The Great Wall of Steroids (a.k.a. China), in their propaganda war to subjugate other countries into their own illiberal image (see our posting of April 14^th), wants us to believe that they are growing and that their economic indicators are now higher they have ever been. With all due respect to their statistical office, the figures and the numbers published by Brookings and the Financial Times tell us a different story, as shown below.

The Brookings Institution and the Financial Times have put together a project titled TIGER (Tracking Indexes for the Global Economic Recovery). In their latest publication, they demonstrate the fragility of the recovery and the worrisome picture of the lack of a robust recovery on the horizon. “As the struggle to contain the virus continues, and with fears of a second wave mounting, the risks of substantial and long-lasting scarring effects on economies are rising. Private sector confidence has been battered, which does not bode well for business investment and employment creation.”

I believe that the figures shown above more than demonstrate the truth of the above statements, for China. Moreover, after a long-week holiday period, when we compare mobility figures between 2019 and 2020 (see shaded area in the graph below), we can clearly see the significant difference that Covid-19 has done in China despite their proclamations that economic activity is rising (the figure below shows that passenger numbers were approximately 20% below last year’s levels in both Beijing and Shanghai).  Moreover, when we diachronically study the Chinese Caixin services PMI, we can clearly see that the index’s three-month moving average slipped further last month to 54.3 from July’s 55.8.

History-writing is the outcome of two great figures: Herodotus and Thucydides. Before Herodotus there were two kinds of “historical” writings: the history of cities (uncritical compilations based on mythological beginnings) and ethnographies (miscellaneous collections of everything that could be said about a particular foreign people). Herodotus introduced us into history as critical art in the form of a prose. Herodotus does not lose sight of the goal towards which his story is moving, and rightly he is called the most “Homeric” of writers. Nowadays, we distinguish between diachronic vs. synchronic history, as introduced by Herodotus and perfected by Thucydides. Diachronic history is the narration of events over time. Synchronic history is the study of things that change slowly or not at all, such as beliefs, structures, behaviors. An illiberal political structure, such as the Chinese, is rooted in a synchronic inflexible historical pattern of freedom repression that cannot escape the diachronic verdict of history which tells us that unless liberty flourishes in the institutions of a country, any attempt to cross the Hellespont would have a Xerxian end, whether that is in Salamis or Plataea.    

In the great traditions established by Herodotus and Thucydides, description without analysis is a body without a mind. “My duty is to say what is said, but not believe the entirety of it. Let this principle hold for the whole work”, Herodotus said. Judgment and critical thinking are elements that a strong paideia teaches its youngsters, in order not to fall victims of false prophets similar to the illiberal Chinese regime, or domestic prophets who proclaim that everything is right because the stock market has recovered, thanks to central banks and their helicopter money (see figure below) which has distorted reality and blinded us onto an unsustainable path (a topic to which we will return).

We choose to close this week’s commentary with some lines from Bob Dylan’s new song titled False Prophet:

Another day that don’t end
Another ship goin’ out
Another day of anger, bitterness, and doubt
I know how it happened
I saw it begin
I opened my heart to the world and the world came in…

Well I’m the enemy of treason
Enemy of strife
Enemy of the unlived meaningless life
I ain’t no false prophet
I just know what I know
I go where only the lonely can go…

I just said what I said
I’m just here to bring vengeance on somebody’s head…

Put out your hand
There’s nothing to hold
Open your mouth
I’ll stuff it with gold
Oh you poor devil look up if you will
The city of God is there on the hill…

You lost your mule
You got a poison brain
I’ll marry you to a ball and chain…

You know darlin’
The kind of life that I live
When your smile meets my smile something’s got to give
I ain’t no false prophet
No I’m nobody’s bride
Can’t remember when I was born
And I forgot when I died

https://youtu.be/2QPBpFAKTGo