Sunday, January 28, 2018

State of the Union: Ronald Reagan's 1982 address


In 1982 Ronald Reagan gave his first State of the Union (SOU) speech to the Congress. It was a good summary of the policies for a sustained economic recovery and the kind of approach that has historically worked well for the United States.

Reagan defined four key principles to guide his government:

  1. Control federal spending
  2. Cut taxes 
  3. Reduce regulation
  4. Keep a strong dollar and the good credit of the United States
Point 2 and 3 have been tried by successive orthodox Republican governments, and also by the current president.

Point 1 has been neglected by both parties, paying with additional debt increased government spending in partisan priorities -social programs or defense- 

Point 4 is particularly important at the present. The dollar and trust on the good faith and credit of US are key to avoid a damaging rise in the interest we pay on our debt and the ability to control inflation, and the Secretary of the Treasure has made imprudent and ill-informed comments on the benefits of a weak dollar. President Trump's own comments during his campaign dallying with defaulting US debt as a last resort have never been clearly recanted.

This SOU might be a good time to do it.

Tuesday, January 23, 2018

European Populism: Ideological Spectrum and Scorecard


Populism has taken over several former communist countries, like Poland. 

There are rising Right-wing populist parties in Austria, France, Germany, Hungary, Netherlands and Poland and Left-wing populists in Spain and Greece.

There are Right-wing populist governments in Greece (Left Syriza) Austria, Hungary and Poland.

WSJ has published a very interesting article on Poland's Right-wing government defacement of anti-Communist union leader and first post-Communist Lech Walesa

Populist governments put a great emphasis in re-writing history (in Argentina the populist Kirchners created a "Historical Revisionism Institute" for that purpose) , renaming streets, moving away statues and donning their leaders' name to all things public. Territorial marking, we can call it, a step further of gerrymandering (and much simpler).


But the authors of the article, Drew Hinshaw and Marcus Walker, add a key graph describing the commonalities and nuances of Left and Right-wing European populism:


Each column shows one ingredient of the Populists' electoral playbook:
  1. Hostility to Muslim immigration
  2. For a looser EU (against multi-state unions)
  3. For higher welfare spending
  4. For a weaker US military presence in Europe
The horizontal axis goes from the Far Left (Syriza and Podemos) to the Far Rigth (Poland and Netherlands)

This confluence between former Communist (Podemos, Syriza) and Fascist (National Front, Poland) parties is not new. Benito Mussolini explained it back in 1921:
"Tomorrow, Fascists and communists, both persecuted by the police, may arrive at an agreement, sinking their differences until the time comes to share the spoils. I realize that though there are no political affinities between us, there are plenty of intellectual affinities. Like them, we believe in the necessity for acentralized and unitary state, imposing an iron discipline on everyone, but with the difference that they reach this conclusion through the idea of class, we through the idea of the nation." 
As quoted in The Myth of the Nation and the Vision of RevolutionJacob Talmon, University of California Press (1981) p. 494, Mussolini's declaration near the end of 1921.

The most interesting twist on European populism is that of Poland. Instead of opposing the European Union, the populist Polish leaders want to turn it into "European First Europe", launching a war against "non-European" immigration.

Hinshaw and Walter explain this new turn of the populist movements:
"Populism has grown where living standards have fallen, such as in Greece and Italy, but also where they haven’t. In Poland, which hasn’t had a recession for a quarter-century, even the successes of convergence with Europe have fed a potent nationalism.
Poland’s turn is unnerving European elites more than Brexit, because few Poles want to leave the EU. Instead, Poland’s populist rulers want to fight a culture war over the character of the EU and what it means to be European.
Some political scientists -like Harvard's Dominique Moisi- have developed a more ellaborated model to explain the motives for the rise of populism in prosperous countries.

For Americans looking at the tug-of-war on DACA and immigration reform, this is an interesting look at the mutations of the reactionary movements in the developed world.

Sunday, January 21, 2018

US Debt Bomb II : Who remembers Simpson-Bowles ?


I took very seriously the Simpson-Bowles report and its proposals when they first appeared.

They were the first bipartisan -or even non-partisan- serious study and proposal I have read so far on the matter of long-term (50 years) financial management of our country.

Unfortunately, after more than 15 years of being issued, presented and discarded, Simpson-Bowles remains the only serious and comprehensive proposal for fiscal reform. In the intervening years, the 2001 deficit has ballooned from the 5.4 trillion legacy that George W Bush received to the 19 trillion that welcomed Donald J Trump in 2016. 

Moreover, measured as a percentage of GDP -as experts Kenneth Roggoff and Carmen Reinhardt found the 90 % debt/GDP as the tipping point at which debt becomes unpayable- is represents a jump from under 60 % to over 100 %, a level that in any other country would put US interest payments in the double-digit ballpark.



Rogoff seems to be more optimistic about the short-term levels of growth that Trump's economy can achieve.


Having said that, the Harvard economist cautions about the challenges ahead if for some of several reasons, trust on the dollar strenght -and the toying with defaulting our sovereign debt (something explicitly banned in our Constitution) instead of doing a harder adjustment on government spending.

Trump -a businessman who called himself "the king of debt"- has flirted with the idea of indirectly defaulting the 19 trillion debt he inherited by repurchasing bonds at a lower price -thereby stiffing bondholders- if necessary.



Trump has not come back to such suggestions, but his seems to be a "supply-side" approach to debt that can leave a serious bubble burst like the one that exploded in 2007-2008.

The fact that dealing with such levels of mounting debt was ignored for such long period of time without any cry for action is just another example of the dangerous disregard for unpopular facts that characterizes populism and partisan thinking.

An over 100 % debt/GDP ratio (still growing) should raise a red flag for anybody holding US dollars or T bonds and Simpson-Bowles should be revisited. But that is, of course, assuming that hard choices are something that partisans want to discuss in an "election year" (code word for "ever", since all years are election years). 

Although Alan Simpson remains one of the most straight-talking, knowledgeable and respected speakers today, his candor, bipartisanship and expertise is not enough to recapture the attention of the majority of voters distracted by 24/7 multimedia partisan networks, droning surrogate talking heads and tweeter name-calling wars. They remain unaware about the growing quicksand where their finances and those of their children and grandchildren are gradually sinking.

A national debt over 100 % of our GDP is the real "swamp" in Washington, a bipartisan 19 trillion dollar-black hole punched by each new administration.


Given the precipitous growth of fiscal deficits (through either spending or tax cuts) Bowles-Simpson should be a starting point to propose an equally fact-based and professionally elaborated long term proposal.

Here is the access to the full Simpson-Bowles report.

US Debt Bomb I: Populism Fuels Partisan Spending out of control


When Senator Daniel P. Moinyhan famously said that "everybody is entitled to his own opinion but not to his own facts" nobody imagined that 40 years later someone will come back with "alternative facts".

I plan to post regularly facts that may or may not please those on one or another partisan position -there are many parties to each set of facts- but I hope will help keep discussions honest and conclusions closer to reality.

It's a tall order for a time in which we as a society live in almost parallel universes divided by invisible gerrymandered lines, that keep voters homogeneous and congresspeople glued to their seats. That old practice has been refined and compounded since the inception of cable TV newscasts and later, partisan websites, which create "echo chambers" that repeat party lines at a set of 3 or 4 daily "news cycles" brainwashing, rinsing and repeating willing viewers with the partisan talking points decided by partisan campaign managers and their press agents. All of this, financed by billions of dollars of media moguls turned into kingmakers.

Such activity requires as well a constant dissing of expertise as "elitism" and replace facts with conspiracy theories and urban legends. 




Partisanship has infected all areas of public life to an almost comic level: universities create "safe zones" to protect college students from the "microagressions" of unacceptable opinions and facts.

Both "Left" and "Right" partisans pick or drop friends, family, clubs, associations, careers, colleges and even jobs based increasingly on partisan politics.

The 2016 election and its aftermath -the first year of Trump's unexpected and dysfunctional presidency- brought the war on facts to a new level of virulence.

First fact-check: "Obama grew the national debt more than all previous presidents together"

Well, although Math can be used creatively, this is too much even for that. Thanks to the useless "debt ceilings" we have a long time-series of national debt from 1981 to 2014:





As we can see, it's awful and dangerous -we are in the 19 trillion level with a new round of tax cuts- and ignores the Bowles-Simpson bipartisan commission recommendations almost to detail -as senator Simpson forecasted-



Obama received a 11 trillion debt from George W Bush in 2008 (together with the Great Recession 2008-2011) and left a 19 trillion -a 68 percent increase) to Donald Trump.

Obama didn't increase the debt more than all his predecessors together, but did increase the debt in dollar terms more than his immediate predecessor: 7. 9 trillion against 5.8 trillion generated by George W Bush -who had the title of "biggest spender" in dollar terms before him. (more details)

In relative terms, however, George W Bush rose the remaining debt he received from Clinton (who made a surplus in his last years) more than 100 % against 68 % for Obama. 

Second Fact-check: Clinton left a surplus to Bush and he turned into debt



Clinton's surplus expected for 2001 never materialized because they were mostly used to finance new spending -tax cuts and wars-. 




There was a huge overestimation of the surplus (estimates of the surplus 27 % were over what it turned to be) but what came in went out in those two ways almost immediately:

Wars and tax cuts combined with Fanny and Freddie real estate debt amounted to almost 70 percent of new public debt by 2019.



So, that second fact is correct, but omits the real estate bubble (Fannie, Freddie and TARP) that remains a bipartisan responsibility.  


Peter Pan Politics


While the country experiences once again the closing of its own government because its two parties play "chicken" withholding funds to pay for the functions they were entrusted to oversee, it's hard not to see government institutions operating as high-school playgrounds.


With a President that communicates by tweets and brags about himself as an old adolescent and public officers and CEOs turning their offices in frat houses and having public temper tantrums, it is not illogical to think that power turns Americans into versions of Peter Pan -that eternal child invested with magic powers that refused to grow-. 

Or perhaps it's the other way around, and Americans vote for Peter Pans that promise to take them away from hard choices in magic trips to Neverland: MAGA, the Great Society, and so on.

In the meantime, back into reality, things don't change. They only get worse.

Government shutdowns are a perfect example of what happens when bad behavior isn't punished. 

There are no punishments for this obvious dereliction of duty. Nobody gets fired, sued or  goes to jail. Government is allowed to stop working without penalties but the governed keep being fined or even serve jail sentences for not paying the taxes. And our soldiers can face court martial for not showing up, even if their paycheck is retained.

Sooner or later, of course, the consequences of not keeping the basic services will come back to affect us and then, adult behavior will return briefly to clean the mess left behind. Moreover, it will be adult behavior what will keep basic services running on the backs of unpaid public servants.

Psychologist Erik Erikson defined adulthood as the sixth and seventh of eight stages in the life cycle. Unlike children, adults' focus is on providing care to others, taking responsibility for those who can't provide for themselves -the too young and the too old-.

Psychoanalist Eric Berne added an interesting explanation: adult behavior is defined as negotiating between our "wants" or impulses and our duties dealing with the constraints of reality.

We would love to double our spending, but we can't do it unless we increase our income before. We cannot hold a debt that exceeds our possibilities of repaying and making a living at the same time. We can't stop eating for too long, and our creditors can't keep loaning additional money to us  indefinitely.

We know we cannot lose our control with our neighbors in ways that will generate retaliation and turn our daily life in constant confrontation and stress.

As adults, we know all that, but as partisan voters we seem to prefer Peter Pan and pipe dreams such as self-paying tax cuts or entitlements. Even more:both parties in the United States now support both options at once: tax cuts AND increased spending.

All of course, will be solved by issuing IOUs  and passing them to the next government  each four years arguing that "growth" or "well-being" fairies will take care of reducing it.

What we did as a society with our last budget surplus speaks volumes. Paying up the debt? Well, not. Neither what Milton Friedman recommended at the time (2000). Friedman considered debt relief politically unfeasible (he knew Americans better) but economically correct, but thought that individual Americans would know better how to allocate the surplus than the Peter Pan government. 



Friedman was half-right and half-wrong. American voters decided for giving themselves a "tax cut" but authorized their government  -POTUS and COTUS- to balloon the spending with a 2 trillion dollar debt war of choice in Iraq for the following 8 years. 



The newly added debt established the foundations for the current 19-trillion-dollar debt.



Winston Churchill's comment on American's behavior seems to describe also that of a Peter Pan:
Americans can always be counted on to do the right thing…after they have exhausted all other possibilities.
Partisan voters are played by their faction leaders into Peter Pan politics merry-go-rounds.

The last time adults were asked to take the floor was, arguably, when the Bowles-Simpson Debt Commission issued its report (2001). 

With Peter Pan politics and politicians in full swing, it's good and sobering giving them the last word to remind reader that reality hasn't changed but in size -quite like tall adolescents-:



Saturday, January 20, 2018

House of Jerks: The Debasement of Public Speech


     a : an annoyingly stupid or foolish person     ·         was acting like a jerk       b : an unlikable person; especially : one who is cruel, rude, or small-                       minded  ·         a selfish jerk
"He speaks like one of us" is often heard as a justification for using vulgarities and profanities in public. Curiously, most of those who tolerate or even celebrate fool language in celebrities or populist politicians would smack their kids or fire their pastor for using those same words in public. 
                            
Foul, insulting language makes politics personal. Perhaps too personal. Trying to justify it with the  tired "politics is a contact sport" invites to double down on fighting words. Using the "s" and the "f" words in public speech is the verbal equivalent of a kick in the groin or a rabbit punch. We ban athletes from professional sports for doing such kind of things. Soccer players get fired and fined for cursing during a game (ask Messi). And using the "f" word to ask for punishment for  players who kneel in protest only adds insult to injury. Which is all what debased speech and name-calling is all about.

Adding irrationality to insult. vulgar speech self-defeats its aggressive purpose. It might please the "base", but it turns the attacked in victim to the eyes of the politically undecided and reinforces the animosity between the parties. 

That might explain why Donald Trump's personal approval rating has never risen over 40 percent after his first year in office in spite of presiding over an otherwise successful economy. By relying only on a faithful "base" of followers, Trump's tweeting and name-calling is cultivating larger wave of new "anti-Trump" voters. Quite like Nixon in 1968, Trump seems to bet on the secret approval of a "silent majority" tired of "political correctness".



Trump's public taunting of women and bragging about sexual harassment as part of the perks of "executive privilege" is already energizing women's rallies and widening the gender gap against him. 

Thanks to Trump, Fox News and Hollywood's meltdowns, "male" is becoming a code word for "jerk" and "power abuser".

Which is the uncivil default behavior not only tolerated but promoted by our political and business leaders. Voters' tolerance of Clinton's Oral Office and Trump's Planet Hollywood are to blame without any doubt. They willingly condoned and voted for well-known sexual predators and tolerated their continuation while in office. Just look at the recent "Stormy" Daniels payments affair.

Politically correct lies -such as "alternative facts" or the juggling to justify Clinton's stay in office- and abusive, personal tweets are in fact debasement of public speech. 

The "trickle-down" effect is visible in plain sight from the deadly clashes in Charlottesville to the mobbing of invited speakers in campuses. And although there has been some swift public punishment at Hollywood, Wall Street and even COTUS, there doesn't seem to be any fix or care for the broken damn at the White House that keeps growing in incontinence.

Not too long ago -in the pre-Tweet, YouTube era- behaving as a gentleman was still considered a default code of public conduct among political or business executives.  The fact that tweets and smart phones have erased dangerously the gray zone between public and private spheres only turns more embarrassing the lack of self-control (still a pre-requisite for keeping a top job, at least for once omnipotent and tenured Travis Kalanick, Harvey Weinstein, Anthony Weiner, Al Franken, Roger Ailes and Bill O'Reilly). We even saw an actor who played a corrupt fictional president fired for his actual acting job for personal corruption in his job.

How it should be? Let's look at some simple examples.

Writer and literary critic George Plimpton is a good example of what manly and civil behavior looked like on those days when they were the standard to bear for everyone. 


Plimpton was the typical "ladies man" and also a gentleman. Those interested in gentlemanship can take a look at the video or read "George Being George", his posthumous biography made by friends, with abundant anecdotes and pictures of his famous Paris Review parties.

Plimpton and others created a civil atmosphere where political enemies such as Henry Kissinger and Gore Vidal socialized between bouts of political yet civic debate. There was Washington Post's Kate Graham whose newspaper was eviscerating the Nixon Administration sharing cocktails with Nixon's Secretary of State and confident.



(A Paris Review party circa 1960: Plimpton, left, Truman Capote, center, Ted Sorensen , Katherine Graham next and Henry Kissinger second standing)

Peggy Noonan wrote in WSJ  an excelent description of a gentleman, which, in my opinion describes all what is lacking in a jerk:
The dictionary says a gentleman is a chivalrous, courteous, honorable man. That’s a good, plain definition. The Urban Dictionary says: “The true gentleman is the man whose conduct proceeds from good will . . . whose self control is equal to all emergencies, who does not make the poor man conscious of his poverty, the obscure man of his obscurity, or any man of his inferiority or deformity.” That’s good, too.
A website called Gentleman’s Journal offers a list of 20 traits that make a man a gentleman. I liked “A gentleman always walks a woman home.” He doesn’t pack her off alone to an Uber downstairs, in the back of which she weeps as she sends her friends horrified texts, which is what happened with the Hollywood star and the girl. I liked, “A gentleman ruins his lover’s lipstick, not her mascara.” And “If a woman comes with baggage, a gentleman helps her unpack it.” 
A gentleman is good to women because he has his own dignity and sees theirs. He takes opportunities to show them respect. He is not pushy, manipulative, belittling. He stands with them not because they are weak but because they deserve friendship. Once at a gathering of women in media, I spoke of a columnist who years before had given me helpful critiques of my work and urged me on. “A gentleman is an encourager of women.”
And  she completes her description with these significant points about what is behind true manly behavior:
"It goes deeper than memorizing and repeating certain behaviors, such as standing when a woman or an older person enters the room. That is a physical expression of inner regard. Being a gentleman involves not only manners but morals. The 19th-century theologian John Henry Newman —an Anglican priest who became a Catholic cardinal—said a gentleman tries not to inflict pain. He tries to remove the obstacles “which hinder the free and unembarrassed action of those about him.” He is “tender toward the bashful, gentle toward the distant, and merciful toward the absurd. . . . He is never mean or little in his disputes, never takes unfair advantage.”
David Gandy, a fashion model, wrote a few years ago in London’s Telegraph that his work had taught him “being a gentleman isn’t about what you do or what you wear, it’s about how you behave and who you are.” A gentleman “holds chivalry and politeness in great regard. He holds the door for people; he gives up his seat; he takes off his coat to a lady on a cold evening.” These are old-fashioned actions, but a gentleman still holds to them “even though the world has changed.”
Being a gentleman is an ambiguous term, which can be confused with social standing or upbringing.  Social standing and power only empower a jerk. The current kind of behavior in government and business was adequately lampooned several decades ago by Mel Brooks in his sketch "It's Good to Be a King" :


"Right" wing CEOs turned into politicians bragged about its perks  off camera quite much like Mel Brooks' portrait of a French King:



"Left" wing politicians like Anthony Wiener or Uber's CEO Travis Kalanick bragged no less about theirs turning their jobs and institutions into playhouses and fraternities:


For those of us who don't see teenagers or frat houses as role models of masculinity , nor Fire and Fury's White House as the idea of how to run a government or a business, civility is not about being "politically correct" but playing by rules of mutual respect and decorum - in other worlds, behaving like adults-.


Civility in public and private behavior is -again- the last defense line for our national union and our constitutional institutions. Civility is much easier to destroy than to build, and continuing down the current path might come with a price tag our country can't afford.

Civility, however, will not come back until we practice and enforce it on elected and un-elected officers and business leaders.

Friday, January 19, 2018

Populism in the United States: Trumpism and its challenge to institutions


For most of its history, the United States remained among the few countries where populism never governed. Its unrivaled prosperity along 250 years should at least demonstrate that prosperity at that level can be achieved without the classical populist recipes: 
  1. Protectionism - high tariffs - restrictions to trade
  2. Anti-immigration measures 
  3. Dictatorial powers vested and concentrated in the Executive
  4. Government - state property monopolies
  5. Large subsidies and government payroll
  6. Closed economy - crony capitalism
  7. Debt default, monetary emission and debasing (devaluations)
These are the reasons why populists around the world unanimously hate international monetary controls (such as IMF or WTO) , free trade and trade agreements. Anything that limits their power and control over "their" people gets in the way of populist governments and politicians.

The rule of law is also resisted by populists by the same reason. Unlike King James I that accepted in 1215 that monarchs had to obey their own laws, populists reject such limitations.

The "will of the people", understood as the "will of the leader of the people" is for populists the only law of the land.

Once they gain enough control, populist leaders invert the governed-government equation: the government chooses the people, not the other way around. 

In Peron's Argentina, Castro's Cuba or Mugabe's Zimbabwe, people must join the Leader's Party (usually called on his/her name or as "Revolution" or "People's" Party) to be able to get jobs, subsidies and benefits.

Populists systems require a steady system of patronage (think of Chicago's "Daley machine") that trades jobs for votes on a regular basis. That's how populist leaders get re-elected almost for life. Or, alternatively, they establish a dynastic rule (like North Korea) or a "rotative" scheme to circumvent term limits (like Peron and his wife Isabel, Kirchner and his wife Cristina in Argentina or Putin and his teammate Mevdevev, who rotate as PM and President, with Putin holding power in both positions).

A third way to get the populist regime perpetually in power is the single Party system, like in the case of China, South Africa or Singapore. The original economic model can vary from extreme communism (like China) to freewheeling capitalism (like Singapore). Populism is not ideology-dependent. It can switch and mutate as required (think of Deng Xiaoping "market communism").

To get to this point with the US system it is necessary to change the Constitution drastically, or circumvent it with a vast network of cronyism installed in the three powers to override their "checks and balances". Another component is frequently using "referendums" to impose as law of the land a circumstantial majority. California is a good example of the consequences of the referendum and recall systems.

Bannon and his Alt Right followers want precisely this when they speak of "deep state" in their efforts to make a "political cleansing" of the Federal Government, the Judiciary, the Intelligence and Security cadres.

Traditional Republicans and Democrats might fight those efforts if not out of conviction, for necessity, because they are the "incumbents" to be replaced. 

In a pluralistic open economy like the US, private companies create an much more extensive set of multiple interests and can also offer resistance.

Trump, finally, might not be interested in such far-reaching changes in the system, nor be in power long enough. He has neither electable heirs nor reliable allies outside his own family, which creates another obstacle. No cunning wives or younger brothers with popular appeal.

And, of course all these plans ignore the existence of a growing number of rivals and enemies, and a deeply divided electorate.

Here, as usual, some additional civil and informed debates about the populist phenomenon:


Europe (Inteligence squared)



Niall Ferguson (global)


Latin America (Mary Anastasia O'Grady)



Thursday, January 18, 2018

"America First" paradox: can prosperity survive trade wars?


One year into Donald Trump's presidency, the fracture between the pro- and anti- Trump camps has widened to fanatically partisan levels.  A solid core of Trump voters -estimated in between 30 and 38 percent- forms what pundits call "the base" supporting the man well beyond his zig-zagging policies and politics. An equally solid "anti-Trump" coalition has launched a widespread "resistance" among minorities, campuses and a wave of challenges to  traditional GOP seats and states.

Moreover, the level of vitriol and partisan speech in pro- and anti-Trump media disseminates not just two opposite sets of opinions, but opposite "facts". 

From a social and cultural standpoint, the country looks more divided than before, going backwards towards the conflicts between those who want the pre and post 1965 social order.

But in the economic front, Trump is presiding over a wave of growing prosperity, which he has both inherited (see the job creation graphic below) 



and stimulated with de-regulation and tax incentives such as those making Apple repatriate 368 billion dollars and create 20,000 new jobs.  




The stock market is soaring over 26,000 points -creating a wealth effect that also reflects in demand and jobs- and a global recovery and a more competitive dollar are helping as well.

This is the kind of scenario that would make a pro-Trump wave as sure as the 6 percent growth of 1963 did for Lyndon Johnson. But there is one caveat: Trump's behavior and the "uncivil war" 


What is good to close real estate deals might be not as good for running a government with our 1787 Constitutional system. 

Steve Bannon and extreme populists and nationalists in the Far Right want to take down the "checks and balances" that limit single-party rule with the "wrecking ball" -. Trump has zig-zagged (and still does) between those dangerous extremists and making deals the usual Washington way. 

And,  yes, on top of all this there is a special prosecutor with wide powers investigating the President and his campaign.

If the coming midterm elections turn the control of the House to the Democrats, Trump will likely face impeachment, on top of further restrictions on his domestic and international agenda from them and from the Republican party that carried him on its ticket but disagrees with many of his protectionist and nationalistic views.

For Trump's presidency is actually a "RINO" (Republican In Name Only) presidency. A lifelong New York Democrat and an admirer of crony capitalist and strongmen regimes -like those of China and Russia- , Trump wants to manage his Presidency as he managed his company: like the uncontested CEO of a single-owner, family-ran company.

That is not what the US Constitution allows, nor what extreme Far Right zealots like Bannon want. Far Right nationalists want Trump not just to become a "strongman" in the mold of Russian or Chinese autocrats, but to use his power to colonize all powers of government with permanent partisan majorities. 


As it looks now, the country goes in "automatic pilot" through a chaotic escalation of civil discord and an uncivil prosperity. This is, by Americas' own historical experience, an unsustainable path: the one of the "House Divided" speech that Lincoln warned during the antebellum of the 1862-64 Civil War.

Trump is still on time to turn out this destructive path and return to constitutional governance. He showed that he can do it briefly by engaging in one hour of civil, bipartisan bargaining on live TV with senators. But he also has shown a dangerous lack of self-control and stability, governing by way of "tweets" launched at odd hours of the morning.

Less than 48 hours after receiving just praise for his show of civility running a bicameral and bipartisan meeting towards an historical agreement, Trump trashed the agreement and his own GOP partners a few hours later with a new eruption of his customary uncivil behavior.

The coming midterms and the economy will define the future of this dysfunctional but consequential political experiment.

The consequences of the social animosity that this style of government is sowing are setting the entire country decades back in a dangerous path.

Milton Friedman warned in one of his last interviews, back in 2005, that the only way that the dollar and US economic prosperity could fall was precisely if the country lost its credentials of respect for the rule of law.



In 1929, when the stock market was at record highs and economists predicted "a stable plateau of prosperity", Americans lost trusts on their banks and government and then the world lost trust on the stability of US and its institutions, and the 1930 recession turned into the Great Global Depression.

Civility is more than just manners and respect for each other.

It is -at the scale of a country- the other name for the rule of and by the laws that distinguish the places that attract investors and immigrants from those who make them run away.

Wednesday, January 17, 2018

Trump's presidency, first year: the politics of antebellum


In 2016, the United States elected its second populist president (after Andrew Jackson . 

A year after, both anti- and pro-Trump find themselves puzzled by the constant 180 degrees swings that characterize the new president's positions.


Author Michael Wolff wrote what in my opinion is the best description so far of Trump's political positions:
"The paradox of the Trump presidency was that it was both the most ideologically driven and the least.
It represented a deeply structural assault on liberal values—Bannon’s deconstruction of the administrative state meant to take with it media, academic, and not-for-profit institutions.
But from the start it also was apparent that the Trump administration could just as easily turn into a country club Republican or a Wall Street Democrat regime.
 Or just a constant effort to keep Donald Trump happy. Trump had his collection of pet-peeve issues, test-marketed in various media rollouts and mega-rallies, but none seemed so significant as his greater goal of personally coming out ahead of the game.”
I think  Wolff has captured the essence of populism: its lack of it. 

Populist leaders can talk with Far Left or Far Right "talking points". Think of Chavez and the Spanish Podemos or the Greek Syriza embracing "socialism" and "equality" criticizing their own Socialist parties for "betraying" socialism.

Look at Marie Le Pen's National Front or Nigel Farage's UKIP and you will find they criticizing their Right wing conservatives (Gaullists and Tories, respectively) for being "too soft" on their Right Wing causes: anti-immigration and protectionism.

Populist leaders use Left or Right-wing speeches alternatively: Left wingers like the chavista regime apply "law and order" harder than their berated Right-wing enemies. Right wingers like Le Pen blast "inequality" and "financial elites" harder than socialists or communists.

Like Wolff notices in describing Donald Trump's zigzagging politics, populist leaders only cling to one thing: keeping happy their own electoral base by channeling their anger with uncivil behavior (like calling names their rivals and flaunting "political correctness") blaming new "enemies of the people" for any failures. Populist leaders have no friends or allies, just "people working for me" -as Trump remembered those who bragged their influence on him.

Ignoring that basic premise was what provoked the fall of grace for Steve Bannon and his rather Napoleonic nationalistic dreams of becoming a "king maker".

It's good to remember how Benito Mussolini used ambiguity to drive coalitions between Far Right and Far Left:
"Tomorrow, Fascists and communists, both persecuted by the police, may arrive at an agreement, sinking their differences until the time comes to share the spoils. I realize that though there are no political affinities between us, there are plenty of intellectual affinities. Like them, we believe in the necessity for a centralized and unitary state, imposing an iron discipline on everyone, but with the difference that they reach this conclusion through the idea of class, we through the idea of the nation." 
As quoted in The Myth of the Nation and the Vision of RevolutionJacob Talmon, University of California Press (1981) p. 494, Mussolini's declaration near the end of 1921.
For populists, principles and ideology are means towards a superior end: gaining and keeping popular support. Ideologues like Steve Bannon and the Far Right are discovering it now.

Populism thrives by fanning the flames of cultural and civil wars in both directions. 

Trump's presidency is basically a new "antebellum". 

The previous one started with the last (and only) previous populist presidency.

Here, an excerpt that might sound familiar to our days:


          Partisan Politicking (Antebellum)
The successful presidential campaign of Andrew Jackson in 1828 began the "Jacksonian" period of populist politics and participatory democracy for white men [...]

political strategists cultivated a candidate's popular appeal on the basis of his reputation for courage, bravery, and masculinity. This formula was amply demonstrated by Jackson's military history in fighting the Creek Indians and then as the hero of the battle of New Orleans against the British in 1815. Democrats hosted mass rallies, parades, and barbecues to stir up popular s upport and enthusiasm for Jackson, and to encourage voters to identify with their party. [...]

Jackson and subsequent presidential hopefuls in the antebellum era tended to avoid making clear statements of their positions on the important political issues of the day, from the national banking system to the tariff. They usually made vague and broad promises to cleanse the government of corruption and privilege, and while they did not usually specify how they planned to do so, their good intentions were usually enough to win over the electorate.

White men became actively involved in politics as a central component of their sexual, national, and even class identity. Though Jackson was a prosperous slaveowner by the time he ran for office, he portrayed himself as a man of the people and derided his opponent, John Quincy Adams, as an intellectual and an elitist. [...]

 In 1828, Jackson received 56% of the vote, the highest percentage of popular support for any president elected in the nineteenth century. Jackson had begun the process whereby successful and propertied candidates had to appeal to a mass electorate and fashion themselves as "men of the people" in order to win elections. [...]

No fundamental redistribution of wealth followed his or any subsequent elections. These candidates presumed to relate to the voters whilst representing the sort of heroism or success that was supposed to be possible for any man in America. Candidates in this new political era quickly learned that they could succeed by touting their military backgrounds or by appealing to popular sentiments and prejudices. 
Historians saw the parallels when Trump was just a candidate:


Left and Right-wing populists like candidates Donald Trump and Bernie Sanders found common ground in Jacksonian populism: