The Beijing Consensus Meets 2022

 A broad notion that the People’s Republic of China represented an alternative and quite possibly superior model of social and economic organization has held sway in many quarters for two decades. Are we now to be done with that?

 What is sometimes called the Beijing Consensus was the subject—or object—of so many thought pieces and earnest discussions over the period, some as late as last year. The West’s stumbles, such as in the Global Financial Crisis of 2008 and then the initial (post-Wuhan) stages of the Covid pandemic, contributed to a sense that an authoritarian state, able to mobilize and allocate resources, was better suited to sustained order and prosperity than are clamorous market-based democracies. This outlook required forgetfulness about earlier such martial experiments, going back at least to the 1930s, but never mind those dusty histories.

The preening of the Chinese Communist Party in this intellectual environment gained full flower with the rise of Xi Jinping and his expansive ambitions for global power and influence.  Thanks to years of mercantilist trade policy—and of course to the productivity of an industrious citizenry—Beijing had flush coffers to put behind its new diplomacy. Meanwhile, the U.S., as representative of the opposing camp, was torn internally and consumed with hostilities abroad that served no particular end.

However, in a remarkably few months of 2022, the worm seems to have turned. Most visibly, China is caught up in a public-health fiasco over Covid that is drastically affecting millions of its people in multiple metropolises.   The Russian aggression against Ukraine has exposed, to some in Europe and elsewhere who were in need of such exposure, an essentially rogue alliance that is, in fact, characteristic of Beijing’s foreign policy.  Stifling of civil society in Hong Kong has not been a good look. And the underpinnings of the PRC’s wondrous record of economic growth, including a massive distortion of GDP toward the corporate sector and away from consumer welfare, have begun to weaken noticeably.  While not as terminally fated as the “no Covid” medical strategy, the “no recession” approach to plugging each successive hole in the top-down investment-driven output model is only yielding  a weaker return in each cycle.  Cutting off China from many international sources of capital, as Xi’s nationalistic course has succeeded in doing, can only further gum up the works.

Although these essential weaknesses in China’s supposed armor—not the literal armor, which continues to grow alarmingly, but its case for moral superiority—are now more acute, they did not suddenly become manifest in 2022.  Sophisticated appraisals, even from sincere Sinologists, have long flagged what so many chose to overlook. In her just-published book on Xi’s grand posture, The World According to China, the Council on Foreign Relations’ Elizabeth Economy notes many contradictions and complications at work. (She has previously detailed the environmental horrors on the Mainland.) Also at the Council, a recent panel examined the PRC’s unfavorable demographics, the ultimate check on its supreme ambitions.

If the exalting of China’s modern reach reflected faddish consciousness as well as innate dislike for the less-bridled capitalism of America, then it may be susceptible to refutation by widely-broadcast events. Yet, Beijing can keep stoking coal into the motherland’s furnace (literally, at times) for a good ways to come. The odds certainly don’t favor an uprising against Xi, let alone the Communist Party, at home.  The looming question is whether the constituency abroad will now be shaken.

College $$$ Backlash? Blackstone Isn’t Sold

Various harbingers appear of an end to the college-cost syndrome, whereby prospective students and their parents reassess the worth of plowing tens of thousands of dollars annually into a degree credential. And surely, on the margins, this revolt against the endless increases in tuition and other bills is evident. But then we see reminders, as in today’s word in the Wall Street Journal of a buyout deal for American Campus Communities, that post-secondary ed remains a hot market. ACC specializes in building housing for such students, and you can sure these are not bare-bones dormitories. Nevertheless, such construction often qualifies for tax-exempt financing, and can turn a nice profit when Dad and/or Mom go looking for a swell (and safe!) place for their academic offspring to decamp. The great real-estate consolidator Blackstone is now putting its stamp on the arrangements. You can be sure its analysts have concluded that no great pullback from the run-up in college costs in the offing.

WSJ News Exclusive | Blackstone Bets on Campus Housing With $13 Billion Acquisition

The deal to buy student-housing owner American Campus Communities is a bet that rents will continue to rise as more college students return to campus.

Americans Return to the Stores

Beware of “trend” stories, but this one from the Wall Street Journal suggests a believable pendulum swing back to brick-and-mortar shopping. Believable, because some buying is best done with tactile or other sensory judgments; because it is sometimes serendipitous, and because it can be part of a natural social experience when the stores are well laid out and managed. Some destination shops such as Trader Joe’s eschewed remote commerce anyway. The warehouse stores have websites that can be useful for certain products but even the staples seem to attract plenty of in-person “members.” Plus, the delivery economy is still sorting out costs and profitability. Amazon, which has unusually mastered the game, continues to raise fees on its now-captive customer base. The others in the bring-it-to-you business are struggling with how they pay for personnel and fuel. Where there are plenty of nearby wallets to pluck–and this may exclude office districts in major cities–I suspect the shopping-aisle lights will stay on for quite awhile.

The Pandemic Was Supposed to Push All Shopping Online. It Didn’t.

E-commerce retailers that rode a surge of online purchases in 2020 are now grappling with the fact that some customers have returned to stores.

Xi Jinping Is in the Neighborhood

Much has been made of the Chinese Communist Party’s inroads into Africa, but less noticed is its increasing penetration of the Western Hemisphere, especially South America. This has proceeded apace for years, including during the Trump administration when regional policy hawks were supposedly on guard. This new report from the Council on Foreign Relations sheds light on the extent of economic and “security” ties–all coming with implied diplomatic sway. And it’s not just with leftist regimes on the continent. Take Chile, whose electorate has seesawed ideologically in recent decades. China advances regardless–now accounting for 34% of the nation’s trade. (To be fair, a part of that is just bargain-priced Chilean wine.) The U.S., on the other hand, shot itself in the pie when Trump pulled out of the Trans-Pacific Partnership (TPP), a non-Chinese deal that would have extended American influence to cross-ocean commerce with Asia. Now Communist China is petitioning to join the trade pact that is replacing TPP…one without U.S. participation. So as we see Xi Jinping’s pernicious presence grow on the world stage, we can find part of the explanation surprisingly close to home.

China’s Growing Influence in Latin America

Over the past two decades, China has developed close economic and security ties with many Latin American countries, including Brazil and Venezuela. But Beijing’s growing sway in the region has raised concerns in Washington and beyond.

Now on Screens Nationwide: ‘Navalny’ v. Putinism

Theater showings around the U.S. today and tomorrow of this CNN Films production, “Navalny,” will include discussion with that network’s Clarissa Ward. I hope the international correspondent will press the matter of Russia’s internal dissent network, which once fueled Alexei Navalny’s rise as an opposition figure to Vladimir Putin. The quieting of that movement in the months and years now since Navalny was first poisoned, and then imprisoned, for his social media-driven democracy campaign hangs over this film. But that sad situation–which has worsened since Putin’s war against Ukraine began–was not brought out in the panel discussion that followed the preview showing I attended in New York last week. “Navalny” can still be enjoyed as a remarkable fly-on-the-wall view of this brave showman’s attempt to troll Putin politically–at times it is humorous in showing the Kremlin’s clumsiness even as the protagonist meets up with its deadly force–but ultimately one wonders whether the whole exercise was in vain. Maybe it is has planted a seed for a later revival of opposition, so we can hope that bootleg copies of the documentary make their way widely through Mother Russia’s samizdat.

Warner Bros & Fathom Events Set Special Theatrical Event For Sundance Award Winning Docu ‘Navalny’

Warner Bros. Pictures is teaming with Fathom Events for a special theatrical event of the Daniel Roher-directed documentary, Navalny, which had its surprise screening at the Sundance Film Festival …

Meanwhile, on the Home Front

While cable-news attention is focused entirely elsewhere, the spillover effects of failed and/or corrupt states in the Americas continue to be felt on the U.S. border, where illegal flows keep swelling. This Associated Press report on the continuing calamity in Haiti is one more omen. The so-called Northern Triangle of Central America–Guatemala, Honduras and El Salvador–remains a source of migrants, to which you can add Daniel Ortega’s Nicaragua. Of course, destitution in Venezuela remains a fact, as do the criminal cartels that act with impunity in Mexico. Food-price inflation is likely to impel further desperate journeys in the region. The refugee/immigration challenge is not limited to Europe these days–why, it’s such a multilayered problem that you’d wish a U.S. vice president to be detailed to address it!

Haitians protest rising insecurity, attack U.S. missionary plane

In southern city of Les Cayes, people attack a small plane owned by a U.S. missionary group.

Affordable Hamptons Housing After Saving Priceless Parcels?

Like many other affluent suburbs or resort areas, the Hamptons of New York is confronting a housing affordability crisis, which is to say that the service and support industries on which the wealthy residents rely cannot reliably staff their operations from nearby residents.

This pinch results either in unfilled positions or lengthy commutes for the non-wealthy workers. The Hamptons has relatively few rental apartments and only a couple of entry highways, so the inconvenience to these employees is felt also by the privileged townspeople, who must share the same clogged roads. Although there is a progressive contingent that wants a more “inclusive” community for its own sake, it’s fair to say that self-interest is a more compelling reason for expanding the home franchise on the South Fork of Long Island.

And a ripe opportunity for doing so looms this November, thanks to recent state legislation allowing a new tax on residential transactions to be approved by the area’s voters. Already, most of these sales are subject to a 2% levy for land and water conservation, and thanks to the boom in the luxury market, that Community Preservation Fee collected $210 million in the East End towns last year. If the proposed housing tax had been in effect, it would have pulled in $50 million more.

What goes for “affordable housing” nowadays is not cheap to build, but $50 million could deliver a slew of it, perhaps as much as has been constructed in the four decades that the issue has been percolating in the Hamptons. During that time, there’s been a lot more talk than action, not just because land is at a premium but because, when bulldozer comes to scrub brush, there’s usually plenty of neighborhood resistance.  Cue apprehension over congestion, school seats, environmental impacts, etc.

In fact, the topic of lowering payments for new homebuyers had been on the minds of South Fork officials even before local real estate really took off from the 1980s. As Robert Cameron ended his terms as town supervisor in 1971, he told the Southampton Press he was worried that the hamlet of Hampton Bays was becoming “saturated” with Section 235 housing, a Great Society program to provide home loans free of down payments.  Hampton Bays, which has no oceanfront and is west of what is generally considered to be the Hamptons, was largely built out with middle-class bungalows on small lots in the 1960s, and Cameron feared it was taking in future trouble.

To the degree the South Fork has found pockets of affordable housing, they’ve tended to be clumped in those western reaches. A separate, frequent location has been along the Bridgehampton-Sag Harbor Turnpike, in a stretch well removed from both of those two villages proper. (Proximity to a busier roadway is usually an attribute, as residents of such units are considered more transit-dependent.)  But even where such spots are identified and set aside—typically as a dedication by a developer seeking market-price housing approvals—the yield is a handful of homes and the process can take years, if it is approved at all. In one of the cases along that turnpike in the 1980s, a would-be 28-lot plan was lost to the late discovery of night salamanders on the property. A proposal for 50 units of senior housing nearby died about the same time.

But the fundamental economics of housing in the Hamptons was established by the larger land-use battles beginning in the 1970s. That was a time when major developers still envisioned subdivisions of a thousand or more tract homes in the woodlands and former potato fields. Such a buildout, and the zoning that could have permitted it, was junked in favor of large open-space dedications after epic pre-Millennial battles. From then, if middle-class families were to purchase much square-footage, they would need some kind of public assist.

With a more solid Democrat majority in recent decades, East Hampton town has been more assiduous about building subsidized housing than has Southampton, but that is a relative measure. Over four decades, the two localities have added maybe a couple hundred such homes.  

Tom Ruhle, who in recent years has been East Hampton’s housing director, was both a planning and town board member as part of the 1980s preservationist wave there. When I met with him in 2019 in a satellite town office looking over the picturesque ocean bluffs in the hamlet of Amagansett—largely saved from building during those earlier days—he acknowledged with an ironic chuckle the circularity of his career. “People can’t afford to live here,” he said, in part because of his efforts to save the land for the people who lived there.

East Hampton today has new “workforce” housing  afoot, while Southampton’s planning board is weighing objections to two substantial projects. One is in Quiogue, a more rural buffer between the toney villages of Quogue and Westhampton Beach. The other, behind a church property, borders on an old, unadorned neighborhood in Southampton Village. The Quiogue site is well-situated for a looming Amazon distribution center and other industrial employment surrounding the nearby Gabreski Airport –thus likely to keep some newly employed commuters from the congested highways.

The other project would bring further density to a condo-heavy stretch of the county road that brings Sunrise Highway traffic to the South Fork. That is one part of Tuckahoe, another hamlet of the town that often feels saddled with more than its share of higher-density development. In 2020, I spoke with Peter Callos, who’d been a vocal opponent of such activity in the area as impinging on the quality of life for longstanding residents. He, like Tom Ruhle, accepted that curbing supply has the effect of favoring wealthier buyers, but complained the issue was being decided without the public “having a choice.” Incrementally, as only the rich and the policy-favored get to move in, “the town is losing its character,” he said.

If the arc of Hamptons home accessibility could be followed in one political lifetime, it would be Fred Thiele’s. A native son who worked his way through local government as a town attorney and ultimately in 1991 as Southampton supervisor, then went on to Albany as a legislator (an Independent caucusing with Democrats), he kept countless homes from being built while also looking to finance others to be built. Which is to say, he was at the forefront of preserving nature during the critical years, then focused on getting at least some few past the housing-scarcity gate. For a good 20 years he pursued schemes to shift the regional gentry’s bounty into a wage-earner kitty. Finally, he got passed and signed by the governor the tax that will be voted on this fall.

The $50 million or however much it would raise annually could be a turning point.  So, however, will be the cumulative result of the ground-level tussles over each successive project, processes which can take a few years. The tax is table stakes now in the Hamptons. The political poker will have more cards to be dealt.

March 25, 2002

Legacy of a Suffolk County ‘Moses’

The death of Lee Koppelman, as noted in this Newsday obituary, closes a long chapter of land-use policy on the eastern end of Long Island. Koppelman was Suffolk County’s planning chief from 1960-1988, as its post-war population boom led to pushback from preservationists, many of them well-off New Yorkers coveting weekend and summer retreats. Koppelman was akin to a “good” Robert Moses in his quest to open parklands and maintain vistas for the sake of a human influx that developers inevitably would supply with bricks and mortar (or cedar shingles). He inspired local master plans that imposed early order and limits on that buildout, but also pushed modern roads that would help bring the new residents and visitors. That put him at odds with what he saw as NIMBY opponents of growth, including elected officials who, from the early 1980s in the town of East Hampton, ratcheted down zoning allowances. When I interviewed Koppelman a few years ago, he recalled one large preserve there whose acquisition price was bid up, in his view, by the town’s intransigence. In another instance, a would-be developer was so angered by dealings at town hall that he would only negotiate a property settlement with the county’s Koppelman–after whom the wooded hiking acreage at the site near Montauk was subsequently named.

Lee Koppelman, legendary Long Island planner, dies at 94

First Suffolk planning director’s “revolutionary” ideas transformed Long Island.

Yet Another Blockage at West Coast Ports?

After all the shipping/logistics industry has been through over the past two years, it might hope for some relief in the middle months of 2022. But not necessarily–the dockworker cartel represented by the West Coast longshoreman’s union is threatening one of its periodic walkouts, as this Wall Street Journal story flags. With pay already well into the six figures, this is a worker collective well able to use its leverage, and Covid-19 has only underscored that. The Biden Administration is trying various steps to uncork supply-chain blockages (beyond what the highly adaptive private players are implementing), but the ports are now so technologically driven that the old notions of marshaling the Army to move the nation’s goods is a non-starter. (As if a Democrat in today’s White House would try!) So count on cost-push inflation to rise a bit higher still as we get into summer.

U.S. Importers Are Trying to Ship Around Potential Labor Disruption

The existing contract with longshore workers expires July 1 and shippers face hurdles to finding alternatives if the talks get ugly.

He Ain’t Heavy, He’s My Brother

Sometimes it’s the advertisements that make the print product of a publication the more interesting version, and that is decidedly true at the New York Times. Various political entities want to put their cause in front of a prestige audience in the time-honored “tombstone” way. Last week, it was a collection of M.D.’s and others using “World Obesity Day” as a peg for demanding that the news media stop “labeling” people as obese “because obesity is a chronic disease, not a lifestyle choice.” They wish the language be shifted from adjective to object, as in “struggling with obesity.” This “person-first” approach, they say, “can begin to eliminate the weight bias against the nearly 200 million Americans living with overweight and obesity.” (My emphasis.) Their condition would thus be equated with other, more recognized, forms of disability. The signatories are all putative experts in the field, but this idea seems too slippery. Nowhere close to all of those 200 million are afflicted with metabolic limitations that condemn them to an unhealthy condition. Rather, this sweeping speech demand is part and parcel of the silencing of discussion of excess weight’s role in Covid-19 co-morbidities. Ever since Michelle Obama left the Kitchen Garden, the national conversation has ceased to focus on what is one of the most obvious means to improving public health…because it could lead to “shaming.” The doctors placing this ad, like marketers catering to heavy would-be customers, would let countless individuals off the hook for their diet and exercise choices. That the surgeon general of the U.S. and other such medical officials do not challenge such notions is an abdication.