"Stop China" Kumbaya: Tom Friedman joins Steve Bannon

Trade wars make strange bedfellows. So is the current standoff between US and China. After three decades of diplomacy and WTO-like agreements, President Trump is trying sanctions and open confrontation to cajole China into respecting international rule of law and intellectual property.

According to Friedman -the most iconic mouthpiece for globalization since its famous book "The Lexus and The Olive Tree" coined the term twenty years ago, back in 1999-, it's due time for a "High Noon" moment of reckoning. Here's Friedman on the subject and on the record in his NYT op ed column:

"I’m glad Trump is confronting China on its market access barriers. Those are the real issue — not the bilateral trade imbalance. This is long overdue. But trade is not a zero-sum game. China can thrive and rise, and we can, too, at the same time. That’s what’s been happening for the past 40 years. But we’d be even better off if China offered the kind of easy access to its market for U.S. manufacturers that it enjoys in America. It’s time to recalibrate U.S.-China economic ties before it really is too late.  

What do I mean? China’s formula for success had three pillars. 

The first was a lot of hard work; delayed gratification; high savings; smart investments in infrastructure, education and research; and a Darwinian system of capitalism. In China’s “jungle capitalism,” 30 companies in the same business emerge and compete to see which becomes the alpha male and wins the government’s backing to go global. This system has produced high levels of innovation — Alibaba, Tencent, DJI — despite a censored internet, lack of a free press and an authoritarian government.

The second pillar was a system of cheating on World Trade Organization rules; the forced transfers of technology; the stealing of the intellectual property of others; nonreciprocal trade rules; and massive government support for the winners of both its Darwinian competitions and inefficient state-owned industries. 

The third pillar — never acknowledged by China — was a stable global trading system built by U.S. statesmen and sustained by the U.S. Navy. It’s been the U.S. Navy in the Pacific that has assured China’s trading partners there that China’s economic domination wouldn’t result in China’s geopolitical domination over them — and therefore made them open to massive trade and investment from China."

Bannon used the financial CNBC network to celebrate Trump's war trade stance:

This "coming together" in a tough stance reached even the Democratic trade committee chair, the rabid anti-Trump Chris Van Hollen, asking for even tougher stances on chinese companies such as ZTE

Economic forces seem to be realigning against China in a long-term game-changing bet. Market signs seem to indicate that there is no shortage of players wanting to gamble for this option. The stakes are high, the dimensions and global character of China's economic position in the world make the ripple effects on the interconnected international economy hard to predict:

In any case, the new strategic scenario seems headed to break the self-imposed boundaries of conventional wisdom, particularly the myth of an invincible authoritarian, state-controlled China model advantage over free market, entrepreneurial economies of the West.

For Trump's base, the realities of his trade war look different:

Free trade doesn't necessarily mean "free range" , one-sided trade deals, particularly when the other side has been voicing for years a "Made in China 2025" plan with targets of 90 percent "made in China" products.

It begs to wonder what kind of free trader is the government that accepts deals with an ultra-nationalist partner with an ultra-mercantilist policy such as China.

In any case, Trump is not provoking a trade war, but reacting to one that started decades ago and has been escalating at broad daylight.

It takes two to tango. This might be a rocky dance.

EU Parliament elections: Populism Turns to the Right

The coming EU Parliament elections will check the strength and sustainability of the populist wave that has taken over UK and Italy, most of Eastern Europe and some smaller countries like Austria.

After an initial wave with Brexit and the triumph of Five Stars in Italy, the populist trend seems to have peaked. Part of this has to do with the poor government performance of the first wave in Spain and Greece -where the far left  Podemos lost votes and Syriza ended implementing an impopular but necessary stabilization program with the IMF-. 

Other, without doubt, with the chaotic and protracted drama around Brexit, which pitted Scotland, Ireland and London against the economically declining regions of England. The Brexiteers didn't have a clear plan nor credible leadership to form a government, and turned to a Remainer PM like Theresa May to implement a deal with EU. The result has been a long stalemate and cold feet for business that have been hemorrhaging out of UK for two years already.

According to a comprehensive Financial Times poll in all EU countries, UK and Italy will increase the seats for EU populists, but far short from a working majority able to elect a populist for the position of EU PM. (click to enlarge) 

While Spain turned to the moderate social-democratic center-left with PSOE, France  -which still has a dominant centrist in power- seems to be wobbling under the street riots promoted by the Yellow Vests anti-European populists.

A closer look by Politico polls show that the moderate center-Right and the center-Left will still hold majorities in the 2019-2024 EU Parliament, with the Liberal centrists as "king-makers" but also needing populist votes to form government.

The growth chart seems to show populists plateauing and moderates bouncing back, most likely as results of Brexit/UKIP, Podemos' and Syriza's fizzling after government and opposition fiascos.

Pro-EU forces hold a healthy 467 majority seats almost doubling Euro-skeptics.

All this said, the situation for the coming five years (2019-2024) is fluid, highly dependent on the economy, mostly at the mercy of the US-China trade brinkmanship.

Last but not least significant, US anti-EU nationalist Steve Bannon is working overtime propping up Trumpian-esque forces in UK (Brexit-UKIP) Italy (Salvini), France (Gillettes Jaunes),  Spain (Vox), Hungary (Orban) and even Brazil (Bolsonaro).

Those who underestimate Bannon's impact and power do so at their own peril. Trump might be less ideological and more pragmatic, but Bannon is a man on a mission, and that mission can generate a Second Coming for right-wing populism in EU. Is good to remind those who look down on this phenomenon that the  First Coming brought Hitler, Mussolini, Franco and WWII during the 1922-1932 decade, right (pun intended) for the hundred anniversary of the crowning of European fascism that preceded World War II.

The Long View: European history tends to repeat itself. During the 20th century two world wars erupted for the same reasons -nationalism, populism, economic depression, anti-immigration and the perennial antisemitism (particularly in Eastern Europe)-

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)

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 Revolution, Jacob 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:

Chickens and eggs: Polarized Parties, Moderate Voters and the other way around

Lack of civility and partisanship in COTUS and POTUS is the cause, not the consequences of "voters' polarization". 

Profesor Morris P. Fiorina, from Stanford University recent research indicates that voters are more moderate and flowing towards the center across the country , but political parties -and donors- are vastly more polarized.

This creates an interesting hypothesis for the current political scenario: voters in the center are increasingly dissatisfied with the available two-parties political options and forced to stay home or vote for a candidate that does not represent their views entirely.

In a recent Wall Street Journal interview with James Taranto, Fiorina explains his findings in a way that might resonate to many moderates:

He arrives with a PowerPoint presentation that visualizes the data behind his theory. A pair of bar graphs show the ideological distribution of lawmakers in the 87th Congress (1961-63) and the 111th (2009-11). In both eras Democrats were the liberal party and Republicans the conservative one. But the pattern is markedly different: In 1961-63, both parties’ lawmakers tended to cluster in the middle. In 2009-11, there were two clusters—Democrats to the left, Republicans to the right. “There’s no longer any overlap at all,” Mr. Fiorina says. “The center is empty. That hasn’t happened in the electorate.”

A line graph illustrates the electorate’s continuity. The share of Americans identifying as politically moderate has remained fairly constant—around 40%, and usually a plurality—since at least 1974. In the same period, another chart shows, independents overtook Democrats as the biggest partisan grouping. As the parties drifted from the ideological middle, centrist voters disaffiliated from the parties. 

That creates what Mr. Fiorina calls “the ping pong pattern” of unstable majorities. One party manages “to win, narrowly, and then they immediately respond to their base. So Bush says we’re going to have personal Social Security accounts, and voters—some say, ‘I didn’t vote for that.’ Or Obama says we’re going to do government health care, and a lot of them say, ‘I didn’t vote for that.’ ” Lawmakers from the party in power “suffer for it in the next election, when they lose the marginal voters,” as Republicans did in 2006 and Democrats in 2010."

The cause of this phenomenon, argues Fiorina, is that political parties have nation-wide platforms with increasingly extreme positions, which play very differently in different states and districts, "sorting out" (emphasis in "out")  moderates that must vote for "a package" or stay home, leaving the district "red" or "blue". That creates also a pattern of swinging majorities, that change the composition and balance of power in both directions, creating a stalemate in most critical issues.

Frustrated voters in turn, blame "Washington" or COTUS for all the laws that they "didn't vote for" (Obamacare as an example) and "repeal and replace" them every 4 or 8 years, creating more uncertainty in critical issues such as healthcare, retirement and investment.

Fiorina expected Trump to break both parties and "re-sort" them closer to more moderate, middle-of-the road voters in spite of his ultra-partisan and divisive political speaking. 

For this column, it's hard to imagine why Fiorina came to have such expectation, other than the non-partisan attitude of a true political scientist. He proves himself an  example of the disappointed moderates that turn off the news in despair after Obamas or Trumps.

Fiorina provides a more compelling explanation in the extreme polarization of the donors class. Here, I think, he touches -although very briefly- some part of the elephant that irrupted in the US political room with Citizens United.

If the Trump White House portrayed by Michael Wolff and the Breitbart politics reported in "Devils Bargain" show something is that the Adelsons, Mercers, Murdochs, Ailes, Kochs, Soros and their "foundations" are the real king-makers in US politics. They not only elect the candidate and fund it; they create a willing voter that buys in what is washed on them by radio, cable news networks and even at the supermarket (let's not underestimate the Enquirer's role in the past election)

I would add gerrymandering to the mix to explain the phenomenon of minority-elected Presidents (like Bush 43 and Trump) and minority party-dominated COTUS that we have been experiencing since 2000.

Politicians -and their clients, their donors- blame voters for the polarization they force to get elected. 

Fiorina's study (and many others) show that it is the other way around. Here are some extra facts (and books)

"Alternative Facts" II: From Dr. Faust to Dr. Strangelove

"Put your sword back in its place," Jesus said to him, "for all who draw the sword will die by the sword.  Matthew 26:52

In an almost perfect parable, Donald Trump faces his own political and business weapons on the loose turning against his presidency.

For someone who has mastered the art of riding the news cycles and using tabloid news and obscure websites to spread "alternative facts" and conspiracy theories about his circumstantial rivals -from his own wives to his own party- the turn of events couldn't have been more paradoxical.

Just when a special prosecutor investigates his financial deals in money laundering schemes -from casinos to empty towers from Punta del Este to Azerbaijan-, Michael Wolff, a journalist invited to full access to the campaign and the White House published "Fire and Fury: Inside the Trump White House" , a bombshell of a book and made public a troubling storm of taped statements from his campaign strategist and nationalist-populist guru pointing to money laundering as the most likely cause for impeachment.

Civility -the restraint from personal attack or slander- has been absent in Trump's rise to power and from his presidency so far. Moreover, civility of the kind candidate McCain exhibited in 2008 

and candidate Romney did in 2012 

Or as the ex-presidents have been doing after hard-fought opposition at The President's Club

rejecting personal attacks on his opponent, has been lambasted by Trump and his entourage of Far Right firebrands as "political correctness", the kind of "weakness" that made McCain and Romney lose their elections. 

On the contrary, it was electing uncivil team mates -like Sara Palin- or not showing their care for people and family -like Romney- 

that they lost their chances.

Incivility, argues Bannon publicly, is the way to wage "war" against a laundry list of enemies lumped into vaguely menacing concepts such as "elites (for college-educated, "Davos" and "Wall Street" types), "establishment" (for the Republican party and its majority leaders in Congress) , "deep state" (for the FBI, CIA and all the career personnel in government) and -more generally "Washington" -for the entirety of the checks and balances established in the Constitution to limit Executive power-.

The book doesn't show anything new about Trump's long-time associates, like Roger Stone or Paul Manafort:

Vulgarity and scandal are not new to this administration. Chaos and backstabbing in public are the norm, as we can recall from the brief summary provided a year ago for the short-serving Secretary of Press Scaramucci:

Whose description of the characters matches very closely those they provide of each other in the book.

The book -and the 200+ hours of tape his author had almost two years to collect in the campaign and the White House- is out as a national best-seller and those named have corroborated the facts and scenes of a dramatically dysfunctional set of staffers, ready for the special prosecution to corroborate. There seem to be no boundaries, no ethical reservations, no friendship to restrain the Bannons and the members of the Trump family -Trump included- to insult their looks, intelligence and accuse each other behind their backs.

Trump's reaction to the book has been also self-damaging: instead of questioning its author, Trump tweeted his fury against Steve Bannon, "ex facto" confirming that he believed Bannon's extensive comments and quotes about Trump, his family and his entire team are true, at least for him. True to form, Trump's tweeting didn't wait for his lawyers or "communication" experts to articulate a defense, much less an offensive.

A day later, they started, trying to prevent the publication of the book (too late; it's already at the top of the book-selling records list) and to attack Wolff's credibility (too late as well, since several of the witnesses of the facts the book describes confirmed the facts and conversations described in the book).

The Mercers, financiers of Bannon and Breitbart, parted ways immediately and Fox News launched Trump's "surrogates" to try to change the subject, then deny its relevance in full evasive mood.

The entire scene described by the book looks like if the Watergate scandal had started by Haldeman and Ehrlichamn publishing the tapes. What Nixon kept out of sight -invective, insults and personal attacks- is precisely what Trump tweets out every day. While Nixon was justifiably paranoid in keeping out of sight, Trump believes and proclaims as good and healthy for his presidency and the country. Or not, as he use to say in mid-sentences after hurling a menace, giving "knowing" wink to the cheers of his unconditional followers. 

Emmanuel Kant explained that the key for judging if an act was moral or not was if it was good to make it universal -in other words, if it is self-destructive or not-. Unfortunately, Trump doesn't seem familiar with Kant.

Trumpism -defined as a style - one based on reality show-like personal attacks and muck racking- rather than a political or government philosophy- demonstrates by way of absurd that it is not, harming itself at a moment of economic and domestic triumph.

Echoes of 1974's Nixon returning from China and winning reelection by a landslide come to mind. 

Civility -paraphrasing Freud's dictum about reason- has a very tiny voice, but very persistent.

Trump may survive this crisis as he did so many others -his entire career is a collection of them-.

Partisan logic narrows the problem to whether Trump can be impeached or not. Either way, partisans on both sides of the question show their typical disdain for civility and care for institutions that must survive electoral terms and supersede political agendas.

Civility will take more time to recover than the economy, domestic or foreign affairs, because what this (and many other) reports show is flagrant and concurrent  disrespect for the Constitution and the spirit of the laws of our republic.

The press -partisan or not- is not "the enemy of the people". Bad behavior in office is. 

"Fire and Fury" is a good title for the kind of country Steven Bannon and the Far Right nationalists live in.

In Alabama, Republican voters couldn't take it anymore. Now, it was Trump's turn to learn the cost of ignoring the old lesson:

"A house divided against itself cannot stand."