Anglosphere vs Eurosphere: the future of EU

The anglosphere has succeeded in bringing together 53 diverse countries much more effectively than the European Union. By respecting their member states "freedom under law" and staying away from Napoleonic central planning, the Anglosphere has been able to achieve the same objectives than the European Union still struggles to accomplish.

I just returned from a trip to a UK where I had time to engage with pro and anti Brexiteers and get a better grasp of what is behind and beyond Brexit.

It is clear to me that beyond the shock of the immigration crisis, terrorism and the loss of blue collar jobs lays a much deeper and ancient cultural gap between Great Britain and the Continent -as they used to call Europe in the old days-.

Well before EU and the process of creating an Eurosphere that started after WWII there was an Anglosphere across the English channel, the Atlantic and in all continents where European and British colonies settled with their mother tongues and culture. 

At a time when Europe and UK contemplate Brexit, is good time to realize about the existence of an "anglosphere" as a non-exclusive alternative to the "European Union" continental project.  It was called Commonwealth and it hsa continually expanded to 53 countries, 26 million square miles and 2,460 million people since its last constitutional update in 1949.

The roots of the Anglosphere go back to 1215, when the Magna Carta established for the first time in human history that rulers should obey their own laws.

"Freedom Under Law" 

remains the core shared principle that serves as a common framework for countries in the Anglosphere.

United by a shared language and colonial past, in which they fought against each other and British rule, English-speaking countries remain and thrive as a de facto global community that has achieved all the goals proposed by the EU in a much more effective way.

The Anglo-speaking nations are the most successful, entrepreneurial, free and innovative nations of the world.  They have risen the standards of living, pushed the boundaries of knowledge and innovation and created the most treasured and successful institutions of freedom.

The Euro zone and the Anglo zone are veering apart, driven by opposite economic, cultural and social models.

• The Euro zone economic model is based on state capitalism, high taxation and regulation, strong and expensive welfare states and shared control over monetary emission. 

• The Anglo zone economic model is based on market capitalism, low taxation (compared to the Euro zone), looser regulation and minimal welfare states with nation governments retaining control over monetary emission.

• The Euro zone cultural model is based on complex, comprehensive Napoleonic-type laws and high levels of labor costs and unionization, with large public employment and government bureaucracies. 

• The Anglo zone cultural model is based on common law (UK has no written Constitution save for the principles), lower levels of labor taxation and unionization, with restrained public employment.

• While in the Euro zone government is viewed as a source of security and social prestige, in the Anglo zone government is viewed as a "necessary evil" and suspicious of red tape, bureaucracy and patronage.

These traits explain why the EU came about as a formal union -with even a formal Constitution and Euro parliament- while the Anglo zone remained a loose "commonwealth" or cultural community and kept strict government independence.

When it comes to trade, the Euro zone is free trade-averse and protectionist -hence the problems with the Irish "backstop" and the default "protective" tariff barriers to non-members- whereas the Anglo zone is more pro free trade and its countries in principle see lower tariffs as a way to stimulate their economies and tariffs in general as barriers to wealth creation.

Brexit in UK and Trump in US have shown a clear preference for one-on-one looser trade agreements. Their condition of members of a cultural and historical Anglosphere  might evolve pretty soon in a regrouping by trade zones across continents and in competition or at least outside the Euro zone framework. 

The Anglo zone countries and economies have been growing at a faster pace than the Euro zone ones and their difference in economic performance and models are pulling them apart.

Brexit and Trump's MAGA are just the first step towards new alliances between US and UK and with the other more dynamic economies of the Anglosphere, such as Singapore, Hong Kong and India.  

The unusual participation of India's PM, Narendra Modi in a Trump rally has sent a strong signal of the acceleration of this process. Thanks to its large English-speaking population and its British and Anglo-like institutions India is better suited to collaborate with US and UK than Communist China.

The Sino-American trade war has provided an opening that both India and US are exploiting to enhance their bargaining positions with China, that remains to a larger extent a less-integrated outsider.

The main reason for this is China's lack or weakness of the equivalent to the Anglo zone key institutions (rules) that Hannan summarizes as three "irreductible elements":

First, the rule of law. The government of the day doesn’t get to set the rules. Those rules exist on a higher plane, and are interpreted by independent magistrates. The law, in other words, is not an instrument of state control, but a mechanism open to any individual seeking redress.

Second, personal liberty: freedom to say what you like, to assemble in any configuration you choose with your fellow citizens, to buy and sell without hindrance, to dispose as you wish of your assets, to work for whom you please, and, conversely, to hire and fire as you will.

Third, representative government. Laws should not be passed, nor taxes levied, except by elected legislators who are answerable to the rest of us. 

We are experiencing a tectonic shift and realignment of the world economy that -in spite of Trump's belligerent rhetoric-  may end strengthening rather than weakening globalization by forcing protectionist and closed economies like EU and China to open their markets and play by the common rules.

As a matter of fact, a recent book on Brexit by Jochen Buchsteiner has recently underscored the existence of two kinds of "Brexiteers": isolationists and nationalists such as Nigel Farage on one hand and those who seek international alliance with other fellow members of the Anglosphere under much more open and free trade-friendly conditions.

Buchsteiner's argument underscores the characteristics of the Anglosphere identified before:

“The Britons have created a strange sociotope for themselves,” Mr Buchsteiner writes, “with a spaceship-like capital city whose international character overshadows all other European metropolises.” Here, “Openness, revolution and tradition are uniquely entangled…In all their urbanity and exceptionalism [Britons] are a strange people.” He suggests that as America turns away from Europe and Asia rises, Brexit might turn out well, though he acknowledges that only time will tell. Mr Roche is less cautious. Brexit, he says, will mean Britain’s rebirth—albeit as a low-tax, low-regulation Trojan horse for American, Chinese and other intercontinental interests at the doors of Europe. “Far from sinking, England [sic] will be renewed. And Elizabeth II will doubtless celebrate her 100th birthday in her revitalised country, confident of itself and prosperous.”

The idea of Brexit as a "Trojan horse" for China and America sounds as exaggerated as the idea of an EU as a "Trojan horse" for the interests of France and Germany. Such distrust and apprehension are the results of centuries of European and World wars between the Euro and the Anglosphere.

It is worth asking whether it would not be more productive to follow rather than opposing those large cultural divisions and seek "soft" versions not only of Brexit but of the EU itself, ditching those elements that are clearly incompatibles, such as trying to combine open borders with welfare states or free trade within with trade barriers without.

Perhaps once Eurocentrists and Anglocentrists have exhausted all other alternatives they might find common ground in common sense.

The Art of the Bluff: Iran loses its hand badly

Bluffing can be a good thing: Iran's overshot fires back, Trump's punt gives US the upper hand 

Moving in a new twist in the bargaining process with Iran, Trump refused for the second time the Iranian bait and gambit by not taking immediate military action.

He also distanced from the Iranian "hawks" by firing John Bolton and distancing from PM Netanyahu. 

In doing so, Trump is trying to find his own path between EU's and Obama's capitulation to Iranian nuclear blackmail and his own hard-right, "neocons" hawks. 

The tactic seems to be working in giving Trump more bargaining power with both sides while keeping his base for the upcoming elections.

Meanwhile, back in Iran the continued sanctions seem to be working by exacerbating internal pressure from the powerful Bazaar on the Iranian dictatorship

while keeping pressure on moderates to come to the bargaining table with concrete and verifiable commitments. By not taking the military option after the drone attacks on Saudi Arabia, Trump has left the Iranians the impopular decision of doubling down with the attacks, which would force the EU to support joint and protective military measures on its own budget.

Trump -who makes no illusions about being popular amongst EU's embattled liberal leaders- is trying to achieve through pressure what Bush 41 achieved by his long-time connections. 

Once again, anti-Trumpism looks disoriented with POTUS 45's moves. They cannot certainly claim that the president is war-mongering like they did with Bush 43 nor criticize him for not attacking Iran -this would force them to align with Israel, something neither EU nor US liberals can do without paying a heavy price with their new electoral base, increasingly formed by anti-Israel, Middle East immigrants.

Trump had his own initiative through his son-in-law Jared stalled a year ago. Although it failed, the plan reflects a more pragmatic approach than the Israeli far right has been proposing.  

Iran: Sanctions are working

After two decades of being pampered with US and EU diplomatic gloves without stopping its Hezbollah and international terrorism sponsorship, Iran seems to be responding to bare knuckle financial sanctions better. Iranians are no longer buying into the "Great Satan" rhetoric that the aging Islamic Republic regime used 50 years ago to shift the blame for its dismal economic performance and systemic corruption. These Iranians are far more westernized and sophisticated  than their parents generation and therefore, harder to bamboozle. 

They haven't experienced a heavy-handed US foreign policy nor the abuses of the Shah. They have instead lived under the corruption and mismanagement of the mullahs and military Guard. 

Under the Islamic Republic regime, the country became increasingly dependent on oil prices. The bonanza of 2000's high prices favored imports, discouraged production and encouraged rampant corruption.  All those problems are now coming back to roost.

They also learned from their 2009 failed upraise to work in tandem between young, college-educated activists 

and the powerful economic forces of the Bazaar.

If Donald Trump gets reelected -as most analysts think- the pressure on the elites of Tehran will become unsustainable. For those who follow the twists and turns of Middle East politics, the question about Iran is no longer "what" will follow the aging regime but "when".

The fall of the Iranian regime will reverberate in all of Middle East and also Latin America, where Hezbollah and oil dollars -the military and economic arms of the regime- still sustain large networks of money laundering, drug trafficking and far-left, anti American regimes and organizations.

For more on this subject, check Michael Rubin's article.

Right-wing Welfare: US Defense Budget

US military budget is clearly both indefensible and unsustainable. 

Click for the full article

After spending almost 4 trillion dollars in a disastrous military engagement in Iraq,

US continues to overspend the rest of the world to act as an international police and army on US taxpayers' pockets.

US defense spending was among the things president Trump sensibly denounced as absurd, signaling an initial impulse to control.

But like most of his predecessors, Trump has just put Defense-subsidized state jobs (and votes) ahead. turning from critic to cheerleader of "two more years" of increased spending

Whether Trump will get Europe and Middle East partners to pay for US military services is still to be seen, but at least he has made clear they have to increase their share of funding military alliances. On this, he has once again flip-flopped dangerously, from critical:

to self-congratulatory conciliation

Both substantial increase on military partners and beneficiaries contributions and results- and foreign strategy-focused spending cuts are necessary.

In absence of a clear international strategy, both spending control and effective military alliances became more unlikely. 

Meanwhile,  the tab keeps running and US politics continue to depend on the perverse incentives of its military-industrial complex -as President Eisenhower warned back in 1961-

Democratic Socialism in Action: Puerto Rico

For those interested in "democratic socialism" Puerto Rico comes handy as the closest US-made example. 

WSJ's columnist Mary Anastasia O'Grady summarized Puerto Rico's situation:

"More than two years into bankruptcy, there is still no agreement on the budget and no access to capital markets. On July 3 the oversight board sued the governor in federal court over his decision to allow municipalities to transfer some $330 million in pension and health-insurance costs to the bankrupt commonwealth."

The island got a pass from US Republican and Democratic Congress (a rare coalition between Paul Ryan -remember that fiscal plan?- and Nancy Pelosi) to bypass its Constitution and declare default. 

The banana republic picture completes with across the political spectrum accusations of corruption and mismanagement. 

Puerto Ricans keep voting with their feet, migrating to continental US, like Alexandria Ocasio-Cortez's parents did a generation ago, migrating from Puerto Rico's misery to Bronx's low income class. 

Download pdf report

US capitalism gave ther daughter the chance to go to college where -like many second-generation migrant children- she became fascinated with the eternal promise of "democratic socialism". At just 29 years, the young and talented Alexandria became congresswoman for her adoptive Bronx.

Puerto Rico didn't do so well. Thanks to the kind of policies now promoted by AOC and her progressive "squad" caucus, net migration remained negative

Leaving an overpopulation of pensioners without working-age contributors to the pension system:

Which is exactly what happens when welfare states grow without welfare. Florida will benefit from working-age Puerto Ricans paying into Social Security and pension systems:

The next step of this example of "democratic socialism" will be a haircut for American bond holders.

More on Puerto Rico's bankruptcy and Puerto Rico's PROMESA

Trump's 180 on Iran: Refusing the Iranian bait

For all the post-fact criticism it receive from both sides of the political spectrum, Trump's zig-zagging course of action with Iran might have more than meets the eye. True to their chess tradition, Iranians tried a gambit, provoking US's military reaction.

Looking at the course of events, it is evident that the weaker player, Iran is playing the aggressor instead of US. First, with the attacks to tankers menacing with cutting the strait of Hormuz. Then, doubling down by downing an unmanned drone.

Trump was in both cases forced to react. His first reaction was foreseeable: threatening military action. The second -calling out an air strike- was not.

Most partisan pundits focused on Trump rather than Iran. Let's turn the attention to the aggressor.

Why a weaker country in dire economic straits invites military aggression from a rival with overwhelming superiority? 

What is Iran to win with provoking US to bomb its military installations?

The answer is clear: jacking up  oil price. 

An US attack would rise significantly giving Iran's economy a desperately needed shot in the arm. Trump's first vague threat of military action sent oil price 6 % up in an instant.

Prices could rise up to 100 usd per barrel giving an immediate 50% revenue boost to Iran's exports. Moreover, US efforts in keeping Hormuz strait open would paradoxically benefit Iran. 

Iran is playing the "mouse that roared" tactic. Like in Peter Seller's classic movie, war with US can pay handsomely to the defeated. 

That's why not taking the bait can be a good response, saving not only Iranian lives, but keeping the choke hold on Iran's economy while assessing more strategic military options, such as setting up a NATO/ Gulf nations joint force to protect Hormuz or even destroy Iranian anti-aircraft and anti-ship capabilities.

Both countries seem to play their national games: Iran's chess gambit is met with US's poker's bluff.

Beyond the "Tale of Two Models": Texas and California in the long view

Texas and California are often used as belt-weathers to compare GOP and Democratic policies in practice, as The Economist recently did in a special report.

The "Blue-Red" stereotype of the two states is both historically and demographically misleading, a tired "tale of two countries" used for partisan polarization.

From 1848 up to 1952, Texas voted Democratic.   Texas voted for JFK and Lyndon Johnson during the 1960s and up to 1991 elected a Democratic, pro-choice woman like Ann Richards  as governor. 

Since 1936, California showed a  voting history characterized by strong swings between short Blue dominance (1936-1948) and much longer Red supremacy (1952-1960, 1968-1988) periods, in which it elected Richard Nixon, Ronald Reagan and Arnold Schwarzenegger as Republican governors.

Both states are testing grounds for  Republican and Democratic models of economic and social governance and beyond ups and downs, both show long-term success. 

Both states have economic entrepreneurial powerhouses in the Bay Area and Silicon Valley and the Texas Triangle, respectively. 

Both states have shown the ability to learn from mistakes and change course, often guided by the least-expected. Under the once ultra-liberal Jerry Brown, California  straightened its finances, controlled its deficit and turned around its economy.

Partisan views usually describe the contrast in tone-deaf, "B&W", "Hell vs Heaven" terms. Pundits such as libertarian Stossel

and progressive Robert Reich

duel like real estate agents over a candid customer.

Reality is more complex and more interesting.

The Economist report suggests looking at  Texas as a younger version of California, more free enterprise, low-tax like California was at the beginning of the 20th century, now trending towards an expansion of its welfare state network. That trend might be based on two key factors: increased affluence and Californian immigrants.

Voting trends seem to support this hypothesis, showing that Democrats have been making inroads in recent Texan elections.

Conversely, Californians have turned to Republican policies of austerity to stop losing business and jobs to lower taxed neighboring states (Texas first among them) and to shore up their bankrupt pension system.

If something can be learned from Texas and California's swinging politics is that there is no "Red or Blue"  model but rather policies that work, such as Texas' low taxation, business-friendly regulation or California's long-term investment in top universities, research and talent-friendly, internationally-minded ecosystems.

From a long view perspective, demographics will keep changing with success and growth. dictating long term social changes that politicians will follow rather than lead, as they always do. 

Looking at Californians migrating to Texas as a signal of victory for Republican views is most likely wishful thinking. 

Californians -quite like Europeans or Latin Americans- will happily take lower taxes and friendlier regulation without leaving behind their like for the kind of welfare benefits they grew accustomed.  

The electoral trend towards Democrats is a good indicator of it. Partisan Republicans might cheer the Californian exodus at their own peril. For them, it has all the makings of a Pyrrhic victory. The Hill explains why:

"Hundreds of thousands of new residents are moving into Texas every year, choosing to live in fast-growing cities and suburbs around the state’s four largest metropolitan areas. Six of the nation’s 10 fastest-growing counties are in Texas. About one in every 10 Texas residents did not live in the state when Sen. Ted Cruz (R) first won his seat six years ago.

“We have a lot of new voters who have held up their hands. There’s thousands of new voters moving to Texas every week,” said Chris Homan, a veteran Texas Republican strategist.

Those new residents are changing the partisan hue of once-reliably Republican suburbs and fueling a massive surge in new voters in solidly Democratic urban cores that even Republicans acknowledge will put the state’s massive haul of electoral votes in play for the first time in a generation."

Politics are a lagging, not a leading indicator.

Policies are just the opposite.

In any case, the Texas-California rival models are a good lab for testing ideas for the future of the country.

Purple Hearts: US Electoral College Reform

At the heart of the current fight between the Trump administration and the Democratic party is the dispute about the legitimacy of electing a President that lost the popular vote.

Instead of trying to win through impeachment (as the GOP in opposition tried also with Clinton) or reforming the Constitution -which the Framers wisely designed to preserve smaller states right and requires an almost impossible two thirds majority- there is a simpler and fairer way: turning the election of states delegates for the Electoral College from "winner-takes-all" to some proportional system (I suggest checking the Swiss D'Hontd system also known in US as the Jefferson method) 

If each state were able to allocate electors for both parties in a proportional way there will be immediate benefits for both those who want a more "democratic" election and for those wot want a more "state-rights" representative one:

1. Both states rights and majority rule would be better protected
2. The reality of "purple" states (almost all) would be better reflected
3. Candidates should campaign and visit all 50 states more often and more likely
4. Voters in small and large states would feel treated more fairly.
5. There would be less interest in using impeachment to uphold "legitimacy" claims, and less sore losers.

Proportional systems have been implemented in some states.

Who would have been elected if implemented in past elections? Just take a look and make up your mind. You might want also to check the Jefferson method.

Notice that in all close elections (2000, 2016) third parties would have made also a difference by becoming "king-makers" and forming coalitions.

That would also give those outside the two-party system more relevance and dilute extreme partisanship.

Rule of thumb: you know the system is fair when no partisan soul is happy with it.

One Down, One to Go: Fixing the Asylum problem

The asylum system is one of the key factors behind the  flood of migrants from Central America overwhelming US's immigration systems. After receiving 490,000 new asylum-seekers since the beginning of 2019, it's evident that "humanitarian reasons" are a bad and fuzzy concept to handle immigration from failed countries south of the Rio Grande border.

The Democratic La Raza-lobbied Congress must be forced to act in putting strict restrictions to asylum eligibility.  Economic need or general insecurity are unacceptable, unworkable criteria to accept migrants, much less minors. 

Mexico has responded to the menace of crippling tariffs with a promise of militarizing its Southern border sending 6,000 troops of its newly created National Guard. Wall Street Journal specialized editor in Latin America Maria Anastasia O'Grady and former Mexico's Foreign Minister under Vicente Fox, Carlos Castaneda have pointed out to Mexico's evident lack of institutional capacity and spotty record of following through its US agreements as major factors that make the new agreement unlikely to succeed. 

The alternative of the current status quo is unsustainable and much worse. Economic pressure will certainly work better than words and paper to make Mexico act on at least part of its commitments.

Now is time to turn to fixing US's institutional weaknesses: asylum and enforcement.

Here are some concrete proposals to do it.

A Maverick Kissinger

Whether you agree or disagree with Steve Bannon -and it's likely that the word "strongly" will be attached to either sentiment- it's clear that his track record reveals more than what his rather sparse words show. For all his enormous influence Bannon, like the young Kissinger, prefers to stay away from cameras and public statements.

After helping Trump win the US presidential election, Bannon fell out of good graces with him and turned to Europe to work as a self-appointed shadow Secretary of State. During his two years in "wilderness", Bannon managed to help seat Victor Orban in Hungary, Matteo Salvini in Italy, turn Brexit into the default position in UK politics and the rise of Marie Le Pen and the yellow vests protesters in France, Vox in Spain and build a formidable bloc to take over the European Union.

Kissinger would certainly envy such accomplishments, but Steve Bannon is a man on a mission and unlike his former boss and current ally President Trump, he's not running for or to stay in office. He's single-mindedly focused on politics and long-term, structural changes in the balance of power in the West, engaged and engaging in a crusade against what he sees as US's foes in a Second Cold War: China and Islamic fundamentalist powers, the Europe promoted by George Soros' Globalist Left.

In spite of his Breitbart, Far Right-, Tea Party- track record, Bannon remains in an almost cynical, pragmatic stance, providing critical views of all his current allies, including Trump, speaking at large to the most recent Martin Wolff's insiders' expose. Bannon's previous declarations in Wolffs book Fire and Fury precipitated his fallout with Trump and his ousting from Breitbart, turning him into his favorite role: a maverick and a loose cannon.

Unlike Kissinger, Bannon is not a prisoner of his former boss, nor he depends on a White House or DoS job. He runs his own operation, initially funded by the Mercer family and later with other wealthy donors coming from his newly acquired connections and fund raising ability. He's a maverick Kissinger rearranging the world order to the nationalist, anti-globalization Right as much as his arch rival George Soros is a Metternich trying to tilt the world order towards the progressive, cosmopolitan Left.

His Oxford speech shows his extreme ideological bent as well as his vision of a worldwide "war" between Left and Right in its extreme versions:

A force to be reckoned with, sooner better than later. Those who ignore or underestimate his influence do so at their own peril.

• Bannon's views on Europe (interview)
• Nougayrede, N. (2019) Bannon is on a far-right mission to radicalise Europe

Mexico's lesson: TR/Trump sticks work better than Obama/Bush carrots

President Trump's tariffs' threat worked, forcing Mexico to commit to serious and accountable actions to stop and stem illegal immigration.

The result was a US-Mexico Joint Declaration, which summarizes Mexico's acceptance to comply with US's demands:

“those crossing the U.S. Southern Border to seek asylum will be rapidly returned to Mexico where they may await the adjudication of their asylum claims.In response, Mexico will authorize the entrance of all of those individuals for humanitarian reasons, in compliance with its international obligations, while they await the adjudication of their asylum claims. Mexico will also offer jobs, healthcare and education according to its principles.The United States commits to work to accelerate the adjudication of asylum claims and to conclude removal proceedings as expeditiously as possible.” 

Looking from a long view perspective, this success might indicate that Theodore Roosevelt (TR) policies of "carry a long stick and a big smile" work if applied in such order -first show the stick or give a first hit with it, then smile, not the other way around- precisely because of the credibility generated by Trump's unpredictable, belligerent and heavy-handed approach to long-time deadbeats like Mexico and China.

The art of the Mexico deal is in understanding that AMLO -as President Andres Manuel Lopez Obrador is known- is a populist that uses far Left rhetoric but has a long track record of cutting pragmatic deals with "foes" that generate taxes, investment or exports revenue.  After a few rounds of posturing, AMLO sent a commission to capitulate in Washington, quite much like Generalissimo Santa Ana did 150 years ago.

Obama's and Bush's rational diplomacy were seen as signs of weakness and opportunities for cheating and taking advantage of a naive or self-doubting neighbor.

At the root of the problem lay the Schengen-inspired migratory policies that both Republicans and Democrats have kept since Reagan's 1986 Amnesty in the hope that the problem would correct itself. Those policies, designed to capture (and or manufacture) Hispanic votes metastasized even further in the form of  "sanctuary cities" that openly ban migratory laws' enforcement in exchange for a permanent majority-making  influx of voting- and welfare net- enabled constituency.

The proponents of such policies have suffered a major blow that will reverberate in the coming 2020 elections against their candidates.  Instead of choosing to bargain with the wall for accommodation, they preferred to sustain a ridiculous denial of the chaos in the border that self-fed into a Tsunami of asylum seekers, scaring a sizable majority in all border states.

Trump and his foreign policy instincts have a point: raw power seems to be more effective than nice words with authoritarian governments with a track record of serial cheating.

Nice words and noble self-criticism -such as Obama's Cairo speech- seem only to encourage more abuse by ceding the moral ground to declared enemies of most of what US stands for: free trade, free markets, freedom of the press, rule of law.

China's next.

• DoS (2019) US-Mexico Joint Declaration