Month: April 2016

Our country being what it is, we have always pretended that we share values with the Saudi regime, but we don’t.  The fact is that our relationship has been based on two tangible things:  our mutual interest in keeping the oil flowing; and our desire for political stability in the area.

Both of these are under threat.  The Saudis no longer have the kind of market power that they did, say, ten years ago.  And, to make matters worse, the Saudis are no longer a force for stability; their foreign policy has become much more aggressive without the means to implement it, unless the US is willing to serve as the tip of the Sunni spear.

It is clear that President Obama wants to free us of our dependence on this relationship, and to put us in a position where we have the ability to cooperate with both the Saudis and the Iranians to maintain regional stability on a case-by-case basis.  Iraq alone makes this necessary, and Syria may ultimately follow.

Where is this going in the long run?  If Clinton wins in November, it is likely that we will go back to being a gendarme for the de facto Israeli/Saudi alliance.  If Trump wins, Obama’s skepticism about these relationships will look mild compared to the changes that are coming.

 

My mother was fond of questioning why the Germans embraced Hitler, given that he looked nothing like the Aryan ideal he espoused.  I never had a good response to her query, other than to say that people will listen with their hearts and not their ears when they’re under enough stress.

A similar question can be asked about Donald Trump.  How can a semi-successful developer and product pitchman with no political or military experience pass himself off as a strong man with all of the answers, even if, for the most part, he can’t actually tell you what they are today? Why are the GOP voters buying into this nightmare?  I think the answer can be found in the success of “The Music Man.”

As you know, the gist of “The Music Man” is that the protagonist, Harold Hill, is a con man who purports to be able to teach students how to play musical instruments through a magical method that requires no actual formal training. When he is ultimately cornered, and the system is put to the test, the musical would have you believe that it actually sort of works.  The show is, and for a long time has been, an American standard, which means that we as a nation love the idea that a huckster with a few redeeming qualities can prevail over reason and conventional morality.  Sound familiar?

Would a real strong man run around the country complaining about the rules? Of course not:  a real strong man doesn’t whine–he kicks butt.

Trump purports to believe that an enormous tariff on Chinese goods will result in the return of manufacturing goods to the US.  This is a classic import substitution program; it resembles the one being employed in Russia, partly by choice and party due to sanctions imposed by the EU.

As in Russia, it wouldn’t work, for the following reasons:

1.  The Chinese economy has evolved to the point where, for a substantial number of essential manufactured goods, there is no alternative supplier.
2.  It would take years before the market actually believed the tariffs would stay in place and the requisite investment in new plant and equipment could be made. Prices would skyrocket in the interim, leading to very high wage demands and a likely increase in interest rates.
3.  For goods that are highly dependent on labor costs, the most plausible alternative to China is not the US, but Vietnam or India.  The tariffs would have to be applied all over the world in order to result in import substitution.
4.  Even if, somehow, the tariffs “worked,” and the substitute goods were ultimately made in the US, the cost of each “saved” job would be prohibitive, based on a multitude of studies, and quality would suffer accordingly.

Does this sound like a good way to “Make America Great Again?”

You’re winners!

Or, at least, you used to be.  You built the arsenal of democracy.  You kicked the Nazis and won the Cold War.  The problem is that, at some point, you started feeling guilty about being the richest and most powerful nation on Earth.  You felt obligated to spend trillions to bring democracy to countries where they can’t even spell the word.  At home, you let everyone in, whether it was lawful or not, and you conceded power to people who hadn’t had it before and who had done nothing to deserve it.  As a result, the country has gone to hell in a handbasket.

Enough of this political correctness crap.  I know who made this country great, and you do, too; you just haven’t had the nerve to say it out loud.  That’s OK;  I’ll do it for you.

There are two ways of dealing with Netanyahu.  The first way, championed by the Clintons, requires us to repeatedly embrace and reassure him in the hopes that it will give him the confidence to make difficult concessions.  The second way, espoused by Obama and Sanders, involves calling him out whenever he acts in a way that is contrary to the interests of peace.

The Clinton method makes for better domestic politics, while the Sanders/Obama technique is more emotionally satisfying.  The bottom line, however, is that neither approach actually works; in the final analysis, we have about as much clout with the Israeli government as the Chinese do with the North Koreans.  The Palestinians have undoubtedly taken note.

Given his enthusiasm for Putin’s “strength,” his interest in visibly crushing Islamic terrorists, his desire to make deals, and his skeptical attitude towards Europe and the promotion of liberal democratic values, you have to believe that a President Trump would be looking to cut a quick deal with Putin in which we and the Russians would agree to collaborate militarily against ISIS in the Middle East in exchange for giving the Russians a free hand in Syria, Ukraine, and most of the rest of the former Soviet Union (the Baltic states possibly, but not certainly, excepted).

Let’s hope we never find out, but if Trump wins, you heard it here first.

As I’ve noted in the past, the PBPs used Reactionary votes to obtain large tax cuts and deregulation for themselves, while the Reactionaries got. . . well, lots of warm words about guns, empty promises to bring mining and manufacturing jobs back, a big recession, and a failed war in Iraq.  It wasn’t exactly an equal bargain, and it is hardly surprising that the Reactionaries are unhappy about it. Having failed to accomplish much in Congress with extremist tactics over the last several years, they are now expressing their anger by voting for Trump.

You would think the Trump phenomenon would result in some PBP soul searching, and a concerted effort to find a program that would appeal to disillusioned white working men without engaging in the worst excesses of Trumpism.  You would be wrong, however; the predominant PBP response has been to express contempt for the Trump voters, who clearly aren’t capable of appreciating the vast benefits created for them by tax cuts for the rich limited government.

Tribal loyalties are very strong, but the likelihood of the creation of a third party is growing by the day, particularly if Trump is denied the nomination in Cleveland.

The analogy between Trump and Berlusconi is obvious; both are boastful businessmen with colorful pasts and strong media connections who insisted that they could cut through the mediocre politics of the day to get their respective nations going again.  While Trump is, as far as I can tell, unlikely to engage in bunga bunga parties at the White House, the most significant differences between the two pertain more to the two political systems than to their personalities; as the directly elected President of the strongest nation in the world, Trump would have the ability to influence world events much more strongly than the Prime Minister of Italy ever could.

Berlusconi was, of course, a complete disaster as Prime Minister, so the next time someone tells you that Trump can turn America around with his vast business acumen, an appropriate response would be, “Just like Berlusconi?”

On most economic issues, Cruz is a Conservative Libertarian, which logically should make him a defender of free trade.  However, for reasons of pure electoral expediency, he has supported the Reactionary position over the CL position on two important issues:  immigration and protectionism.

This wouldn’t be a big deal if Cruz could pivot back to the center in a general election, but his entire campaign shtick revolves around his supposed ideological incorruptibility, so it is hard to see how he can walk it back.

There once was a Texan named Ted.

He’s closing, but Trump’s still ahead.

He once favored trade

But that stance he’s betrayed

And the TPP’s probably dead.

Mercantilism probably makes some sense if you are operating a state capitalistic system like the Chinese.  Every export business is, in a sense, an arm of the state, which seeks to accumulate and distribute assets in a way to maximize public gratitude and stability.

America is a different story.  Our country does not trade with China; our people and companies do business with their businesses.  Does it make sense to say that I am “losing at trade” if I buy a Chinese-made TV at a really good price? Similarly, are American construction and manufacturing companies “losing” if the Chinese are selling steel at remarkably low prices?  Clearly, no.

The bottom line with trade is that it is intended to benefit everyone; it is not a zero-sum game.  Focusing exclusively on the deficit in traded manufactured goods is, therefore, a warped way of looking at the situation, particularly since Americans frequently add much of the value to “Chinese”  products in the first place.

              We Didn’t Make That Here

iPhones made in China.

New cars from Japan.

Lots of clothes from Vietnam.

Some say it’s out of hand.

 

The flow of goods upon our shores

Can look like a tsunami.

It’s hollowed out the middle class

And damaged our economy.

 

We export jobs around the world

To lands with cheaper labor.

We get low prices in exchange

As they return the favor.

 

But we also have stuff for sale.

New works from Hollywood.

Drugs and beef and services.

Some manufactured goods.

 

We didn’t make that here, you say.

I cannot disagree.

But very few will benefit

When trade’s no longer free.

Sanders isn’t going to be the nominee, but you can’t say he hasn’t made a difference.  Here is his legacy, for good and for ill:

1. He has driven Clinton away from free trade agreements.  It is hard to see how the TPP can be approved at this point, given the success of the Trump and Sanders campaigns with protectionism.  The Chinese will be delighted.
2. He has put higher taxes and an expanded welfare state on the table.  Sanders is the most left-wing candidate I can remember seeing in my lifetime.  While some of his success simply derives from the fact that he is not a Clinton, one has to assume that part of it is a constituency to make America Danish.  That means we will see more proposals to expand the welfare state in the future.  One hopes that future candidates will have a more sophisticated idea of what is actually workable, but I give him credit for taking on a taboo and, to some extent, winning.
3. You can run a financially successful campaign with very little support from large donors.   Look for more of this in the future.

Here is the state of the Middle East and Africa when Trump’s successor took office in 2021:

1.  Trump almost immediately made a deal with Putin in which the latter was given a free hand in the former Soviet Union (minus the Baltic states, although there was some ambiguity there) in exchange for assistance with the war against IS.  Trump also agreed to support the Assad regime for the duration of the war.  Russia and the US then turned their guns collectively on IS.  The Caliphate was destroyed; however, elements of IS remain in other parts of the world.
2. Naturally, one of the outcomes of the American/Russian alliance on Syria was intense Turkish and Saudi anger.  Trump made it clear that his loyalty to them was purely transactional.  The Saudis responded by starting to work on a nuclear weapon.  As a result of all of this, Trump moved closer to Iran, notwithstanding his concerns about the nuclear agreement.
3. Trump attempted to midwife a deal between the Israelis and Palestinians, but failed.  Thereafter, he lost interest in the subject, which he regarded as hopeless, and essentially told the Israelis to do as they pleased.
4. Trump eliminated all humanitarian and economic aid to African nations and stopped cooperating with international agencies doing humanitarian work, claiming that the US could no longer afford it.  He responded to pandemics, not by providing aid, but by prohibiting travel to and from the affected nations. American prestige in Africa collapsed, with the Chinese being the principal beneficiaries.