Comments by "Louis Giokas" (@louisgiokas2206) on "Econ Lessons" channel.

  1. Thanks for this video. Great concept and information. The numbers you cite for attacking vs defending forces works here in Ukraine because both sides are somewhat evenly matched in equipment and technology. In fact, they are both drawing from the same original pool of equipment. This breaks down when there are technological advantages. Iraq is a great example. In their war with Iran, in the 1980s, that turned into a stalemate. Both sides had a similar number of forces. It was long and bloody, with no real strategic result in the end. The Gulf War was totally different. The west never did have an overwhelming number of troops. It was air power, intelligence and superiority of equipment that decided the issue. In the Iraq War of 2003, the US force that invaded and destroyed the Iraqi army and state was actually much smaller. Again, it was air power and technology that made the difference. The term often used is "force multiplier". This is actually possible to calculate. In both cases Iraq had plenty of time to create defensive obstacles and fortifications, which they did, in depth. The US side had plans and methods to overcome these, which it did. In Ukraine the Ukrainians do not have this capability. The missing element is air power to suppress the opposing forces while breaking through the defenses. This is the problem Ukraine has in the south. It is also the problem the Russians have in the Kharkiv assault. That said, if Ukraine finally gets F-16s into operation and is able to use long range fires to attack Russian troop concentrations in Russia itself, then the situation totally changes. This is starting to happen, and it changes the details of the equation, not the concept itself.
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  5. Mark, I totally agree with you. Amazing. Just a look at the BRICS countries is instructive. Brazil has massive problems. Their agriculture is totally dependent on massive inputs of fertilizer. Without that and modern technology, they would not be able to grow much. These all come from outside. They haven't even been able to agree on a currency in their local neighborhood. They also have totalitarian tendencies from both the left and the right. Their slums are epic. Russia we all know about. Enough said there. India is on a decent track, but they have a territorial dispute with another BRICS country that the Indians expect will turn into open warfare in the near future. I tend to agree with them. I think their democracy will help them. Look at the situation with Modi. All the pundits assumed he and his party would steamroll the latest elections. It didn't happen. Now he has to govern in coalition. China is going down. They are experiencing something worse than what Japan did which led to their three lost decades. Japan was rich when that happened. That allowed them to recover, and even then it took a long time. China is a lower middle-income country at best. They don't have the resources to recover. The CCP is going down. They have the territorial dispute with India mentioned above, and potentially with Russia as well. Then of course there is Taiwan. They are also antagonizing Japan on so many levels. Don't they remember what Japan did to them many times in the past (it was not just WWII)? Finally, there is South Africa. The country is falling apart. They can't even keep the lights on. The BRICS countries want a muti-polar world. They will get it. It is called imperialism. None of them did well in that era, which covers most of human history. How stupid can they be? Massively stupid it seems.
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  7. You nailed it. China's recent official maps show parts of Russia as Chinese territory. The territorial disputes, often mentioned by Xi, go back to the Russian Empire and Qing dynasty days. The Chinese claim that they were forced to sign several unequal treaties. Even in the recent past, Jiang Zemin signed away a big chunk of territory. After Jiang died it came out that the Russians forced his hand because they had compromising information on him from his time studying in the Soviet Union. Xi intentionally released that information but waited until after Jiang was dead. Some think that if Russia is defeated in Ukraine, it would be an easy thing for China to move in. Russian doctrine is to use nukes to combat such a move. Considering the relative size and quality of their nuclear arsenals I don't think Russia would even hesitate. Heck, half the missiles probably have water in them instead of fuel. Others are reportedly in silos that won't open. The thing about the oil price sanctions is a little confused. The oil price cap did what could be done by the west short of actually seizing cargos. Russian oil can no longer be carried on ships insured by western companies. This has led to the shadow fleet. which is far less efficient, something the west cannot control by indirect means. The other thing that Mark fails to understand is that China is paying a very low price for Russian oil and gas. They don't pay the world market price. Russia just needs to keep the wells pumping so they don't freeze up. The price issue is a big part of the reason the big gas pipeline Russia wants to build is not happening. China does not want to be beholding to Russia, having seen what they did to Europe. They also are offering too low a price. Russia also needs Chinese capital to build the pipeline. That is not forthcoming.
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  13. While I agree in general about the Russians not being great, they were nothing out of the ordinary. What do you think the British did in their empire (the largest in history). Look at what they did to India. India was actually a fairly (very?) advanced industrial power at the time of colonization. The British made sure that ended. Why do you think South and Central America speak Spanish or Portuguese and that most are Catholics? Keeping with Imperial Russia, have you heard the term "the great game"? We often use it in terms of contemporary situations, but it was coined to refer to the rivalry between the Russian and British empires. You see, it takes two "sides" to have a game. The actions of the Japanese in the 19th and first half of the 20th century were really a response to what the Europeans had been doing. They had the strength to compete and felt they were owed. They also needed resources. Why trade for those when you take them? Along the same lines why did Germany, a latecomer to the game, colonize Africa? How about the Polish–Lithuanian Commonwealth? From the late 16th to the late 18th century, they controlled much of what is now Ukraine. Look into how that worked and the effect on Ukrainians. To judge the world of the past by our contemporary standards is really foolish. One thing that is germane to this whole discussion is the stated desire of the Russians and Chinese to have a multipolar world. What that really means is returning to the historically normal state of things, namely imperialism. In the last 200 years that did not go well for either of those countries. The basic reasons for that have not changed. That they would want it shows a fantastic level of ignorance of history and their current condition.
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  15. Very interesting. A completely different take on the guy, and very valuable. Stellar analysis. Of course, I wonder what he was thinking. Prior to the influx of western capital, the Chinese economy made the Soviet economy look like a success story. The term for creating a totally self-dependent economy is "autarky". That was Hitler's idea. The only thing I disagree with you, and many others, on is an assumption that the current complex global supply chains we have are necessary, or even a good thing. In fact, there are two motivations for the current state of affairs. One is that our product companies are no longer run by engineers, but by MBAs and bean counters. I explain below. This leads to the constant search for labor differentiation. A corollary to that is the move of manufacturing to countries with a large and growing market. This is a way to get around protectionism, plain and simple. Look at automobile manufacturing. Japanese and Korean companies build cars in the US. Why? Is the labor cheaper? No. They were trying to forestall being kicked out of the most lucrative market in the world. Another example is BMW. All of their SUVs are assembled in the US. I told a German colleague of mine this and he was not happy. To show you the madness of this, my attorney (and friend; good to have one of those) bought one recently. He had to wait for a while because parts and assemblies were flying back and forth across the Atlantic. In the 1980s the movement in manufacturing was to collocate engineering and manufacturing. This was, in large part, because of the concept called "design for manufacturability". It was driven as much by quality as cost. To go back to automotive, GM wanted to design a "world car" platform they could sell, with local adaptations, anywhere. They could also produce it anywhere. They had fancy graphics of the envisioned assembly plants. All their suppliers would have feeder plants actually abutting the main assembly plant. This was also driven by the idea of "just in time" or JIT manufacturing. This all falls apart in the current model. I have already written too much, but just a couple more things. One is that I have already seen examples of products that were brought back to the US after moving manufacturing to China. Instead of just making the same thing, the product was reengineered to be more efficient to manufacture. The cost actually came down. In the US! I have consulted with companies and know of the situations of many more (some very large) that contract manufacturing to China. I was involved, of course, because they were having problems. The Chinese manufacturers did not build the product exactly as specified, and they failed. You can't separate engineering for quality (product and production process) and quality control from manufacturing. The result is the low quality of many of the goods we have now. This is a part of what I talk about above. The other thing is automation. Have you seen the plants in China that produce the iPhone? There are hundreds of thousands of people involved using very little automation. The workers are literally peasants. What we will see as disengagement from China proceeds is much more innovation in automation. That is capital intensive, so it is not likely to work in China, or in Russia. By the way, I use a lot of examples from the automotive world, but my background is in aerospace. We often studied what was being done in other manufacturing areas to get ideas for our own manufacturing.
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  23. The statement that economists often repeat is that "...if you have free trade and good relations economically..." ignores the political aspect of international relations. The evidence was always there, but the issue was political and geostrategic, so economists downplayed it. Look at the 20th century. The reason this worked for western Europe was that there was a US security umbrella and an active enemy on the border. The EU did not bring peace through trade between countries that had been enemies for centuries. It was 500K American troops and nukes. Something similar happened in Japan and Korea. Their democracies were imposed by the US. Heck, the Japanese and Koreans only admitted they were on the same side in the last month or two. What is the common thread? Trade? As President Joe likes to say: Come on man! It was the threat of immanent nuclear annihilation. You have to get the order right. It is the security landscape first and the economy and trade later. When the Soviet Union disintegrated the leaders of the west did, as you say, assume that this was different. The thought was, in the case of Russia, that the death of the communist ideology would bring change. Well, they forgot the Czarist, Imperial Russia that came before. In the case of China, the ideology didn't even disappear. My point is that the US and other western leaders are what I would charitably call rank amateurs. The last US president with any real foreign policy experience and knowledge was George H. W. Bush. He even wanted to have a conversation about how we move forward and evolve the system in light of events such as the dissolution of the Soviet Union. He was voted out of office and left in 1993. Who took over after him? The governor of a small southern state, Bush's son, the governor of a larger state, a junior senator, a businessman (he at least had foreign business experience) and a long-time senator from one of our smallest states. The American people don't care about this stuff. That is the history of the US, by the way.
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  25. My family situation was quite similar to yours. My grandparents came over from Greece, Arcadia in the Peloponnese. The men came over and established themselves and then sent back for wives. Ah, the good old days. On my father's side, my grandfather was a carpenter. He built his own house. It is still in the family. They lived a decent life in a factory town (Springfield area) in Massachusetts. On my mother's side, my grandfather had several businesses over time, the main one being the pool hall on Main Street in Annapolis. He also built a house in town (not by himself) which is also still in the family. All of them had a fourth-grade education. My mother's father was very well read. Some of their children went to university. Boys only, of course. ALL of their grandchildren went to university, with lots of Masters, PhDs and some MDs. Not untypical. My father did not go to university. He got into Harvard but would not let his parents borrow the money. I love and respect my father, but that was a real mistake. He was very mathematically inclined. In the 1930s he studied calculus in high school. So did I, which was rare. So did both my sons. In fact, they took a university course. My father later went back to get an associate degree. I was born in Washington, DC where my father had moved to work at an Army electronics and weapons lab. He got to do some extremely interesting stuff, most of which he couldn't talk about. But he did expose me a lot of fascinating stuff. Enough of the background. Now to the Depression. My parent's experience could not have been different. The Depression greatly affected my father, and it was quite negative. As a kid he would walk around the neighborhood selling corn from his wagon. As an industrial town, Springfield was hit hard. My mother didn't notice the Depression. The pool hall was in a building owned by my grandfather's uncles. They basically said pay what you can, take care of your family, and we'll settle up when this thing is all over. That's what he did. Also, Annapolis is the state capital and has the Naval Academy. It was also a fishing port at the time. So, my mother happily roller skated around town with her dog, half collie and half wolf I was told, totally oblivious. By the way, Mark, the housing thing has a lot to do with the baby boom, don't you think. When your parents bought their house, the population of the US was much smaller.
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  29. What you hope for Russia is laudable. I don't see it happening. They had their chance after the Soviet Union fell apart. They chose "stability" over freedom. If you look at the other republics of the Soviet Union that became independent countries, the record is very mixed. The Baltic republics did democratize and integrated with western Europe and became part of the EU. At the other extreme you have Belarus. Then there are places like Georgia which is not fully rid of Russian influence and interference. Even Ukraine was touch and go, and was much like Georgia is now, for a time. The Russian people are basically serfs. Look at the videos that come out of Russian peasants appealing to the czar, I mean Putin, for redress of grievances and protection. It is like something out of the19th century. Read Gogol's book "Dead Souls". It was written in the middle of the19th century. It precisely describes Russia today. That Russia and China became the first major countries to have successful Marxist communist revolutions goes totally against Marx's theory. He assumed that it would be the industrial proletariat that would be the vanguard of the revolution. Workers of the world unite! Remember that slogan. Marx was not talking about the rural peasantry. Even Lenin assumed this would happen after the successful revolution in Russia. Didn't happen. Then Lenin added his twist to Marxism by offering the peasants "free stuff", which he later took away. Mao did the same thing in China. When, not if, The Russian Federation falls apart it is very likely to break into a number of warlord-controlled pieces. I predict that China will do the same, by the way. That is their history.
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  41. You make a very good point about capitalism. That is the only system that can adjust organically to changes. As you have pointed out, it does that well. I follow Zeihan, and many of his prognostications and predictions are spot on. I have read all his books. Some of the situations he talks about are happening in real time. It is fun to watch. I think he even got the Ukraine situation correct as far as the invasion. There are things I disagree with him about, and one is the flexibility of capitalism and industry. I could go on and on (as I am wont to do) with examples. There is one thing I just saw from him, that makes me think he is shifting his thinking a bit toward mine. His latest video (today) on his personal channel is titled "China Will Soon Lose the Title of "World's Manufacturer". He does mention the sunk cost of industrial plant and infrastructure in China, but then makes a surprising admission. This will shift to other places where economic factors are more favorable. Don't forget that China has only been industrializing for the last forty years or so. A fun fact, which I think I got from Zeihan, was that by 1900 or so the US had a larger share of industrial exports than China does today. Industrial facilities are always being tweaked, improved, reconfigured and moved. I have been involved in some of that. Ukraine, like Poland, will be an attractive investment destination once the war is over. Just before the war one of the oil majors was starting a program to drill for oil in the east of Ukraine, for example. There are plenty of natural resources in Ukraine that could benefit Europe. And, as you say, an innovative and motivated population. Maybe they will even have a baby boom like after WWII once the Russians are kicked out. I like what you say about NATO vs. the EU. I tend to agree with Zeihan that the EU is dying. It is a protectionist clique after all. For example, there is currently lots of angst in the UK about their leaving the EU. Actually, there are people talking against that and economic predictions that the EU could overtake Germany in economic size in the next decade. We will see.
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  45. That collective unconscious is present in the society. It is clear that the society in Russia corrupt. The thing is it has been for centuries. I have mentioned it before, but one should read Gogol's book "Dead Souls" which was written in the middle of the 19th century. It reads like a description of Russian society today. It is also entertaining. Peter the Great, also in the middle to late 19th century, tried to modernize Russia. Frankly, he didn't get far. The Soviets tried to create "the new Socialist man". They failed, and under Putin we see a return to the time of the czars. A majority of those Russians who might have understood what is going on left the country. The thing that is instructive is to look at the US. People from all over the planet come to the US. They typically assimilate and thrive. The culture in the US is flexible, unlike that of Russia. Another part of it is geography. The US has, basically, among the best farmland in the world, and lots of natural resources. I read once a historian speculating on why the Americans revolted. Frankly, they were, on the whole, much wealthier than their European counterparts. I am talking about the average person. My own is typical. My grandparents came over from Greece towards the beginning of the 20th century. They all had 4th grade educations. They were successful. Far more successful than they would have been in Greece. All their children had high school educations with some going on to university. ALL their grandchildren went to university, with a number of MS, PhD and MD degrees in the mix. That is typical. And, as in most cases, they did not bring any wealth with them.
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