Future historians may one day write about the “Trump Revolution” in foreign policy.  President Trump broke with cajoling and complaining to China about its predatory economic policies.  He chose tariffs, the harassment of major Chinese corporations, and a diplomatic warm-up with Taiwan.  The Biden administration has, so far, stuck with those policies or even extended them.  President Trump broke with just trying to coerce North Korea through decades of ineffective economic sanctions.  He chose to talk to the North Korean dictator after North Korea demonstrated that it had acquired both inter-continental ballistic missiles and nuclear weapons in spite of those sanctions.  He did this in spite of much expert opinion that the barbarian Kim should not have been allowed an audience with the emperor without having made some kind of offer of tribute.  Now, President Biden has expressed a willingness to meet with Kim.  President Trump openly disparaged the value of NATO (as opposed to Britain) and behaved rudely when Angela Merkel came to call.  President Biden leads a revived NATO not because Vladimir Putin launched a war of aggression in Ukraine, but because the Ukrainian people chose to fight and have a leader of commanding moral authority. 

            The Biden administration and those that come after it [1]will have to deal with the Trump legacy, but also with current and future problems.[2]  Covid, the troubles of global supply-chains, pressures to shift off Russian energy exports, and now Russia’s blockade of Ukrainian food exports look to have unpredictable long-term consequences as well as harsh short-term ones. 

            One lesson for all concerned might be that advanced countries that depend upon imported  energy sources (oil, natural gas) give hostages to fortune.  At the moment, that energy comes from Russia (in the case of Central and Western Europe) and the Persian Gulf (in the case of China).  That dependence opens energy-importers to pressure from the exporters.  Over the long-run, European countries that substitute American energy sources for Russian ones merely make those countries vulnerable to American pressure.  While the Messiah tarries on “green” energy, it is possible that nuclear power will become the energy source of choice for those desiring national or regional independence.  Chernobyl, Fukushima, and Three Mile Island offer alarming examples of what can go wrong, but that doesn’t mean that people will not find solutions.[3]

            American politics seems to have been tilting toward protectionism since the Trump administration.[4]  Yet protectionism clashes with the American-sponsored international economic system created since the Second World War.  Individuals in many foreign countries are powerfully attracted by American democracy and economic opportunity.  Hence the tide of immigration that is one force troubling American policy.  That isn’t the same as many foreign countries being attracted by those things.  This matters because a dynamic American economy that is open to foreign goods plays a vital role in holding other countries to American leadership.  Most of America’s current economic troubles—chiefly inflation—will pass in a few years.  Will the United States still be a pro-free trade nation afterward? 

            “Hope for the best, plan for the worst.” 

[1] Please God, not Kamala Harris. 

[2] Walter Russell Mead, “Managing a World Order in Crisis,” WSJ, 24 May 2022. 

[3] For example, figure out everything that the Soviets did, then don’t do any of those things. 

[4] Please God, not “the first Trump administration.” 

Zion Island 24.


TO: Admiral John A. Waters, Jr., Director of Security, Atomic Energy Commission. 

FROM: Joseph McCarthy, Security Supervisor, Hanford Works, Hanford, Washington. 

DATE: 26 December 1952. 

RE: Possible loss of plutonium from Hanford Works. 

  1. On the afternoon of 24 December 1952, three sealed freight cars belonging to the A.E.C. were added to a Union Pacific freight train bound from Portland, Oregon, to Salt Lake City, Utah, at Benton Port, Washington. 
  2. From Salt Lake City, the sealed cars—two decoys and real cargo car—were bound for Sandia Laboratory, Albuquerque, New Mexico.  They bore standard Union Pacific Railroad markings and were indistinguishable from the other cars. 
  3. On the night of 24-25 December 1952, the freight train derailed near Nampa, Idaho.  Several freight cars caught fire. 
  4. The Security Office at Hanford did not receive report of this incident until just before noon on Christmas Day.  Investigators were immediately dispatched. 
  5. The preliminary telephone report from the investigators make several alarming points. 
  6. The train appears to have derailed because the spikes securing the rails on two successive 39-foot sections had been removed before the train arrived. 
  7. The freight cars caught fire because of arson. 
  8. Small explosive charges were used to destroy the seals and locks on the A.E.C. real cargo car, but not on the two decoys. 
  9. A small, but as yet undetermined part of the cargo destined for Sandia was removed. 
  10. Investigation continues.  Request permission to contact the F.B.I. offices in Salt Lake City and Seattle. 


Out in the Cold 2.

            The Great Depression (1929—various dates depending on where you were in the world) dealt a heavy blow to capitalist democracy.  In many minds, it discredited what had been on the surface a thriving engine of prosperity and liberty.  The worst that its critics could muster was accusations that it was tacky and often unjust to those on the margins.  Now it seemed to offer only the freedom to starve.  In many places, rickety new democracies collapsed.  Elsewhere they seemed paralyzed by internal disputes that might well end in democratic collapse.  In the United States, voters eventually turned to the feverish experimentalism of the New Deal. 

            Under these circumstances, Communism and the Soviet Union offered an appealing alternative loyalty—to the extent that people could ignore the reality for the ideal.[1]  Both Communism and the Soviet Union had a particular attraction for educated people who felt themselves estranged from the American society of the day.  Eventually, the Second World War put the United States and the Soviet Union on the same side in an alliance of convenience.  For people already inclined to distrust the American government, keeping information secret from America’s Soviet “ally” amounted to weakening the war effort.  Thus, among the sort of people who ended up in government civilian bureaucracies and universities, there were many people willing to help out the Soviet Union with more than $10 in the donation bucket at a rally. 

            Mildred Fish (1902-1941) grew up poor in the Middle West, but managed to get a BA and then an MA in English literature.[2]  She met and married Arvid Harnack when the German economist was visiting America.  In 1929, they returned to Berlin.  Already people with progressive opinions, they were radicalized by the Depression and, in particular, by the Nazi seizure of power.  Red, white, and black swastika banner billowing everywhere, torch light parades, book burnings, and mass arrests repelled them deeply.  As the Second World War began, the Harnacks came into contact with members of the much larger and multi-national Soviet intelligence operation called “the Red Orchestra.”[3]  In 1940, they became small cogs in that machine.  Arvid Harnack obtained a position in the Ministry of Economics, while Mildred worked their wide range of friends.  They fell when the ferocious German hunt for the larger “Red Orchestra” began to succeed in Summer 1942.  German counter-intelligence in Belgium tracked a Soviet radio operator, captured him, and then read an accumulation of coded radio messages.  Several of these led the police to the Harnacks.  Both were brutally tortured, then executed.[4]  They were two among many who paid with their lives for their political and moral commitments. 

            Among Mildred Harnack’s pre-war acquaintances was Martha Dodd (1908-1990), the daughter of the American ambassador to Germany William E. Dodd.[5]  Ambassador Dodd tended to distrust the regular State Department officers, so he let Martha help him with his work.  This opened a gap in embassy security.  The flighty Martha had a series of foreign lovers.  First, they were Nazis, then later anti-Nazis.  In March 1934, one of the latter, a Soviet intelligence officer, received orders to recruit her as a spy.  She fell for it, especially after the “Night of the Long Knives” (Hitler’s June 1934 purge of his enemies) opened her eyes to the reality of the Nazi regime.  She provided what information that came her way to her Soviet contacts until her father ended his tenure as ambassador in December 1937.  At the same time, she socialized with Mildred Harnack without being drawn into her work. 

Martha Dodd stayed in contact with Soviet agents after she returned to the United States, but had little to tell of value.  She encouraged the recruitment of her husband, Alfred Stern (but he didn’t know anything either) and had some contact with other low-value Soviet Agents.[6]  Without any valuable sources from 1937 on and without any real contact after the Second World War, her contacts with Soviet agents ended in 1949.  However, the “Red Hunt” in the United States gathered steam just as Martha Dodd wanted to put her past behind her.  Too late: the FBI already had her under surveillance.  Martha Dodd and Alfred Stern were small-potatoes in the eyes of the FBI, so they weren’t subpoenaed to testify until 1956.  They bolted to Prague.    

None of these agents was particularly important or valuable to the Soviet Union.  Is there anything to be learned from their cases?  There are several lessons.  First, the Soviet Union could call upon intelligent people motivated by a strong ideological commitment.  Unlike German espionage in the United States, they didn’t have to rely upon coercing unstable renegades. 

Second, espionage is a lot easier in peacetime than in wartime.[7]  The “Red Orchestra” fell because it had to rely upon insecure and discoverable radios to handle communications.  In peacetime, information collected and orders could pass back and forth through secure diplomatic communications.  In peacetime Germany and in the United States before and after Pearl Harbor, the Soviet Union had embassies that could serve as secure bases for its intelligence officers.  Those officers could recruit, evaluate, direct, support, and discipline their agents.  Those agents, of very variable quality and temperament, could be built into powerful networks.

A third lesson might be that the Soviet intelligence agencies possessed some very able case officers.  Ishkak Akhmerov (1901-1976) ran NKVD agents in the United States from 1935 to 1945, then went home without having been discovered.  Vasily Zarubin (1894-1972) and his wife Elizabeth Zubilin (1900-1987) ran a network in the United States from 1941 to 1944, only being recalled because of a false report from a disgruntled subordinate.  Arthur Adams (1885-1969) gained the first valuable intelligence on the Manhattan Project, although he was discovered by Army Intelligence.  He still managed to escape to the Soviet Union in 1946. 

            In short, the Soviets succeeded much better than did the Nazis against the same target. 

[1] Paul Hollander, Political Pilgrims: Travels of Western Intellectuals to the Soviet Union, China, and Cuba, 1928-1978 (1981) is highly entertaining.  On the other hand, the Communist Party of the United States of America paid for the legal defense and publicized the case of the “Scottsboro Boys.”  Most everyone else just stood around with their hands in their pockets. 

[2] This was back when state universities intentionally offered a low-cost, high-quality education because it was an investment in the common good. 

[3] Understandably, there has been much interest in the “Red Orchestra.”  For an introduction, see: https://en.wikipedia.org/wiki/Red_Orchestra_(espionage)#CITEREFScheel1985 

[4] Rebecca Donner, All the Frequent Troubles of Our Days: The True Story of the American Woman at the Heart of the German Resistance to Hitler (2021).  The story has been told before by Shareen Blair Brysack, Resisting Hitler: Mildred Harnack and the Red Orchestra (2000). 

[5] A lot of her activity is covered in Eric Larson, In the Garden of the Beasts: Love, Terror, and An American Family in Hitler’s Berlin (2011). 

[6] On Boris Morros, see Jonathan Gill, Hollywood Double Agent (2020); on Jane Foster Zlatovski, see her memoir, Jane Foster, An Un-American Lady (1980). 

[7] This, in turn, suggests that a prissy refusal on moral grounds to offer “diplomatic recognition” to a hostile regime just blinds one when it is most necessary to have information. 

Out in the Cold 1.

            Fictional spies make for good stories.  Real spies are tougher to write about.  For one thing, the documentary sources are mostly secret for a long time.  Writers have to conjecture some parts of the story.  For another thing, they are human, rather than super-human.  Real spies act for a range of motives and with a range of skillfulness.  Still, the inherent interest to readers of the “secret world” of spies maintains an audience for real spy stories. 

            The Second World War offers rich ground.  A great struggle between Good and Evil overlapped with other ideological struggles between Capitalism and Communism, and Nationalism and Internationalism.  They took root during a great economic crisis that caused many people to doubt the viability of democracy while imagining authoritarianism to be the “wave of the future.”   It was a “total war” in which armed forces were joined by industry, technology, science, propaganda, and espionage as important weapons of war.  Finally, the war set the United States solidly on the path away from isolationism and toward its troubled role as “the greatest power on Earth.” 

            In the late Thirties, all countries recognized the potential power of the United States.  Both Nazi Germany and the Soviet Union targeted the United States for espionage.  Germany efforts misfired badly.  German military intelligence, the Abwehr, began reasonably enough.  They reached beyond the usual military attaches to build an infrastructure among the crews of the merchant and passenger ships that regularly called at American ports.  They targeted German-Americans by appealing to racial solidarity and nationalism.  They sought people with direct access to technical information.  The “trade craft”[1] of the agents turned out to be a weak spot.  One German-American agent tried to obtain 35 blank passports by pretending to be the Secretary of State.  Arrested in February 1938, he soon told what he knew.  This led the Federal Bureau of Investigation, newly tasked with domestic counter-espionage, to jury-rig an investigation.  Leon Turrou soon identified 18 suspected German agents.  Used to chasing bank robbers rather than foreign spies, let most of them slip between the FBI’s fingers.  The rest were convicted in an October 1938 trial.  The bad publicity from the case made J. Edgar Hoover determined that things would go better next time.[2] 

            It did.  In early 1940 the FBI turned a very reluctant German agent, William Sebold.[3]  He put them on the trail of a large German network headed by Fritz Duquesne.[4]  After carefully building cases, the FBI arrested 33 people at the end of June 1941.  All were swiftly convicted.  Again, the newspapers splashed the news around, but this time it pleased Hoover. 

            The Duquesne case wrecked Abwehr operations in the United States.  Still, pressed hard by American entry into the war in December 1941, the Abwehr sent off eight saboteurs by submarine.  They landed on the American coast in June 1942.  Almost immediately, two of them defected and betrayed the others to the FBI.  All were arrested, tried by a special military tribunal, and sentenced to death.  The two defectors were granted clemency: 30 years in prison for one and life for the other.  FBI Director Hoover suppressed all mention of the defectors in explaining the case to the public. 

            Finally, in late November 1944, two more German agents landed from a submarine off the coast of Maine.[5]  The two were mismatched: an experienced German agent and an unstable American renegade.  The renegade didn’t stick with spying for Germany any longer than he had with anything else. He soon bolted with much of the cash, burned through a lot of it on wine, women, and song, and then turned himself in.  The German soon fell into the hands of the FBI.  Both were sentenced to death, but the sentences were commuted to prison terms.  That ended German efforts to spy on the United States. 

            The Abwehr had a good sense of what information it wanted and what targets it wanted to sabotage.  It just lacked the human means to achieve these ends.  The quality of people available to the Abwehr plagued their operations.  Spying required both commitment to the cause and the time needed to work into a useful position.  The first operation foundered on the stupidity of an agent; the rest suffered defections before they had scarcely begun.  Apparently, in New Deal America, neither National Socialism nor German ancestry provided much motivation to run great risks.  Few of the German agents had any natural talent: they weren’t habitually circumspect, or suspicious, or stolid, or even careful.[6]  Often they became spies because the Germans first twisted their arms, then sent them abroad with no way of keeping an eye on their recruits.[7]  The failures of the weak links then brought disaster for the handful of able German agents.[8] 

            The wartime cases did much to unjustifiably burnish the reputation of the Counter-Intelligence Division of the FBI.  The role of the defections in catching the spies got erased in the press coverage.  Instead, the FBI celebrated the determined gum-shoe work of its agents. 

Moreover, several of the cases led to movies that distorted the realities.  “Confessions of a Nazi Spy” (dir. Anatole Litvak, 1939) purported to tell the story of Leon Turrou’s 1938 investigation.  Warner Brothers made it as a wake-up call to Americans about the Nazi danger, but it failed at the box office.[9]  “They Came to Blow Up America (dir. Edward Ludwig, 1943) tells a thoroughly fanciful story of the eight saboteurs of 1942.  Again, the FBI is all over the plot foem the beginning.  “The House on 92nd Street” (dir. Henry Hathaway, 1945) retold the story of the Duquesne spy rung—with the full support of the FBI.  Finally, the story of the final two saboteurs appeared—again much refashioned—in the West German film “Spy for Germany” (dir. Werner Klingler, 1956).  Understandably, this one did not glorify the FBI. 

The lesson here might be that a foreign enemy wishing to spy in the United States would require better quality human assets and professional case-officers on the ground. 

[1] OK, I read John Le Carre novels.  What about it? 

[2] Rhodri Jeffreys-Jones, The Nazi Spy Ring in America: Hitler’s Agents, the FBI, and the Case that Stirred a Nation (2020). 

[3] See: Peter Duffy, Double Agent: The First Hero of World War II and How the FBI Outwitted and Destroyed a Nazi Spy Ring (2014). 

[4] On Duquesne, see: https://en.wikipedia.org/wiki/Fritz_Joubert_Duquesne#Second_World_War_%E2%80%93_Duquesne_Spy_Ring  I’m not sure that I actually believe his story. 

[5] At a point way up in the Gulf of Maine.  The nearest town had a population of only 750 people.  The two men from “Away” were soon noticed. 

[6] In this, if not in motivation, they resemble most members of European Resistance movements. 

[7] In contrast, German counter-intelligence operations in the occupied countries worked to devastating effect.  In large part, this is because they were in a position to keep a close watch on the agents they recruited from among the conquered peoples. 

[8] Several members of the Duquesne network had obtained valuable intelligence on American air power. 

[9] On the other hand, it appears in a brief scene in “Operation Mincemeat” (dir. John Madden, 2021). 

Anne Frank and the Wolves.

            The Nazi “Final Solution to the Jewish Question” turned out to not be “final.”  A million European Jews survived.  Persecuted and pursued, many Jews tried to hide.  The Nazis hunted them relentlessly.  Still, the Nazis were short-handed.  They called upon all sorts of auxiliaries.  Sometimes these auxiliaries hoped for a material reward.  Other times, they were coerced.[1]  Still other times, the Nazis allowed people to voice personal animosities that had not been able to express before.[2]  So Jews in hiding found themselves vulnerable to betrayal. 

            Otto Frank (1889-1980) grew up in a prosperous, assimilated German Jewish family.   Other branches of the family settled in Switzerland and France, while Otto spent several years in the United States.  He fought in the Germany Army during the First World War, then worked at the family bank.  He married in 1925 and fathered two daughters–Margot and Anne.  Even before the Nazis came to power in January 1933 the family had considered emigration.  In 1934 they moved to the Netherlands.  Started over at age 45 as a businessman in a foreign country with a different language, Otto Frank was a resilient man. 

            In May 1940, the German conquest of the Netherlands renewed the danger to the Frank family.  Otto Frank transferred ownership of his business to his employees to forestall “Aryanization” (confiscation).  In July 1942, when deportations from the Netherlands began, he took his family into hiding.  There they remained until 4 August 1944.  Then German police burst in.  The Frank family soon went to Auschwitz.  Only Otto Frank survived the war. 

            How had the Germans discovered the Frank family?  It could have been an accident, incidental to a search of the building on some other matter like black market food trading.  It could have been the result of betrayal.  A 1948 Dutch police investigation focused on finding the Germans and the Dutch police responsible for the raid.  One of the Germans had hanged himself in 1945 to dodge trial.  The other, Karl Silberbauer, had disappeared. 

            Later, interest turned to an informer.  In 1963, Simon Wiesenthal caught up with Silberbauer.  Almost twenty years on, the German claimed to have a vivid memory of the arrest itself, but he could say nothing about who had informed.  His boss had received a tip.    

            At one time, suspicion fell on a sister of one of those hiding the Frank family.  The sister was said to have had a lover in the German forces and to have worked for the Germans during the Occupation.  Purportedly, she had been talking on the telephone in German on the morning of the arrest; and the German who ordered the raid is said to have recalled receiving a tip in a call from a young woman. 

            A more recent investigation has nominated Arnold van den Bergh (1886-1950).[3]  Van den Bergh also was Jewish.  It is conjectured that he betrayed the Franks to save his own family.  (In 1945, he had been anonymously denounced to Otto Frank.)  Not likely scoffed the experts. 

            In theory, only six people knew of the hiding place.  Benjamin Franklin once said that “two may keep a secret if one of them is dead.”  Who knows how widely the “secret” spread?

[1] For an example, see Peter Wyden, Stella: One Woman’s True Tale of Evil, Betrayal, and Survival in Hitler’s Germany (1992).  Not that I recommend the book itself, but if you unearth her story it is fascinating. 

[2] See: Robert Gellately, “The Gestapo and German Society: Political Denunciation in the Gestapo Case Files,” The Journal of Modern History Vol. 60, No. 4, December 1988. 

[3] Rosemary Sullivan, The Betrayal of Anne Frank: A Cold Case Investigation (2022). 

Yo Ho Ho.

            One excellent business book is called Ninety Percent of Everything,[1] because ninety percent of all goods make part of their journey by sea.  Moreover, a good deal of what does not move on the surface—data, for example–does move by undersea cables.  It is a symbol, a cause, and an effect of globalization.  That is all the more marvelous because the seas have had an episodically bloody history.[2]  This tends to be forgotten during periods of extended peace.  We have been living through such a period for many decades.  Now we are warned that a less peaceful time may be at hand once again.[3] 

            Since the Second World War, the United States Navy (and to a diminishing degree the Royal Navy) have policed the world’s sea-lanes.  That vital prop to world commerce requires a large fleet manned by skillful crews. 

            China’s rise to a central position in the world economy linked it inextricably with merchant shipping.  Shipping, especially container ships and super-tankers, carry the country’s vast quantity of imports and exports.  This ocean-born trade both profits from American naval power and—in changed circumstances—would be threatened by it.  One logical solution for China has been to construct its own ocean-going navy.  On average, Chinese ships are ten years younger than are American ships.  It has matched this building program with an aggressive claim to sovereignty over the South and East China Seas.  In addition, Zi Jinping’s “Belt and Road Initiative” has given China control of container ports in Somalia, South Korea, Belgium, Somalia, and Greece.[4] 

However, China’s quest for maritime security inevitably poses a threat to American predominance.  One problem may arise from the general ignorance.  People are ignorant to the benefits of globalization, while all too aware of its alleged costs.  They are ignorant of the importance of the sea lanes for globalization.  They are ignorant of the place of the U.S. Navy in securing those sea lanes.  And they are ignorant of the current state of the Navy. 

That navy is immense in comparison to the fleets of other nations.  It is widely dispersed around the globe.  It also suffers from budgetary neglect by the same leaders who are working it to a frazzle.  The size of the fleet will glide downward as aging ships are retired.  A couple of recent collisions at sea by American destroyers can be explained by inadequate time training in basic seamanship on ships constantly at work fighting terror (or political embarrassment). 

Inevitably, the historian is reminded of earlier times.  There was the Anglo-German naval arms race before the First World War.  There were the defense budget constraints on the democracies during the appeasement era.  There was the British announcement that the last Royal Navy ship would be withdrawn from the South Atlantic before Argentina invaded the Falklands.  It might be better if the two naval powers reconciled their differences.   

[1] Rose George, Ninety Percent of Everything (2014). 

[2] A few favorites: Garrett Mattingly, The Armada (1959); Lord Morley’s entry on Nelson in the DNB; and S.E. Morison, The Rising Sun in the Pacific (1948).  Many amazing stories in each. 

[3] Bruce D. Jones, To Rule the Waves: How Control of the World’s Oceans Shapes the Fate of the Superpowers (2021); Gregg Easterbrook, The Blue Age: How the U.S. Navy Created Global Prosperity—And Why We’re in Danger of Losing It (2021). 

[4] China may also be interested in a “Reverse Burma Road” through Myanmar that would short-circuit any efforts to close the Straits of Malacca. 

Liberal Internationalism and Southeast Asia.

            “Liberal internationalism” arose as a response to “great power politics.”[1]  Liberal internationalism asserted that nations pursuing their individual advantage, with war as the final arbiter, need not offer the only form of international relations.  Instead, international co-operation could provide benefits for all; and international institutions and non-governmental organizations (NGOs) could address problems that nation-states find it difficult to overcome.  In terms of operating principles, liberal nationalism has sought to develop the United Nations specifically as a means of discovering non-violent solutions to problems; the growth of international trade, partly in the belief that economic interdependence hampers political conflict; and the spread of democracy partly in the belief that democracies don’t go to war with one another.[2]  The most common buzz-term is “rules-based order.” 

            In recent years, the “rules-based order” has seemed to be collapsing.  Zi Jinping’s China has vigorously pursued its national interests at the expense of other countries near and far.[3]  Putinist Russia wants what it wants and will use military power to try to get it.  The European Union has suffered from severe internal tensions, with Britain bolting for national sovereignty.  President Donald Trump broke with common platitudes, and the Biden Administration has continued some of his new approaches.  A new age of great power politics may have begun. 

            During the early Cold War, the United States arrayed regional alliances against the Soviet Union (North Atlantic Treaty Organization, NATO) and the Peoples Republic of China (Association of Southeast Asian Nations, ASEAN).  Burned by the Vietnam War and buoyed by the results of Richard Nixon’s opening to China, American interest in ASEAN drifted a good bit.  Now President Biden trying to rally the members of ASEAN to contain China once more.  It looks to be rough sailing.[4] 

            Mostly, the ASEAN countries are pre-occupied with rapid economic development to feed, house, clothe, and employ large populations.  They are not or not-very democratic.  They are more open to some Western ideas (nationalism, laissez-faire capitalism) than to others (climate change, standard labor practices).[5]  Both Covid and the Ukraine war sent economic shock waves through the region by choking off tourism, disrupting the global supply chains to which they contribute and upon which they depend, and now pushing up interest rates.  Most of all, they don’t want to be chained to either the Chinese or the American chariot, but hope to exploit from some form of neutralism. 

            It remains to be seen if the Democrats’ liberal internationalism can find ways of accommodating necessary partners who don’t share most of their beliefs. 

[1] The alternative term is “Realism,” but who wants to self-identify as “Unrealistic”?  Ends the argument before you even start making your case. 

[2] See: https://en.wikipedia.org/wiki/Liberal_international_order  Key scholars include Robert Keohane and John Ikenberry, but John Mearsheimer offers challenges. 

[3] The “Belt and Road Initiative,” the claims to every little reef and islet in the South China Sea, and its hollow commitments to the Paris Climate Accord can serve as examples. 

[4] Walter Russell Mead, “What Does Southeast Asia Want?” WSJ, 17 May 2022. 

[5] Americans pushing rights for labor onto still-industrializing countries seems like just another round of imperialism.  America’s turn away from free-trade endangers their plans.  Climate change may be real, but they’ll just live with the consequences unless Western countries pay the whole bill for adaptation

Off the Charts.

            The regular public schools work OK for many people.  They don’t work for other students.  At least that’s the perception.  Many of the allegedly under-served students are Black or Hispanic.[1] 

            Republicans have long endorsed giving vouchers to families to spend on whichever school they prefer.  This approach sought to open taxpayer dollars to a market competition.  They anticipated that private schools would soak up much of the money in what amounted to a referendum on the public schools in any given constituency. 

            Thirty years ago, Democrats bent before the winds to avoid breaking.  They agreed to charter public schools.  Charter schools enjoy a degree of autonomy from the school district bureaucracy, but receive public funding.  Moreover, and here’s the rub, students have to apply and be accepted.  In effect, this allows the charter schools to cull out all the students who are undesirable for one reason or another.  Special-needs students get culled.  So do the unmotivated.  So do persistent discipline problems.  All this dross gets left behind in the regular public schools.  They are doomed. 

That is exactly the—often unspoken—motivation for parents who want to enroll their children in charter schools.  Some public schools (and some entire school districts) were in a downward spiral long before the charter school movement arose.  Students in charter schools, it is alleged, are freed from disorder and distraction.  Students in charter schools, it is alleged, can actually engage in learning.  Poor people who see education as a way out like charter schools. 

Charter schools have proved themselves popular.  Today, 3.6 million students attend 7,700 charter schools.  There are several million more students on waiting lists to get into charter schools.    Of these, better than two-thirds are from low-income households. 

The Obama Administration favored charter schools.  Hence, it came as a surprise when Joe Biden expressed reservations about charter school.[2]  Now the Biden Administration has proposed additional regulations for charter schools.  As justification, critics of charter schools point to a series of scandals involving some of the “for-profit” charter schools.  However, the “for-profits” account for 12 percent of the charter schools, while the new regulations will apply to all the charter schools (about one-half of the total) that receive federal funds. 

One requirement has drawn much fire from charter school supporters.  Teachers unions and school districts have resisted the growth of charter schools.  The regulation would accord priority in gaining grants from the federal Charter School Program to charters that partner with regular public schools.  This would allow the school district to brake the growth of the charter schools in their area.  Similarly, new schools would have to assess “unmet demand.”  That appeared to be defined in quantitative terms, rather than in terms of public school failure to educate.  The reaction against the regulations has been intense and bipartisan. 

[1] Erica L. Green, “Charter Rules Pushed by U.S. Spur Backlash,” NYT, 14 May 2022. 

[2] President Biden is best understood as a “time server.”  This old-timey expression means someone without any personal convictions who thinks that s/he must follow the prevailing spirit/beliefs of the time in which s/he lives.  Hence, Senator Biden was tough on crime in the Nineties and is appalled at mass incarceration today.  He supported opposition to mandatory bussing to integrate the schools and is now appalled to have it thrown in his face by Kamala Harris. 

Put in the Stocks.

            Stocks have had a very good run.[1]  From 2011 through 2021, the annual return on stocks averaged 17 percent.  Interest rates have been at very low levels for a very long time.  The Trump tax cut may have produced a “sugar high,” but who doesn’t like sugar?  Generous government payments sustained consumer spending through the Covid pandemic.  Correspondingly, unemployment was held down.  All this kept companies performing well during the pandemic.  With just over 50 percent of Americans owning at least some stocks, that increased wealth and generated income for many people through capital gains and dividends.[2]    It also generated a lot of tax revenue for government.  These things held true both before and during the pandemic. 

            Now economic troubles have disrupted the market.  Inflation is running at an alarmingly high level.  Essential goods—food and energy—suffered painful price increases.  The Federal Reserve Bank has begun raising interest rates and taking other measures to bring down inflation to its target level of 2-3 percent per year.  Companies with poor long-term situations are having the life-support system taken away.  Even companies with excellent long-term prospects are suffering declines in the price of their shares.  The prospect of an economic slowdown and the shifting of investment conditions have sent the stock market lower.  So far, there have been six weeks of continuing losses. 

            Beyond the immediate bleeding, there exists the possibility of a long run of lower returns from the stock market.  It is impossible to predict the future, but a number of economists are muttering-in-print about a 5 percent annual return for several years.  That’s going to be a painful drop from 17 percent.  That will affect spending by asset-owners and it will effect tax revenue available to government.  Retirees may feel a particular pinch.[3] 

            What significance do these developments hold for politics?  Commonly, the party in power loses seats in Congress in off-year elections.  Those are approaching in November 2022.  So, the razor-thin majority held by Democrats in the House of Representatives is in danger.  The dead-lock in the Senate, breakable by the Vice President only in budget-related “reconciliation” votes, could shift to favor Republicans.[4] 

            The Federal Reserve Bank is talking about continuing the interest rate increases through 2023 in order to defeat inflation.  That suggests that inflation will not be under control before the off-year elections.  The larger economy may well slow down.  No president, let alone Fightin’ Joe Malarkey, can do much except wait for the Federal Reserve Bank to follow its policy.  About all he will be able to do is to inveigh against the rich not paying their fair share of taxes and corporations that engage in price gouging to fatten their profits.  This will be ugly. 

[1] Michael Corkery, “For Stocks, Era of Easy Money Jerks to a Halt,” NYT, 14 May 2022. 

[2] Stock ownership in America is both fairly wide-spread and narrowly concentrated.  Thus, just over half of Americans own some stock.  On the other hand, the top 5 percent of asset owners own 72 percent of the stock. 

[3] To belabor the obvious, retirees have a limited pool of assets to generate income in addition to what they receive from Social Security and—sometimes—pensions.  Those assets have to last until some unknowable future death date.  There’s a tension between maintaining a suitable level of spending by burning through assets at an accelerated pace and tightening your belt to make sure that you don’t die in a refrigerator box under an overpass. 

[4] In which case Democrats will congratulate Senate Majority leader Charles Schumer for not getting rid of the filibuster. 

My Weekly Reader 16 May 2022.

            The rise of strong states forms one of the three key features of European history in the Seventeenth Century.[1]  There were, however, two rival forms of the strong state.  By far the most popular took the form of royal absolutism.  Here, France provided the very model of a modern centralized bureaucracy.  Less common was the “constitutional” government.  Here, Britain led the way through monarchs governing in cooperation with the elected representatives of the rich and powerful.  Between 1688 and 1815 the two countries and systems fought it out.  Britain won. 

            What did the British do with their victory in the century that followed?  First, Britain enjoyed the “free security”[2] that came from the absence of any real rival until late in the Nineteenth Century.  Pre-occupied with the problem of nationalism, Continental Europeans had neither the interest or the power to fight Britain.  Elsewhere, once-great states like China, India, and the Ottoman Empire were rapidly decaying.  Britain built a vast over-seas empire while pursuing a policy of “splendid isolation” in Europe.  Second, it led the world economy as the “first industrial nation.”  This generated vast new wealth, albeit very unevenly distributed.  Third, and perhaps most impressively, Britain both achieved this world leadership and economic transformation without suffering immense domestic convulsions.[3] 

            How did the British achieve these remarkable successes?  Plausible answers would include, science, prosperity, two-party representative government, and bourgeois values.  Advances in biology, chemistry, medicine, and engineering offered authoritative explanations for and solutions to pressing problems.  Truth bent the Liberal political ideology of limited government into new form.  Public health, sanitation, education, and labor regulations all advanced.  By the dawn of the Twentieth Century, the welfare state had begun to appear.  The increased wealth from trade and industry paid for these reforms that ameliorated, rather than exacerbated, social tensions.  Political competition between Liberals and Conservatives expanded the electorate, which forced social problems onto Parliament’s agenda.  The bourgeois values of hard work, self-restraint in almost everything, patriotism, and education made the broadening middle class an effective storm anchor. 

            Why did this century of triumph come to an end?  Again, the answers are multiple and complex.  Essentially, all of the conditions that had favored British success in the Nineteenth Century turned against Britain in the Twentieth Century.  The century of free security gave way to a century of wars—hot and cold–against powerful enemies around the globe.  Britain lost its economic primacy as many other countries followed the British path to industrialization and prosperity.  The easy amelioration of social tensions gave way eventually to fights over shares of the pie.  The Liberal Party changed as much as it could without changing as much as it needed to in order to remain viable.  A more polarized set of choices faced the British people as they faced decades of challenges.  . 

            Still, if Britain has declined, it would be hard to argue that the British people have declined.  Health, wealth, and freedom have found a new equilibrium at a much higher level. 

[1] The others were the emergence of a global capitalist economy, and the triumph of human reason over tradition. 

[2] I borrow the term from the Nineteenth Century American experience of having two vast oceans as buffers against foreign intrusion and no serious continental rivals. 

[3] David Cannadine, Victorious Century: The United Kingdom, 1800-1906 (2017).