Cromwell

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.

He began his reign by promising a sea change in the culture and an increase in the power of the executive. He weaponized law enforcement and used it against his enemies. He built a large standing army run by members of his political faction. He suspended the enforcement of laws against his allies. In the end, it was too much; the establishment fought back and prevailed.

Is it James II or Donald I? Time will tell.

From nominating unqualified loyalists to cabinet posts to unconstitutionally freezing spending to firing civil servants in violation of federal law, Trump has been pushing the envelope in his first two weeks in office. So far, the response of the GOP majorities in Congress has been very muted. Is that a good idea?

As Sir Thomas More advises Roper in “A Man for All Seasons,” if you cut down all of the trees in pursuit of the devil, there’s nowhere to hide when he turns on you. Who is to say that the FBI won’t show up at your door if you say something to piss off the man on golf cart after Patel is confirmed? What will stop a future Democratic president from using the powers you are conceding to Trump against you and the GOP?

Protecting the checks and balances in the system isn’t just a matter of idealism; it’s a form of self-preservation.

Gabbard and RFK should be easy no votes for McConnell; neither is a reliable Republican, and both have unconventional views on critical subjects that he despises. But what about Patel? Is Mitch prepared to stand up against the MAGA enforcer to preserve the integrity of the system, or will he roll over in the interest of partisan politics?

TBD.

Justin Trudeau sounds genuinely bewildered. Why would America turn on its friends? What is Trump trying to accomplish? Do Americans really want to pay higher prices for everything? Is that what they asked for when they elected Trump?

Sensible questions, all, but they ignore the fact that Trump views all human interactions as power struggles in which the strong try to dominate the weak. If he sees his marriage in that light, why wouldn’t he take the same approach to foreign affairs?

The traditional rationales for tariffs are to protect critical infant industries from unfair foreign competition, to protect national security, and to create a lever to liberalize trade restrictions in other countries. All of these rationales can be applied to at least some goods and services from China. But how many of them make sense for Canada and Mexico?

None. Nada. I can’t wait to hear what Trump’s mainstream economic advisers say about this.

Life in the time of Trump.

The rule of the tech bros.

They want to shatter the deep state.

What comes next, no one knows.

They’re battling the MAGA base.

We don’t know who will win.

And Uncle Donald loves the fight.

They all bow down to him.

To the CLs, American tech supremacy is the natural outcome of a state that minimizes taxes and regulations on business. To the tech oligarchs, it is validation of their right to rule the country; they delivered the goods and should be rewarded for it with power and deference. They earned their right to be the masters of the universe.

With that as background, how should we react to DeepSeek? With a mixture of fear and satisfaction. The Chinese have proved that the low tax, low regulation, tech-friendly state doesn’t have to win the race.

It would, of course, be absurd to blame Trump for the crash, since he has been in office for less than two weeks. Nevertheless, we need to remember that when Trump and Musk talk about making dramatic reductions in the federal workforce and breaking things, there will be real life consequences to the public, and events like this will be one of them.

Just because Musk and Trump think a few disasters here and there are worth the price of admission doesn’t mean we have to agree.

J. Edgar Hoover was a reactionary without loyalties to any party or politician; he struck fear in the hearts of presidents of both parties. Kash Patel is a reactionary with boundless loyalty to Donald Trump. Does that make him worse?

Yes, because it broadens his list of potential targets to anyone of either party who opposes Trump. Just imagine the havoc he can wreak at the FBI during the 2028 campaign. He will know that his job depends on it.

After the inevitable backlash, the new administration withdrew the memo ordering the freeze on trillions of dollars of federal spending. This issue will return sooner or later, however; Trump is still determined to push the envelope on impoundment and create a constitutional crisis. It’s just a matter of time.

The Democrats now have a big problem deciding what to do when Mike Johnson comes to them to keep the government open and raise the debt ceiling. How can they make a deal that involves spending when Trump can overturn it afterwards by impounding funds?

Legally binding guarantees on impoundment will have to be on the table when the debt ceiling and spending authorizations are being negotiated.

Large numbers of left-leaning activists–most notably, Arab-Americans and trans activists–spent the last several years beating up liberals rather than reactionaries on social media. Why? Because the justice of their cause was so self-evident that the beliefs of hundreds of millions of people on the right side of the spectrum were not worthy of discussion, of course. The possibility that reactionaries might use their unpopular opinions to win power and make their lives much worse seems never to have occurred to them.

The election was primarily lost on inflation, but the division over Gaza and the trans issue didn’t help. As a result, we have a president who is openly musing about ethnic cleansing in Gaza and issuing a blizzard of orders attempting to deny trans people medical treatment.

Such is the wisdom of making the perfect the enemy of the good.

The new Trump order mandating a freeze on all federal payments that may in some way promote Marxism or wokeness created chaos, probably to the delight of the man on golf cart. It has already been blocked temporarily. What comes next?

A few observations are pertinent here. First, while the administration is arguing that the freeze is not an attempt at impoundment, the supposed constitutional right to impound is inherently implicit in it. Second, if the pause truly is very temporary, it may well escape meaningful judicial review this time around. Third, if impoundment is ultimately reviewed against the legal standard applied in the Truman-era Youngstown case, as it should be, Trump will lose at every level of the judiciary, including “his” Supreme Court. Will that cause him to stop? If he doesn’t, and I have my doubts, we will have a full-blown constitutional crisis on our hands, because legislative control of the power of the purse goes back to the days of the English Civil War and is at the heart of our system.

For Elon Musk, China is, well, complicated. On the one hand, it is a major source of his wealth; on the other, it represents an existential threat to Tesla, as Chinese EVs are reputedly better and much cheaper than his cars. Given Musk’s proximity to Trump, what does this mean for American policy towards China?

You will have noticed that with all of the sound and fury during Trump’s first days in office, very little has been said about China; it is a dog that isn’t barking. That may be due to Musk’s influence. Musk will probably be a voice advocating for some sort of grand bargain involving managed trade, not unrelenting hostility towards the Chinese.

Steve Bannon will not be pleased.