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/

My Weekly Reader 1 March 2017.

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In recent years, I have noticed–and lost track of–how many times a head-line in the New York Times describes something as “risky.”[1]  The word is meant to deprecate, rather than to laud the thing being described.  Clearly, both the editors and the typical Times reader are risk averse.  OK, so what?  So this.

Tyler Cowen, The Complacent Class: The Self-Defeating Quest for the American Dream (2017), argues that risk-taking and an openness to change “made America the world’s most productive an innovative economy.”  Now, however, the American economy appears much less innovative and aspirational.[2]  Start-ups as a share of American companies have fallen from 12-13 percent in the 1980s to 7-8 percent today; over the last eight years productivity growth has increased at about half the average rate for the period since 1945.  The former may be taken as a rough measure of entrepreneurialism; the latter may be taken as a rough measure of technological innovation.  Then there is the widespread prescription of mood-leveling anti-depressants.  Perhaps these blunt enthusiasm and engagement (as well as the impulse to drive your car into a telephone pole)?  Even Americans’ recreational drugs-of-choice disappoint.  We’ve gone from dropping acid and snorting coke to drifting away on an opioid cloud.

Cowen believes that Americans have shifted from “building a new and freer world” to “rearranging the pieces in the world we already have.”  To steal a metaphor from demography, Americans are becoming increasingly “endogamous” (marrying people inside the familiar social group) and decreasingly “exogamous” (marrying people outside the familiar social group).  That is, people are increasingly “matching” with others who share their own identity, whether it is politics, or residential location, or interior design.[3]  One way or another, risk-aversion and a fear of change have seized hold of the hearts of a broad swathe of Americans.

While Cowen offers some cautious suggestions about the future, the book may incite a closer examination of the past.  If Cowen is correct, then how did this risk-aversion come about?  In a sense, “morning in America” or no, the last forty years have been trying times.[4]  The oil shocks of the Seventies announced a long era of the disruption of the settled economy of the post-war period.  A whole set of important social relationships and institutional arrangements rested upon the prosperity yielded by that settled economy.

A whole string of unforeseen disasters revealed errors in human judgement.  Take a few recent examples.  The invasion of Iraq in 2003 seemed like a good idea to some people and a bad idea to other people, but no one anticipated that the Pentagon would mess-up the subsequent occupation.  In the first decade of the 21st Century, a housing bubble existed and banks were badly compromised, but only a few people perceived the danger and government regulators were not among them.  The “Deepwater Horizon” blow-out left some people agape at the realization that no one in the oil industry had ever asked what would happen if the blow-out preventer failed, as technology does with surprising frequency.[5]

Seen in this light, it is possible to understand why many people have come to adopt a stance of “first do no harm.”  However, it may be that such a stance does a different kind of harm.

[1] For a sampling, see: https://www.google.com/search?q=New+York+times+%22risky%22&ie=utf-8&oe=utf-8

[2] Matthew Rees, “Lazy Does It,” WSJ, 1 March 2017, p. A15.

[3] For another take on this issue, see: https://waroftheworldblog.com/2017/02/08/pret-a-penser/

[4] “Make America Great Again” is a frank acknowledgement of a feeling shared by many Americans.

[5] For example, Samsung phones catching fire or Takata air-bags deploying when there weren’t supposed to.

Small wars and demolition.

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North Korea has developed nuclear weapons.  Not really a problem.  FedEx doesn’t pick up in North Korea and the North Koreans don’t have a delivery system (Inter-Continental Ballistic Missile, ICBM).  Oh, wait, they just tested an intermediate range missile.  Well, that couldn’t reach the United States.  So, not really a problem, yet.  It could reach South Korea or Japan, however, and both are American allies.[1]  So, that’s a problem.

North Korea has been “carpet sanctioned” by the United Nations (U.N.) for its nuclear program and other things.[2]  Chinese support is North Korea’s only lifeline.  It seems to be widely agreed that Chinese pressure could bring an end to the regime.  According to President Trump, “China has control, absolute control, over North Korea.”  So, why doesn’t China topple the North Korean psychocracy?  It could be that North Korea isn’t any more trusting of China than it is of anyone else.  Perhaps lots of Chinese agents of influence and spies within the North Korean government keep ending up dead?  That could cut down the scope for action short of war.

Or, perhaps China sees North Korea as a desirable destabilizing force in the region.  China, The Peoples Republic, of has been intruding aggressively into the non-state waters of the South China Sea.  This program of reef-claiming, reef-enhancing, and reef-arming has put China at odds with Japan, Taiwan, the Philippines, and Vietnam.  In these alarming circumstances, North Korean aggression and the perception that China has a leash on North Korea may work to enhance China’s bargaining power.  In this context, China’s Foreigners Ministry has argued that the Americans should deal directly with North Korea.[3]

Meanwhile, the United States is at war with radical Islam.  In Afghanistan, the Taliban use safe-havens in Pakistan from which to wage war in their own country.  According to the local American military commander, the war is a “stalemate.”  A mere 8,400 American soldiers are trying to brace-up and train the Afghan army and police.  The Taliban seem able to learn how to fight a war without such trainers.

In Iraq and Syria, the Islamic State has been battered into fragments.  Again, a small number of American troops are serving as trainers and advisers for Syrian and Iraqi troops, and as spotters for air strikes.  Still, several political problems remain on front-burners.  First, ISIS will not long survive as an organized military force or a political community.  What will become of the survivors as they flee the cauldron?  Will they attempt to return home, there to continue the struggle?[4]  Then, the defeat of ISIS is a long way from the defeat of radical Islam.  What new insurgency will pop up, either immediately or in the future?

Second, much of the heavy lifting in both Syria and Iraq has been done by Kurds.  Over the long-term, American support for the Kurds challenges the national integrity of Syria, Iraq, and Turkey.  The Russian-backed Assad regime in Syria may be in no position—or no mood—to carry the fight to ISIS.  An Iraq riven by sectarian conflicts may find itself in the same boat.  That would leave Turkey—a NATO ally of the United States—as the chief opponent of Kurdish nationalism.  That, in turn, will create a dilemma for American diplomacy.  Will America back the Kurds[5] or the Turks?  In either case, the Russians will find an opening.

[1] “America’s Military Challenges,” The Week, 3 March 2017, p. 11.

[2] That doesn’t seem to have done the trick.

[3] The sloppy murder of the half-brother of the North Korean dictator Kim Jong-Un in a Kuala Lumpur airport and the subsequent hasty execution of five North Korean intelligence officers may complicate matters for China.

[4] Or, alternatively, take up the rocker and thrill younger generations with their tales of daring-do?

[5] “Gratitude has a short half-life”—Thomas Harris, The Silence of the Lambs.

Memoirs of the Addams Administration 8.

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From the New Deal through the Seventies, the “closed shop” provided a major source of union membership.[1] Union membership has declined from 20.1 percent of workers in 1983 to 10.7 percent in 2016.  Now, a majority (28/50) of states are “right to work” states where compulsory membership in unions is outlawed.[2]  President Trump has further undermined union sympathy by calling for heavy spending on long-overdue infrastructure projects, by promising to revise trade agreements, and by adopting a stance of “America First.”  All these are things that Democrats or Republicans might have done, but did not do, in years gone by.

There are an estimated 11 million illegal immigrants in the United States.[3]  The vast majority are Mexicans who fled their failing-state homeland for the opportunity to work in the United States.  They perform many tasks—and perform them well–that other Americans do not desire to perform.  To put it mildly.  That reality argues for allowing the illegals to remain as legal workers, if not as candidates for citizenship.  On the other hand, the obvious presence of the illegals drives a lot of Americans wild.  OK, the illegals cluster in the places—farm fields in Georgia or Arizona, hardware store parking lots, landscaping businesses, the kitchens of restaurants, faculty office buildings—or at the times—early in the morning or late at night–where high-income, highly educated people would not notice them.  Some native-born Americans feel that their culture is being swamped by a foreign culture.  Some of them think that the laws are being flouted by Republican businessmen avid for cheap labor and by Democratic politicians—who insist upon a “path to citizenship” for the “undocumented”–avid for potential voters.  Both of the latter headings play into a feeling that the system is rigged by the “elites” for their own benefit.  Senator Bernie Sanders caught part of that feeling.  That feeling is part of what brought Donald Trump to the White House.

The Republicans have embraced “repeal and replace” for the Affordable Care Act.  Replace with what?  That’s where things are getting tricky.  Republicans who dare to think about the nuts and bolts favor market-based solutions.  They believe that “consumers” who approach medical care as a “commodity” will be bargain-hunters.[4]  That, in turn, will hold health care costs in check.  How to make people into cost-conscious consumers?  At the moment, an expanded system of Health Savings Accounts (HSAs) is being much caressed.  The HSAs allow people to divert pre-tax income to an individual fund that can be used to pay for things like deductibles and co-pays.  Usually, such HSAs run with a high-deductible health insurance policy.  About 30 percent of employers now offer high deductible + HSA insurance to their workers.  Republicans propose to raise the current caps on annual contributions ($3,400 individual/$6,750 family) to at least the maximums set by the insurance policy for out-of-pocket and deductible costs.

Given Americans’ reluctance to save for predictable calamities like old age, it’s a little much to expect them to save for unpredictable calamities like medical problems.[5]  One solution might be to make such contributions mandatory, or at least require an Opt-Out decision.   Thus, even Republicans are being driven by realities toward a form of the nanny-state.

[1] See: https://waroftheworldblog.com/2015/03/02/american-union-stay-away-from-me-uh/

[2] “Issue of the week: Labor’s diminishing clout,” The Week, 3 March 2017, p. 38.  In “right to work” states, employees are not required to pay union dues or belong to a union to get a job.

[3] “Deportations: Immigration crackdown begins,” The Week, 3 March 2017, p. 16.

[4] “Health insurance: Can HSAs replace Obamacare?” The Week, 3 March 2017, p. 36.

[5] Half of Americans have no retirement account.

Memoirs of the Addams Administration 7.

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Democrats are unhappy with the outcome of the November 2016 presidential election.  It is easy to understand why.  With the House and the Senate already in Republican hands, winning the White House offered the only way for Democrats to check potential Republican legislation and to prevent Republican control of judicial appointments that will control the interpretation of laws for a generation.  So, their fallback positions have been to allege that Trump is an authoritarian and to raise the possibility of impeachment.[1]  Democrats have been quick to characterize President Trump’s behavior as “crazy.”[2]

In a recent Twitter post, President Donald Trump called the mainstream media (MSM) “the enemy of the people!”  One journalist quickly analogized Trump to Hitler, Mao, and Lenin, who all used the same phrase.[3]  (He left out the noted Scandinavian tyrant Henrik Ibsen, who seems to have originated the phrase.)  Another journalist argued that Trump seeks a country where “there is no such thing as truth.”  Senator John McCain (R-Arizona), who has eclipsed David Brooks as the Republican-Democrats-love-to-quote, said that attacking the press is “how dictatorships get started.”  Picking up on Senator McCain’s line, one journalist argued that President Trump’s long-running and now-escalated criticisms of the MSM constitute “something new and potentially dangerous for our democracy.”[4]  How so?  Is journalism a bulwark of democracy that—like Joe Friday—is committed to placing “just the facts” before voters?  Are journalists going to bend before the broken wind of criticism emerging from the White House?  Is the MSM going to lose credibility in the eyes of the Americans who have been fleeing from the MSM’s print and digital formats in immense numbers for two decades?  A recent Gallup Poll reported that less than one-third (32 percent) of Americans have “a great deal” or a “fair” amount of confidence in the media.  This seems to be the lowest level since whenever they began tracking this issue.[5]

President Trump added Lieutenant General H.R. McMaster to his team as National Security Adviser to replace Michael Flynn.  McMaster is a highly-regarded-in-some-quarters combat commander, counter-insurgency expert, strategist, and military intellectual.[6]  Although the New York Times has castigated the Trump administration as “packed with radicals and amateurs,” so far as national security goes, the reality is different.  McMaster fits into a larger pattern.  Secretary of Defense James Mattis, Secretary of Homeland Security John Kelly, and Secretary of State Rex Tillerson were all lauded for their achievements in their previous fields of endeavor. [7]  Mattis, Kelly, Tillerson, and McMaster have all distanced themselves from policies proclaimed by President Trump.[8]  One issue here is whether the settled culture of official Washington can tolerate non-traditional experts—military officers and business executives—as leaders of important agencies.  A second issue is whether only non-traditional experts—military officers and business executives—can make Washington work.

[1] Impeachment would put the conventional—but extremely conservative—Vice President Mike Pence into office.  I’m not sure that it would alter conditions for the better for Democrats.  So, I’m not sure that they are thinking about things in a clear-headed way.

[2] “Trump: the sanity question,” The Week, 3 March 2017, p. 16.  In any event, see: https://waroftheworldblog.com/2017/02/17/bug-eyed-with-fear-and-vengeance/?iframe=true&theme_preview=true

[3] At some point, an intrepid researcher is going to have to go back to figure out where the name-calling originated.  Neither side seems able to achieve a degree of objectivity on the relationship.  See: “The War of the Roses” (1989, dir. Danny DeVito).

[4] “The press: Are journalists ‘the enemy of the people’?’ The Week, 3 March 2017, p. 6.

[5] “Poll Watch,” The Week, 3 March 2017, p. 17.

[6] To declare a personal interest, I once heard General McMaster speak.  I thought at the time—it was a juvenile response—that I would follow him into the mouth of Hell.  I have not changed my position.  See also: Thomas Ricks, The Generals: American Military Command from World War II to Today (2013) on the tribes within the army.

[7] Really, who would you rather have negotiating on behalf of the United States, the former head of a ferocious oil company or the guy in the pink tie?  See: http://www.bourncreative.com/meaning-of-the-color-pink/

[8] As has Secretary of Education Betsy DeVos.  King Frederick the Great of Prussia once proclaimed that “I and my people have come to an agreement.  They may say what they want and I may do what I want.”  What if the reverse situation prevails here?