Cromwell

Trump is doubling down on his plan to own and redevelop Gaza; as I predicted, he’s threatening to cut off aid to Egypt and Jordan if they don’t go along. King Abdullah will be meeting with him in the next few days. His survival as the head of the Jordanian state is on the line, so they will have lots to talk about.

Trump is threatening to destabilize the entire Middle East. He’s arguably even more extreme than the Israeli far right. And make no mistake, this could get worse; if he somehow succeeds with his ethnic cleansing scheme, the precedent will be set, and the West Bank will be next.

Call it the no state solution–the best way to destroy American influence in the Middle East that you could possibly imagine.

As I’ve noted many times before, the problem with Venezuelan refugees was largely the result of the unsuccessful effort by Trump and Rubio to get rid of Maduro. Having used the refugee issue to batter Biden, Trump now has to resolve it himself. Could he do it with an agreement in which Maduro agrees to accept millions of Venezuelan deportees in exchange for a promise not to engage in regime change?

Any such agreement would be heartless, cynical, and disgraceful. It would be a huge embarrassment to Rubio, and it would cost the GOP votes in Florida. But if Trump’s overriding objective is to deport people, it could be done.

Don’t be surprised if it happens.

Bret Stephens is right about two things: Maduro is a really bad guy who is responsible for immiserating his people; and neither carrots nor financial sticks have done anything to budge him. Stephens draws the conclusion that we should send in the military and depose him. Is that a good idea?

It makes more sense than occupying Panama, because we can justly argue that we are putting the guy who actually won the latest election in power. Given Trump’s rhetoric, however, it is unlikely that anyone in Latin America will accept a liberal democratic justification for the intervention. Everyone will assume that Uncle Sam has gone back to being an imperialist gringo again, the continent will move closer to the less threatening Chinese, and we will have to use force again and again to stop it.

Ross Douthat invited the would-be techno-aristocrat Marc Andreesen to describe his political evolution in a column a few weeks ago. The narrative ran like this:

1. The left initially supported tech; the admiration was mutual. Both parties agreed on social liberalism and the need to expedite the economy of the future.
2. But the left went nuts on identity issues starting with the last few Obama years. The tech workforce became way too demanding and started pushing employers around.
3. Trump really wasn’t so bad in his first term, in spite of all the sound and fury.
4. The woke disease made its way into government during the Biden years. Biden viewed tech with unwarranted suspicion, not unrestrained enthusiasm.
5. As a result, tech is supporting Trump. Yes, there are some darkish figures in the Trump coalition that could wield some influence unless appropriately checked, but kindly Uncle Donald will keep them under control.

Two observations are pertinent here. First, Andreesen simply refuses to acknowledge the many negative impacts of tech that became obvious over the past decade; the left had good reason to react the way it did. Second, the tech barons, Andreesen among them, clearly have an adversarial relationship with their workers. That explains the support for Republicans and the interest in increasing the number of visas for immigrants.

In a column that ran in the NYT a few days ago, Robert Lighthizer suggested a new two-tiered approach towards world trade: the outer circle (primarily China) would be subjected to stiff new tariffs by the inner circle; and smaller tariffs would be used within the inner circle to eliminate trade surpluses and deficits caused by regulations other than tariffs. Probably not coincidentally, Trump just announced that he would be imposing reciprocal tariffs on the rest of the world in the near future. Can these schemes work?

The Trump plan won’t work, because as Lighthizer correctly notes, trade imbalances are often created, not by tariffs, but by subsidies, regulations, and other subtle government mechanisms that may be difficult to find and quash. The Lighthizer plan wouldn’t work because most trade imbalances between, for example, Germany and the US are attributable to different national attitudes towards working, consumption, and saving, not government regulations which discriminate against foreign products.

To: Elon Musk

From: Cromwell

Date: Today

Re: Fork in the Road

Elon, you’ve been a great success as an entrepreneur, even though some of your businesses haven’t done too well lately. Your calling card is breaking things. That’s fine in the private sector; you and your investors make money in the long run by learning from your mistakes, and no one outside of a small circle gets hurt.

But America is not a small start-up. Its president is not a CEO of a closely held company. It has citizens, not stockholders and employees. It was created and defended by average people–not by you–to further their collective interests, not just the interests of a handful of tech bros. Breaking things, in the context of government, could result in millions of people getting hurt, not just you and a few investors. What makes you think they will stand for that?

Overreaching will result in a backlash. By this time next year, the midterm elections will be just around the corner, and you will be the most unpopular man in America. At that point, you will have to make a choice. Will you moderate your behavior, or will you encourage Trump to double down on his autocratic tendencies?

I know you’re contemptuous of average Americans, but before you answer the question, consider two facts. First of all, for all of its faults, it was American liberal democracy that made you the man you are today. That would not have happened anywhere else in the world. Second, the powers you give the presidency can be turned against you in the future. Is it worth the risk?

Trump and the techno-aristocrats don’t actually agree on that much; the former is basically a reactionary who wants to recreate the economy and the society of the 1950s, while the latter want to go to Mars. They do agree, however, on the great man in history theory. As they see it, the fate of mankind rests in the hands of a few geniuses whose efforts should be freed from regulation; the rest of us are just flotsam and jetsam who can and should be ignored.

It is no wonder that openly anti-democratic ideas are flourishing on the right. The problem, of course, is that aristocracies and monarchies have their shortcomings, too. For every Henry V, there is a John; for every Edward I, there is an Edward II; for every Venice in 1200, there is a reactionary aristocracy in the reign of Louis XVI.

In other words, sometimes the great man in history is just a guy on a golf cart.

Another day, another injunction; the lower courts are pushing back against several of Trump’s unlawful actions. But the consensus among left-leaning commentators seems to be that it isn’t enough; the Democrats should be doing more to stop the Trump onslaught. Is that true?

Let’s be real here–the public heard the argument about Trump being a threat to liberal democracy and rejected it. In addition, the Democrats don’t have a single leader who can command the internet and the airwaves the way Trump does. The resistance won’t have any political legs until the American people start feeling the negative effects of the Trump counterrevolution. For now, all we can do is point out the errors of Trump’s ways and rely on the courts to keep him under some degree of control.

Of course, if he starts violating court orders, that will call for different tactics.

Donald Trump really, really hates the EU–much more, even, than the Chinese, who at least have the decency to be led by a strongman. In his eyes, the EU is pious, woke, and wimpy. It has the audacity to regulate American companies. It runs a large trade surplus with us while it free rides on our defense spending. It cares, or at least claims to care, about international law and human rights instead of talking about what really matters–power and wealth. It has to go.

Destroying the EU will probably be one of Trump’s principal foreign policy objectives over the next four years. You can expect him to use divide and conquer tactics–to offer better terms to EU countries with right-wing populist governments that are willing to suck up to him and pay lots of money for protection. As a result, the EU will be split into two groups: one that despises him but for pragmatic or ideological reasons bends the knee to him; and one that despises him even more and responds to his bullying by moving closer to China.

To what extent will Trump succeed? TBD.

The current version of the Supreme Court, as incorporated into the McConnell Project, prohibits the left from wielding power even when it wins elections. As a result, reform of the Court is likely to be front and center during the Democratic primaries in 2028.

But what if the Court, instead of being passive-aggressive, consistently blocks Trump’s most egregious attempts to break the Constitution and liberal democracy? It’s a real possibility, although hardly a given. If it happens, it will be much more difficult for the left to attack the Court in 2028. Reform will effectively be off the table, and the left will be hobbled for the foreseeable future..

On a note related to the Gaza scheme discussed in my last post, Trump wants to create a sovereign wealth fund to use for strategic investments inside and outside of the country. Never mind that there is no revenue source for such a fund or any authorization from Congress–he is planning for it anyway.

Putin runs Russia largely by controlling access to its natural resources. It is a neo-feudal state in which underlings get rich by successfully competing for his approval. Given the size and complexity of the American economy, I never thought anything like it would be possible here, but between the new sovereign wealth fund (controlled, of course, by the omniscient developer-in-chief) and the power to create exemptions and compensation schemes for favored businesses relating to tariffs, we will be moving in that direction.

Let’s deconstruct Trump’s plan to depopulate, occupy, and redevelop Gaza:

1. He wants to remove millions of Palestinians from the area in violation of international law;
2. He wants to resettle them in Egypt and Jordan over the strong objections of the governments of those countries;
3. He presumably thinks those objections can be overcome with threats of tariffs and aid cutoffs even though the aid is provided to further the security of Israel; and
4. Mr. “America First” wants to use American troops and billions of American dollars to remove the rubble and the unexploded munitions, to say nothing of the population, in order to turn Gaza into a new Riviera.

The absurdity of this makes even me gasp. Is the ultimate idea behind this to build a new Trump hotel in Gaza City? Will he justify the scheme by arguing that the vast investment is worth it because he knows how to turn real estate into a big profit? Is America turning into the Trump Organization–now backed by an army and nuclear weapons–right in front of our eyes? It appears so.

Canada’s economy is intertwined with America’s in ways that benefit both countries. It is not a conduit for large amounts of fentanyl or illegal immigrants. So why would Trump threaten tariffs that would damage residents of both countries?

This dispute was, and is, about power, not money. Trump wants the people of Canada to know that, regardless of who their prime minister is, he’s their boss. They can continue to enjoy the benefits of their relationship with America as long as they shut up and do what he says.

He wants them to be Melania.

Assume that you are the domestic manufacturer of a widget with a unit price of $1.00. Further assume that you have a foreign competitor that makes a comparable widget for the same price. Finally, assume that a new tariff has been imposed which makes it impossible for the foreign competitor to sell its widget in America for less than $1.10. What do you do?

You can increase your price by up to nine cents without giving up your new competitive advantage, thus increasing your profits significantly. Under the circumstances, how could you resist?

You won’t. And that’s why the inflationary impacts of tariffs go beyond the impact on the goods that are actually subject to the tariffs unless my final assumption is defeated by a combination of a higher dollar and the willingness of the foreign competitor to accept lower profits. Don’t bet the ranch on that.

While we’re talking about the Stuarts, it is useful to note that Trump’s declaration of bogus emergencies to enhance his powers has an antecedent–Charles I and the ship money case. In fact, it is highly likely that at some point, the Supreme Court will have to decide the same issues that were presented to King’s Bench in the 1630s: what is the legal definition of an emergency; and can a declaration of one be reviewed by the judicial branch?

The precedent suggests dangers for both sides. John Hampden lost the ship money case, but it became one of the grievances against Charles, who ultimately lost his head.