Category Archives: American Politics

The Constitution in Formation.

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Briefly, the textbooks would tell us that the Americans declared independence from Britain, worked up a national government, found that the rig-up—the Articles of Confederation—didn’t work well, and then adopted the Constitution that exists today.  Historians have long, unavailingly, offered a more complex story.[1] 

            A recent book restates the more complex view.[2]   By 1760, Britain’s North American colonies had achieved a level of economic and political development that would enable them to stand as a group as an independent political community.[3]  The expulsion of the French from North America ended a long-standing threat that had encouraged a reliance upon Britain.  Some debate on a federation of the colonies became inevitable.  Indeed, it had already begun during the French and Indian War.  In 1760, a new king with new ideas, George III, ascended the throne in Britain.  His stubborn determination to bend all resistance—domestic or colonial–to his policies poured fuel on the colonial debate.  Crisis followed crisis from the Stamp Act through the Townshend Acts to the “Intolerable Acts” that followed the Boston Tea Party.  Two successive “Continental” Congresses were chosen to voice and advance American concerns.  Widely-followed debates centered on the continuing issues of the desirable limits of government power and the safeguarding of individual rights.  In the end, a war for independence sought to turn beliefs into reality. 

            Between 1775 and 1781, the Americans improvised a war government out of the Continental Congress.  However, they also engaged in a re-writing of colonial charters of government into state constitutions.  Generally, the new constitutions sought to shift power from the executive to the legislature and to increase democratization.  State governments also stifled dissident opinion, notably that of Tory opponents of independence.  There was a war on after all.  This same government continued to manage national affairs after independence had been gained.  As before the war, so after the war: intense political debate had a very wide following.  In one sense, it offered a kind of political education.  In another sense, however, it was white-male-property-owning democracy in action.[4]  These debates gave birth to the Constitution and the Bill of Rights. 

            Yet the debates did not stop there.  What did the words mean?  How could they be put into action?  The ferment and debate continued.[5]  To take one example, who would decide the “constitutionality” of laws passed by Congress?  We have one answer today, but others then argued that the President could decide, others that the individual states could decide.  Then, what did the “men” in “all men are created equal” mean?  Did it mean only white males or did it mean “all mankind”?  Both abolitionism and women’s suffrage got rolling in the 1830s. 

            One trouble with “originalism” is that there were different factions of “originalists.” 

[1] Old favorites include: Lawrence Gipson, The Coming of the Revolution, 1763-1775 (1954); John Alden, The American Revolution, 1775-1783 (1954); and Richard B. Morris, The Forging of the Union, 1781-1789 (1987). 

[2] Akil Reed Amar, The Words that Made Us: America’s Constitutional Conversation, 1760-1840 (2021). 

[3] That is, they could manage the public business without falling into chaos; they could pay their way in the world without help from a foreign government. 

[4] Which seems to me preferable to government by only one or a few white-male-property-owning authoritarians. 

[5] In terms of establishing the credibility of the Executive Branch, see: Carol Berkin, A Sovereign People: The Crises of the 1790s and the Birth of American Nationalism (2017).

A Big Lack of Trust.

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            The rise of big business hotly followed the Civil War.  Railroads, coal mines, steel mills, oil, telegraphs, and banks all grew in size and wealth as America industrialized.  Big companies integrated horizontally and vertically.  They formed ‘trusts” to cut up the national market and set prices without reference to market forces.  Companies played a rough game with each other, with their workers, and with their customers.[1]  The aggrieved fought back in a variety of ways, none of them very effective.  State regulation of railroads, national anti-trust legislation, and guns and dynamite made headlines without braking the advance of big business. 

            Louis Brandeis, lawyer and then Justice of the Supreme Court, advanced a compelling theory of anti-bigness.[2]  Brandies argued that there could be neither competition nor bargaining in sectors where one actor dominated the market for goods, services, or employment.  Moreover, a dominant company—well the handful of men who owned or controlled it–could impose its will in other areas thanks to the wealth it accumulated.[3]  His views came to dominate legal and government approaches to the growth of big business from the New Deal to the Eighties. 

            If a criticism might be offered, it is that the approach is subjective, moralistic, and essentially aesthetic.  It didn’t try to measure whether customers were economically better or worse off from any particular size of or market domination by a company.  It believed that competition should not be carried to its logical conclusion, victory for one competitor.  It could cite many instances of bad behavior by companies without demonstrating the representatives of those anecdotes.  Fundamentally, it reflected a view that, when pushed too far, inequalities of wealth and power are unseemly. 

            This view finally sparked an effective response in the Reagan Era.  In 1978, Yale law professor Robert Bork published The Antitrust Paradox.  The “paradox” identified by Bork lay in the raising of consumer prices and the limiting of competition through anti-trust laws that effectively protected established competitors.  Bork argued that “consumer welfare” should be the standard for deciding whether some merger should be allowed.  The price and variety of goods offered to the consumer could be measured objectively.  Bork’s view gained dominance in the courts. 

            If a criticism of this approach might be offered, it is that it views humans too narrowly.  How much stuff people can buy and at what price isn’t the only measure of human happiness or welfare.  For example, trust in the larger social, political, and economic systems to give people what they believe to be a fair shake in life also is essential.  That confidence often is based in emotion and intuition, rather than cold logic.  It is subject to manipulation.[4]  It’s real.  It’s vital. 

            Now a new phase in anti-trust has opened.  The current approach has been labeled “neo-Brandesian.”  Its face is Lina Khan, the new chair of the Federal Trade Commission. 

[1] See Glenn Porter, The Rise of Big Business, 1860-1920 (1992) for a concise summary of the scholarly literature.  See Raymond Chandler, The Long Goodbye (1953) for a mid-century popular evaluation: “There ain’t no clean way to make a hundred million bucks…. Somewhere along the line guys got pushed to the wall, nice little businesses got the ground cut out from under them… Decent people lost their jobs…. Big money is big power and big power gets used wrong. It’s the system.” 

[2] Greg Ip, “Latest Antitrust Approach Has Its Own Risks,” WSJ, 8 July 2021. 

[3] It’s probably hard to regulate anything effectively when one party can hire all the best lawyers. 

[4] American media is the last great industry largely free from government regulation.  Long may it so remain. 

What is not said.

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            Wealth and income inequality have become a much-discussed issue in American politics.  Democrats emphasize the injustice and aesthetics of recent income and wealth inequality.  Narrowing that gap has become a primary concern for many Democrats.  One way to achieve this is to increase what Europeans call “social provision” of services and money to lower income groups.  The “human infrastructure” component of their plans call for government spending on child-care, universal pre-K, free community college, and expanded spending on health-care.  Once created, such entitlements do not go away.  They only expand. 

A second way is to substantially raise taxes on both the income and the underlying assets of the wealthy.  The maximalist version of the current infrastructure bill nicely illustrates this double policy.  As one New York Times reporter puts it: they “see a rare opportunity to harness the political popularity of infrastructure spending to achieve their long held policy of raising taxes on the rich.”  Senator Ron Wyden (D-Oregon), chairman of the Finance Committee, puts it succinctly: “What we’re doing is generating revenue, but we are also making a major area of American government more fair, so people don’t feel they’ve been played while the rich person gets off scot-free.”[1]  In sum, the Democrats have long desired to tax the rich and they think that they have finally found a winning justification. 

The tax proposals chiefly target corporations, the fossil fuels industry, and wealthy individuals.  First, the tax on corporations would rise from the current 21 percent, the “small business” tax break for certain partnerships and limited liability companies (LLCs) would end, and so would a provision that taxes the fees of private equity firms as capital gain rather than as income.  The tax breaks currently allowed to fossil fuel companies would be redirected to benefit “clean energy” companies.  The top tax rate on individuals would rise from 37 percent to 39.6 percent, and the tax on capital gains for those earning more than $1 million a year would rise from 20 percent to 39.6 percent.  It is hoped that such measures would generate $2.5 trillion in revenue over ten years. 

One thing that is not discussed is alternative uses for the increased tax revenue.  Over the last 20 years, the real Gross Domestic Product (GDP) of the United States has slightly more than doubled.[2]  Over the same period, the national debt has risen from about $6 trillion to about $27 trillion.[3]  That is, it has more than quadrupled.  From 2016 to 2020, the national debt increased from 106.6 percent of GDP to 127 percent of GDP.  This has taken place in an environment of near-zero interest rates.  If interest rates had to rise to counter either a serious inflationary surge or speculative bubbles, then the cost of that debt would rise as a share of the budget. 

Suggesting that the increased revenue go to reducing the debt to a more manageable size would be met with hoots of derision.  No one is going to want to pay for benefits that their predecessors received, but for which they refused to pay.  Herein lies the lesson. 

[1] Both quotes are from Jonathan Weisman, “Bipartisan Infrastructure Talks Collide With Democrats’ Goal to Tax Rich,” NYT, 21 June 2021.  Conservatives would contest the “scot-free” designation.  In their view, the top 10 percent of income earners paid 71,7 percent of federal income tax on adjusted gross income, while the bottom 50 percent of income earners paid 2.94 percent of the federal income tax on adjusted gross income.  See “Letters to the Editor,” WSJ, 26-27 June 2021.  As my beloved sister-in-law said when asked to define “fair”: “more, a lot more.” 

[2] See: https://www.statista.com/statistics/188105/annual-gdp-of-the-united-states-since-1990/ 

[3] See: https://fiscaldata.treasury.gov/datasets/historical-debt-outstanding/historical-debt-outstanding

Too Much of A Good Thing.

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            The Great Depression (1929-1939) rocked capitalism.  Conventional economic thought offered no useful response.  Indeed, following its dictates only made things worse.  It held that governments should not intervene excessively in the natural workings of the capitalist economy.  However, if the “natural workings” of the capitalist economy puts 25 percent of the labor force out of work for a long stretch, then something new needs to be done.  Some countries—the United States, Nazi Germany, Imperial Japan–fumbled towards an effective solution.  Government deficit spending would have to fill up the gap between what the economy wanted to produce and what it needed to produce to maintain employment and living standards.  This actually worked, especially under the conditions of total war.[1] 

            It took a while, but after the Second World War these ideas were legitimized as more than just ad-hoc emergency measures.  Labeled “Keynesianism,” the legitimized government interventions, especially deficit spending, as a response to serious downturns in the business cycle.  Along with expanded provision of government services, the new approach seemed to be validated by the “Great Boom” of the post-war decades.  Health, education, and living standards all improved markedly during this time.  British Conservative Prime Minister Harold Macmillan crowed that “most of our people have never had it so good.” 

            Inevitably, a fly lit in the ointment.  The fly took the form of consequences that were unintended, unanticipated, and frankly undesired.[2]  Success at dealing with major down-turns tempted democratic political systems to apply the solution to less grave down-turns and then to enhancing up-turns.[3]  This seemed to reflect the invalidation of yet another old nostrum: that deficits financed by just printing money eventually undermine confidence in the currency, eventually stoke inflation to unacceptable levels, and eventually force central banks to raise interest rates.  “Eventually” never put in an appearance, so governments began to get the idea that free money actually is free.[4] 

            Now—or maybe “again” would be more accurate—storm flags are going up.[5]  A “perfect storm” in a rare one that combines several meteorological events.[6]         Cassandras discern something similar developing in economic policies. 

First, printing money raises asset values (stocks and bonds, houses).[7]  That’s great, except that just under half of Americans own no stocks and bonds, and ownership of most stocks and bonds is highly concentrated.[8]  Although much played up by the left, economic inequality really has risen dramatically.  That threatens to de-legitimize capitalism in the eyes of ordinary citizens. 

Second, easy money and government bail-outs do more than curb the negative effects of a recession or depression.  They also curb the positive effects.  Governments step in rather than allowing “creative destruction” to re-allocate economic resources and rewards.  Inefficient, non-performing firms don’t get driven under.  These “zombie”[9] companies continue to tie down capital and labor that would be better directed to new firms that are more competitive, efficient, and innovative.[10]  The share of “zombies” among publically-traded companies has risen from about 2 percent in 2002 to 19 percent by 2019.  Pouring money into “zombie” firms doesn’t increase production or productivity by any significant amount.  Instead, “creative destruction” lies at the heart of functional capitalism.  So, let her rip. 

Third, easy money and bail-outs are a part (not the whole) of the forces that have created an economy dominated by big companies.  Big firms can borrow the money needed to get bigger still.  They can buy start-ups before they grow into real competitors; they can hoover-up talented workers; and they can hire the armies of lawyers needed to cope with the immense and complicated regulations generated by active governments.  Hug rewards flow toward a company that can achieve market dominance.  Stomping on ants may come to seem preferable to thinking about uncomfortable innovations. 

In essence, capitalism is being smothered by the efforts to shield people from risk and adversity.[11]  In theory, it is not necessary to throw out the original Keynesian baby with the bathwater to solve this problem.  Governments must still save the economy in cases of serious down-turns.  The problems lie, first, in what it does after a crisis and, second, what it does when times are good.  The schoolroom solution is that governments should exercise some self-discipline.  After a crisis they should reel back in the debt they issued to revive the economy.  When times are good, they should refrain from trying to make them even better by printing more money. 

The solution rests on a hope that voters or interest groups will reward politicians who follow this path.  That hope, in turn, rests on a belief in civic virtue and a sense of self-restraint.  Will voters and interest group virtuous and capable of self-restraint?  Or are they habituated to government stimulus?[12]  Maybe it will take a big smash-up to change minds.[13] 

That opens up a discussion about “culture” (values, beliefs, behaviors) that is bound to be difficult.  It would be easy to give into cultural pessimism here.  Still, there’s always been “a lot of ruin in the Republic.” 

[1] On all this, see: Charles P. Kindleberger, The World in Depression, 1929-1939 (1973); and Alan S. Milward, War, Economy, and Society, 1939-1945 (1979). 

[2] See Gregor Samsa. 

[3] In the United States, it isn’t possible to blame only the “tax-spend-elect” Democrats for this.  Purely for electoral reasons, Republicans eventually responded with “tax-cut-spend-elect.”  Their latest tax cut came in 2017, when the recession of 2008 hardly even appeared in the rear-view mirror.    

[4] Two “oil shocks” in the 1970s led to a severe inflation.  After central banks defeated this inflation in the early 1980s, they pushed down interest rates to low levels.  Asian “sovereign wealth funds” soaked up a lot of the US Treasury paper thus generated.  See: Jacques Rueff, The Monetary Sin of the West (1972) for its criticism of the US for inflating the whole world’s economy.  More to the point, Rueff’s views influenced French president Charles de Gaulle to attack the value of the dollar in 1965.  See: https://en.wikipedia.org/wiki/Exorbitant_privilege 

[5] Ruchir Sharma, “The Rescues Ruining Capitalism,” WSJ, 25-26 July 2020. 

[6] See: Sebastian Junger, The Perfect Storm: A True Story of Men Against the Sea (1997). 

[7] After Congress took flight from Keynesianism from 2008 on, the Federal Reserve Bank stepped in with “quantitative easing”: buying privately-owned financial assets to pump up their value. 

[8] Just over half of Americans own some stocks and bonds, but most stocks and bonds are owned by a few people. 

[9] Companies that don’t earn enough profit to pay even the interest on their debts. 

[10] On the very real  problems in Asia, see: https://en.wikipedia.org/wiki/Zombie_company 

[11] There may be a larger argument to be made about the other unintended effects of the post-war reforms on a broader range of citizens.  For example, Zachary Karabell quotes Alexander Brown, founder of the investment bank Brown Brothers (later Brown Brothers Harriman): “Don’t deal with people about whose character there is a question.  It keeps your mind uneasy.  It is far better to lose the business.”  Karabell, “The Capitalist Culture That Built America,” WSJ, 15-16 May 2021.  Reflecting on some of the comments I have read in my local township Facebook page, I think that you shouldn’t say things that would make Jimmy Stewart or Lee Marvin believe that you should have your mouth washed out with soap. 

[12] A question at the heart of the work of the “Concord Coalition.”  https://en.wikipedia.org/wiki/Concord_Coalition 

[13] William E. Leuchtenberg, Franklin D. Roosevelt and the New Deal, 1932-1940 (1963). 

All the News That Fits Is Printed.

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            Why do people believe nonsense?[1]  One answer might be that people operate in an environment of nothing but nonsense.  They don’t have any choice.  Obviously, that’s not the case today, at least in Western-style democracies with public education systems, a free press, modern medicine, economies based on science and technology, and a general celebration of human reason.  These institutions churn out immense amounts of “sense.” 

            Another answer might be that people filter information according to their group identity.  According to sociologists and psychologists, people always have some sense of belonging to a sub-group of society, their “in-group.”  It is a basic evolutionary survival strategy.  That sense of group identity can vary with the larger social and political context.  In a period of dramatic change or conflict, those larger events can intensify the sense of belonging to an in-group.  Belonging can strengthen one’s sense of security when the person feels embattled by hostile forces.  “News” about whatever forces or groups that are seen as threatening the in-group can become one of the shared elements reinforcing group identity. 

            Word of mouth communication of “news” provides validation.  External or authoritative repetition of the “news” provides an even stronger validation.  On the one hand, when that “news” is voiced or sponsored by a major public figure, then it seems more plausible still.  It gains credibility from being stated by a public figure.  It also expands the reference community of the “in-group” beyond local acquaintance.  On the other hand, media exposure and endorsement of the “news” lends further credibility while massively expanding awareness of it.  Social media has become a particular concern because of the feed-back from “likes” and “shares” provides an affirmation to the person who posts some bit of the “news.” 

            Taken together, “in a highly polarized society,” these factors “pull heavily toward in-group solidarity and out-group derogation.  They do not much favor consensus reality or abstract ideals of accuracy.”  In the context of contemporary American politics, this is concerning. 

            It’s possible that the cause for concern is real, but that both the degree of danger and the novelty of the situation are over-stated.  In 1678 Titus Oates cooked up the story of a “Popish Plot” to kill British King Charles II.  He accused the Jesuits and a long list of prominent Catholics.  The government investigated and the list of accused people grew.  Then the magistrate investigating the charges was found murdered.  You can imagine the television reports, if there had been television in the 17th Century: “New Plot by the ‘Scarlet Whore of Rome’!”; “Jesuit Secret Agents at Work in England!”; “Catholics Are Traitors!”  The accusations played into all the fears and prejudices of ordinary Englishmen after a century of domestic and foreign conflict.  Parliament took up the cause, forcing the king—who suspected the whole thing was a crock—to allow Oates to continue.  At least fifteen innocent men were executed for participation in the “Popish Plot.”  By 1681, tempers had begun to calm down.  Just as quickly as people had believed in the plot, they suddenly disbelieved in it. 

            So why are “misinformation” and “fake news” such an urgent issue now?  Perhaps it’s because, in America’s polarized politics, both “in-groups” feel under assault; prominent figures sound the alarm; and every corner of the media is filled with passionate intensity.  Or maybe not. 

[1] Max Fisher, “In an Us-Versus-Them World, Misinformation Reigns,” NYT, 10 May 2021. 

The Murder Spike.

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            As the Covid-19 pandemic tide ebbs, all sorts of things come into plain view.  One unsightly revelation is the sharp rise in homicides during 2020.  Overall, the number of murders in major cities rose by more than a third (37 percent) over 2019.[1]  The number of the slain rose by 40 percent in New York, 58 percent in Atlanta, 62 percent in New Orleans, 74 percent in Seattle, 78 percent in Louisville, and by 95 percent in Milwaukee.  Taking New York City as an example, in 2006 there were 596 homicides; in 2009, there were 471 homicides; and in 2017, there were 292 homicides.  During 2020 there were 447 homicides.[2]    

            The resulting sorrow is unevenly distributed.  The violence hit the borough of Brooklyn hard: homicides rose almost 70 percent.  More strikingly still, 10 of the city’s 77 police precincts, representing 13 percent of the city’s population, accounted for 34.2 percent of the homicides. 

            What brought down the number of homicides?  What caused them to surge upward once more?  The truth is that no one is sure.  In some minds, the murder spike resulted from “frustration, anger,…trauma and mental health challenges” inflicted by the pandemic and its attendant lock-downs.[3]  In some minds, two decades of aggressive and targeted policing brought down murder rates; while the progressive reforms of recent years handcuffed the police.  The 1994 Crime Bill added 100,000 police to American forces, while greatly increasing prison space.  Policies like “stop and frisk” in high-crime areas, high cash bail and long periods awaiting trial, and mass incarceration, it is argued, cut down the freedom of action allowed to criminals.  These policies may—or may not—have driven down crime levels.  They undoubtedly spawned a political backlash that decried mass incarceration and disparate effects of policing. 

            New York City embraced the new attitude.  In 2014, the city stopped appealing a court verdict against “stop and frisk” policing; the police then greatly reduced their use of the practice.  In 2019, the city announced a plan the close the gigantic Riker’s Island jail and to limit the city’s jail population to a much lower total of 3,300 inmates.  In 2020, after the murder of George Floyd, the City Council passed further reforms.  These included a $1 billion cut in the police department’s budget, and explicit restrictions on the use of things like choke-holds.[4]  The budget cut led the NYPD to skip recruiting an entire class of new officers.  The state did its part as well.  In 2017, it raised the age of criminal responsibility, making it more difficult to charge 16- and 17-year olds as adults.  In 2020, it passed bail reform to reduce cash bail. 

In short, say conservatives, the reformers shifted the balance of forces on the streets of crime-plagued areas between the police and the criminals.  One result, they say, is that many police have backed off from pro-actively enforcing the laws, while others have retired. 

For the last decade, Blacks and Hispanics have born the burden of gun violence (95 percent) and that trend continued through 2020.  If Black Lives Matter, then do all Black lives matter or just those taken by the police?  It’s a choice facing progressives.  

[1] Heather MacDonald, “Taking Stock of a Most Violent Year,” WSJ, 25 January 2021. 

[2] Rafael A. Mangual, “The Homicide Spike Is Real,” NYT, 20 January 2021. 

[3] Chicago mayor Lori Lightfoot, quoted in MacDonald, “Taking Stock.” 

[4] For what it’s worth, see Joseph Wambaugh, The Onion Field, where the opinion is offered that it is really hard to subdue those resisting arrest without using choke-holds. 

The Age of Revolt 1.

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            Where did “Trumpism”–the political movement–come from?[1]  It arose out of the profits and losses from globalization.  The costs were born by one segment of American society while the profits flowed to another segment.  The beneficiaries were, first and foremost, the “political, cultural, and financial elite.”  Their right to lead rested upon the pursuit of the common good. 

In theory, the free-trade policies pursued by a whole series of American administrations after the Second World War would benefit Americans.  They would allow the American economy to shift jobs producing low-value goods offshore and to redeploy assets toward higher-value jobs and goods.  For a long time, these policies had no costs for Americans.  The American economy emerged from the war with a long-term competitive advantage over anyone else.  It could have not only butter and guns, but low-end butter and high-end butter.  By the Sixties, that advantage had eroded badly.  As foreign competition began to bite, it turned out that a lot of people depended on those low-value jobs for their living and found it difficult to shift into high-value jobs. 

Globalization began to take a more serious toll on the American working class in the wake of the “Oil Shocks” of 1973 and 1979.[2]  That seems incomprehensibly long ago to most journalists and politicians, so they just ignore the larger story.  Then the North American Free Trade Agreement (NAFTA, 1994) reduced tariffs on trade with Mexico and Canada.  It accelerated the early wave of job-losses.  Already in the 1990s, Pat Buchanan and Ross Perot could run for president, if not win, on the loss of blue-collar manufacturing jobs.  At the same time, China’s abandonment of suicidal Maoist economic policies and its entry into the World Trade Organization (1990) greatly accelerated the loss of jobs.  Those job losses not only tossed many workers into unemployment, they also left whole communities hollowed out and unable to address human problems.  They not only tossed workers into unemployment, they undermined the value of the homes that formed an important asset of many workers.  They not only tossed workers into unemployment, they also foreclosed the possibility of the children of the workers finding steady work at a living wage anywhere near their parents. 

Globalization may have eroded manufacturing jobs, but it created enormous opportunities for the American financial services industry.  Industrializing countries needed capital and expertise.  Wall Street could provide both, not least because of the inflow of Chinese profits to New York banks and to the swelling 401(k) savings of the Baby Boomers.  Increasingly “cosmopolitan” in its outlook, Wall Street also became increasingly influential over national economic policy.[3] 

The year 2008 marked a turning point.  A great deal of elite foolishness and some guile created the 2008 financial crisis.  That, in turn gave rise to revolts on the right (Tea Party) and left (Occupy Wall Street); and to the invasion of the political system by “outsiders” like Barack Obama and Sarah Palin.  Donald Trump, the ultimate outsider, was just a heart-beat away. 

[1] Gerald F. Seib, “Where Trump Came From—And Where Trumpism Is Going,” WSJ, 16-17 January 2021. 

[2] “In the wake of” does not mean “solely caused by.”   For more of my peculiar view of this process, see https://waroftheworldblog.com/2015/03/02/american-union-stay-away-from-me-uh/  and https://waroftheworldblog.com/2015/12/17/the-new-economy/

[3] For one highly critical view of this process, see Simon Johnson, “The Quiet Coup,” The Atlantic, 5 May 2009. 

Team of Rivals in 2024.

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            In the likelihood that Joe Biden will not run for a second term, he has stocked his Cabinet and White House with his view of what would be desirable contenders for the Democratic presidential nomination in 2024. 

            Susan Rice briefly entered the Democratic primaries in 2020.  She went nowhere, so she angled for the Secretary of State.  Biden never seriously considered her, but he didn’t just toss her aside either.  Rice is a foreign policy expert without domestic policy credentials or much political sense.[1]  Biden appointed her head of his domestic policy council.  This will broaden her area of expertise and bring her into contact with many political figures.  If she’s a quick learner, she could make a stronger candidate in 2024. 

            Gina Raimondo is Secretary of Commerce.  BA, Harvard; Rhodes Scholar, Oxford; JD, Yale: she’s smarter than the average bear.  Venture capitalist, then Rhode Island State Treasurer, where she had the audacity to reform the near-bankrupt state employee pension system.  So, smart, but also a tough little cookie.  First female Governor of Rhode Island from 2015 to 2021.  Also, she seems to be on bad terms with Governor Michael Cuomo of New York. 

            Pete Buttigieg[2] is Secretary of Transportation.  BA, Harvard; Rhodes Scholar, Oxford: so he, too, is smarter than the average bear.  Consultant at McKinsey for a few years; mayor of South Bend, Indiana.  Service in Afghanistan with the Naval Reserve.  Openly gay, but the military service in a combat zone inoculates him against blowhards in recliners.[3]

            Most attention has focused on Vice President Kamala Harris.  However, Biden still doesn’t seem to have hived-off some large area of responsibility for her.  Unless he does, she may spend the next four years representing the United States at the funerals of foreign leaders.  That isn’t great preparation to run for president.  Why take her on as Vice President, then basically short-circuit her presidential ambitions?  Perhaps he can’t help holding a grudge about being blindsided by the question on bussing?  Perhaps he is a little concerned about her questioning of Brett Kavanagh?  Perhaps he’s alert to the reality that she flamed-out as a primary candidate, particularly among Black voters. 

            Equally interesting is who is not in the cabinet.  Elizabeth Warren probably wanted to be Secretary of the Treasury,[4] but would have settled for Attorney General.[5]  Bernie Sanders probably wanted to be Secretary of Labor.  Both got skint.  So did the “progressive” wing of the Democratic Party.  Biden may believe that linking too closely to the left wing of the party spells disaster in future elections. 

            Thus, one could read the tea leaves to say that Biden is using second-tier positions as a school for the development of the next generation of Democratic party leaders. 

            Nancy Pelosi and Charles Schumer are not doing the same with the next generation of House and Senate leaders.  There gerontocracy has dug in. 

[1] Otherwise Hillary Clinton could not have run a pick off her on the Benghazi television interview. 

[2] What were the clerks at Ellis Island thinking? 

[3] See: https://www.youtube.com/watch?v=LUyjT8VpwMI 

[4] Neither Wall Street nor the AARP would have sat still for that. 

[5] Anti-trust suits galore; claw-backs of “illegitimate” profits earned during the Trump presidency; and endless investigations (backed with pre-dawn serving of search warrants) of everyone who ever held a federal government position under Trump. 

The Asian Century 17b.

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Yet, for historians—if not for political scientists or economists—there is reason for cautious optimism.  On the one hand, the historical record suggests that democracies can be slow to mobilize their strength, but better able to mobilize that strength over the long haul.[1]  If one looks at (or, much worse, had to live through) the period from 1930 to 1942, one could easily believe that the liberal system had shot its bolt.  Economic depression, the collapse of new democracies, the appeasement of authoritarian nations, and military defeat slammed confidence in the Western system.  Three years later Berlin and Tokyo lay in smoking ruins. 

Second, “there’s a great deal of ruin in a nation.”[2]  The recent unpleasantness at the end of the Trump presidency led journalists and public intellectuals to invoke the example of the disputed presidential election of 1876.  Squalid as were those events, they also helped settle a period of deep division within the United States and helped bring on a long period of rising power and prosperity.[3] 

American business may be resistant to government guidance on China policy, but it is resistant to government policy on many things.  Usually, the outcome is satisfactory to most people.  American society is immensely creative and innovative.  The rapid development of two vaccines for Covid 19 demonstrate that old truth.  Conversely, the many problems with distributing the vaccine fall to the responsibility of the state and federal governments.  Hardly cause for business to defer to the state.  During the pandemic, American businesses have moved rapidly ahead with collaboration software (like Zoom), direct delivery bypassing stores, and cloud computing to manage all of it.  Compare this with the PRC’s treatment of Jack Ma, the entrepreneur who created Alibaba and Ant.  He got “disappeared” for a while after he suggested that entrepreneurial innovation outstrips old ideas.  About the subordination of business to the state for example. 

America remains remarkably open to immigration.[4]  Immigration helps off-set the aging of the native-born population, while admitting large numbers of people eager to work and to create their own futures.  In contrast, the PRC oppresses its own people and violates international agreements, like the Anglo-Chinese agreement on Hong Kong, in order to get more people to oppress.  China is not a country of voluntary immigration. 

By any standard, China’s economic progress since the death of Mao has been extraordinary in statistical terms.  However, much of that progress came from moving peasants out of low productivity rural farming and into higher productivity urban manufacturing.  The government has used subsidies, entry into the world market, and massive intellectual property theft to push China so far forward so fast.  There is good reason to wonder if the PRC has reached the limits of what can be obtained by such methods.  Just when they’ve alarmed the US. 

[1] This is a central theme of Gordon Wright, The Ordeal of Total War, 1939-1945 (1968).  It remains the best single volume history of the Second World War. 

[2] Adam Smith.  I forget where I read it, but it stuck with me. 

[3] Richard White, the author of The Republic for Which It Stands: The United States During Reconstruction and the Gilded Age, 1865-1896 (2017), would wish to qualify this view if it ever came to his attention. 

[4] In 2017, 2018, and 2019, an average of 1,085,181 people obtained lawful permanent resident status each year.  In 2013, 2014, 2015, and 2016, an average of 1,060,401 people obtained lawful permanent resident status each year.  See: https://www.dhs.gov/immigration-statistics/yearbook/2019/table1 

The Asian Century 17a.

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            It is now commonly accepted that the United States (US) and the Peoples Republic of China (PRC) are strategic competitors.[1]  All eyes regard this competition, for they represent two different approaches to government and economic management.[2]  China combines an effective authoritarian government with state-managed semi-capitalism.  The US combines democracy with a regulated free market.  For the duration of the “Fifty Years War”[3] the United States represented the preferred wave of the future for an ever-growing share of the world’s population.  Is the US able to win a new competition or have essential elements of its previous strength dissolved?  Is China better able than were Nazi Germany and the Soviet Union to win a competition with the US?  It depends where you look. 

Does the Covid 19 pandemic of 2020 offer any insight into the relative positions of the US and the PRC?  The answer must be NO if examined in international perspective.[4]  Democratic Taiwan did better than the PRC; the United Kingdom did even worse than did the US in spite of doing all the things that Democrats criticized the Trump administration for not doing.  The explanation for the diversity of results may have something to do with an Asian culture of compliance with the public interest in comparison with a Western culture of asserting individual rights at the expense of the community. 

It is sad, but true that the Covid pandemic is a transitory event.  It has been deadly and disruptive in its impact, but in a year it will be history.  More fundamental issues should be alarming.  So far, China has won the trade war launched by President Trump.  During 2020 its trade surplus increased, as did the trade deficit of the US.  The Trump administration’s attack on Huawei Technologies led the PRC to pour resources into its semi-conductor industry.  American efforts to get other countries to join in exerting pressure on China signally failed.  European, South American, and Asian countries are so entranced by the promise of the China market that they seek to fill the gaps when other countries try to pressure China.[5]  Nor is American politics oriented toward pursuing a coherent industrial policy during peacetime.  One of Trump’s last acts as President was to see his efforts to encourage an American rival to Huawei come to grief.  Intel announced plans to offshore some of its chip production; while Cisco rejected government entreaties to buy either Nokia or Ericsson.  Here they put the bottom line ahead of national strategy.  One of Biden’s first acts as President was to cancel the permit for the Keystone XL pipeline.  Here he put the demands of environmentalists over the interests of America’s Canadian ally (and over those of the American construction workers who had been building the pipeline). 

Finally, Chinese news media are portraying the riot at the Capitol as proof that American democracy is crumbling.  Many, here and abroad, would agree with this grim judgement. 

[1] Greg Ip, “China Played Its Hand Well in 2020.  Will It Keep Winning?” WSJ, 23-24 January 2021. 

[2] I’m not sure how Francis Fukuyama makes sense of this development.  Apparently, Hegelianism only takes you so far.  See Fukuyama, The End of History and the Last Man Standing (1992).  Still, he’s teaching at Chicago and I’m working at an educational wide spot in the road.  So,…

[3] The struggle from 1940 to 1990 between capitalist liberal democracy and autarkic dictatorships. 

[4] See: https://ourworldindata.org/covid-cases 

[5] For example, the European Union recently concluded an agreement with China to increase investment.  In doing so, they ignored a suggestion from Jake Sullivan, then President Biden’s national security advisor-designate that they should wait.