceased to exist;
  2. ego, survival, greed, and ambition direct his moral compass; and
  3. he has come to believe his own propaganda.

London concludes that Putin will only use nuclear weapons "if he believes doing so is the only means to preserve his power as dissent increases within his own ranks and military options dwindle". To prevent that from happening, the US and NATO would have to:

"[S]ignal publicly and privately to the Kremlin that any use of nuclear weapons, whether tactical or not, in Ukraine or beyond, would be devastating to him personally. Words alone do little with Putin, so the United States and NATO would necessarily need to begin taking observable actions accompanied by diplomacy, messaging, and covert influence efforts that demonstrate preparations to conventionally destroy Putin's forces in Ukraine if he resorted to nuclear first use."

That strategy involves "yet further investment of American blood and treasure today in requiring Putin to face consequences designed to prevent a full-scale war and potential nuclear escalation".

You can read the full report by Swift Centre here (~12 minute read), and Douglas London's piece here (~11 minute read).

5—Further reading...

👩 The "pink tax" may be a myth: "We find that women's products are more expensive in some categories (e.g., deodorant) but less expensive in others (e.g., razors). Further, in an apples-to-apples comparison of women's and men's products with similar ingredients, the women's variant is less expensive in three out of five categories."

🕵️‍♀️ "A China-based team at TikTok's parent company, ByteDance, planned to use the TikTok app to monitor the personal location of some specific American citizens."

⚠️ Days before becoming Prime Minister, Liz Truss was warned by economists – who were supportive of her growth agenda – that "markets are nervous about the UK and about policy options. If immediate economic policy announcements are handled badly then a market crash is possible... to keep the markets onside, it is important that fiscal policy is explained clearly, that fiscal actions now are targeted and, further ahead, are focused on the supply side of the economy".

💸 Former Bank of England governor Mervyn King: "All central banks in the west made the same mistake. During Covid when the economy was actually contracting because of lockdown, central banks decided it was a good time to print a lot of money. That was a mistake and led to inflation: we had too much money chasing too few goods. That was predictable, it was predicted and it happened."

📱 "Without their phones, most of my students initially felt lost, disoriented, frustrated, and even frightened. That seemed to support the industry narrative: look how disconnected and lonely you’ll be without our technology. But after just two weeks, the majority began to think that their cell phones were in fact limiting their relationships with other people, compromising their own lives, and somehow cutting them off from the 'real' world."