Author Archives: jsh54

Operation Iraqi Future.

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Between 2011 and 2014, unanticipated events in the Middle East created problems that are now moving toward critical phases.  In 2011 a long, complicated civil war broke out in Syria.  By and large, the Obama administration evaded involvement.  Also in 2011, the Obama administration believed that it had escaped the Iraq quagmire.  The United States and Iraq could not agree on terms for the continued American presence in that troubled country.[1]  American troops pulled-out.  Various forms of Hell marched in.  In 2014, the troops of Islamic State (ISIS) drove east out of civil war-torn Syria.  They soon over-ran the Western (largely Sunni) areas of Iraq.  Iraq’s Shi’ites toughened-up; Iran sent arms and men; and the United States supplied air-power.  In 2014, Russia seized the chance created by a political crisis in Ukraine to re-take the Crimea and to sponsor rebel groups in two districts of eastern Ukraine.  International economic sanctions on Russia followed.

In 2016, Russia forged an alliance with Iran to defend the Assad regime in the Syrian civil war.  The joint intervention of the two powers now seems to have confirmed that the regime will remain in control of western Syria at least.  The 2016 Obama/Kerry agreement with Iraq[2] fended-off a war between the United States and Iran while facilitating an American-Iranian war against ISIS.  Victory over ISIS appears[3] to be at hand.

President Trump ran on a platform of opposing Iran.  Doubtless, Secretary of Defense James Mattis has done his best to rein-in the President until the CrISIS is over.  Still, the day will come when ISIS has been beaten and the Americans and Iranians can think anew about their relationship.  Iraq will find itself a pawn in that relationship.

What happens next in Iraq and Syria?  Iraqis are divided over which “friend” to support.[4]  Do they favor the United States or Iran?  Iran has real advantages: Iran is Shi’ite and the majority of Iraqis are Shi’ite; Iraq’s Iranian-armed militias have played a large role in the defeat of ISIS.  The government of Iraq is full of pro-Iranian Shi’ites.  The argument for keeping America engaged in Iraq after the defeat of ISIS springs from this same Iranian domination.  Keeping the Americans involved offers the best guarantee that Iran won’t just turn Iraq into a puppet.  Also, there will have to be some kind of reconciliation between Sunnis and Shi’ites of post-ISIS Iraq.  An American presence might limit Shi’ite oppression of their none-too-loyal Sunni countrymen.

Russia and Iran disagree on the final outcome in Syria.  Russia chose sides in the Sunni-Shi’ite civil war inside Islam, but wants to limit its involvement in the struggle.  To avoid becoming mired in the larger conflict, Russia favors a compromise in Syria that would meet the demands of some Sunnis (although not the Westernized young people beloved of Westerners).  Iran hopes to see Bashar al-Assad turn Syria (or his portion of it) into a Shi’ite bastion.[5]

Iran and Russia will stick together; America and Iran—and Russia—may fall out.  Still, room exists for pragmatic diplomacy.  People just have to seize the chance.  But what chance?

[1] Iraq’s Shi’ites wanted the Americans out so that they could go about the business of misgovernment unimpeded.  Iraq’s Sunnis wanted the Americans to stay as a check on the Shi’ites, rather than out of love for the country that had destroyed their country and their own place at the peak of that country.  The Americans were—and are—weary of war in the Middle East.  President Obama sought to meet this desire of the voters.

[2] Until the memoirs come out, when it may be renamed the Clinton-Kerry or Clinton-Obama deal with Iran.

[3] Count no man happy until he is dead.

[4] Yaroslav Trofimov, “Iraq Faces Balancing Act Between the U.S. and Iran,” WSJ, 17 March 2017; Yaroslav Trofimov, “Russia, Iran Need Each Other, Despite Differences,” WSJ, 17 February 2017.  .

[5] Over the long-run an Iranian client-state in Syria on the frontiers of Israel—a sort of super-Hezbollah—would challenge the security of Israel in a profound way.

The Deep State Strikes Back.

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In a classic essay, George Orwell warned of the distortions of language that come with politicization.[1]  To the rage of their opponents, President Donald Trump or some of his followers have appropriated the terms “fake news” and “deep state” as charges hurled at those opponents.  The term “fake news” began to circulate late in the presidential campaign to describe the largely anti-Hillary Clinton rumors produced by many web-sites in Eastern Europe.  Now Trump slings the term around to answer media criticism.  In his view, the heavy reliance upon anonymous sources by the New York Times[2] means that editors assign reporters to write stories that conform to the paper’s ideological position and to claim that anonymous sources provided the “facts” cited in the stories.   The term “deep state” is a Western academic term[3] itself appropriated from popular usage in Middle Eastern countries.[4]

The current ugly controversy high-lights the reality that civil servants and scholars are not apolitical technical experts serving merely as instruments of a democratic government.  They have policy agendas of their own.  These can reflect belief, settled tradition, or bureaucratic interest.[5]   President Trump is the preferred candidate neither of the Democrats, nor of mainstream Republicans.  These are the groups from which most public servants are recruited.  President Trump’s clownish personal behavior[6] and lack of preparation make him widely disliked in the bureaucracy.  That animus extends to his more outlandish cabinet appointments.

President Trump’s criticism of federal agencies and his lack of a tame clientele with which to fill administrative positions “has put institutions under enormous stress.”  This, in turn, “has forced civil servants into an impossible dilemma.”  They can either defend their institutions against his assault or they can surrender to his demands to do things in a new way.   Either course will weaken the credibility of the institutions they represent.   So far, Trump has lashed out at the courts, the intelligence community, and the mainstream media (MSM).  The current “tribal” polarization of American politics shrinks the role for reason on both sides, regardless of which side has the “facts” on its side.[7]

Critics argue that Trump could be much more effective by working through the bureaucracy and with the press, rather than attacking these institutions.  He should, in short, accept the existence of the “fourth branch” of government.  In this view, the bureaucracy and the press operate as important checks on presidential power, hence as guarantees of American democracy.  The development of a powerful bureaucracy with policy positions of its own is one of the issues not much discussed in the Federalist papers.  Its power has only grown as partisan gridlock in the legislature has led presidents to act through executive branch writing of rules and regulations.  This seems to be what Steve Bannon has in mind when he calls for the dismantling of the “administrative state.”  In this sense, the criticism of Trump’s actions misses a point.

[1] George Orwell, “Politics and the English Language.”

[2] See: https://www.google.com/search?q=New+York+Times+public+editor+on+anonymous+sources&ie=utf-8&oe=utf-8  Much of the concern has come from a series of a Public Editors.  On the origins of the Public Editors, see: https://en.wikipedia.org/wiki/Howell_Raines

[3] Academia leans left in the same way that professional military officer corps lean right.

[4] See: https://waroftheworldblog.com/2017/03/10/the-deep-state/  The term is now being re-appropriated by Trump foes.

[5] Most scientists believe in androgenic climate change and believe government should act to counter it.  Most military officers believe that the military needs bigger budgets and more generals and admirals.

[6] It should be remembered that most young children don’t like clowns.  They find them frightening and offensive.

[7] That is, Democrats would believe the charges even if they weren’t true.

Boxing Day 2004.

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Thailand is a developing country in Southeast Asia.  Most of its economy depends on agriculture (rice); then on manufacturing (look at the labels of whatever you bought at Walmart); and then on tourism (15-20 percent of the economy).  Tourists come to Thailand for many reasons.  The climate is tropical, it has beautiful beaches, and it has amazing cultural sites.[1]  One of the best places is Phuket (Foo-ket, not something else that might occur to you), an island off the west coast of Thailand in the Andaman Sea.  It has some gorgeous beaches (or so I’m told) and the cost of living is very low.  There’s an airport that handles almost 3 million travelers a year.  There are many luxury hotels, but they aren’t allowed to mess with the beaches.  As a result, it’s full of foreign tourists and European expat retirees.

Just before 1:00 AM on 26 December 2004, the Indian tectonic plate slid over the Burmese plate somewhere between the island of Simeulue and the west coast of Sumatra a hundred odd miles away.  This natural process caused a violent undersea earthquake in the eastern Indian Ocean.  All along the fault, one plate moved upward suddenly.[2]  The shock sent off waves called tsunamis.  The waves headed in all directions, but most importantly to the west and to the east.[3]   It is possible to create tsunami warning systems.  However, the sensor systems themselves are expensive; then there is the complicated issue of how to warn people ashore once a tsunami has been detected; and then there is the problem of what to do in a coastal plain when you have been warned that a tsunami is sweeping down on you.[4]  The poor countries surrounding the Indian Ocean didn’t have a warning system.  In any event, the waves reached northern Sumatra in 15 minutes.

In deep water, the waves move very fast, but don’t have any great height.  When they hit the shallows close to shore, they slow down and achieve great height.[5]  On a long stretch of the west coast of Sumatra and Indonesia, the waves were 8o feet high when they came ashore and travelled inland for as much as a mile.

The waves hit different parts of the Indian Ocean littoral at different times.  Indonesia and Thailand are “developing countries.”  One result of their state of economic development is that there is a shortage of “hard” structures made out of reinforced concrete, a shortage of roads, shortage of landline and cell-phone communications, and a shortage of emergency services.  The waves killed between 185,000 and 230,000 people, and laid waste the towns of northern Indonesia and western Thailand.

One last thing.  Tilly Smith was vacationing at Phuket, Thailand, with her parents.  She saw the sea receding from the shore and bubbles all over the surface.  She had just finished a geography lesson in school about tsunamis.  She told her parents; her parents—who were smart enough to have a kid like Tilly—warned people at the beach; and, amazingly, all the other Brits on the beach “scarpered” before the wave arrived.  Nobody got killed.  Tilly was 10 years old.[6]

[1] It also has a lot of poverty-stricken, but beautiful young people.  As a result, sad to say, international sex-tourism is a major revenue source.

[2] When the 300-pound William Howard Taft was President of the United States, his Secret Service bodyguards warned off other swimmers at Cape May, saying that “the president is using the ocean.”

[3] There is a GIF of the shock waves at https://upload.wikimedia.org/wikipedia/commons/4/47/2004_Indonesia_Tsunami_Complete.gif  Must have made for great surfing off Mozambique.  OK, that’s callous.

[4] Bend over and kiss your ass good-bye?

[5] See: Stephen Crane, “The Open Boat.”  http://public.wsu.edu/~campbelld/crane/open.htm

[6] But go ahead, keeping checking your cell-phones while I’m talking.  See: Charles Darwin.

Memoirs of the Addams Administration 10.

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Jonathan Chait has argued that Donald Trump and a coterie of advisers “cooperated with the undermining of American democracy by a hostile foreign power [Russia].”  James Clapper, former Director of National Intelligence and no fan of President Trump, has said that “there is no evidence” of “collusion between members of the Trump administration and the Russians.”[1]  So which is it?  Chait is a partisan Democratic journalist at a time of considerable distress for the party.  Clapper is an experienced professional who had access to all they key intelligence before he left office.  All things considered, Clapper’s seems the more credible voice.

Even so, that leaves the problem of all the false denials of contacts between some Trump followers and various Russians.  Michael Flynn has been the most egregious case of this so far, but Jeff Sessions may still end up in serious trouble over his terminological inexactitude.

The Russians undoubtedly “intervened” in the election by hacking into the computers of various Democratic figures and institutions, then releasing the fruits through Wikileaks.   The results came in the revelation of information that the Clinton campaign would have preferred to keep secret because it likely would alienate many voters in a tight race.  First, how did that “undermine democracy”?  Second, would the revelation of this information by American investigative journalists not have undermined democracy?  As for the lying, part of the explanation may be the firestorm of criticism heaped on Republicans by Democrats after the election.  Another part of the explanation may be sheer stupidity.   As Jonathan Tobin has pointed out, the Benghazi witch-hunt didn’t help Republicans.

There seems to be a lot of that going around.  Recently, Breitbart News claimed that a story in the New York Times had reported that federal officials had “intercepted communications and financial transactions” between Russians and members of the Trump posse.[2]  Almost immediately, President Trump walked—stormed, really—into a door by claiming that “Obama had my ‘wires tapped’ in Trump Tower just before the victory.”  This charge elicited a hostile reaction from all across the spectrum.

Under these circumstances, many observers may be having a sigh of relief that actual legislation on important issues has begun to move forward.  Republicans launched their campaign to “repeal and replace” the Affordable Care Act (ACA) with the American Health Care Act (AHCA).[3]  In some ways, the AHCA really is “Obamacare lite.”[4]

What gets lost in the criticism of the bill is that Americans pay a lot more for not-as-good health care than do people in Western Europe and Japan.   The ACA did little to address this problem.  Arguably, it is a more important problem than the issue of people without insurance.  (They always had “catastrophic care” through emergency rooms.  I know it’s cold to say that.)  Both Medicaid and a lot of employer-provided health insurance are in effect open-ended when it comes to spending.   The fundamental dispute between Republican and Democrats is the likely effect of limiting spending.  Will insurers hold down their premiums in a less-regulated market in order to gain customers, then find ways to cram-down costs?  This is the Republican wager.  Or will insurers shred insurance for the poor in order to keep targeting the easy money?  This is the Democratic wager.  Whoever “wins,” the stakes are high.

[1] Both are quoted in “Trump and Russia: What do we really know?” The Week, 17 March 2017, p. 6.  On Chait, see https://en.wikipedia.org/wiki/Jonathan_Chait

[2] “Trump accuses Obama of illegal wiretap,” The Week, 17 March 2017, p. 4.  The story in the NYT ran on 19 January 2017.  See: https://www.nytimes.com/2017/01/19/us/politics/trump-russia-associates-investigation.html?_r=0

[3] “Republicans face a revolt over health bill,” The Week, 17 March 2017, p. 5.

[4] See: https://waroftheworldblog.com/2017/03/05/memoirs-of-the-addams-administration-9/

The Economy Stupid.

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Since the 1970s, the fates of working Americans have become uncoupled.[1]  Those with a college education have prospered, while those without a college education have seen their incomes stagnate.  Then, the “Obama recovery” since the financial crisis has not been a very satisfactory recovery by historical standards.  The rate of growth has been slow.

First, it is worth asking why the recovery was so unimpressive   On the one hand, demography exerted a choke-hold.  Baby Boomers have begun to retire, while the share of women in the paid labor force seems to have plateaued.   This could be off-set by rising productivity of the labor we do have.  On the other hand, however, a long-running decline in productivity growth has continued to drag on the recovery.  There are various theories about why this has happened, but no consensus, let alone a solution.  On yet another hand, economists point to “skill-biased technological change.”  That is, employers constantly introduce new technology that replaces many low-skill employees while creating a demand for a smaller number of higher-skilled workers.   Those higher skills are acquired through some form of education (although it doesn’t have to be college).

Second, the economic problems have had social effects, and those social effects now have had political consequences.  Donald Trump won the votes of those without a college education by an eight percent margin; Hillary Clinton won the votes of those with a college degree by a nine percent margin.  Even this disguises the reality of President Trump’s electoral base.  The core of voters who actually propelled Trump to the Republican nomination was much more distinctly those without a college education.  Most Republicans—many of them with college degrees—merely voted for Trump because they were supporting the Republican candidate.

What kind of shape is the economy in as Donald Trump takes the helm?  Unemployment is down to 5 percent, what economists regard as “full-employment” given the constant churning in the economy.  Inflation is finally up around 2 percent, the target long-pursued by the Federal Reserve Bank.  The Fed appears poised to raise interest rates this month to keep inflation from accelerating beyond this target point.

To what extent can President Trump deliver on his commitments to the voters who gave him the nomination?  The same forces that have dragged on the economy for a while now are likely to hamper some of his plans, while some of his plans will likely further drag on the economy.

For one thing, tax cuts combined with a big infrastructure plan will expand the deficit and increase inflationary pressures.  The Fed will raise interest rates in response, dragging back on the economic growth that the president wants to encourage.   The anti-immigrant stance will only worsen the labor supply bottleneck is in the years ahead.  Thus, there is some reason to expect that the Trump administration will disappoint its core constituency.

Democrats might want to hesitate before shifting from protesting in the streets to dancing in the streets.  First, no one doubts that America needs a massive overhaul of its infrastructure.  How to pay for it and how to burst through the resistance of opponents[2] are problems for any successor to the Trump administration.  Second, in a labor-short economy, a big chunk of workers (those without college degrees) are being left behind.  Somebody needs to think of a constructive solution, rather than just viewing them with contempt.

[1] Gregory Mankiw, “Advice for Trump: Ask an Economist,” NYT, 12 March 2017.

[2] For example, both the Keystone XL and Dakota Access pipelines are infrastructure projects.

Syrian End-Game.

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Adolf Hitler’s aggression created an alliance of Great Britain, the United States, and the Soviet Union that brought down the Third Reich in flames.  However, that “Grand Alliance” consisted of countries with very different aims united only by the German danger.  As soon as victory came in sight, the allies began to fall out with one another.  Their competition produced the Cold War.

Now the same thing is happening as the ISIS caliphate begins to crumble.[1]  The current wars in the Middle East (the ISIS war, the Syrian civil war) have become proxy wars.  Turkey has become the chief supporter of the various Sunni Arab rebel groups, like the Free Syrian Army; the Russkies and the Iranians are the supporters of the Assad regime; and the Americans are the chief supporters of the Kurds in both Iraq and Syria.   Now, these disparate allies-of-convenience are beginning to pursue their interests.  Their proxies are likely to pay the price.

The central dynamic in the next phase is likely to be Kurdish nationalism.  The Turks hate the Kurds, and the Kurds hate the Turks.  Turkey is a NATO member (if not exactly an ally), but the Americans have supplied the Kurds with a lot of support.  So, at some point, the Americans are going to have to make a choice or broker a deal.  Now the Kurds have begun to doubt American support.  The Syrian Kurds, at least, have had some contact with the Russians.

Turkish support for the Sunni Arab rebels actually puts them on the side of the major losers in this struggle.  Both the American-backed Kurds and the Russian-backed Assad regime have greater assets on the battle field.  Contacts have opened between the Assad regime and the Syrian Kurds.  The short-term goal of such talks might be co-operation against ISIS, but the long-term goal might be a meeting of minds about Turkey.  Naturally, Turkish president Erdogan would rather cut a deal with the Assad regime he has been trying to overthrow in order to forestall an Assad-Kurd alliance.  Assad’s chief aim seems to be to get control of the key western parts of Syria, where the Sunni rebels are his chief opponents.[2]  The Sunni rebels—commonly called the “moderates” by President Obama—are going to pay a heavy price if this happens.

For its part, Russia is allied with Iran to support the Assad regime.  Now the Iranian-controlled militias fighting in Syria have ignored Russian-sponsored local truces.  Both the Russians and the Assad regime are going to have to choose whether to cut ties with Iran.

Their immediate problem is that they want to know what the Americans are going to do.  In so far as Syria is concerned, the Trump administration, like the Obama administration, sees things almost entirely in military terms.[3]  They want ISIS destroyed.  This has produced a pause in American participation in Syrian peace talks now underway in Geneva.  At the same time, the American face a dilemma: the Trump administration wants to improve relations with Russia, the Russians are allied—for the moment—with Iran, and the Trump administration is hostile to Iran (as are several of America’s regional allies).[4]  The U.S. and Russia recently joined to block an attack by Turkish Sunni clients toward the ISIS stronghold in Raqqa because it would have cut across a movement by Kurds and Assad forces.  Does this have any longer-term meaning?

So, who will get eastern Syria once ISIS is destroyed?  The Kurds?

[1] Yaroslav Trofimov, “Battle for Raqqa Set to Shape Mideast,” WSJ, 10 March 2017; Yaroslav Trofimov, “ U.S. Disengagement Creates Hurdles for Syria Peace Talks,” WSJ, 3 March 2017.

[2] That is, Syria may be headed toward “de facto” partition.

[3] An American tradition.  Look at Stephen Ambrose, Eisenhower and Berlin, 1945: The Decision to Halt at the Elbe. (1967).

[4] To make matters worse, the out-of-power Democrats want to preserve the deal with Iran brokered by John Kerry while also attacking Russia as a way of impugning President Trump.

The Deep State.

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Anyone who paid attention to the Egyptian coup that overthrew the Muslim Brotherhood government of Mohammed Morsi, or to Recep Tayyip Erdogan’s battering of the Turkish military, civil bureaucracy, and intellectuals after a failed coup will have encountered the term “deep state.”  It refers to networks of officers, bureaucrats, journalists, and businessmen who actually control government by concerted actions behind the scenes.[1]  The “deep state” endures across generations, rather than being a momentary conspiracy; it recruits its members by invitation, rather than by public competition; and it is inherently un-democratic, both in its means of operation and its ability to manipulate the course of elected governments.  However, Middle Eastern societies seem particularly vulnerable to conspiracy theories.

Now the term has surfaced in American politics.   Breitbart News, other right-wing web-sites, and the social media feeds of many Trump supporters have been using the term for a while now.  When President Trump’s supposed “grey eminence,” Steve Bannon, used the term “administrative state” in a speech to the Conservative Political Action Conference, the New York Times construed his words to refer to the “deep state.”[2]  Newt Gingrich seemed to be playing Charlie McCarthy to Bannon’s Edgar Bergen when he said that “We’re up against a permanent bureaucratic structure defending itself and quite willing to break the law to do so.”  Their aim is to undermine the Trump presidency.   Some even see this conspiracy as being directed by former President Barack Obama, who announced his willingness to break the traditional silence of former presidents when the new administration threatened “our core values.”[3]  (This view ignores the roll-out of HealthCare.gov.)

Former Obama administration government officials rushed to denounce the charge, albeit in circumspect language.  One said that “deep state” is “a phrase we’ve used for Turkey and other countries like that, but not for the American republic.”[4]  Another expressed surprise that a president would suggest that civil servants would try to undermine the government.  So, that’s settled.[5]   The NYT sought to normalize this as habitual Republican back-biting.

What gets lost in this unseemly mud-slinging is the pedigree of the issue.  In his 1959 farewell address Dwight Eisenhower warned of a “military-industrial complex.”  In the 1960s and again in the last few years, well-informed people have analyzed the power of the national security bureaucracy.  Sandwiched in between these Jeremiads, the journalist-turned-open-novelist Fletcher Knebel hit the best-seller lists with “Seven Days in May” (1962), about a military coup, and “The Night of Camp David” (1965), about a crazy president.  More recently, Chalmers Johnson published three books on the costs of “empire.”  Democracy was chief among them.[6]  Well-informed people haven’t taken the issue as a joke.  Even if everyone else does.

Is there a “deep state” in America?  Of course not.  What seems more likely, and disturbing, is that there is a momentary open quarrel between a president and the national security professionals.   Would such a quarrel precipitate the formation of a “deep state”?

[1] If this is true, then the common public discourse and action beloved of academics has little real meaning.  Instead, the books on the shelves of junior army officers and school principals, and conferences on the middle floors of government ministries or dinner meetings in private homes hold the key to understanding events.

[2] Julie Hirschfeld Davis, “’Deep State’?  Until Now It Was a Foreign Concept,” NYT, 7 March 2017.

[3] It is worth comparing these remarks with the boom in sales of dystopian novels to alarmed Democrats.

[4] OK, so what’s the American term?  The NYT reporter did not ask.

[5] Although it doesn’t seem to have been the Russkies who leaked to the press news compromising National Security Adviser-for-a-Day Michael Flynn.

[6] See: https://waroftheworldblog.com/2015/02/13/cinay-sayers/;and https://en.wikipedia.org/wiki/Chalmers_Johnson

My Weekly Reader 9 March 2017.

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In the bad old days,[1] individual nation-states pursued the welfare of their citizens—political, economic, psychic—through nationalism, protectionism, and war.  The “Devil’s Decades” from 1914 to 1945 thoroughly discredited this approach.  In place of this disgraced “realist” world-view arose two rival systems.  The Soviet model of centrally-planned economies and Big Brother-little brother domination of surrounding countries came to dominate one half of the world.  The Western model of a market economy based on borders open to the flows of capital and people, and regulated by rules and laws came to dominate the other half of the world.  Both systems seemed to depend on international political stability.  Thus, “The “Cold War” was, as John Lewis Gaddis put it, “The Long Peace.”  However, the Soviet model also rested upon a set of beliefs about human beings that were completely false.[2]  Since 1990, former followers of the Soviet model have been in flight toward the Western model.  Intellectuals declared “the end of history” since all the ideological rivals to the Western model had been defeated.

The financial crisis of 2008-2009 and the adjustment problems of the Eurozone posed huge problems of economic management for experts and politicians.  However, they hardly dented the belief in the one best way.  Hence, it is fascinating to encounter a restatement of the Western model[3] made just before the Brexit referendum, the election of Donald Trump as president of the United States, and the arrival of Marine Le Pen as a sort of Snow White to a host of populist dwarf parties.

Michael Mandelbaum understands the substance of international relations and domestic politics almost entirely in material terms.  A stable international order has allowed governments to focus on the promotion of economic growth and the distribution of its benefits.  (Indeed, the pacification of international relations and the de-legitimization of most ideologies have left them nothing else to pursue.)  Mandelbaum carefully explains the main components of the system.  He considers the changes that may be necessary to respond to the rise of the BRIC (Brazil, Russia, India, China) economies.  He calmly contemplates the teeter-totter shift in power as the United States experiences a relative decline and other countries develop economically.

Two points are worth noting.  First, Mandelbaum says little about the impact of the disruptive changes in the old industrial countries brought by globalization.  The adjustment costs of globalization have chiefly been born by common people in sectors of the economy swept by the winds of change.  Currently, Western populism is being fueled by the anger of these people at the elites who have promoted globalization without devising any adequate devices for helping the losers.  Attention-grabbing though these movements have been, what will happen if the Chinese, Indian, and Brazilian people disrupted by globalization launch their own populist movements?  At least the Western countries have political systems designed—however grumpily and disdainfully—to accommodate grievances.

Second, writing in 2014, Mandelbaum foresaw that “it is reasonable to expect that the United States will do less global policing in the future than it has in the past….making the world a politically and militarily more turbulent place.”  Donald Trump may make this long-term trend worse, but he didn’t cause it.

[1] Admittedly, days beloved by history students.

[2] As one fictional character remarked, “All you had to do was keep them penned in and wait for the food riots to start.”  See William Gibson, Pattern Recognition.

[3] Michael Mandelbaum, The Road to Global Prosperity (2014).  See Tod Lindberg, “An Elite Guide to Globalization,” WSJ, 3 April 2014, p. A15.

Memoirs of the Addams Administration 9.

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A calmer, more coherent, and less confrontational Donald Trump offered his first address to Congress.[1]  “Everything that is broken in our country can be fixed.  Every problem can be solved.”  He didn’t have Theodore Sorenson as his speech-writer, but that’s still a pretty up-beat statement.  Everyone noted the new tone.  Over half (57 percent) of Americans felt a “very positive reaction” to the new-and-improved Trump, while 21 percent felt “somewhat favorably.”  That’s better than three-quarters (78 percent) of Americans.  On the other hand, 22 percent took a dim view (or no view) of the speech.  That suggests that the majority of Americans are at least open to Trump’s ideas, provided he doesn’t act like a moron in presenting them.  It also suggests that the die-hard opposition to Trump is restricted to a MoveOn ghetto.  Could this Donald Trump have been elected president?  What if he had given this speech on inauguration day?

What are Donald Trump’s policies exactly?  That is hard to tell and the speech did little to clear up this question.  He wants a big infrastructure plan, and a border wall, a lot more money for defense and a lot less money for the snail darter, tax cuts for someone, and a replacement for the Affordable Care Act (ACA).  Republicans have been desperately trying to fill in the gaps with regard to the ACA.[2]  In the current version, “subsidies” to low income people to help them buy health insurance will be replaced with “tax credits” (worth more than those people pay in taxes) to purchase health insurance; it would replace the ACA’s federal subsidies to states that expand Medicaid with federal subsidies to states that create “risk-pools” to insure those with pre-existing conditions.[3]  Some of the problems of Republicans arise from the self-repeal of those covered by the ACA.  Many young people have not purchased insurance, regardless of the make-believe mandate.  This has distorted the financial model of the exchanges.  Many thinly-populated areas—red states—pay higher premiums and have less choice of provider than do densely-populated—blue state—areas.  The ACA sought to entice states to expand Medicaid by offering a temporary increase of federal cost-sharing from 60 percent to 100 percent, but down-played the subsequent reduction that would leave these states freighted with additional costs.  The ACA sought to eliminate product differentiation by requiring all the insurance plans to offer the same set of liberal mandated benefits.[4]  In short, is the current ACA an inadequately-financed effort to by-pass the market economy?  And all that implies.

At least for the moment, Trump’s astonishing victory has lifted the dead hand of Ronald Reagan off the Republican Party. For decades, Republicans have tried to our-Reagan Reagan.  Now they have to think anew an act anew.  Then, if Democrats don’t believe in the Trump administration, investors do believe.[5]  At least for now.  The much-delayed recovery of the economy from the financial crisis slump of 2008-2009 provides an underlying force.  President Trump’s endorsement of tax cuts, infrastructure projects, and deregulation have all poured fuel on the underlying fire.  However, trade war and tariff protection are implicit in “America First.”  With 44 percent of the goods and services sold by Standard and Poor 500 companies going abroad, people are skittish.  It’s still early days, so they aren’t alone.

[1] “A sunnier Trump lays out his policy goals,” The Week, 10 March 2017, p. 4.

[2] While the mainstream media (MSM) have been lambasting Republicans for trying to repeal and replace the ACA, the exchanges have been failing and premiums soaring.

[3] Just as the Obama administration found itself compelled by reality to follow some main lines of the Bush II foreign policy, the Trump administration finds itself compelled by reality to follow some main lines of the Obama domestic policy.  Anyway, that’s what I think at the moment.  Probably I’m wrong on both counts.

[4] “GOP divided over Obamacare repeal plan,” The Week, 10 March 2017, p. 5.

[5] “Conservatism: The Party of Reagan embraces Trump” and “Stocks: will the Trump rally last?” The Week, 10 March 2017, pp. 6, 33.

My Weekly Reader 3 March 2017.

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In the last third of the 19th Century, America sprinted through massive industrialization.  Sweeping development ended in “consolidation.”[1]  Big business sought to control the dangers to immense investments they had made.  By organizing production and markets they sought to avoid destructive competition and reduce waste.  “Trusts” and holding-companies, vertical and horizontal integration became hall-marks of industry.  Under the sponsorship of J. P. Morgan, this consolidation movement spread to financial services and capital markets.  Bankers and stock-brokers became central figures in the private management of the American economy.

“Old money” seems out of place in a “New Land” built by such hustlers.  Still, it has been an American reality since the time of Edith Wharton.  Prep schools, Ivy League universities, clubs, churches, and marriage bound families with a lineage into one important element of the American elites.  By the early 20th Century, banks and the stock-exchange opened an appealing career avenue to the young men of this group.  Like many others of his group, Richard W. Whitney (1888-1974) turned down it.[2]

From 1919 on, Whitney and Company brokered most of the bonds for the great Morgan bank.[3]  This burnished the already-impressive respectability that came with an education at Groton and Harvard, followed by marriage into a family with excellent ties to the Republican party.  Respectability isn’t the same thing as admiration.  Other men in the market didn’t think much of Whitney’s abilities.  The client base of his firm failed to grow.  However, bonds aren’t flashy (or mercurial) in the way that stocks may be, so they appeared to be a perfect match with Dick Whitney.  Appearances can be deceiving.  Whitney lived beyond his means.  Rather than retrench, he borrowed from an ever-widening pool of banks, family, friends, and acquaintances.  The personal loans often were unsecured by collateral, other than his respectability, family ties, and friendships.

When the Stock Market crashed in October 1929, Whitney became highly esteemed for his ineffectual steadiness in the face of disaster.[4]  Soon, his colleagues on the Stock Exchange elected him president, then re-elected him four times.

For a time, his respectability allowed him to go on borrowing.  Eventually, even the president of the Stock Exchange couldn’t get an unsecured loan.  So, in 1936, he misappropriated resources placed in his trust, then did it again and again.  In March 1938, the roof fell in.  Convicted of embezzlement, Whitney did three years in prison.

One question raised by this little immorality tale is how idiots—honest and dishonest—come to have big chunks of money.[5]  Richard Whitney didn’t strike people as sharp.  Anyone from the world of the monied must have been able to set a price on his life-style, then match it with what they knew of his income.  Yet they went on lending him money or trusted him to manage the resources of other people.  Why?

When Whitney lost everything and went to prison, friends gave his now-homeless wife a house to live in.  Later, Whitney’s more successful older brother paid all of his huge personal debts.  The bonds of family and friendship and respectability hold fast, even in the face of logic.

[1] See Naomi Lamoreaux, The Great Merger Movement in American Business, 1895-1904 (1988).

[2] Malcolm MacKay, Impeccable Connections: The Rise and Fall of Richard Whitney (2017).  Reviewed by Malcolm Carter, “Blue Blood, Red Ink,” WSJ, 28 April 2017, p. A11.

[3] Both his uncle and brother had made partner at Morgan.

[4] That’s not the worst quality a person can possess.

[5] For another, later, tale, see: https://waroftheworldblog.com/2015/01/19/by-the-waters-of-babylon/