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Ben's blog and articles

Updated: Mar 25, 2020

Mexicans are "rapists". Muslims should be "banned" from entering America. Black and Hispanic members of Congress should "go back" to where they came from. Immigrants hail from "shithole countries". White supremacist groups contain some "very fine people".


The debate about whether Donald Trump repeatedly calling the coronavirus outbreak a "Chinese virus" represents an act of racism or not must surely be one of the most pointless debates since mediaeval scholastics squabbled about how many angels could dance on the head of a pin.


Simply look at the man's long and consistent record of xenophobia and then judge whether he's using the label "Chinese virus" in a factual and entirely innocent way, as he insists. It's really not worth wasting any intellectual bandwidth on this question.


That's not, of course, to deny the seriousness of the nominal leader of the free world intentionally stirring the cauldron of bigotry in this way at a time of mass anxiety, economic stress and spiking incidents of racist abuse - and even assaults - directed towards ethnically Chinese people in western countries.


Nor should we be sanguine about Trump's tweedy epigone, Nigel Farage, ranting on Twitter: "It really is about time we all said it. China caused this nightmare. Period."


Before we dismiss him as an irrelevance, bear in mind that some 30 per cent of the electorate voted for Nigel Farage's Brexit Party only last year and he has appeared on BBC Question Time 33 times. He tweets to 1.5 million followers. Farage may not have a parliamentary constituency, but be in no doubt: he has an audience.


The words of political leaders can have real-world consequences, particularly at a time when people are angry and scared. But, of course, in this age of populism, that's precisely the point.

In the case of Trump, it's important to recognise that the president consistently uses racism as a way of distracting attention from other unhelpful subjects.


In this instance that would be his administration's slow response to the unfolding health crisis, influenced by his initial personal denial of the problem. Another embarrassment is the US stock market, which Trump once presented as a metric of national economic virility, but which is now falling faster than during the Wall Street Crash.


A media frenzy over anti-Chinese racism is no doubt precisely what the White House wants at this time when Trump faces an existential threat to his hold on power in the autumn presidential election. And as autocrats down the ages have understood, an external scapegoat is useful at a time of domestic pressure.


My worry is over whether the desperate president is pushing on an open door. I chronicled in my 2013 book Chinese Whispers how longstanding and powerful anti-Chinese sentiment has been in America.


During the California gold rush of the 1840s a song called "John Chinaman" started doing the rounds among miners, resentful at the competition of Chinese immigrants labourers:


Oh, John, I've been deceived in you,

And all your thieving clan,

For our gold is all you're after, John,

To get it as you can.


Trump's economic Sinophobia has deep roots.


Another verse demonstrated a disgust over Chinese eating habits.


I thought of rats and puppies, John,

You'd eaten your last fill;

But on such slimy pot-pies, John,

I'm told you dinner still.


That's an uncomfortable echo from history at a time when amateur internet virologists are confidently sourcing Covid-19 to the fact that a (tiny minority) of Chinese people sometimes eat bat.


Writing a book about western myths and misrepresentations about China has also attuned me to another unfortunate pattern: the strange cycle of hyperbolic condemnation and hyperbolic praise.


First, China was castigated by pundits for attempting to suppress news of this novel virus. The autocrats of Beijing, we were told, had effectively unleashed this new plague on the world through their reflexive secrecy. Now, more often, Beijing is lauded by pundits for its success in curtailing the Covid-19 menace through mass population lockdowns, showing the rest of the world how to do it.


There's no moderation in these takes. While the local authorities in Wuhan did initially try to cover up the outbreak, Beijing rapidly shared vital information with foreign governments, learning the lessons of the 2003 Sars episode. The messy reality is that even unpleasant autocracies can sometimes behave responsibly.


The praise is overdone now. It's entirely possible that the draconian Wuhan lockdown has only temporarily controlled the outbreak and that it will later re-emerge in a perhaps more destructive fashion. It remains to be seen whether authoritarian regimes really are superior at coping with public health emergencies than liberal democracies.


Yet in western eyes China seems to be either Mordor or a shining city on the hill.

It's not only the rank demagogues whose words on China we need to be wary of.

Updated: Apr 1, 2020

US equities stabilised on Thursday 19 March but my analysis shows that one of the main American equity market indexes over the past month has been falling even more rapidly than during the Wall Street Crash of 1929.


The Wall Street Crash, which occurred in the autumn of 1929, marked the end a huge speculative bubble in American shares.


The Dow Jones Industrial Average – which is made up of 30 large US listed firms – fell almost 90 per cent from its peak in September 1929 to when the market finally bottomed out in July 1932.


All the share gains of the “Roaring Twenties” were wiped out.


Since then, along with equity markets across the developed world, it has plummeted.

The Dow has crashed by almost 32 per cent. Virtually all of the spectacular gains since Donald Trump entered the White House in January 2017 have been erased.


How does this compare to the great share sell-off of 1929?


Worse than 1929


As the chart above shows, the Dow has actually been falling at faster rate over the past month.

We simply do not know where shares will bottom out, but the pace of the sell-off is certainly alarming from a historical perspective.


When the share bubble burst in the late 1929s a huge amount of financial fraud and corporate malfeasance was revealed.


Some equity analysts believe there was something of a bubble this time around too with company valuations stretched beyond what their fundamental future profitability justified.


Yet the proximate cause of this market collapse was something external: the Covid-19 outbreak

and the catastrophic impact on economic activity and virtually all listed companies.


Where’s the bottom?

It  seems reasonable to assume that the path of the US – and global – stock markets over the coming months and years will depend more than anything else on progress in the physical world in defeating this viral threat.

Updated: Mar 25, 2020

Is the time ripe?


The effective shutdown of large parts of the hospitality industry as of this morning – pubs, cafes, restaurants etc – as the government seeks to suppress the Covid-19 outbreak is likely just a taster of the disruption to come.


And the crisis has prompted some to call for a Universal Basic Income as an emergency measure to support those affected.


For the uninitiated, a Universal Basic Income, or UBI, is an unconditional flat regular payment from the state to every adult. Its supporters traditionally argue that a UBI would vastly improve upon the complicated and, in their eyes, demeaning, existing state benefits system – the dole, disability living allowance, tax credits etc. They say it would, ultimately, revolutionise national well-being and even boost our national productivity.


Its detractors traditionally argue that a UBI would either be unaffordable or the individual payments too small to compensate benefit-reliant people for the dismantling of the existing system. They warn that giving people a guaranteed income from the state could damage the incentive to work.


And round and round the argument goes.


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But does the specific nature of the economic shock from the coronavirus suppression measures taken by governments change the terms of that debate? Is there not a case for at least a temporary, flat payment to everyone in the country from the Treasury amid what looks likely to be a major and possibly prolonged economic crisis?


It’s generally agreed that large numbers of working people are going to need help if they are to continue paying their mortgages, their rent, their electricity bills, their groceries over the coming months. There’s talk about the state giving employers financial incentives to keep on staff through the crisis rather than making them redundant. But why not cut out the middle man and give the money directly to the employees instead?


The objection about undercutting work incentives manifestly lacks relevance in these circumstances of enforced shutdown.


Perhaps the strongest argument in favour of the UBI proposition relates to the explosion in the numbers working in the gig economy and self-employment in recent years. The number of self-employed has shot up over the past fifteen years from 3.25 million to more than 5 million people, putting around 15 per cent of the workforce in this category. Some self-employed people are well off, but most are not. Around half are estimated to earn less than the minimum wage.

How to help these workers through this crisis?


The digital platform taxi driver, the agency-supplied cleaner, the zero-hours factory worker don’t have an employer that can be incentivised by the Government to keep paying wages even as the work dries up. Isn’t a UBI a way to get into all the cracks of the labour market?


A UBI would undoubtedly be expensive. But so too would a mass subsidy for firms’ payrolls. And most economists believe concerns about government deficits and debt levels should not be a priority at this time. If the scheme is temporary that would add to its attractiveness. As for the “universal” element, it’s important to bear in mind that those who don’t need the flat payment because their pay doesn’t fall would be required to pay much of it back through a higher income tax bill.


Wouldn’t a UBI not only be effective in supporting incomes of the most financially vulnerable, but also provide a powerful confidence-boosting signal that the state stands as the ultimate insurer for workers?


It’s certainly a beguiling argument. But there’s a powerful counter-case, too.


The advantage of channelling support to workers through their companies is that it also helps prevent the employers themselves from going under – something that would be disastrous for the productive capacity of the economy when this crisis ultimately passes.


There is also more scope to support people better through the existing tax and benefits system than many appreciate. And the capacity of the current system to reach people – even the self-employed – should not be underplayed.


Torsten Bell of the Resolution Foundation, a think tank founded to engage with the practical question of how to help those on low to middle incomes, recommends making statutory sick pay significantly more generous (at the moment it covers only 30 per cent of wages), increasing the level of out-of-work benefits, boosting the resources of job centres and raising tax credits to families.


The advantage of this programme is that it can be done rapidly. An entirely new distribution system for the UBI would not be simple to set up at the best of times, as the decade-long debacle over the roll-out of Universal Credit shows.


And these, as we can all surely appreciate, are not the best of times.