War Movies: “Anthropoid” (2016).

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If you want a look at a true case of “state-sponsored terrorism” and at one approach to counter-terrorism, watch “Anthropoid” (dir. Sean Ellis, 2016).  It gives a compelling view of the May 1942 assassination of Reinhard Heydrich (the head of the Reich Main Security Office and also “Reich Protector of Bohemia and Moravia”[1]) and of what followed. 

In the movie, the motive for the assassination is the desire on the part of the Czech government-in-exile to inspire more resistance in the Nazi-occupied country.  The team of killers (Josef Gabcik, Jan Kubis[2]) is air-dropped at night; overcome difficulties to reach Prague; find that the Germans have wrecked the resistance movement and they must rely upon a small group of locals; eventually, they are joined by some other parachutists who had been dropped later; and they improvise an attack on Heydrich.  The German is mortally wounded; a gigantic manhunt begins; the Germans track the parachutists to a Prague church; and one hell of a gunfight ensues.  The few surviving parachutists kill themselves rather than be taken alive. 

The movie strives for realism: it was filmed in Prague and mostly on the sites where events occurred; the pervasive fear of the Germans among the Czechs is brought out, not minimized; the semi-botched assassination is clearly portrayed; and the ferocious Nazi manhunt should leave anyone squirming. 

Still, the movie simplifies or omits some things.  First, it begins with Gabcik and Kubis on the ground in a Czech forest.  The movie elides the origins of “Operation Anthropoid.”  In fact, Eduard Benes, the leader of the Czech government-in-exile, feared that the West would sell out his country after the war if the Czechs didn’t show some fight.  The British and French had surrendered the Sudetenland to Hitler at Munich (September 1938) and had shrugged their shoulders when Germany occupied the rest of the country (March 1939).  Several thousand Czech soldiers had found their way to the West before the Second World War began (September 1939), but this wasn’t much of a contribution.  Internal resistance had mostly been the work of the Czech Communist Party after Germany attacked the Soviet Union (June 1941).  If the Germans lost the war, the Communists might claim a moral right to rule as the only true “resisters.”   A dramatic act might arouse non-Communist resistance, but it would surely make the government-in-exile appear to be doing something.  So, kill Heydrich now for a distant gain.    

Second, Heydrich had crushed the resistance by a combination of carrot and stick.  He had good material.  Few Czechs wanted to run risks for the sake of the Western powers that had betrayed them before.  Wages and working conditions in factories were improved at the same time that Gestapo penetration agents combatted the Communist underground. 

Third, the Germans unleashed a savage response to the attack on Heydrich.  Mass arrests; right to torture in the pursuit of some clue; massacres of villages on the mere rumor that someone had sheltered the killers.  In a society where few people actually backed resistance, this worked.  Finally, one of the parachutists betrayed someone else to save his own family; and the betrayed finally gave up the hiding place of the other parachutists. 

“The Battle of Algiers” openly confronts truths that “Anthropoid” skims over. 

[1] Also the driving force behind the implementation of the Holocaust.  On this, see: “Conspiracy” (dir. Frank Pierson, 2001), with Kenneth Branagh as Heydrich and Stanley Tucci as Adolf Eichmann. 

[2] Played by Cillian Murphy and Jamie Dornan respectively. 

China Tariff Shock.

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            Once upon a time, people harbored high hopes for post-Mao China.[1]  The country adopted “market socialism,” invited Western capital and experts to facilitate its transition to participant in the global economy, and sent many of its own best and brightest to study and work in Western countries.  Employing a very simplified understanding of the West’s own history, people conjectured that a market economy would grow, enrich, and make assertive a middle class that would insist upon a more responsive government.  China would “Westernize.” 

            To accelerate this process, in 2001, China won admission to the World Trade Organization (W.T.O, successor to the General Agreement on Tariffs and Trade, G.A.T.T).  “It did not have the effect that Long Shanks planned.”[2]  Instead, for ten years, cheap Chinese goods deluged foreign markets.  In the United States, 2.4 million jobs were lost, a million of them factory jobs.  All this happened between 2001 and 2011, and it kept happening at a slower pace afterward.  In 2019, China earned a trade surplus with the rest of the world of more than $500 billion.  Nobody did anything about it.  Why not?  Well, the price of many consumer goods fell.  Consumption increased for many people.  The number of service jobs increased, so lots of people weren’t working in factories, “dark, satanic” or otherwise.  “We’re doing better, right?”[3] 

            Since 2020, China has pursued a major export offensive on top of this already large volume of exports.  It has done so by subsidizing manufacturers of its already low-cost products to the tune of $1.9 trillion over four years. 

In one sense, the offensive has succeeded: in 2024 it earned a surplus of almost $1 trillion.  Since 2013, China has deployed much of its new-found wealth to entangle other counties in a complicated relationship that makes tariff retaliation against China difficult.[4]

In another sense, the offensive has failed: it has aroused international alarm and resistance.  Beyond the United States, the affected industries range from Indonesian textile factories to the German auto industry.  The first phase of the counter-attack against China’s trade offensive appeared in President Donald Trump’s first term with tariffs on China.  These were retained by the Biden administration.  The Chinese responded by moving some of its production “off-shore’ to other countries like Vietnam and Thailand, Turkey and Hungary, and—of course—Mexico.[5]  Trump’s second term began with new and gigantic tariffs on China, but also on many other countries. 

The American tariffs close off an estimated $400 billion in sales to the American market.  If China can’t cut back production, those goods will have to go elsewhere.  Other countries have begun to follow Trump’s lead.  They are hampered by those previously-established economic relationships with China. 

            Trump’s tariff barrage is best understood not as the start of a “Trade War.”  It’s best understood as a counter-attack in a trade war that has already been going on.  It’s a trade war which the United States and many other countries have been losing.  Through not fighting back. 

[1] “China Shock 2.0” The Week, 25 April 2025, p. 11. 

[2] Reference to another Mel Gibson historical wish-it-had-been-this-way mess. 

[3] To belabor the obvious, both the job losses and the failure of solidarity eventually had large political effects. 

[4] See: Belt and Road Initiative – Wikipedia 

[5] See: How Chinese firms are using Mexico as a backdoor to the US 

Sites of Disorder.

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N.C. Wyeth, Gunfight in a Western Saloon, 1916. 

            My Old Man comes home from the war.  Gets a job working in the purchasing department of a Standard Oil office in Seattle.  That palls after a few years, so he quits, goes to Sun Valley, gets work in a resort restaurant, and spends the rest of the time skiing.  Lives cheap and saves money.  When the season ends, he takes the long route back to Seattle.[1]  Probably goes to Las Vegas, Los Angeles, and San Francisco.  He liked to play poker and he was good at it, so places with gambling appealed to him. 

            One time, he’s in San Francisco.  Heard about a game upstairs above a restaurant in Chinatown.  Round-eyes are welcome.  So he goes.  Old building, with authentic versions of all the BS decorations you see in modern Chinatowns.  Wide double doors next to the entrance to the restaurant.  An equally wide wooden staircase leading up to a landing, then the staircase turned right to the “gambling den.”  Landing is decorated with this big ornamental Chinese grill on the wall facing down the first set of stairs to the front doors.  He’s hustling up the stairs, glances to his left at the grill.  There’s a little room behind the grill.  Sitting in a chair looking out is this big Chinese guy.  He’s got a sawed-off double barrel shotgun across his lap.  He’s a Loss Prevention Specialist. 

Kind of reassuring.  Private gambling establishments weren’t legal.  Cops were paid to look the other way, but you couldn’t call the cops if someone ripped you off.  (Same with prostitution and drugs.)  Lots of cash on hand, between the house and the gamblers.  So, if a bunch of guys in overcoats and fedoras came bursting through the front door and hurried up the steps with their hands in their coat pockets, they were liable to catch a double load of double-O.[2] 

Another time he’s in a bar in Seattle, having a drink.  Not a really elegant place, so to speak.[3]  One of the other patrons starts to get quarrelsome.  Bouncer appears, grabs up the guy, and shoves him out of the door.  Tranquility returns.  Later, there’s a knock at the door (that kind of place) and the bouncer goes to open the door.  The previously-discharged patron has returned.  Bouncer slams the door shut, but the guy already has one arm inside the door.  He’s holding a .45-cal. Colt semi-automatic pistol.[4]  He can’t get in—or out, come to that—because the bouncer is putting all his weight against the door.  So he fires off the entire magazine until the slide locks back.  I forget what my old man told me happened next.  Thing is, everybody inside the bar was on the floor from the first instant they saw the gun.  Trying to get behind something solid. 

In any case, “places of ill repute” got that way, in part, because they were attended by “disorder.”  Wyeth is giving us a close-up view of just how bad bad behavior could get. 

[1] Where he picks up work driving a cab and, later, teaching people to drive.

[2] Best I understand it, each 12-gauge shotgun shell loaded with buck shot contains twelve 30-cal. balls.  For a view of the effects, there’s a posthumous photograph of the outlaw Bill Doolin at Doolinbody – Bill Doolin – Wikipedia   

[3] I could have said “if you know what I mean.”  However, even I don’t know what I mean exactly because middle-class people these days don’t have any real idea of what a “dive bar” of the old kind was like.  Well, maybe you do, even if I don’t.  There’s a place down the street, a hole in the wall place.  Sells $3 pints of beer.  However, I heard one co-ed say “After classes this afternoon, I’m going to Milo’s.”  So, not the sort of place that would appear in a Raymond Chandler novel.  And Chandler had drunk in most kinds of places.  Like Joseph Roth. 

[4] Things were all over the place after the war.  Soldiers, especially officers, declared them “lost in battle.”  William Manchester, the writer, threw his into a river during the late Sixties when he grew horrified by senseless violence.  My father-in-law had his from the Navy.  One time his wife wakes him up at night, says “Alec, I think someone is looking in the window.”  He rolls over and reaches under the bed to where he kept the gun.  Fired a shot through the window, then went back to sleep.  Defense Department sold off tons of them as “War Surplus.”  Same for the M-1 carbine.  Gun dealers advertised it as a “light sporting rifle.”  Somebody, nobody knows for sure who, shot Ben Siegel in Hollywood.  Bunch of times.  With a guy like that, you’d want to be sure.  Then there were the Lugers. 

Diary of the Second Addams Administration 17.

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            Has the post-Second World War period of ever-increasing “globalization”[1] come to an end?  If it has, then what will replace it?  Will it be a return to widespread “protectionism”?[2]  Will it be a restricted and managed globalization within large economic blocs protected by a high common external tariff? 

            Some will attribute the troubled state of international affairs to President Donald Trump’s rash and unsteady imposition of tariffs on anyone who crosses his line of sight.  In this view, “more trade is better, especially for the United States.”[3]  Trump’s tariffs will push up prices for consumers while slowing down economic activity.  It will make it “more costly for U.S. manufacturers to source vital parts and machinery.”  The result may be “stagflation” (stagnation plus inflation), such as what beset America in the late 1970s and early 1980s.[4]

One could also attribute the smoldering crisis to a long-running combination of Chinese aggression with American complacency. 

            Chinese aggression should and does strike fear in the hearts of men.  China has used hard work, the mobilization of national talents, the repression of consumption below what might have been, the conversion of a vast population of under-employed peasants turned into tireless industrial workers, borrowed Western expertise, intellectual property theft on a grand scale, manipulation of the international trade regime, the repression of individual liberty by an autocratic state, and appeals to national pride.  Economic power has been transformed into military and diplomatic power.  China has begun to throw its weight around in the Far East and beyond.  The goal seems to be to evict the United States from the Western Pacific.  That would be a first step to establishing Chinese hegemony over South Korea, Japan, Taiwan, the Philippines, and Vietnam.[5]  On the other hand, there’s a particularly American character to China’s policy.  As the political philosopher George Washington Plunkitt once said, “I seen my opportunities and I took ‘em.”[6]   

            The manifestations of American complacency appear in the triumphalism following victory in the Cold War;[7] the misinterpretation of Francis Fukuyama’s The End of History and the Last Man Standing; the combination of a long decrease in defense spending to yield a “Peace Dividend”; and the cornucopia of material benefits unleashed by ever more free trade.  Toy shops and coffee shops and retirement savings will now suffer.  Nobody wants discomfort.    

[1] Defined as progressive rounds of reducing barriers to trade, finance, and migration. 

[2] Defined as individual nations or blocs of nations raising up tariffs and non-tariff barriers to trade, combined with restrictions on the movement of capital and people. 

[3] Republican Yoda Karl Rove in the Wall Street Journal, quoted in “Global order: Goodbye to the age of free trade?”, The Week, 18 April 2025, p. 34. 

[4] Tom Orlik in Bloomberg, quoted in ibid. 

[5] Strategists refer to Japan, Taiwan, and the Philippines as the “First Island Chain.”  South Korea and Vietnam can be considered the mainland anchors of this chain.  Together, they provide the geographic positions from which to limit Chinese power projection.  The loss of that island chain to Chinese domination would cripple both American trade relations with those countries and power projection.  For some idea of how the United States reached this advantageous position, see Evan Mawdsley, Supremacy at Seas: Task Force 58 and the Central Pacific Victory (2025). 

[6] “I Seen My Opportunities and I Took ‘Em.”: An Old-Time Pol Preaches Honest Graft 

[7] Queen – We Are The Champions (Live Aid 1985) 

Diary of the Second Addams Administration 16.

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            The United States and China continued hammering each other in mid-April 2025.  Both countries raised their tariffs on each other (the US to 145 percent and China to 125 percent).  China barred is airlines from taking delivery of Boeing jets and its rare-earth and magnet producers from exporting to the United States; while the United States tightened the screws on AI technology exports to China.  The United States showed some interest in negotiating, but China wouldn’t bite.[1] 

            The incoherence of the Trump administration’s tariff policy with regard to the rest of the world flooded into the China policy.  President Donald Trump said that there would be no “carve-outs,” then crawfished again.  There would be only a 20 percent tariff on cell phones, laptops, and modems.  Then he crawfished again: new tariffs on electronics and semi-conductors would soon be announced. 

            Regardless of their incoherence, the main point in the eyes of some critics lay in the pain that they inflict on ordinary Americans.  Tariffs will force up prices and disrupt supply-chains.  “Mom-and-pop shops that rely on Chinese imports” will suffer.[2]  “Mom-and-Pop!  Their lives of hard work and service to the local community wrecked by Trump’s tariffs!”  Well, actually, most of the Mom-and-Pop stores got destroyed decades ago by Walmart and Amazon.  This is just evoking a nostalgic image for lack of a good argument. 

            Other critics warned that the tariffs will just make China mad.  It will retaliate in ways that hurt Americans and America.  China can restrict exports (as with rare earths and high-end magnets); China can blacklist American firms, driving down their profits and the value of their stocks; China could sell off a part or all of its $760 billion in U.S. Treasury bonds. 

            They aren’t drawing the logical conclusion.  First, we’re very vulnerable to Chinese pressure and, to some degree, dependent upon Chinese good will to fend off disaster.  So we should make nice?  How about we remember the old adage that “If I owe you $100, then I have a problem; if I owe you $1 million then you have a problem”?    

            Rare earths and magnets are described as “critical to manufacturing everything from cars and planes to drones and weapons systems.” So we are dependent on our chief rival for these goods?  In case of open conflict, or even just tense bargaining over important issues, China could boycott their export to the United States?  With what effect on our ability to produce “cars and planes… drones and weapons systems”?  OK, suppose we got into a dispute not with China, but with China’s ally Russia?  I know that’s far-fetched, but give me some rope here.  Say Russia attacked Ukraine.  Would fear of China withholding key resources cause us to support Ukraine less fully than we could do and might want to do?  In any case, would it be a good idea to try to regain our technology industrial independence? 

            Second, the United States isn’t really hammering China with tariffs.  Almost alone and in his usual rabbity fashion, Donald Trump is hammering China.  Lots of right-thinking people are trying to distance themselves from a president engaged in a trade war with our deadly enemy in economy and international relations.  Who do you think Taiwan, South Korea, Japan, and Australia would want to win that one, if they have to choose?  Who would you choose? 

[1] “Trade war with China threatens U.S. economy,” The Week, 25 April 2025, p. 5.    

[2] New York Post, quoted in “Trade war with China threatens U.S. economy,” The Week, 25 April 2025, p. 5. 

Diary of the Second Addams Administration 15.

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            Since the end of the Second World War, the United States has led the way in the construction of an international economic system based on “relatively free trade bound to relatively predictable governance and the rule of law.”[1]  Along the way, according to some critiques, America’s trading partners have exploited the system to America’s disadvantage.  Now, President Donald Trump has alleged that many of America’s trading partners engage in “unfair trade practices.”[2]  In early April 2025, Trump imposed a 10 percent basic tariff on all imports, plus additional tariffs as high as 50 percent on other countries.[3] 

            The reaction to this announcement got ugly: the stock market lost $10 trillion; China imposed a retaliatory 84 percent tariff on imports from America; and all sorts of people howled.  JPMorgan said the tariffs would probably cause a recession; and Lawrence Summers, the former Secretary of the Treasury and former President of Harvard University known for giving it with the bark on, predicted such a recession would cost 2 million Americans their jobs.  Other critics argued that the tariffs would dismantle the American-led international economic system.  Who will profit?  China will profit, because all the countries bruised by American tariffs and incoherence might look to China as a new leader.  Xi Jinping “is unlikely to miss the priceless opportunity Trump has given him.”  Really?  China will abandon its long-running policy of repressing domestic consumption and conquering foreign markets in order to replace the Americans as the world’s leading consumer-nation? 

            Then Trump abruptly crawfished, suspending the implementation of his “additional” tariffs on most countries for 90 days.  For these countries, the administration was willing to negotiate, if they wanted to do so.  However, he jacked up the tariff on Chinese goods to 125 percent in retaliation for China’s retaliation for Trump’s initial tariff increase.  Treasury Secretary Scott Bessent said that trade negotiations had been the plan all along.[4]

            Critics on left and right belabored the incoherence of the tariffs.  Acknowledging that criticism to be on-target still leaves a question.[5]  Is it useful to distinguish between Trump’s tariffs policy toward China and Trump’s tariff policy toward the rest of the world?  Trump has flip-flopped on everyone except China.  With China, he has doubled-down.  That country produces many goods that were invented in America and are important consumer goods, like cell and computers. 

What is wrong-headed about Trump’s tariff war is that he has not offered a coherent plan to rally the rest of the world against the Chinese export giant while negotiating tariff equality with America’s other trading partners.  China has been steam-rolling many countries.  There is a lot of fear and resentment directed at China abroad in the world.  The makings are there for a better American-led system. 

[1] Tom Rogan, Washington Examiner, quoted in “Trump dials down tariffs, but not for China,” The Week, 18 April 2025, p. 4.  On the institutional structure of the American-led, rules-based order, see: Bretton Woods system – Wikipedia; General Agreement on Tariffs and Trade – Wikipedia ; and World Trade Organization – Wikipedia 

[2] If he means that other countries impose higher tariffs on American goods than America imposes on goods from those countries and/or they raise up other “non-tariff barriers,” then he’s pretty much right. 

[3] “Trump dials down tariffs, but not for China,” The Week, 18 April 2025, p. 4. 

[4] Pee-wee’s Big Adventure (3/10) Movie CLIP – I Meant to Do That (1985) HD 

[5] I’m willing to stipulate that it is an ignorant, probably stupid, question.  But I want to ask it all the same. 

Not the Country We Once Were 2.

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            Why are bond-holders retreating from U.S. Treasury bonds now?  The huge deficits and growing national debt have been around for a while.  The willingness and ability of the United States government to pay the interest on the debt is no different now than it was a year ago or—in all likelihood—a year from now.  How is the sell-off to be explained? 

            Peter Goodman of the New York Times,[1] has raked up a variety of explanations.  They require some interrogation.[2]  Goodman doesn’t necessarily connect the explanations, but they can be read to point in one direction. 

“An erosion of faith in the governance of the world’s largest economy appears at least in part responsible for the sharp sell-off in the bond market in recent days.”  President Trump’s tariffs, he reports, have “shaken faith in that basic proposition [that the US will properly manage the global environment and maintain its creditworthiness], challenging the previously unimpeachable solidity of U.S. government debt.”  Goodman quotes Professor Mark Blyth of Brown University for support.  “The whole world has decided that the U.S. government has no idea what it is doing.”  He adds that “[o]ne reason [for the bond sell-off] appears to be an effective downgrading of the American place in global finance, from a safe haven to a source of volatility and danger.”  Purportedly, the tariff war with China, in particular, creates the danger of a global recession and undermines the role of the U.S. as the manager of the world’s “peace and prosperity.” 

I can believe the first half of this, but the second half is less credible.  Nothing fiscal is threatening the creditworthiness of the United States right now.  Why do tariffs disturb the bond market?  Similarly, bonds are commonly regarded as a hedge against stock fluctuations and in recession.  So, fear of a recession is making people sell bonds, rather than buy them? 

Goodman mentions other possible factors:

“Hedge funds and other financial players have sold holdings as they exit a complex trade that seeks to profit from the gap between existing prices and bets on their future value.”  This sounds very much like “financial players” are dumping bonds now to force the government to raise the yield on bonds.[3]  Today’s sellers will then buy back the bonds at a higher rate tomorrow.  Similarly, “[s]ome fear that China’s central bank [which holds $761 billion] in U.S. Treasury debt, could be selling as a form of retaliation for American tariffs.” 

What are the effects of investors selling bonds now?  In early April 2025, “the yield on the closely watched 10-year Treasury bond soared to 4.5 percent from below 4 percent—the most pronounced spike in nearly a quarter century.”  Raising interest rates to attract borrowers “tends to push up interest rates throughout the economy, increasing payments for mortgages, car loans and credit card balances.”  This will hurt ordinary Americans.  They will howl. 

            Are Wall Street and China pressuring President Trump to lay off his incoherent tariff policy?  If so, is that who we want to surrender to?  It won’t be the last time. 

[1] Peter Goodman, “Trump Tariffs Shake Faith In the Safety of U.S. Bonds,” NYT, 14 April 2015.

[2] Pin on The Far Side 

[3] “Speculators have been unloading bonds in response to losses from plunging stock markets, seeking to amass cash to stave off insolvency.”  Does this mean that other “financial players” are in danger of getting gored as collateral damage? 

Not the Country We Once Were 1.

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For quite some time now, United States government bonds were a global safe-haven when conditions got rocky somewhere else in the world.  This rested upon the belief that the US government could and would pay its IOUs.[1]  It has been easy for the United States to find lenders willing to buy Treasury bonds at lower rates of interest than might otherwise have applied. 

The consequences have been good or bad depending on how you look at it.  Various benefits for the United States flowed from the belief in the reliability of American public credit.  For one thing, the willingness to lend has eased the cost of the big deficits and growing national debt.  Americans have not had to strike a balance between taxes and spending. 

Furthermore, for those individuals who rely upon credit purchases, buying a car, or a house, or a lot of stuff at Walmart has been cheaper.  The reverse of the medal here is that all those foreigners who wanted dollar-denominated bonds raised the value of the dollar relative to the currencies of those other countries.  These “strong” dollars made imports cheapish.  This, too, eased the cost of consumption.[2]  OK, where did these foreigners get the dollars to buy Treasury bonds?  They got them by selling cheap goods to Americans.  Then they buy US Treasury bonds, which raises the value of the dollar, which makes their goods cheaper for Americans and American goods more expensive for everyone. 

Along the way, all those cheap imports first undercut, then destroyed, much of America’s manufacturing base.  If all it had done was wreck the American production of teddy-bears, we could live with that.  However, many of the goods now produced abroad are things like pharmaceuticals, computers, information/communications technology, and automobiles.  Since joining the World Trade Organization in 2000, China has been the main predator stripping the bones of the non-financial and non-entertainment sectors of the American economy.[3] 

As the national borrowing has increased, the size of the debt has grown to very high levels.  The debt can be regarded as solid so long as the United States has the will and the means to pay the interest, at least, on it.  The share of the interest payments in government spending has grown in recent years.  Partly, this reflects the sheer volume of the debt; partly, it reflects the higher interest rates charged to control the inflation. 

However, what if the debt or the interest rate on the debt grow so large, that the interest payment exceeds what Americans are willing and able to pay?  This has been a continual and growing theoretical concern among economists and investors for many years.  People will lend so long as they believe that they will be paid back.[4]  If they lose confidence, then they will try to get rid of their government I.O.U.s.[5]  (I don’t recall hearing any of this discussed in presidential debates.)  It is possible that the recent “retreat” from bonds is the first tremor of an earthquake.    

Or perhaps not.  A large share of the small group controlling global business and financial resources (countries, companies, banks) really dislike the current American economic policies.  So is also possible that this is just a warning shot.  Will people attend to the warning? 

[1] Peter Goodman, “Trump Tariffs Shake Faith In the Safety of U.S. Bonds,” NYT, 14 April 2015. 

[2] Just for fun, go through all your stuff, from underwear to lap-tops and make a list of where everything comes from. 

[3] How do you fight a war with fictional “super heroes” dressed in Spandex and piles of money? 

[4] They will lend even when they suspect that they will not be paid back in full.  Under these conditions, they charge a “risk premium’ in the form of higher interest rates still.  Argentina, a notorious bad bet, pays high rates. 

[5] Maybe something like this.  Fire sale – Margin Call (2011) 

Slowly for a long time, then all of a sudden.

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            The newspapers are reporting large-scale decline in sales of United States Treasury bonds.  It is believed that “investors” are losing confidence in the United States as a world economic leader. 

            First, who is doing the selling?  Is it financial firms, like banks and hedge funds?  Is it the central banks of the targets of President Trump’s tariffs (the Peoples’ Republic of China, the European Union)?  There is plenty of evidence that all of these entities are opposed to the tariff policy.  Are they trying to exert pressure on the United States to alter its policy?  Is the government of the United States going to have to yield to this pressure? 

            Second, the government of the United States is in a precarious financial position.  The balance between revenue and spending has been out of whack for quite some time, although it got dramatically worse with the arrival of Covid.  The interest on the national debt has become the third largest government outlay, shouldering its way past military spending. 

            The reason to consider this issue is because the falling market for Treasury paper—like what we are now seeing—is how a financial crash could begin. 

An Episode of Appeasement: The Anglo-German Naval Pact, June 1935 4.

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            Having decided to accept the German proposal for talks on a naval agreement, the government spent the next few months quietly setting the stage.  First, in January 1935, the Foreign Secretary, Sir John Simon, informed King George V that an agreement might help get Germany back into “the comity of nations.”  In February 1935, Prime Minister Ramsay MacDonald met with the then very anti-German French Prime Minister Pierre Laval.  The “communique” afterward expressed their hope that talks with Germany would lead to enhanced security in Europe.  In late March 1935, Simon had a preliminary meeting with Hitler in Berlin.  The German dictator told Simon that he was done with the arms limitations imposed by Versailles Treaty.  Germany would expand its army from the 100,000-man limit imposed by Versailles to 500,000 men, begin conscription, and build an air force.  However, Hitler would make commitments to Britain to limit naval forces.  Hitler also announced that Joachim von Ribbentrop, a Nazi schemer, rather than an experienced diplomat, would lead the German delegation in such talks. 

Yet no talks began.  The British foreign policy-makers were divided in their attitudes.  Sir Robert Vansittart, the chief British diplomat, believed that Hitler meant to conquer all of Europe, so the best solution was a strong alliance with France, Italy, and even the Soviet Union if necessary.  Anthony Eden, the second-ranking political figure at the Foreign Office, wanted British commitment to Western Europe, but would abandon Eastern Europe; he also put more stock in the League of Nations than in an Italian alliance.  Sir John Simon, the Foreign Secretary, had no views of his own and went where Vansittart pushed. 

The British were busy negotiating the “Stresa Pact” with France and Italy.  Signed on 14 April 1935, it committed Britain, France, and Italy to resist any future German violations of the Versailles Treaty.  The Stresa Pact” could not be squared with a bilateral Anglo-German agreement to violate the naval limits in the treaty. 

At the end of April 1935, the Germans prodded the British by informing them that they had launched new U-Boats and had begun construction of 12 more.  They meant “We’re going ahead; with or without you.”  This got the British moving.  On 29 April 1935, Simon told the House of Commons that Germany had begun building U-Boats; on 2 May 1935, Prime Minister MacDonald told the Commons that he would seek a naval agreement with Germany. 

Things moved fast.  Ribbentrop came to London on 2 June 1935.  On 4 June, he told the British that Germany would accept the 35 percent ratio, but nothing less, and that the British had a few days to decide.  Simon, the Foreign Secretary, walked out in answer to such rude behavior.  Stil, on 5 June the government accepted Ribbentrop’s proposal.  Two days later, Simon left the Foreign Office and Sir Samuel Hoare became Foreign Secretary.  During further discussions, the Germans accepted the British requirement that the German fleet be symmetrical with the Royal Navy.  The two parties signed the completed agreement on 18 June 1935. 

The Anglo-German agreement enraged the French.  Britain had not consulted the French or the Italians.  The agreement of the British and Germans to “legalize” a violation of the disarmament clauses of the Versailles treaty could not be squared with the “Stresa Pact.”  It appeared to fall into the tradition of “Perfidious Albion.”  It’s hard to form an alliance against a common danger when the parties don’t trust each other.  That’s part of the story of appeasement.