What this means in practice is that while the U.S. runs a revenue deficit on trade, we run an enormous surplus in profits on trade when properly accounted for. This is clearly obvious in global statistics on profits and wealth accumulation. From 1998 to 2024 U.S. corporate profits grew from around $500 billion to $3.7 trillion, a more than sixfold increase. The rest of the world saw profits grow from $102 billion to $457 billion, only a 3.5-fold increase. Said another way, the U.S., with 5% of the global population and 25% of global GDP, made 83% of world profits in 1998, which increased further to 89% in 2024. Not surprisingly, over the same period U.S. household net worth has increased from $37 trillion to $174 trillion today, the greatest accumulation of wealth in the history of the planet, and the U.S. stock market has outperformed all other world markets (occasionally excepting Sweden) massively since World War II.
In partial response to some of yesterday’s comments about Luther and the church he founded:
Lutherans and Lutheranism and the Lutheran church have evolved considerably since their beginnings in the High Middle Ages. While it is appropriate and necessary to be clear-eyed concerning Martin Luther and his antisemitic views, it is also necessary and appropriate to take caution lest one’s feelings in that regard shade over into animus and become a reverse blood-libel directed at contemporary Lutherans. E.g.: His [Luther’s] blood/antisemitism be upon us.”
My father and his very German family, Missouri Synod Lutherans all, were the among the most tolerant people I ever knew, much more so than the Irish side of my family. Nary a trace of anti-Jewish animus in their makeup. As was the case, more or less, with the vast number of Germans who immigrated to America between the 1600s and late 1800s. Not incidentally to this point, Germans in the early-mid 1800s were among the most anti-slavery people in America and they served (and suffered, and died) in large numbers in the Union army during the Civil War. Generally speaking they were committed abolitionists and believed that the Civil War was essentially a crusade to end slavery and that taking part in it was a moral imperative.
Yemen’s Houthis hit tankers in Red Sea as US strikes Iran for 12th consecutive night
Crew safe after Iran-backed rebels say they hit two Saudi ships that violated their blockade; Iran says it targeted US military assets in Kuwait and Jordan in response to strikes
I was always surprised to learn that the Dutch had a long history of international banking and investment, which was important to the history of the Pilgrims and the Plymouth colony.
The puritans left England because of religious turmoil there and were comfortably established in the Netherlands. Eventually they became worried that their children and grandchildren would become more Dutch than English, as well as other concerns, I’m sure. So, off to the New World. But how do they get the ride over and finance the whole affair?
Dutch bankers were interested in making an investment in the New World and they paid the way. However, the early years of the colony were a disaster, because the governor tried to set things up in accordance with their contract which stated that the bankers would own a big chunk of the “profits.” Profits were those things produced above basic necessities, and those necessities were to be equally distributed amongst everyone. People began to “freeload” off of that system.
Countries like Sweden and now Norway with North Sea oil, I’d guess are wealthier than the Netherlands, but the Netherlands has been a rather wealthy country for a long time because of their investment banking community.
Copilot
The Dutch Search for the Source of Nutmeg
In the 15th and 16th centuries, nutmeg was one of the most valuable commodities in the world. It was believed to have medicinal, aphrodisiac, and even plague?preventing properties, and it was so rare that it grew nowhere else on Earth — only in the Banda Islands of the Maluku (Spice) Islands in present?day Indonesia commonplacefacts.com+1. This scarcity made it worth far more than gold, and European powers scrambled to find its source.
The Spice Race and European Quest
By the mid?15th century, the Ottoman Empire controlled the Middle Eastern spice trade routes, blocking European access to nutmeg and other spices. This forced European nations to seek alternative sea routes, leading to explorations by Vasco da Gama and Christopher Columbus commonplacefacts.com. Columbus’s 1492 voyage to the Americas was partly motivated by the search for the Spice Islands and nutmeg blog.herbsociety.org.
Dutch Conquest of the Banda Islands
The Dutch East India Company (VOC), founded in 1602, was determined to secure a monopoly on nutmeg. After initial contact in 1599, the Dutch signed trade agreements with Bandanese chiefs. However, resistance to Dutch monopolies led to violent conflict. Between 1609 and 1621, under the command of Jan Pieterszoon Coen, the Dutch launched military campaigns, massacres, and forced deportations, depopulating the islands and enslaving thousands of Bandanese Wikipedia. The conquest secured Dutch control over the only source of nutmeg.
The “Manhattan Transfer”
In 1667, the Dutch traded Manhattan (New Amsterdam) to the British for the small island of Run, one of the Banda Islands blog.herbsociety.org. This deal, known as the “Manhattan Transfer,” was a direct result of the Dutch desire to control the nutmeg trade. The years of conflict over the islands were called the Nutmeg Wars blog.herbsociety.org.
Aftermath and Decline of the Monopoly
The Dutch monopoly lasted until the 18th century, when Pierre Poivre smuggled nutmeg trees from the Banda Islands to Mauritius, creating a new source and breaking the Dutch monopoly blog.herbsociety.org.
In summary: The Dutch search for nutmeg’s source led them to the Banda Islands, where they conquered the region, enslaved its people, and monopolized the spice trade — a quest that reshaped global trade, colonial politics, and even the fate of Manhattan.
Re the Dutch and banking, their presence in Manhattan played a big part in its becoming a commerce and financial center. And perhaps not coincidentally, Amsterdam had a substantial Jewish presence in the 16th century, many coming there from Portugal and Spain after the expulsion. (More of course came in the 1930s, like Ann Frank’s family.) The Jews were treated relatively well there for centuries until the Nazis came along.
“From 1998 to 2024 U.S. corporate profits grew from around $500 billion to $3.7 trillion, a more than sixfold increase…Not surprisingly, over the same period U.S. household net worth has increased from $37 trillion to $174 trillion today, the greatest accumulation of wealth in the history of the planet…”– WSJ Editorial
Aye, but here’s the rub:
Net worth growth has been positive across income groups since the late 1990s, but it has been highly uneven—much stronger (in both absolute dollars and often percentage terms) for higher-income households. This aligns with the large rise in aggregate household net worth (roughly $37 trillion to ~$174 trillion) being driven heavily by asset appreciation (stocks, business equity, real estate) that higher-income groups own in far greater proportions.
Data come primarily from the Federal Reserve’s Survey of Consumer Finances (SCF). The most detailed recent cross-section is the 2022 SCF (values in 2022 dollars). Historical SCF waves (e.g., 1998/2001) show lower real levels across the board, with the biggest absolute and often relative gains at the top. The Distributional Financial Accounts (DFA) confirm that wealth concentration has persisted or increased over the period.
We are heading toward a real fork in the road as the country continues it’s path to a digital economy. While AI is the focus, AI can’t assemble the real world products that provide the benefits of a modern society. But AI powered robots can. We’re still a few years to several decades away from that technical revolution– but we need to start now analyzing how we’re going to tax the benefits of this revolution.
There is nothing nefarious about this growing income gap, but it highlights the nature of a shifting economy.
Let’s be pragmatic. As this shift occurs, there will be dislocation of workers– just like what happened during the outsourcing revolution in the 90’s and early 2000’s. About half of the US government’s receipts comes from taxes on wages. Robots won’t receive wages. So they’ll have to be taxed on some formula of productivity.
Possibly moving away from wage taxes to a VAT, or some other new tax base, such as taxing compute, robots, or corporate AI profits.
Royal Dutch Shell, a.k.a., Shell Oil Corp.
It isn’t just banking that made the Dutch wealthy. There is a lot of oil in Indonesia, a former Dutch colony IIRC. The Japanese in WWII (2, not 11, Ilhan) sized those resources after defeating the Dutch in early 1942. However, once the USN got their topedos to work USN submarines made transporting the oil impossible (grosly simplified history).
Nonetheless, Shell is still a major in the oil and gas business.
Putting in sideways (sort of) a good word for the Friesians, in both senses of that term, the people and the horses: a youtube channel of Friesians raising Friesians — https://youtube.com/@friesianhorses
Remember my Trump Tally comments? This one may end up on my X account rather than the blog — or I may just leave it here — since I’m reluctant to bash President Trump any harder than I already have, especially as he appears to have gotten us bogged down in Iran. I’m giving him time to ‘Fix‘ it, because I would genuinely love to see Iran brought to its knees.
Trump’s approach to Ukraine has been one of the clearest self-owns of his second term. By treating Kyiv as a burden to be offloaded onto Europe, cutting direct support, and repeatedly signaling that ‘this has nothing to do with us‘, he didn’t just strain an alliance – he accelerated Ukraine’s pivot away from Washington.
What’s emerging instead is a more self-reliant Ukraine that is:
• Deepening its integration with the EU,
• Building real industrial and security partnerships with Gulf states (Saudi Arabia, Qatar, UAE) centered on its battle-tested drone and air-defense tech,
• And turning wartime innovation into exportable capability and potential reconstruction capital.
Those same Gulf partnerships are already delivering an unexpected side benefit: Ukrainian advisers and interceptor systems are helping key American partners defend against Iranian drones – the very threat now complicating Trump’s own Middle East quagmire.
The irony is sharp. The same president who bet on Putin and treated Ukraine as a problem to be managed is watching it develop the attributes of a tougher, more diversified, technologically sharper nation – one less dependent on the very American support Trump has been so eager to withhold, and quietly useful to U.S. interests in a second theater. Europe is stepping up, the Gulf is buying in, and Ukraine is converting necessity into leverage.
Short-term transactional politics are producing longer-term strategic costs for the United States, while the country he tried to sideline finds new partners and a clearer path forward.
Europe beyond Poland and those very near to Rossia, are by and large self-serving wankers. For example the now pitiful Royal Navy.
Trump decided that Europe had to get serious about their own survival, but socially they haven’t, and with few exceptions militarily they haven’t either. Trump saw China as the main threat, not Roosia, and Ukraine at the moment is showing how weak Roosia has become. Not that Ukraine can stop sufficient Roosian ballistic missiles.
Iran with a nuclear weapon was not on President Trump’s top priority list on January 2025 IMO. But it isn’t a war of choice for the USA or Israel.
The European wankers were toots fine with a Tehran twelver nuke scenario it appears. As are the Democrats/DSA.
Civil Rights today!
Civil Rights Tomorrow!!
Civil Rights FOREVER!!!
Dutch is sort of a strange mixture of English and German. If you know a bit of German it’s not that hard to understand written Dutch. But spoken Dutch is something else. It’s very guttural. There was a German joke that Dutch wasn’t a language but a throat disease.
I lived in Rotterdam for a few months in 1979 but because nearly everyone spoke English I didn’t pick up much Dutch. I’m going back for a visit next week for the first time in 47 years. It will be interesting to see how much has changed.
Western Europe, North America, and the Antipodes suffer from being ruled by an elite disdainful of the country’s vernacular population and disdainful up to the point of working to have them turfed out by foreigners. This is sustained by public apathy. Allowing their militaries to rot is a different expression of the same mentality. Repairing this issue in one country after another is going to be an involved process and perhaps a violent one.
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It’s been a while since we’ve had a good Donnybrook over trade deficits. Maybe this will stir the pot.
https://www.wsj.com/opinion/trade-deficit-derangement-syndrome-fe3f37d6?st=AKkyUf
In partial response to some of yesterday’s comments about Luther and the church he founded:
Lutherans and Lutheranism and the Lutheran church have evolved considerably since their beginnings in the High Middle Ages. While it is appropriate and necessary to be clear-eyed concerning Martin Luther and his antisemitic views, it is also necessary and appropriate to take caution lest one’s feelings in that regard shade over into animus and become a reverse blood-libel directed at contemporary Lutherans. E.g.: His [Luther’s] blood/antisemitism be upon us.”
My father and his very German family, Missouri Synod Lutherans all, were the among the most tolerant people I ever knew, much more so than the Irish side of my family. Nary a trace of anti-Jewish animus in their makeup. As was the case, more or less, with the vast number of Germans who immigrated to America between the 1600s and late 1800s. Not incidentally to this point, Germans in the early-mid 1800s were among the most anti-slavery people in America and they served (and suffered, and died) in large numbers in the Union army during the Civil War. Generally speaking they were committed abolitionists and believed that the Civil War was essentially a crusade to end slavery and that taking part in it was a moral imperative.
https://www.timesofisrael.com/yemens-houthis-hit-tankers-in-red-sea-as-us-strikes-iran-for-12th-consecutive-night/
Irishotter49…
Yes. The LCMS position can be found here (scroll down or search on page for “semit”):
https://www.lcms.org/about/beliefs/faqs/lcms-views
I was always surprised to learn that the Dutch had a long history of international banking and investment, which was important to the history of the Pilgrims and the Plymouth colony.
The puritans left England because of religious turmoil there and were comfortably established in the Netherlands. Eventually they became worried that their children and grandchildren would become more Dutch than English, as well as other concerns, I’m sure. So, off to the New World. But how do they get the ride over and finance the whole affair?
Dutch bankers were interested in making an investment in the New World and they paid the way. However, the early years of the colony were a disaster, because the governor tried to set things up in accordance with their contract which stated that the bankers would own a big chunk of the “profits.” Profits were those things produced above basic necessities, and those necessities were to be equally distributed amongst everyone. People began to “freeload” off of that system.
Countries like Sweden and now Norway with North Sea oil, I’d guess are wealthier than the Netherlands, but the Netherlands has been a rather wealthy country for a long time because of their investment banking community.
Copilot
The Dutch Search for the Source of Nutmeg
In the 15th and 16th centuries, nutmeg was one of the most valuable commodities in the world. It was believed to have medicinal, aphrodisiac, and even plague?preventing properties, and it was so rare that it grew nowhere else on Earth — only in the Banda Islands of the Maluku (Spice) Islands in present?day Indonesia commonplacefacts.com+1. This scarcity made it worth far more than gold, and European powers scrambled to find its source.
The Spice Race and European Quest
By the mid?15th century, the Ottoman Empire controlled the Middle Eastern spice trade routes, blocking European access to nutmeg and other spices. This forced European nations to seek alternative sea routes, leading to explorations by Vasco da Gama and Christopher Columbus commonplacefacts.com. Columbus’s 1492 voyage to the Americas was partly motivated by the search for the Spice Islands and nutmeg blog.herbsociety.org.
Dutch Conquest of the Banda Islands
The Dutch East India Company (VOC), founded in 1602, was determined to secure a monopoly on nutmeg. After initial contact in 1599, the Dutch signed trade agreements with Bandanese chiefs. However, resistance to Dutch monopolies led to violent conflict. Between 1609 and 1621, under the command of Jan Pieterszoon Coen, the Dutch launched military campaigns, massacres, and forced deportations, depopulating the islands and enslaving thousands of Bandanese Wikipedia. The conquest secured Dutch control over the only source of nutmeg.
The “Manhattan Transfer”
In 1667, the Dutch traded Manhattan (New Amsterdam) to the British for the small island of Run, one of the Banda Islands blog.herbsociety.org. This deal, known as the “Manhattan Transfer,” was a direct result of the Dutch desire to control the nutmeg trade. The years of conflict over the islands were called the Nutmeg Wars blog.herbsociety.org.
Aftermath and Decline of the Monopoly
The Dutch monopoly lasted until the 18th century, when Pierre Poivre smuggled nutmeg trees from the Banda Islands to Mauritius, creating a new source and breaking the Dutch monopoly blog.herbsociety.org.
In summary: The Dutch search for nutmeg’s source led them to the Banda Islands, where they conquered the region, enslaved its people, and monopolized the spice trade — a quest that reshaped global trade, colonial politics, and even the fate of Manhattan.
Re the Dutch and banking, their presence in Manhattan played a big part in its becoming a commerce and financial center. And perhaps not coincidentally, Amsterdam had a substantial Jewish presence in the 16th century, many coming there from Portugal and Spain after the expulsion. (More of course came in the 1930s, like Ann Frank’s family.) The Jews were treated relatively well there for centuries until the Nazis came along.
“From 1998 to 2024 U.S. corporate profits grew from around $500 billion to $3.7 trillion, a more than sixfold increase…Not surprisingly, over the same period U.S. household net worth has increased from $37 trillion to $174 trillion today, the greatest accumulation of wealth in the history of the planet…”– WSJ Editorial
Aye, but here’s the rub:
We are heading toward a real fork in the road as the country continues it’s path to a digital economy. While AI is the focus, AI can’t assemble the real world products that provide the benefits of a modern society. But AI powered robots can. We’re still a few years to several decades away from that technical revolution– but we need to start now analyzing how we’re going to tax the benefits of this revolution.
There is nothing nefarious about this growing income gap, but it highlights the nature of a shifting economy.
Let’s be pragmatic. As this shift occurs, there will be dislocation of workers– just like what happened during the outsourcing revolution in the 90’s and early 2000’s. About half of the US government’s receipts comes from taxes on wages. Robots won’t receive wages. So they’ll have to be taxed on some formula of productivity.
Possibly moving away from wage taxes to a VAT, or some other new tax base, such as taxing compute, robots, or corporate AI profits.
Royal Dutch Shell, a.k.a., Shell Oil Corp.
It isn’t just banking that made the Dutch wealthy. There is a lot of oil in Indonesia, a former Dutch colony IIRC. The Japanese in WWII (2, not 11, Ilhan) sized those resources after defeating the Dutch in early 1942. However, once the USN got their topedos to work USN submarines made transporting the oil impossible (grosly simplified history).
Nonetheless, Shell is still a major in the oil and gas business.
Putting in sideways (sort of) a good word for the Friesians, in both senses of that term, the people and the horses: a youtube channel of Friesians raising Friesians —
https://youtube.com/@friesianhorses
Remember my Trump Tally comments? This one may end up on my X account rather than the blog — or I may just leave it here — since I’m reluctant to bash President Trump any harder than I already have, especially as he appears to have gotten us bogged down in Iran. I’m giving him time to ‘Fix‘ it, because I would genuinely love to see Iran brought to its knees.
Trump’s approach to Ukraine has been one of the clearest self-owns of his second term. By treating Kyiv as a burden to be offloaded onto Europe, cutting direct support, and repeatedly signaling that ‘this has nothing to do with us‘, he didn’t just strain an alliance – he accelerated Ukraine’s pivot away from Washington.
What’s emerging instead is a more self-reliant Ukraine that is:
• Deepening its integration with the EU,
• Building real industrial and security partnerships with Gulf states (Saudi Arabia, Qatar, UAE) centered on its battle-tested drone and air-defense tech,
• And turning wartime innovation into exportable capability and potential reconstruction capital.
Those same Gulf partnerships are already delivering an unexpected side benefit: Ukrainian advisers and interceptor systems are helping key American partners defend against Iranian drones – the very threat now complicating Trump’s own Middle East quagmire.
The irony is sharp. The same president who bet on Putin and treated Ukraine as a problem to be managed is watching it develop the attributes of a tougher, more diversified, technologically sharper nation – one less dependent on the very American support Trump has been so eager to withhold, and quietly useful to U.S. interests in a second theater. Europe is stepping up, the Gulf is buying in, and Ukraine is converting necessity into leverage.
Short-term transactional politics are producing longer-term strategic costs for the United States, while the country he tried to sideline finds new partners and a clearer path forward.
Europe beyond Poland and those very near to Rossia, are by and large self-serving wankers. For example the now pitiful Royal Navy.
Trump decided that Europe had to get serious about their own survival, but socially they haven’t, and with few exceptions militarily they haven’t either. Trump saw China as the main threat, not Roosia, and Ukraine at the moment is showing how weak Roosia has become. Not that Ukraine can stop sufficient Roosian ballistic missiles.
Iran with a nuclear weapon was not on President Trump’s top priority list on January 2025 IMO. But it isn’t a war of choice for the USA or Israel.
The European wankers were toots fine with a Tehran twelver nuke scenario it appears. As are the Democrats/DSA.
I’ll pass on your Trump Tally (again).
Related: “…main threat…”
Much of this is known, but is all of it?
+Bonus:
“California’s Civil Rights Mafia”—
https://www.zerohedge.com/political/californias-civil-rights-mafia
Civil Rights today!
Civil Rights Tomorrow!!
Civil Rights FOREVER!!!
Dutch is sort of a strange mixture of English and German. If you know a bit of German it’s not that hard to understand written Dutch. But spoken Dutch is something else. It’s very guttural. There was a German joke that Dutch wasn’t a language but a throat disease.
I lived in Rotterdam for a few months in 1979 but because nearly everyone spoke English I didn’t pick up much Dutch. I’m going back for a visit next week for the first time in 47 years. It will be interesting to see how much has changed.
Western Europe, North America, and the Antipodes suffer from being ruled by an elite disdainful of the country’s vernacular population and disdainful up to the point of working to have them turfed out by foreigners. This is sustained by public apathy. Allowing their militaries to rot is a different expression of the same mentality. Repairing this issue in one country after another is going to be an involved process and perhaps a violent one.