"Europe - One Man's Perspective"

 Yesterday’s violent sell-off was a reminder to recall Benjamin Graham’s advice: “In the short run the market is a voting machine, but in the long run, it is a weighing machine.”

 

I don’t pretend to have any insights as to the future direction of stocks, but I would caution against quick judgments. A grandson, a graduate student, born in 2001, asked me yesterday if he should be concerned about the market. While we should always be alert, ‘concerned’ was too strong a word. I told him that the compounded annual price return of the DJIA, since he was born, was about 6%, roughly the same annualized return since I was born 84 years ago. Not that that means anything, other than to suggest stocks may be fairly priced, but one has to expect volatility. Stocks can become overvalued, just as they can become undervalued. Five years ago, the market acted violently to the outbreak of COVID. In March of that year 20 days out of 23 trading days had the DJIA up or down more than 1.5%. On March 12, the Index was down 10%; the next day it was up 9.4%. Uncertainty leads to volatility, but long-term investors have always benefitted by the magic of compounded returns – that the market, in the short term, is a voting machine, but in the long term it is a weighing machine.

 

Now, on to today’s TOTD, which has nothing to do with the market.

 

Sydney M. Williams

www.swtotd.blogspot.com

 

Thought of the Day

“Europe – One Man’s Perspective”

April 4, 2025

 

“Europe was created by history. America was created by philosophy.”

                                                                                                                                Margaret Thatcher (1925-2013)

                                                                                                                                British Prime Minister, 1979-1990

 

I remember my first trip to England, looking out from the plane’s window at the island’s green fields, thinking that it was from this place that most of my ancestors sailed westward across the Atlantic to a new world. Most were poor, traveling as indentured servants, but endowed with a belief in the promise of a new start in a new world. They were driven by optimism, a belief that an unknown future in a strange country would be better than what was ordained for them at home. It was with a sense of wonder and pride in their courage that I gazed at a land that, had they not emigrated, I might have called home.

 

However, what prompted this essay were recent condescending remarks of Vice President J.D. Vance and Defense Secretary Pete Hegseth. In his February 14^th speech in Munich, Mr. Vance said, “What I worry about is the threat from within.” While I am sympathetic to the idea of the threat from within – a failure to focus on economic growth, anti-democratic attempts to silence opposing opinions (for example, the extraordinary treatment of Marime Le Pen), and the failure of most European nations to assimilate hordes of migrants seeking refuge, and the consequence of their impact on culture. However, his patronizing tone unnecessarily imperils our relationship with Europe. And the comments by Vance and Hegseth, relayed by Jeffrey Goldberg of The Atlantic, from what is now being called “SignalGate:” Vance: “I just hate bailing Europe out again.” Hegseth: “I fully share your loathing of European free-loading. It’s pathetic.” While it is true that most European countries have not complied, until recently, with the two percent rule for defense contributions, most have increased their spending since then President Trump made a fuss in 2017. They should give credit where credit is due

 

Americans should be careful about belittling old allies. The United States – for better or worse – is far different than Europe. More than a hundred and fifty years ago, Henry James wrote to Harvard professor Charles Eliot Norton: “It’s a complex fate being an American & one of the responsibilities it entails is fighting a superstitious valuation of Europe.” Unlike Europe, where migrants mostly live segregated lives, years of assimilation in the U.S. have produced a multi-cultural population, so that almost all Americans, whether white, black or Asian, can trace part of their ancestry to one country (or several) in Europe.

 

And consider what Europe has gifted us over the Centuries: Artists like Michelangelo, Rembrandt, Constable and Picasso. Writers like Tolstoy, Jane Austen, Victor Hugo, and Dante Alighieri. Composers like Bach, Vivaldi, Debussy and Tchaikovsky. Scientists like Archimedes, Galileo, Darwin, Einstein and Enrico Fermi. Thinkers and philosophers, from Plato and Aristotle to Adam Smith, Voltaire and Nietzsche. Think of the palaces, museums and cathedrals designed by architects like Louis le Vau, Bernini, Juan de Villanueva and Christopher Wren.

 

These are gifts from the past that keep on giving, as can be heard in any symphony, seen in every museum, and read in libraries and classrooms. But what about the present and the future? The European Union is a worthwhile experiment. Keep in mind, the Continent was embroiled in two world wars in the 20^th Century. Peaceful coexistence is better than war. But there remains much that is unknown. Will a united Europe retain the customs, cultures and languages of their individual states? Or will it become an amorphous mixing bowl? George Washington once, allegedly, forecast: “Someday, following the example of the United States of America, there will be a United States of Europe.” I hope so.

 

During the Cold War, Western Europe and the United States were united in their pledge to defeat the scourge of Soviet Communism. Europe was divided, because of an imperialistic Soviet Union, by what Winston Churchill described as an “iron curtain” that had “descended across the continent.” One consequence was the formation of NATO three years later, in 1949. Russia’s continued belligerence, after the collapse of the Soviet Union in 1991, meant that NATO remained relevant, but the situation changed. Russia was smaller, but still the possessor of thousands of nuclear weapons, and had aligned with other totalitarian regimes like China, North Korea and Iran. Europe, after being battered in two World Wars, a decade-long global depression, and a forty-five-year Cold War, focused on becoming social welfare states. Since the end of the Cold War, E.U. nations have spent roughly ten times as much on “social protection” as on defense. (Eastern Europe, with close memories of Soviet occupation, spends less on welfare and more on defense than does Western Europe.) 

 

But that generosity has brought other problems. As Margaret Thatcher once said: “The problem with socialism is that eventually you run out of other people’s money.” Europe has not focused on the productive side of its economy. In 2023, the U.S., with a population 110 million less than that in the E.U., produced a GDP 62% larger. Since the turn of the millennium, Europe’s economy has increased 134% versus 172% in the U.S. Europe needs to ensure they can continue to afford the governments and societies they have created.

 

As well, the continent has a more significant problem – an unaddressed demographic problem, which will further affect their future well-being. Not enough women are having babies. The total fertility rate (TFR) in Europe in 2023 was 1.38. The last time that rate was above replacement (2.1) was 1974. Today, the population of the European Union stands at 746 million, with an average age of 44.7. Projections suggest that the population in Europe by the end of the Century will decline to 588 million, with an average age in excess of 50. Europe is not alone with this demographic challenge. South Korea, Taiwan, Singapore, Hong Kong share the dubious distinction of having the planet’s lowest birth rates. China at 1.18 and Japan at 1.26 are both below Europe’s. The United States’ is higher but at 1.78, still below replacement. Low birthrates in Europe are being offset by increased migration. For example, in 2023 3.67 million babies were born in the E.U., while 4.6 immigrants arrived from non-E.U. countries. Nevertheless and as mentioned above demographers suggest the population will continue to age, and their culture will change to accommodate their changing populations. No one knows what the economic and cultural effects will be, but over the past several decades growth rates have shown a persistent slowing, yet the welfare state continues uninterrupted. That trend is unsustainable.

 

Nevertheless, for reasons both sentimental and practical, Europe is worthy of our friendship. It is the first line of defense against Russia. As well, it is our past and, given what it has produced over the past two thousand years, it is a fount of inspiration and brings pleasure to our futures. Despite despots and kings, wars and famines, the world is a better place because of Europe. It needs a correction but deserves our respect.

"Domesticated"

 I admit to strong opinions about politics, our national debt, the purpose of our schools and universities, gender identity, woke culture and myriad other subjects. However, when overwrought, and my pen fails me, I take a few deep breaths and pick up something comic, like a Wodehouse novel or collection of his short stories. There are over a hundred to choose from, beginning with The Pothunters in 1902 (written at age 21) and ending with Sunset at Blandings, written in 1975 (at age 93), and published posthumously in 1977. But I also try my hand at more personal essays, such as this one which I hope will provide some cheer regardless of the weather or one’s political affiliation.

 

Sydney M. Williams

 

More Essays from Essex

“Domesticated”

March 29, 2025

 

“I’m not very good at being domesticated. I’ve tried. The domestic

life I find claustrophobic – the rituals and habits and patterns.”

                                                                                                Ralph Fiennes (1962-)

                                                                                                British actor – Lord Voldemort in the Harry Potter series

 

The other day, while folding my second load of laundry, with breakfast dishes still in the sink and the bed still unmade, I thought of how domesticated I have become since retiring and moving to Essex Meadows – domesticated in the sense of sharing daily chores. I don’t mean domesticated like a dog. I was house-trained before Caroline and I were married sixty-one years ago. For the first fifty years of our married life Caroline did the laundry, made the bed and cleaned up the kitchen. I assumed some of those responsibilities when we moved to our apartment in January of 2016

 

Domestication was not a primary consideration for my parents; both artists, they scorned traditional roles. My father did not grab his dinner pail or take his briefcase and go off for the day. And my mother did not put on an apron, clean the house and set out my father’s slippers and prepare his dinner. Nevertheless, they had rituals. After breakfast, with us on the school bus, they would head to the barn where my father milked the half-dozen goats and my mother looked after the horses. They had a small business, Red Shed Rubber Animals. My mother modeled animals out of clay and my father prepared the molds to produce a rubber animal. The house was left to care for itself, at least until my older sister turned fifteen and mastered the vacuum cleaner.

 

I did not inherit my parents’ artistic genes. Examples of my early talents can be seen in a falling-apart 1947 photo album in which I placed ads for Westinghouse, Mickey Mouse and Schlitz, and in a rubber dog with two legs that I had modeled in clay. It was of no surprise to my family that I became a stockbroker. 

 

As I have grown older, my hair has become unruly, but, having been domesticated, my life has become more – if there is such a word – ruly. Now, upon waking and with no office to go to, I check the mouse traps – placed after discovering a forlorn little mouse in our washing machine (I have found none since putting them out) – take my pills, prepare and eat breakfast, glance through the newspapers, consider ideas for essays, make the bed, do the laundry on every third day, and run the dishwasher when it fills up. 

 

Unlike Mr. Fiennes, I enjoy the regimen domestication brings, which still allows me time to use what creative skills I have in writing. While I did not exactly come from a “wild or natural state,” making beds and doing laundry were not my natural focus. First married, and in our one-bedroom second-floor apartment – where to reach the bathroom one had to crawl across the bed – Caroline took command. And I became blissfully oblivious of how the household worked – clothes placed in the hamper appeared, miraculously, a few days later in my bureau, dirty dishes were washed and back in the cupboard, floors and rugs cleaned. That has now changed.

 

Now, you must excuse me; I have to go. I am being told the heating vents need vacuuming.

"Communism, China & Senator Cotton's New Book"

 

Sydney M. Williams

 

Thought of the Day

“Communism, China & Senator Cotton’s New Book”

March 28, 2025

 

“Last month, Senator Tom Cotton published what might

be the most important book of the 2020s on China.”

                                                                                                                Jimmy Quinn

                                                                                                                National Review, March 20, 2025

 

“I have seen the future, and it works” – words written by Lincoln Steffens following a visit to the newly formed Soviet Union in 1918. Last year, while in Shanghai for a store opening, Apple CEO Tim Cook was obsequious in his praise of China: “I think China is really opening up…it’s so vibrant and so dynamic.”

 

For more than a hundred years many, supposedly perceptive Western geopolitical analysts, journalists and business leaders, have chosen to ignore the evil that is Communism. In his 1919 book, Ten Days that Shook the World, American journalist John Reed, scion of a wealthy Oregon family, wrote sympathetically of the Russian Revolution that he had witnessed in Petrograd. Warren Beatty turned the book into a 1981 film, Reds, nominated for an Academy Award. In 1937, after spending months with Mao Tse Tung’s Red Army, American journalist Edgar Snow wrote Red Star Over China, a glowing portrait of life in Communist areas. He contrasted his experience with Mao and his Communist followers with his depiction of the gloom and corruption of Chiang Kai-shek’s Kuomintang’s government, which relocated to Taiwan in 1949.

 

For Americans, Communism has never approached the revulsion felt for Nazism, yet the similarities are far greater than their differences. In the February 5, 2018 issue of The New York Review of Books, Ian Johnson responded to an earlier article by Timothy Snyder, “Who Killed More, Hitler or Stalin?” Johnson wrote that the question was slightly off: “…it should have included a third tyrant of the 20^th Century, Chairman Mao. And not just that, but that Mao should have been the hands-down winner, with his ledger easily trumping the European dictators’.” According to his research, Stalin killed somewhere between 6 and 9 million people, Hitler between 11 and 12 million, and Mao between 35 and 45 million, most during the Great Leap Forward (1958-1962) and the Cultural Revolution (1966-1976). Nazism and Communism both practice(d) genocide, are (were) authoritarian, and have (had) no regard for individual rights or human life.

 

Repression and intimidation in China did not end with Mao’s death in 1976. While accurate numbers are not available, estimates of those killed in 1989’s uprising in Tiananmen Square range from a few hundred to several thousand. Since Xi Jinping became President of the People’s Republic of China in 2013 more than a million Uyghurs and other Turkic Muslims in Xinjiang Province have been placed in internment camps. No one claims to know how many have died. The province has a population of 24 million, half of whom are Uyghurs, so almost one in ten Uyghurs have been confined. The BBC has reported that Uyghur women have been sterilized, and former Secretary of State Anthony Blinken has called what has happened in the province “genocide and crimes against humanity.” In a review of Emily Feng’s book Let Only Red Flowers Bloom, Maura Elizabeth Cunningham wrote in last weekend’s Wall Street Journal: “Under Mr. Xi, the definition of what makes a person ‘Chinese’ has become increasingly narrow: someone who exclusively speaks Mandarin, marries Chinese and has two or three children, respects the leadership of the CCP (Chinese Communist Party), accepts censorship and surveillance and recalibrates in accordance with each new political campaign…” In the Introduction to his new book, Voice for the Voiceless, the Dalai Lama wrote about Communism and Tibet, which he was forced to leave in 1959: “The issue is not about the matter of economic development…The issue is about a people’s need and right to exist with their distinct language, culture, and religious heritage.” An impossible dream for Tibetan Buddhists in China today.

 

China has a population of about 1.4 billion, of whom about 100 million (or 7%) are members of the Communist Party, the second largest political party in the world (in a one-party state!), but one not open to all. Officers of the People’s Liberation Army (PLA) are members, but most enlisted soldiers are not. While China, according to official statistics, has the world’s second largest economy, as measured by GDP ($18.8 trillion versus the U.S. at $28.2 trillion, its GDP per capita is $13,400 versus the U.S. at $83,000. Indicative of its concentration of wealth, China has, according to the Hunan Global Rich List, 814 billionaires, more than the U.S. That number, according to the Washington Times, includes Xi Jinping, who has never worked in the private sector. Mr. Xi has been hailed for eradicating poverty in China, but, as Bitter Winter (a European magazine that focuses on religious liberty and human rights) has stated: “Xi Jinping is a master in the Orwellian art to redefine the meaning of words to suit his propaganda.” In 2021, he put poverty at below $2.30 per day. The issue of how many Chinese fall below the poverty line was raised before Xi Jinping’s presidency, in Will the Boat Sink the Water? by Chen Guidi’s and Wu Chuntao, published in 2004. 

 

China represents a clear and present risk to Western liberalism – economically, militarily and culturally. 150 countries, representing three quarters of the world’s population and over half of the world’s GDP have signed Memorandums of Understanding (MoUs) to join China’s Belt and Road Initiative (BRI). China’s banks – backed by the CCP – have funded projects, including railroads, ports and gas pipelines in countries in Asia, the Middle East, Europe, Africa and Latin America. Sean Thomas, in the April edition of The Spectator, wrote: “China is now the biggest trading partner for virtually every South American nation, supplanting the U.S. in the last decade.” While their military budget is less than ours (assuming we can believe their numbers), their standing army is twice ours – the largest army in the world. China has constructed artificial islands and military installations in the South China Sea, through which travel one third of all global maritime trade. In the 2022-2023 academic year, American universities enrolled almost 290,000 Chinese students, while 800 Americans studied at Chinese universities.

 

It is with that background, and at the suggestion of an old skiing buddy, that I picked up and read Senator Tom Cotton’s short but information-packed book, Seven Things You Can’t Say About China. Reading it convinced me of what I long suspected – China is an evil empire and the U.S. needs to be prepared. In seven concise chapters, covering 170 pages, Senator Cotton instructs the reader on how China is preparing for war, how they wage economic war, how they infiltrate society and are coming for our kids, and how they might actually win. In a telling example, and quoting PEW Research Center, he relates that in 2020 9% of young American adults got their news from Chinese-owned TikTok; today, 39% do. He starts off chapter VII, “China Could Win:” “Most of us take American global dominance for granted, without thinking much about it; since at least World War I, that’s just the way it’s been.” Complacency has become nemesis.   

 

If you believe, as I do, that most people, regardless of heritage or cultural background, prefer liberty to dependency, this is a book you should read. The West, led by the United States, is an advocate for the former, while China exemplifies the latter. In the U.S., we command our fortunes, and we control our futures. The vast majority of Chinese, living under the tyranny of a dictatorship, control neither their fortunes nor their futures. We cannot let them win.

 

In the March 16, 2025 issue of The Telegraph, senior foreign correspondent Roland Oliphant wrote: “China, not Russia, is the only country on the planet capable of challenging the United States’ military, economic and political hegemony.” Caveat emptor should apply when dealing with Communist China.