This episode looks at the partial government shutdown and who will emerge victorious, the Go Fund Me drive to help fund the border wall, Trump’s plan to withdraw troops from Syria and Afghanistan, and the looming war between Bernie and Beto for the soul of the Democratic left.
by D.J. McGuire
Having shaken the foreign policy establishment to its core (which, by itself, is not automatically a mistake) by choosing to cut and run from Syria (which, given the situation on the ground, definitely isa mistake), President Trump is now taking aim at the Federal Reserve’s independence in setting monetary policy.
President Donald Trump has begun polling advisers about whether he has the legal authority to fire Federal Reserve Chairman Jerome Powell, according to two people familiar with the matter, who described the President as newly furious at the Fed chief as markets tumble.
Earlier this year, Trump’s advisers told the President that it was doubtful he would have the law behind him if he fired Powell. But Trump has renewed the issue after the Fed again raised its benchmark interest rate this week.
So far, the White House hasn’t come to a final legal determination on Trump’s authority to fire his Fed chairman, whom he nominated a year ago. The law states the President can fire a Fed governor for cause, but it hasn’t been tested on the firing of a chairman.
This is what Trump said to his Treasury Secretary.
I totally disagree with Fed policy. I think the increasing of interest rates and the shrinking of the Fed portfolio is an absolute terrible thing to do at this time
For those of us in the economic field, this is the equivalent of using a nuclear weapon. As noted above, a Fed Chair has never been fired.
This will be a serious test for both political parties. For my old party (the Republicans), it will be about how much they are willing to let Trump abuse his power and shatter stability. Just about every opponent of Keynesian economics prefers sound money and stable economic policy. A president who fired a Fed Chair because he (Trump) prefers looser money would be the exact opposite of both.
That said, it is just as challenging for my new party (the Democrats). They’ll be willing to call out Trump on abuse of power and stability, but I wonder if they’ll be willing to defend Jay Powell for what he is doing.
This matters because Powell needs defending – not just on a constitutional level, but on a policy one as well. An expansion in its tenth year, a Keynesian sugar high tax cut that is over $150 billion annually, and price hiking tariffs on finished goods and inputs alike are a bonfire worth of inflationary kindling. Any Fed Chair worth his or her salt would respond exactly as Powell did – raising interest rates and reducing the balance sheet from quantitative easing. All that goes double or morefor a Fed Chair in Powell’s situation – with interest rates still well below normal and a balance sheet vastly swelled by quantitative easing.
Federal Reserve Chairman Jay Powell is doing exactly what he should be. As such, he should remain exactly where he is. I fear no Republican will be willing to say either. Many Democrats will say the latter, but I fear I may be the one of the very few willing to say both.
That doesn’t make me wrong, though.
by D.J. McGuire
Those who know about my long and strange trip through Election 2016 know that I landed on my eventual choice (Hillary Clinton – yes, for those of you who didn’t know, thatHillary Clinton) due to one issue – Syria.
…I saw reports from the United States (Reuters) and from the region itself (al-Hayat, although the Jerusalem Post has a better translation, it also gets Akram al-Bunni’s name wrong). They revealed the preference of the Syrian opposition – the real opposition, not the Iraqi Ba’athists who keep Daesh operating – for Mrs. Clinton.
That tipped the balance, and countered Johnson’s superior positions on economic matters, at least to me. This year has been a long-running internal conflict between my inner neoconservative and my inner libertarian…and in the end, the neoconservative won.
For the analyst in me, this is a real leap of faith, but if there is a chance of a free Syria, I have to take it. If that means voting for Hillary Clinton, then God help me, that’s what I must do.
Obviously, we never got to see if Mrs. Clinton lived up to that. Her Republican opponent, by contrast, insisted that all he cared about in Syria was ISIS. He even contradicted his own running mate’s critique of Syrian tyrant Bashar Assad (CNBC).
Only we now know Trump was more interested in the appearance of defeating Daesh (as ISIS is known in the locale) than the reality of defeating Daesh – for he claimed a premature victory this morning and announced he was pulling troops out of Syria (CNN).
Trump issued his first public comments on the decision Wednesday evening in a video message posted to Twitter, in which he pointed to the sky to reference US military personnel who have been killed in Syria.
“We have won against ISIS,” Trump said. “We’ve beaten them and we’ve beaten them badly. We’ve taken back the land and now it’s time for our troops to come back home. I get very saddened when I have to write letters or call parents or wives or husbands of soldiers who have been killed fighting for our country.”
There was only one problem with Trump’s assertion: it was a lie – as folks in his own Administration acknowledged:
Resistance to the move was strong among some in the administration. A senior administration official told CNN’s Jake Tapper that the President’s decision to withdraw US troops from Syria is “a mistake of colossal proportions and the President fails to see how it will endanger our country.”
“Senior officials across the administration agree that the President’s decision-by-tweet will recklessly put American and allied lives in danger around the world, take the pressure off of ISIS — allowing them to reconstitute — and hand a strategic victory to our Syrian, Iranian and Russian adversaries,” the official said.
No matter, Trump wants his victory lap – and he’ll have it even if the race is still going on.
In the meantime, Russia and Iran now know there is no one to stop them from propelling Bashar Assad to regain total control of Syria. Any attempt to use the area we controlled to allow Syrians to build a future free of Ba’athismis out the window.
Oh, and in case anyone – anywhere – tries to discount the accusations and evidence of collusion between the Trump campaign and the Putin regime with the what-did-Putin-really-get-for-it question, we have the answer right in front of us.
Putin got Syria. He got his chief client state in the region (the Tehran mullachracy) as the pre-eminent power in the northern Middle East. The forces of tyranny are ascendant in the region (and worldwide) as we retreat.
Once again, for emphasis, the battle with Daesh was notover (CNN).
Tobias Ellwood, a minister in the British Ministry of Defense, said in a tweet that he “strongly” disagrees with Trump’s comment on Wednesday that ISIS had been defeated. “It has morphed into other forms of extremism and the threat is very much alive,” Ellwood wrote, while the Defense Ministry told CNN there would be no immediate change to its current operation in Syria.
If anything, the only real surprise here is that people are surprised. Trump has been an isolationist for decades, and has always preferred the big splash of symbolism over the hard work of real action. He has repeatedly promised to pull our troops out of Syria; it has been his staff that pulled a Sir Humphrey Appleby and prevented it until now.
I also understand and appreciate those who are concerned about the lack of Congressional authorization. One could argue that this deployment was consistent with the anti-al Qaeda authorization of 2001, given that Deash was once al Qaeda in Iraq, but even I consider that a slender reed on which to lean. A far more robust argument should have been made by Trump himselffor Congressional authorization against this specific enemy at the very least. Instead, Trump is pretending the battle is over as a cover for his decision to cut and run.
When it became clear Trump had defeated Clinton two years ago, I hoped against hope that I would be able to say I was wrong, and that Trump had confounded my very low expectations of him. Instead, he validated them.
Again, this was the issue that led me to switch from Gary Johnson to Hillary Clinton. I knew it was a leap of faith then. I have been proven right now – in the worst way imaginable.
Donald Trump lost Syria – check that, he gave Syria away.
by Kevin Kelton
Hi. Come in and sit down. I’m here – we all are here – because we love you and we need to tell you something. This may be a little tough to hear, but hear me out.
We know you and we see you. You are bright, educated, and consider yourself relatively smart, sophisticated, worldly, and informed. You’ve voted Republican most of your life (or at least over the last decade or so) because you love your country and truly believe in conservative political philosophy. While you think of yourself as open-minded and are still somewhat open to voting for the right Democrat, you’ve always hated the Clintons, and you came to particularly resent and despise Hillary during the 2015-16 campaign as you learned more and more about her true evil intent – from her “illegal” email server to her support for Muslim terrorists to the highly corrupt Uranium One deal, her secret concussion, The Clinton Foundation “slush fund,” how she and the DNC cheated Bernie to fix her nomination, the “highly suspicious murder” of that poor young DNC staffer who was about to spill the beans, and all her other “crooked” behaviors that were revealed to you day after day by Fox News, Rush Limbaugh, Alex Jones, conservative media outlets and blogs, and of course by your close, trusted friends on Facebook and the links with the salacious headlines that they reposted and urged you to read…day after day after day.
YOU WERE DUPED. And you still don’t know it (or do but can’t accept it) because you are still being duped by the same powers that filled your brain with fake news and utter nonsense. You think you were immune to the more far-fetched conspiracy stories. But you’d click anyway, at first just once or twice to see what people were saying. But soon you were doing it regularly – as each click got you more and more intrigued. You say to yourself, oh, I never really believed that stuff. You just thought they were funny and had a slight “ring of truth,” even though you didn’t really buy into them.
It was just recreational web surfing. It was fun; it was harmless. You could stop anytime you wanted.
But you absorbed it all – fake new story after story after story – and it clouded your judgment and subtly changed your perceptions. Your mind was slowly poisoned, so slowly you didn’t realize it was happening. You still sincerely believe you are smart, informed, and your belief system is right and true. But you have been brainwashed and used by people smarter than you. You are a walking, talking disinformation campaign and you don’t even know it. You are part of a massive, worldwide disinformation pyramid scheme.
You are a Russian bot in human form. And you don’t even realize it.
Consider this an intervention by a friend. You are on a very self-destructive path. You are a disinformation addict, and the disinformation pushers have you hooked just like a junkie. You shoot-up regularly on Twitter, Facebook, and with Fox News and other disinformation cartels who are playing you like a fool and cashing in on your addiction. Only in this case, you won’t die from your overdose. You’ll only kill the nation you love. Look at what happened to Michael Flynn and Michael Cohen – two other “smart men” who got duped and hooked, and saw it destroy their lives. Learn from their mistakes.
We all love you and are here for you. But you need to make a change, and make it fast. So please read these articles and start to turn your life around now.
This special retrospective episode looks back at the early days of The More Perfect Union podcast from our very first podcast in September of 2015 through the end of 2016, with clips that cover the rise of Trump, chaos in the GOP primary campaign, and the Hillary-Bernie battle for the soul of the Democratic party.
by D.J. McGuire
When I chose to become a Democrat (a few hours after Trump was declared the victor of the presidential election), I expected a difficult period of adjustment. I’d left the GOP six months earlier, but leaving one major party and switching to the other one are two very different things.
Of course, Trump had ensured the two parties had flipped their supposed positions on national security. Those who have listened to the More Perfect Union Podcast since November 2016 are well aware that my opposition to Bashar Assad’s Syrian regime was what led me to vote for Hillary Clinton in the first place. Trump’s behavior towards Vladimir Putin in particular has made it far easier to be a conservative Democrat than I thought possible – not that it makes up for the damage to the free world. What I assumed would cause the largest headache was watching my old party on economic policies (where at least in theory they preferred freer markets) while my new one clung to its instincts for greater government intervention.
Nearly two years later, much to my surprise, that isn’t what I’m seeing. Sure, the Democrats are clearly moving leftward on health insurance, but they’ve moved in the opposite direction on freer trade (the voters far more dramatically than the elected officials).
Meanwhile, the Republicans…oh, dear. The party has largely swallowed whole Trump’s rampant protectionism, either lapping up tariffs as the great panacea or naively telling themselves it’s all about getting “better deals” – never mind that the only two agreements Trump has reached are either worse than the status quo (Mexico) or no longer operative according to Trump (the EU handshake).
Meanwhile, Trump has also spent time whacking the Federal Reserve for raising interest rates, even complaining to Bloomberg about how he couldn’t depreciate the dollar for his trade wars because the Fed wouldn’t play ball.
Then came the social media wars. At first, I figured Laura Ingraham insisting on turning Facebook and Twitter into public utilities was just an extreme one-off. I was wrong (CNBC).
U.S. Attorney General Jeff Sessions will meet with state attorneys general later this month to discuss concerns that tech companies “may be hurting competition and intentionally stifling the free exchange of ideas on their platforms,” the Department of Justice said in a statement Wednesday.
The proposed meeting between the country’s top prosecutor and state officials is the first major signal of potential antitrust action against Silicon Valley and follows recent claims by President Donald Trump of political bias and censorship by major social media firms.
Here’s what Sessions’ Justice Department had to say:
“We listened to today’s Senate Select Committee on Intelligence hearing on Foreign Influence Operations’ Use of Social Media Platforms closely. The Attorney General has convened a meeting with a number of state attorneys general this month to discuss a growing concern that these companies may be hurting competition and intentionally stifling the free exchange of ideas on their platforms.”
Keep in mind, the hearing was supposed to be about how foreign intelligence uses social media to influence the American people. Instead, the DOJ is all about government mandates (or worse) about “political bias”.
If the Republican Party continues on this course (and given that Trump is pushing the matter, this is very likely), then it will become the party of nationalizing Silicon Valley, the party of putting America’s most dynamic and fastest growing sector under government control.
Michael Lind once pondered, in Politico, that “The Democrats of 2030 may be more pro-market than the Republicans.” At the rate the GOP is going, despite the desire of many Democrats for government-monopoly health insurance, the switch will come much sooner than 2030. Indeed, one could argue it’s happening right now.
So be prepared, my fellow Democrats, and try not to faint.
D.J. McGuire – a self-described progressive conservative – has been part of the More Perfect Union Podcast since 2015
by D.J. McGuire
The behavior and policies of the president continue to shock and to dismay – especially for conservatives such as myself (yes, I still use the noun). Freer trade is tossed aside for crippling tariffs amid complaints over “bad deals.” The dynamic information technology sector has become a target for nationalization among screaming heads such as Laura Ingraham. Allies are smeared where hostile tyrants are feted. Yet through it all, a large chunk of right-wing and center-right voters are, for now, staying with the withering husk that is the Republican Party for one reason and one reason alone – “the courts.” This post is my attempt to persuade them why this argument is a profound error.
Today’s Issues v. Tomorrow’s Issues
The first problem with the assertion that control of the judiciary branch is worth the exponentially increasing damage of the Trump presidency is that such control is specious at best. The issues that divide “liberal” (or if you prefer, “progressive”) and “conservative” in 2018 are not likely to be the issues that divide them in 2030, or in 2040, or in 2050. Unlike financial investment, past performance is an excellent indicator here.
Dwight Eisenhower selected as Chief Justice one of the most conservative office holders in the Republican Party – California Governor Earl Warren. Known at the time as a strike-breaker and a firm supporter of limited government, Warren’s libertarian outlook was given an entirely different label as social issues and law enforcement matters crashed into the public realm in the 1960s. Ike’s own Vice President became one of Warren’s top political critics. Nixon replaced Earl Warren with Warren Burger, who became one of the five Republican appointees to the Court to side with the majority in Roe in 1973. The author of the dissent in that case was Byron White – the lone appointee of John F. Kennedy. Thirteen years later, Berger would change his own mind on the subject (yet another sign that ideological consistency on the Court doesn’t survive the passage of time).
The intervening decades have seen similar acts of temporal confusion. Donald Trump spent his campaign praising the late Antonin Scalia – the justice who cast the fifth vote that declared burning the American flag to be constitutionally protected speech. While Bush v. Gore has become a bete-noir for much of the left in America, it’s not remembered that half of the Democratic appointees to the Court agreed to invalidate the Florida recount on which Gore’s last gasp depended (although none agreed with the smaller majority that insisted there wasn’t enough time to conduct a more proper recount there). Five years later, conservatives were thrilled when President Bush appointed John Roberts as Chief Justice. He was considered a sure-fire conservative…who cast the fifth vote to declare that the Affordable Care Act was constitutional – over the objection of “moderate” Anthony Kennedy.
What issues will drive conservatives in the 2020s and beyond? We really don’t know. As noted above, the right seems much more willing to regulate cyberspace today than even five (or two) years ago. Any attempt to nationalize Google will likely run into trouble from the very conservative court appointments that the right champions today. If the president attempts to exit trade deals without Congressional agreement (and largely in violation of the law), conservatives eager to rebuild Fortress America will find Bush and even Trump appointees in their way.
In other words, past and present “betrayals” of conservatives came not merely from judges and justices changing their minds (although that does happen), but also from electorate redefining what “conservative” means. Thus we find Reagan appointees invalidating laws against marriage equality in California and allowing charges against Paul Manafort to go forward (to conviction) in Virginia, among other things. I am all but certain Trump appointees will disappoint future conservatives, in part because they will take positions that would make present conservatives (myself included) blanche.
The one exception to this may be the abortion issue. Indeed, nearly every conservative who still calls themselves a Republican cites it as the one reason they stay in the GOP. There is a problem with that, however.
Reversing Roe/Casey is a defeat disguised as a victory
As I was a politically precocious teenager, I’m in an increasingly unique position among any American under 50 – I remember what it was like when the judicially-imposed right to an abortion appeared to be coming to an end. It was after the Webster decision of 1989 weakend Roe, but before Casey v. Planned Parenthood reaffirmed it. Keep in mind, this was less than two decades after Roe, when the status quo ante was a real memory for most Americans.
For pro-lifers, it was a disaster. Pro-life Republicans were vanquished in 1989 elections, and pro-lifers in both parties were banged up in 1990 (as an example: a pro-life Democratic Governor in Minnesota was defeated by a pro-choice Republican challenger who had only been on the ballot nine days). Conservatives ran to the safety of economic issues in 1991 (and recovered nicely in the 1989 states’ legislative elections). George Bush the Elder went from 53% of the vote in 1988 to 38% in 1992 (and his two opponents – Ross Perot and Bill Clinton – were not pro-life by any stretch).
A quarter-century later, there are far fewer voters who remember the pre-Roe era, let alone look forward to it. Even if the Supremes reverse Casey, far fewer states will attempt to ban abortion than people realize. If anything, pro-choicers vocalizing their worst fears (albeit understandably so) are providing pro-lifers with their most perverse hopes. Odds are, both are wrong. For too long, abortion opponents have focused on changing a Supreme Court decision instead of saving children. The rest of the country has noticed, and is not happy.
The Benefits of “winning the courts” are ephemeral, but the cost is sure to be permanent.
Is this truly worth the damage Trump has wrought, my fellow conservatives? Is the chance to be disappointed by judges who change their minds (or by those who don’t when you do) truly worth the rupturing of our alliances? Is the erection of damaging barriers to trade really an acceptable price for the opportunity to be caught completely flat-footed due to forty years of political atrophy and neglect on the one issue that you claim is so important?
Before you answer, consider one more piece of historical evidence. The most politically charged Court decision of the 19th century was Dred Scott v. Sanford.
How well did that turn out for the victors?
D.J. McGuire – a self-described progressive conservative – has been part of the More Perfect Union Podcast since 2015
by D.J. McGuire
Donald Trump did not advance the cause of freer trade with his partial agreement with Mexico. If anything, the “deal” raises barriers to trade rather than lowers them, while moving the North American Free Trade Area closer to the backward and sclerotic model of a customs union – and that assumes he doesn’t exclude Canada. If Canada ends up on the outside looking it, things will be even worse.
As usual, Trump himself gave no details during his Oval Office press conference with his Mexican counterpart – Enrique Pena Nieto – on speaker phone. About the only specifics we got were that Trump wants to “terminate” the North American Free Trade Agreement and replace it with this new agreement, if Canada signs on. If Canada refuses, Trump will slap a 25% auto tariff on them and call it a day.
Oh, and Canada apparently has until Friday to make up its mind (Daniel Dale, Toronto Star).
Even if Canada chooses to shoe-horn itself into this deal, the specifics we now have (CATO, AEI, and Dale) are still a net negative from the status quo. The “North American standard” for cars will be raised to 75% from 62.5% (i.e., unless the car is 75% made in North America, it won’t qualify for being tariff-free). There is a sunset clause (albeit stretched from 5 years, as Trump originally wanted, to 16) with a mandated review every six years. Investment protections were “gutted.” There may even be a new tariff power for the US against any new Mexican cars.
Senator Ben Sasse (R-Nebraska) is already worried (via Megan Cassella, Politico):
…there is reason to worry that this might be a step backward from NAFTA for American families – especially on fundamental issues of presumed presumed expiration of the deal, and empowering government bureaucrats rather than markets to determine the components of cars and other goods.
Indeed it is a step backward, as well as a step toward a serious sovereignty issue – a customs union. Unlike free trade areas, where nations can set whatever trade policies they like with countries not in the FTA, customs unions have uniform trade barriers that all nations must accept. The car percentage requirement is such a barrier; raising it as this agreement does makes it worse.
Again, this is even if Canada ends up in the deal. If not, further disruptions in trade due to Trump’s tariffs are likely. Moreover, whether Canada agrees or not, Trump clearly would like to replace NAFTA with this deal. That requires Congressional approval – trade deals are not treaties, but executive agreements, which means Congress has the power to enact laws that match the agreements, or invalidate agreements by refusing to enact said laws. Will the GOP-controlled Congress finally draw the line and refuse Trump’s demand.
Don’t hold your breath.
This is not an agreement that lowers barriers, but raises them. It does not advance freer trade, but attacks it. It will be more likely to add uncertainty than to alleviate it. It’s a bad deal for Mexico, for the United States, and for the rest of the world.
D.J. McGuire – a self-described progressive conservative – has been part of the More Perfect Union Podcast since 2015
by D.J. McGuire
Yesterday afternoon, Senator John McCain passed away. Personal tributes are pouring in, as one would expect from his record of service and sacrifice for his country. Many Americans admired him. For some of us, however, it was much more than that. I am among those who voted for John McCain; in fact, I voted for him three times (2000 Republican primaries, 2008 Republican primaries, 2008 general election). I am convinced that it would have been a better nation had he won in 2000 or in 2008. As such, I am more focused on the exit of John McCain, the political force.
Many of McCain’s admirers disagreed with him, strongly, on foreign policy. I was not among them. With McCain’s passing, the number of us who believe liberating Iraq was the right thing to do has likely fallen from six to five (I still think we few are right). McCain was always more willing to see America – and the American military – as a potential force for good in the world. For those of us who recognized “neoconservative” as an actual set of beliefs rather than a convenient anti-Semitic dog whistle, John McCain may have been the last, and was certainly one of the most vocal.
As such, his passing will have political consequences. Contrary to what the president and his sycophants would have us believes, there are still millions of Republicans for whom John McCain is far more the model than Donald Trump. I left the Republican Party earlier than most of them – and I think I joined the Democratic Party sooner than any others – but with McCain’s passing, I won’t be the last. The next time Trump undermines NATO, or attacks our allies, or cozies up to dictators, John McCain will no longer be there to remind those voters what their Republican Party was – but is no more.
So, we can expect the Republican Party to get smaller and more devoted to Trump, but the Democrats may experience some growing pains, as their coalition expands to include – well, to include more voters like me.
John McCain never assumed America was perfect. He was an active and avid reformer at home, but he knew that even as America strove to make itself better it could also make the world better. For those of us who agree with him, he will not only be mourned, but deeply missed.
by D.J. McGuire
The events of the last 24 hours (for which we did a special episode – you can listen here) have led many to wax nostalgic over Watergate (euphemism, people, euphemism). It’s also led me to ponder the era between then and now, and I’ve found something that could be ominous for nearly all of the potential 2020 Democratic candidates (including my preferred choice, Congressman John Delaney).
The early 1970s gets harder to remember with every year (the past is like that), but we should not forget that the American people’s revulsion with Washington corruption neither began nor ended with Richard Nixon. This was the era of the Church Committee hearings with subsequent intelligence reforms, campaign finance law reform, and a serious rethink of the structure of economic regulation. Right and left had their own answers to the conundrum of corruption – smaller government for the former, cleaner government for the latter.
One other result that has dramatically impacted the nation has been noticed less: the effect on presidential elections. We’ve had 11 of them since Nixon’s resignation. Here are the highlights:
- Permanent coalitions are not in vogue: Republicans have won 6 elections; the Democrats, 5. Democrats have won the popular vote 7 times; Republicans, 4. Only once has a party won 3 in a row (GOP: 1980-88). Prior to Watergate, it happened five times.
- More instability markers: Four times the winner did not win a majority of the popular vote. More to the point, the popular vote winner lost the election twice. That had only happened three times in the previous 184 years.
- In only six of the the elections did the voters also give the winning party control of the House of Representatives – two of them were in elections where the president elected did not win the popular vote.
- Yet one consistency came through: the candidate with less experience in Washington was elected nine out of eleven times – including three of the four times an incumbent president was re-elected.
The data point to a clear recommendation for the Democrats in 2020: do not nominate someone with more than four years experience in Washington D.C. Of course, that would rule out nearly every Democrat considering a run: Joe Biden, Elizabeth Warren, Bernie Sanders, Corey Booker, Kirsten Gillibrand, John Delaney, Sherrod Brown, etc. Even Kemala Harris, whose Washington tenure started 17 days before Trump’s, might have pause.
Granted, Trump himself “broke” more than a few rules in 2016, but he didn’t break this one. Moreover, the Trumpenproletariat’s instinct for whataboutism is likely to make voters even less likely to value experience in the nation’s capital. Democrats might want to look to Governors. One of them, Montana’s Steve Bullock, is already considering a run. Moreover, when incumbent presidents have lost in the post-Watergate era (1976, 1980, and 1992), a Governor has defeated them. Every time.
by D.J. McGuire
Amidst the whirl and rush of the now painfully normal nonsense spewed by the president, few outside the financial markets noticed his comments on monetary policy during his interview with Reuters. They were important comments nonetheless – and discouraging on all fronts. For someone who defines his worldview on countering inflation, political chicanery on monetary policy, protectionism, and malinvestment (and for a quarter-century, defined himself as a Republican based on those things), I was saddened and angered – but not surprised – by Trump embracing all four (again).
This is Trump taking aim at the Federal Reserve:
“I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” Trump said, referring to Powell. Trump nominated Powell last year to replace former Fed Chair Janet Yellen.
U.S. stock prices dipped after Trump’s comments to Reuters and the U.S. dollar .DXY edged down against a basket of currencies.
Trump, who criticized the Fed when he was a candidate, said other countries benefited from their central banks’ moves during tough trade talks, but the United States was not getting support from the Fed.
“We’re negotiating very powerfully and strongly with other nations. We’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated,” Trump said.
On one level, this is just typical bull-in-the-china-shop-talk from Trump, concerns about which are usually valid (and they are here) but still go ignored by his supporters (as will these). In this case, there’s more to it, which just makes things worse.
For starters, Trump is making clear that the domestic economy is not important in his thinking. I doubt he is even aware that the Fed actually has a legal mandate to ensure price stability. He is fixated on his trade war, period.
This means that inflation – which eats away at investment returns, creates havoc in labor markets, and increases suffering for fixed income recipients – is likely to be even worse than it is now (and at present, it’s bad enough to wipe out any wage gains – See Bloomberg), especially in policy areas where Trump can avoid the Fed. Last year’s tax cut was a prime example of a Keynesian, inflationary stimulus endorsed and signed by the president. I fear it won’t be the last.
Moreover, Trump’s comments are yet another sign that the Republican Party – which in my youth prided itself on sound monetary policy and a strong dollar – no longer has any interest in both. This makes it that much harder for the nation to learn and internalize the lessons of “quantitative easing” – the last decade’s experiment with radically expansionary monetary policy. Contrary to Keynesian orthodoxy, the mass monetization of any debt the Fed could find led not to roaring increases in aggregate demand, but rather a shift in thinking on paper assets. Bonds were treated as stocks (with a focus on price rather than yield) and a new asset bubble (in bonds) took the place of the last one (housing). Thus, not only did investment in the real economy remain slow to recover, but the asset bubble exacerbated wealth inequality, which further increased income inequality.
Under Janet Yellen, the Fed at least began the process on unwinding this error. Under Jerome Powell, it is now trying to bring interest rates back to at least normal without knocking the economy into recession. This is a tricky task in any time, let alone one where the President of the United States is demanding policies that would make the bubble even bigger (and more likely to pop, badly).
I know that Trump-Nixon parallels are in vogue, but the current president’s complaints remind me of his predecessor’s surrender on economic policy in 1971, when he announced, “We are all Keynesians now.” Trump is – with more verbiage and less intellect – effectively saying the same thing. Whether Democrats will note this and take political advantage by exploiting a new angle to win over never-Trump conservatives remains to be seen.
by D.J. McGuire
For understandable reasons, most Americans assume that Donald Trump is a one-man wrecking crew, determined either to destroy or to reshape the current global order. In reality, however, the international order that has held in place in the Atlantic for over 70 years (and in the rest of the world for roughly 30) has been fraying for some time, and Trump is himself as much a symptom as a cause. The regions of the world are turning away from each other, and American frustration has now led to its acceleration under Trump. The result will be a world of regional powers – until one of them tries to assert global dominance, forcing the United States out of its coming stupor to lead the democratic world once more.
The Fall of the Global Order
The chief goals of the “western world” from 1945 through 1990 (and the entire world since 1990) have been greater political and economic freedom, via democracy and freer trade. Even those who were most threatened by these tenets paid lip service to them for roughly a quarter century.
Events of the last decade have challenged this. The Great Recession revealed the dark side of international economic connections. The rise of a revanchist Russia has greatly damaged the democratic world’s confidence in itself. The behavior of the European Union towards Greece and Italy shattered the notion of the EU as a force for democracy and progress. The “Global War on Terror” revealed the apparent limits of American patience with extended military engagements. Xi Jinping’s increasing grip on the Chinese mainland has combined with economic instability to create a dangerous vacuum in justification for his dictatorship. Finally, the dramatic increase in continental sources of American energy has begun shifting America’s view of its interests abroad (especially in the Middle East).
As a result, “It’s a small world after all” has become more a dark warning than a cheery sentiment – and the peoples of said world are acting accordingly. Had this just been the United States experiencing this, the rest of the world would have simply reoriented the system with a new hegemon, and there are eager candidates for the role. Yet none of them are in a position to stake the claim, and they all have regional matters to address.
The Coming Regional Order
As a result, when the present global order falls – likely on a glide path, but falls nonetheless – it will likely be replaced by an unstable mix of regional powers: China, Russia, the EU, and the less engaged United States. The first two will be looking to expand their power without to contain potential dissent within. The European Union will attempt to turn its continental reach into real power via internal reform and centralization. The US will be trying to find a balance between reducing its obligations to the rest of the world and protecting its interests, which time will show to be far more global than the electorate currently realizes.
In theory, the Chinese Communist Party need not concern itself with electorates. In practice, legitimacy can arguably be more tricky for tyrannies than for democracies – which in part is why tyrannies resort to wars, mass incarcerations, huge development projects, etc. For the CCP, greater power abroad combines with stoking resentment of outsiders at home to give it enough legitimacy to stay in power (for now). So long as the US was blocking its regional objectives, the CCP had become (accidentally and ironically) the most likely power to challenge the US on a global scale. A retreating America will open up regional opportunities for the regime – especially in Southeast Asia and Taiwan (whose gutsy, independent democracy won’t survive the new order). While some of this will bring alarm to other capitals, the CCP can use their North Korean puppet regime as leverage until its usefulness expires – at which point Beijing can simply make the problem go away by annexing it.
The Vladimir Putin regime, by contrast, has a slew of international allies and interests left over from the former Soviet Union, and Putin hasn’t been shy about using them (especially in Syria). However, his fixation has largely been with his “near abroad” (i.e., the former Soviet republics), and an America willing to withdraw from the global stage would give him the free hand there he has craved. Like the CCP, Putin has relied upon anti-foreign resentment and increasing power (and, in his case, actual territory) for his regime’s legitimacy. That will likely continue, to the detriment of Ukraine, Georgia, Azerbaijan, and the Baltic states.
For the European Union, the problem is legitimacy – or lack thereof. The transition from trading association to intertwined economy was quite a success, the next step (to full-blown nation-state) has not gone nearly as well. The EU’s challenge will be sorting out what it is, and how it governs itself, so it can be strong enough to reject encroachments from outside. It will arguably be the most inward -looking regional power for some time.
That leaves the United States, which is attempting to become the second global hegemon in history to relinquish the role. The failure of the first (Great Britain in the period between World Wars) had been enough to delay this reckoning through the 1990s and 2000s, but the American people put their foot down in 2016 (whether they were “professionally guided” – to use Sir Arnold’s term – by outside forces will be discussed later). As it will be a Republican Administration beginning the withdrawal, the US is likely to settle in as a regional, hemispheric power. This can be seen from Donald Trump himself, who is loathe to criticize tyrannies in Europe and Asia but eager to criticize them in Latin America. I am also assuming this retreat in part because of the still strong isolationist tendencies within the left wing of the Democratic Party.
While this regionalist order may seem stable from day-to-day, there will be problems. The Middle East, slowly losing the attention of the rest of the world due to changes in energy markets, will continue to be of interest to the three eastern hemisphere powers (i.e., all but the US), leading to conflict. The same will likely be true of Africa (which already has heavy CCP and EU involvement).
However, the most likely sources of “problems” will be American allies unwilling to accept second-tier status and the end of global democratic aspirations. At present, political power in Great Britain rests with an explosive coalition of insular and globalist voters united in anti-regionalism. Although it’s likely that the regionalist center will reassert itself, ti’s not guaranteed. Japan has a long history of hostility to China (there is no way that can be written without it being an understatement) and its leaders have used its recent conversion to democracy as a new reason for old geopolitics. Our NATO allies (especially in the Baltics) will be deeply worried about Russia expanding its regional hegemony. Finally, the Republic of India, while friendly with Russia, will hardly be willing to serve as Moscow’s vassal; they also have a long history of problems with the CCP.
Indeed, it will be the concept of self-determination in general that poses the greatest threat to this regionalist semi-dystopia, as nations around the world – many of whom freed themselves from colonialism less than a century ago – will be far less likely to accept what they will see (rightly) as imperialism under new names. So long as America is run by Republicans, the US will likely respond with cold indifference. The Democrats are another matter.
How it will end
At some point, Donald Trump will no longer be president. Indeed, a Democrat is all but certain to enter the White House either on 20 January 2029 or before then (I hope). However, given the aforementioned isolationism in the Democratic left (and the laws of political inertia), it is unlikely that a Democratic president will dramatically take aim at the new order (especially if said Democrat doesn’t get to 1600 PA Ave until 2025 or 2029). Said Democrat will, however, likely attempt to protect an old American ally or an African democracy from imperial encroachment. Moreover, time will show the American people that the stable international order currently under threat was a boon for international trade and American commerce.
That will likely lead to a global confrontation of some kind, forcing America out of its regionalist stupor as it relearns the lessons of the mid-20th century. How many casualties are involved in that confrontation, I cannot say.
How this can be reversed
There is no reason that this future is inevitable. Some might note the mere fact that I’m predicting it would make it less likely. More to the point, it can be avoided if the American people in general (and the Democratic Party in particular) recognize the damage to American interests that come with retreating from the world stage.
Ironically, that could come from the most divisive issue in current American politics: the Mueller investigation. The events that Mueller is probing (the Russian regime’s criminal interventions in America’s last presidential election) will be far more likely in this future as regional powers probe each other for weaknesses. If the Democratic Party is willing and able to make the logical connection between the events of 2016 and the rise of anti-American regional powers (and replace the president with one of their own in 2021), they can halt the erosion of American power before it can become permanent. Alliances and trade relationships could still be rebuilt in time; and Putin could be checked in Europe; and the CCP would realize that the US is not yet ready to give them free reign outside of the area under the regime’s control. Democrats have a further interest in challenging Russian revanchism, given Putin’s inspirational support to white supremacy in America.
However, if the Democrats are unwilling to do that, this future is more likely than any other.
D.J. McGuire – a self-described “progressive conservative” – has been part of the More Perfect Union Podcast since 2015