Federal Reserve should survive Trump bluster

 

Gordon L. Weil

As courts deal with President Trump’s executive orders, people have come to understand that judges make decisions influenced by their politics.  Hardly a news item about a court decision appears without mentioning the president who appointed the judge.  The underlying message is that Republicans appoint reliable conservatives, while Democrats name liberals.

If judges don’t perform independently, courts end up looking partisan, as the Supreme Court does.  Trump spokespersons help promote that belief by attacking judges when the president’s policies face setbacks.  He thinks judges should follow the lead of the president who picked them.

Trump is now also trying to bend the Federal Reserve, the nation’s central bank, to his will. The Fed sets short-term interest rates that have broad economic effects. He wants lower rates that, he believes, will spur growth and reduce the interest costs on the federal debt, which has been sharply increased by his policies.

He focuses on who will be the Fed chair.  As with other of his policies, he would go back to a time when the Fed’s Board of Governors and its rate setting Open Market Committee, adopted rates set by the chair.  Trump believes that a new leader, supportive of his views on interest rates and even taking direction from him, will be able to bring down rates.

Just as judges are supposed to reflect the leanings or the partisan stance of the presidents who appointed them, Trump believes that Fed governors should similarly follow the election results rather than their economic analysis.  He would like to easily replace Fed governors, shaping the Board to follow his will.

In effect, the last remaining major “court” would be stripped of its neutrality.   The Fed makes decisions that affect almost everybody, unlike most legal rulings, so if it lost its independence, the effect would flow across the entire economy.

The federal government deploys two major tools to influence the economy.  One is fiscal policy, wielded by Congress and the president, and it focuses on spending and taxes.  The other is monetary policy, managed by the Fed, and it focuses on the value of the dollar, often measured by the rate of inflation that can gradually reduce its value.

Fiscal policy is meant to be political.   Monetary policy, with the goals of taming inflation and promoting job growth, is supposed to be isolated from politics, and it usually is protected.  As a sign of its intended independence, Fed governors are appointed for 14-year terms, thus insulating them from election results.

The Fed is not taxpayer financed.  It receives payments from banks and its own trading in money markets.  It is a combined public-private entity, acting independently in line with the judgments of the governors and the presidents of the regional Fed banks, who are chosen by their own boards.

This is the system that Trump wants to change.  It has generally worked well, though possibly moving slower or faster than would be ideal.  It has tried to keep interest rates low and employment high, both part of congressional mandate.

In a rare break from Fed neutrality, President Nixon, facing reelection, induced its chair to lead the Fed into cutting interest rates.  The result was raging inflation.   Soaring interest rates were halted under a new Fed chair, using astronomical interest rates and causing a recession.  President Reagan reaped the political reward for the ultimate recovery.

The Fed no longer works that way.  Trump has attacked Fed chair Jerome Powell, his own pick for the job, for not cutting rates.  The president may fail to understand that the chair no longer calls the shots.  Votes on rates by the Open Market Committee, composed of Fed governors and selected regional Fed bank presidents, are public, but Trump seems to ignore them.

Last week’s vote showed a three-way split. The majority, including Powell, supported a small rate reduction; some opposed any reduction; one wanted a bigger cut.   Trump wants next year’s new chair to lead the Fed into making deep cuts.  But his appointee is likely to prove as independent as Powell.  And Powell could remain on the Board as a governor.

While the Supreme Court has supported stronger executive power for Trump by allowing him to fire independent agency members, it seems ready to protect the Fed.  It recognizes the intent, virtually from the outset of the country, to have an independent central bank.  So does Congress.

Both understand that the independent Fed has given the world a currency of reliable, long-term value.  The U.S. dollar is recognized as the principal reserve currency by other countries and businesses around the world.  Trump’s own National Security Strategy would retain the dollar’s role.

In the end, Trump’s effort to have his new chair seize Fed control is likely to amount to nothing more than futile and distracting bluster.

Trump's National Security Strategy would reshape world

 

Gordon L. Weil

Welcome to neo-isolationism.

The 1940 version of America First was pure isolationism.  The U.S. could prosper and avoid events in the rest of the world, buffered by the two largest oceans.  Then, the aircraft of militaristic Japan and the submarines of Nazi Germany eliminated the buffers and silenced American isolationism.

America First is back.   The new National Security Strategy states, “the affairs of other countries are our concern only if their activities directly threaten our interests.”   The new buffer is not mere oceans, but entire continents – South America and Europe.   Projecting President Trump’s sense of victimhood, the Strategy focuses on bringing them into line with the U.S.

The purpose of the Strategy is “[t]o ensure that America remains the world’s strongest, richest, most powerful, and most successful country for decades to come….”  Other countries should help ensure the success of American objectives.

The Monroe Doctrine warned Europe against seeking to regain control in newly liberated Latin America.  The U.S. would protect it from foreign intervention.   That the U.S. might gain unwanted dominance in some of these nations was largely ignored.  Generally, the policy worked, and Latin America became heavily dependent on the U.S.

In Europe, the situation was strikingly different.  Deep historical, national rivalries led to brutal armed conflict.   Despite American hopes of avoiding Europe’s wars, the U.S. followed Britain and others into two conflicts, which became world wars, and tipped the balance against the aggressors.

After the Second World War, the U.S. sought to create ways of preventing another European conflict.  NATO would serve as an integrated military command opposing growing Soviet expansion, and the European Union would interconnect economies there so tightly that war would become impossible.   The U.S. strongly backed both.

Elsewhere in the world, America’s enormous economic and military power enabled it to dominate.  With the collapse of the Soviet Union, Pax Americana reigned.  Given supposed U.S. benevolence, some analysts thought it might last for good.  But, as America aided others to grow their economies, it reduced its own influence.

Trump came to believe that “American foreign policy elites convinced themselves that permanent American domination of the entire world was in the best interests of our country.”  Their belief, he found, was contrary to the wishes of the American people.

From the outset, Trump argued that the U.S. was bearing too much of the cost of defending Europe and other allies.  He was correct that, in virtually all cases, other countries depended on the U.S. for their national defense and for the pursuit of their shared foreign policy objectives.

But his military posture does not cut American defense spending.  His trade policy, aimed at making the U.S. more self-sufficient, raises domestic market costs.  America First is worth it.  Added government debt would be paid later by another president.

In his view, the world would be dominated by the U.S., China and Russia.  Though it has no legitimate claim to such a role, Russia rattled its nuclear arms and boldly invaded Georgia and Ukraine, meeting little external resistance.  Trump recognized that Europe and the U.S. had opted for appeasement not opposition.  He admires Putin’s style, readily giving ground.

Trump can succeed in making his Strategy happen.  The historical tragedy is that Europe completely failed to take advantage of its potential to become a unified economic, political and military force.  European unity lost its grand goals and became technocratic.  It could offer no balance or constraint on the U.S. 

Europe’s demon is nationalism.  European unity, was once a lofty hope, has been lost in successive waves of nationalism, as best demonstrated by Brexit.  Just as with Trump in the U.S., European governments are moving to the right, stressing national identity.  Instead of waning, nationalism is gaining.

The Trump administration encourages Europe’s trend to the right.  If it comes to share Trumpian values and beliefs, he expects that it will align more closely with American policy.  If it insists on going its own independent way, he might withdraw U.S. protection of Europe.

Trump wants Europe to boost its military strength and no longer lean on the U.S., though that would increase European independence from American leadership.  As with other Trump policies like trade, the more he succeeds, the more he reduces U.S. influence. 

Europe should have learned from the Ukraine experience that it must defend its continent and can no longer rely heavily on the U.S.  Trump sees only three great powers to the exclusion of any rivals.  So far, the Europe-based “coalition of the willing” is not a new power, but just brave talk.    

Ukraine gives Europe a new opportunity to forge unity, though the effort requires painful political and economic compromises and sacrifices. Otherwise, Europe won’t become a fourth great power, leaving unchallenged the authoritarian trio sanctified in Trump’s Strategy.

Supreme Court revives its worst decision

 

Gordon L. Weil

 

The worst decision ever made by the U.S. Supreme Court was its 1857 ruling in the Dred Scott case.

The Court has just issued an obvious offspring of that decision. 

In Dred Scott, the Court majority decided that African residents, brought to the country as slaves or their descendants, were not citizens, even if they were free, because the founders of the U.S. had not considered them to be eligible for citizenship.  The decision said:

We think ... that they [Black people] are not included, and were not intended to be included, under the word "citizens" in the Constitution, and can therefore claim none of the rights and privileges which that instrument provides for and secures to citizens of the United States. On the contrary, they were at that time [of America's founding] considered as a subordinate and inferior class of beings who had been subjugated by the dominant race, and, whether emancipated or not, yet remained subject to their authority, and had no rights or privileges but such as those who held the power and the Government might choose to grant them.

This was racist originalism.  Africans were not citizens when the country was created, the Court found, and thus could not later be citizens.  In fact, the Constitution guarantees the rights of “persons” not only “citizens.”

There were two dissents.  One noted that African Americans were citizens and voted in five states when the U.S. was created under the Articles of Confederation.   Some states had ended slavery.   Thus, the majority was flat wrong.  The second dissenter found that U.S. federal law, which recognized that Blacks could be citizens, prevailed over a contrary Missouri statute.

Despite the passage of the Civil War constitutional amendments, many African Americans were denied their civil and voting rights until the 1960s.  The 1965 Voting Rights Act provided that the federal government could ensure states did not block full Black suffrage and could require federal advance approval of changes affecting minority voting in some locations.

The legacy of the Civil War was redeemed by this legislation.  But the current Supreme Court eliminated federal pre-approval of voting changes on the grounds that racial discrimination no longer exists.   It now appears poised to eliminate federal power over states to prevent discrimination, leaving it to the courts to deal with electoral bias case-by-case.

Because the Republican margin in the House of Representatives is extremely narrow, President Trump urged states under GOP control to modify district boundaries, usually done after the census every 10 years, to increase Republican majority districts before the 2026 elections.   His Department of Justice found the current Texas districts discriminate and sought change.

Texas redistricted to add five GOP seats.  Its action was challenged on the grounds that the redistricting was both partisan and intentionally discriminatory.   The Texas GOP replied that redistricting was purely for partisan purposes, which is legal, and to meet DOJ requirements.

A U.S. district court ruled that the redistricting was discriminatory.  In redrawing the lines, Texas intentionally reduced the possibility of seats going to Blacks.    To reach this conclusion, the court had conducted nine days of hearings, received testimony from 23 witnesses and collected thousands of exhibits.   It produced a record of more than 3,000 pages.

The Supreme Court is supposed to defer to the factual judgment of district courts unless they are clearly unreasonable.  Justice Elena Kagan, a dissenter, said that the district court’s work had been rejected over a single holiday weekend.  The majority simply overruled the district court, apparently ignoring its extensive record, and believed Texas.

The Court’s majority criticized the district court for not having shown deference to the Texas Legislature.  It also said the lower court should have produced an alternative map, accepting without questioning the DOJ claim that the current map was discriminatory.

This ruling may forecast the upcoming decision on federal review of state districting.  It is almost certain to strip the Voting Rights Act of any federal powers to prevent discrimination.  It will become an unenforceable law, possibly left only to individuals who believe they have suffered racial discrimination.

The Court majority asks people to believe that discrimination does not exist or is so rare that federal protection of voting rights is no longer necessary.   This finding must overcome any evidence that Blacks suffer from official bias, because they are black.  It must rely on the fact that most Blacks vote Democratic and color-blind partisan redistricting is legal.

The Civil War and the Voting Rights Act may have forced the country to allow Blacks to vote, but they did not prevent those in power from making Black votes meaningless.  The Court echoes Dred Scott’s message that they have “no rights or privileges but such as those who held the power and the Government might choose to grant them.”

 

 

Trump in Caribbean may enjoy immunity

 

Gordon L. Weil

The furor over the shooting of two survivors of an armed attack on a Caribbean vessel is all about who gave the execution order.

But there’s a lot more to it than that.  It gets to the essence of the Trump presidency.

The central issue joins the Supreme Court’s 2024 decision on presidential power with Trump’s view of himself.  The combined effect may be to have created a presidency of unlimited power.  The only restraints on Trump are either the formal, if extremely remote, possibility of his removal from office, or an electoral rebellion by voters across the country.

The question before the Supreme Court was whether presidents could face criminal charges for actions taken while they were in office.  To answer that question, the Court made a sweeping statement about the extent of presidential powers.

Presidents are completely immune from any legal control when they exercise the specific powers delegated to them in the Constitution, it ruled.  For example, the power to issue pardons, liberally used by Trump, cannot in any way be questioned or limited by Congress.  Acting as commander-in-chief, potentially against Venezuela, may also be immune.

In contrast, the Court found that presidents are completely subject to control when they clearly act in a private capacity, without any official authority being involved. Such actions may be difficult to identify.

A problem arises when they exercise powers that are at the edge of their authority or which they share with Congress.  The Court said they must be presumed to enjoy immunity, though the Court will have to determine case-by-case if they went too far.  It made no judgment on Trump, but sent the cases back to the district courts where they died when he became president.

The Court reveals that it is highly unlikely to find that presidents had exceeded their legal authority.  If they applied the law differently from congressional intentions by using their own interpretation, they would be presumed to enjoy immunity.  Trump may be right when he claims he is not strictly bound by the law.  His immunity covers his appointees, like Hegseth.

Relevant to the Caribbean case, the Court planted a little noticed bombshell.  The Constitution requires presidents to “take Care that the Laws be faithfully executed …,” but the Court ruled that requirement applies “domestically.”  It seemingly set a different standard for the exercise of presidential powers as commander-in-chief and in managing foreign affairs. 

Destroying alleged drug-smuggling vessels on the high seas is not “domestic.”  Might the president avoid faithfully executing the laws of war even if they have been adopted in U.S. law? 

Could the president order an invasion of another country without a declaration of war if there is no remedy besides impeachment?

Can the president allow violations of the Nuremberg rules of international law that ban subordinates’ claims that they were “just following orders?” 

The Court seems to say that if presidents act as commander-in-chief, they are not bound by the law.  They must only obey the Constitution, which offers a lot of leeway in interpretation.

Most past presidents, with the notable exception of Richard Nixon who quit before he was convicted, have followed constitutional understandings that embody the spirit of the American Revolution against the British king and the intentions of the Framers of the Constitution.  Trump has pushed his authority beyond those historical limits.

His approach appears to flow from an inbred notion of his personal superiority.  His special qualities allow him to disrespect other people and nations.  Nobody has the right to his respect or even courtesy, because he operates on a uniquely elevated level, as validated by voters.

When it comes to immigrants, he seeks to operate as prosecutor, judge and jury simply to exercise his personal prejudices, especially involving non-white people and nations.  His policies are predicated on obvious falsehoods.  He must know he is lying to Congress, the media and the public.

He has no respect for Congress. Its Republican majority clings to their seats and privileges, and appease his excesses to avoid his backing a primary challenger.   They have abdicated the preeminent constitutional role of Congress, thus failing to hold him accountable.  He ignores them with impunity.   He regards the Democrats as “the enemy.”

If his policy runs against the law, he overrules it.  His policy then becomes the law.  See DEI.  See USAID.  Perhaps he has gone too far with the Caribbean killings or having been caught trying to escape his previous promises about revealing the Epstein files.   Congressional Republicans seem restive, but it’s probably too early to call it courage.

The American Republic is united not by common ethnicity, but by common ethics.  With the Court’s backing, Trump sheds historical balances and restraints and offers instead dangerous change, with the clear message, “I am the law.”   

 

Trumps policies falter; 'The economy, stupid' -- once again

 

Gordon L. Weil

“The economy, stupid.”

That phrase, posted by strategist James Carville in Bill Clinton’s 1992 campaign headquarters, has entered American political mythology as a revelation of dazzling brilliance and simplicity.

It isn’t.  It’s an eternal political truth; campaigns are always about the economy, though that’s not always recognized.

Inflation is the immediate problem.  Reacting to voter unhappiness with prices under the Biden presidency, Trump promised: “Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods.”  Apparently, many voters, having lost faith in the Democrats, believed him.

Yet, inflation in September was higher than in the last full month of the Biden administration.  Trump runs the risk of facing the same kind of voter frustration with prices that brought him to office.

He asserts that the economy is sound, and people will soon see that he has kept his campaign promise.  Of course, that’s not quite the same as the “day one” promise.

Trump may claim that all is well and getting better for several reasons.  The stock market is soaring, and he may see it as a good representative of the national economy.  Yet its performance might reflect excess optimism about the rapid deployment of AI, which may not happen.  If that bubble bursts, it could harm both the market and the economy.

He may also be only looking at a slice of the American public.  Surveys suggest that Republicans, the wealthiest people and investors are positive about the economic outlook.  But they are out of step with everybody else.  While they wield great economic power, they are not the mass of voters.

Trump’s tariff policy contributes to inflation, though not as quickly as foreseen in some dire forecasts. His team takes credit for the limited early impact, ignoring the lags inherent in economic change, and that inflation will thus increase as the months roll by.  Importers will absorb less of higher tariffs than at the outset, with more costs being passed on to consumers.

By applying across-the-board tariffs, Trump failed to take account of American dependence on certain products that cannot be replaced by U.S. production.  Big price increases have occurred in coffee, women’s clothing and electronics.  Seeing the trend, he has begun lowering some agricultural tariffs.  There may be more reductions to come.

When President Reagan took office facing high inflation, he left it to the Federal Reserve to take the unpleasant measures needed to lower it.  The policy amounted to saying it will hurt more before it gets better.  Reagan remained blameless, while the Fed raised interest rates.  The Fed tamed inflation, but caused much pain in doing it.

By contrast, Trump has plunged in and tried to get the Fed to cut interest rates, which he argues will promote growth.  His pressure may have influenced the Fed, slowing a reduction in inflation.  To the extent that his policy fails, Trump, unlike Reagan, may get the blame.

Housing is a special problem, with demand exceeding supply.  Inevitably, that scarcity drives up prices.  One underlying factor is that by eliminating immigration, the government has cut labor force growth needed for housing construction.

The tariff policy has also had an unanticipated rebound effect.  The U.S. may cut imports and bring production home, but it may lose exports due to retaliation.   After U.S. auto tariffs forced two American carmakers to close some Canadian production, Canada removed a tariff-free exemption on some of their exports to its market, costing the carmakers solid sales. 

One key to Trump’s approach is his heavy reliance on cheerleading to overcome people’s worries about the economy.  An old song included this line: “Wishing are the dreams we dream when we're awake.”  

Unlike the song’s lyrics, wishing won’t make it so.  Trump offers dreams more than paycheck reality.  People pay the price at the check-out counter, an experience that Trump may have missed.  No amount of telling them that it will soon be better, without evidence for the claim, can change the higher costs that people pay.  Dreams can become nightmares.

Trump’s problem, one he shares with many others who have occupied the White House, is in taking responsibility for the state of the economy.  This overstates presidential influence; the economy is usually influenced by a myriad of factors outside of their control.  

In this case, however, Trump’s trade, immigration and Fed games have put him squarely in the game.  He exudes confidence in these initiatives, while they produce uncertainty and come up short on promised results.

Even if he abruptly alters policies, the inevitable economic lag will mean the effects of his past moves will be felt next year.  In short, he has handed Democrats a major issue to boost their 2026 congressional campaigns.  The economy, stupid.

Ukraine, Europe oppose US plan aiding Russia

 

Gordon L. Weil

President Trump’s view is that Ukraine has lost the war with Russia and ought to surrender or lose U.S. support, making its ultimate defeat even worse.

Ukraine’s view is that, while it will negotiate for peace, it will never give up.

In his desire for a rapid end to hostilities, even if it only yields a tenuous ceasefire, Trump is obviously unaware of both international law and Europe’s history with Russia aggression.  A ceasefire is a starting point in negotiations, but Trump has little interest in the details of the deal.  For him, a ceasefire is peace.

A basic definition in international law applies to the U.S. proposals.  There are certain rules that have been generally accepted by almost all countries, often in treaties, that are the real body of international law.  Beyond that, the term is often thrown around carelessly.

Part of the generally agreed rules are the four conditions that define a nation-state. 

1.  It must have sovereignty, able to defend itself and make decisions for itself.

2.  It must have territory, defined by borders accepted by other nation-states.

3.  It must have a population that shares in values, whether ethnic or civic or both.

4.  It must have a government, capable of making decisions for the nation-state.

Trump, who rewrites American constitutional understandings and the world’s trade rules, believes he can strip a nation of characteristics that will result in its disappearance as a state.  Ukraine, which meets these international standards, is threatened. 

On this point Europe (except for Hungary) splits with the U.S.  Many countries there, having lost their nationhood to Nazi Germany in World War II and believing its outcome ruled such threats illegal for good, have opposed Trump’s proposals for a Russia-Ukraine agreement.

Trump’s original 28-point proposal included several points that would undermine Ukraine’s status as a nation-state.  Ukraine would voluntarily turn over to Russia some national territory still under its control, cede the territory seized by Russia, refrain from seeking NATO membership, cap the size of its armed forces, and hold national elections within 100 days.

These proposals would remove sovereign powers from Ukraine.  Because Russia would make no parallel commitments, it could readily overpower Ukraine to make it a satellite.  While the U.S. might pledge to defend Ukraine, its waffling on its NATO mutual defense commitment could worry Kyiv.  Russia would gain the buffer it wants with NATO and could expand its influence.

Trump also implied that, in addition to staying out of NATO, Ukraine’s joining the EU could be questioned.  He also proposed that Russia be invited back into the G-7 group.  The Europeans responded that these are matters for NATO, the EU and G-7, not for an agreement between Ukraine and Russia (or Trump and Putin).

No peace agreement will return Crimea and other Russian occupied parts of the country to Ukraine control.  But Ukraine looks to international law for an answer, likely unknown to Trump.  It’s about recognition.

Together with other countries, Ukraine could recognize the de facto control (control in-fact) by Russia of occupied territory, but refuse to recognize de jure control (control by right) of it.  In that way, it could avoid taking constitutional action required to cede territory, while accepting current reality and keeping the door open for a later resolution.

As U.S.-Ukraine negotiations were under way, Sweden announced that it would never recognize Russia’s annexation of Crimea and other territory.   The statement made clear that Trump could not sweep away Ukraine’s status as a nation-state, because other countries would not go along.

Trump reportedly thought that Ukraine was slowly losing territory to Russia.  He also believed that the Zelinskyy government was weakened by corruption.   Both developments would force the Ukraine president to give way to Russian demands.  He missed the degree of Ukraine’s commitment to its status as a nation-state.

A member of the Ukraine parliamentary opposition dismissed this belief.  “His problems don’t impact our ability to conduct the talks, even if the American side may mistakenly think so.”  A German observer commented that, if Zelenskyy accepted the Russo-American proposal, “he would not be president anymore when he comes home.”

A Ukraine official in the negotiations offered a veiled analogy to Trump’s hard push for a deal and for the Nobel Peace Prize: “We were not sitting in the Netflix headquarters writing scripts that will be Oscar-nominated.”  Trump mistakenly sought acclaim like he received for his multi-point Gaza plan.

Putin wants to turn Ukraine into a satellite, relenting only if the price becomes too high or the U.S. gets tough. Trump wants an end to armed conflict regardless of what would follow and ignoring Ukraine’s future as a nation-state.

If Trump succeeds, Putin would have won his war.   And Trump would have reshaped the law of nations.

Europe's failure helps Russia

Gordon L. Weil

Famed British operetta composers Gilbert and Sullivan wrote about a reluctant military squad that kept proclaiming that it would advance “forward on the foe.”  But, frozen in place, it was repeatedly reminded, “Yes, but you don’t go.”

That looks like the story of today’s Europe facing the Russia-Ukraine war.  Britain, France, Germany and others see the Russian invasion of Ukraine as a threat to all of Europe.  If Russia’s Putin gets away with again breaking a non-aggression promise, he becomes a danger to all of Europe, especially the nations closest to his country.

The Europeans believe that if Putin succeeds in effectively controlling Ukraine through military force, he is likely to want to extend his reach.  He appears to dream of the day when the Soviet Union controlled eastern Europe, including many countries now members of the EU and NATO.  For Europe, the Cold War is back, but it’s hot.

Their worries are justified.  Russia planes and drones have overflown Baltic countries and Poland.  They have harassed British aircraft and airports.  They have sent warships and drone- launching ships into Scandinavian waters.  They have even used British drug money laundering to disguise Russian war funds.

This has brought Europeans together to create what they call a “coalition of the willing.”  But the U.S. is not completely willing and has stood aside.  It provides intelligence to Ukraine and will sell some weapons to European countries that they may then transfer to Ukraine.  But no American dollars or military are involved in the active defense of Ukraine.

Given the relative weakness of European armed forces and its own limitations, Ukraine recognizes that it is dependent on the U.S. in general and President Trump in particular.  It strengthens its links with Western Europe and receives significant financial aid from EU members.

But Ukraine is fighting on an unlevel field.  Russia freely attacks sites in Ukraine, but the U.S. limits the victim’s response in the attacker’s homeland.  The natural alternative for Ukraine is Europe, a region with other countries worried about the war.  The U.S. can write off Ukraine, because, unlike Europe, it finds it has no apparent strategic value, but they can’t.

Here’s where Gilbert and Sullivan come in.  The Europeans make bold statements, hold high-level meetings, attack Russia and press the U.S. but they take little supportive military action.  They would only put peacekeeping patrols on Ukraine’s soil after a peace agreement was signed.  They purchase and forward weaponry, adding to the profits of their American manufacturers.

The coalition of the willing has committed to supporting Ukraine financially “for as long as it takes.”  Could that commitment be undermined by persistent Ukrainian corruption, the end of the Zelenskyy government or loss of interest by Europe’s taxpayers?  Their support is taken for granted and does not help Europe get into the negotiations on the war’s resolution.

In the 1950s, when the European Union was being created, mainly as a way of making it impossible for France and Germany to go to war against one another yet again, the underlying thinking was that the Europeans should become almost fully integrated in a relationship covering their economies and armed forces.

The intent became clear when France vetoed UK membership, claiming it was an Atlantic nation that would not be fully committed to Europe.  By the time Britain later joined, many other countries did as well, but their demands for national sovereignty blocked integration.  As the move toward unity faltered, Brexit proved the French right.

Today, the Europeans see the Russian attack on Ukraine as a threat to themselves.  But, instead of becoming a strong partner to the U.S., they let themselves become America’s dependents.  That leaves them able to protect their own vital interests only so far as Trump will let them.

Trump’s peace proposals would end hostilities by weakening Ukraine, which would allow a future Russian attempt at a takeover.   The Europeans have been excluded in his planning, because they have no relevant power.  He has correctly recognized their dependency and now acts on it.

If the Europeans believe what they say about Russia’s war on Ukraine being the opening gambit in a long-term war against them, they are not acting like they mean it.  They are not sending enough weapons they now have at home to the front lines of their war in Ukraine.

If Ukraine has a NATO-like relationship with Europe, they should act as though it would trigger a NATO-like response, though one without the U.S.  Their arsenals should be fully engaged.  They should offer to keep combat troops in Ukraine to protect against future Russia aggression.  They should not be deterred by Russian saber-rattling or by the temptations of appeasement.

Otherwise, they remain American dependents, giving up their right to make decisions about their own defense to Trump and the U.S. 

  

Democrats need uniy, not purity

 

Gordon L. Weil

The Democrats sense their chance to retake control of the federal government and put a lid on MAGA.  But they run the risk of getting in their own way.

They see their wins in Virginia, New Jersey and New York City as signs the voters are turning away from President Trump and toward them.  Pundits pile onto this snap judgment, possibly engaging in wishful thinking. 

There’s still a long way until November 2026, and we know nothing about intervening events.  Also, notwithstanding its recent victories, the Democratic Party struggles to find its identity and a leader.

Perhaps the Dems biggest problem is that it is engaged in a family feud about what it needs to win next year.   Of course, they agree or hope that opposing Trump might be enough to return them to power.   But, beyond that, the Dems are split on their identity.

Moderates seek a revival of traditional Democratic social welfare policies that could respond to the economic worries of middle- and lower-income people.  They want the restoration and even the expansion of health and food support programs.  Government stimulus spending is possible.  At the same time, they would downplay attention to controversial social issues.

This approach would restore more than it would innovate.  At best, it could extend New Deal-style policies, but it might not amount to real change.  It could represent an attempt to link working people with rising minorities under an activist government.  It would undoubtedly unravel Trump policies.

Progressive Democrats, while not opposing the moderates’ policies, assert that they do not go far enough to meet the popular demand for change.  It is not enough to reanimate the Affordable Care Act or pour government dollars into promoting economic activity.  They see the government being widely regarded as a failure, pursuing policies that do not promote progress.

They would go well beyond the ACA to universal health care, though they avoid government -run socialized medicine as in the U.K.  Federal housing and food assistance would move toward eliminating poverty.  They want to restore environmental regulation. And they favor measures to allow equal opportunity for all people in society who face discrimination.

The moderates worry that progressive policies have limited appeal to the electorate, and progressives complain that moderates ignore increasing demands for major change.  Each sees the other as either being too narrow or too unrealistic to regain the support of a winning, popular majority.

This kind of split in the Democratic Party is nothing new.  It’s almost business as usual.

After World War II, moderate President Harry Truman battled progressives led by Henry Wallace.   They differed on policy toward the Soviet Union with Truman taking a hard line and Wallace believing that partnership was possible.  Truman prevailed.

In 1980, moderate Georgia Gov. Jimmy Carter defeated liberal Sen. Ted Kennedy for the nomination.  Twelve years later, moderate Arkansas Gov. Bill Clinton overcame the drive of progressive California Gov. Jerry Brown.  In 2006, Sen. Barack Obama, seen as a liberal, had to defeat Hilary Cinton, perhaps seen as more moderate.

The split did not prevent Democrats on either side from winning elections when they achieved enough party unity to defeat divided or dispirited GOP opposition.   That’s what the Dems hope for in the 2028 presidential election.   They work to send strong, advance signals by winning next year’s congressional contests.

Each side now believes that Trump will sink himself, and they offer the better alternative.  But there is a better model in their party’s history than seeking to prevail over other Dems.  It was the coalition put together by Franklin D. Roosevelt in winning his first two terms as president.

Roosevelt faced Democratic divisions far deeper than the party does today.  The most obvious divide existed between Dixie Democrats, southerners who supported segregation, and northern Black constituencies, which demanded greater access.  Political tradition and expediency kept them in the same party.

FDR needed the support of all congressional Democrats to deal with the Depression and its economic dislocation.  He identified the issues shared by all their constituents, no matter their views on race.  Improving economic conditions for everybody unified the Dems.   Beyond the necessary core programs, their divide survived.

Today’s Democrats could try to create a unifying platform focusing on their common understanding of broad national priorities.  In a huge nation, it is futile to believe that, beyond their shared core interests, all Dems are likely to see party policy the same way. 

If winning is what matters most, the Democrats need to turn their core agreements into their national platform and not require total unity.  Compromise is essential, and it’s needed now, as is a unifying national leader.

Otherwise, the Dems might end up echoing statesman Henry Clay’s famous declaration: “I would rather be right than be president.”  Despite numerous tries, he never was president. 

MAGA melts; promises can't be kept

 

Gordon L. Weil

MAGA may be failing when it comes to some of President Trump’s key policies.

Like many candidates for executive office, he made promises with broad political appeal, but which ignored and encountered harsh reality – from political to economic to legal – that made keeping them impossible.

After making bold and popular promises, Trump last week backtracked on commitments relating to tariffs, immigration and military action. 

With global free trade becoming increasingly unworkable, Trump imposed a new system depending on a multitude of bilateral arrangements.  He levied across-the-board tariffs on almost all countries.  He acted swiftly in the belief that other countries would flock to make trade concessions so that he would lower tariffs aimed at them.

Economists warned that the tariff burden would fall mainly on American consumers as their cost was passed on by importers.  He denied that tariffs caused inflation and even denied that prices were rising.   Unhappy consumers saw prices on groceries increase, whatever he might claim.

No obvious effort was made to equate the dollar value of trade concessions made by others with the cost imposed by new tariffs.  Instead, Trump lowered tariffs in return for promises of massive new investment in the U.S., though it is doubtful that tracking foreign investment commitments is possible.  In the short-term, domestic manufacturing benefitted little from tariff protection.

Finally, Trump came to realize that his tariffs were driving up prices for individual consumers.  Last week, he ordered tariffs lifted on foods for which U.S. production was insufficient to meet demand, pushing prices up.  More tariff cuts on non-food items are said to be coming.

“Wait. If lowering tariffs lowers prices, what does raising tariffs do to prices?” Erica York, a vice president at the Tax Foundation, asked.  It may be called a matter of “affordability,” but that’s really inflation.

In the end, some relatively low tariffs may survive, but the policy itself is in trouble.  Even more troublesome is the possibility that the Supreme Court, usually supportive of his expanded use of power, could overturn many of his tariffs because they are illegal or even unconstitutional.  Such a decision could lead to undermining his assertion of unlimited power.

He floated the idea of returning some of the tariff revenue to American taxpayers.  This may have been an attempt to encourage the Court not to see tariffs as taxes.  It probably won’t work, leaving him in violation of his MAGA promise to not raise taxes.

On immigration, Trump promised what amounted to the complete elimination from the U.S. of undocumented or illegal immigrants, starting with the most criminal.  Dating from his first presidential campaign, that promise was the MAGA cornerstone.

He made clear he was trying to deport as many as possible, even if they were not criminals.  In fact, law-abiding, productive residents were the easiest to target, which concerned some people who had supported his policy.  He even reduced legal immigration. 

His anti-immigration policy had been the binding force among his supporters.  Last week, that changed. 

Trump said that the U.S. lacks people with “certain talents,’ who should be admitted so they can train Americans.  Some loyal Trumpers disagreed with that and with his willingness to admit 600,000 Chinese students.  Georgia GOP Rep. Marjorie Taylor Greene, the ultimate Trump backer, dissented, so Trump called her “wacky” and ceased supporting her.

When asked if his policy would displease MAGA backers, he asserted that he alone had invented MAGA.   That statement implied they must follow his lead.  However, because he had adopted policies espoused originally by others, that leadership is now in question.

He recognized that the U.S. cannot go it alone, especially in technical areas.  He may come to realize that the economic growth he wants depends on a growing population resulting from legal immigration.   Because of issues related to the immigrants’ ethnicity, he may encounter even more MAGA opposition.

After his first term, Trump prided himself on having kept the U.S. out of armed conflict.  That struck a contrast with the Democrats, pleasing his backers.  The bombing run he ordered on Iran began to raise doubts, though he excused it by noting that no American lives were lost.

Last week, he strayed even further from his commitment.  He stationed a huge American aircraft carrier, the world’s largest warship, in the Caribbean Sea as an obvious threat to Venezuela.  It might have been better placed in the South China Sea to face down Chinese marine aggression than to confront a relatively minor portion of the drug trade.

Trump risked restoring America’s role as the “world’s policeman,” a policy completely contrary both to his claim to being a peacemaker and his policy of keeping the U.S. out of foreign conflicts.  America First now seems to allow for the use of American military power abroad.

MAGA is melting.

 

 

 

The big gap is not wealth, but age

 

Gordon L. Weil

Last week, eight Democratic U.S. senators broke ranks with their party and voted to end the government shutdown.  In return, they got a weak promise for a later vote on health insurance. 

To some, it looked like “snatching defeat from the jaws of victory.”  By hanging tough, the Democrats could have forced the GOP to agree to help for ACA beneficiaries.   Instead, they gave up all leverage.

The Democrats’ split and its political implications ignored its underlying message about the state of American politics.

The average age of all defecting senators is about 70 and six are eligible for Medicare (plus the federal government’s own employee coverage).  The oldest is Maine’s Angus King, who is 81.  The 22 million people adversely affected by the ACA cuts, resulting from an earlier Republican budget bill, are not eligible for Medicare.  They are too young.

The big gap in the U.S. is supposedly the wealthy and everybody else.  But an even bigger gap may exist between the old and everybody else.  The Senate vote may be a good indicator of how much a geriatric Congress is out of touch with the needs and worries of most Americans.

The U.S. is a gerontocracy.  The current Congress is the third-oldest in American history.  The average age of senators is about 64.  The median age of all Americans is 39.

Surveys show that most Americans are not satisfied with the government, but there is little action to modify and improve the system.  Some may believe that the inherent strength of the political system will restore a government that will again merit their trust.  But many seem to feel they must make the best of an increasingly authoritarian regime.

That may not be true of the new, young voters.  They believe that the government fails in dealing with the public’s needs for health care, housing and income support.  That is the similarity between recently elected New Your Mayor Zohran Mamdani and right-wing influencer Nick Fuentes.  Though one thinks it does too little and other that it does too much.

Mamdani favors a government large enough to provide the resources to meet those needs.  Fuentes wants less government.  Mamdani personifies a government reflecting diverse groups in society.  Fuentes espouses racist policies and wants to turn control over entirely to white, Christian men.

Unlike most of the older generation, young activists like these know their way around the new media.  They have escaped the world of traditional journalism and network television for social media and influencers.  They want to be seen as people like their young constituents in their personal taste and familiarity with popular culture.

They want to exploit the frustration of young people which appears to be bringing them increasingly into the political process.  Their participation is putting politics in a different light.

The Republicans have largely become loyal followers of Trump.  Whatever he wants, however erratic, becomes their policy, and many hurry to develop rationales for his personal preferences.  The Democrats have largely become nothing more than the Trump opposition.  They believe that he will offend so many Americans, that, even without offering cogent alternatives, they will win.

In neither party, does the current political leadership actually lead.  The complacent GOP and the cowering Dems can come up with nothing innovative.

In contrast, the new, young activists have proposals.  The Democrats promote universal health care, civil rights and reducing climate change.  Oddly, their oracle is an old man, Sen. Bernie Sanders.  The MAGA influencers propose to dismantle much of the government and return to a society in which privilege ruled.  Oddly, their oracle is an old man, Trump.

The young Democrats are a key component of their party’s Progressive wing, which seeks to make their proposals the central element of the Democratic platform.  They believe that the moderate Democrats are not responding to public needs.  Mamdani’s win encourages them to believe they are gaining momentum.

The young Trump Republicans are at the extreme of the MAGA faithful.  They call Democratic proposals for government policy a socialist conspiracy.  They oppose the growing role of women and non-whites in government.  The reaction to the assassination of Charlie Kirk encourages them to believe they can reach more people with a nationalist message.

Neither the young Progressive Democrats or the extreme MAGA Republicans are likely to prevail.  But they can pull each of the parties somewhat closer to their views and serve as a powerful political influence.  Each lays the groundwork for their future growth.

The old guard leading the parties misses the appeal of the young activists to many average voters who share their belief that the government has failed and cannot be trusted.  Their outmoded perspective prevents them from accepting demands for change.

Clearly, it’s time for new and younger leadership that can listen better. 

 

 

 

Trump makes Biden's mistake; misreads the economy

 

Gordon L. Weil

Donald Trump is making the same mistake as Joe Biden.  And, like Biden (and then Kamala Harris), he may pay the price.

He sees the national economic data as showing prosperity and believes he should reap a political reward for having made it happen.

It’s true that for both national job creation data was good, inflation was being reduced from Covid levels, and wages were beginning to increase. The stock market, which is supposed to embody the prospects for the future economy, climbed.

Biden and Trump had sharply different ways of keeping their versions of the good times rolling. 

Biden relied on traditional Democratic “pump priming” to restore the post-pandemic economy.  Added to that, he tried to boost income support programs.  These measures required government spending, but Biden saw national recovery emerging.  His support for greater government involvement in the economy led Trump to call him a radical socialist.

But Trump has turned out to like big government as well.  His unprecedented tariff moves are aimed to promote domestic manufacturing.  He has made the government a direct corporate investor.  He pushes the national debt to new records by big spending on the military and border security.

Both have believed that their actions promote a strong economy and cite the national statistics to prove their point.  They both have erred in believing that good national numbers translate into prosperity for all individuals.  Implicitly, they argue that national success will trickle down to working people.   That’s an old theory that has never worked. 

Both missed that many middle-income and poor families are struggling to pay for food, clothing and shelter.  A favorable national economy does not spread itself to all people.

This has been due partly to what people see as inflation.  They cannot keep up with rising prices, even if they receive modest pay increases.  Inflation was artificially low before the pandemic, and the Federal Reserve has successfully lowered it, but not fully to pre-Covid levels.  The long effort to restore a balanced, normal economy has led to problems for personal budgets.

Biden used government outlays to meet those problems, but they often missed the mark.  Trump sees great promise through the creation of manufacturing jobs, but that takes time and meanwhile, families struggle.  He also cuts federal benefit programs, compounding the effect as less federal money flows into the economy.

Trump sees the readings he gets from the stock market as a measure of economic health.  Yet the market reflects speculation, these days on AI, as well as short-term profitability.

Some see Trump’s prosperity, real or promised, as being like the U.S. during the 1920s.  Business and the stock market soared. The privileged few enjoyed lives of excess.  The government stepped back.   It couldn’t last and finally, there was an economic price to pay. 

The well-regarded monthly survey of consumer sentiment is a useful measure of how average people see the economy.  Right now, it is at a near-record low with only about half of the people being optimistic about the economic outlook.  Consumers are cutting down on discretionary spending.

The erratic course of Trump’s policy moves makes it difficult to forecast the economic outlook and it generates a sense of instability, which undermines chances for sustained growth.

A major cause of the disconnect between apparent national prosperity and the economic life of most Americans is the gap between the wealthy and average people.  With only a small segment of the population owning a commanding share of the nation’s wealth, views on the state of the national economy are skewed.

Average families don’t have to understand economics.  They can see the income gap. 

The East Wing of the White House is abruptly demolished to build a huge, lavish ballroom.   It is financed by some of the wealthiest Americans, many of whom gain profitable favors from the Trump administration.  At the same time, Trump withholds food stamps.

Elon Musk, whose mythical Department of Government Efficiency devastated government agencies, induces his Tesla investors to agree to pay him $1 trillion.

These actions don’t involve the direct expenditure of public funds.  But they send a readily understandable message about the two Americas – the wealthy and everybody else. 

Trump promises voters that the economy will be working well for them, as it does for the wealthiest, by the time of next year’s congressional elections.  He strongarms the Federal Reserve to lower interest rates even faster to aid that effort, risking greater inflation. 

He is an experienced sales person.  He asserts that the economy is booming, not because he truly believes it, but to imply that better times are on the way.  Biden learned that the people pay more attention to their current expenses than to national statistics or campaign promises.  Trump seems not to have learned from Biden’s hard-earned lesson.

 

 

Trump's ego undermines his policies

 

Gordon L. Weil

Imagine a president who wanted to add to the national territory, sought to reform banking, and staged a bold fight on tariffs.  He won the presidency but without winning a popular majority.

Donald Trump?  This describes him well, though he has not yet succeeded on any of his goals.

But it isn’t Trump.  You may well have never heard of this president.  He was James K. Polk, the eleventh president.  Unlike Trump, he pledged to serve only one term, and he did.  Also, unlike Trump, he achieved all his goals. 

Most importantly, he served without displaying outsized ego or self-promotion, resulting in his historical anonymity.  But he changed the nation.  If you want to make America great again, Polk’s presidency is part of the past that Trump would restore.

Anyone who aspires today to the American presidency must have a big ego.  The task and the responsibility are so great that a person with a normal view of their limits would not have enough self-regard to carry them through a campaign much less the presidency.  But Trump’s view of himself surpasses any of his predecessors.

Trump’s ego is the hallmark of his administration.  He makes extravagant claims about his memory, his knowledge of science, his wealth, and his ability to use power effectively.  He sees his supposed success in real estate as proof of his extraordinary ability to make deals among nations.

He seeks to burnish his status by adding vast territory to the United States (Greenland, Canada, though the Panama Canal seems to have been dropped), and returning the banking system to the banks, and making the U.S. economically independent.  He would by himself turn the tide of American history.

With no embarrassment he has made clear that his political style relies rely on threats to his GOP friends and foreign allies, and depend heavily on flattery.  Foreign leaders quickly found that unbounded praise is an essential tool in inducing him to alter his policies.  They also never tire of admitting their dependence on the U.S. with the resulting need to stay on his good side.

Nowhere is this more obvious than his attempt to collect nominations for the Nobel Peace Prize from the leaders of other nations.  He may believe that a rush of high-level nominations will enhance his chances.  It looks like gaining endorsements for one’s candidacy during a political campaign. 

Trump appears to consider the praise and support he actively cultivates as a sign that others recognize his outstanding qualities and accomplishments.   His ego allows him to miss their obvious flattery, not representing their sincere beliefs, but as a necessary tool of their own foreign policies.  He is not widely regarded as the “very stable genius” that he claims to be.

Nominating him for the Peace Prize amounts to merely promising to write to the Norwegian Nobel Committee.  Nominations remain secret for 50 years.   Sinking small vessels on the high seas, threatening to use force against Venezuela and Nigeria or sending the military to repress domestic free speech will deny him the Prize, no matter what else he does.

The ultimate expression of his ego may have been slapping an added 10 percent tariff on Canadian imports, because he disliked a television ad.  Tariffs are taxes and are supposedly based on economic considerations not presidential whim.

Much of the world sees through his personal management of American policy.  The country is increasingly held responsible for having elected him twice.  Because such a choice may be possible in the future, many countries grow wary of a close, long-term relationship with the U.S. 

Trump uses the powers of his office, enhanced by the backing of the Supreme Court and the GOP Congress, to serve his ego more than the national interest.  This may reshape the U.S. and its effect can extend well into the future.  He may not achieve his goals, but he is making his mark.

And the anonymous Polk?  In the four years of his presidency, he almost doubled the size of the country through the controversial Mexican War and astute diplomacy with Great Britain.

He also created an independent national treasury, arguing the U.S. could manage its own financial affairs, not the banks.  This led eventually to the Federal Reserve, the public-private arrangement setting monetary policy that Trump would now topple.

And Polk changed national tariff policy.  He lowered tariffs so they would cover the cost of government but not overly protect domestic industry, thus reducing prices.  This policy worked for 20 years.

Trump’s excessive focus on himself – his ego gratification – gets in the way of stable and sound public policy, conservative or not.  It offends many whose support he needs.

Displaying little ego, Polk acted for what he saw as the public good.  A contrast with today.