tag:blogger.com,1999:blog-114390102024-03-12T20:24:11.168-04:00Graffiti: Ruminations on political and economic life."Perhaps the sentiments put forth here are not yet sufficiently fashionable to procure them general favor. A long habit of not thinking a thing wrong gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom. But the tumult soon subsides. Time makes more converts than reason."
--Thomas PaineUnknownnoreply@blogger.comBlogger407125tag:blogger.com,1999:blog-11439010.post-68274473734385324372023-04-26T22:02:00.013-04:002023-04-26T22:09:33.831-04:00Is any bank small enough to fail anymore?<p><span style="font-family: Roboto; font-size: medium; white-space: pre-wrap;">In a blink of an eye, it was over. For a minute there, it seemed like the collapse of Silicon Valley Bank was going to consume us. Now, just a few weeks later, we have moved on. According to Google Trends, however significant the 2023 bank crisis seemed to be in the moment, that moment has passed. </span></p><span id="docs-internal-guid-a0b50fc3-7fff-1c66-a969-b6bc8d296e90" style="font-family: Roboto; font-size: medium;"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The specter of the 2008 global financial crisis was hard to ignore when federal regulators closed down Silicon Valley Bank on March 10th. Indeed, the 2023 bank crisis had many elements of the 2008 crisis. The shutters of fear rippling through financial markets. The failure of a highly visible institution and rumors about which might be next. The debates over the urgency of federal intervention to stanch the risks of contagion spreading across the financial system balanced against the </span><a href="https://twitter.com/sensanders/status/1635690340345626624?s=46&t=bUNGd3FKrTkBKa-hpZY0Aw" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">outrage</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> at the prospect of bailing out fat cats. Then, after the fat cats are bailed out and the dust settles, the political retribution against those who did what needed to be done.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In 2008, that </span><a href="https://www.investopedia.com/articles/economics/09/financial-crisis-review.asp" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">sequence</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of events took several years to play out, while this time around, it was all over in a matter of days, except for the political retribution. Early in the week of March 6th, we heard there were funding </span><a href="https://www.wsj.com/articles/rising-interest-rates-hit-banks-bond-holdings-11668123473?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">problems</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> at Silicon Valley Bank. On Wednesday, the crisis accelerated. By the end of the day Thursday, led by venture capitalists who </span><a href="https://www.washingtonexaminer.com/news/business/svb-collapse-peter-thiel-silicon-valley-" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">urged</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the early-stage companies they had funded to pull their money out, the </span><a href="https://www.axios.com/2023/03/11/the-largest-bank-run-in-history" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">largest</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> bank run in history was on. By the end of the week, SVB was shut down by bank regulators, and the debate on the importance of preventing </span><a href="https://www.cnbc.com/video/2023/03/10/svb-could-lead-to-tighter-lending-standards-and-less-credit-availability-says-wedbushs-david-chiaverini.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">contagion</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, even if it meant bailing out the fat cats, roiled the Internet. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The backstory is fairly succinct. Silicon Valley Bank was unlike any other commercial bank in the country. It was founded forty years ago to meet the needs of startup companies, and for decades had a </span><a href="https://books.google.com/books?id=QtoxDwAAQBAJ&pg=PA65#v=onepage&q&f=false" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">symbiotic</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> relationship with Silicon Valley’s leading venture capital firms. Venture capitalists urged their start-up and early-stage portfolio companies to keep their funds in SVB, and SVB in turn maintained a multi-billion venture investment unit that held equity stakes in those same companies, as well as in the venture capital firms themselves. As venture capital funding </span><a href="https://www.statista.com/statistics/277501/venture-capital-amount-invested-in-the-united-states-since-1995/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">exploded</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> over the past half-decade, growing from $90 billion in 2017 to $345 billion in 2021, SVB </span><a href="https://www.thestreet.com/banking/svb-collapse-elon-musk-makes-a-frightening-comparison" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">kept pace</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, with deposits growing from $49 billion in 2018 to $189 billion in 2021. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Before its collapse in March, SVB’s ten largest depositors had an average of $1.3 billion </span><a href="https://www.axios.com/newsletters/axios-macro-5b62ca9d-3966-4c0a-adb8-e8582d8b4645.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmacro&stream=business" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">parked</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in SVB, and only 7% of SVB’s </span><a href="https://www.axios.com/2023/03/15/silicon-valley-bank-outlier-uninsured-deposits" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">deposits</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> fell within the $250,000 limit </span><a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/svb-signature-racked-up-some-high-rates-of-uninsured-deposits-74747639" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">covered</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by FDIC deposit insurance, compared to </span><a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/svb-signature-racked-up-some-high-rates-of-uninsured-deposits-74747639" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">upwards</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of 60% at most commercial banks across the country. In sum, SVB was a major player in the closed, </span><a href="https://www.economist.com/finance-and-economics/2023/03/14/what-the-loss-of-silicon-valley-bank-means-for-silicon-valley" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">incestuous</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Silicon Valley world, where venture capital </span><a href="https://www.axios.com/2023/03/10/svb-bank-run-silicon-valley-bank?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosam&stream=top" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">rules</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, and billionaires help other billionaires create new billionaires. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It remains unclear why a handful of leading venture capitalists turned on Silicon Valley Bank. For years, venture capitalists had directed their portfolio companies to use SVB as the depository for their funds. One would have expected that those venture capitalists – touted far and wide as among the most brilliant financiers on the planet, and with billions of dollars of client funds at stake – would have paid attention to issues SVB was facing as the Fed was increasing interest rates. After all, the challenges facing commercial banks as rising rates were translating into losses on their bond holdings had been written about </span><a href="https://www.wsj.com/articles/rising-interest-rates-hit-banks-bond-holdings-11668123473?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">months</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> earlier in the Wall Street Journal, and this past November JPMorgan raised specific </span><a href="https://nypost.com/2023/03/12/jpmorgan-analysts-warned-about-silicon-valley-banks-16b-in-unrealized-losses-in-november/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">concerns</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> about the impact on Silicon Valley Bank. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And it is hard to imagine that there weren’t solutions to the problems Silicon Valley Bank was facing. As one SVB insider </span><a href="https://www.cnn.com/2023/03/13/business/svb-employees-angry-at-ceo/index.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggested</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, one would imagine that any number of sovereign wealth funds would’ve been happy to take a piece of Silicon Valley Bank and in doing so secure its place as a player in the most dynamic economic region on earth. Yet somehow it all came tumbling down, when rather than fix the problem, leading venture capitalists in the Silicon Valley chose to </span><a href="https://www.washingtonexaminer.com/news/business/svb-collapse-peter-thiel-silicon-valley-" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">cut</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and run.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As the run on Silicon Valley Bank began to gain steam that Thursday, those same venture capitalists and hedge fund gurus took to social media to demand that the federal government step in and fix the </span><a href="https://www.thedailybeast.com/peter-thiel-claims-he-had-cash-stuck-in-silicon-valley-bank-during-bank-run" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">situation</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. The irony was lost on no one, as a cabal of </span><a href="https://www.sfchronicle.com/tech/article/silicon-valley-bank-hypocrisy-17839312.php" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">erstwhile</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.politico.com/news/magazine/2023/03/18/d-c-silicon-valley-00087611" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">libertarians</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, who had long lectured the nation on the evils of government regulation, thought of every excuse under the sun why the federal government must immediately</span><span style="font-style: italic; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">step into the breach. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">They were not just pleading for a bailout; they were demanding one. Not for Silicon Valley Bank, mind you, but for themselves. It turns out they had little </span><a href="https://twitter.com/DavidSacks/status/1634360878236831746?s=20" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">interest</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in whether SVB survived – or they would have fixed the problem themselves – but they had a huge financial stake in protecting the billions of dollars of deposits their portfolio companies had tied up in those uninsured accounts. As one observer </span><a href="https://www.currentaffairs.org/2023/03/every-libertarian-becomes-a-socialist-the-moment-the-free-market-screws-them" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">put</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> it, every libertarian becomes a socialist the moment the free market screws them. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Early that Saturday morning, hedge fund </span><a href="https://www.google.com/search?q=bill+ackman+net+worth&oq=bill+&aqs=chrome.2.69i57j46i39j0i56j69i61j69i60l2j69i65l2.7390j1j4&sourceid=chrome&ie=UTF-8" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">billionaire</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Bill </span><a href="https://twitter.com/BillAckman/status/1634564398919368704" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Ackman</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> threw down the gauntlet: Jerome Powell and Janet Yellen had 48 hours to guarantee all of the deposits in Silicon Valley Bank or there would be a run on the entire banking system, leaving no banks in the country standing save the four largest banks, which have been deemed “too-big-to-fail” since 2008, and where the government effectively guarantees all deposits</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And he was right. In the early moments of the crisis, many observers – including former Treasury Secretary Larry Summers and hedge fund superstar Ken Griffin – </span><a href="https://www.economist.com/finance-and-economics/2023/03/16/how-deep-is-the-rot-in-americas-banking-industry" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">presumed</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://fortune.com/2023/03/14/citadel-ceo-ken-griffin-silicon-valley-bank-moral-hazard/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">that</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> SVB had the perfect profile of a bank that could be allowed to fail without significant risk of contagion, given its narrow regional and industry focus. But that turned out </span><a href="https://twitter.com/LHSummers/status/1635007265563639808?s=20" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">not</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to be the case. Unlike 2008, when the contagion that came close to cratering the global financial system was a product of the very real linkages among mortgages, mortgage-backed securities, and mortgage-based derivatives that fell apart when the housing market went south, contagion this time around was as much a behavioral phenomenon as a financial one.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As rumors of the run on SVB rocketed across the Internet on March 9th and 10th, individuals thousands of miles away watched the crisis unfold in real-time and wondered how they could be sure their own bank was safe. And many of them decided not to wait to find out. At that moment, we learned that the nature of contagion had changed, as the impact of the collapse of Silicon Valley Bank was both immediate and severe. In the blink of an eye, </span><a href="https://finance.yahoo.com/news/depositors-yank-another-126-billion-from-us-banks-210851940.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">hundreds</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of </span><a href="https://www.cnbc.com/2023/03/28/svb-customers-tried-to-pull-nearly-all-deposits-in-two-days-barr-says.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">billions</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of </span><a href="https://fortune.com/2023/03/11/silicon-valley-bank-run-42-billion-attempted-withdrawals-in-one-day/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">dollars</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.ft.com/content/6e84dd52-cbf3-46e7-b397-99592aa6e990" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">were</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.bloomberg.com/news/newsletters/2023-04-24/bloomberg-evening-briefing-massive-disney-layoffs-resume-this-week?cmpid=BBD042423_BIZ&utm_medium=email&utm_source=newsletter&utm_term=230424&utm_campaign=bloombergdaily" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">drained</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> from </span><a href="https://www.axios.com/newsletters/axios-markets-b92d3eb5-4b1e-4eef-9d64-74395491fef0.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">regional</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> banks nationwide</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Then, as suddenly as the 2023 bank crisis burst onto center stage, by Sunday March 12th it was over. Using their </span><a href="https://www.nytimes.com/2023/03/28/business/economy/bank-bailout-regulators.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">authority</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to </span><a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">waive</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the limits on FDIC deposit insurance in the face of what they </span><a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">deemed</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to be a systemic threat to the financial system, Powell and Yellen did what Ackman and others had demanded and guaranteed that all depositors at Silicon Valley Bank would be made </span><a href="https://www.axios.com/newsletters/axios-markets-d577f240-02cd-4126-9c25-4c1aff93811e.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">whole</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgG9KG0PUGPxFcGkAEGHCeenxVPXENg8Tc7zuYnSxNHZ7A4Y4RIMXD8JidLfxQmr2F0iUgbeYcZuI3WpuXdc72KRGLDg1SW3rVmmaU14reyTmhAkExHo2WVpEIbBFUedBjHYVizZ_5SHlr6-iPtHAzfh2p2icLHBxezGzt8lCVLoIwao5wsrw/s1800/Financial%20Oscar.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1800" data-original-width="1800" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgG9KG0PUGPxFcGkAEGHCeenxVPXENg8Tc7zuYnSxNHZ7A4Y4RIMXD8JidLfxQmr2F0iUgbeYcZuI3WpuXdc72KRGLDg1SW3rVmmaU14reyTmhAkExHo2WVpEIbBFUedBjHYVizZ_5SHlr6-iPtHAzfh2p2icLHBxezGzt8lCVLoIwao5wsrw/s320/Financial%20Oscar.jpg" width="320" /></a></div><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline;">Call it what you will, sound judgment or capitulation, but Powell and Yellen waved their magic wand, the sense of crisis dissipated, and people began to move on. Was it a bailout? Of </span><a href="https://messaging-custom-newsletters.nytimes.com/template/oakv2?campaign_id=116&emc=edit_pk_20230314&instance_id=87696&nl=paul-krugman&productCode=PK&regi_id=62543568&segment_id=127769&te=1&uri=nyt%3A%2F%2Fnewsletter%2Fd34a70ea-8e6e-5785-a915-260c60335e86&user_id=fd2ba01ea5ea529b3fbceb3339b0d351" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline;">course</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline;"> it was. Yellen publicly </span><a href="https://www.usatoday.com/story/news/politics/2023/03/12/janet-yellen-silicon-valley-bank-bailout/11459456002/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline;">insisted</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline;"> that they did not bail out Silicon Valley Bank, but that was just a matter of semantics. SVB shareholders may have lost out, but depositors who had no legal right to be protected from financial loss got their billions back – including those who instigated the run in the first place. Given that essential fact, it is disingenuous to suggest otherwise. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline;"><br /></span></p></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The political retribution was swift and furious. </span><a href="https://www.washingtonpost.com/business/2023/03/17/bank-regulation-svb-collapse/?utm_campaign=wp_politics_am&utm_medium=email&utm_source=newsletter&wpisrc=nl_politics&carta-url=https%3A%2F%2Fs2.washingtonpost.com%2Fcar-ln-tr%2F396e579%2F6414491ee7f5585f19d0d3ee%2F596d17f09bbc0f20866a6d00%2F12%2F57%2F6414491ee7f5585f19d0d3ee&wp_cu=324b0857c4db9a89d99070f139d79bf9%7C65704ad8-9c20-11df-bd09-12313b066011" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Critics</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on </span><a href="https://www.axios.com/2023/03/15/progressives-and-bankers-are-both-blaming-fed-regulators-for-their-role-in-svbs-collapse?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">both</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> sides of the aisle piled on, </span><a href="https://www.nytimes.com/2023/04/04/business/dealbook/jamie-dimon-letter-bank-crisis.html?action=click&algo=bandit-all-surfaces-shadow-lda-unique-time-cutoff-30&alpha=0.05&block=trending_recirc&fellback=false&imp_id=577379892&impression_id=49158afc-d3ea-11ed-a4f1-53c270114e13&index=4&pgtype=Article&pool=pool%2F5bffce26-a993-4ed4-af7d-8894fdf413ca&region=footer&req_id=857520491&shadow_vec_sim=0.5481389168566911&surface=eos-most-popular-story&variant=holdout_best_most-popular-story" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">blaming</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> federal regulators for </span><a href="https://nypost.com/2023/03/14/svb-bailout-shows-capitalism-is-breaking-down-ken-griffin/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">being</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “asleep at the wheel” for failing to identify the problems at Silicon Valley Bank early on. Yet that turned out not to be the </span><a href="https://www.nytimes.com/2023/03/19/business/economy/fed-silicon-valley-bank.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">case</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, as for more than a year federal bank regulators had repeatedly and with increasing urgency </span><a href="https://www.marketwatch.com/story/fed-had-expressed-its-concerns-over-silicon-valley-bank-for-a-year-report-7fead3a5" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">warned</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> SVB management of the risks it faced in a rising interest rate environment. </span><a href="https://www.bloomberg.com/news/articles/2023-03-27/fdic-probing-management-conduct-in-svb-signature-bank-failures" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Management</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, the bank board of directors, and the venture capitalists were all culpable for SVB’s collapse, but only the VCs walked away unscathed.</span></span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In the wake of the collapse of Silicon Valley Bank, Bernie Sanders returned to the themes of the 2008 crisis and the outrage at once again seeing those who had done so much to instigate a crisis reap a financial windfall from its resolution. For Sanders, that meant doubling down on his </span><a href="https://twitter.com/SenSanders/status/1635690340345626624?s=20" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">insistence</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that commercial banks should be broken up to put an end to ‘too-big-to-fail.’ </span></span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Looking back at events in March, however, it’s hard not to reach the opposite conclusion. As deposits flowed out of regional banks on March 9th and 10th, much of the money withdrawn from small regional banks flowed </span><a href="https://www.businessinsider.com/jpmorgan-big-banks-benefit-from-silicon-valley-bank-collapse-2023-3" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">into</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> JPMorgan Chase and Citibank. Many of those who had followed the collapse of Silicon Valley Bank on their laptops and smartphones, and </span><a href="https://www.nytimes.com/2023/03/13/business/regional-bank-stocks.html?te=1&nl=paul-krugman&emc=edit_pk_20230425" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">feared</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that their bank might be next, chose to transfer their money to banks that the federal government had officially confirmed would not be allowed to fail. </span></span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As it turned out, this time around too-big-to-fail banks were not a part of the problem, but instead part of the solution; for panicked depositors at least. While FDIC insurance may officially be limited to $250,000, the public knows full well that the nation’s largest banks will be bailed out come hell or high water. Therefore, for those banks, federal deposit insurance is effectively unlimited. </span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In today’s world, where people can move their money instantaneously from apps on their phones, it should come as no surprise that as soon as news broke of the collapse of a little known bank, hundreds of billions of dollars were moved nearly instantaneously to those banks people knew would never be allowed to fail. The confluence of social media, smartphones, and financial technology have become the new</span><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4422754&utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business" style="text-decoration-line: none;"><span style="color: black; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">catalysts</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> for</span><a href="https://www.sfchronicle.com/bayarea/article/twitter-fueled-run-toppled-silicon-valley-bank-17915239.php" style="text-decoration-line: none;"><span style="color: black; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">contagion</span></a><span style="font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, and a central question arising from the 2023 bank crisis is not whether we need to get rid of banks that are too big to fail, but whether the small-enough-to-fail banks of Bernie Sanders' imagination have ceased to exist.</span></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><i style="caret-color: rgb(0, 0, 0); text-size-adjust: auto; white-space: normal;"><span style="caret-color: rgb(26, 26, 26); color: #1a1a1a;">Artwork by Joe Dworetzky. Follow his cartooning on Instagram at @joefaces and his journalism at </span><a href="http://authory.com/JoeDworetzky">authory.com/JoeDworetzky</a></i></span></p><br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-12062849982246822382023-03-03T11:27:00.005-05:002023-04-26T22:02:39.394-04:00Red States aren't victims, they're flush with Blue State money .<p><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Marjorie Taylor Greene</span><a href="https://www.nbcnews.com/politics/congress/marjorie-taylor-greene-calls-national-divorce-liberal-conservative-sta-rcna71464?utm_source=substack&utm_medium=email" style="text-decoration-line: none;"><span style="color: black; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">thinks</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> it is time for red states and blue states to go their separate ways. “Everyone I talk to says this,” she</span><a href="https://twitter.com/mtgreenee/status/1627665203398688768" style="text-decoration-line: none;"><span style="color: black; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tweeted</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, “From the sick and disgusting woke culture issues shoved down our throats to the Democrat’s traitorous America Last policies, we are done.”</span><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;"> </span></p><span id="docs-internal-guid-0f6deced-7fff-d58e-f84f-6861993920c9"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">She may have a point…</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">For at least a decade now, I have</span><a href="https://appalled.blogspot.com/2013/10/the-taker-caucus.html" style="text-decoration-line: none;"><span style="color: black; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">argued</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that blue state America has been dealt a bad hand, politically and financially. I circulated a book proposal six years ago with the title “FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free,” but to no avail. It seems, however, that like a Chinese balloon, once you float something, you never know where it could end up. In this case in the hands of Marjorie Taylor Greene. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Politically, the Constitution from day one gave</span><a href="https://www.newyorker.com/news/hendrik-hertzberg/alexander-hamilton-speaks-out-iii-two-senators-per-state-regardless-of-population" style="text-decoration-line: none;"><span style="color: black; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">disproportionate</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> political power to small and rural states – which today are by and large red states if you ignore Delaware and Rhode Island – by giving each state two senators regardless of size, and then compounded that political advantage in the structure of the Electoral College.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The bad financial deal for blue states came more recently, with the ratification just over a century ago of the 16th Amendment that created the federal income tax, which shifted the</span><a href="https://web.archive.org/web/20120114120602/http:/www.cato.org/pubs/journal/cj1n1/cj1n1-10.pdf" style="text-decoration-line: none;"><span style="color: black; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">burden</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of paying the cost of the federal government onto the wealthier states and taxpayers at the time in the Northeast and Midwest.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">A comparison of the federal income taxes paid and benefits received between Delaware and West Virginia provides a case in point of how that impact is felt today. Based on</span><a href="https://www.nationalpriorities.org/analysis/2014/state-smart-federal-funds-50-states/" style="text-decoration-line: none;"><span style="color: black; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">data</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> compiled for the year 2014 by the National Priorities Project, West Virginia received over $7,000 in federal aid per capita – largely from entitlement programs such as Social Security and Medicare – while paying less than $3,000 per capita in federal income taxes, for a net subsidy from the federal government of $4,000 per person. At the other end of the spectrum, Delaware paid the federal government $19,800 per capita in federal income taxes while receiving $6,400 per capita in federal aid, for a net outflow to the federal government – and then on to red states like West Virginia – of $13,400 per capita.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="border: none; clear: right; display: inline-block; float: right; height: 407px; margin-bottom: 1em; margin-left: 1em; overflow: hidden; width: 407px;"><img height="407" src="https://lh5.googleusercontent.com/igzmq5WMP4meyrio3V2EJVGt5NaA7zh2oZI77_XY5eyOW5KoCm4AEJGgSNU80EZeLcYVSCqf5tvXw-qEvgwVUR9ObnLSV8AX6jpQEl_mptSdSgOVksTPGMox-EawM6Rxyw1I1xuLK3TSeYdlBc0GK_4" style="margin-left: 0px; margin-top: 0px;" width="407" /></span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The reason for that difference is simple: the Delaware economy is more productive than West Virginia’s, with per capita personal</span><a href="https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_income#cite_note-12" style="text-decoration-line: none;"><span style="color: black; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">income</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of $36,000, or roughly 50% more than West Virginia’s $24,400. Delawareans earn more, pay more in federal income taxes, and rely less on federal government social programs.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The notion that the federal government operates a massive system of income redistribution from blue states to red states is not just spin offered up by some progressive think tank. Rather, it is a view laid out cogently by the center-right Tax Foundation. In its</span><a href="https://taxfoundation.org/federal-tax-burdens-and-expenditures-state/" style="text-decoration-line: none;"><span style="color: black; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: blue; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">study</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> entitled “Federal Tax Burdens and Expenditures by State,” the Tax Foundation went even further, emphasizing that the federal income tax not only redistributes income from the wealthy to the poor – as progressive supporters of the 16th Amendment hoped would be the case a century ago, and no doubt many Democrats would support today – but that it redistributes income from the middle-income residents of high-cost states to the middle-income residents of low-cost states, a form of redistribution that has little political, much less moral justification.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The net outflow of dollars being sucked out of blue states is huge. In 2021, for</span><a href="https://www.irs.gov/statistics/soi-tax-stats-gross-collections-by-type-of-tax-and-state-irs-data-book-table-5" style="text-decoration-line: none;"><span style="color: black; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">example</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, New York State taxpayers paid $285.1 billion in federal personal income taxes, an amount that was $73 billion – or $3,700 per capita – higher than it would have been had the federal tax burden been shared among the states on an equal per capita basis as the Constitution originally required. That means that New York taxpayers contributed an additional $73 billion – an amount greater than New York State’s personal income tax and sales tax collections for that year combined – into the federal kitty to pay for federal programs provided to residents of those states that Marjorie Taylor Greene suggested would like out.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Of course, far from appreciating this built-in system of blue state largesse, the fact that red state residents are financially dependent on blue state charity has only compounded the resentments that divide us. Indeed, even as they ridicule New York, the Left Coast, and Taxachusetts, red state politicians are never able to explain why, after decades of their low state tax policies – to say nothing of literally trillions of dollars of subsidies that have flowed to their states from blue state coffers – their states remain near the bottom in state rankings of key economic and demographic outcomes, while the high-tax blue states they deride continue to</span><a href="https://fred.stlouisfed.org/release/tables?rid=110&eid=257197" style="text-decoration-line: none;"><span style="color: black; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">produce</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> higher family incomes across their populations. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">While economists like Art Laffer and Stephen Moore regularly proclaim tax cuts to be the panacea that will assure economic prosperity, the simple fact is that educational attainment has long been the </span><a href="https://www.nber.org/digest/jun04/education-level-drives-city-growth" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">primary</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://cityobservatory.org/talent-and-prosperity/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">driver</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of state and family financial </span><a href="https://www.bls.gov/emp/chart-unemployment-earnings-education.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">success</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, and investments in education – including K-12 schooling, community colleges, and research universities – rather than tax cuts have been the key to improving family incomes over time.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As I studied the financial inequities created by the ratification of the 16th Amendment, I never concluded that a “national divorce” was the solution but instead suggested eliminating the federal income tax and restoring a greater degree of federalism and state self-reliance. Year after year, blue state advocates of single-payer healthcare or investments in mass transit wonder why their states lack the money to achieve their hopes and dreams, and the answer is simple: their money has been shipped off to Alabama. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Suffice it to say, if Greene explained that each man, woman and child in New York would get to keep that $3,700 each year as part of the deal, she could probably count on their support for the constitutional amendment that would be required to let the red states leave.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But the blue state argument for ending the century-long experiment in federal redistribution is not simply that California, New York and others should not be forced to continue to subsidize less economically productive states – particularly ones that appear to loath their “sick and disgusting woke culture” – but also that decades of federal subsidies have brought with them the sort of moral hazard of which conservative commentators have long warned: Flush with the flow of federal money decade after decade, red states appear to have had fewer incentives to use their own resources to make the kinds of investments that would have increased family incomes in their states over time, and ultimately reduced reliance on blue state money.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Marjorie Taylor Greene may want a national divorce, and if they understood how much money the current system is costing them, many blue state taxpayers might enthusiastically support the idea. But a divorce along state lines will not solve the deep divide in our politics. Greene may choose to view red and blue America as divided along state lines, but the truth is far more complicated. </span><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">Not only do those divisions exist within each state – as every state includes predominantly blue urban areas and predominantly red rural areas – but they are present within the communities in which we live, and for many of us around the holiday table when we gather together with our families.</span></p><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><span style="font-family: Times; font-size: medium; white-space: normal;"> </span><i style="caret-color: rgb(0, 0, 0); font-family: Calibri; font-size: 15px; text-size-adjust: auto; white-space: normal;"><span style="caret-color: rgb(26, 26, 26); color: #1a1a1a; font-family: TimesNewRomanPSMT;">Artwork by Joe Dworetzky. Follow his cartooning on Instagram at @joefaces and his journalism at </span><a href="http://authory.com/JoeDworetzky">authory.com/JoeDworetzky</a></i></span></div></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-64805775882593373152023-02-12T11:04:00.002-05:002023-03-03T11:28:03.143-05:00Sarah Sanders is right, Republicans have to chose: normal or crazy<p><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">What is the state of our union? If you look at traditional economic metrics, things are humming along. We have emerged from a pandemic, have weathered the worst of the ensuing inflation, labor markets are booming along at unheard of levels, and even investors have to admit that given all that has transpired, to have the S&P 500 exactly where it was two years ago – and still up almost 20% from Election Day 2020, when Donald Trump </span><a href="https://www.reuters.com/article/us-usa-election-trump-india/trump-says-stock-markets-will-crash-if-he-loses-election-idUSKCN20J1EN" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">said</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the sky would fall if he was not reelected – is pretty good.</span></p><span id="docs-internal-guid-19fc4473-7fff-7bb1-bb0b-b47aa8f4df6e"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But if you believe in the two party system, this is a bleak moment indeed. As Nancy Pelosi </span><a href="https://thehill.com/homenews/house/3849261-pelosi-us-needs-a-strong-republican-party-and-this-is-not-it/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">commented</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the other day, the nation needs a strong Republican Party, but “this is not it.” She may have been pointing to Kevin McCarthy’s weakness as Speaker, but her words were as aptly pointed at Republicans in the Senate, where Mitt Romney – just ten years ago the standard-bearer of the GOP – is regularly shunned by his peers for making eminently reasonable statements that fail to be sufficiently hostile to Joe Biden or the Democrats. So it was last week, when Romney’s irrefutable </span><a href="https://www.washingtonpost.com/politics/2023/02/08/mitt-romney-george-santos-state-of-the-union/?utm_campaign=wp_news_alert_revere_trending_now&utm_medium=email&utm_source=alert&location=alert" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggestion</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that George Santos has no place in Congress, was met by silence among his peers; just one more reminder that nearly the entire Republican establishment has given up the ghost and cowers in fear of offending the party’s vengeful, conspiracy-infected, party base.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Donald Trump’s MAGA movement – the most recent iteration of nativist isolationism that has been deeply rooted in our nation’s DNA since the founding of the republic – has officially taken over the Republican Party. As Marjorie Taylor Greene </span><a href="https://www.washingtonpost.com/politics/2021/12/01/marjorie-taylor-greene-says-shes-gop-base-not-fringe-well-see-2022/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">observed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> recently, the GOP is 70% MAGA now. While some may refute that number out of hand, it is validated by </span><a href="https://www.politifact.com/article/2022/jun/14/most-republicans-falsely-believe-trumps-stolen-ele/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">public</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.nbcnews.com/meet-the-press/meetthepressblog/poll-61-republicans-still-believe-biden-didnt-win-fair-square-2020-rcna49630" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">opinion</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://today.yougov.com/topics/politics/articles-reports/2022/03/30/which-groups-americans-believe-conspiracies" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">polling</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> suggesting that half of Republicans apparently </span><a href="https://today.yougov.com/topics/politics/articles-reports/2022/03/30/which-groups-americans-believe-conspiracies" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">believe</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Democrats are child-trafficking pedophiles, while two-thirds continue to </span><a href="https://www.poynter.org/fact-checking/2022/70-percent-republicans-falsely-believe-stolen-election-trump/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">believe</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the 2020 election was stolen, despite all evidence to the </span><a href="https://www.washingtonpost.com/politics/2023/02/11/trump-campaign-report-electoral-fraud/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">contrary</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. MAGA dominance over what George W. Bush once </span><a href="https://www.nytimes.com/2004/10/17/magazine/faith-certainty-and-the-presidency-of-george-w-bush.html?utm_source=substack&utm_medium=email" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">called</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the “reality-based community” is evidenced by the behavior of formerly mainstream Republicans who have learned to parrot MAGA talking points. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Last week, when the Chinese balloon appeared over the Montana skies, it provided reams of data, not on atmospheric conditions or the location of Minuteman III intercontinental missile silos – all of which anyone from here to Beijing can pull up on an iPhone – but on the depraved state of the Republican Party. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">When the balloon first </span><a href="https://www.nytimes.com/2023/02/03/us/montana-china-spy-balloon.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">emerged</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the Montana skies, Donald Trump </span><a href="https://www.newsweek.com/donald-trump-shoot-down-balloon-chinese-spy-orb-1778817" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">pounced</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on the issue, demanding in ALL CAPS on his alternative Truth Social website that the Chinese invading aircraft be shot down. Before one could say the words “Hunter Biden’s laptop,” Republicans across the nation’s capital – with the predictable </span><a href="https://twitter.com/mkraju/status/1623739437774503937?s=12&t=pdF_k3vspmc5TtGrmneDeg" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">exception</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of Mitt Romney – </span><a href="https://www.washingtonexaminer.com/restoring-america/courage-strength-optimism/rubio-slams-biden-not-announcing-plans-for-handling-chinese-spy-balloon" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">rose</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> up as if on </span><a href="https://www.wicker.senate.gov/2023/2/wicker-rubio-demand-answers-on-chinese-spy-balloon" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">command</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, </span><a href="https://twitter.com/RepMTG/status/1621294190041636864?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1621294190041636864%7Ctwgr%5E34dba0a7e10dd8c35f9641d71b0f302099933a9e%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.newsweek.com%2Fdonald-trump-shoot-down-balloon-chinese-spy-orb-1778817" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">insisting</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that Trump “would never have tolerated this.” Marjorie Taylor Greene, who day by day is supplanting Mitch McConnell and Kevin McCarthy as the face of today’s GOP, seized the moment, </span><a href="https://twitter.com/SykesCharlie/status/1621879170887294983?s=20&t=7IcYhuUIQ8BcNf0ZbFYUrg" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tweeting</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that “literally every person” she knew was talking about how to shoot down the balloon. Then, MAGA darling Kari Lake, as if to prove her own national security credentials as she continues to </span><a href="https://people.com/politics/kari-lake-interested-donald-trump-running-mate-source-says/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">position</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> herself to be Donald Trump’s running mate in 2024, </span><a href="https://mobile.twitter.com/KariLake/status/1621506285765099520" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tweeted</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a photo of herself in full camo with a gun, looking to the skies, ostensibly ready to take down the Chinese invading balloon twelve miles overhead.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Whatever the facts of Balloongate might be, neither Donald Trump nor Marjorie Taylor Greene could give a hoot. Within hours, as the issue migrated from the risk of satellite debris falling on </span><a href="https://www.nytimes.com/2023/02/03/us/montana-china-spy-balloon.html?action=click&pgtype=Article&state=default&module=styln-us-china&variant=show&region=MAIN_CONTENT_1&block=storyline_top_links_recirc" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">populated</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> areas in Montana should the balloon be shot down, to a national security crisis of the highest order, it vaulted to center stage across the MAGAsphere. One more defense of Donald Trump. One more source of amped up outrage. One more opportunity to extract a few more dollars from the new base of the Republican Party. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">When Marjorie Taylor Greene screamed “Liar!” at Joe Biden during the State of the Union speech last week, she was not seized by a momentary fit of rage, but rather following a proven gameplan for fleecing her supporters. “</span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Remember</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">,” GOP politicians whisper down the lane to each other to this day, “[South Carolina Congressman] </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Joe Wilson </span><a href="https://abcnews.go.com/GMA/joe-wilson-resolution-rare-rebuke-house/story?id=8588452" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">raised</span></a><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> $2 million in twenty-four hours after he screamed ‘You lie!’ at Barack Obama during a speech to a joint session of Congress.” </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Though that iconic moment took place almost a decade and a half ago, it has become a defining moment in our politics. Forget that Wilson was </span><a href="https://abcnews.go.com/GMA/joe-wilson-resolution-rare-rebuke-house/story?id=8588452" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">sanctioned</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by his peers for his “breach of decorum,” that breach of decorum has become the </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">modus operandi</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of many Congressional Republicans for a simple reason: it works. Breach decorum; incite outrage; collect money. </span></p><br /><span style="border: none; display: inline-block; height: 398px; overflow: hidden; width: 398px;"><img height="398" src="https://lh4.googleusercontent.com/HMPHD5cSlZOeCWcfM6BgRcIc5oeZv0vqLo1VBnVn6AT2DRS_c8pPeF3ngoxfxUepToxE6sf5LtMvqByjvfID2K2oN-c1kqSoSr1aJ0YMV8tMYO8wkGNbf1Z2YIj3XllGHJC_QYuWGhT6fXqX7li2064" style="margin-left: 0px; margin-top: 0px;" width="398" /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Which takes us back to the state of the union. For somewhat less than half the country – but apparently well more than half of the GOP – the state of the union has become one of preoccupation with really silly stuff, as Balloongate was just the most recent example. While we are coming to understand the </span><a href="https://www.axios.com/2023/02/09/chinese-spy-balloon-communications" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">intelligence</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> purposes and capabilities of the Chinese balloon, two things appear clear. First, China has been sending surveillance balloons across the globe – including the United States – for </span><a href="https://www.washingtonpost.com/national-security/2023/02/07/china-spy-balloon-intelligence/?utm_source=alert&utm_medium=email&utm_campaign=wp_news_alert_revere&location=alert" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">years</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. And second, military and intelligence officials interviewed about the matter do not seem particularly perturbed. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Surely, no one in Congress can seriously believe that our adversaries don’t spy on us – or that we don’t spy on them. While Marjorie Taylor Greene accused Joe Biden of refusing to stop the Chinese from surveilling our missile silos and military facilities, former Montana Governor Brian Schweitzer, who </span><a href="https://www.nytimes.com/2023/02/03/us/montana-china-spy-balloon.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">grew</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> up on a farm just down the road from an intercontinental missile silo, pointed out the absurdity of the hyperbolic response on the right. Anyone, he observed, who wants to see where our missiles are buried can drive by the silos and snap a photo. “Taking a rental car,” he suggested, “would be a lot cheaper than sending a balloon from Beijing.” </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If the issue is overhead photo surveillance, as Greene suggested, spying on the United States is a pretty easy gig, and it has become easier by the year. A decade or so ago, National Public Radio ran a </span><a href="https://www.npr.org/2014/07/29/335293314/welcome-to-the-nuclear-command-bunker" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">series</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on the country’s land based intercontinental missile system, together with images of missile silos from Google Maps. One reader at the time </span><a href="https://www.npr.org/sections/thetwo-way/2014/07/31/336847318/to-find-america-s-nukes-try-google-maps" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">offered</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> an ironic response to the publishing of what some might have deemed at the time – and today, apparently – to be top secret information: </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">"Thanks for the map. Can you now publish the GPS coordinates? You've been real helpful, Kim IL Sung."</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And that was ten years ago. Today, Google Maps provides GPS coordinates with a single click, and there are any number of apps that are surely being mined on a regular basis for useful data by foreign intelligence services. One example is Strava, a running app, which a few years ago inadvertently </span><a href="https://www.nytimes.com/2018/01/29/world/middleeast/strava-heat-map.html#:~:text=Strava's%20online%20exercise%2Dtracking%20map,can%20lead%20to%20unintended%20consequences." style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">identified</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and broadcast to the world the location of secret military installations across the globe. And then there is TikTok, the Chinese </span><a href="https://www.npr.org/2022/11/17/1137155540/fbi-tiktok-national-security-concerns-china" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">espionage</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> tool masked as a video-sharing app.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">When it comes to intelligence operations against the United States, data gathering is not the challenge. As Vladimir Putin demonstrated in 2016, the art is in the design of strategies that will set us against each other; that will, to use an overused word, trigger our worst instincts. And last week offered an abject lesson: want to take us down a notch and embarrass the United States in the eyes of the world, send a balloon our way and watch us turn on each other like a pack of rabid dogs. And that may well have been the objective, argued Dr Hoo Tiang Boon, a China expert at the China programme at Singapore's S Rajaratnam School of International Studies. </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">"They have other means to spy out American infrastructure, or whatever information they wanted to obtain. The balloon was to send a signal to the Americans, and also to see how the Americans would react."</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In her official Republican Party response to Joe Biden’s State of the Union speech, newly elected Arkansas Governor, and former Trump Press Secretary, Sarah Sanders painted a dissenting view of the state of the union. Forget Biden’s optimistic vision of a nation emerging from pandemic years at home and defending democracy abroad, Sanders mirrored the </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">American Carnage </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">theme from Donald Trump’s inaugural address, painting a picture of the country through her eyes as a dark, forbidding place, with woke mobs ransacking the landscape. With no sense of irony, she suggested that “the choice is between normal or crazy.” </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And so it is. In today’s Republican Party, crazy is firmly in control. But the problem for the nation is not the half of Republicans who embrace QAnon conspiracy theories, the Big Lie, and the venomous nonsense that Greene and her compatriots spew on a daily basis. Rather, the problem is the erstwhile normal Republicans who have continued to play along, and in doing so have vaulted them into positions of power. They want to believe this has all been a bad dream, and one day it will all be over. But it doesn’t work that way. The more power they cede to the MAGA majority in their ranks, the worse things will get. Nancy Pelosi hit the nail on the head; the time has come for Republicans in the reality-based community to make a choice: have the courage to stop cowering in the shadows and take their party back, or have the courage to leave the GOP. </span></p><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><span style="font-family: Times; font-size: medium; white-space: normal;"> </span><i style="caret-color: rgb(0, 0, 0); font-family: Calibri; font-size: 15px; text-size-adjust: auto; white-space: normal;"><span style="caret-color: rgb(26, 26, 26); color: #1a1a1a; font-family: TimesNewRomanPSMT;">Artwork by Joe Dworetzky. Follow his cartooning on Instagram at @joefaces and his journalism at </span><a href="http://authory.com/JoeDworetzky">authory.com/JoeDworetzky</a></i></span></div></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-91314545668782669802023-01-31T10:44:00.001-05:002023-01-31T10:44:03.163-05:00The nuclear bomb in the public square.<span id="docs-internal-guid-6e359bcf-7fff-c686-eefc-094ca5095ca2"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Last week’s economic news could not have been better. Gross Domestic Product, the measure of the overall size of the economy, </span><a href="https://www.bea.gov/data/gdp/gross-domestic-product" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">grew</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> at an annualized rate of 3% over the second half of last year after having declined over the previous two quarters. While there are myriad measures of inflation, the most common measure, the Consumer Price Index, </span><a href="https://www.bls.gov/news.release/cpi.nr0.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">rose</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> at an annualized rate of 1.8% over the same period – it actually declined by 0.1% in December – after having jumped 9.1% over the </span><a href="https://www.bls.gov/news.release/archives/cpi_07132022.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">previous</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> year. And despite over 200,000 </span><a href="https://www.bloomberg.com/news/articles/2023-01-25/tech-layoffs-2023-ibm-latest-to-slash-workers-with-google-amazon-microsoft" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">layoffs</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the tech sector over the last year, the unemployment rate continued to edge </span><a href="https://www.bls.gov/news.release/pdf/empsit.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">downward</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to an historical low of 3.5%, while wages </span><a href="https://www.atlantafed.org/chcs/wage-growth-tracker" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">grew</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by over 6%, and reached </span><a href="https://www.wsj.com/articles/biggest-pay-raises-went-to-black-workers-young-people-and-low-wage-earners-11674425793" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">double</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> digits for the lowest-income workers. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">All that news came in the face of the Federal Reserve Bank’s year-long </span><a href="https://www.axios.com/2023/01/23/fed-optimistic-about-inflation?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmacro&stream=business" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">efforts</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to bring inflation down by bringing the economy to heel. It is hard to imagine the economic news could have been stronger; inflation has come down, but the economy is continuing to roll along.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Six months ago, in a survey of 400 corporate leaders by </span><a href="https://kpmg.com/xx/en/home/insights/2022/08/kpmg-2022-ceo-outlook.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">KPMG</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, 90% believed that a recession in 2023 was inevitable and more than half thought the downturn was likely to be long and severe. Now, that </span><a href="https://www.goldmansachs.com/insights/pages/why-the-us-can-avoid-recession-in-2023.html#:~:text=The%20threat%20of%20a%20U.S.,much%20lower%2C%20at%2035%25." style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">sentiment</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> has changed dramatically. As news over the past week suggests, it seems increasingly likely that we will avoid a severe downturn. Even Fed antagonist Larry Summers, who </span><a href="https://www.bloomberg.com/news/articles/2022-06-20/summers-says-us-needs-5-jobless-rate-for-five-years-to-ease-cpi" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">warned</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> last summer that taming inflation would require unemployment north of 6% for several years, has </span><a href="https://www.bloomberg.com/news/articles/2023-01-27/summers-urges-fed-to-avoid-pledging-rate-hikes-after-next-week" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tempered</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> his predictions.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Against the backdrop of an economy that appears to be steadily emerging from three years of pandemic-induced turmoil, House Republicans sit with their finger on the trigger of a nuclear </span><a href="https://www.bloomberg.com/news/articles/2023-01-23/zandi-says-too-calm-investors-raise-risk-of-us-default-calamity" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">bomb</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, threatening to blow it all up. And the nuclear bomb analogy is an apt one. Moody’s Analytics chief economist Mark Zandi – who for decades has been among the most </span><a href="https://content.time.com/time/subscriber/article/0,33009,1890405,00.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">respected</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> economic analysts – warned </span><a href="https://www.bloomberg.com/news/articles/2023-01-23/zandi-says-too-calm-investors-raise-risk-of-us-default-calamity" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">last week</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that a failure by Congress to raise the debt ceiling on a timely basis could have disastrous consequences. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Specifically, Zandi suggested that even in the event of a brief impasse forcing the country to default on its obligations, GDP would decline by 4%, nearly 6 million jobs would be lost, and stock prices would slide by a third. And beyond Zandi’s numbers, the consequences of a U.S. default would ripple across the globe in less quantifiable ways. Much of the global economic system takes U.S. fidelity to its obligations for granted, as Treasury securities are the presumptive risk free obligations upon which systems of credit and collateral across the world are predicated.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Suffice it to say that there is little evidence that such dire consequences of a U.S. default have deterred the self-serving instincts of the radicals that Kevin McCarthy has put in charge of his caucus. For all their laudable talk about </span><a href="https://www.nytimes.com/2023/01/08/us/politics/house-republicans-rules.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">restoring</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “regular order” to Congress – the traditional system under which legislation is debated and passed through the committee process – they have no interest in the process of debate and compromise that is the essence of constitutional governance. Instead, they proved earlier this month that they are, at their core, hostage takers who will use any means at their disposal to get what they want. For Texas Congressman Chip Roy, this means using the debt ceiling vote to force </span><a href="https://www.texastribune.org/2023/01/25/texas-congress-chip-roy-border-debt-ceiling/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">changes</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the Biden Administration border policies that he has been unable to win through the regular order that he says he stands for. For others in the oddly named “Freedom Caucus,” it means threatening Armageddon over a debt ceiling increase which never bothered them when Donald Trump was setting </span><a href="https://www.propublica.org/article/national-debt-trump" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">records</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> running up the public debt. For Matt Gaetz, Andy Bigg, and Lauren Boebert, it is, like everything else, about little more than attention-seeking and </span><a href="https://www.yahoo.com/entertainment/anti-mccarthy-republicans-raising-money-224821546.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">fundraising</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="border: none; clear: right; display: inline-block; float: right; height: 451px; margin-bottom: 1em; margin-left: 1em; overflow: hidden; width: 451px;"><img height="451" src="https://lh4.googleusercontent.com/AMcz7MHC4Lt3DrhMvJfuK4wBnJpraCzcLHxtpf5U6R9Oy1YfrnMqJ_5Wg2FYie_tx3w_mVBQ-nvd5l9iWDBj2x5e77DBgefHidv5uXmIBTSAcu2NlxBEjTlrDjOpU8qSrzBkl-tbXggM1RCvXi2XGtU" style="margin-left: 0px; margin-top: 0px;" width="451" /></span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Yet for all the yelling and screaming, the threats and counter-threats in Washington DC, thus far the markets are paying little heed. When asked last week about his views on the debt ceiling, Ray Dalio, founder of the world’s largest hedge fund and a widely </span><a href="https://www.theguardian.com/business/2020/feb/09/ray-dalio-billionaire-hedge-fund-capitalism" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">regarded</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> observer on the state of the world, suggested that the debt ceiling crisis is a “</span><a href="https://finance.yahoo.com/news/billionaire-investor-ray-dalio-says-194803538.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">farce</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">,” a recurring event of performative political theater that is detracting attention from the genuine threat posed by the global rise of populist and nationalist forces, and the dangerous consequences of the “</span><a href="https://asia.nikkei.com/Editor-s-Picks/Interview/Dollar-dominated-global-order-is-fading-away-Ray-Dalio" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">fading</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> away” of the post-World War II dollar-based economic order.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In a similar vein, in an </span><a href="https://www.bloomberg.com/opinion/articles/2023-01-25/jeremy-grantham-and-bitcoin-want-you-to-cheer-up?srnd=opinion" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">interview</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> last week in </span><a href="https://www.bloomberg.com/opinion/authors/AT2bBytfUHQ/john-authers" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Bloomberg</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, legendary contrarian investor Jeremy Grantham was surprisingly upbeat on market prospects – an unusual stance from a person for whom the sky is always falling. While Grantham believes there is some risk of a further 15% pullback, he emphasized several forces that could push markets higher over the coming year – including the increasing likelihood that the economy will not fall into recession, and that the Fed will end up pivoting on interest rates sooner than expected. He also noted that U.S. politics loomed to be a positive for the markets, as looking back over the past 100 years, the seven months beginning the October before midterm elections and ending the following April have produced far better stock market returns than any months in the four-year political cycle. As to the risk of an apocalyptic debt default? Nary a mention.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="border: none; clear: right; display: inline-block; float: right; height: 247px; margin-bottom: 1em; margin-left: 1em; overflow: hidden; width: 414px;"><img height="247" src="https://lh5.googleusercontent.com/pJcPPlfGgHOjHRRrqzrXaDAAUzfATVMgRH1eBdsI71LR2sxtt5Ftmdzb6uF7N2hTRxH9aoMAS-k-Bdk4ZfqxIHftiJfQYaYBXQALvDrIq0Mm7XFLXmN7tEWYTVaOgdEjbwOovYiFTKPalKrufiUcKLw" style="margin-left: 0px; margin-top: 0px;" width="414" /></span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">None of this is to suggest that brinkmanship at the federal level will not take its toll; it is simply that, as Ray Dalio </span><a href="https://finance.yahoo.com/news/billionaire-investor-ray-dalio-says-194803538.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">observed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, this is the 79th time since 1960 that the debt ceiling will have been reached, and far from the first time that there has been political posturing in advance of dealing with it. This week, in Guggenheim Investment’s </span><a href="https://www.guggenheiminvestments.com/perspectives/macroeconomic-research/10-macroeconomic-themes-for-2023?utm_source=pardot&utm_medium=email&utm_campaign=2023%macro%themes&utm_content=macroeconomic%20research" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">report</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “10 Macro Themes for 2023,” the debt ceiling issue crept in at number 10: </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Divided Government and Narrow Majorities Will Spur Debt Limit Drama. </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The report’s conclusion reflected the sanguine market attitude to date:</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“While we do not expect a default, the standoff is likely to go until the last minute, possibly resulting in a reprise of the 2011 debt limit debate, which led to a U.S. credit rating downgrade and a market selloff. The debate could also result in a government shutdown, which would worsen the market impact.”</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The simple fact is that if Republicans want to be a credible governing party, Kevin McCarthy </span><a href="https://thehill.com/homenews/senate/3819666-mcconnell-us-never-will-default-on-its-debt/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">cannot</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> allow the United States to default on his watch, and over the weeks ahead, there are two people who will likely play outsized roles as he navigates his way to a solution. One is Marjorie Taylor Greene. Greene is McCarthy’s link to the </span><a href="https://www.washingtonpost.com/politics/2023/01/18/house-gop-votes-marjorie-taylor-greene-is-not-fringe/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">MAGA</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> wing of the party, which she has accurately </span><a href="https://www.washingtonpost.com/politics/2021/12/01/marjorie-taylor-greene-says-shes-gop-base-not-fringe-well-see-2022/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">described</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as now representing 70% of the GOP. But she was not one of the party rebels against McCarthy’s speakership; instead, she was perhaps his most important </span><a href="https://www.nytimes.com/2023/01/23/us/politics/kevin-mccarthy-marjorie-taylor-greene.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">wingwoman</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. She had already made her deal with McCarthy, and he is her path to power. So when the time comes that McCarthy has to round up the votes to move a debt ceiling deal forward – particularly as it is likely to mean allowing a deal to pass with Democrat votes – he must fully expect Greene to have his back. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The second person is Ken Griffin. Griffin, the founder of Citadel Asset Management, is among the wealthiest people in the financial world. With the death of Sheldon Adelson, Griffin has become the largest </span><a href="https://www.opensecrets.org/political-action-committees-pacs/congressional-leadership-fund/C00504530/donors/2022" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">contributor</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to Kevin McCarthy’s Congressional Leadership Fund PAC. More a globalist of the Dalio school than MAGA Republican, Griffin supported Barack Obama in 2008 and Mitt Romney four years later, but declined to contribute to Trump’s campaign in 2016. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Raising and distributing money to Republican congressional candidates has been the key to Kevin McCarthy’s rise to Speaker. And in the 2022 campaign cycle, when McCarthy raised and distributed $260 million, Ken Griffin contributed almost 10% of those funds. As the manager of a gigantic, multinational hedge fund, Griffin’s focus over the years, like Dalio’s, has been on the impact of actions in Washington on global markets and the stability of the US dollar. Indeed, in 2018, he famously lashed out at Donald Trump for his attacks on Fed Chair Jerome Powell, which Griffin feared were </span><a href="https://www.marketwatch.com/story/founder-of-hedge-fund-giant-says-trumps-fed-attack-threatens-confidence-people-have-in-the-dollar-2018-11-13" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">eroding</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the “stature of our currency in global markets and to the faith and confidence people have in the value of the dollar.” And nothing would contribute to the erosion of faith and confidence in the dollar more swiftly than a U.S. default in the wake of a failure by Congress to address the debt ceiling. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Last week, the markets pushed upward as the news was pouring in that the economy was outperforming expectations. Yet, the closer to the brink the grandstanding goes, the more volatile the markets are likely to become. Not because the Ray Dalios or Jeremy Granthams of the world are going to panic, but because much of the rest of us may. At the end of the day, although we may get to the brink, we will not go over it. One has to imagine that at some point, before the nonsense on Capitol Hill is allowed to crater the economy and accelerate the unraveling of the dollar-based economic order, Kevin McCarthy’s phone is going to vibrate, and Ken Griffin will be on the line. And when that moment comes, McCarthy will understand that whatever price might have to be paid, it will be time to get the deal done. </span></p></span><p> <i style="caret-color: rgb(0, 0, 0); font-family: Calibri; font-size: 15px; text-size-adjust: auto;"><span style="caret-color: rgb(26, 26, 26); color: #1a1a1a; font-family: TimesNewRomanPSMT;">Artwork by Joe Dworetzky. Follow his cartooning on Instagram at @joefaces and his journalism at </span><a href="http://authory.com/JoeDworetzky">authory.com/JoeDworetzky</a></i></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-12384995458736012862023-01-16T23:25:00.005-05:002023-01-17T09:55:46.025-05:00Brazil Riots Could Mark a Sea Change in Our Politics.<p><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">It was such a familiar story. The president of a country insisted that the opposition party is preparing to steal an upcoming election. After the president lost, mobs of supporters heeded their leader’s call and stormed the capital, seeking to overturn the election results. Now, the battle continues, pitting the nation’s judiciary, which aims to uphold the nation’s election results, against partisans of the defeated leader. Who will ultimately win, as is so often the case, rests with the military.</span></p><span id="docs-internal-guid-8313513e-7fff-e894-ab84-d27f4a9583f2"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">When we look at Brazil, it feels like we are looking through a window at the history of Latin America. The juntas. The coups. The assassinations. The long history of authoritarian rulers trampling nascent democratic institutions. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But this time, it is not a window we are looking through, but rather a mirror reflecting back on ourselves. Jair Bolsonaro’s strategy of seditious insurrection was right out of Donald Trump’s playbook. Bolsonaro’s team of seditious conspirators were given aid and comfort from Donald Trump’s top tier, most </span><a href="https://www.salon.com/2023/01/09/steve-bannon-and-maga-allies-promoted-fake-stolen-election-claims-ahead-of-brazil-riots/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">notably</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> campaign strategist Steve Bannon and communications director Jason Miller. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">A seditious conspiracy is easier to recognize from a distance. As it turned out, few, if </span><a href="https://thehill.com/policy/international/3805369-us-lawmakers-condemn-jan-6-style-rioting-at-brazilian-government-offices/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">any</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, national Republicans of note seized the moment to offer moral support to the rioters in Brasília. Few, if any, watched the mayhem in the capital of the largest country in South America and argued, as they did in the days following January 6th, that the rioters were peaceful protesters expressing their free speech rights. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Only Tucker Carlson, as one might have </span><a href="https://www.france24.com/en/live-news/20220521-tucker-carlson-voice-of-white-america-s-outrage-and-fears" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">predicted</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, was prepared to go full MAGA and embrace the obvious </span><a href="https://www.newsweek.com/bolsonaro-supporters-storm-brazils-congress-echo-jan-6-invasion-1772143" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">parallels</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> between Brasília on January 8, 2023 and Washington DC on January 6, 2021. Carlson </span><a href="https://www.newsweek.com/tucker-carlson-blasts-brazils-rigged-election-1772688" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">asserted</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that the November election had been rigged, and millions of Brazilians were rightfully protesting because they "know that their democracy has been hijacked." The Big Lie had gone global.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="border: none; clear: left; display: inline-block; float: left; height: 393px; margin-bottom: 1em; margin-right: 1em; overflow: hidden; width: 393px;"><img height="400" src="https://lh5.googleusercontent.com/pz8JBOuOLqQrx3NV5ufoxsxPEvy6-wzfzRonMIGFf-vJW9P3lxt__bBmUuPhSWJ6dB2T0TeoApaIfGmNbJ-S6op3Hau-nSqhYLDnhu9U47kSYc5mHYZ_gL_thytEN59tjNFN9bt-VlHhpueS2YivH9jnjLA8-s0LstiWow_AUqk3PTo_zkPnYdOzh8vHrg=w400-h400" style="margin-left: 0px; margin-top: 0px;" width="400" /></span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">Coming in the wake of Republican underperformance in the midterm elections, and a day after Kevin McCarthy’s abject surrender to the MAGA wing of the GOP as the price of winning the Speaker’s gavel, events in Brazil may help to bend the arc of our politics away from the downward spiral we have been on for years now. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Although the Republican Party has had its battles over the years, such as those between progressives and conservatives in the 1920s, and between moderates and conservatives in the 1960s and again in the 1980s, today’s battle between traditional and MAGA Republicans is of a different order. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If you are unclear about the distinction between the two groups, the dividing line is simple: you are a traditional Republican if the words “I don’t like Donald Trump, but I like his policies,” have ever crossed your lips. But if Trump speaks to you regardless of his policies, if you believe the 2020 election was stolen, and if you are sympathetic to the suggestion that leading Democrats are pedophiles and sex traffickers, you likely fall into the MAGA camp. It is a long leap from questioning the inherently messy nature of elections to buying into QAnon conspiracies made up out of whole cloth, but today’s GOP has </span><a href="https://www.aei.org/op-eds/gop-plays-a-risky-game-by-elevating-qanon/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">gone</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a long way down that road.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Traditional Republicans in today’s GOP are akin to the proverbial frog who failed to respond as the water around it got hotter and hotter, until finally it found itself in boiling water and could not understand how it got there. For decades, the Republican coalition has in large measure comprised two groups: traditional economic conservatives primarily focused on lower taxes and less government, and social conservatives brought into the Republican coalition beginning in the 1970s with promises around social issues – guns, abortion, “religious liberty,” and the like. While for years, traditional Republicans tolerated social conservatives in their midst as the price of winning their tax cuts and business deductions, the rise of Donald Trump flipped the power dynamic in the GOP, to the point where polling now </span><a href="https://docs.cdn.yougov.com/bpeqshr9sf/econtoplines.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggests</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that nearly half of the party consists of self-identified MAGA Republicans.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">For those traditional Republicans who have turned a blind eye to the MAGAfication of their political party, hoping that the rise of Trump would be a passing annoyance, the insurrection in Brazil should be a tipping point. Images of Steve Bannon’s shock troops in the streets of Brasília are a stark reminder that they have been in common cause with seditious conspiracists and abject lunatics for years now. As evidenced by a recent Economist/YouGov </span><a href="https://docs.cdn.yougov.com/bpeqshr9sf/econtoplines.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">poll</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, 70% of their GOP brethren have bought into Donald Trump’s Big Lie, and believe that Joe Biden sits illegitimately in the White House; two-thirds have a </span><a href="https://today.yougov.com/topics/politics/articles-reports/2022/03/30/which-groups-americans-believe-conspiracies" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">favorable</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> view of QAnon </span><a href="https://www.prri.org/research/the-persistence-of-qanon-in-the-post-trump-era-an-analysis-of-who-believes-the-conspiracies/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">conspiracy</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://today.yougov.com/topics/politics/articles-reports/2022/03/30/which-groups-americans-believe-conspiracies" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">theories</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">; and fully </span><a href="https://today.yougov.com/topics/politics/articles-reports/2022/03/30/which-groups-americans-believe-conspiracies" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">half</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> believe that Democratic Party leaders “are involved in elite child sex-trafficking rings.” Now, as Matt Gaetz flexes his power in the House, and Jair Bolsonaro spreads his own Big Lie and mimics Trump’s insurrection, those traditional Republicans who have remained silent through all that has ensued have no choice but to confront the world of their creation.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Events since the 2022 midterms appear to suggest an ebbing of the MAGA tide. Many on both sides of the aisle yearned to see the House stalemate resolved by a </span><a href="https://www.9news.com.au/world/fred-upton-speaker-kevin-mccarthy-vote-republicans-democrats-hakeem-jeffries-usa-politics/47b83613-4ef9-4a5b-b6d6-db289e2c2427" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">coalition</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of centrist Democrats and Republicans coming together to elect a Speaker rather than by Kevin McCarthy caving into the demands of the far right. Indeed, a CBS News poll this month </span><a href="https://www.cbsnews.com/news/cbs-news-poll-inflation-cooperation-and-investigation/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggests</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the GOP is split right down the middle between those who want Congressional Republicans to cooperate with Democrats and those who want Congressional Republicans to investigate Democrats with a vengeance. Nonetheless, there have been signs of successful efforts to push back against </span><a href="https://www.nytimes.com/2022/01/26/opinion/covid-biden-trump-polarization.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">hyperpartisanship</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> at the state level across the country. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This month, in Pennsylvania and Ohio, Democratic and Republican legislators came together to elect a moderate Democratic and Republican speaker, respectively, undermining the power of right-wing legislators in both states. Even in deep red South Carolina, Republicans holding an overwhelming majority </span><a href="https://www.nytimes.com/2023/01/11/opinion/house-republicans-kevin-mccarthy-far-right.html?smid=em-share" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">rejected</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the demands of the South Carolina Freedom Caucus and chose a more moderate course. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Images of turmoil on the streets of Brasília could not have been more timely. Coming in the wake of the MAGA victory on the House floor, those images – not a warning of what might happen in our country at some point in the future, but rather a reminder of what has already happened here – have forced traditional Republicans to confront the damage that has been done to our country as they have sat silently by. Brazil on January 8th is what January 6th here at home looked like to the rest of the world, despite what Republicans might want to believe. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Perhaps this moment will pass as the House investigations ramp up, Brazil fades into the rearview mirror, and Donald Trump seeks to regain his grip over the Republican Party. But the evidence is already there that Republicans are giving renewed attention to the political center. Faced with underperformance among moderates and independent voters in the midterm elections, as well as the success of state-wide votes preserving abortion rights in red states, Republicans who have long since sworn off the mainstream media have begun </span><a href="https://www.bloomberg.com/opinion/articles/2023-01-13/fox-news-republicans-try-cnn-in-2023" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">showing</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> up on CNN and MSNBC. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">There has been no sea change yet, so far just ripples suggesting that the tides of our politics may be shifting. You will know that sea change has come when 2024 Republican presidential hopefuls like Ted Cruz, Josh Hawley and Tom Cotton begin to show up for interviews with Anderson Cooper or on the Rachel Maddow show.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="background-color: white; color: #333333; font-family: Georgia, serif; font-size: 13px; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><em style="--tw-ring-color: rgb(59 130 246 / 0.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 #0000; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; color: #404040; font-family: "SF Pro Text", -apple-system, ui-sans-serif, "system-ui", "Segoe UI", Roboto, Helvetica, Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol"; font-size: 14px; letter-spacing: -0.3px;">Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em></p><p dir="ltr" style="background-color: white; color: #333333; font-family: Georgia, serif; font-size: 13px; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><em style="--tw-ring-color: rgb(59 130 246 / 0.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 #0000; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; color: #404040; font-family: "SF Pro Text", -apple-system, ui-sans-serif, "system-ui", "Segoe UI", Roboto, Helvetica, Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol"; font-size: 14px; letter-spacing: -0.3px;"><br /></em></p><p dir="ltr" style="background-color: white; color: #333333; font-family: Georgia, serif; font-size: 13px; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p dir="ltr" style="background-color: white; color: #333333; font-family: Georgia, serif; font-size: 13px; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><em style="--tw-ring-color: rgb(59 130 246 / 0.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 #0000; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; color: #404040; font-family: "SF Pro Text", -apple-system, ui-sans-serif, "system-ui", "Segoe UI", Roboto, Helvetica, Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol"; font-size: 14px; letter-spacing: -0.3px;">Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces. And thanks to Damon Langlois https://www.damonlanglois.com/ for summing up our current state of affairs in his sandcastle sculpture of one-time Republican Abraham Lincoln.</em></p><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-15355519363149874492023-01-06T19:59:00.000-05:002023-01-07T16:03:57.261-05:00After this week, the GOP will never be the same.<p><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">It all seems so inevitable in retrospect. Back in the 1960s, Republican Party strategists made a few simple calculations and decided to build what would become the modern GOP coalition of disparate voter groups, each with their own distinct set of priorities. And for the better part of a half century, it has worked. The model of single-issue politics – notably including anti-tax, pro-gun, and anti-abortion voters – delivered Republican victories and offset whatever demographic advantages Democrats might have expected to give them an advantage.</span></p><span id="docs-internal-guid-b7a3e71c-7fff-035c-0d5c-2b337385ab9f"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The GOP pivot in the 1960s and 70s came in the aftermath of Richard Nixon’s narrow victory over Hubert Humphrey in 1968. In that election, Nixon </span><a href="https://en.wikipedia.org/wiki/1968_United_States_presidential_election" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">outpolled</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Humphrey 43.4% to 42.7%, while Alabama’s segregationist Governor George Wallace took 13.5% of the vote running as a third party. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As Nixon political strategist Kevin Philips </span><a href="https://www.nytimes.com/packages/html/books/phillips-southern.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">explained</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> at the time, the election math was straightforward: the numbers of voters that had flocked to George Wallace far exceeded the potential Black vote for a Republican Presidential candidate, particularly as Democrats had made great inroads into the Black vote beginning in the New Deal and with Harry Truman’s integration of the military. If the GOP was prepared to walk away from its brand as the Party of Lincoln, it could build a new Republican majority for decades to come. And it was a strategy, Phillips </span><a href="https://www.nytimes.com/packages/html/books/phillips-southern.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">argued</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, that would build upon itself, “The more Negroes who register for Democrats in the South, the sooner the Negrophobe Whites will quit the Democrats and become Republicans. That’s where the votes are.”</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And the proof was in the pudding. In short order – beginning with Nixon’s overwhelming victory in 1972, twelve years of Ronald Reagan and George Bush in the White House, and culminating with the GOP finally winning the House in 1994 after 40 </span><a href="https://www.cbsnews.com/htdocs/politics/campaign2004/house.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">years</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of Democrat control – the power of that new coalition overwhelmed whatever loyalty long-time Republicans might have had to their long-time Black comrades-in-arms, and their identity as the Party of Abraham Lincoln.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">For the better part of the last half-century, the strategy has worked perfectly. Business elites who long comprised the core of the Republican Party, have won power through the votes of less educated white voters motivated by guns, religion, and racial resentments. But for most of those years, as Lee Atwater had </span><a href="https://www.nytimes.com/2005/10/06/opinion/impossible-ridiculous-repugnant.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">explained</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in 1981, Republicans learned to speak in code: </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">"You start out in 1954 by saying, 'N–ger, n–ger, n–ger.' By 1968 you can't say 'n–ger' -- that hurts you. Backfires. So you say stuff like forced busing, states' rights and all that stuff. You're getting so abstract now [that] you're talking about cutting taxes, and all these things you're talking about are totally economic things and a byproduct of them is [that] blacks get hurt worse than whites.”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Over the ensuing years, the strategy became more abstract, as Atwater suggested, but the underlying message endured. In the mid-1980s, while Reagan Lieutenant Grover Norquist refined the GOP playbook into the anti-tax, pro-gun, and anti-abortion messaging, while the use of </span><a href="https://www.theatlantic.com/daily-dish/archive/2010/03/karl-rove-and-his-gay-dad/189234/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">wedge</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> issues to draw anti-gay voters to the polls, and racially coded language endured. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">By the time Donald Trump grabbed the playbook, all the nuance was out the door, as racial code was replaced with a bullhorn. With the emergence of Trump’s MAGA followers as the unchallenged base of the party, the GOP leadership literally did away with a policy platform, suggesting instead that it stood for </span><a href="https://www.foxnews.com/politics/gop-no-new-2020-platform-trump-agenda" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">whatever</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Donald Trump stood for. A half century after George Wallace ran as a populist channeling white resentments against establishment elites, the politics of race and resentment has subsumed any last vestiges of the GOP as the party of personal responsibility, and White and Christian Nationalists came out of the closet and pranced proudly on the White House lawn. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The internet changed everything, and it changed nothing. It changed nothing because it has only amplified the effectiveness of resentment and hate as organizing principles in politics. It changed everything because it freed politicians with social media skills from dependence on the leaders of political parties for funding.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">To watch Matt Gaetz and Lauren Boebert on the floor of the House this week has been to see the fulfillment of the MAGA dream. The Republican Party is in turmoil, as the political progeny of the George Wallace voters have come of age. Lured into the Republican Party a half-century ago to serve as the election day tools of business elites, this week MAGA consumed the host. The 90% of the House Republicans who sat quietly in their allegiance to Kevin McCarthy seethed in resentment every time Gaetz stood up to speak. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Yet the Matt Gaetz that stood before him would not bend the knee; he was a man fulfilled. Ridiculed for years for his Elvis hair and his apparent interest in sex with </span><a href="https://www.vanityfair.com/news/2022/07/matt-gaetz-women-who-support-abortion" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">underage</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> women, he ruled the roost this week. In 2020, Gaetz </span><a href="https://www.vanityfair.com/news/2020/09/matt-gaetz-donald-trump-firebrand" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">explained</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> his ethos as a member of Congress in an interview with Vanity Fair. “</span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If you aren’t making news, you’re not governing.” </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Being on social media, being on Fox, that is governing, according to Gaetz. Garnering attention is the job. Getting clicks is the mission. Because attention and clicks equals money, and money means no one can tell you what to do. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEheoC3kaGeAMSLSy17t6zTUBhYWcj98fcSeSLy11Y5BOc3dsGfmHrXFm7MjpTPZqDF8G_IxmXakOSTcgEOmMxpJYRWUAwKVbfGi6PgCGPyKEIkLh-FIBtAEslKWuTEqYNBiV8lUxpABPtnwYQr9wPYObXGMNrgOzxpNAMzNCgDOn08CBilKUw/s2400/The%20Speaker%20copy.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="2400" data-original-width="2400" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEheoC3kaGeAMSLSy17t6zTUBhYWcj98fcSeSLy11Y5BOc3dsGfmHrXFm7MjpTPZqDF8G_IxmXakOSTcgEOmMxpJYRWUAwKVbfGi6PgCGPyKEIkLh-FIBtAEslKWuTEqYNBiV8lUxpABPtnwYQr9wPYObXGMNrgOzxpNAMzNCgDOn08CBilKUw/w400-h400/The%20Speaker%20copy.jpg" width="400" /></a></div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Standing before his colleagues, taking on Kevin McCarthy, was the moment Matt Gaetz has dreamed of, and that Lauren Boebert lives for, because they both live only for the attention. Once Donald Trump’s foot soldiers, they have found their own voices. This week, when Trump came to Kevin McCarthy’s aid and declared that it was time for Boebert and Gaetz and the rest of those blocking McCarthy to fall into line, they were unmoved. Donald Trump, Boebert was quick to </span><a href="https://www.youtube.com/watch?v=yAq73z8rvIM" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">declare</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on the floor of the House, was her favorite president, but they were not going to do his bidding. Instead, the time had come for him to do what she demanded, and tell McCarthy it was time to withdraw.</span><p></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">On Friday, as McCarthy came within a few votes of victory, Gaetz lashed out once more. </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Kevin McCarthy is the LaBron James of special interest fundraising</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, he declared. The issue of special interest fundraising is central to the MAGA view of Washington DC as a swamp, and the MAGA mission to drain the swamp. And this is Gaetz’s sweet spot as well. In 2020, he was the </span><a href="https://www.politico.com/news/2020/02/27/matt-gaetz-swears-off-pac-money-117956" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">first</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Republican member of Congress to refuse to take any PAC contributions. After Gaetz’s attack on McCarthy, </span><a href="https://twitter.com/hashtag/sellout?src=hashtag_click" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">#sellout</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> trended on Twitter, and those who have been supporting McCarthy – even those with MAGA cred like Dan Crenshaw and Margorie Taylor Greene – found themselves scurrying to </span><a href="https://twitter.com/hashtag/sellout?src=hashtag_click" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">defend</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> themselves against MAGA rage.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Kevin McCarthy may yet win the votes this week, and be sworn in as Speaker of the House, but Matt Gaetz and Lauren Boebert have already won the war. Whoever emerges as Speaker of the House, that person will serve at their pleasure. The tail is now wagging the dog.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="background-color: white; color: #333333; font-family: Georgia, serif; font-size: 13px; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><em style="--tw-ring-color: rgb(59 130 246 / 0.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 #0000; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; color: #404040; font-family: "SF Pro Text", -apple-system, ui-sans-serif, "system-ui", "Segoe UI", Roboto, Helvetica, Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol"; font-size: 14px; letter-spacing: -0.3px;">Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em></p><p dir="ltr" style="background-color: white; color: #333333; font-family: Georgia, serif; font-size: 13px; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><em style="--tw-ring-color: rgb(59 130 246 / 0.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 #0000; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; color: #404040; font-family: "SF Pro Text", -apple-system, ui-sans-serif, "system-ui", "Segoe UI", Roboto, Helvetica, Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol"; font-size: 14px; letter-spacing: -0.3px;"><br /></em></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p dir="ltr" style="background-color: white; color: #333333; font-family: Georgia, serif; font-size: 13px; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><em style="--tw-ring-color: rgb(59 130 246 / 0.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 #0000; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; color: #404040; font-family: "SF Pro Text", -apple-system, ui-sans-serif, "system-ui", "Segoe UI", Roboto, Helvetica, Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol"; font-size: 14px; letter-spacing: -0.3px;">Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces. And thanks to Damon Langlois https://www.damonlanglois.com/ for summing up our current state of affairs in his sandcastle sculpture of one-time Republican Abraham Lincoln.</em></p><br /></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-12698568268531161282022-11-02T09:30:00.002-04:002022-11-02T10:12:15.342-04:00As It Barrels Ahead, Is the Fed Flirting With Disaster?<p><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The stock market has rallied nearly 9% over the past two weeks, proving that even in this grimmest of seasons, hope springs eternal. The hope, in this case, rested on the </span><a href="https://seekingalpha.com/news/3893754-federal-reserve-should-talk-about-reducing-size-of-rate-hikes-now-sf-feds-daly" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggestion</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by Mary Daly, the President of the Federal Reserve Bank of San Francisco, and member of the Federal Reserve’s rate-setting Federal Open Market Committee, that the Fed should begin to consider how and when to reverse course from its unrelenting </span><a href="https://www.wsj.com/articles/economists-now-expect-a-recession-job-losses-by-next-year-11665859869" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">drive</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to push the nation’s economy into </span><a href="https://www.businessinsider.com/what-are-ceos-saying-recession-2023-economy-layoffs-hiring-freezes-2022-10" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">recession</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. It is on such modest suggestions that market rallies hinge these days.</span></p><span id="docs-internal-guid-c0a12c5d-7fff-1c47-b60d-29525d09eb6b"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">For months now, the Governors of the Federal Reserve have </span><a href="https://www.wsj.com/articles/kashkari-says-fed-needs-to-keep-tightening-until-theres-compelling-evidence-of-declining-inflation-11664304009" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">insisted</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that they would not be deterred from raising interest rates until there is strong evidence that inflation is coming down, and since the release of the </span><a href="https://www.bls.gov/news.release/cpi.nr0.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">inflation</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> numbers for September, the Fed has been </span><a href="https://www.nytimes.com/2022/10/18/business/economy/federal-reserve-inflation-november-meeting.html?te=1&nl=evening-briefing&emc=edit_ne_20221018" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">barreling</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> toward another large increase in interest rates. Then, seemingly out of the blue – with no particularly positive news on the inflation front to point to – a few Fed Governors started </span><a href="https://www.wsj.com/articles/feds-brainard-says-rate-rises-will-slow-economy-over-time-11665423314?mod=article_inline" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">whistling</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a different tune. Perhaps, Fed Vice Chairwoman Lael Brainard </span><a href="https://www.wsj.com/articles/feds-brainard-says-rate-rises-will-slow-economy-over-time-11665423314?mod=article_inline" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggested</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in a speech in Chicago on October 10th, they should act more judiciously, and pause to see the effect of the steps the Fed had already taken. This was not a radical suggestion. After all, as any student of monetary economics could tell you, it will take time to gauge the full </span><a href="https://www.wsj.com/articles/feds-inflation-fight-has-some-economists-fearing-an-unnecessarily-deep-downturn-11665197755?mod=hp_lead_pos1" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">impact</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the steps that the Fed has already taken to tighten the screws. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Surely, the Fed Governors all know this to be the case, as the existence of a </span><a href="https://www.investopedia.com/terms/r/response_lag.asp" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">time lag</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> between monetary policy actions and outcomes – generally viewed to be in the </span><a href="https://www.sapling.com/8087404/time-lag-monetary-fiscal-policy" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">range</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of nine months to two years – is axiomatic. And Fed Chair Jerome Powell, Lael Brainard, and their colleagues have experienced this time lag first hand, as the inflation they are fighting today is at least </span><a href="https://www.project-syndicate.org/commentary/us-federal-reserve-inflation-blame-by-kenneth-rogoff-2022-05" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">in part</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a product of the actions they themselves took two years ago, when they increased the money supply by </span><a href="https://fred.stlouisfed.org/series/M2SL" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">trillions</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of dollars to keep the economy afloat in the wake of the Covid pandemic.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If, in their </span><a href="https://www.wsj.com/articles/kashkari-says-fed-needs-to-keep-tightening-until-theres-compelling-evidence-of-declining-inflation-11664304009" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">zeal</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to prove themselves equal to the task of preventing a 1970s-style inflationary cycle – and perhaps along the way sidestep blame for a mess at least in part of their own creation – Fed Governors lost sight of that most basic truth of monetary economics, it was thrown in their face by a meme that rocketed across the financial community even as Vice Chair Brainard was speaking in Chicago. Sometimes, when people are closeted in their own information bubble and immune to reasoned discourse, ridicule can wake them up. And so it was when market analyst Peter </span><a href="https://mobile.twitter.com/pboockvar/with_replies" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Boockvar</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> gave up debating the nuances of monetary economics and offered </span><a href="https://www.cnn.com/2022/10/12/business/nightcap-fed-inflation" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">instead</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “The Weed Gummy Theory” to explain the seeming inability of the Fed Governors to consider the </span><a href="https://www.wsj.com/articles/feds-inflation-fight-has-some-economists-fearing-an-unnecessarily-deep-downturn-11665197755?mod=hp_lead_pos1" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">risks</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> they are running as they continue to raise interest rates without pausing to assess the impact of their actions. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">According to Boockvar, the Fed is </span><a href="https://www.cnn.com/2022/10/12/business/nightcap-fed-inflation" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">like</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “</span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">an eager but inexperienced consumer of weed gummies, which, notoriously, take longer than anyone expects to kick in… In other words, we may find ourselves in 2023 doing the macroeconomic equivalent of curling up in the fetal position on the couch, murmuring to no one in particular that that last gummy was too much, man.”</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If Boockvar’s parody helped some here at home understand the risks inherent in the pace of Fed rate hikes, the rest of the world has not needed weed analogies to understand the potential adverse impacts from the pace of Fed rate hikes, as the Fed actions to date have already ignited a tsunami of consequences across the rest of the world.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As the Fed pushed interest rates upward over the past six </span><a href="https://fred.stlouisfed.org/series/FEDFUNDS" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">months</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, it has shifted the flows of capital across the world into the U.S. dollar and out of other currencies. As illustrated in the graph below, Fed interest rate hikes since the beginning of the year have triggered declines of 20% or more in the value of other currencies. Among other consequences, the dramatic rise in the value of the dollar has amplified the inflationary impact of increases in the cost of energy and agricultural commodities caused by Vladimir Putin’s war. Because those commodities are priced in dollars, inflation in those countries now reflects both the higher cost of the commodities on world markets, as well as the cost of converting their currency into dollars. As a result, inflation across much of the world is higher than it is here at home, in part due to the actions of the Fed: CPI </span><a href="https://www.bls.gov/news.release/cpi.nr0.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">inflation</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the U.S. remained just over 8% in September, but it has </span><a href="https://ec.europa.eu/eurostat/documents/2995521/15131946/2-19102022-AP-EN.pdf/92861d37-0275-8970-a0c1-89526c25f392" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">reached</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> 11% in the European Union, while in Egypt, one of the world’s largest </span><a href="https://www.marketwatch.com/story/egypt-shifts-wheat-buying-strategy-to-cope-with-high-prices-271662122223" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">consumers</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of Ukrainian and Russian agricultural products, it now </span><a href="https://www.bloomberg.com/news/articles/2022-09-08/egypt-inflation-quickens-to-14-6-fastest-in-almost-four-years" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">stands</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> at 15%. </span><span style="border: none; display: inline-block; height: 255px; overflow: hidden; width: 405px;"><img height="255" src="https://lh3.googleusercontent.com/QYiHOQB4zYT-emHAQvilEk5qH5eLa6iMwmfqf6Mxoyo1rdnMncYdGGOfFqGZ2Ie4FDp2eD63esv-dvwUhJ1aLDkR-1XIqQHbQzskffhDG30V-y7JRDadNimKytrT9OgHJfF3HUTOzI9oHzeg_gnpzPnnBG1OwDkAUJTLkM28_81QQuSuFoy-5oGiQYtcNg" style="margin-left: 0px; margin-top: 0px;" width="405" /></span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The response of central banks across the globe has been swift, as they have found themselves forced to </span><a href="https://www.bloomberg.com/news/articles/2022-09-22/almighty-dollar-runs-rampant-in-an-increasingly-divided-world?utm_medium=email&utm_source=newsletter&utm_term=220923&utm_campaign=bop" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">raise</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> interest rates, both to mute the inflationary impact of the rise in the dollar, and to stem the pace of capital flight. The result has been that central banks in countries that had barely rebounded from Covid-related recessions are now raising interest rates, with the </span><a href="https://www.nytimes.com/2022/10/04/opinion/the-all-too-real-risk-of-a-global-recession.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">likely</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> consequence of throwing their local economies back into </span><a href="https://www.forbes.com/sites/billconerly/2022/09/23/global-economy-headed-into-recession/?sh=65843f43abfa" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">recession</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, and, ultimately, severely cutting back economic growth across much of the globe. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It was not that long ago that Fed chair Ben Bernanke embraced the role of “central banker to the world” in the face of the 2008 global financial crisis. As the global financial system teetered on the verge of collapse, countries around the world looked to the United States for leadership, and the Federal Reserve in turn assured that resources were </span><a href="https://www.nytimes.com/2014/02/24/business/feds-aid-in-2008-crisis-stretched-worldwide.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">available</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to prevent the collapse of financial institutions across the globe. Two years ago, as the spread of Covid-19 similarly threatened to collapse economies across the globe, the Fed again stepped into the </span><a href="https://crsreports.congress.gov/product/pdf/IF/IF11498" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">breach</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, assuring access to dollar reserves and liquidity for central banks around the world. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This time, however, things feel different. It is fair to say that the Fed now finds itself </span><a href="https://www.nytimes.com/2022/10/05/briefing/fed-reserve-inflation-labor-economy.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">between</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a rock and hard place. While Fed Chair Jerome Powell and Vice Chair Brainard publicly </span><a href="https://www.politico.com/news/2022/09/30/jay-powell-world-00059620" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">acknowledge</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the impact of Fed policies on other countries, the persistence of domestic inflation and the emergence of inflation as the </span><a href="https://www.nytimes.com/interactive/2022/10/18/upshot/times-siena-poll-registered-voters-crosstabs.html?utm_source=substack&utm_medium=email" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">paramount</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> focus of midterm elections seem to have left them with little wiggle room to moderate Fed policies with an eye to the impact on the world beyond our borders. Yet, it is the Fed’s </span><a href="https://www.bloomberg.com/opinion/articles/2022-09-15/us-interest-rates-are-becoming-weapons-of-mass-economic-destruction?fromMostRead=true" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">singular</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> focus on its domestic 2% inflation target that may yet bring a tsunami of unintended consequences to our shores. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">2% inflation has become synonymous in the public imagination with the “good old days.” However, like many things today that we have come to view as normal – double-digit annual stock market returns, a world awash in capital, and 3% home mortgages among them – the Fed’s 2% inflation target has not been around that long, and simply may not be a prudent objective. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The Fed’s 2% target was </span><a href="https://www.brookings.edu/product/rethinking-the-feds-2-percent-inflation-target/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">established</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in 2012, four years after the introduction of zero and negative interest rate policies by central banks across the globe in response to the near collapse of the global financial system. It was a time when deflation, rather than inflation, loomed as the major threat to global economies. While inflation remained below 2% for the ensuing decade – leading people to see it as “normal” – there was little normal about it. Indeed, the last </span><a href="https://inflationdata.com/Inflation/Inflation/DecadeInflation.asp" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">decade</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> prior to the 2010s when inflation averaged 2% or lower was the 1950s. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Even inflation in the range of 2.5 to 3% – the </span><a href="https://inflationdata.com/Inflation/Inflation/DecadeInflation.asp" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">average</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> rates of inflation during the 2000s and 1990s, respectively – may be an unrealistic target, as so many of the factors that enabled the past four decades of low inflation are quickly slipping away. Perhaps as much as any other factors, inflation in the 2 to 3% range over the past three decades was made possible by the fall of the Berlin Wall, the opening of China under Deng Xiaoping in 1978, and China’s entry into the World Trade Organization in 2001. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Together, those events brought more than a billion people into the global, market-based economic system, and engendered a global competition in labor costs. Among the impacts of the ensuing process of global economic integration were the shipping of millions of American manufacturing jobs overseas and downward pressure on domestic wages, which together helped keep inflation in check. Now, with the combination of domestic (and </span><a href="https://www.iberglobal.com/files/The_Global_Workforce_Crisis_bcg.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">global</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">) labor shortages, support for trade unions at the </span><a href="https://news.gallup.com/poll/398303/approval-labor-unions-highest-point-1965.aspx" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">highest</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> level in 60 years, increased </span><a href="https://www.nytimes.com/2022/09/01/business/tech-companies-china.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tensions</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> with China, and post-Covid </span><a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/02/24/executive-order-on-americas-supply-chains/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">moves</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> toward “onshoring” and “</span><a href="https://www.linkedin.com/pulse/what-does-friend-shoring-mean-global-supply-chain-wang#:~:text=Published%20Aug%2024%2C%202022,run%20the%20global%20economic%20system.%E2%80%9D" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">friend-shoring</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">” of </span><a href="https://www.syracuse.com/business/2022/10/micron-picks-syracuse-suburb-for-huge-computer-chip-plant-that-would-bring-up-to-9000-jobs.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">corporate</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> supply chains, those trends appear to be </span><a href="https://www.nytimes.com/2022/10/04/opinion/the-all-too-real-risk-of-a-global-recession.html?searchResultPosition=1" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">reversing</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Perhaps the Fed can succeed in pushing back against that tide. A restoration of stable, 2% inflation is achievable, former Treasury Secretary Larry Summers </span><a href="https://www.bloomberg.com/news/articles/2022-06-20/summers-says-us-needs-5-jobless-rate-for-five-years-to-ease-cpi?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmacro&stream=business#xj4y7vzkg" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">insists</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, through a deep and long recession of sharply elevated unemployment over several years. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But Summers' suggested roadmap raises a second factor that the Fed cannot afford to ignore, which is the dependence of the United States on the support of nations across the globe, and the potentially catastrophic consequences of the Fed failing to take into account the impact of its actions on other countries. Since the Second World War, and in particular since the early 1970s, when the United States reached an agreement with the Kingdom of Saudi Arabia providing for the U.S. commitment to defend the Kingdom in exchange for the recycling of “petrodollars” into the U.S. economy, we have benefitted from the “</span><a href="https://en.wikipedia.org/wiki/Exorbitant_privilege" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">exorbitant privilege</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">” of living in a world where the dollar is the global reserve currency and trade is conducted in dollars. It is a privilege that for decades has protected the United States from consequences that other countries routinely face for running trade deficits, budget deficits, or, as we see today, being captive of inflation driven by escalation in value of a foreign currency. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">We have come to treat that privilege as an entitlement, yet it rests, spoken or otherwise, on the consent of the rest of the world. Should the Fed fail to take into account the distress that its actions are causing in other countries, and should a consensus emerge across the globe that our actions have become too nakedly self-interested, we should not be surprised to see a fraying of that consent. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Over the past few weeks, we have been given a glimpse of what such an erosion of support might look like. Largely unreported outside of the financial press in recent weeks has been the sudden </span><a href="https://www.bloomberg.com/news/articles/2022-10-10/the-most-powerful-buyers-in-treasuries-are-all-bailing-at-once" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">exit</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of major global buyers from the U.S. Treasury market, putting upward pressure on U.S. bond rates. Japan, which surpassed China in recent years as the largest </span><a href="https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/mfhhis01.txt" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">holder</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of Treasury securities, has reduced its </span><a href="https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">holdings</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by 10% over the course of this year, and stopped purchases of new securities, due to the high cost of hedging yen-dollar risk as the dollar has continued to rise. For its part, China has not been a net buyer of Treasury securities for more than a decade. Farther down the list, Russia, once among the largest holders of treasuries, completely exited the market following its annexation of Crimea in 2014, while Saudi Arabia's decoupling from its alliance with the US has trimmed its holdings by 50%.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The possibility of a continued </span><a href="https://www.washingtonpost.com/business/the-feds-next-crisis-is-brewing-in-us-treasuries/2022/10/14/c8a9c0d6-4ba7-11ed-8153-96ee97b218d2_story.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">dislocation</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the Treasury market should shake people up, as the consequences of Treasury bonds falling out of favor globally would have significant domestic ramifications. Like the Fed’s 2% inflation target, the world of 2% to 3% long-term Treasury interest rates that we have come to view as “normal” over the past decade has been the exception, not the rule, and only came about in the </span><a href="https://www.reuters.com/article/us-usa-fed-zirp/ten-years-on-feds-long-strange-trip-to-zero-redefined-central-banking-idUSKBN1OF0HI" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">context</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the global recovery from the 2008 collapse. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Yet, in its ten-year budget projections, the Congressional Budget Office continues to assume that Treasury yields will remain in the 2.9 to 3.8% range for the balance of this decade. Should, however, long-term Treasury yields return to the range of 5% to 7% – the rate environment that prevailed for the two decades preceding the 2008 collapse – the impact would be significant, as cost of interest on the national debt would rise from $350 billion last year to around $1.5 trillion five years from now, an amount exceeding the combined cost of Medicaid and Defense spending. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As the Fed continues its single-minded pursuit of restoring 2% inflation, it may be pursuing an unsustainable goal, given the emerging trends in a de-globalizing economy. And as Peter Boockvar suggested, and much of the rest of the world already understands, it may be risking dramatic, unintended consequences for the world, and ultimately for us. Given the deterioration of our politics during what objectively have been the best of times, one can only imagine how we will manage should that outcome come to pass. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Yet it could happen. While events may yet </span><a href="https://www.politico.com/news/2022/09/30/jay-powell-world-00059620" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">force</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a change in the Fed’s thinking – such as cascading defaults in emerging market countries, or perhaps growing political </span><a href="https://www.washingtonpost.com/business/which-comes-firstinflation-or-political-instability/2022/04/24/46e63bc0-c3cf-11ec-8cff-33b059f4c1b7_story.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">instability</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> – the Fed appears to be undeterred. Perhaps, before a tsunami of adverse, unintended consequences reverberates back on our shores, someone should remind Jerome Powell that when Paul Volcker left office in August 1987, inflation was 4.7%, and it remained in the 5% range for the next two decades. While the Fed’s 2% inflation goal has acquired almost mystical significance, the single-minded pursuit of that objective may instigate reactions that will be far more difficult to control.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><em style="--tw-ring-color: rgb(59 130 246 / 0.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 #0000; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; color: #404040; font-family: "SF Pro Text", -apple-system, ui-sans-serif, "system-ui", "Segoe UI", Roboto, Helvetica, Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol"; font-size: 14px; letter-spacing: -0.3px;"><br /></em></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><em style="--tw-ring-color: rgb(59 130 246 / 0.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 #0000; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; color: #404040; font-family: "SF Pro Text", -apple-system, ui-sans-serif, "system-ui", "Segoe UI", Roboto, Helvetica, Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol"; font-size: 14px; letter-spacing: -0.3px;"><br /></em></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><em style="--tw-ring-color: rgb(59 130 246 / 0.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 #0000; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; color: #404040; font-family: "SF Pro Text", -apple-system, ui-sans-serif, "system-ui", "Segoe UI", Roboto, Helvetica, Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol"; font-size: 14px; letter-spacing: -0.3px;">Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><em style="--tw-ring-color: rgb(59 130 246 / 0.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 #0000; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; color: #404040; font-family: "SF Pro Text", -apple-system, ui-sans-serif, "system-ui", "Segoe UI", Roboto, Helvetica, Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol"; font-size: 14px; letter-spacing: -0.3px;"><br /></em></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><em style="--tw-ring-color: rgb(59 130 246 / 0.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 #0000; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; color: #404040; font-family: "SF Pro Text", -apple-system, ui-sans-serif, "system-ui", "Segoe UI", Roboto, Helvetica, Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol"; font-size: 14px; letter-spacing: -0.3px;">Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces. And thanks to Damon Langlois https://www.damonlanglois.com/ for summing up our current state of affairs in his sandcastle sculpture of one-time Republican Abraham Lincoln.</em></p><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-91075275861470196742022-10-05T15:44:00.008-04:002022-10-05T19:46:17.671-04:00The metamorphosis of Jerome Powell.<p><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">Federal Reserve Chair Jerome Powell finally won his war. </span></p><span id="docs-internal-guid-58e9861e-7fff-a7a5-9c86-990971d03230"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">No, not the fight against inflation, which has been front page news for months now. That battle has certainly been on Powell’s mind; but behind the scenes, a different war has been raging for the better part of the year, this one between the Federal Reserve and Wall Street. It has been the battle to convince the elite cadre of professional money managers and stock and bond traders whose decisions drive markets on a day to day basis that Jerome Powell is the second coming of Paul Volcker – the legendary Fed chair who crushed post-Vietnam War inflation by boosting interest rates well into double digits and casting the nation into a deep recession. And it has been a titanic struggle, with trillions of dollars and Powell’s legacy on the line. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">For decades now, Wall Street traders and deep-pocketed investors have come to rely on the Fed to step in and make sure that stock market downturns, when they happen, do not get out of hand. Dating back to Alan Greenspan’s appointment as Fed chair in 1987, the Fed has been </span><a href="https://www.rollingstone.com/politics/politics-news/how-alan-greenspan-helped-wreck-the-economy-231162/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">enamored</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the “wealth effect,” which suggests that the Fed should step in – meaning reducing interest rates and pumping money into the system – should stock market declines hit the 20% threshold, or thereabouts. The notion was that it was in the broad public interest to make sure that the loss of wealth among the investor class did not become severe enough to adversely impact the rest of the economy. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The wealth effect, in other words, was essentially trickle-down economics stood on its head: if a rising tide was presumed to lift all boats – a core tenet of modern capitalism – it only made sense that rough seas could sink all boats. And from such logic was birthed the </span><a href="https://www.investopedia.com/terms/g/greenspanput.asp#:~:text=Greenspan%20put%20was%20the%20moniker,to%20a%20regular%20put%20option." style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Greenspan “Put”</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> – a term that encapsulated the belief on Wall Street that when push came to shove, the Federal Reserve would step in to stem market losses (in the manner of a “</span><a href="https://seekingalpha.com/article/4515913-what-is-put-option?source=acquisition_campaign_google&utm_source=google&utm_medium=cpc&utm_campaign=15199871039&utm_term=130394020238%5Eaud-1455007593542:dsa-402690192841%5E%5E559673290317%5E%5E%5Eg&internal_promotion=true&gclid=CjwKCAjw-L-ZBhB4EiwA76YzOZ2lRkvsyuFah276lqeap8EjIekbHxo3X7H34ps6RCWhC-kGd3lV4xoCkYEQAvD_BwE" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">put</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">” option, a type of investment product that can insulate investors from declines in the price of a stock). </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Over the ensuing decades, belief in the Greenspan Put (subsequently renamed the “Fed Put” as Greenspan’s policies were embraced by subsequent generations of Fed leaders) has been pervasive. Indeed, Jerome Powell made his bones as Fed chair by his </span><a href="https://www.washingtonpost.com/outlook/2022/04/01/inside-feds-frantic-efforts-save-economy-pandemic/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">remarkable</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> performance in early 2020, when stock markets were collapsing as the implications of the novel coronavirus first </span><a href="https://www.cdc.gov/museum/timeline/covid19.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">became</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> apparent. Faced with deepening market turmoil, Powell drew from the </span><a href="https://www.washingtonpost.com/outlook/2022/04/01/inside-feds-frantic-efforts-save-economy-pandemic/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">playbook</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> created by then-Fed chair Ben Bernanke in response to the 2008 global financial crisis, and used all the tools at the Fed’s disposal to keep money flowing through the economy.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And it worked: in the wake of a 30% decline in the S&P 500 from mid-February to early-March 2020, the Fed moved aggressively to stabilize the financial markets. By the end of May, the stock market declines had largely been reversed, and even as Covid-19 shutdowns wrecked havoc across the economy, the flood of liquidity pumped into the system by the Federal Reserve marked the beginning of a new bull market, and bond and stock markets alike soared to new historic highs. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">While the Fed’s performance in 2020 was widely </span><a href="https://www.washingtonpost.com/outlook/2022/04/01/inside-feds-frantic-efforts-save-economy-pandemic/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">hailed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, it set the stage for the struggle between Powell and Wall Street that played out over the course of the past year. When inflation emerged as the new scourge facing the country, Jerome Powell pivoted from the Ben Bernanke playbook and sought to remake his identity as a stern inflation-fighter in the model of Paul Volcker. But as much as he tried to insist that the era of the Fed Put was over, stock and bond traders did not buy it. Instead, they took Fed interest rate hikes this year in </span><a href="https://www.bloomberg.com/news/articles/2022-09-06/surge-in-bond-yields-dollar-to-pressure-asia-open-markets-wrap" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">stride</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, and every time Powell or one of his </span><a href="https://www.bloomberg.com/news/articles/2022-09-07/fed-vice-chair-brainard-says-will-fight-inflation-until-it-turns?cmpid=BBD090722_CUS&utm_medium=email&utm_source=newsletter&utm_term=220907&utm_campaign=closeamericas" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">colleagues</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on the Fed Board of Governors went public to </span><a href="https://derivativelogic.com/dl-monitor/fed-to-markets-we-wont-flinch?utm_source=mailchimp&utm_medium=email&utm_campaign=s2s20220912" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">insist</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that they were </span><a href="https://www.cnbc.com/2022/05/17/powell-says-the-fed-will-not-hesitate-to-keep-raising-rates-until-inflation-comes-down.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">serious</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> about pushing up interest rates to </span><a href="https://www.cnbc.com/2022/06/22/powell-tells-congress-the-fed-is-strongly-committed-to-bringing-inflation-down.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tackle</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.bloomberg.com/news/articles/2022-07-27/fed-watchers-say-markets-got-it-all-wrong-on-powell-pivot" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">inflation</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, a day or two of market losses were inevitably followed by market rallies, as traders remained confident that when the time came, the Fed would reverse course and bring interest rates back down. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">After a battle that continued back and forth for most of the year, Powell finally prevailed two weeks ago. With the Fed’s </span><a href="https://fortune.com/2022/09/21/fed-raises-interest-rate-75-basis-points/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">latest</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> three-quarters of a point hike in interest rates, and continued quantitative </span><a href="https://www.axios.com/newsletters/axios-markets-c2f0524a-414d-429c-b72d-db211daadb0c.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tightening</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> (Fed-speak for selling long-term bonds to force long-term interest rates higher) pushing mortgage rates to the </span><a href="https://www.cnbc.com/2022/09/23/some-homebuyers-are-facing-payment-shock-ways-to-save-on-a-mortgage.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosam&stream=top" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">highest</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> level since before the 2008 financial collapse, traders </span><a href="https://www.bloomberg.com/news/articles/2022-09-23/goldman-slashes-s-p-500-target-citing-higher-path-for-fed-rates-l8dxthrq?cmpid=BBD092322_OUS&utm_medium=email&utm_source=newsletter&utm_term=220923&utm_campaign=openamericas" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">threw</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the towel. Bond and equity </span><a href="https://www.bloomberg.com/opinion/articles/2022-09-26/beware-the-cover-curse-how-to-know-when-a-market-meltdown-is-overdone?srnd=opinion" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">markets</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.washingtonpost.com/business/2022/09/23/stock-markets-fed-rate-hike/?utm_source=alert&utm_medium=email&utm_campaign=wp_news_alert_revere&location=alert" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tumbled</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, and market </span><a href="https://www.kpmg.us/insights/economic-data-analysis/september-2022-fomc-meeting.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">indicators</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> turned broadly negative, suggesting a widespread expectation that the economy will experience a recession of some duration, and that the Fed will not </span><a href="https://www.kpmg.us/insights/economic-data-analysis/september-2022-fomc-meeting.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">pivot</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to bring interest rates back down until 2024 at the earliest. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If Jerome Powell had a credibility problem, it was of his own making. He came </span><a href="https://www.newyorklifeinvestments.com/insights/introducing-the-powell-pivot" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">late</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to the conviction that inflation was a problem that needed to be tackled with strong medicine, as for most of 2021 he argued that inflation was a “</span><a href="https://www.cnbc.com/2021/12/01/powells-pivot-on-inflation-turns-the-trader-pandemic-playbook-on-its-head.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">transitory</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">” problem that would resolve itself in time. But the irony of his efforts to </span><a href="https://www.bloomberg.com/opinion/articles/2022-09-22/powell-is-volcker-s-wannabe-second-coming-on-inflation-how-long-to-reach-2?cmpid=BBD092222_OUS&utm_medium=email&utm_source=newsletter&utm_term=220922&utm_campaign=openamericas" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">channel</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Paul Volcker as his inflation-slaying role model ran far deeper. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">After all, Volcker was picked to lead the Fed by Jimmy Carter to tackle inflation that had become a chronic problem in the wake of the sustained </span><a href="https://www.aei.org/carpe-diem/m2-growth-suggests-1970s-inflation-wont-return/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">expansion</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the money supply by the Fed over the decade preceding Volcker’s appointment. The pattern of double-digit growth in the money supply that Volcker inherited is highlighted in the graph here, which tracks the “M2” supply of money in the economy against inflation, as defined by the Consumer Price Index. At the far right side, the graph also illustrates the far more dramatic growth in the money supply in 2020, when the Fed’s coronavirus response led to a massive increase in the money supply. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"></p><div style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em; text-align: right;"><img height="241" src="https://lh6.googleusercontent.com/M6TyC_xJ0pvH1apN2flUFN89hwX370CIeyoDHPK8d2UekejWcEq06WPCOSipk_j5hCumpaVSxgm-238SNOq_I2sxDtln87B1wSYznZchYGomr8jX8xmpwBKZvNtJsjsFl0KdER2_b2yR1GAqD2opIogGhSgVK8_Vu0E5pzMztvC5P2oKoDMU-t4SRQ=w400-h241" style="margin-left: 0px; margin-top: 0px;" width="400" /></div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The expansion of the money supply under Powell’s leadership had no </span><a href="https://www.nytimes.com/2020/04/09/business/economy/fed-economic-rescue-coronavirus.html?referringSource=articleShare" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">precedent</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in recent history. As much of the country shut down in 2020, the Fed pumped $5 trillion into the economy, ultimately resulting in a 40% </span><a href="https://fred.stlouisfed.org/series/WM2NS" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">increase</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the money supply. By way of comparison, in the wake of the 2008 financial collapse, the increase in the money supply barely exceeded 10% in any one year. In the view of </span><a href="https://www.wsj.com/articles/powell-printing-money-supply-m2-raises-prices-level-inflation-demand-prediction-wage-stagnation-stagflation-federal-reserve-monetary-policy-11645630424" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">monetarists</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> – economists who view growth in the money supply as the most important factor leading to inflation – it was only a matter of time before this massive increase in the money supply impacted price levels across the economy. In simple terms, they would argue that Jerome Powell is now fighting a problem of his </span><a href="https://www.washingtonpost.com/business/2022/02/06/federal-reserve-inflation-money-supply/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">own</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> making. </span><p></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Yet over the course of the Fed’s battle with inflation, Powell has had little or nothing to say about the expansion of the money supply on his watch. When questioned during Congressional hearings in early 2022 on the potential consequences of the substantial expansion of the money supply in 2020, Jerome Powell </span><a href="https://www.washingtonpost.com/business/2022/02/06/federal-reserve-inflation-money-supply/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">demurred</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. In the new world order of financial innovation, he argued, the linkages between the money supply and inflation is no longer as clear as it once was. Instead, in </span><a href="https://www.federalreserve.gov/newsevents/testimony/powell20220622a.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">testimony</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> before the Senate Banking Committee he embraced the widely held view that current inflation had been unleashed by the combination of the impact on energy and commodity prices of Putin’s invasion of Ukraine and global supply chain disruptions caused by the Covid-19 pandemic. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Powell’s ardent </span><a href="https://www.cato.org/regulation/summer-2022/was-it-really-triage" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">advocacy</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> for expanding the money supply to address the coronavirus problem made his subsequent </span><a href="https://apnews.com/article/inflation-health-coronavirus-pandemic-business-6e7c813472a3eb706e0cdafe305c1477" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">insistence</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> for much of 2021 that inflation was a “</span><a href="https://fortune.com/2021/12/03/inflation-no-longer-transitory-higher-prices-fed-chair-powell-treasury-yellen/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">transitory</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">” problem that would go away of its own accord all the more puzzling. Traditionally, there is a considerable time </span><a href="https://www.investopedia.com/terms/r/response_lag.asp" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">lag</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> between monetary policy actions taken by a central bank, and when the impact of those actions ripple across the economy – whether those efforts are targeted at stimulating the economy, which the Fed sought to do by expanding the money supply in 2020, or stemming inflation as it is now seeking to do. And the emergence of inflation in the second quarter of 2021 appeared to be a case in point, as the first </span><a href="https://www.statista.com/statistics/273418/unadjusted-monthly-inflation-rate-in-the-us/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">surge</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the rate of inflation – 2.6% to over 5% from March to July 2021 – came right within the nine to eighteen month time lag that monetary economists would predict from when the Fed began expanding the money supply in early 2020, to when it began to impact price levels. Whatever other factors were present – Putin’s war and global supply chain issues – it is hard to imagine that as a central banker responsible for monetary policy, Powell would not have expected that increasing the money supply by 40%, as the Fed did in 2020, would not have some degree of inflationary impact a year or two down the road.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Jerome Powell is an enigma. Four years ago, in a quieter moment, he </span><a href="https://www.marketwatch.com/story/heres-what-fed-officials-are-saying-about-the-interest-rate-outlook-2018-11-26" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">compared</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Fed policy making to walking through a room full of furniture in the dark, </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“What do you do? You slow down. You stop, probably, and feel your way.”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Managing a complex modern economy with the blunt tools available to a central banker, his words suggest, is an art, as much as a science, complicated by the long lag time between actions and effect. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Then the crises hit. First Covid-19, and then inflation, and that notion of feeling your way along seemed to have fallen by the wayside. In 2020, the previously stoic, cautious Jerome Powell morphed into a sort of Ben Bernanke on steroids, as his notion of carefully feeling his way along gave way to an </span><a href="https://www.politico.com/news/2020/10/06/fed-chair-powell-relief-economy-426793" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">aggressive</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “go big, go fast” philosophy, and a 40% increase in the money supply – four times the rate of growth Bernanke oversaw in 2008. Now, having embraced his Volckerian persona, Powell has again left his “slow down, feel your way” stance in the rearview mirror. Once again, it is pedal-to-the-metal, just heading in the opposite direction this time.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">History may not treat Powell well. Interviewed last week, long-time Wall Street wizard Carl Icahn </span><a href="https://finance.yahoo.com/amphtml/news/billionaire-investor-carl-icahn-warns-165840843.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">offered</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a harsh retort to Powell’s newfound embrace of Paul Volcker, as Icahn compared the Fed’s expansion of the money supply in 2020 to the debasement of the currency that brought about the fall of the Roman Empire. Others fear that in his zeal to tighten the economic screws, there is a real </span><a href="https://twitter.com/CathieDWood/status/1567648679334387713" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">possibility</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that Powell will overshoot to the </span><a href="https://www.nytimes.com/2022/10/04/opinion/the-all-too-real-risk-of-a-global-recession.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">downside</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> this time, and leave the nation trapped in a deflationary spiral. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In the end, it is not the extremes of Powell’s actions that are difficult to comprehend, as the challenges he has faced are truly historic, but the refusal to acknowledge the potential unintended consequences of his actions, as the nation is whipsawed from one crisis to the next. Perhaps this will not be the end of the world as we know it, as Icahn suggests, but while Jerome Powell continues to try to reframe his persona in the heroic image of Paul Volcker, a more apt analogy may be the arsonist who hops on the fire truck and seeks to lead the effort to put out the blaze, hoping beyond hope that no one will notice the box of matches in his back pocket.</span></p><div><br /></div><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><p style="background-color: white; font-family: Times; font-size: medium; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; padding: 10pt 0pt; white-space: normal;"><span face="Calibri, sans-serif" style="background-color: transparent; color: #1a1a1a; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</span></p><p dir="ltr" style="font-family: Times; font-size: medium; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; white-space: normal;"><span style="font-family: Roboto;"></span></p><p dir="ltr" style="background-color: white; font-family: Times; font-size: medium; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; padding: 0pt 0pt 10pt; white-space: normal;"><span face="Calibri, sans-serif" style="background-color: transparent; color: #1a1a1a; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</span><span style="background-color: transparent; color: #333333; font-family: Georgia; font-size: 9pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><div><span style="background-color: transparent; color: #333333; font-family: Georgia; font-size: 9pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div></span></div></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-62392307034640205402022-08-22T23:47:00.001-04:002022-08-22T23:47:17.726-04:00Today’s inflation is a harbinger of changes that lie ahead<p> <span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Inflation is widely </span><a href="https://www.pewresearch.org/fact-tank/2022/05/12/by-a-wide-margin-americans-view-inflation-as-the-top-problem-facing-the-country-today/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">viewed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as the number one problem facing the country – even Donald Trump’s continuing efforts to relegate American democracy to the dustbin of history takes a distant back seat – and barely a quarter of the public apparently believe that the Inflation Reduction Act passed by Democrats in Congress will do </span><a href="https://morningconsult.com/2022/08/17/inflation-reduction-act-reduce-prices-irs-survey/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">anything</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to help get inflation under control. And when the federal Bureau of Labor Statistics – the official inflation record-keeper – published data for July that indicated that the annual rate of Inflation had </span><a href="https://www.bls.gov/news.release/cpi.nr0.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">dipped</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to 8.5% – down from 9.1% in June – people just shrugged. </span></p><span id="docs-internal-guid-c34d7cc4-7fff-d4f2-c4a7-4452553d216d"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">After all, at 8.5%, the year-over-year rate of inflation for July remained the highest rate since December 1981 – except, of course, for the 9.1% rate in June. But it was a big deal, and may well turn out to have been a sign of things to come. Why? Because while the 8.5% rate of inflation was the composite of the preceding 12 monthly rates, the rate of inflation for the month of July actually came in at zero. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">For anyone who has filled up their gas tank recently, this should not have come as a surprise. After all, while global oil prices peaked this past March at $120 per barrel in the wake of Vladimir Putin’s invasion of Ukraine, and the price of gasoline peaked two months later at over $4 a gallon nationwide, oil and gasoline prices have each </span><a href="https://tradingeconomics.com/commodity/crude-oil" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">declined</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by 25% from those peak levels. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And it’s not just gasoline prices that have come back down. The price of wheat, which was similarly impacted by the war in Ukraine, nearly doubled in March, but has since fallen back to where it </span><a href="https://tradingeconomics.com/commodity/wheat" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">was</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> last year. </span><a href="https://tradingeconomics.com/commodity/lumber" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Lumber</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and </span><a href="https://tradingeconomics.com/commodity/eggs-us" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">eggs</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, prices of which made headlines as inflation surged, have each tumbled 70% and 50%, respectively, from their peaks. Even the cost of </span><a href="https://www.cbsnews.com/news/falling-airline-ticket-prices-travelers-urged-to-take-advantage-inflation-gas-prices/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">air travel</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> is coming down. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And financial markets have taken </span><a href="https://www.wsj.com/articles/there-are-signs-inflation-may-have-peaked-but-can-it-come-down-fast-enough-11658568604?mod=article_inline" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">notice</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. Market expectations of the rate of inflation over the next </span><a href="https://fred.stlouisfed.org/series/T5YIE" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">five</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to </span><a href="https://fred.stlouisfed.org/series/T10YIE" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">ten</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> years – calculated by comparing the trading relationships between traditional fixed-rate US Treasury securities and “inflation-indexed” securities – have fallen back to 2.5%, just a bit above the Federal Reserve Bank’s 2% target.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Arguments abound about the confluence of events that have brought inflation roaring back to 1970s levels. Putin’s invasion of Ukraine upended global markets for oil and natural gas, as well as agricultural commodities. Covid-19 has had wide ranging impacts, roiling labor markets at home and global trade abroad. Millions of Americans, who may have previously given little thought to business or economics, have been forced to grasp the implications of “global supply chains.” </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And there are those who reject all of those factors, and assert instead that the singular cause of the sudden spike in inflation was the massive printing of money by the Federal Reserve Bank in the face of the collapse of economic activity at the onset of the coronavirus pandemic. This </span><a href="https://corporatefinanceinstitute.com/resources/knowledge/economics/monetarist-theory/#:~:text=The%20monetarist%20theory%2C%20as%20popularized,inflation%2Fdeflation%20in%20an%20economy." style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">view</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> – held by “monetarists,'' a school of economics that argues that inflation is primarily a function of money supply – is straightforward. As the economic activity shut down in early 2020, the Fed responded by flooding money into the economy with the hope of forestalling an economic collapse. Once the Fed did that, it was only a matter of time before that flood of new money flowing through the economy drove up prices. Forget Putin’s war and global supply chains; inflation, in the monetarist view, is simply about the money.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">We may never know whose explanations are correct, but we will know in a few short weeks if the zero percent rate of inflation in July is matched again in August, and whether the evidence begins to suggest that inflation is indeed moderating. But whichever way it turns out, the impacts of the war, the pandemic, and the Fed’s printing of money may only be the first chapters in a larger inflation story.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As we debate the causes and trajectory of inflation today, the common </span><a href="https://www.bloomberg.com/features/2022-federal-reserve-recession-inflation-response/?cmpid=BBD081822_MKT&utm_medium=email&utm_source=newsletter&utm_term=220818&utm_campaign=markets" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">expectation</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> is that it will in relatively short order be brought back down to the 2% range, as reflected in financial market expectations. After all, low inflation has been with us for decades now, dating back to Fed Chairman Paul Volker’s determined success in taming post-Vietnam War inflation.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But an essential underpinning of the low inflation environment that we have come to take for granted since the 1990s was the fall of the Berlin Wall, the end of the Cold War, and the steady integration of Russia, China and other nations into </span><a href="https://www.csis.org/world-economic-order-present-and-future" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">the</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> world economic order. Since the end of the Cold War, US foreign policy toward our Cold War adversaries has been built around a military policy of containment – implemented through regional military alliances – coupled with economic policies promoting rule-based, free trade and global economic integration, generally referred to as globalization. While economists </span><a href="https://www.nber.org/digest/jun07/has-globalization-changed-inflation#:~:text=Many%20policymakers%20and%20journalists%20cite,of%20the%20economy's%20price%20changes." style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">disagree</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on the </span><a href="https://www.stlouisfed.org/publications/regional-economist/first-quarter-2018/why-inflation-so-low" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">extent</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the impact of globalization on inflation, it is generally viewed as having kept </span><a href="https://www.ecb.europa.eu/pub/economic-bulletin/articles/2021/html/ecb.ebart202104_01~ae13f7fe4c.en.html#:~:text=Trade%20globalisation%20may%20affect%20inflation,has%20a%20direct%20disinflationary%20effect." style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">inflation</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in check by </span><a href="https://scholar.harvard.edu/files/rogoff/files/rogoff2003.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">engendering </span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">global labor competition that </span><a href="http://economics.mit.edu/files/6613" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suppressed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> wage growth and reduced the costs of manufactured goods. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Enthusiasm over the entry of China and Russia into the World Trade Organization went beyond the potential economic benefits. In his 2005 book, </span><a href="https://www.amazon.com/World-Flat-History-Twenty-first-Century/dp/0374292884/ref=asc_df_0374292884/?tag=hyprod-20&linkCode=df0&hvadid=344041575299&hvpos=&hvnetw=g&hvrand=6226629213543962720&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9028818&hvtargid=pla-488046705802&psc=1&tag=&ref=&adgrpid=69358344215&hvpone=&hvptwo=&hvadid=344041575299&hvpos=&hvnetw=g&hvrand=6226629213543962720&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9028818&hvtargid=pla-488046705802" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The World is Flat</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, Thomas Friedman argued that free trade and economic interdependence would be the key to preventing future conflicts. In what he dubbed the "Dell Theory of Conflict Prevention," Friedman argued that </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">"No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain."</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> And others took the geopolitical case for globalization a step further, arguing that economic integration would </span><a href="https://www.amazon.com/End-History-Last-Man/dp/0743284550/ref=asc_df_0743284550/?tag=hyprod-20&linkCode=df0&hvadid=312519927002&hvpos=&hvnetw=g&hvrand=7692904813444250797&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9028818&hvtargid=pla-450959267276&psc=1" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">necessarily</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> bring in its wake political </span><a href="https://www.brookings.edu/articles/does-globalization-promote-democracy-an-early-assessment/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">liberalization</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in Russia and China and other, smaller, authoritarian countries. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Over the past decade, in events that foreshadowed what we have watched over the past year, Friedman’s theory was dealt severe blows, as Russia and China each demonstrated that rather than economic interdependence moderating their behavior in the world, it would be used as a weapon against their trading partners. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In China’s case, in 2012, during the months leading up to Xi Jinping’s appointment as General Secretary by 18th Central Committee of the Chinese Communist Party, anti-Japanese </span><a href="https://en.wikipedia.org/wiki/2012_China_anti-Japanese_demonstrations" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">demonstrations</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> spread across China, ostensibly related to a dispute over uninhabited </span><a href="https://en.wikipedia.org/wiki/Senkaku_Islands_dispute" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">islands</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> held by Japan, and Japan’s occupation of China in the 1930s. In response to the public outcry, and in violation of WTO rules, China </span><a href="https://www.foxnews.com/world/china-halts-rare-earth-exports-to-japan-amid-tensions-over-territorial-dispute-traders-say" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">halted</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the sale of critical rare earth metals that were essential to Japan’s electronics industries. The Japanese government has since </span><a href="https://www.businesstimes.com.sg/top-stories/japan-inc-investing-less-in-china-now" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">warned</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Japanese companies of the political risks of investing in China and relying on it as a supply chain partner, and Japanese investment in </span><a href="https://www.scmp.com/week-asia/economics/article/3159083/japanese-foreign-direct-investment-china-slows-tensions-rise" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">China</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> is now less than its investment in most other, far smaller, Asian nations.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">For his part, Vladimir Putin has proven adept at using the dependency of European nations on Russian natural gas as a </span><a href="https://www.wsj.com/articles/russia-to-halt-gas-flows-to-europe-for-pipeline-maintenance-11660934206" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">weapon</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in international affairs. In 2014, he cowed European nations into quietly acquiescing to his first war with Ukraine and annexation of Crimea out of </span><a href="https://www.theguardian.com/world/2022/jun/02/germany-dependence-russian-energy-gas-oil-nord-stream" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">fear</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that Russia would shut off natural gas supplies. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">When Xi Jinping and Vladimir Putin met in Shanghai on the eve of Russia’s invasion of Ukraine, they effectively put a nail in the coffin of the Dell Theory. In a paraphrasing of Tip O’Neil’s dictum that “all politics is local,” they </span><a href="http://en.kremlin.ru/supplement/5770" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">declared</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in no uncertain terms that the pursuit of national interest – which really meant their own political interest – would henceforth </span><a href="http://en.kremlin.ru/supplement/5770" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">prevail</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> over whatever rules of conduct the United States and other nations might seek to impose. Ukraine and Taiwan were clearly in the cross-hairs, economic interdependence be damned. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Three months after the Shanghai declaration, no doubt shaken by the harsh western sanctions levied against Russia in response to Putin’s invasion of Ukraine, Xi sought to tamp down rising geopolitical tensions and focus international </span><a href="https://www.chinadaily.com.cn/a/202205/19/WS628641e0a310fd2b29e5dd48.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">attention</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> instead on solidifying and expanding trade under the auspices of the WTO. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But the horse had already left the barn. This past June, Apple Computer </span><a href="https://www.bloomberg.com/news/newsletters/2022-06-07/apple-s-troubles-in-china-aren-t-going-away-quickly" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">announced</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> plans to diversify production away from China, notably to Vietnam, as well as India and Brazil. Apple’s decision mirrored </span><a href="https://www.whitehouse.gov/wp-content/uploads/2021/06/100-day-supply-chain-review-report.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">recommendations</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> from the Biden administration a year earlier that companies carefully consider geopolitical risk exposure in order to increase the resilience of their global supply chains. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In the wake of Apple’s announcement, the words “Reinventing Globalization” were </span><a href="https://www.economist.com/weeklyedition/2022-06-18" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">emblazoned</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> across the cover of The Economist, and the magazine editorial </span><a href="https://www.economist.com/leaders/2022/06/16/the-tricky-restructuring-of-global-supply-chains" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">observed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that Apple’s migration away from China is becoming the norm, rather than the exception: </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“The pandemic and war in Ukraine have triggered a once-in-a-generation reimagining of global capitalism in boardrooms and governments… This new kind of globalization is about security, not efficiency: it prioritizes doing business with people you can rely on, in countries your government is friendly with.”</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">With the devastation of Ukraine continuing unabated, and Xi’s Taiwan rhetoric escalating by the day, advanced industrial nations that have long promoted unfettered globalization now have been given a clear vision of its downside: A move by China against Taiwan, which Xi appears to be suggesting is inevitable, if not imminent, would </span><a href="https://www.cnbc.com/2022/08/02/apple-chipmaker-tsmc-warns-taiwan-china-war-would-make-everybody-losers.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">wreak</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.bloomberg.com/opinion/articles/2022-06-23/economic-chaos-of-a-taiwan-war-would-go-well-past-semiconductors" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">havoc</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on the global supply of critical semiconductors. In the near term it would force the </span><a href="https://www.pcgamer.com/an-invasion-of-taiwan-would-shut-down-global-chip-production-as-nobody-can-control-tsmc-by-force/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">shutdown</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of Taiwan-based TSMC – the world’s largest supplier of advanced microchips – and, should China succeed, it would leave a geopolitical adversary in control of </span><a href="https://www.bloomberg.com/opinion/articles/2022-06-23/economic-chaos-of-a-taiwan-war-would-go-well-past-semiconductors" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">90%</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of global advanced chip production. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Globalization has always been a two-edged sword. In purely economic terms, the global search for low cost labor and profit maximization engendered an era of economic growth and the low inflation world that we have come to take for granted. Along the way the outsourcing of production from advanced economies to emerging economies across the globe contributed to a dramatic </span><a href="https://blogs.worldbank.org/developmenttalk/trade-has-been-global-force-less-poverty-and-higher-incomes" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">reduction</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the percentage of the world population living in extreme poverty, most </span><a href="https://www.wsj.com/articles/china-says-it-has-met-its-deadline-of-eliminating-poverty-11606164540" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">notably</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in India and China. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But globalization did not come without costs. Here at home, placing American workers in direct </span><a href="http://economics.mit.edu/files/6613" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">competition</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> with low wage workers across the globe </span><a href="https://appalled.blogspot.com/2015/05/the-shaming-of-american-worker.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">eviscerated</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the manufacturing heartland of the United States. It contributed to the rising tide of income inequality. And, as exemplified by Donald Trump’s rise as the avatar of the aggrieved American working class, it ultimately contributed to the </span><a href="https://www.nytimes.com/2022/08/03/opinion/kenya-presidential-elections.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">fracturing</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of our political system, and </span><a href="https://thefulcrum.us/big-picture/the-economist-democracy-index" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">shredding</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the image of the United States as a beacon of democracy in the world. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As we wait to see what lies ahead in the inflation reports for the next few months and learn whether this round of inflation is behind us, under the radar screen of much of the media, a reconfiguration of the global economic order is underway that could have far more lasting ramifications than the rate of inflation from one month to another. The era of globalization, characterized by the global search for low cost labor and profit maximization above all other considerations, is clearly coming to an end. The question that remains, as the editorial in The Economist </span><a href="https://www.economist.com/leaders/2022/06/16/the-tricky-restructuring-of-global-supply-chains" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">asked</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, is whether the next era of globalization, which prioritizes security over efficiency, and doing business with people and nations you trust, can be accomplished without a new descent into protectionism and worsening inflation.</span></p></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-54848034178642092882022-07-06T15:51:00.003-04:002022-07-06T15:52:34.227-04:00As Inflation Fades, Jerome Powell's Biggest Problem Will Be Republicans<span id="docs-internal-guid-21e85e0c-7fff-4228-6564-30160b27bb73"><span style="font-family: Roboto;"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Bored Ape Yacht Club NFT prices have </span><a href="https://www.bloomberg.com/news/articles/2022-06-29/nfts-have-fallen-off-the-cliff-as-sales-sink-to-lowest-in-year?fromMostRead=true" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">been</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://blockworks.co/bored-ape-yacht-club-nft-prices-slump-along-with-market/" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">hammered</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">NFTs – “non-fungible tokens” – are proof of ownership of digital products, most commonly images, </span><a href="https://musicpromotoday.com/2022/03/28/independent-musicians-are-making-big-money-from-nfts/" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">music</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> or short videos, that exist on a blockchain. A blockchain is a digital ledger where digital items are stored, and – theoretically at least – cannot be hacked or stolen. Cryptocurrencies – such as Bitcoin or Ethereum – are kept on a blockchain; now NFTs are there too. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Bored Ape Yacht Club (BAYC) is a </span><a href="https://www.marca.com/en/lifestyle/us-news/2022/05/07/627684ece2704eb9488b4587.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">collection</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of bored ape NFTs, like the one </span><a href="https://opensea.io/collection/boredapeyachtclub?utm_governance=OPNS4isjwe1eqjtyfdvw4qvt&utm_source=google&utm_medium=paid&utm_account=6961136327&utm_term=bored%20ape%20yacht%20club&utm_matchtype=e&utm_campaignid=17417918061&utm_adgroupid=141065552367&utm_keywordid=kwd-1395118120729&wpsrc=Google%20AdWords&wpcid=17417918061&wpsnetn=g&wpkwn=bored%20ape%20yacht%20club&wpkmatch=e&wpcrid=602164877643&wpscid=141065552367&wpkwid=kwd-1395118120729&gclid=Cj0KCQjwhqaVBhCxARIsAHK1tiM9Vrtf4wAmh1hnlPmzq-eyy1ro5yqvY6hQFmcf_Qk49PpDsrsjS64aAnVxEALw_wcB" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">shown</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> here that was posted for sale recently. Serena Williams apparently has </span><a href="https://www.marca.com/en/lifestyle/us-news/2022/05/07/627684ece2704eb9488b4587.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">purchased</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> at least one of BAYC’s NFTs. So have Eminem, Stephen Curry and Shaquille O'Neal. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: right;"><span style="border: none; clear: right; display: inline-block; float: right; height: 206px; margin-bottom: 1em; margin-left: 1em; overflow: hidden; width: 166px;"><img height="206" src="https://lh4.googleusercontent.com/E5PQW-NLUXepDyy6ihr0R_KSsHtZK1GvrSTfhq6_jBRMOD4MDXJRp0zphpHvMO5hXBOK_BM3yDME5G2keKtCKtKqYcgIrIBDdUeQeuBJ_DjG9fQtdRlsSfTSuLBkWKPOV9FyDhLG8_pCoI_cEw" style="margin-left: 0px; margin-top: 0px;" width="166" /></span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><div style="text-align: left;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline;">Why those celebrities bought NFTs is a reasonable question. Just as you cannot put your cryptocurrency in your pocket, or </span><a href="https://www.goldsmart.co.nz/bitting-gold-coins/" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline;">bite</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline;"> it to see if it is real, you cannot keep other people from putting a picture of the image you own on their wall – or using it to illustrate their blog. </span></div><div style="text-align: left;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline;"><br /></span></div></span></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If none of this makes sense to you, take heart: it probably doesn’t really make sense to them either. Just think of NFTs as the latest shiny thing to come along that people want to be part of, like your cousin who will not stop talking about the killing he made in a cryptocurrency he bought that has a picture of a dog on it. Perhaps those celebrities wanted to buy the digital images to support the artists that produced them. Perhaps being part of the crypto ecosystem – now </span><a href="https://www.nytimes.com/2022/06/16/opinion/sway-kara-swisher-chris-dixon.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">branded</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as Web 3.0, or Web3 for short – </span><a href="https://www.vulture.com/2022/01/paris-hilton-jimmy-fallon-bored-ape-yacht-club-nft.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">enhances</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> their personal brand value.</span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Or perhaps, as crypto </span><a href="https://web3isgoinggreat.com/" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">critic</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Molly White has </span><a href="https://www.washingtonpost.com/technology/2022/05/29/molly-white-crypto/" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">argued</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, they simply got caught up in the “litany of </span><a href="https://www.readmargins.com/p/is-web3-faking-it?s=r" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">scams</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, failures and </span><a href="https://www.wsj.com/articles/the-2-trillion-cryptocurrency-market-is-drawing-interest-from-investors-scrutiny-from-u-s-regulators-11641119404" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">frauds</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">” that White argues have been the sum and substance of Web 3.0; a universe where boosters and venture capitalists scheme “to separate regular people from their money.” </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="border: none; clear: right; display: inline-block; float: right; height: 175px; margin-bottom: 1em; margin-left: 1em; overflow: hidden; width: 330px;"><span style="font-family: Roboto;"><img height="175" src="https://lh3.googleusercontent.com/Sx2g36LOsEwueNsfH878TIz8jSM9c4hSzZJPV8YEaE-OYV-V6l_sEsxRAdKtuAq5qK0O65rZpHlB8OHjEOsiLaR5dGA-S8a8r2hIWuKQZMWgqGq3rEA-wgBVXBDiLk9DcnSu45rk5iDsznutJg" style="margin-left: 0px; margin-top: 0px;" width="330" /></span></span><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And White’s perspective has been vindicated. As prices of BAYC NFTs, along with much of the crypto universe of assets, has come </span><a href="https://www.bloomberg.com/news/articles/2022-06-13/nfts-including-blue-chip-bored-apes-fall-as-crypto-market-sinks" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">crashing</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.wsj.com/articles/the-crypto-party-is-over-11655524807" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">down</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> – as illustrated by the chart here showing the crash in the overall NFT market – it is the small investors who have </span><a href="https://www.nytimes.com/2022/06/29/technology/crypto-crash-divide.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">taken</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the hit. Sure, the Winkelvoss brothers – of Facebook and </span><a href="https://www.imdb.com/title/tt1285016/" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">The Social Network</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> fame – have lost a billion here or a billion there, but like the other now-billionaire crypto boosters, they are doing just </span><a href="https://www.nytimes.com/2022/06/29/technology/crypto-crash-divide.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">fine</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The crash in NFT prices is a classic example of a market bubble. Indeed, the very existence of NFTs, along with the rise of cryptocurrency as an “asset class,” should be a lesson in financial hubris that we learn from. Of course, we never learn from financial bubbles, as economists Carmen Reinhart and Ken Rogoff observed in their 2011 </span><a href="https://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691152640" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">book</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This Time Is Different: Eight Centuries of Financial Folly.</span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Everyone denies that they are part of a bubble, until the world comes crashing down around them. Crypto enthusiasts in particular have chafed at comparisons between the rise of Bitcoin and the 17th-century market frenzy in which Dutch traders drove the price of tulip bulbs sky-high, before “tulipmania” came to a crashing end. After all, one crypto advocate </span><a href="https://cointelegraph.com/news/do-you-still-compare-bitcoin-to-the-tulip-bubble-stop" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">wrote</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> late last year, “Bitcoin is a technology, tulips are plants, and no discerning person would take the comparison much further.” </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: right;"><span style="border: none; clear: right; display: inline-block; float: right; height: 387px; margin-bottom: 1em; margin-left: 1em; overflow: hidden; width: 387px;"><span style="font-family: Roboto;"><img height="387" src="https://lh4.googleusercontent.com/9riCydev_Mc1UTFOQF-6c8SVd-d2YMIRD3q5_94IU9ESrhGWawhOEJB7kYR95ETkGTSOR4C52H3k9EU7exOqO6YxfZXZNCuclLUaKlzoiFJ73VhdKsOvfm6bn0D0-5LIiN1RnQzhJqJ-ZcjGvlo" style="margin-left: 0px; margin-top: 0px;" width="387" /></span></span><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></span></p><div style="text-align: left;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline;">Perhaps comparing Bitcoin and blockchain to tulip bulbs is a bit over the top. After all, cryptocurrency offers very real value as a covert means of exchange for those engaged in money-laundering, tax evasion, and myriad other criminal activities, while tulips are pretty flowers. But a comparison of the trading frenzy that has surrounded ownership of digital images of bored simians to </span><a href="https://www.investopedia.com/terms/t/tulipmania.asp#:~:text=Tulipmania%20is%20the%20story%20of%20a%20speculative%20bubble%2C%20which%20took,some%20houses%20at%20the%20time." style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline;">tulipmania</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline;"> in 17th century Holland actually seems fairly straightforward. </span></span></div><p></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It is hard to assess the Web 3.0 bubble and ensuing crash outside of the context of the rest of the market bubbles that built up over the decade since the 2008 global financial collapse, and the integral role played by the Federal Reserve Bank. The fear </span><a href="https://features.marketplace.org/bernanke-paulson-geithner/" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">among</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> central bankers and Treasury officials of a prolonged depression in the wake of the 2008 collapse led to unprecedented efforts to push interest rates across the globe to zero, and below. These efforts were spurred on by belief that the deflationary cycle that characterized Japan’s “Lost Decade” following the 1990 </span><a href="https://seekingalpha.com/article/3633996-3-similarities-1990-japanese-asset-bubble-collapse-and-today?source=acquisition_campaign_google_premium&utm_source=google&utm_medium=cpc&utm_campaign=17477063178&utm_term=137229720709%5Eaud-1157855518528:dsa-402690192841%5E%5E535988761156%5E%5E%5Eg&internal_promotion=true&gclid=CjwKCAjw2f-VBhAsEiwAO4lNeHcTraMj2BYwXsHPPOYL4FIA6XfY5d792TK_FWuUhMSp5kp0-dOvwxoCQAUQAvD_BwE" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">collapse</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the Japanese Asset Bubble was in part due to a </span><a href="https://www.thebalance.com/japan-s-lost-decade-brief-history-and-lessons-1979056" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">failure</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the Japanese central bank to </span><a href="https://www.imf.org/external/pubs/nft/2003/japan/index.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">respond</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> aggressively to sustain economic growth. Driving interest rates to and below zero, drove asset values to historically high levels.</span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><span style="font-family: Roboto;">Asset values from stocks and bonds to real estate respond directly to central bank interest rate policies. Not to get too far into the weeds, but this is because the value of cash flow generating assets (stocks generate earnings/dividends, real estate generates rents, etc.) generally reflect projected future earnings discounted at prevailing interest rates. Therefore, as interest rates decline, asset values rise. Accordingly, as the US Federal Reserve Bank pushed interest rates towards zero in the wake of the 2008 financial collapse, and as rates were pushed to below zero in Europe, stocks, bonds and real estate each exploded in value, with stocks in particular rising 500% over the ensuing decade. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="border: none; clear: right; display: inline-block; float: right; height: 225px; margin-bottom: 1em; margin-left: 1em; overflow: hidden; width: 310px;"><span style="font-family: Roboto;"><img height="225" src="https://lh6.googleusercontent.com/Rx_8RFpowvP7idwH7eQ6rxv2uIOiLS9TCEHbYv3ym_18qlBJ2yWy4H1xyaARyfjnhKOpJj2bXiWSnEQuvtn7R3BFnCrr_8NVhL4-uVsy7VfNCcychsoeFMm3oXb-kgt2klgl-AiJZKx51zdiVw" style="margin-left: 0px; margin-top: 0px;" width="310" /></span></span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><span style="font-family: Roboto;">This historical relationship is presented in the graphic shown here that was produced by Nobel laureate economist Robert Shiller. It presents the inverse relationship between stock “price/earnings ratio” (which calculates a stock price as a multiple of a company’s most recent annual earnings) and long-term interest rates. As illustrated here, stock market peak reached in 2021 marked the second highest level of stock valuations – stock prices on average rose to nearly 40 times company earnings – in the past 150 years, exceeded only by the “dot-com” bubble that peaked in 1999, and surpassing the market highs reached just before the market crash in October 1929 that ushered in the Great Depression. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Accordingly, no one should be </span><a href="https://www.protocol.com/newsletters/protocol-fintech/nft-crash-risk?rebelltitem=1#rebelltitem1" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">surprised</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that the NFT market collapsed as Federal Reserve Bank policies </span><a href="https://www.coindesk.com/business/2022/05/16/morgan-stanley-says-nfts-next-to-watch-after-ust-collapse/" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">shifted</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in response to inflation fears. Just as central bank zero-interest rate policies and quantitative easing drove those asset values to new heights, the reversal of Fed policies over the past several months to push interest rates upward brought asset prices crashing back </span><a href="https://link.mail.bloombergbusiness.com/click/28086474.93346/aHR0cHM6Ly93d3cuYmxvb21iZXJnLmNvbS9vcGluaW9uP2NtcGlkPUJCRDA2MTcyMl9BVVQmdXRtX21lZGl1bT1lbWFpbCZ1dG1fc291cmNlPW5ld3NsZXR0ZXImdXRtX3Rlcm09MjIwNjE3JnV0bV9jYW1wYWlnbj1hdXRoZXJz/613101cea065fe6a9a58441aB1ca4c5ad" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">down</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> (though by historical standards, as the graph above shows, they remain very high). </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><span style="font-family: Roboto;">Nor should anyone be surprised that the NFT price implosion has been more severe than the stock market as a whole. After all, investor enthusiasm for NFTs, like the Web 3.0 investment universe as a whole, grew out of the dramatic rise in stock prices in response to zero and negative interest rate policies since the post-2008 global financial collapse. As traditional stock, bond, and real estate investments became increasingly overvalued, investors naturally began to search for new “alternative investments” that might offer new investment possibilities. First money poured into unregulated hedge funds. Then private equity became all the rage. Then crypto rode the wave. And finally NFTs, the newest newfangled investment to come around, joined the party. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In a 1996, then-Fed Chairman Alan Greenspan gave a seminal </span><a href="https://www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">speech</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> entitled “The Challenge of Central Banking in a Democratic Society,” in which he reflected on the challenge that investor “irrational exuberance” and ensuing market bubbles present to central bankers, whose job includes seeking to prevent damage to the broader economy as those market bubbles inevitably collapse. His comments came as the dot-com bubble was just beginning its ascent – the NASDAQ Composite Index had nearly </span><a href="https://www.google.com/search?q=nasdaq+composite+history&oq=nasdaq+composite&aqs=chrome.1.69i59j0i20i263i512j0i433i512j0i512l4j69i60.5150j1j4&sourceid=chrome&ie=UTF-8" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">doubled</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> over the twenty-four months preceding Greenspan’s speech, and would increase a further </span><a href="https://www.google.com/search?q=nasdaq+composite+history&oq=nasdaq+composite&aqs=chrome.1.69i59j0i20i263i512j0i433i512j0i512l4j69i60.5150j1j4&sourceid=chrome&ie=UTF-8" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">300%</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> before the dot-com bubble burst three and a half years later – and six years into </span><a href="https://www.imf.org/external/pubs/nft/2003/japan/index.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Japan’s</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “lost decade.” </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This time around, Jerome Powell faces an additional problem, beyond, as Greenspan suggested, having to balance the need to raise interest rates to slow the economy down and bring inflation into line, against the damage to the economy that might be caused by the ensuing collapse of stock and other asset markets. The widely held view is that the Fed waited too long to take inflation seriously. While inflation </span><a href="https://www.ft.com/content/6cfb36ca-d3ce-4dd3-b70d-eecc332ba1df" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">emerged</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on the </span><a href="https://www.ft.com/content/5d2aef18-e9c4-486a-8323-c5fc6addf5f7" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">horizon</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> during the first half of last year, it was not until early this year that the Fed acknowledged that it was more than a transitory phenomenon. During the intervening months, the public </span><a href="https://www.bloomberg.com/graphics/2022-opinion-inflation-rising-prices-gas-food-comparison/?srnd=opinion" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">perception</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> took hold that inflation is out of control. That has left the Fed fighting a fundamentally different battle: it is fighting public </span><a href="https://www.bloomberg.com/news/articles/2022-06-13/year-ahead-inflation-outlook-matches-record-in-ny-fed-survey#:~:text=A%20quarter%20of%20respondents%20expect,to%20keep%20such%20expectations%20anchored." style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">expectations</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> about inflation as much as it is fighting inflation itself. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">To an extent that seems remarkable given where we were just a couple of months ago, market fears of inflation have </span><a href="https://www.bloomberg.com/opinion/articles/2022-07-06/a-classic-reverse-ferret-gets-up-the-trousers-of-markets-in-narrative-u-turn?srnd=opinion" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">evaporated</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. Global commodity prices have begun to </span><a href="https://www.barrons.com/articles/wheat-oil-copper-commodity-prices-recession-inflation-51656368110" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">fall</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, and, in a symbolic breakthrough, oil </span><a href="https://www.bloomberg.com/news/articles/2022-07-05/wti-oil-drops-below-100-as-recession-fears-overwhelm-markets" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">dipped</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> below $100, suggesting that the price of gasoline should soon follow. However, as Bloomberg’s John Authers </span><a href="https://www.bloomberg.com/opinion/articles/2022-07-05/earnings-and-stocks-won-t-have-a-happy-ending-in-the-new-slowdown-narrative?srnd=opinion" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">observed</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, inflation fears are only abating because </span><a href="https://www.reuters.com/markets/europe/dollar-shelters-under-recession-clouds-investors-put-safety-first-2022-06-27/" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">recession</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and </span><a href="https://noahpinion.substack.com/p/disinflation-begins?utm_source=substack&utm_medium=email" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">deflation</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> now loom as the greater risks. Nonetheless, Powell has indicated that the Fed </span><a href="https://www.bloomberg.com/news/articles/2022-06-22/powell-sees-ongoing-rate-hikes-needed-to-tame-hot-inflation" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">plans</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to continue to </span><a href="https://markets.businessinsider.com/news/stocks/stock-market-today-dow-jones-us-recession-fed-inflation-powell-2022-6" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">raise interest rates</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. If zero growth was going to be sufficient to tame inflation a few months ago, now it is apparent that the Fed is </span><a href="https://www.bloomberg.com/news/articles/2022-07-06/fed-sees-more-restrictive-rates-possible-if-inflation-persists" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">willing</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to tolerate a recession of some duration to bring public </span><a href="https://seekingalpha.com/news/3854021-could-stocks-plunge-50-investors-gear-up-for-a-bumpy-second-half?mailingid=28269783&serial=28269783.2912017&userid=56804241&source=email_wsb&messageid=wall_street_breakfast&utm_source=seeking_alpha&utm_medium=email&lctg=62c19c3dfe29114c3f0f1204&utm_campaign=WSB_7_5_22&utm_term=wall_street_breakfast" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">expectations</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of future inflation into line. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><span style="font-family: Roboto;">Powell is going to have a tough fight on his hands, one that goes well beyond the prices at the pump that have driven popular anger. He will be fighting a Republican Party that will be loath to let go of inflation as a central theme for the 2022 and 2024 elections. GOP strategists smell blood in the water, as memories of the 1980 presidential election – when double-digit inflation helped bring about the Reagan Revolution and twelve years of GOP rule – dance like sugar-plums in their heads. Every Jerome Powell press conference touting the Fed’s success in bringing inflation back into line will no doubt be met by a barrage of political ads, harangues by Tucker Carlson and Sean Hannity, and social media posts from Mar-a-Lago reassuring the faithful that, indeed, the sky is falling.</span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Whether, or when, the prices of bored ape NTfs recover from the drubbing they have taken over the past months remains to be seen. To add some perspective, it took the NASDAQ fifteen years from the collapse of the “dot-com” bubble in 2000 to get back to the level it had reached at the peak of the bubble, notwithstanding the fact that the NASDAQ includes the FAANG stocks (</span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">F</span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">acebook, </span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">A</span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">pple, </span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">A</span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">mazon, </span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">N</span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">etflix, </span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">G</span><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">oogle) that have been central to the market rally over the past decade. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But even a restoration of Fed zero interest rate policies – as former Treasury Secretary Larry Summers now apparently </span><a href="https://www.wsj.com/articles/larry-summers-nailed-inflation-but-is-he-right-on-what-comes-next-11656343688?st=adzeohh170tcpat&reflink=article_email_share" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">expects</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> – and a relatively quick bounceback in the stock market, may not help. If one considers tulipmania to indeed be the more apt analogy to the NFT bubble, the future is less rosy. Tulip bulbs never returned to the prices reached during the peak of the bubble in 1637 (when a single bulb </span><a href="https://www.history.com/news/tulip-mania-financial-crash-holland" style="text-decoration-line: none;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">apparently</span></a><span style="font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> sold for as much as the annual salary of a skilled artisan); and those celebrities looking to recover what they invested in their digital images of bored ape over the past year may have to wait a while.</span> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><br /></span></p><p style="background-color: white; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; padding: 10pt 0pt;"><span face="Calibri, sans-serif" style="background-color: transparent; color: #1a1a1a; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"></span></p><p dir="ltr" style="background-color: white; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; padding: 0pt 0pt 10pt;"><span face="Calibri, sans-serif" style="background-color: transparent; color: #1a1a1a; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</span><span style="background-color: transparent; color: #333333; font-family: Georgia; font-size: 9pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><div><span style="background-color: transparent; color: #333333; font-family: Georgia; font-size: 9pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-45011161785938822652022-06-28T11:45:00.002-04:002022-06-28T11:47:56.119-04:00 If Democrats Don't Stop Fighting Each Other, Things Could Get Much Worse.<div class="separator"></div><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The Supreme Court dropped the hammer this week. While Samuel Alito’s draft opinion, along with the names of a majority of justices prepared to support it, had been </span><a href="https://dpaul.substack.com/p/alito-opinion-released-by-a-pro-choice" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">leaked</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> nearly two months ago, nothing could prepare people for the shock and pain that has reverberated across the country.<br /></span><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">The question of where the Court, and the nation, goes from here remains to be seen. Now that anti-choice activists have achieved the essential first step in their 50-year-long </span><a href="https://www.nytimes.com/2022/06/25/us/conservative-christians-roe-wade-abortion.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">effort</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to outlaw abortion, there is no reason to believe it ends here. The next battles will no doubt include state-level legislation criminalizing women who travel across state lines to get abortions, as well as </span><a href="https://www.nytimes.com/article/medical-abortions-mifepristone-misoprostol-illegal.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">prohibiting</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the prescription and delivery by mail of abortion pill.</span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial;"><span style="font-size: 14.6667px; white-space: pre-wrap;"><br /></span></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial;"><span style="font-size: 14.6667px; white-space: pre-wrap;">And then there is the Holy Grail of Christian conservatives: passage of a federal “human life” statute or constitutional amendment that would broaden the definition of “person” under federal law to include the “unborn,” as early as the moment of conception. Should an embryo or fetus be deemed a “person” under federal law, abortion would become tantamount to murder, and laws enacted in liberal states protecting abortion rights would be rendered moot. In that event, there would be no safe havens, there would be no recourse; abortion would become illegal everywhere in the country.</span></span><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;"> </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjBvLFg_xu60hLz5Zl797-a0ZWkbU1AjTAq5hExJYcA3OuQC2y7_-LNd_nE6AWcelG80DIBscStxKyNfuNYDOiFG6UCUoXwnX4NTcTUtOQ6K8fVCRdoou4vidlYtvw4HInsQZzuAsHoeFtors6sIiOd-9RZTEeXEv9pi_SZ6KaarfSXsDDHwQ/s1800/Roe%20v%20Wade%20copy.jpeg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1800" data-original-width="1800" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjBvLFg_xu60hLz5Zl797-a0ZWkbU1AjTAq5hExJYcA3OuQC2y7_-LNd_nE6AWcelG80DIBscStxKyNfuNYDOiFG6UCUoXwnX4NTcTUtOQ6K8fVCRdoou4vidlYtvw4HInsQZzuAsHoeFtors6sIiOd-9RZTEeXEv9pi_SZ6KaarfSXsDDHwQ/s320/Roe%20v%20Wade%20copy.jpeg" width="320" /></a></p><p></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This is a pivotal moment for the Democratic Party. For the better part of two years, Democrats in Congress have failed in their efforts to pass various iterations of Joe Biden’s legislative agenda. Progressives, in particular, yelled and screamed – most notably at Joe Manchin – and came up with all manner of excuses as to why they were not able to get anything done. Yet at no point have they looked in the mirror and considered the essential fact that from day one, they did not have the votes to pass the sweeping legislation of their dreams.</span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">Counting votes is the most essential, elemental skill in democratic politics. I assumed that even if some members of Congress did not understand this, Joe Biden and his chief of staff Ron Klain surely do. I presumed that behind closed doors Joe Biden and Joe Manchin had quietly made a deal: that after Democrats tried to appease progressives by trying to get their multi-trillion dollar wish list passed, but failed because they didn’t have the votes, Biden and Manchin would get whatever they had agreed upon done. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Apparently they didn’t have a deal. Apparently, the problem Democrats have with basic political math reached right to the top. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The question, now that Roe v. Wade has been struck down, is whether Democrats are prepared to look in the mirror and realize that it is their own failure to heed the fundamental laws of electoral politics that has left them – and millions of American women – in the straits they find themselves in today. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe v. Wade was struck down, in part, because Republicans know how to count, and understand that at the end of the day, you can’t achieve anything unless you have the votes. Up until the presidency of Ronald Reagan, the Republican Party was a broad-based coalition of generally small-government conservatives and fiscally conservative moderates that was welcoming to politicians with a range of views on taxes, abortion, and guns, among other issues. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">That all changed in the 1980s. In the wake of the Reagan Revolution, GOP strategists identified a discrete number of single-issue voting groups that the party would cater to going forward to drive voter turnout. The </span><a href="https://appalled.blogspot.com/2008/01/uncharted-waters.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">strategy</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> was straightforward: as long as Republican candidates would swear fealty to those core issues – most notably anti-abortion, pro-gun, and anti-tax – those candidates would be assured that those single-issue voters would show up on Election Day, regardless of what other stances a candidate might hold. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The execution of the strategy was not as simple as it might seem, as it required political maturity on the part of those voters. Anti-abortion voters, for example, were often vehemently opposed to trade with China, due to treatment of Chinese Christians by the Communist Party. Yet anti-abortion groups and their voters consistently kept their eyes on the prize, turning out for anti-abortion Republican candidates that supported trade with China along with those that opposed it. They understood, decade after decade, that they could not – in their eyes – let the perfect become the enemy of the good. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The defeat of George H.W. Bush for a second term in 1992 after he violated his no-tax pledge has stood for the past 30 years as the object lesson to Republicans of the consequences of failing to toe the line, while the election of Donald Trump a quarter century later proved to be the defining example of the effectiveness of the Republican strategy. Trump, a man with few notable personal convictions, embraced the Republican single-issue voter playbook with a vengeance. He swore as he campaigned in 2016 that his tax cuts would be the </span><a href="https://www.cnbc.com/2016/08/08/trump-touts-sweeping-and-costly-tax-cut-plan.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">largest</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> ever, that his </span><a href="http://www.theguardian.com/us-news/2016/may/20/nra-endorses-donald-trump-convention" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">support</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> for the NRA would not waver, and that his Supreme Court nominees would </span><a href="https://www.cnbc.com/2016/10/19/trump-ill-appoint-supreme-court-justices-to-overturn-roe-v-wade-abortion-case.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">overturn</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Roe v. Wade. And he delivered.</span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It has become a truism of sorts that activists on the left and the right control the political parties. And while that may in large measure be true, it has widely differing implications for Democrats than it does for Republicans. For the GOP, fealty to Christian conservatives, gun rights activists, and anti-tax voters has been part and parcel of an intentional Election Day turn-out strategy that has succeeded in building a degree of Republican political </span><a href="https://www.cato.org/multimedia/cato-daily-podcast/pollsters-still-perplexed-over-gop-performance-polls" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">power</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> at the federal, state, and local level that far outstrips what raw </span><a href="https://www.politico.com/news/magazine/2020/11/12/2020-election-analysis-democrats-future-david-shor-interview-436334" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">demographics</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> might appear to dictate.</span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">For Democrats, in contrast, political activism on the left has rarely been accompanied by a commitment to turn out on Election Day for whomever the Democratic Party might ultimately nominate. Indeed, George W. Bush and Donald Trump each </span><a href="https://www.npr.org/2017/08/24/545812242/1-in-10-sanders-primary-voters-ended-up-supporting-trump-survey-finds" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">likely</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> won the presidency on the backs of progressive voters who succumbed to Ralph Nader’s “Tweedledee vs. Tweedledum” assessment of democratic politics, and either stayed home, voted independent or voted Republican out of spite. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This year, even as the prospect looms of Republicans not simply winning back majorities in the fall, but toppling of the democratic process itself two years down the road, we see articles and hear comments about this </span><a href="https://www.politico.com/news/2022/04/10/democrats-youth-vote-2022-midterms-john-della-volpe-00024264" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">group</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> or that </span><a href="https://www.bloomberg.com/news/articles/2022-01-16/black-democrats-see-bleak-2022-as-biden-disappoints-on-issues" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">group</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that may not show up in the fall should Joe Biden or Democrats in Congress not deliver whatever it is they care about before Election Day. The fact that Democrats might not have the votes does not seem to matter. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Unlike Republican voting groups that have stayed the course for decades to achieve the victories that they won this week on guns and abortion, too many within the Democratic Party remain only too willing to cut and run if they don’t get what they want, when they want it. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But the Democratic Party problem runs far deeper than its failure to pass legislation during the current term. As former Obama pollster David Schor has </span><a href="https://www.nytimes.com/2021/10/08/opinion/democrats-david-shor-education-polarization.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">argued</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> since the 2020 election, Democrats are increasingly losing ground among mainstream, working and middle class voters – of all races – as the discourse within the party increasingly reflects the language and issues of highly educated elites. “That’s really dangerous,” Schor </span><a href="https://unherd.com/thepost/david-shor-college-liberals-have-hijacked-the-democratic-party/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">observed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in an interview last year, “because in the Democratic Party, if you don’t have non-white conservatives, and you’re just a party of educated, white liberals, that gets you to 25%-30% of the vote.” </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And the situation only looms to get worse. The emergence of inflation, and the increasing </span><a href="https://www.bloomberg.com/opinion/articles/2022-06-23/x-rated-recession-risks-look-unavoidable-for-markets?srnd=opinion" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">likelihood</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that we are heading into a recession, is only increasing the </span><a href="https://projects.fivethirtyeight.com/polls/generic-ballot/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">distance</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> between party elites – who continue to be focused on issues surrounding racial justice, climate change, gender and sexuality, and identity politics – and the broader electorate that is </span><a href="https://s3.documentcloud.org/documents/21867873/cnn-poll-on-economy-and-biden-approval-rating.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">overwhelmingly</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> concerned about the economy and crime. Those in the party who ignore the chasm that now separates them from many in the country do so at their peril. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This should be a road to Damascus moment for Democrats. For 40 years, Republicans treated every election as though Roe v. Wade itself was on the ballot, while too many Democrats, so often caught up in one internecine feud or another, failed to grasp the urgency of the moment. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Perhaps – just perhaps – even as frustration over Roe is at a </span><a href="https://www.washingtonpost.com/politics/2022/06/27/democrats-angry-party-leaders/?utm_campaign=wp_politics_am&utm_medium=email&utm_source=newsletter&wpisrc=nl_politics&carta-url=https%3A%2F%2Fs2.washingtonpost.com%2Fcar-ln-tr%2F3739cc6%2F62badfd5cfe8a21601c77a9a%2F596d17f09bbc0f20866a6d00%2F12%2F67%2F62badfd5cfe8a21601c77a9a&wp_cu=324b0857c4db9a89d99070f139d79bf9%7C65704ad8-9c20-11df-bd09-12313b066011" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">boiling</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> point, and rage is pushing activists to accelerate their threats of retribution against a Democratic Party that has limited options to address the Court ruling, the shock of waking up in a post-Roe world will be enough for those who have argued over the years that there is no difference between the two parties to realize their own culpability for the Supreme Court decision this week. Perhaps, even as tempers flair, those in the party who have routinely vilified Joe Manchin and other political centrists will realize it is time to sheath their daggers. </span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">T</span><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">hrough its decision, the Supreme Court has shaken the political equilibrium of the country and offered Democrats an opportunity to chart a new course. If Democrats hope to respond to the Roe decision and protect abortion rights for women across the country, they will need to compete more effectively than they have in years at the state and local levels where the coming battles will be fought, and they will have to win back voters that they have alienated. If Democrats hope to win those battles, they will need to start, as a unified party, by looking to Democrats who serve effectively in red states and districts, as models of how they might work to restore trust in their party across the electorate. </span></p><p style="background-color: white; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; padding: 10pt 0pt; text-align: left;"><span face="Calibri, sans-serif" style="background-color: transparent; color: #1a1a1a; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</span></p><p dir="ltr" style="background-color: white; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; padding: 0pt 0pt 10pt;"><span face="Calibri, sans-serif" style="background-color: transparent; color: #1a1a1a; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</span><span style="background-color: transparent; color: #333333; font-family: Georgia; font-size: 9pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><br /><br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-4366989652610527532022-05-15T22:48:00.003-04:002022-05-15T22:48:59.002-04:00Samuel Alito and the unraveling of America.<p><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">Barry Goldwater and Kevin Phillips saw this moment coming decades ago. Iconic figures in the history of the modern conservative movement, they each warned of what lay in our future should conservative Christians come to dominate the Republican Party.</span></p><span id="docs-internal-guid-16eb8cba-7fff-d222-0c14-d09cae98311d"><span id="docs-internal-guid-16eb8cba-7fff-d222-0c14-d09cae98311d"></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Goldwater – famous for his proclamation that “Extremism in defense of liberty is no vice!” as he accepted the Republican Party nomination for President in 1964 – was openly disdainful of evangelical leaders who sought to sink their claws into the GOP. “</span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If and when these preachers get control of the [Republican] party, and they're sure trying to do so,” </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">he warned as Jerry Falwell’s Moral Majority began to flex its muscles during the early days of the Reagan Administration,</span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “it's going to be a terrible damn problem. Frankly, these people frighten me… these Christians believe they are acting in the name of God, so they can't and won't compromise.”</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If anything, Kevin Phillips' warning was more dire. A political advisor to Richard Nixon in 1968 and a </span><a href="https://www.latimes.com/entertainment/la-et-rutten16apr16-story.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">principal</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> architect of Nixon’s Southern Strategy – whereby the GOP traded its traditional support among Black Americans for the support of southern and working class white voters – Phillips was no innocent bystander to the evolution that Goldwater feared. Along with Lee Atwater, Grover Norquist, and Karl Rove, Phillips was the </span><a href="https://www.theatlantic.com/ideas/archive/2019/08/emerging-republican-majority/595504/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">midwife</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the modern Republican coalition that has for decades relied upon election day turnout among conservative Christians as its path to power. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In his 2005 </span><a href="https://www.amazon.com/American-Theocracy-Politics-Religion-Borrowed/dp/0143038281" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">book</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">American Theocracy, </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Phillips described how the growing power of social conservatives within the GOP had transformed the Party of Abraham Lincoln into a party increasingly controlled by base voters opposed to Darwinism, skeptical of science, and imbued with what he called “</span><a href="https://www.c-span.org/video/?191622-1/after-words-kevin-phillips" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">theocratic tendencies</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">.” In the </span><a href="https://www.nytimes.com/2006/03/19/books/review/clear-and-present-dangers.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">words</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of Columbia University history professor and then-Provost Alan Brinkley, in his New York Times book review at the time, </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">American Theocracy </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">presented “a nightmarish vision of ideological extremism, catastrophic fiscal irresponsibility, rampant greed, and dangerous shortsightedness."</span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In other words, Phillips described the world that has emerged before our eyes.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As millions of Americans </span><a href="https://abcnews.go.com/Politics/supreme-court-poised-reverse-roe-americans-support-abortion/story?id=84468131" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">grapple</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> with the implications of the Supreme Court overturning </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe v. Wade,</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> it is important to consider the implications of Justice Samuel Alito’s </span><a href="https://www.politico.com/news/2022/05/02/read-justice-alito-initial-abortion-opinion-overturn-roe-v-wade-pdf-00029504" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">draft</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> opinion, which appears to have the support of a majority on the Court. While many have hailed the overturning of </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as a </span><a href="https://www.wsj.com/articles/justice-alitos-originalist-triumph-supreme-court-draft-opinion-constitution-abortion-roe-v-wade-justices-11651695865" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">victory</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> for originalism – the theory of jurisprudence that the Constitution should be interpreted in a manner consistent with what was intended at the time – Alito’s stance is less originalist than it is theocratic. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">While this assertion may seem hyperbolic to some – just more evidence of sour grapes by those who refuse, as Justice Clarence Thomas </span><a href="https://www.washingtonpost.com/politics/2022/05/06/clarence-thomas-abortion-supreme-court-leak/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggested</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> last week, to accept outcomes that don’t go their way – this is not my assertion alone, but one that reflects the words of Samuel Alito’s one-time role model, Antonin Scalia.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The central objection of originalists to the Court’s ruling in </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe v. Wade, </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">is that </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> confirms a liberty on Americans based on the “Due Process Clause” of the Fourteenth Amendment, notwithstanding the fact that the term “abortion” itself never appears in the Constitution. If a right, they argue, was not enumerated by the Founders, it must in turn fall to the jurisdiction of the states. </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> is not alone in its reliance on the Fourteenth Amendment, as that amendment – passed in 1868 as part of the package of amendments in the wake of the North’s victory in the Civil War – has been the basis of Supreme Court rulings dating back a century or more. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh3XtenIrWe3fWYlxhJ502qrK9gmrTFYb0e2m9aq3ba7f3xnplRkEycn7jtpY3hOVWKduyC6AbkXA9hnC8zi98vt5QKcIu1uTmaUGLm_wPMPdzLJQ1ivYGTQ2YSptBfIb2mAu2Uy-phRx2hJDsPklxxUWg2qrlLg63gwcx_n3ZKSX_Io7iHbA/s1800/Supreme%20Court%20No%20Heros%20work%20here.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1800" data-original-width="1800" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh3XtenIrWe3fWYlxhJ502qrK9gmrTFYb0e2m9aq3ba7f3xnplRkEycn7jtpY3hOVWKduyC6AbkXA9hnC8zi98vt5QKcIu1uTmaUGLm_wPMPdzLJQ1ivYGTQ2YSptBfIb2mAu2Uy-phRx2hJDsPklxxUWg2qrlLg63gwcx_n3ZKSX_Io7iHbA/w400-h400/Supreme%20Court%20No%20Heros%20work%20here.jpg" width="400" /></a></div><p></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Liberties guaranteed by the federal government that Americans now enjoy based on Supreme Court rulings under the umbrella of the Fourteenth Amendment include same-sex marriage, interracial marriage, the use of pornography in the home, and the use of contraception. The Supreme Court confirmed all these rights despite the fact that none of them can be found by name in the Constitution. Even something seemingly as basic as the right of parents to choose to send their children to private schools came about through a ruling a century ago, when the Court </span><a href="https://en.wikipedia.org/wiki/Pierce_v._Society_of_Sisters" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">extended</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the rights of Americans under the Due Process Clause to recognize personal civil liberties. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Yet Alito bends over backwards to assure readers of his draft opinion that none of these rights that Americans take for granted are under threat, should </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> be overturned. Quite the contrary. Far from being an originalist attack on liberties that are nowhere to be found in the Constitution, his attack on </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> is purely reflective of his own moral view of the universe. </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">is unique, he tells us, because abortion is unique. And abortion is unique, in the </span><a href="https://newsletters.theatlantic.com/the-third-rail/627535eb95033600218457a5/roe-v-wade-obergefell-gay-marriage/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">words</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of evangelical commentator David French, “because abortion involves harm to a non-consenting party, the ‘potential life’ it destroys.” </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“</span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">None of the other decisions cited by Roe and Casey,” </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Samuel Alito states in his </span><a href="https://www.spectator.co.uk/article/full-text-leaked-roe-v-wade-draft-ruling" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">opinion</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">,</span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">referring to those other Supreme Court rulings that rely on the Fourteenth Amendment to confer freedoms not specifically identified in the Constitution, </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“involved the critical moral question posed by abortion.</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">They do not support the right to obtain an abortion, and by the same token, our conclusion that the Constitution does not confer such a right does not undermine them in anyway.”</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Thus has he threaded the needle. </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">is </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">sui generis</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> because it involves a critical moral question.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This, however, is not true. A number of the other Fourteenth Amendment cases involved vexing moral issues; some at the time of the ruling, others still today. Surely, same-sex marriage and interracial marriage were viewed by opponents as critical moral questions at the time the Court ruled; and, at least with respect to same-sex marriage, a segment of Americans still </span><a href="https://www.nytimes.com/2022/05/11/us/politics/roe-wade-supreme-court-abortion.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">hold</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that view. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">While last year saw support for gay marriage (protected by the Court in its 2015 decision in </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Obergefell v. Hodges</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">) </span><a href="https://news.gallup.com/poll/350486/record-high-support-same-sex-marriage.aspx" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">hit</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the 70% mark, as recently as 2008 the two major contenders for the Democratic presidential nomination each opposed same-sex marriage; and opposition among Republicans was widespread. According to </span><a href="https://news.gallup.com/poll/350486/record-high-support-same-sex-marriage.aspx" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Gallup</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, last year marked the first time support for gay marriage among Republicans reached 50%, while a quarter of the country continues to believe same-sex marriage should be illegal. A number of states continue to have laws banning same-sex marriage on the books, notwithstanding the Court ruling in </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Obergefell</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, with Republican legislatures repeatedly declining to remove them. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Perhaps most notably, contraception remains a critical moral question for </span><a href="https://scholars.org/contribution/how-catholic-hospitals-restrict-reproductive-health-services" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">many</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. In 1965, in its ruling in </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Griswold v. Connecticut, </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">where the Court affirmed the right of couples to use contraceptives, a majority of the Court found that a right to privacy could be </span><a href="https://www.oyez.org/cases/1964/496" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">inferred</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> from various constitutional amendments, even though a right to privacy is never specifically mentioned in the Constitution itself. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Three years after the Court ruling in </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Griswold</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, Pope Paul VI </span><a href="https://www.catholic.com/tract/birth-control" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">published</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a papal encyclical declaring that it is “</span><a href="https://www.thecatholicthing.org/2018/01/09/contraception-intrinsically-evil/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">intrinsically</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> wrong to use contraception to prevent new human beings from coming into existence.” That encyclical, which reflects exactly Samuel Alito’s concern over “potential life” </span><a href="https://www.bbc.co.uk/religion/religions/christianity/christianethics/contraception_1.shtml#:~:text=The%20Roman%20Catholic%20Church%20believes,pill%20or%20condoms%20in%20themselves." style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">remains</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Church doctrine to this day. Furthermore, according to </span><a href="https://www.guttmacher.org/article/2020/10/people-all-religions-use-birth-control-and-have-abortions" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">data</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> from the Guttmacher Institute, while contraception and abortion are equally common among people of all faiths, each is opposed on moral grounds by a quarter to a </span><a href="https://www.pewresearch.org/religion/2022/05/06/americas-abortion-quandary/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">third</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the public.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Alito’s stance – picking and choosing his way through the Fourteenth Amendment and falling on protecting “potential life” as his rationale is not conservative jurisprudence. Or at least to a lay observer, it appears to be a far cry from originalism as it is explained by Antonin Scalia in his dissent in </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Planned Parenthood v. Casey</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, which Alito chooses to reference in his draft opinion. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In that dissent, Scalia specifically rejected the entitlement of justices to impose their moral judgments, which Alito embraces. </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“I reach that conclusion,”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Scalia </span><a href="https://www.law.cornell.edu/supremecourt/text/505/833" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">explained</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in Casey, as to why abortion was not a protected liberty, </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“not because of anything so exalted as my views concerning the ‘concept of existence, of meaning, of the universe, and of the mystery of human life.’ Rather, I reach it for the same reason I reach the conclusion that bigamy is not constitutionally protected because of two simple facts: (1) the Constitution says absolutely nothing about it, and (2) the longstanding traditions of American society have permitted it to be legally proscribed.” </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Perhaps Alito simply lacks the courage of his convictions. Perhaps, as badly as he wants to overturn </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe,</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Alito </span><a href="https://www.nytimes.com/2022/05/06/us/politics/republicans-abortion.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">fears</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the outcry that would – and should – ensue if the Court were to do as Scalia’s originalism would dictate, and set the dominos in motion for a series of cases aiming to </span><a href="https://www.theguardian.com/us-news/2022/may/03/roe-v-wade-birth-control" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">overturn</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> rights Americans now enjoy to, including the use of contraception, </span><a href="https://www.nbcnews.com/feature/nbc-out/states-across-u-s-still-cling-outdated-gay-marriage-bans-n1137936" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">gay marriage</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, interracial marriage, and on down the list. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Or perhaps Alito’s timidity is a strategic ruse, because he understands that a full assault on all of those rights Americans now take for granted would play into John Roberts’ hands, as the Chief Justice </span><a href="https://www.businessinsider.com/john-roberts-could-persuade-conservative-scotus-not-to-overturn-roe-wade-2022-5" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">seeks</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to build a majority for a more circumscribed affirmation of the Mississippi law that is the focus of </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Dobbs v. Jackson Women’s Health</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, in a manner that would fall short of the complete reversal of </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">that Alito so badly seeks.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Most likely, this is just Samuel Alito with the gloves off. He has made clear over his years on the Court, the </span><a href="https://www.cnn.com/2020/11/13/politics/samuel-alito-supreme-court-federalist-society-speech-analysis/index.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">direction</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in which he wants the Court to head. To frame him as simply an originalist is to ignore his determination to use the power of the Court to redress the </span><a href="https://www.cnn.com/2021/06/18/politics/alito-religious-liberty-smith-fulton/index.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">injustices</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that he believes people of faith in America face at the hands of an </span><a href="https://faithandpubliclife.com/the-high-cost-of-aggressive-secularism/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">aggressive</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> secularism across society and culture, where, in his words, those who "cling to traditional views on marriage are </span><a href="https://www.cnn.com/2020/11/12/politics/samuel-alito-religious-freedom-federalist-society/index.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">labeled</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as bigots.” Religious liberty, as he has </span><a href="https://www.cnn.com/2020/11/12/politics/samuel-alito-religious-freedom-federalist-society/index.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">framed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> it, is about whether "society will be inclusive enough to tolerate people with unpopular beliefs." </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And that is indeed a fair question… perhaps the defining question. It is the reason, one imagines, that Scalia emphasized that his stance in his dissent in </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Casey</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> was not about his personal religious convictions, but rather sticking to the letter of the law. “Critical moral questions,” to use Alito’s words in his draft opinion, inherently cut both ways. But Alito's concern for religious liberty is only about those whose views on “critical moral questions” mirror his own. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Having established an entitlement of “potential life” for protection under the law in </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Dobbs</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, it is inconceivable that a Court majority with Alito at its head will be satisfied with delegating decisions regarding abortion to the states. Extending his moral judgment to its logical conclusion, it is only a matter of time before that new majority foresakes any remaining pretense of originalism and finds that abortion – permitted by states in the wake of the overturning of </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe –</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> violates newly-found constitutional rights of the unborn. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This is the moment that Barry Goldwater and Kevin Phillips warned against. As a justice on the highest court in a liberal democracy, Samuel Alito is supposed to be able to look past his own exalted views of the mystery of human life. Unfortunately, he is not. Coming in the wake of the January 6th insurrection, the emergence of a majority on the Court with the inclination and power to embrace Alito’s theocratic doctrine of jurisprudence looms to be just the next step in our country’s unraveling. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p><em style="color: #1a1a1a; font-family: Calibri; font-size: 16px;">Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p style="background-color: white; color: #333333; font-family: Georgia, serif; font-size: 13px;"><em style="color: #1a1a1a; font-family: Calibri; font-size: 16px;">Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em> </p><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-54860810493426728732022-05-04T14:51:00.014-04:002022-05-05T09:03:10.585-04:00Alito opinion released by a pro-choice law clerk? I'm not buying it.<span id="docs-internal-guid-0edd375a-7fff-3863-881b-df718f0d0081"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">John Roberts is </span><a href="https://www.politico.com/news/2022/05/03/chief-justice-roberts-draft-abortion-opinion-00029593" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">livid</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, as well he should be. The public release of Justice Samuel Alito’s draft opinion has caused a firestorm. Mitch McConnell is </span><a href="https://thehill.com/news/senate/3475407-mcconnell-supreme-court-leak-should-be-investigated-punished/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">livid</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as well. The leaker should be investigated and punished, he insisted. Lock her up and throw away the key. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">McConnell’s utter lack of self-reflection or irony was on public display once again, as he blasted the leaker for eroding public confidence in the legitimacy of the Court. Of course, no one in the nation’s capital has done more to damage the legitimacy of the Court than McConnell himself. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It is McConnell’s presumption that the leaker was part of the radical left cabal that he rails against incessantly. Perhaps history will show that some left-leaning Supreme Court clerk leaked the opinion, hoping that the ensuing public outcry would force the Court’s hand, pressuring the justices to bow to “activist pressure,” in McConnell’s words.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">I’m not buying it. A law clerk seems the least likely candidate for the leak, as they would have the most to lose. Lawyers are supposed to take their code of ethics seriously – except, it seems, for Supreme Court nominees who apparently believe that lying to Congress is OK if that is what it takes to ensure confirmation. And a Supreme Court law clerk caught leaking Court documents would place their career in jeopardy. </span></p><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxBibGnZAKvB7VylavQ61Dzp0a9I5KhPbZXE6bJ-DEaLD6ZQYpxN6USmBTNwmQvY8MQJWLZXIUimfd9eXAgIr7s3nkd-otE3mycSmrUOpZEiBJsCxEtws0oSTfNSJzDUytGir1BDmy_Vcy8uHZEdjp_KE36NMW66DRYvYREGDj24Yq8IF8zQ/s1800/Roe%20v%20Wade%203%20copy.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1800" data-original-width="1800" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxBibGnZAKvB7VylavQ61Dzp0a9I5KhPbZXE6bJ-DEaLD6ZQYpxN6USmBTNwmQvY8MQJWLZXIUimfd9eXAgIr7s3nkd-otE3mycSmrUOpZEiBJsCxEtws0oSTfNSJzDUytGir1BDmy_Vcy8uHZEdjp_KE36NMW66DRYvYREGDj24Yq8IF8zQ/w400-h400/Roe%20v%20Wade%203%20copy.jpeg" width="400" /></a></div></div><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And for what? According to the Politico </span><a href="https://www.politico.com/news/2022/05/03/chief-justice-roberts-draft-abortion-opinion-00029593" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">story</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> about the draft opinion, Justices Clarence Thomas, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett had signed up for the Alito draft in conference. Would they be put off by the public outcry from the left? Hard to imagine. Barrett and Gorsuch are true believers; and Kavanaugh and Thomas would be more likely to double down in the face of protests after their perceived treatment by Democrats during their confirmation hearings.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">No. The Alito draft was at least two months old. Why leak it now, when the time is so short until the end of June when the opinion would be released? Who would benefit?</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It seems more likely that someone leaked the Alito draft opinion now because John Roberts never signed on. Roberts feels <a href="https://www.politico.com/news/2022/05/03/chief-justice-roberts-draft-abortion-opinion-00029593">betrayed</a>, perhaps because he actually was betrayed. In the ensuing months since Alito circulated his draft, Roberts may well have been steadily working on his colleagues to understand the importance of moderating the language of the forthcoming opinion. Narrowing the scope of controversial opinions has been his </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">modus operandi</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> for years now, as Roberts has sought to maintain the legitimacy of the Court even as it has migrated sharply to the right.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The reason why Alito’s opinion had to be released was immediately evident during the 24 hours since the draft opinion hit the press. Anti-abortion activists have been beside themselves with glee. Forget returning authority over abortion law to the states, activists have immediately pivoted to </span><a href="https://www.usatoday.com/story/news/nation/2022/05/03/anti-abortion-groups-whats-next-roe-wade/9627494002/?gnt-cfr=1" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">passing</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a national anti-abortion law. If </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe v. Wade </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">set the course of the last half-century, broadening privacy rights across a range of social issues, Alito’s sweeping opinion was going to set the course for the next half century, undoing so much of the damage they firmly believe that </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> had done. Half measures would not do.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The leak was not about stopping the Alito opinion from becoming the law of the land; it was to ensure that it </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">does</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> become the law of the land. The target was Roberts, and his continuing – albeit steadily </span><a href="https://www.pewresearch.org/politics/2022/02/02/publics-views-of-supreme-court-turned-more-negative-before-news-of-breyers-retirement/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">failing</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> – determination to have the Roberts Court survive with a modicum of public confidence and judicial legitimacy.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If John Roberts was on the verge of achieving a 6-3 majority for his more moderate, partial repeal of </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe, </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">an anti-abortion activist's objective in leaking the document would be to remind the anti-abortion community how much was at stake. Their objective would be to shame the justices who were migrating toward Roberts, and bring them back into line.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The simple fact is that the headline in the New York Times, “Draft Ruling on Abortion Signals Seismic Political Shift,” had it wrong. There has been no seismic shift in the politics of abortion, The <a href="https://www.forbes.com/sites/alisondurkee/2022/05/03/how-americans-really-feel-about-abortion-the-sometimes-surprising-poll-results-as-supreme-court-reportedly-set-to-overturn-roe-v-wade/?sh=5580b30e7ac1">polling</a> is largely unchanged. At least two-thirds of Americans are broadly pro-choice, while one-quarter to one-third are generally opposed to legalized abortion under most circumstances. A far smaller percentage are opposed to abortion under any circumstance. Far from a political shift, the draft ruling is simply one more illustration of the imbalance of power in the country that derives from the Apportionment Clause of the Constitution – which gives two senators to the 600,000 residents of Wyoming and another two to the 40 million residents of California. That distortion, in turn, has resulted in a Supreme Court that is broadly unrepresentative of the nation itself.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline;"><span style="font-size: 11pt; white-space: pre-wrap;">
If someone were to consider the type of activist on the right who might have the access and opportunity to instigate a leak of the Alito draft opinion, that person would not have to think hard before they considered Virginia Thomas, the wife of Clarence Thomas. </span></span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Ginni Thomas, who has been in the news recently for her string of text messages advocating for overturning the 2020 election, has been a long-time force in her own right within right-wing politics. As Jane Mayer </span><a href="https://www.newyorker.com/magazine/2022/01/31/is-ginni-thomas-a-threat-to-the-supreme-court" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">wrote</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> earlier this year in the New Yorker, Ginni Thomas has aligned herself with a number of right-wing activists with issues in front of the Court, and, as Mayer writes, “has declared that America is in existential danger because of the ‘deep state’ and the ‘fascist left,’ which includes ‘transsexual fascists.’” </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">While this suggestion is purely speculative, Ginni Thomas has been in a unique position to understand the deliberations within the Court over the repeal of </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe. </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">More importantly, as an activist who has waited years for this moment of Court power to arrive, she understands that there is going to be only one Supreme Court repeal of </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Roe v. Wade.</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> This would be the only shot.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The Alito opinion was written a couple of months ago. The notion that a pro-choice law clerk leaked it seems to lack imagination. For decades, anti-abortion activists have been dreaming of a moment such as this. If they get the slightest inkling they are being betrayed by John Roberts, leaking the opinion could be the only way to get the justices – whom they worked so hard to put on the Court – back in line. If the person who leaked the document could also orchestrate things so that the blame falls on those on the left whom they so </span><a href="https://www.newyorker.com/news/news-desk/legal-scholars-are-shocked-by-ginni-thomass-stop-the-steal-texts" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">revile</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, so much the better. </span></p></span><p><em style="color: #1a1a1a; font-family: Calibri; font-size: 16px;">Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em></p><p style="background-color: white; color: #333333; font-family: Georgia, serif; font-size: 13px;"><em style="color: #1a1a1a; font-family: Calibri; font-size: 16px;">Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em> </p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-80055831110565593692022-04-30T14:26:00.033-04:002022-04-30T14:32:14.829-04:00Each day, Vladimir Putin reminds us what’s at stake.<span id="docs-internal-guid-b57ecf65-7fff-c651-505a-390628b0da98"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Last July, Harvard Kennedy School homeland security analyst Juliette Kayyem raised the </span><a href="https://today.law.harvard.edu/is-the-u-s-in-a-cyber-war/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">question</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of whether Russia’s persistent cyber and information operations against the United States should be viewed as acts of war. Specifically, she suggested that it was a “legal fiction” to treat cyber attacks differently from physical attacks against a nation. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Kayyem made the case for changing our definition of warfare against the backdrop of a series of news stories earlier that year of successful Russian cyber operations against the United States. Last May, Russian operatives succeeded in shutting down the Colonial Pipeline, a fuel distribution system that </span><a href="https://www.bbc.com/news/business-57050690" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">delivers</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> nearly half of the diesel, jet fuel and other petroleum supplies across the East Coast. A few weeks later, they shut down JBS, the world’s </span><a href="https://www.bbc.com/news/business-57423008" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">largest</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> meat producer, which supplies 20% of the nation’s beef. Both shutdowns were brief, but the point was made: Russia had proven its ability to shut down critical elements of our economic infrastructure, should they choose to do so.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIt4dPZvTlysLLiRsgV5VWey1RPVvhWnXX_Rgb0DfWNK1PUK8CBfo7lEIlFfvM0S97zbEBYbxI0cDx-2AsMcy3PRzKjm9MEJ-1_DuoqiJPyOFeUdQk4lkAQA0PLsYKMRd08NFlDQ6tzxp5qoc2RdRrbDXAyLY3gE87xE7kYXO2mnlf0bmDHg/s480/Pipeline.jpeg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="480" data-original-width="480" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIt4dPZvTlysLLiRsgV5VWey1RPVvhWnXX_Rgb0DfWNK1PUK8CBfo7lEIlFfvM0S97zbEBYbxI0cDx-2AsMcy3PRzKjm9MEJ-1_DuoqiJPyOFeUdQk4lkAQA0PLsYKMRd08NFlDQ6tzxp5qoc2RdRrbDXAyLY3gE87xE7kYXO2mnlf0bmDHg/s320/Pipeline.jpeg" width="320" /></a></div></div><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">More ominous than either of those attacks, however, was the massive “SolarWinds” cyber </span><a href="https://foreignpolicy.com/2021/01/11/cyberattack-hackers-russia-svr-gru-solarwinds-virus-internet/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">attack</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a year earlier. Unlike the ransomware attacks on the Colonial Pipeline and JBS, SolarWinds was a long-term operation in which cyber operatives of Russia’s GRU Military Intelligence Agency and SVR Foreign Intelligence Agency created their own back doors into the networks of </span><a href="https://www.wsj.com/articles/microsoft-solarwinds-hackers-continue-to-hit-technology-companies-11635145200?mod=Searchresults_pos16&page=2" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">hundreds</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of major corporations. Among the notable aspects of the SolarWinds attack was that the cyber-warriors did not actually do any particular damage once inside corporate networks. Rather, their presence, burrowed deep inside the operations of major companies, raised fears of what they might be capable of doing, should the time come.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As significant as these cyber operations may have been, Russia’s most significant achievement in the cyber realm has been the effectiveness of efforts by the GRU and the Kremlin-directed Internet Research Agency in undermining social cohesion in, and the stability of, democracies in countries across Europe and here at home.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Kayyem’s argument last year that we were “at war” with Russia – or at least that Russia was at war with us – was hard for many to grasp. Even now, there is a surreal aspect of the Ukraine war. The barbarity of Russian assaults and the conduct of its soldiers on the ground seem to be a vestige of another era. The images of refugee families in colorful down jackets pulling their rolling luggage seems incongruous with our advanced, globalized world. It is a war without any apparent purpose in an era where war itself – old fashioned war, with tanks rolling across open field, cities fire-bombed, and families huddled in underground bunkers – seems to lack purpose.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Perhaps that explains why, even as Russia has been hell-bent on destroying our democracy over the past decade, we have treated its operations against us as criminal matters under the jurisdiction of the Department of Justice rather than as acts of war. In the past four years, Robert Mueller and his team </span><a href="https://www.pbs.org/newshour/nation/read-muellers-full-indictment-against-12-russian-officers-for-election-interference" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">indicted</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> twelve officers of the Russian GRU for election interference in 2018, and the Department of Justice indicted </span><a href="https://www.nytimes.com/2022/03/24/us/politics/russians-cyberattacks-infrastructure-nuclear-plant.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">four</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> members of the FSB – the successor agency to the KGB – and six </span><a href="https://www.justice.gov/opa/pr/six-russian-gru-officers-charged-connection-worldwide-deployment-destructive-malware-and" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">members</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the GRU for a range of cyber operations in the US and across the globe, though in each case those charged were Russian nationals who never set foot in an American courtroom. Even our response to perhaps the most infamous GRU cyber operation, dubbed “Sandworm,” was undertaken through a court-authorized law enforcement operation by the Department of Justice rather than by the military.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As the war in Ukraine has escalated, President Biden has insisted time and again that we are not at war with Russia. It is a stance that has been met with an extraordinary degree of unanimity from Republicans and Democrats alike. Two weeks into Putin’s invasion, speaking on Fox News Sunday, Connecticut Democratic Senator Chris Murphy </span><a href="https://www.foxnews.com/transcript/fox-news-sunday-on-march-6-2022" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">commented</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“I think we need to be clear that we are not going to go to war with Russia,”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> while Iowa Republican Joni Ernst concurred. Over on ABC’s “This Week,” Florida Republican Marco Rubio </span><a href="https://abcnews.go.com/Politics/week-transcript-amb-linda-thomas-greenfield-sen-marco/story?id=83280394" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">summed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> up the consensus view: </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“It means starting World War III.” </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Yet even as the DC political establishment appeared unified in the notion that war with Russia is unthinkable, there were two groups who fully embraced Juliette Kayyem’s assertion that Russia’s acts against us constituted acts of war: the US and Russian militaries.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Dating back at least a decade, the Russian armed forces have </span><a href="https://carnegieendowment.org/2019/07/03/west-fears-russia-s-hybrid-warfare.-they-re-missing-bigger-picture-pub-79412" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">embraced</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a </span><a href="https://inmoscowsshadows.wordpress.com/2014/07/06/the-gerasimov-doctrine-and-russian-non-linear-war/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">doctrine</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> referred to as </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“Next Generation Warfare,”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> which is fully aligned with Kayyem’s perspective. </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Next Generation Warfare</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> views cyber, psychological, and information operations (a generalized term encompassing propaganda, social media and other activities designed to undermine social cohesion and political stability) as essential elements in a </span><a href="https://foreignpolicy.com/2014/05/05/how-putin-is-reinventing-warfare/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">continuum</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of war-fighting tactics, at least as essential to achieving strategic outcomes as are troops on the ground. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In October 2016, just as Russian information operations targeting the 2016 presidential election were in full swing, military analysts at West Point published a report </span><a href="https://mwi.usma.edu/countering-gray-zone-hybrid-threats-mwi-report/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">describing</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Russian cyber warfare and destabilization operations – referred to as “gray zone hybrid threats” – as an essential element of Russia’s strategic warfare doctrine. Those analysts highlighted one salient aspect of gray zone hybrid threats: </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“aggressors use ambiguity and leverage non-attribution to achieve strategic objectives while limiting counter-actions by other nation states.”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Said another way, by assuring ambiguity surrounding what was done, how it was done, and who was doing it, Russia’s destabilization operations have left political parties across Europe and here at home at each other's throats, with little focus on how it is that all of a sudden previously functioning democracies are sliding into disarray. If Robert Mueller achieved anything in his arguably failed tenure as special counsel for the United States Department of Justice following the 2016 election, many of those indictments laid out elements of the Russian operation in fulsome detail.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Suffice it to say, if Russia has been at war with us for the better part of a decade, as Kayyem argued, the evidence suggests that its tactics have been successful. Russia has demonstrated its cyberwarfare capabilities – and increased public anxiety accordingly – with respect to its ability to disable core infrastructure systems. Its information operations, as intended, have undermined our ability as a nation to respond to an external threat, as the analysis of gray zone hybrid threats suggests. And, most significantly, Russia’s efforts to undermine both faith in and commitment to </span><a href="https://www.pewtrusts.org/en/trust/archive/winter-2020/how-americans-view-trust-facts-and-democracy-today" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">democracy</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> across a large share of the electorate have borne fruit. While historians may yet assess whether Vladimir Putin, Donald Trump or Mark Zuckerberg made the greatest contribution to the weakening of public faith in democracy in the United States, Russia’s success in turning profit-maximizing social media algorithms into weapons of mass destruction is unarguable.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The notion that the Colonial Pipeline and other cyber attacks represented the testing phase of an integrated military strategy became clear on the eve of Russia’s invasion. Energy “</span><a href="https://www.nytimes.com/live/2022/04/27/world/ukraine-russia-war-news#poles-and-bulgarians-put-up-a-resilient-front-in-the-face-of-russias-natural-gas-blackmail" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">blackmail</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">” – the ability to shut down natural gas pipelines, and turn off the lights and heat across Europe – has for years long loomed large as a weapon Russia could wield against European countries should it choose to do so. During the two-week period before the Russian military rolled into Ukraine, GRU </span><a href="https://www.bloomberg.com/news/articles/2022-03-07/hackers-targeted-u-s-lng-producers-in-run-up-to-war-in-ukraine?utm_campaign=wp_the_cybersecurity_202&utm_medium=email&utm_source=newsletter&wpisrc=nl_cybersecurity202" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">hackers</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> moved into high gear, launching an assault on liquified natural gas production facilities in the United States, operated by Chevron, Cheniere Energy, and Kinder Morgan, among others. Putin’s objective was straightforward: to shut off alternative sources of supply to Europe on the eve of the invasion, in order to maximize his leverage over the EU during the conflict to come.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">None of this helps us resolve the fundamental dilemma of how to respond to a nuclear-armed state that believes itself to be at war with us, even if we don’t believe we are at war with them. This week, Putin’s Foreign Minister Sergei Lavrov </span><a href="https://www.wsj.com/articles/russias-lavrov-says-nato-is-in-proxy-war-in-ukraine-11650965583" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">repeated</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Russia’s thinly veiled threats to use nuclear weapons should the West continue to arm Ukraine, and Russia find itself with its back against the wall. Like its cyberwarfare and information operations, the use of nuclear weapons is an </span><a href="https://thebulletin.org/2022/03/russian-military-doctrine-calls-a-limited-nuclear-strike-de-escalation-heres-why/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">integrated</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> part of Russia’s warfighting doctrine. But unlike cyberwarfare and the like, no one questions whether the use of nuclear weapons would constitute an act of war. And, of course, the threat to use nuclear weapons is itself a gray zone tactic, designed to undermine the ability of Russia’s adversaries to sustain a cohesive response to its war with Ukraine.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The choice Putin is offering the world is stark. Either cede to him the right he has demanded to impose Russia’s will on its neighbors, or he will take the world into the abyss. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But if there is a ray of hope, it is in the wake-up call Vladimir Putin has given the world. Just as his years of war against the West appeared to have borne fruit, and the liberal democratic order appeared to be </span><a href="https://www.theatlantic.com/magazine/archive/2021/12/the-autocrats-are-winning/620526/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">losing</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> ground across the globe – and just three months after he and China’s Xi Jinping declared </span><a href="https://www.wsj.com/articles/russias-vladimir-putin-meets-with-chinese-leader-xi-jinping-in-beijing-11643966743" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">victory</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> for their authoritarian new world order – Putin’s invasion of Ukraine has reminded us how much is at stake.</span></p></span><p><em style="color: #1a1a1a; font-family: Calibri; font-size: 16px;">Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em></p><p style="background-color: white; color: #333333; font-family: Georgia, serif; font-size: 13px;"><em style="color: #1a1a1a; font-family: Calibri; font-size: 16px;">Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em> </p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-12776909225408153402022-04-18T10:21:00.002-04:002022-04-18T10:21:55.740-04:00Inside Xi's thinking.<p><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">When Russia’s invasion of Ukraine stalled early on, there was a moment of </span><a href="https://www.americanpurpose.com/blog/fukuyama/preparing-for-defeat/" style="font-family: Arial; font-size: 11pt; text-decoration-line: none; white-space: pre-wrap;"><span style="color: #1155cc; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline;">optimism</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that things might come to a quick end. Pundits imagined that the Russian people, disgusted by what was being done in their name and angered by the sight of their children returning home in body bags, would take to the streets and overthrow the despot and his oligarch minions who have preyed upon them for decades. Or perhaps, Lindsey Graham suggested, senior Russian military officers, forced into a war of folly by an egomaniacal leader, would step in. Or, surely, as sanctions against Russia continued to grow, Chinese Xi Jinping would rise to the occasion and force his Russian ally to step back, before the damage to the global economic order – and by extension China itself – became irreparable.</span></p><span id="docs-internal-guid-4a0414ed-7fff-2d83-8480-9c1ecd90ce07"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It was all an illusion, as it turns out. The Russian people – except perhaps for the younger, urban intelligentsia – appear to have rallied behind their President. And no one should be surprised; Russians have been weaned on oppression at the hands of tsars and commissars alike for literally centuries. Suffering is in their DNA; as is fear and resentment of the West that now animates Putin’s rising popularity. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The notion that Russia’s military leaders might grasp the nettle and take matters into their own hands was similarly delusional. Even if there were a tight-knit cabal of military leaders who decided the moment had come to take Putin down, he is as well protected as any leader in the world by his Presidential Security Service of long-time loyalists. A master of the use of poison to dispatch his adversaries, Putin understands that physical distance is an essential defense against pandemic and putsch alike. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And then there is China. Three weeks before Russia invaded Ukraine, President Xi Jinping hosted Vladimir Putin in Beijing, where together they </span><a href="https://www.cnbc.com/2022/02/06/op-ed-xi-and-putin-tout-a-redistribution-of-power-in-the-world-and-they-arent-shy-about-their-ambitions.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">declared</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that the American Century had run its course. No longer, they asserted, would Russia or China live under the thumb of American dictates, or be bound by the web of international laws and treaties that limited their right to assert dominance over their regions of the world. For Russia, this meant the right to reassert its control over its “near abroad,” those territories that have defined its periphery dating back to the pre-World War I Russian Empire and into the Soviet era. For China, the clear references were to Hong Kong, Taiwan and the South China Sea. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Xi and Putin intended for their deepening alliance and declaration of a New World Order to provide a new axis around which authoritarian regimes across the globe, and populist political parties pushing back against the liberal democratic world order, could rally. There is no small irony that in their </span><a href="http://en.kremlin.ru/supplement/5770" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">declaration</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of victory of authoritarianism over liberal democracy , Xi and Putin felt that they had to give lip service to democracy as “a universal human value” over and over again. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The leaders of two nations that have each been led for at least a thousand years by tsars and emperors and commissars – and in Russia’s case today, an emerging totalitarian dictator – who have never chosen to offer their citizenry a voice in who would lead them, felt that they had to assert their democratic </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">bona fides.</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“The two sides note,”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> their Joint Statement </span><a href="http://en.kremlin.ru/supplement/5770" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">claimed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“that Russia and China as world powers with rich cultural and historical heritage have long-standing traditions of democracy, which rely on thousand-years of experience of development, broad popular support and consideration of the needs and interests of citizens.” </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But those rhetorical flourishes were quickly rendered moot, as the brutal aggression of Putin’s forces exposed in real time the dark underbelly of authoritarian power: the interests of citizens be damned, there are no rules and few guardrails that can contain an autocrat armed with nuclear weapons. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">For western and Chinese analysts alike, Xi Jinping loomed as the only viable restraint on Vladimir Putin’s ambitions. Two weeks into the war, a number of Chinese analysts </span><a href="https://uscnpm.org/2022/03/12/hu-wei-russia-ukraine-war-china-choice/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">appealed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to Xi to walk away from Putin in the name of China’s long-term economic interests. Like many in the western media, those commentators saw a quick end to the war, and no outcome for Putin in which Russia could survive as a great power. Accordingly, in their view, Xi had just a few weeks to make his choice, and should he fail to walk away from Putin and declare China’s commitment to the world order, the consequences for China would be dire. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlzVRXPEdZUt8OuAbH3LyKoWV58VLnPTl1PurVPDNX0Cll--rLnz3opxxh4feTlCTBqFZAADEE1s_aqkeG4dq6l8RCz3rogxYS5ffL5hWaM3wSm7v-yK24_Tx0d4VQWAxPkZhCU0oTqvjJ4MiwUMA7fl1Bs-8Wco4AWBZc1d39ltslRvpOVw/s480/Tic%20Tac%20Toe%20Xi.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="480" data-original-width="480" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlzVRXPEdZUt8OuAbH3LyKoWV58VLnPTl1PurVPDNX0Cll--rLnz3opxxh4feTlCTBqFZAADEE1s_aqkeG4dq6l8RCz3rogxYS5ffL5hWaM3wSm7v-yK24_Tx0d4VQWAxPkZhCU0oTqvjJ4MiwUMA7fl1Bs-8Wco4AWBZc1d39ltslRvpOVw/w400-h400/Tic%20Tac%20Toe%20Xi.jpeg" width="400" /></a></div><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">But those few weeks have now passed, and it has become clear that Xi is not going to walk back support for his partnership with Putin, but rather will let the war play out. But those few weeks have now passed, and it has become clear that Xi is not going to walk back support for his partnership with Putin. You would have thought we would have learned our lesson in North Korea – that Xi somehow was going to step in and solve a problem that vexed the United States – but as he has with Kim Jong Un, it appears Xi is going to let the war play out. Perhaps the consequences for the global economy will be significant, but it has become clear that Xi is watching events unfold with a different strategic calculus. One has to believe that when Xi chose to deepen his partnership with Putin – a man who had already been at war with Ukraine for the better part of a decade and had over 100,000 troops massed at the border – he had already contemplated both the benefits and the risks of how events might unfold. </span><p></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It is easy to imagine that Xi believed that if Russia succeeded in swiftly toppling the regime in Ukraine, while NATO cowered in their barracks, it would demonstrate the Achilles heel of the vaunted U.S. global network of military alliances: only countries with explicit security guarantees could rely on U.S. protection. With Putin having exposed this vulnerability, China would have expanded latitude to assert its will over Taiwan and the South China Sea. But equally important as seeing the upside should Putin succeed, Xi probably had also thought through the consequences should Putin fail in his war, and may have seen opportunities in that outcome for China as well: in the worst case, should Russia face crippling sanctions and isolation from global trade networks and financial systems, Russia would quickly become dependent on China as its main trading partner. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Russia is a leading global supplier of myriad strategic natural resources – far beyond just oil and gas – and few things could offer greater advantages to the Chinese manufacturing colossus than having monopsony control over those resources. The opposite of a </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">monopoly</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, where a single seller can dictate the price of a product, a </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">monopsony</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> is a situation in which a single purchaser can assert pricing power over the sellers of a product. For China, the implications of having monopsony power over Russia with respect to critical natural resources is that China would have the leverage both to dictate the prices it would be willing pay for Russian commodities – including demanding a steep discount below world market prices. Importantly, China would also have greater latitude to require that payment be in renminbi (Chinese currency) rather than dollars. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Clearly, the world would push back against China playing both sides in the West’s economic war with Russia. The balancing act for Xi in such a scenario will be to sustain China’s access to Russia’s natural resources – effectively circumventing Western sanctions – while not facing sanctions of its own that might limit its ability to sell manufactured goods into the U.S. and European markets. This week, U.S. Treasury Secretary Janet Yellen warned China of dire consequences, mirroring the words of Chinese analysts during the early days of the war, yet Xi may well conclude that the West would lack the stomach to try to isolate China as it has Russia, particularly after the war comes to an end and the world is looking to move on. After all, energy sales aside, Russia is a very small economy in the scheme of things – which is why the Western alliance and so many global companies have been willing to act in concert – while China is a dominant global economic power, a critical part of global supply chains (as we have all learned) and a key driver of global corporate profitability. More importantly, playing a high stakes game of chicken with the West would likely serve Xi’s political interests well at home, a consideration that would give him room to maneuver this time around. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As Putin’s war grinds through its second month, it is increasingly evident that the worst may well be yet to come. None of the easy outs that pundits imagined early on seem likely to emerge, and Xi Jinping, in particular, appears to have no interest in being the West’s savior. At this point it is not even clear which outcome Xi actually prefers: that Putin win his war or lose it. One offers the prospect that, with Putin having tested the waters and found them tolerable, Xi will be able to act on his long-standing ambition to rejoin Taiwan with the mainland, while the other offers the possibility that Xi might effectively own Russia’s rich trove of natural resources, enabling China to take one more step toward its goal of surpassing the United States as the world’s dominant economy. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And perhaps preference has nothing to do with it, as Xi cannot control what will happen in Ukraine. For Xi, simply seeing the opportunities that either outcome might offer may be all that matters, as both outcomes would bring him one step closer to his ultimate goal: to take his place alongside Mao Zedong as the paramount rulers in China’s long history.</span></p><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div></span><p style="color: #1a1a1a; font-family: Calibri; font-size: 16px; line-height: 26px; margin: 0px 0px 1em; text-size-adjust: auto;"><em>Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em></p><div style="color: #1a1a1a; font-family: Calibri; font-size: 16px; line-height: 26px; margin: 0px 0px 1em; text-size-adjust: auto;"><em>Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-41797038328696963502022-02-27T19:39:00.001-05:002022-02-27T19:39:35.976-05:00Democracy may turn out to be the winner in Putin's war.<div style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Just a few weeks ago, it seemed inconceivable that Russia would invade Ukraine. This is the 21st century after all, and invading another sovereign country seems like such an antiquated approach to conflict resolution. And after all, what was the conflict that needed resolution? Ukraine presents no threat to Russia. At least no military threat. It isn’t like Chechnya, which harbored terrorists who slipped into Russia to plant bombs in its cities, nor did it pose some other kind of destabilizing threat to Russia that might warrant some kind of disproportionate military response. Ukraine gave up its Soviet-era nuclear warheads long ago, and Ukraine’s senior military brass have been straightforward in their </span><a href="https://www.nytimes.com/2021/12/09/world/europe/ukraine-military-russia-invasion.html?action=click&module=RelatedLinks&pgtype=Article" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">assessment</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that if Putin chose to attack Ukraine, there was little Ukraine could do about it. </span></div><span id="docs-internal-guid-75fe07f0-7fff-48d5-57c9-63a24d723497"><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Yet that is the path Putin chose, and no one should be surprised by the scope of his ambition. For the better part of two decades, Putin has insisted on three things. First, that Ukraine is </span><a href="http://en.kremlin.ru/events/president/news/66181" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">historically</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> part of Russia. Second, that the establishment of Ukraine as an independent country is part of a long-term strategy by the West to undermine the Russian state. And third, that Russia has the right to assert control over its “near-abroad.”</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiRgHyA4OCG1Ihd8FfemyW9Q9-iguqmc6RBwX9fQVU7ZtIlLRWIpATg1FaR4IyF-DVMvH_N2B1kXVC756BSuE4Jcak-ewM8o7lvlnd3aK9YwRZfavdihaUrP6cEWpYB5JyAN8Cu1JX3EnbS-OKg4fnvxonSbusjRMTqOwLwWddYXYUcjiWhvQ=s1800" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1800" data-original-width="1800" height="320" src="https://blogger.googleusercontent.com/img/a/AVvXsEiRgHyA4OCG1Ihd8FfemyW9Q9-iguqmc6RBwX9fQVU7ZtIlLRWIpATg1FaR4IyF-DVMvH_N2B1kXVC756BSuE4Jcak-ewM8o7lvlnd3aK9YwRZfavdihaUrP6cEWpYB5JyAN8Cu1JX3EnbS-OKg4fnvxonSbusjRMTqOwLwWddYXYUcjiWhvQ=s320" width="320" /></a></div><span style="font-family: Arial; font-size: 14.6667px; white-space: pre-wrap;">The persistent</span> </span><a href="https://www.theatlantic.com/ideas/archive/2022/02/putin-chooses-forever-war/622875/?utm_source=newsletter&utm_medium=email&utm_campaign=atlantic-daily-newsletter&utm_content=20220222&utm_term=The%20Atlantic%20Daily" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">theme</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the media – that Putin is a madman making up a self-serving narrative out of whole cloth – </span><a href="https://www.nytimes.com/2022/02/21/opinion/putin-ukraine-nato.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">ignores</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the long history that brought the world to this point. Part of the inclination to portray Putin as unhinged is because he repeatedly frames Russia as the victim of Ukrainian aggression, while the world has watched as Russia </span><a href="https://www.nytimes.com/2022/01/16/magazine/ukraine-war.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">invaded</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Ukraine in 2014 seizing its territory, and over the past months encircled its less-powerful neighbor with battalions of tanks, girded for war. The core Russian demand over the years – that Ukraine forever forsake its ambitions to join NATO – stands in stark relief against persistent Russian actions that explained exactly why Ukrainians have felt the need to be part of an alliance that might come to its aid. </span><div><span style="font-family: Arial;"><span style="font-size: 14.6667px; white-space: pre-wrap;"><br /></span></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It is difficult for many of us to take seriously historical narratives that differ from those we grew up with. The renderings of history that we learn early on in school ground our beliefs about right and wrong, about who is a hero and who is a scoundrel. We come to believe these truths to be self-evident, and resist the notion that others might view the world differently. This is vividly illustrated by the struggle many white people continue to have with the notion that Black Americans might have different narratives of our nation’s history than the ones that populate conventional textbooks. In a similar vein, we struggle to understand how Russians might view the West as the aggressor – which we have come to view as Russian paranoia – since Russia has so often been the aggressor in conflicts over the years. Understanding Putin’s perspective does not mean that he is right – or that his actions are excusable – but it can help us to better calibrate our own responses.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If one considers the Russian perspective – just for a moment – paranoia on their part may be warranted. Over the past 600 years, Russia has been invaded time and again by its neighbors. Turkey, Poland, Japan, Sweden and Germany have each invaded Russia at least twice. France only invaded once, but unlike the others, Napoleon Bonapart made it all the way to the gates of Moscow in one of the most chronicled military campaigns in history. If Ukraine itself never took a shot at Russia, it is probably because for all but a few decades of Russia’s thousand-plus years of existence, Ukraine was part of Russia. Indeed, it was the heartland of Russia, as the state we now know as Russia was originally </span><a href="https://www.britannica.com/topic/Kyivan-Rus" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">founded</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> during the 10th century with Kyiv as its capital. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It is a sordid, conflict-ridden history, and one that drove Stalin’s determination to surround the Soviet Union with client states. It is this history that informs Putin’s oft-quoted comment that the collapse of the Soviet Union was the greatest political tragedy of the 20th century. Although the Soviet Union was our ideological foe, Putin’s pining for the Soviet era has been about borders rather than ideology. The Soviet Union built its phalanx of client states in Eastern Europe and along its southern flank – regions that Putin now refers to as Russia’s “near-abroad” – to provide a buffer zone, to protect the homeland from the next invading foreign armies that were sure to come. The siege of Leningrad and the Battle of Stalingrad, where an estimated two million civilians and soldiers died just 80 years ago, remain seared in the Russian psyche. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Against that backdrop, the US policy of </span><a href="https://history.state.gov/milestones/1945-1952/kennan" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">containment</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> over the better part of the past century played into Russian historical fear of </span><a href="https://nationalinterest.org/blog/skeptics/nato-encirclement-may-be-creating-new-crisis-russia-27617" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">encirclement</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, further animating Russian paranoia. While keeping the Soviet Union in check was the </span><a href="https://www.theatlantic.com/politics/archive/2001/08/putin-is-right-russia-belongs-in-nato/377557/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">premise</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> behind the creation of NATO, Russian nationalists, who watched NATO continue to expand after the USSR was relegated to the ash heap of history, have long </span><a href="https://www.nytimes.com/2022/02/21/opinion/putin-ukraine-nato.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">viewed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> NATO as just one more instrument of western power ultimately designed for the </span><a href="https://www.nytimes.com/2022/02/04/world/europe/russia-public-opinion-ukraine-us-nato.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">destruction</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the Russian state.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As if to confirm those fears, in 1997, while western powers were debating whether to admit former Warsaw Pact countries into NATO, US foreign policy senior statesman Zbigniew Brzezinski published an article arguing that the ultimate US policy objective must be to </span><a href="https://freerepublic.com/focus/news/1254548/posts" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">break</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Russia up into three smaller states. A year later, after the US Senate ratified NATO expansion, George Kennan – the architect of the US policy of containment to combat the USSR decades earlier – </span><a href="https://www.nytimes.com/2022/02/21/opinion/putin-ukraine-nato.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">predicted</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that the push to expand NATO toward the Russian border would ultimately provoke the Russian response we saw this week. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Yet each step along the way – despite one warning after another – we have preferred to label Putin a madman rather than seriously consider the possibility that Russian </span><a href="https://www.nytimes.com/2022/02/04/world/europe/russia-public-opinion-ukraine-us-nato.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">fears</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the West might be as historically grounded as the West’s fears of Russia. With a new American missile system recently </span><a href="https://www.nytimes.com/2022/02/16/world/europe/poland-missile-base-russia-ukraine.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">installed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the Polish woods just 100 miles from the Russian border and 800 miles from Moscow and set to be operational later this year, it is remarkable that American pundits continue to be befuddled by Putin’s motives, seemingly forgetting how the United States and Russia marched to the brink of nuclear war sixty years ago at the height of the Cold War, when Russia planted its missiles 90 miles off the coast of Florida. Putin </span><a href="http://en.kremlin.ru/events/president/news/67438" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">emphasized</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the point this past December, to any who might have been listening: </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“Are we deploying missiles near the US border? No, we are not. It is the United States that has come to our home with its missiles and is already standing at our doorstep.” </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The conventional wisdom is that Putin’s goal is to rewrite the post-World War II borders and rebuild the territorial footprint of the Soviet Union, yet over the years he has consistently framed his ambitions as dating farther back in time. Rather than the post-World War II world, he has envisioned a return to the Great Powers world that existed prior to World War I, when regional powers had the latitude to control political affairs within their own domain, unfettered by international law or the dictates of a global superpower. On February 4th, with little fanfare in the American media, Vladimir Putin and Xi Jingping – who has long shared Putin’s resentment at living under the heavy hand of US dictates – </span><a href="https://www.newyorker.com/news/daily-comment/russia-and-china-unveil-a-pact-against-america-and-the-west" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">announced</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the return to just such an era, as together they affirmed Russia’s freedom of action over Ukraine, and China’s similar rights with respect to Taiwan. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But things turned out not to be as simple as they seemed just a month ago. As Thomas Friedman </span><a href="https://www.nytimes.com/2022/02/25/opinion/putin-russia-ukraine.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">wrote</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the other day, this week we saw</span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “a raw, 18th-century-style land grab by a superpower –– but in a 21st-century globalized world. This is the first war that will be covered on TikTok by super-empowered individuals armed only with smartphones, so acts of brutality will be documented and broadcast worldwide without any editors or filters.” </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And so it has been. We watched this week as elementary school kids climbed out of a basement in eastern Ukraine, after their school was shelled by Russian troops. We heard about the Russian soldiers who laid down their arms, saying they thought they were there to gather intelligence, but had no interest in shooting people. We watched a national leader become a global hero, as the Ukrainian President stood his ground, urged his fellow citizens to stand up against Russian aggression, and refused US offers to fly him out of the country. And we watched as an overwhelmingly powerful military found out that things were not going to be as easy as they had thought. All in real time.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This week, just a day after China endorsed Russia’s invasion of Ukraine, China declined to vote with Russia in the UN Security Council against a resolution deploring Putin’s action. Xi Jingping, who just four weeks ago announced a new world order, seemed to have had his own calculus regarding any military move against Taiwan abruptly upended. Putin did Xi the favor of testing the waters this week, and it turns out the water is very, very cold. Just a few days ago it appeared that the rising group of authoritarians across the globe might help Putin not just win the day, but win the future. Now, he is facing </span><a href="https://www.vanityfair.com/news/2022/02/putin-stands-alone-as-world-moves-to-isolate-him-ukraine" style="text-decoration-line: none;"><span style="color: black; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">global</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> condemnation, and Xi Jingping has abruptly turned his back. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Just days ago Vladimir Putin was demanding Ukraine’s unilateral disarmament and surrender as the price of starting peace talks. Now, peace talks have begun with no preconditions. Perhaps what we thought just a few weeks ago might actually be true; that this is the 21st century, and there are things that you just can’t do anymore.</span></p><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><p style="color: #1a1a1a; font-family: Calibri; font-size: 16px; line-height: 26px; margin: 0px 0px 1em; text-size-adjust: auto; white-space: normal;"><em>Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em></p><div style="color: #1a1a1a; font-family: Calibri; font-size: 16px; line-height: 26px; margin: 0px 0px 1em; text-align: left; text-size-adjust: auto; white-space: normal;"><em>Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em></div></span></div></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-69889424166511915322022-01-28T17:42:00.002-05:002022-01-28T17:42:40.297-05:00Will it take Joe Manchin switching parties for Democrats to realize he is not their enemy?<span id="docs-internal-guid-1bef4f61-7fff-cbf8-d82d-6476f758057c"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">If Democrats have a strategy, it has not been easy to discern. It has been a year since the run-off elections in Georgia left the country with a 50-50 split in the Senate. As the 2020 election approached, the possibility that Democrats had a chance not just to flip the Senate from the then-53 seat GOP majority, but </span><a href="https://fivethirtyeight.com/features/final-2020-senate-forecast/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">win</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> their own 55-seat majority danced like sugar-plums in their heads. The plans for the Democrat control of Congress and the White House dazzled the faithful. Reshaping the Supreme Court to </span><a href="https://www.cnn.com/2019/03/11/politics/court-packing-fdr-democrats-buttigieg/index.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">redress</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the perfidy of the Merrick Garland nomination – four years before Amy Coney Barrett’s last minute elevation to the Court – led the agenda. And there was Medicare expansion, immigration reform, free college tuition, myriad climate change initiatives, and on and on.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It did not come to be, of course. Despite running against a president viewed by Gallup as the most </span><a href="https://www.washingtonpost.com/politics/2019/01/16/trump-is-most-polarizing-president-record-almost-nobodys-opinion-him-is-changing/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">polarizing</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on record, Democrats barely limped away with control in the House. And it took two run-off victories in Georgia to win a 50-50 split in the Senate. A 50-50 Senate, with the reliance on Kamala Harris as the tie-breaking vote is a world apart from a 55-45 majority, as polling guru Nate Silver </span><a href="https://fivethirtyeight.com/features/final-2020-senate-forecast/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">pointed out </span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">on the eve of the election. While fivethirtyeight.com </span><a href="https://fivethirtyeight.com/features/final-2020-senate-forecast/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">gave</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Democrats a 75% chance of flipping the Senate that night, Silver observed that something less than that would leave moderates – he pointed to Joe Manchin – in control of the agenda. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"></p><div style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em; text-align: right;"><img height="400" src="https://lh6.googleusercontent.com/mAikFD9hJpMSXEBRgSsu8v2hwVw7pFlh4_qQav6EsE9C09QUtyhuWJfrTc-ndBsH5JTXi5BEGFJaWRLRvpwlx4Ud84hhR383u_jVeGaJpjRPoNDs7fnuU_qKY3m1D6vazh-wDli3=w400-h400" style="margin-left: 0px; margin-top: 0px;" width="400" /></div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-size: 11pt;">Insanity, Albert Einstein is credited with having observed, is doing the same thing over and over again and expecting a different result. So it has been over the past year, and so it was again last week. Everyone, whatever their point of view on the matter, understood as the Senate debated voting rights legislation that it had no chance of passage; and yet the White House and Democrats in the Senate pushed ahead. Why exactly seems unclear. Perhaps party leaders felt a duty of loyalty to base voters to bring the matter to a vote. Perhaps some believed there might be a moral victory, or perhaps some future political advantage to be gained in forcing Republicans to vote no. Perhaps. But after a year of watching one legislative initiative after another fall by the wayside, the vote seemed less one of a party standing on principle than one more demonstration of strategic miscalculation.</span></p></span><p></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Democrats of all stripes are steaming with rage in the wake of the unwillingness of two of their colleagues to agree to change the Senate filibuster rules and allow voting rights legislation to become law. Yet as painful as it is to admit, the intransigence of Joe Manchin and Kyrsten Sinema on the filibuster and other Democrat plans is the symptom, not the cause, of the larger problem, which is, as Nate Silver observed, the limitations of what is possible in a 50-50 Senate. From the day the Georgia results were announced, one thing was clear: Joe Manchin was the </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">de facto</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> majority leader of the Senate. Chuck Schumer may have that label on the door to his office in the Hart Senate Office Building, but his is a title in name only. Unlike Mitch McConnell, who holds an iron fist over his now-minority caucus, Schumer can only pass legislation with the consent of Joe Manchin. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It is unclear how this basic fact of vote counting seems to have eluded so many Democrats for so long. Early on, progressives, in particular, seemed to cling to an illusion that the world was other than it is. During the run-up to the 2020 election, Alexandra Ocasio-Cortez made the accurate </span><a href="https://www.politico.com/news/2020/01/06/alexandria-ocasio-cortez-joe-biden-not-same-party-094642" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">observation</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that in most other countries, she and Joe Biden would be in different political parties. In many parliamentary democracies, a small energized political faction might indeed be able to win significant commitments and concessions as the price of joining a governing coalition. But ours is not a parliamentary system, and despite their considerable efforts to impose their will on the Democratic Party, progressive Democrats have proven time and time again over the last year that they do not have the leverage that Joe Manchin has. There is no reason to yell and scream about it; that is just the way it is. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The irony of progressive rage at Joe Biden’s failure to deliver on their agenda is that he was not given a mandate for progressive transformation by the electorate. If transformation of the nation was on the minds of voters in 2020, there were many candidates to choose from during the Democratic primaries. Indeed, Fox News exit polls from the 2020 November election </span><a href="https://www.foxnews.com/elections/2020/general-results/voter-analysis" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggest</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that the country is much more centrist than one might assume from the tenor of our unceasing partisan warfare, with 12% of voters describing themselves as very liberal and 16% as very conservative, while the remaining 72% lie somewhere in between. Among Democratic primary voters – who by a substantial </span><a href="https://fortune.com/2020/06/06/joe-biden-democratic-nomination-presidential-election-2020/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">majority</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> described themselves as moderate or conservative – and general election voters of all political leanings </span><a href="https://www.theatlantic.com/politics/archive/2020/11/why-biden-won-presidency/616980/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">exhausted</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by four years of Donald Trump, voting for Joe Biden was as much as anything a vote for a few years of peace and quiet. As one Democratic strategist </span><a href="https://www.theatlantic.com/politics/archive/2020/11/why-biden-won-presidency/616980/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">observed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> at the time, people were tired of having Hulk Hogan in the White House and were ready for a few years of Mister Rogers.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It was not to be. After seeing their hopes for a strong Senate majority dashed by a cautious electorate, Democrats might have taken the long view and worked to rebuild the trust of the electorate, even as the GOP was being drawn inexorably into the grip of conspiracy theorists and fringe agitators. But instead of seizing the opportunity to build a broad coalition of those praying to return the country to some kind of normalcy, Congressional Democrats have spent a year fighting for an agenda of “transformation” with a desperation that reeks of a belief that this 50-50 Senate is the best and only opportunity they are ever going to have. It did not have to be that way. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It was just a few years ago, after all, that Democrats held a 59-41 seat majority in the Senate, a majority that was made possible by an explicit strategy of seeking candidates that were suited to the profile of the electorate in each state and congressional district. Manchin is immune to pressure from Democratic activists – indeed bullying by the left only inures to his </span><a href="https://www.thedailybeast.com/joe-manchin-isnt-moved-by-democratic-attackshes-emboldened-by-them" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">benefit</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> back home – for the simple reason that he knows his constituents: he out-performed Joe Biden in West Virginia by nearly 20 points, beating his last Republican opponent 50% to 46%, while Donald Trump trounced Joe Biden 69% to 30%. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“The bottom line,”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Massachusetts Senator Edward Markey </span><a href="https://www.nytimes.com/2022/01/20/climate/build-back-better-climate-change.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">commented</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> last week after the defeat of the voting rights legislation</span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, “is that…the only thing that can pass is a package that has the votes.”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> While Markey’s conclusion would have been more useful had he made it a year ago, after the Georgia election, rather than last week, it suggests that after a year of banging their heads against the wall, Democrats may be ready to step back and consider what is possible in a 50-50 Senate. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Perhaps, but perhaps not. The </span><a href="https://www.theguardian.com/us-news/live/2022/jan/19/bernie-sanders-democrats-sinema-manchin-politics-live-latest" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">response</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> among many </span><a href="https://www.politico.com/news/2021/02/02/manchin-sinema-challengers-464821" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">progressives</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to a year of failed efforts has not been to look in the mirror and consider whether they might be out of step with an electorate that is more centrist than they might imagine. Instead, they have suggested that if there is learning to be done, the onus is not on them. Bernie Sanders set the tone, as he pronounced that this is a moment to double down on the progressive agenda, rather than pull back, showing more enthusiasm for talking about </span><a href="https://www.theguardian.com/us-news/2022/jan/19/bernie-sanders-joe-manchin-kyrsten-sinema" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">mounting</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> primary challenges against Joe Manchin and Kyrsten Sinema Sinema – neither of whom are up for election until 2024, when the stakes for Democrats loom to be far greater than those two Senate seats – than </span><a href="https://thehill.com/homenews/sunday-talk-shows/590959-sanders-says-biden-cant-count-on-him-to-support-almost-any" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">supporting</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> any pared back legislation that Joe Biden may offer. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The 2022 midterm elections are just nine months away, and Democrats are already confronting significant headwinds. Historical data </span><a href="https://fivethirtyeight.com/features/why-the-presidents-party-almost-always-has-a-bad-midterm/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggests</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that the party that holds the White House loses an </span><a href="https://en.wikipedia.org/wiki/United_States_midterm_election#:~:text=The%20party%20of%20the%20incumbent,four%20seats%20in%20the%20Senate." style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">average</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of 26 seats in the House and enough in the Senate to put Mitch McConnell back in charge. And this time, Democrats won’t have Donald Trump to kick around – or at least he will not be on the ballot. Against that backdrop, Democrats cannot afford continued infighting if they want to hold on to majorities in Congress; yet it appears to be unavoidable. Progressives and moderates have been at each other’s </span><a href="https://www.cnn.com/2020/11/06/politics/abigail-spanberger-house-democrats-2020-election/index.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">throats</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> since the results began to trickle in on election night 2020, as each side </span><a href="https://www.washingtonpost.com/politics/2021/12/20/manchin-hits-back-effort-badger-him-reinforcing-democrats-gamble/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">blamed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the other for the party’s disappointing performance. Perhaps if Joe Manchin accepted Mitch McConnell’s </span><a href="https://www.newsweek.com/mitch-mcconnell-if-joe-manchin-switched-parties-he-would-join-folks-similar-views-1662390" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">urging</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> for him to switch parties – putting all of their ambitions at risk, to say nothing of a Supreme Court seat – Democrats would wake up and realize how much is at stake.</span> </p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><br /></p><p><span>ORIGINALLY POSTED TO <a data-cke-saved-href="http://appalled.blogspot.com/" href="http://appalled.blogspot.com/" target="_blank">GRAFFITI</a> BY DAVID PAUL ON SUNDAY, JANUARY 27, 2022.<br /><br /><em>Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p><span style="font-family: inherit;"><em>Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em></span></p></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-15231178484915735592021-12-14T19:59:00.003-05:002021-12-15T20:13:25.080-05:00Are we still "America" if we let democracy fade away?<p><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Our 20 year war in Afghanistan had barely ended and the foreign policy press was rife with articles banging the drums about the wars to come in East Asia. The </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">casus belli</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> – the instigating factors for the war with China that apparently lies inevitably in our future – include our longstanding commitment to </span><a href="https://www.cato.org/commentary/washingtons-lonely-crusade-defend-taiwan" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">defend</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Taiwan, the critical role of the United States in protecting freedom of navigation in the South China Sea – through which a large percentage of global trade flows – and, ultimately, the balance of power in global economic and political leadership.</span></p><span id="docs-internal-guid-27eeb6f6-7fff-45a5-9029-4087906e70d9"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">With </span><a href="https://www.wsj.com/articles/inflation-surge-pushes-u-s-real-interest-rates-into-more-deeply-negative-territory-11639321204" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">inflation</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and </span><a href="https://www.bloomberg.com/news/articles/2021-11-18/oil-set-for-weekly-drop-as-decision-on-spr-hangs-over-market" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Covid-19</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> each surging, and Democrats </span><a href="https://abcnews.go.com/Politics/president-bidens-job-approval-sinking-inflation-crime-covid/story?id=81701113" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">scrambling</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as the 2022 midterm elections lie less than a year away, the most consequential act of Joe Biden’s presidency – ending the war in Afghanistan – has already faded from public view. While the wars in Iraq and Afghanistan </span><a href="https://news.gallup.com/poll/352793/americans-split-whether-afghanistan-war-mistake.aspx" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">enjoyed broad</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> public support when George W. Bush launched the global war on terror in the wake of 9/11 – Gallup polling at the time suggested that 75% and 90% of the public supported our invasions of Iraq and Afghanistan, respectively – public attitudes toward both wars turned </span><a href="https://www.washingtonpost.com/politics/2021/08/18/when-how-americans-started-souring-war-afghanistan/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">south</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> long ago. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It is remarkable how much has changed over the ensuing decades. Islamic terrorism, the pretext for both wars and the fulcrum of national politics from 9/11 to the 2008 financial collapse, is now barely more than a Lauren Boebert </span><a href="https://www.9news.com/article/news/local/next/boebert-ilhan-omar-terrorist-backpack-jihad-squad-colorado/73-b8bf1787-bd6f-4a22-825d-9cadee6454ce" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">laugh</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.cnn.com/2021/11/26/politics/lauren-boebert-ilhan-omar-anti-muslim-comments/index.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">line</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. A decade into the Bush wars, the global war on terror had already lapsed from being a serious issue of public engagement to just another political issue over which the political parties could bludgeon each other. By the time we reached our second decade of wars in west Asia, three-quarters of </span><a href="https://thehill.com/hilltv/what-americas-thinking/551040-poll-73-percent-support-us-withdrawal-from-afghanistan" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Americans</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, </span><a href="https://charleskochinstitute.org/news/new-poll-3-in-4-americans-want-troops-home-from-afghanistan-iraq-favor-less-defense-spending-less-military-engagement-abroad/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">across</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the political spectrum – an unfathomable degree of public consensus in this era of unceasing political combat – wanted out of Afghanistan and approved of Biden’s determination to pull out. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Donald Trump's stance as an anti-war candidate in 2016 marked a pivotal shift in the political landscape. His instinctive sense of the public </span><a href="https://www.nytimes.com/2016/04/04/opinion/campaign-stops/why-trumps-antiwar-message-resonates-with-white-america.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">zeitgeist</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> was on full display when he </span><a href="https://time.com/5912938/trump-afghanistan-iraq-troop-reduction/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">campaigned</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.atlanticcouncil.org/blogs/new-atlanticist/ending-the-endless-war-trope/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">against</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> George W. Bush’s “forever wars.” Indeed, it was the singular marker that set Trump apart from the Republican Party establishment, and that turned Bush-era neoconservatives into the base of anti-Trump Republicanism. Yet, despite four years as Commander-in-Chief, Trump proved </span><a href="https://www.axios.com/off-the-rails-trump-military-withdraw-afghanistan-5717012a-d55d-4819-a79f-805d5eb3c6e2.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">incapable</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of forcing a withdrawal from Afghanistan on his recalcitrant generals – a source of frustration that was evident in his last ditch effort to </span><a href="https://www.nytimes.com/2020/11/16/us/politics/trump-troop-withdrawal-afghanistan-somalia-iraq.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">force</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a troop withdrawal during his waning days in office.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The simple truth, as </span><a href="https://www.cato.org/commentary/750-bases-80-countries-too-many-any-nation-time-us-bring-its-troops-home" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">noted</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by the conservative CATO Institute, is that </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“President Joe Biden did what his three predecessors could or would not: halt a seemingly endless war.”</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> But he did more than that. In his speech the day after our final exit from Kabul, Biden </span><a href="https://www.thebulwark.com/the-birth-of-the-biden-doctrine/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">turned back the clock</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on a quarter-century of U.S. foreign policy, asserting that the end of the wars in Iraq and Afghanistan marked the end of an era of American militarism.</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “This decision about Afghanistan is not just about Afghanistan,”</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> he </span><a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/08/31/remarks-by-president-biden-on-the-end-of-the-war-in-afghanistan/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">said</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">.</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “It’s about ending an era of major military operations to remake other countries. We saw a mission of counterterrorism in Afghanistan – getting the terrorists to stop the attacks – morph into a counterinsurgency, nation-building – trying to create a democratic, cohesive and united Afghanistan.”</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But Biden did not leave it there. While the </span><a href="https://www.thebulwark.com/the-birth-of-the-biden-doctrine/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Biden Doctrine</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> argued for the disengagement of ground troops, the President went on to suggest that “</span><a href="https://foreignpolicy.com/2021/09/30/over-the-horizon-counterterrorism-afghanistan-united-states-flying-blind/#:~:text=31%2C%20Biden%20said%20U.S.%20forces,troops%20in%20Afghanistan%2C%20though%20they" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">over-the-horizon</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">” operations will become the </span><a href="https://www.thedrive.com/the-war-zone/9848/how-a-secretive-special-operations-task-force-is-taking-the-fight-to-isis" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">backbone</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of our global anti-terrorism strategy. Over-the-horizon operations – by definition those undertaken from outside national borders – </span><a href="https://www.heritage.org/defense/report/us-over-the-horizon-capability-afghanistan" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">rely</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on a variety of satellite, drone and other surveillance systems to identify and attack terrorists or other targets. While the strategy comports with the clear antipathy of the American electorate to have military forces engaged in conflicts across the globe, it arguably represents an escalation of U.S. engagement, from a moral standpoint if not a military one. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEi18EdDqiThdi14yeNaw-U8IHZfSX3CgPLtp7z4e-gMBsYlONy6UWH0NrwTlnW2uscewZkhYDOO1aEMeXQA1M3gOUHImYqgmWyCL-NEJ9i48CLYbqls0aCthVHW5mAZUNKAsgePMSKjR9sDAv88cuRXMYxWfXwRxyrcfhvuLlEjqZDS9WNnlg=s960" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="960" data-original-width="960" height="400" src="https://blogger.googleusercontent.com/img/a/AVvXsEi18EdDqiThdi14yeNaw-U8IHZfSX3CgPLtp7z4e-gMBsYlONy6UWH0NrwTlnW2uscewZkhYDOO1aEMeXQA1M3gOUHImYqgmWyCL-NEJ9i48CLYbqls0aCthVHW5mAZUNKAsgePMSKjR9sDAv88cuRXMYxWfXwRxyrcfhvuLlEjqZDS9WNnlg=w400-h400" width="400" /></a></div></span><p style="text-align: left;"><span><span style="font-size: 16px; white-space: pre-wrap;">War is not what it used to be, Yale historian Samuel Moyn argues in his new</span> </span><a href="https://www.amazon.com/Humane-United-States-Abandoned-Reinvented/dp/0374173702" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">book</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Humane: How the United States Abandoned Peace and Reinvented War, </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">published earlier this year. </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“The American way of war,”</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> he observes,”</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> is more and more defined by a near complete immunity from harm for one side and unprecedented care when it comes to killing people on the other.”</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> But in its migration away from notions of “total war” – that once saw death and destruction as tools to achieving a quick and decisive end to hostilities – the advent of “humane war” in Moyn’s view has resulted in </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“America’s military operations [becoming] more expansive in scope and perpetual in time by virtue of these very facts.”</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><div><span style="white-space: pre-wrap;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The emergence of special forces as the tip of the American spear reflects the evolution that Moyn describes; yet it also reflects the quandary that we may well face going forward. Moyn opens his book with a vignette, contrasting a wedding on a beautiful day in New Canaan, Connecticut with a similar wedding day in Kandahar Province, Afghanistan. He describes the </span><a href="https://twitter.com/azmatzahra/status/1429831426371883009?s=12" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">impact</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of drone warfare – central to the over-the-horizon operations Joe Biden touted – on the psyche of a population knowing that at any moment surveillance drones may be flying overhead, and the prospect that a missile strike could ensue at any moment if a drone operator in a far-off bunker mistakes a peaceful gathering for a terrorist threat. It was a scene captured in the opening </span><a href="https://www.imdb.com/title/tt3284012/plotsummary" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">scene</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of Season 4 of the fictionalized Showtime series </span><a href="https://www.imdb.com/title/tt1796960/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Homeland</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, and </span><a href="https://www.washingtonpost.com/national-security/2021/11/03/kabul-drone-strike-inspector-general-report/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">mirrored</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the closing moments of our departure from Kabul, when a drone strike killed ten civilians, after men loading water canisters into a car were </span><a href="https://www.nytimes.com/2021/09/10/world/asia/us-air-strike-drone-kabul-afghanistan-isis.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">mistakenly</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> believed to be planning an ISIS bomb attack. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Reporting in the New York Times </span><a href="https://www.nytimes.com/2021/12/12/us/civilian-deaths-war-isis.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggests</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that the inadvertent targeting of civilians has become an inevitable consequence of drone operations. One recent article </span><a href="https://www.nytimes.com/2021/11/13/us/us-airstrikes-civilian-deaths.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">described</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a strike in 2019 in Syria that killed 70 civilians who were mistakenly targeted by a surveillance drone operator. That attack – executed by a secretive special forces unit – took even the U.S. command forces on the ground by surprise, and led to an Air Force intelligence officer and Air Force lawyer to report their concern that the mistaken targeting of civilians by the special forces unit may have constituted a war crime. Suffice it to say this is a uniquely American problem; no other nation’s military has been granted – or has presumed itself granted – the latitude to fly surveillance drones over other nations’ sovereign territory, and select and attack targets as drone operators in a far-off bunker might see fit.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Since the waning days of World War I, when President Woodrow Wilson </span><a href="https://rebootcamp.militarytimes.com/military-honor/world-war-i/2017/04/05/100-years-ago-war-declaration-started-the-american-century/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">committed</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> U.S. troops to the European war in order to “make the world safe for democracy,” democracy has been our </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">raison d'être</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the world. Our post-World War II role as the global policeman, for all its flaws, was legitimized by our role in building the architecture of the democratic institutions that engendered and enabled the rise of democratic governance across the globe. It is that role as the global defender of democratic values that lends legitimacy to the global footprint of our military (we have military bases in </span><a href="https://www.cato.org/commentary/750-bases-80-countries-too-many-any-nation-time-us-bring-its-troops-home" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">80</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> countries and territories, and our special forces are reportedly active in nearly </span><a href="https://www.businessinsider.com/us-special-operations-forces-are-special-but-not-elite-2020-4#:~:text=America's%20special%20operations%20forces%20(SOF,Osama%20bin%20Laden%20in%202011." style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">twice</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as many) and the </span><a href="https://www.washingtonpost.com/national-security/2021/12/13/kabul-drone-strike-no-punishment/?utm_source=alert&utm_medium=email&utm_campaign=wp_news_alert_revere&location=alert&wpmk=1&wpisrc=al_news__alert-world--alert-national&pwapi_token=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJjb29raWVuYW1lIjoid3BfY3J0aWQiLCJpc3MiOiJDYXJ0YSIsImNvb2tpZXZhbHVlIjoiNWJlODQ4ZTU5YmJjMGY0ZDZiZDFmYTE5IiwidGFnIjoid3BfbmV3c19hbGVydF9yZXZlcmUiLCJ1cmwiOiJodHRwczovL3d3dy53YXNoaW5ndG9ucG9zdC5jb20vbmF0aW9uYWwtc2VjdXJpdHkvMjAyMS8xMi8xMy9rYWJ1bC1kcm9uZS1zdHJpa2Utbm8tcHVuaXNobWVudC8_dXRtX3NvdXJjZT1hbGVydCZ1dG1fbWVkaXVtPWVtYWlsJnV0bV9jYW1wYWlnbj13cF9uZXdzX2FsZXJ0X3JldmVyZSZsb2NhdGlvbj1hbGVydCZ3cG1rPTEmd3Bpc3JjPWFsX25ld3NfX2FsZXJ0LXdvcmxkLS1hbGVydC1uYXRpb25hbCJ9.smsnER4LRcsXTN6AqP6rDXAvGfOjFvfl47FBx1WXJf4" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">freedom</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of action that it enjoys.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The years </span><a href="https://www.yabiladi.com/img/content/EIU-Democracy-Index-2015.pdf" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">since</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the 2008 global financial collapse, however, have seen a backsliding away from liberal democracy, as anti-democratic populists have emerged in nations across the world, railing against globalist elites and the post-World War II order the United States did so much to build. But it is the full flowering of anti-democratic populism in the United States that looms to transform global politics. In 2016, </span><a href="https://www.economist.com/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">The Economist</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.eiu.com/n/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Intelligence Unit</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.eiu.com/public/topical_report.aspx?campaignid=DemocracyIndex2016" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">downgraded</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the United States from “Full Democracy” to “Flawed Democracy” in its </span><a href="https://en.wikipedia.org/wiki/Democracy_Index" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Democracy Index</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. The downgrade reflected the “erosion of trust in government and elected officials” marked by Donald Trump’s campaign rhetoric and ensuing election, which was then exacerbated in 2020 by his unwillingness to accept the results of the election and the steadily growing </span><a href="https://www.washingtonpost.com/opinions/2021/05/17/republicans-are-sprinting-away-democracy/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">transformation</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the Republican Party into an avowedly </span><a href="https://www.theguardian.com/commentisfree/2021/jun/08/american-democracy-fighting-for-its-life-republicans" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">illiberal</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> political movement. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">While our increased reliance on special forces and drone operations may assuage a skeptical public, our deteriorating commitment to democracy at home has ominous implications for the freedom we presume our forces should enjoy to pursue our enemies abroad. Our expansive military operations across the globe are ultimately justified by our long-standing moral authority as the “leader of the free world.” Should we lose that moral authority, we risk becoming just another bully on the world stage. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As Russian troops are massed on the border with Ukraine, and China increases its </span><a href="https://www.bbc.com/news/world-asia-58794094" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">threatening</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> stance toward Taiwan, Vladimir Putin and Xi Jingping are well aware of two salient factors that may fundamentally alter the balance of power in the world and give them the latitude they have long sought to assert their own interests on the ground. First, the American public has grown weary and distrusting of wars that our leaders thrust upon us. But perhaps of equal significance is the emerging possibility that the moral justification of our leadership in the world may be waning as a direct product of the </span><a href="https://www.nytimes.com/2021/12/15/opinion/republicans-democracy-minority-rule.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">deterioration</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of our commitment to democracy at home. Martin Wolf of the </span><a href="https://www.ft.com/martin-wolf" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Financial Times</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> suggested as much in his piece two months ago </span><a href="https://www.ft.com/content/a2e499d0-10f0-4fa2-8243-e23eedc4f9f4" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">entitled</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “The strange death of American democracy:” </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“Today, the transformation of the democratic republic into an autocracy has advanced. By 2024, it might be irreversible. If this does indeed happen, it will change almost everything in the world… The U.S. is the sole democratic superpower. Its ongoing political transformation has deep implications for liberal democracies everywhere…In 2016, one could ignore these dangers. Today, one must be blind to do so.” </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Or to put it succinctly: what happens when we wake up to find that we are no longer the moral leader of the world we have long imagined ourselves to be?</span></p><div><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div><div><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><p style="font-size: medium; white-space: normal;"><span>ORIGINALLY POSTED TO <a data-cke-saved-href="http://appalled.blogspot.com/" href="http://appalled.blogspot.com/" target="_blank">GRAFFITI</a> BY DAVID PAUL ON SUNDAY, DECEMBER 14, 2021.<br /><br /><em>Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em><br /></span></p><p dir="ltr" style="font-size: medium; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; white-space: normal;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p style="font-size: medium; white-space: normal;"><span style="font-family: inherit;"><em>Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em></span></p></span></div></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-19108417713454147422021-10-31T16:34:00.008-04:002021-11-01T09:42:50.589-04:00For Dems, a bitter wake-up call is better than no wake-up call at all.<div style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">For many Democrats, the morning after Election Day last November was met less with excitement over the prospect of a new progressive era than the relief of knowing that the Trump presidency was going to come to an end. Joe Biden offered the prospect of building a political home for Democrats and independents, and a fair share of Republicans who could not stomach being part of the cult of Donald Trump and its stolen-election shibboleth. A few years of a quiet, calm presence in the White House, and a Congress that recognized the limitations that were inherent in a 50-50 Senate seemed within our grasp.</span></div><span id="docs-internal-guid-e0c5196d-7fff-cbb5-a018-177367c2eccd"><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It didn’t seem like too much to ask for, but apparently it was. Before he left town last week for meetings in Europe with foreign leaders, Joe Biden announced the “framework” for a trimmed down $1.75 trillion spending plan. One might have hoped that he had the votes this time around. Of course, if he had the votes, he would not have announced a framework; he would have announced a deal. Instead, progressives sent him </span><a href="https://www.wfsb.com/news/pelosi-warns-democrats-not-to-embarrass-biden-as-leaders-push-for-infrastructure-vote/article_2f5a9be0-7641-5aab-9af5-177387864dfd.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">packing</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, declining to move forward with either of the two trillion-dollar-plus initiatives that were once touted as defining his presidency.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><br /></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><a href="https://1.bp.blogspot.com/-YPhmLDYm_TE/YX8GS-5RT6I/AAAAAAAAHk4/8EDuQWGFys02m4t0YEV_xpeTUxz85Dr1gCNcBGAsYHQ/s1280/Play%2Bnice.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1280" data-original-width="1280" height="400" src="https://1.bp.blogspot.com/-YPhmLDYm_TE/YX8GS-5RT6I/AAAAAAAAHk4/8EDuQWGFys02m4t0YEV_xpeTUxz85Dr1gCNcBGAsYHQ/w400-h400/Play%2Bnice.jpg" width="400" /></a></span></div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">I never thought it was going to be easy. Last March, I shook my head in wonder as Alexandra Ocasio-Cortez made the talk show rounds, attacking her fellow Democrats for the timidity of their spending ambitions. Forget $3.5 trillion, or even $6 trillion, she argued. $10 trillion </span><a href="https://www.axios.com/aoc-biden-infrastructure-f2cbe0df-099e-47f6-a358-3c0938d4f642.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">sounded</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> about right to her. It was just a few years ago that a trillion dollars was a lot of money. No longer; apparently a trillion here and a trillion there no longer adds up to real money.</span></span><div><span style="font-family: Arial;"><span style="font-size: 14.6667px; white-space: pre-wrap;"><br /></span></span><span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">To be clear, my problem has never been the economics of the numbers Democrats have been throwing around. After all, these are ten-year numbers. $3.5 trillion is really $350 billion a year, and even $10 trillion simply suggests that the federal government might spend as much money each year supporting American families as we do on the military. As images of our unruly exit from Afghanistan suggested the waning of the American Century, and countries from the </span><a href="https://apnews.com/article/0229dd7556264040810d9e7f96f3aa0a" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">EU</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and </span><a href="https://www.nytimes.com/2021/08/31/world/europe/ukraine-biden-zelensky.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Ukraine</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to </span><a href="https://time.com/6094500/us-taiwan-defense/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Taiwan</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and </span><a href="https://asia.nikkei.com/Politics/International-relations/Afghanistan-turmoil/Chaotic-Afghan-exit-compels-Japan-to-rethink-reliance-on-US-security" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Japan</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> are questioning the reliability of U.S. security guarantees, it may be that the time has come to revisit the balance between the hundreds of billions of dollars we spend annually defending global alliances and energy supply lines, and domestic spending at home. Of course, that is not the debate we are having, though perhaps one of these days it will be.</span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It was never the Democrats' grasp of budget math that troubled me, but rather their facility with political math. Each time I heard Bernie Sanders proclaim that he had 80% of the Senate Democratic Caucus lined up behind his $6 trillion plan, I wondered what point he was trying to make. After all, 80% of 50 Senators is 40 votes, and 40 votes in the U.S. Senate is not even enough to sustain a filibuster, much less pass anything. All he was doing was telling the world that he didn’t have the votes to pass his plan, even as he was contributing to the perception among a fair share of Democrats, who believe that $6 trillion is an unfathomable sum of money, that Sanders and his allies have lost touch with reality. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In the heady days before the November election, when visions of a 56-44 Senate majority danced in their heads, Democrat ambitions included ending the filibuster, packing the Supreme Court, restoring the Voting Rights Act, and funding a massive domestic program. After voters rendered their harsh </span><a href="https://www.washingtonpost.com/politics/2021/02/11/democrats-underperformed-their-expectations-2020-thats-not-surprising-considering-where-country-is/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">verdict</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and gave Democrats just 6 wins among 14 competitive Senate races, Democrats – including Joe Biden, who of all people should have understood the implications of a 50-50 Senate – seemed determined to ignore the impact of the election on the viability of their spending plans. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">AOC spoke a simple truth early in 2020 when she </span><a href="https://www.politico.com/news/2020/01/06/alexandria-ocasio-cortez-joe-biden-not-same-party-094642" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">observed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that in any other country, she and Joe Biden would be in different political parties. But as appealing as a parliamentary system is beginning to look these days, progressives in Congress are stuck living within a system that gives them very little leverage over Senate centrists. Yet even as progressives have watched their spending dreams get whittled down from $10 trillion to $6 trillion to $3.5 trillion, and now to $1.75 trillion, House Progressive Caucus chair Pramila Jayapal continues to </span><a href="https://www.politico.com/news/2021/10/29/biden-agenda-stalled-again-chaos-517711" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">posture</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as though they are negotiating from strength. But other than </span><a href="https://ktvz.com/news/2021/10/28/biden-to-attend-house-democratic-meeting-as-leaders-press-progressives-to-back-infrastructure-bill/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">sending</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Joe Biden off to Europe this week empty handed and sending Virginia voters to the polls on Tuesday increasingly </span><a href="https://news.gallup.com/poll/356591/congress-approval-lowest-2021-democrats-turn-negative.aspx" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">concerned</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that Democrats in Congress are not up to the job, it is hard to understand what exactly Jayapal and her progressive colleagues imagine they are accomplishing beyond the steady deterioration of the credibility of the national Democratic Party. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Progressives prefer to ignore polling data that suggests that much of the American electorate tends to be </span><a href="https://www.washingtonpost.com/opinions/2021/10/14/new-problem-democrats-americans-suddenly-want-smaller-government-after-all/?utm_medium=email&utm_source=newsletter&wpisrc=nl_opinions&utm_campaign=wp_opinions" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">moderate</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and politically centrist. According to 2020 </span><a href="https://www.foxnews.com/elections/2020/general-results/voter-analysis" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">exit polls</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, the progressive left constituted just 11% of the electorate, while 16% identified as “very conservative” – a term that has </span><a href="https://fivethirtyeight.com/features/how-trump-has-redefined-conservatism/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">apparently</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> migrated from admiration for Edmund Burke and William F. Buckley to fanatical devotion to Donald Trump. The fact that 33% of voters placed themselves in the center in the exit poll, while fully 72% eschewed extreme labels on either side appear to be consistent with Gallup poll </span><a href="https://news.gallup.com/poll/15370/party-affiliation.aspx" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">numbers</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on political affiliation among the electorate, which have suggested for years that while the Democratic Party has tended to hold a slight edge over Republicans, the largest share of the public – roughly 40-45% – identify as Independent. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Progressives on the left and conservatives on the right – who tend to constitute the activists in each party – have long preferred to assume that unaligned voters, and in particular those who choose not to vote year after year, view the world as they do. For years, conservatives – back when that word had meaning – looked at the 45% or so of the electorate who don’t vote in presidential elections and imagined the lion’s share to be like-minded, small government folks, just waiting in the weeds for a Barry Goldwater or Pat Buchanan to run on faithful conservative principles, pledging to get government off their backs. Progressives have viewed the electorate in much the same way, except that for them, those who fail to show up on Election Day are the beleaguered masses yearning for a government that stands up for them and provides a sweeping support system to help them build a better life. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This perspective is reflected in the conviction of Congressional progressives that their proposed massive infusion of new government programs will uplift American families and transform the politics of the nation – including bringing working class voters back into the Democrat fold. Those voters turned out for Obama’s promise of hope and change, progressives are quick to point out; he just failed to deliver the goods. Whether or not Bernie’s $6 trillion or AOC’s $10 trillion would transform the politics of the nation, however, is going to remain a theoretical proposition, as it was never going to happen in a 50-50 Senate – as Bernie Sanders’ own vote count attested. Joe Manchin – tiring no doubt of the tactics of Democratic activists who seemed to think that running ads </span><a href="https://www.cnbc.com/2021/06/10/ad-war-erupts-in-west-virginia-as-both-sides-try-to-pressure-joe-manchin.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">attacking</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> him in his home state would force him to accede to their demands – wryly </span><a href="https://www.yahoo.com/now/manchin-says-elect-more-liberals-215600758.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggested</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> last month that if progressives want to achieve their goals, the essential first step is “to elect more liberals.”</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The urgency of the moment that has consumed progressives – the conviction that everything must be done right now, regardless of the realities of a 50-50 Senate – appears to reflect a fear that 50-50 may be as </span><a href="https://www.nytimes.com/2021/10/08/opinion/democrats-david-shor-education-polarization.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">good as it is going to get</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“Demographics as destiny,”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the view that has been widely embraced among Democrats that demographic </span><a href="https://www.nytimes.com/2021/08/24/opinion/us-census-majority-minority.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">trends</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> are necessarily going to turn the nation blue has given way to a fatalistic sense that Republicans hold </span><a href="https://view.e.economist.com/?qs=6674f1f6886465b3956ca476c3f15bfa6916648020c26993a50775864fd070b9f96ce4516470d9f8aecebc60640598738bb615ba41382738e6a7dd9ebfbf55adda65e936953c953f5e5640dffcaff429" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">structural</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> advantages in the makeup of the Senate and Electoral College – rooted in the Apportionment Clause of the Constitution – that are going to be difficult to overcome. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Ruy Teixeira, co-author of </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The Emerging Democratic Majority</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, the 2002 </span><a href="https://www.amazon.com/Emerging-Democratic-Majority-John-Judis/dp/0743254783" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">book</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that gave rise to the demographics-as-destiny thesis, </span><a href="https://www.persuasion.community/p/demography-is-not-destiny" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggested</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in a recent essay entitled “Demography is Not Destiny” that the real problem the Democratic Party faces is one of its own making. A Senior Fellow at the progressive Center for American Progress, he criticized the party for centering its politics around its growing share of highly educated voters, even as it has turned its back on white working class voters that remain essential to its political future. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Barack Obama’s data guru David Shor has </span><a href="https://www.nytimes.com/2021/10/13/opinion/david-shor-biden-democrats.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">expressed</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a similar concern, though his focus was on the alienation of working class voters of all racial and ethic groups. </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“We’ve ended up in a situation where white liberals are more left wing than Black and Hispanic Democrats on pretty much every issue: taxes, health care, policing and even on racial issues or various measures of ‘racial resentment….So as white liberals increasingly define the party’s image and messaging, that’s going to turn off nonwhite conservative Democrats and push them against us.”</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Teixeira, though, suggests that Shor’s prescription – </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“Do a lot of polling to figure out which of their views are popular and which are not popular, and then they should talk about the popular stuff and shut up about the unpopular stuff”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> – is naive, at best, as changing course would require that Democrats step back from “militant identity politics” that have become central to progressive politics. </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“This has resulted in branding the party as focused on, or at least distracted by, issues of little relevance to most voters’ lives. Worse, the focus has led many working-class voters to believe that, unless they subscribe to this emerging worldview and are willing to speak its language, they will be condemned as reactionary, intolerant, and racist by those who purport to represent their interests.”</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Tuesday’s election in Virginia looms to be a bitter wake-up call for Democrats. A recent Washington Post poll </span><a href="https://www.washingtonpost.com/dc-md-va/2021/10/29/virginia-governors-race-poll/?utm_source=alert&utm_medium=email&utm_campaign=wp_news_alert_revere&location=alert&wpmk=1&wpisrc=al_news__alert-national--alert-politics--alert-local&pwapi_token=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJjb29raWVuYW1lIjoid3BfY3J0aWQiLCJpc3MiOiJDYXJ0YSIsImNvb2tpZXZhbHVlIjoiNWJlODQ4ZTU5YmJjMGY0ZDZiZDFmYTE5IiwidGFnIjoid3BfbmV3c19hbGVydF9yZXZlcmUiLCJ1cmwiOiJodHRwczovL3d3dy53YXNoaW5ndG9ucG9zdC5jb20vZGMtbWQtdmEvMjAyMS8xMC8yOS92aXJnaW5pYS1nb3Zlcm5vcnMtcmFjZS1wb2xsLz91dG1fc291cmNlPWFsZXJ0JnV0bV9tZWRpdW09ZW1haWwmdXRtX2NhbXBhaWduPXdwX25ld3NfYWxlcnRfcmV2ZXJlJmxvY2F0aW9uPWFsZXJ0JndwbWs9MSZ3cGlzcmM9YWxfbmV3c19fYWxlcnQtbmF0aW9uYWwtLWFsZXJ0LXBvbGl0aWNzLS1hbGVydC1sb2NhbCJ9.Gms70mSVztidjy_6_G2TqU68hXzQmlETnagr_eXyQGQ" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggests</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that the race is a toss-up, despite Democrats having a 6-7 point edge in voter identification among the Virginia electorate. The </span><a href="https://www.washingtonpost.com/dc-md-va/2021/10/29/virginia-governors-race-poll/?utm_source=alert&utm_medium=email&utm_campaign=wp_news_alert_revere&location=alert&wpmk=1&wpisrc=al_news__alert-national--alert-politics--alert-local&pwapi_token=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJjb29raWVuYW1lIjoid3BfY3J0aWQiLCJpc3MiOiJDYXJ0YSIsImNvb2tpZXZhbHVlIjoiNWJlODQ4ZTU5YmJjMGY0ZDZiZDFmYTE5IiwidGFnIjoid3BfbmV3c19hbGVydF9yZXZlcmUiLCJ1cmwiOiJodHRwczovL3d3dy53YXNoaW5ndG9ucG9zdC5jb20vZGMtbWQtdmEvMjAyMS8xMC8yOS92aXJnaW5pYS1nb3Zlcm5vcnMtcmFjZS1wb2xsLz91dG1fc291cmNlPWFsZXJ0JnV0bV9tZWRpdW09ZW1haWwmdXRtX2NhbXBhaWduPXdwX25ld3NfYWxlcnRfcmV2ZXJlJmxvY2F0aW9uPWFsZXJ0JndwbWs9MSZ3cGlzcmM9YWxfbmV3c19fYWxlcnQtbmF0aW9uYWwtLWFsZXJ0LXBvbGl0aWNzLS1hbGVydC1sb2NhbCJ9.Gms70mSVztidjy_6_G2TqU68hXzQmlETnagr_eXyQGQ" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">difference</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> appears to be the 18-point edge that Republican Glenn Youngkin has built over Democrat Terry McAuliffe among Independents, up from 8 points a month earlier. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Should McAuliffe lose, many will be quick to point to Youngkin’s effective use of the latest GOP </span><a href="https://www.foxnews.com/politics/mcauliffe-critical-race-theory-racist-dog-whistle" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">dog whistle</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> surrounding the </span><a href="https://www.nytimes.com/2021/10/27/us/politics/beloved-toni-morrison-virginia.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">teaching</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of a Toni Morrison book in a Loudoun County classroom. Yet, in a race that has had significant national visibility from the outset, it will be hard not to point a finger of blame at the abject failure of Congressional Democrats to understand the constraints of the political hand they were dealt, and do their job with some degree of humility rather than hubris.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Even if McAuliffe squeaks by, the notion that Democrats are </span><a href="https://thehill.com/homenews/administration/574958-biden-sees-support-from-independents-drop" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">shedding</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> support nationally among independents is a big, big </span><a href="https://www.washingtonpost.com/powerpost/democrats-midterm-independents/2021/10/23/4271ad96-335f-11ec-a1e5-07223c50280a_story.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">problem</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. But even a bitter wake-up call will be better than none at all. Right now, both political parties are animated by activists in their ranks, while the largest share of the electorate is looking on in dismay. </span></p><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div><div><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><p style="font-family: Times; font-size: medium; white-space: normal;"><span>ORIGINALLY POSTED TO <a data-cke-saved-href="http://appalled.blogspot.com/" href="http://appalled.blogspot.com/" target="_blank">GRAFFITI</a> BY DAVID PAUL ON SUNDAY, OCTOBER 31, 2021.<br /><br /><em>Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em><br /></span></p><p dir="ltr" style="font-family: Times; font-size: medium; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; white-space: normal;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p style="font-family: Times; font-size: medium; white-space: normal;"><span style="font-family: inherit;"><em>Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em> </span></p><div><span style="font-family: inherit;"><br /></span></div></span></div></span></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-56681118083471780742021-10-05T18:23:00.005-04:002021-10-31T16:35:39.121-04:00Debt ceiling hypocrisy.<p><span style="font-family: Arial; font-size: 12pt; white-space: pre-wrap;">That ritual of political hypocrisy is upon us: the time has come when Congress must raise the debt ceiling. </span></p><span id="docs-internal-guid-cd5845ed-7fff-1d45-ec6f-19d6aa1dd718"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">There is little new in the political brinksmanship we have already seen, and it will reach a crescendo as the October 18th deadline looms. Time and again, we watch the same politicians who were only too willing to help amass trillions upon trillions of dollars of red ink, grandstanding as they point the finger at anyone but themselves when the debt ceiling vote rolls around. And each time, as we saw last week, the Secretary of the Treasury and Chairman of the Federal Reserve Bank dutifully </span><a href="https://www.nytimes.com/2021/09/28/business/economy/yellen-powell-senate.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">march</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> down to the Capitol, pound the table, and admonish members of Congress to put their partisan differences aside, and do as duty calls, lest financial calamity befall us all. Skyrocketing unemployment. An economy plunged into recession. Savings lost, lives destroyed.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Mitch McConnell is having none of it. A brilliant political tactician who may well go down in history as one of the prime movers in the destruction of the American Experiment, McConnell sees everything through the lens of political advantage. For this one brief moment, he appears to be luxuriating in being in the minority, as he can leave the debt ceiling problem in Chuck Shumer’s lap, even as he looks to squeeze some tactical advantage for Republicans when the Senate is once again up for grabs next year. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">McConnell has been down this path </span><a href="https://crsreports.congress.gov/product/pdf/RL/RL31967" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">fourteen</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> times over the past two decades and knows how this movie ends. He has declared he will have no part of the debt ceiling vote, and – unlike Democrat leaders Shumer and Pelosi – his members will follow him in lockstep. Not a single Republican Senator – not even Ohio’s Rob Portman or Missouri’s Roy Blount, erstwhile “moderates” on the eve of retirement, who one might have hoped would behave like grownups before they ride off into the sunset – has given any indication they will budge on the matter. Yet there is no risk of financial calamity, as he knows that when push comes to shove, Democrats will never allow a default on their watch.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">No one should be surprised, of course. Republicans, who </span><a href="https://www.chicagotribune.com/news/ct-xpm-2004-01-12-0401120168-story.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">normalized</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> massive </span><a href="http://appalled.blogspot.com/2008/09/at-precipice.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">deficits</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> during the Reagan Revolution, </span><a href="https://appalled.blogspot.com/2013/02/the-day-music-died.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">reliably</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> get on their high horses when the time comes to raise the debt limit whenever a Democrat sits in the oval office, and this time is no different. The debt ceiling is itself a </span><a href="https://www.washingtonpost.com/us-policy/2021/09/30/treasury-debt-ceiling-agencies/?utm_campaign=wp_post_most&utm_medium=email&utm_source=newsletter&wpisrc=nl_most&carta-url=https%3A%2F%2Fs2.washingtonpost.com%2Fcar-ln-tr%2F34d5e71%2F6155e40f9d2fda9d41f14421%2F5be848e59bbc0f4d6bd1fa19%2F16%2F72%2F6155e40f9d2fda9d41f14421" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">contrivance</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the purest sense, as when the time comes when the debt ceiling has to be raised, the acts of fiscal profligacy that necessitated raising it have long passed. If politicians, whether in Congress or the White House, oppose deficit spending and the issuance of debt that derives from it, they might consider introducing balanced budgets in the first place. But that would force them to actually do the heavy lifting of governing – balancing priorities of taxing and spending that Article 1 of the Constitution suggests they were elected to do.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Since Ronald Reagan </span><a href="https://appalled.blogspot.com/2008/09/we-have-seen-enemy.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">changed</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the rules of the game, one GOP president after another has done their level best to push the public debt ever higher, even as they claimed to be fiscal conservatives. Indeed, the record </span><a href="https://appalled.blogspot.com/2008/09/we-have-seen-enemy.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">shows</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> – as much as Republicans bristle when confronted with the actual data – that the GOP has consistently outperformed Democrats when it comes to piling up the red ink. Reagan and George H.W. Bush gave new meaning to the word profligacy – in terms of the budgets they introduced, lest one try to shift the blame to Congressional Democrats during that era – while Donald Trump </span><a href="https://www.thebalance.com/trump-plans-to-reduce-national-debt-4114401" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">outdid</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> them all, piling up a record $8 trillion in new debt in a single term in office. Fiscal conservatism, once the hallmark of Republicanism, has long been reduced to little more than a rhetorical device. Refusing to raise the debt ceiling after decades of pumping out red ink is not the hallmark of prudence, but rather performative theatre of the most cynical sort, a truncheon with which to bludgeon Democrats before the GOP faithful. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Even as President Biden lashed out at Mitch McConnell this week for his debt ceiling gamesmanship, and </span><a href="https://www.washingtonpost.com/us-policy/2021/10/04/biden-schumer-debt-ceiling/?utm_campaign=wp_post_most&utm_medium=email&utm_source=newsletter&wpisrc=nl_most&carta-url=https%3A%2F%2Fs2.washingtonpost.com%2Fcar-ln-tr%2F34df4d5%2F615b29e59d2fda9d41fb49d9%2F5be848e59bbc0f4d6bd1fa19%2F15%2F74%2F615b29e59d2fda9d41fb49d9" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">refused</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to guarantee that the nation would not head over the fiscal cliff that looms just two weeks away, the markets evinced little concern that a default on U.S. debt and the ensuing financial calamity </span><a href="https://www.reuters.com/business/treasurys-yellen-agrees-debt-default-would-cause-irreparable-damage-us-2021-09-30/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">predicted</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by Treasury Secretary Janet Yellen constitute a material risk. Even after a 5% pull-back over the past month, the S&P 500 remains up 25% over the past year, while long-term bond markets have been similarly sanguine. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Investors have many good reasons to be concerned about the state of the world; it is just that Congress’s ritual games of brinksmanship are nowhere near the top of the list. First and foremost, there is China to worry about. Forty years ago, China President Deng Xiaoping launched the transformation of the Chinese economy. It was an action that transformed the world, as it opened China up to world trade and led, in turn, to: China’s </span><a href="https://www.bc.edu/content/dam/files/schools/law/lawreviews/journals/bciclr/27_2/06_TXT.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">membership</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the World Trade Organization; previously unimaginable </span><a href="https://ourworldindata.org/the-global-decline-of-extreme-poverty-was-it-only-china" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">declines</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the percentage of the world population living in extreme poverty; the </span><a href="https://appalled.blogspot.com/2015/05/the-shaming-of-american-worker.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">evisceration</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the American middle class; political </span><a href="https://appalled.blogspot.com/2010/10/theyre-mad-as-hell-but-so-easy-to.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">unrest</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and </span><a href="https://appalled.blogspot.com/2016/11/it-is-not-so-complicated-it-was-always.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">depression</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> across the American heartland; and the </span><a href="https://appalled.blogspot.com/2016/11/it-is-not-so-complicated-it-was-always.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">rise</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of Donald Trump. China grew more prosperous. Much of America grew less prosperous. And in both countries income and wealth inequality exploded.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Over the past few months, China President Xi Jingping has changed course. Readers of the financial press </span><a href="https://www.economist.com/finance-and-economics/xi-jinpings-talk-of-common-prosperity-spooks-the-prosperous/21803895" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">know</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that he has implemented a dramatic </span><a href="https://www.economist.com/finance-and-economics/xi-jinpings-talk-of-common-prosperity-spooks-the-prosperous/21803895" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">crackdown</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on China’s largest corporations and </span><a href="https://www.nytimes.com/2021/10/05/business/china-businesses.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">wealthiest</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> elites. He has moved the country away from its growth-at-all-cost policies toward the </span><a href="https://www.bbc.com/news/business-58417234" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">prioritization</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of “common prosperity.” Those changes, in turn, threaten to upend the rules of global trade and investment, and have contributed to stock market volatility over the past few months.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">While some might imagine that the cascading evaporation of democracy in America before our eyes – The Economist magazine recently </span><a href="https://www.economist.com/graphic-detail/2021/02/02/global-democracy-has-a-very-bad-year?gclid=Cj0KCQjw1dGJBhD4ARIsANb6Odkz-IHhRswZfpaOzJlP0m3mnkzAbHWj9Z8VPsZNbUs_XlFjpz_Ex2gaAhPvEALw_wcB&gclsrc=aw.ds" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">downgraded</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the United States from Full Democracy to Flawed Democracy in its Global Democracy Index – would have unsettled global markets, the real driver of volatility over the past month or two appears to have been the Xi Jingping’s </span><a href="https://www.washingtonpost.com/opinions/2021/09/21/xi-jinpings-disturbing-maoist-turn/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">determination</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to veer away from Deng's capitalist road and put a bit of Mao back in his step. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And along with turmoil in the world’s second largest economy, there are plenty of other concerns for investors to focus on, before considering whether the debt ceiling is a real problem. There are </span><a href="https://www.washingtonpost.com/business/interactive/2021/supply-chain-issues/?utm_campaign=wp_post_most&utm_medium=email&utm_source=newsletter&wpisrc=nl_most&carta-url=https%3A%2F%2Fs2.washingtonpost.com%2Fcar-ln-tr%2F34d5d8f%2F6155e40f9d2fda9d41f14421%2F5be848e59bbc0f4d6bd1fa19%2F8%2F72%2F6155e40f9d2fda9d41f14421" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">continuing</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://www.theguardian.com/business/2021/oct/02/how-the-supply-chain-crisis-is-affecting-six-big-economies" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">disruptions</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to global supply chains. Soaring global </span><a href="https://www.axios.com/whats-behind-rising-energy-prices-fd8ce2f0-53d6-43b9-8ff8-93107e109722.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">energy</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> prices and supply shortages. There are fears of </span><a href="https://www.marketwatch.com/story/inflation-rate-hits-30-year-high-pce-shows-as-u-s-confronts-major-shortages-11630068319?mod=article_inline&mod=article_inline" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">inflation</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and fears of </span><a href="https://www.bloomberg.com/news/features/2021-09-30/wall-street-titans-reveal-the-next-big-risks-deflation-inequality-hackers?cmpid=BBD093021_BIZ&utm_medium=email&utm_source=newsletter&utm_term=210930&utm_campaign=bloombergdaily" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">deflation</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, and impacts on stock </span><a href="https://www.marketwatch.com/story/professor-who-called-dow-20-000-says-hes-nervous-about-trends-in-inflation-that-could-spark-a-stock-market-correction-11632949212" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">valuations</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. There are rising </span><a href="https://www.nytimes.com/2021/10/03/world/asia/china-taiwan-flights-airspace.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tensions</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the South China Sea and the Straits of </span><a href="https://www.newsweek.com/china-could-invade-taiwan-under-these-seven-scenarios-defense-report-says-1624989" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Taiwan</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and doubts about America’s </span><a href="https://www.washingtonpost.com/opinions/2021/09/29/emmanuel-macron-is-right-that-europe-should-defend-itself/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">commitments</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> across the globe. Against that backdrop, Washington’s quasi-annual debt ceiling dance barely registers. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Somehow, investors seem able to </span><a href="https://www.nytimes.com/live/2021/10/05/business/news-business-stock-market#global-stocks-creep-back-after-wall-streets-drop" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">look past</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> most anything these days. As long as global interest rates remain near their historic lows, everything else seems to be discounted as just more noise in the social media soap opera of everyday life. The GOP at war with democracy. The Democratic Party at war with itself. The Maoist Restoration in China. The pandemic of the unvaccinated. And the possibility of a US debt default. It is all just grist for the mill, and things just roll along.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Until they don’t. Over the past few decades, each time the debt ceiling had to be raised and the ritual game of brinksmanship started, a voice whispered in the back of my mind, </span><span style="font-family: Arial; font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“What if things are actually different this time? What if this time they really don’t get it done?” </span><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And each time, of course, that voice recedes when members of Congress, often with just hours to go, belly up to the bar and behave like grownups. The debt ceiling is raised. Default is averted. Financial calamity waits until the next time around. </span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But what if things actually are different this time, and the unthinkable actually happens? Isn’t everything actually different this time around? Few imagined Donald Trump would get elected, but he did. Few could believe that a majority of Republicans in Congress would vote against the peaceful transfer of power, but they did. Have we really ever seen this degree of dysfunction? Things could be different this time, for the simple reason that things are different this time.</span></p><br /><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Perhaps, if Mitch McConnell stays the course, content that he has the strategic advantage, Democrats will call his bluff and decide not to play the grownups all by themselves, as he fully expects them to do. If the progressives and moderates in Congress are willing to go to the mattresses battling each other, perhaps this time, instead of doing as McConnell expects them to do, what he is counting on them to do, they will instead make common cause and call his bluff. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Then, on or around the stroke of midnight on October 17th, announcing that Mitch McConnell has forced their hand, they will change the rules of the game. They can pass legislation not raising the debt ceiling, but instead confirming Janet Yellen’s ability, as Secretary of the Treasury, to mint five $1 trillion </span><a href="https://www.nytimes.com/2021/10/01/opinion/biden-coin-democrat-republican-debt-limit.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">coins</span></a><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as the law allows. It is a tactic that has long been whispered about, and for which legislation is already on the books. It would change the rules of the game, and end the charade of the debt ceiling forever. </span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p><span>ORIGINALLY POSTED TO <a data-cke-saved-href="http://appalled.blogspot.com/" href="http://appalled.blogspot.com/" target="_blank">GRAFFITI</a> BY DAVID PAUL ON SUNDAY, OCTOBER 4, 2021.<br /><br /><em>Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p><span style="font-family: inherit;"><em>Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em> </span></p><div><span style="font-family: inherit;"><br /></span></div></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-88748775984327240332021-08-22T23:56:00.001-04:002021-08-23T00:14:16.963-04:00The fall of Kabul and the dying embers of the America Century<p><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“Victory has 100 fathers,”</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> President John F. Kennedy observed in the wake of the United States’ failed invasion of Cuba at the Bay of Pigs a half-century ago, </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“and defeat is an orphan.”</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Within hours of images of Afghans clinging to the landing gear of American military transports flashing across social media, cable news shows, across the political spectrum, were awash with armchair generals telling us how it all could have been avoided. We should have waited until the winter to exit. We should have made sure all of the Afghans who had supported our efforts over the past two decades were given exit visas before we left. We should have negotiated a better deal with the Taliban. And – from Democrats panicked about the downstream political consequences – Biden should have waited until after the midterms. </span></span></p><span id="docs-internal-guid-3f989d1c-7fff-dbac-45b0-c9f12db83bcc"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Coming as it did in the wake of the 9/11 attacks, our war in Afghanistan was supposed to be the war Americans agreed on. Early on, according to Gallup, 90% of Americans </span><a href="https://news.gallup.com/poll/352793/americans-split-whether-afghanistan-war-mistake.aspx" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">supported</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the invasion of Afghanistan. But that support did not last. By 2009 a majority of the public had turned </span><a href="https://www.pollingreport.com/afghan.htm" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">against</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the war, and by this past spring, three-quarters of Americans </span><a href="https://thehill.com/hilltv/what-americas-thinking/551040-poll-73-percent-support-us-withdrawal-from-afghanistan" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">supported</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Donald Trump and Joe Biden’s determination to put an end to it. And those are significant numbers because in our world today, there is literally </span><a href="http://brightlinewatch.org/still-miles-apart-americans-and-the-state-of-u-s-democracy-half-a-year-into-the-biden-presidency/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">nothing</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that three-quarters of Americans agree on. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><a href="https://1.bp.blogspot.com/-Kep3Kj9DHlM/YSMcNGEYAiI/AAAAAAAAHd8/wYfTadwP4FEH2uiCMdVfVEHru7R-sWvPACNcBGAsYHQ/s1800/Afhan%2BProverb%2Bcopy.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1800" data-original-width="1800" height="400" src="https://1.bp.blogspot.com/-Kep3Kj9DHlM/YSMcNGEYAiI/AAAAAAAAHd8/wYfTadwP4FEH2uiCMdVfVEHru7R-sWvPACNcBGAsYHQ/w400-h400/Afhan%2BProverb%2Bcopy.jpg" width="400" /></a></span></span></div><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Americans, who supported the withdrawal from Afghanistan just a few months ago, </span><a href="https://www.politico.com/news/2021/08/16/poll-afghanistan-withdrawal-taliban-505165" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">panicked</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as they grappled with the consequences of America’s exit. </span><a href="https://morningconsult.com/2021/08/16/afghanistan-withdrawal-taliban-polling/?mkt_tok=ODUwLVRBQS01MTEAAAF-7_WnFf8qFlBDRq9D0GEapoGqzX-dGtxLOya_nKplFq2wo5SuvPbDCAJtWQCGs6f9Oas5B2A7yuY-9jwIuiuyLudx1yVJ_IgEc9qP2Mp6pDg" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">According</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to a Morning Consult poll barely 50% now support our departure, with just under 50% having decided that our leaving is a bad idea “if it means the Taliban regains control of most of the country.” Democrats, fearful of the consequences for Afghan women and children, as well as for their Congressional majorities, are feverishly looking for an appropriate </span><a href="https://www.vanityfair.com/news/2021/08/i-really-suspect-there-was-no-plan-congress-and-diplomats-want-answers-to-bidens-chaotic-afghan-withdrawal?utm_source=nl&utm_brand=vf&utm_mailing=VF_CH_082021&utm_medium=email&bxid=5be9d8723f92a40469e75dfe&cndid=13454196&hasha=affffd2f7d9cdedd01b4bbface9cc862&hashb=49c95d3e2a6d2ed557eaa3ef05cbc6f44ae98f39&hashc=03abce0b3c5ab27326a754ac8fbfb21ebc2758e787b1dae5fef67f7db5d23472&esrc=newsletteroverlay&source=EDT_VYF_NEWSLETTER_0_COCKTAIL_HOUR_ZZ&utm_campaign=VF_CH_082021&utm_term=VYF_Cocktail_Hour" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">response</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. Republicans, who over the past four years have acceded to the GOP’s </span><a href="https://appalled.blogspot.com/2019/10/unmaking-world-of-our-making.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">flipping</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> from the party of Bush/Romney internationalism to Trump isolationism, have now flopped back against a withdrawal that Trump set in motion, and are </span><a href="https://www.foxnews.com/politics/biden-afghanistan-republicans-demand-resignations" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">demanding</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that heads roll. </span></span><p></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But what, exactly, did Americans think was going to happen back when they supported our exiting the country, if not a return of the Taliban? Taliban control over much of the countryside has been a </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">fait accompli </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">for years now, rising to more than </span><a href="https://www.cfr.org/backgrounder/taliban-afghanistan" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">50%</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the country by early this year. While the fall of Kabul came quicker than expected, few if any observers seemed to doubt that a Taliban takeover of the country was inevitable. The simple truth is that despite all the recriminations raining down on President Biden, our departure from Afghanistan was less about military defeat than political weariness. Our footprint on the ground has been very small, barely more than 10,000 combat troops since combat operations ended in 2014, with barely 100 </span><a href="https://en.wikipedia.org/wiki/United_States_military_casualties_in_the_War_in_Afghanistan" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">total</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> fatalities over the ensuing years. Nonetheless, a solid, bipartisan majority of Americans opposed a continuing U.S. presence in the country, notwithstanding the importance of that presence for Afghan women and girls, in particular. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As JFK suggested, Joe Biden is bearing alone the price of our defeat in Afghanistan. Yet what we witnessed in Afghanistan may have been less a military defeat than the final exhaustion of the will of the American people to play the role that the world has thrust upon us, and that we have thrust upon the world, for much of the past 80 years. As hard as it may be to imagine as we watch bodies falling from planes and fear for the lives of young women destined to live under the dictates of the Taliban, this historical moment may have ramifications across the globe even more consequential than what is bound to transpire in Afghanistan itself. China’s Xinhua News Agency </span><a href="https://www.theweek.co.uk/news/world-news/953849/what-are-china-and-russia-planning-for-afghanistan" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">summed up</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> this possibility as it described the images flashing around the world as marking the “death knell for declining U.S. hegemony.” </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Just months before his Bay of Pigs comment, President Kennedy laid down his vision of American leadership in the post-World War II world. </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“Let every nation know,” </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">he said in his 1961 inaugural address,</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty.”</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Kennedy’s rhetoric, which would echo as the marker of U.S. global leadership during its Cold War with the Soviet Union and beyond, mirrored the words twenty years earlier of Time magazine publisher Henry Luce, when he coined the term “</span><a href="https://books.google.com/books?id=I0kEAAAAMBAJ&pg=PA64#v=onepage&q&f=false" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">The American Century</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">.” In 1941, months before the Japanese attack on Pearl Harbor and the United States’ entry into World War II, Luce </span><a href="https://books.google.com/books?id=I0kEAAAAMBAJ&pg=PA64#v=onepage&q&f=false" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">defined</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a vision of America as the avatar of liberal democracy in the post-war world that would be embraced for decades to come by Republicans and Democrats alike. The United States, he argued, was not simply a democratic experiment at home, but necessarily a force for advancing liberal democracy in the world. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Yet, through all the post-war years – even as the United States led the creation of the network of institutions and treaty relationships that have come to define the modern world – the American public never fully embraced the Luce vision. The problem at root is that the American public – separated from much of the world by two oceans and rarely feeling its security under threat – has viewed the notion of the country having responsibilities for global leadership with deep suspicion dating back to George Washington’s farewell warning to the nation to avoid “foreign entanglements.” Public distrust has been exacerbated by our finding ourselves embroiled in wars under false pretenses, or supporting corrupt regimes and corporate interests. By 2005, when George W. Bush mimicked JFK and </span><a href="https://www.independent.co.uk/voices/commentators/george-bush-freedom-is-on-the-march-in-the-middle-east-527517.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">declared</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that “freedom is on the march” as the United States sought to impose its vision of a democratic order in Afghanistan and Iraq, the rhetoric had become unabashedly partisan. Ten years later, Donald Trump leveraged that distrust, as he ran for President on a nakedly isolationist platform, and succeeded in </span><a href="https://appalled.blogspot.com/2019/10/unmaking-world-of-our-making.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">turning</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> much of the Republican Party against the global order it had done so much to create.</span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The messy unwinding of our military engagements from Vietnam to Afghanistan have underscored both the difficulty in keeping the American public engaged in a sustained vision of America’s role in building democracy abroad, as well as the limited support for our military engagements among our allies on the ground. In Afghanistan, our closest “ally” in the region, Pakistan, has made no bones about </span><a href="https://www.washingtonpost.com/world/2021/08/18/pakistan-hand-taliban-victory/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">celebrating</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> our defeat at the hands of the Taliban. What many in the United States have for years viewed as Pakistan’s fecklessness simply reflects its geopolitical realities. After all, since its creation as a Sunni Muslim state carved out of British India three-quarters of a century ago, it has been surrounded by hostile states, notably Hindu India along its eastern border and Shia Iran to the west. Seeking a Sunni Muslim ally in its neighborhood, Pakistan and its intelligence services </span><a href="https://www.hrw.org/reports/2001/afghan2/Afghan0701-02.htm" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">supported</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the Taliban dating back to the days when the Pakistanis and the CIA together supported the Afghan mujahideen against the then-Soviet occupiers. The mujahideen were an earlier incarnation of the Pashtun fighters that would morph into the Taliban. Pashtuns make up the largest ethnic group in Afghanistan and the second largest in Pakistan, and as such, the Taliban were a natural ally for Pakistan.</span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Our Turkish ally similarly celebrated our </span><a href="https://www.rollingstone.com/politics/politics-news/why-trump-decision-abandon-kurds-syria-disaster-898493/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">abandonment</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of our Kurdish allies when Donald Trump agreed to pull U.S. troops out of Syria two years ago. As the seat of a thousand-year-old regional power, Turkey has long bristled at the United States’ seeking to impose its will in a region that Turkey views as its back yard, and in particular being told how it should treat the Kurds – whom Turkey views as terrorists. And despite our efforts to build a multi-ethic democracy in Iraq, our pullout after nearly a decade on the ground ended up being as much as anything a </span><a href="https://www.reuters.com/investigates/special-report/iraq-iran-shrines/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">gift</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to Iran, our foremost adversary in the region. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">While Pakistan, Turkey, and Iran each celebrated as we pulled troops out of Afghanistan, Syria, and Iraq, respectively, the end of our engagement in Afghanistan looms to be most significant for Russia and China. The end of U.S. global hegemony, as the Xinhua News Agency suggested, looms large for both countries, who have each been at odds with the U.S. over their desire to restore their historic dominance over their regions of the globe. Vladimir Putin has long stated his desire to return to a world order that ceded the right to regional powers to control their own neighborhood. For Russia, this means recognizing its dominion over its “near abroad,” which includes countries bordering on Russia, and in particular those historically </span><a href="https://www.theatlantic.com/international/archive/2014/09/how-a-famous-soviet-dissident-foreshadowed-putins-planin-1990-russia-ukraine/379467/" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">part</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the Russian state. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">In a similar vein, China President Xi Jingping aspires to reverse what the Chinese view as a </span><a href="https://www.cnn.com/asia/live-news/china-hong-kong-oct-1-live-intl-hnk/h_839e8f86f979ae798e6790793cea71d8" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">century</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> or more of subjugation at the hands of the west and Japan, dating back to the Opium Wars with the British in the 1800s. China’s fixation for years now has been on reestablishing what it asserts are its historic rights over the South China Sea, </span><a href="https://en.wikipedia.org/wiki/Nine-dash_line" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">usurping</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> rights now accorded under international law to Vietnam, the Philippines, Indonesia and Malaysia. And just as Ukraine is viewed by Russia as historically sovereign soil, Taiwan is viewed by China as an integral part of its territory. </span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Russia and China are each surely watching the U.S. withdrawal from Afghanistan – against the backdrop of our ongoing political turmoil, and the long history of ambivalence among the American people toward military engagements overseas – to see if it portends an opportunity to assert their own </span><a href="https://appalled.blogspot.com/2019/10/unmaking-world-of-our-making.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">global interests</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. In the wake of Afghanistan and Iraq, it is hard not to believe the world may have changed. In the event of Russian troops entering Ukraine, or the Chinese military attacking Taiwan, will the world cede to us the power to intervene? Or equally important, will the American people – divided as we are over every issue that comes along, large or small – agree to go along? And if the answer to both is no, how will the world, as united as it might be against any given violation of the international order, seek to enforce that order?</span></span></p><span style="font-family: Roboto;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As we put the war in Afghanistan behind us, a central question left hanging in the air is whether the American people any longer have the will to play the role in the world that Henry Luce and JFK imagined, and defend the global institutions created under our watch. Hu Xijin, an editor of the Chinese state-produced Global Times, </span><a href="https://twitter.com/HuXijin_GT/status/1426949490380967937" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tweeted</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> a meme this week that underscored this question: “The power transition in Afghanistan is even more smooth than the presidential transition in the US.” Or, to put it succinctly, if the acceptance of election results and the peaceful transfer of power is the </span><span face="Calibri, sans-serif" style="font-size: 12pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">sine qua non</span><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of the democratic order that we have sought to advance across the world, it is hard to see how we continue to play the role that Henry Luce and JFK envisioned if one of our major political parties, and a solid minority of the citizenry, don’t believe in them at home. The fall of Kabul that we are witnessing before our eyes may fall on Joe Biden’s shoulders, as JFK suggested. But if we are really </span><a href="https://appalled.blogspot.com/2018/06/the-withering-of-pax-americana.html" style="text-decoration-line: none;"><span face="Calibri, sans-serif" style="color: #1155cc; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">watching</span></a><span face="Calibri, sans-serif" style="font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the end of the American Century, that is an event whose consequences are far more difficult to fathom.</span></span></p><br /><p><span>ORIGINALLY POSTED TO <a data-cke-saved-href="http://appalled.blogspot.com/" href="http://appalled.blogspot.com/" target="_blank">GRAFFITI</a> BY DAVID PAUL ON SUNDAY, AUGUST 22, 2021.<br /><br /><em>Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em><br /></span></p><p><span style="font-family: inherit;"><em>Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em> </span></p><br /></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-56542927169780912922021-07-18T14:03:00.016-04:002021-07-19T17:39:46.529-04:00Mitch McConnell is rooting for inflation and crime. It suits him well.<p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="white-space: pre-wrap;"><span style="font-family: Roboto; font-size: medium;">Inflation and crime are soaring – if you believe the headlines – and Mitch McConnell could not be happier. He desperately wants his old job back as Majority Leader of the Senate, and had hoped that with Democrats in charge and eager to revert to their tax-and-spend ways, Republicans could simply dust off their deficit hawk talking points and ride public anxiety about a growing national debt to flip the Senate back to the GOP sixteen months from now. </span></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><br /></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Federal deficits, however, don’t seem to have the </span><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">traction</span><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as a political issue that they once did. Since the 1980s, we have been warned of the ills that would befall the economy on the heels of federal deficits – from squeezing out capital for private investment, to sky high interest rates, to insolvency and default – yet none of them has come to pass. After Donald Trump </span><a href="https://www.newsweek.com/under-donald-trumps-watch-national-debt-increased-78-trillion-1561627" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">layered</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on $8 trillion in new federal debt in just one term – the third-biggest </span><a href="https://www.washingtonpost.com/business/2021/01/14/trump-legacy-national-debt-increasee/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">increase</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the national debt relative to the size of the economy of any presidential administration in U.S. history – one might imagine that even Republicans have become cynical of those Republicans who scream about deficits when Democrats are in charge, only to ignore them when the GOP takes back the White House and is ready to cut taxes. When the Wall Street Journal editorial board – the standard-bearer of conservative media – </span><a href="https://www.wsj.com/articles/a-bipartisan-pact-to-supersize-the-irs-11624660100" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">opined</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> last month that it would prefer to see Congress add a hundred billion dollars a year to the federal deficit for ten years to fund the proposed bipartisan infrastructure bill, rather than give the IRS additional funding to crack down on tax evasion, you knew the era of the fire-breathing deficit hawks was behind us. </span></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><br /></span></p><span id="docs-internal-guid-6563a9b5-7fff-6a6c-0f0c-b48c9e04947a"><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Mitch McConnell </span><a href="https://thehill.com/homenews/senate/562957-mcconnell-blasts-35t-budget-deal?rl=1" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">declared that</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> inflation is “raging” because he needs people to believe it is raging. He says violent crime is “</span><a href="https://fox17.com/news/local/kentucky-sen-mitch-mcconnell-violent-crime-explosion-coincides-with-defund-police-effort-politics-republican-democrat-donald-trump-joe-biden" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">exploding</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">” because he needs them to believe it is exploding. He needs those issues to be foremost on their minds because, according to </span><a href="https://news.gallup.com/poll/343976/quarterly-gap-party-affiliation-largest-2012.aspx" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Gallup</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, Democrats now hold the largest advantage over Republicans in party affiliation in a decade; and if Republicans are going to win back independent and suburban voters sixteen months from now and take back the Senate, he needs the 2022 midterm elections to be about something other than Donald Trump, January 6th, and Republican voter suppression. </span></span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Yet both issues are looming to be problematic. When Federal Reserve Chair Jay Powell </span><a href="https://www.federalreserve.gov/newsevents/testimony/powell20210714a.htm" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">testified</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to Congress last week, he stuck to his view that while inflation ticked up </span><a href="https://www.washingtonpost.com/business/2021/07/13/inflation-cpi-june-prices-fed/?wpmk=1&wpisrc=al_news__alert-economy--alert-national&utm_source=alert&utm_medium=email&utm_campaign=wp_news_alert_revere&location=alert&pwapi_token=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJjb29raWVuYW1lIjoid3BfY3J0aWQiLCJpc3MiOiJDYXJ0YSIsImNvb2tpZXZhbHVlIjoiNWJlODQ4ZTU5YmJjMGY0ZDZiZDFmYTE5IiwidGFnIjoid3BfbmV3c19hbGVydF9yZXZlcmUiLCJ1cmwiOiJodHRwczovL3d3dy53YXNoaW5ndG9ucG9zdC5jb20vYnVzaW5lc3MvMjAyMS8wNy8xMy9pbmZsYXRpb24tY3BpLWp1bmUtcHJpY2VzLWZlZC8_d3Btaz0xJndwaXNyYz1hbF9uZXdzX19hbGVydC1lY29ub215LS1hbGVydC1uYXRpb25hbCZ1dG1fc291cmNlPWFsZXJ0JnV0bV9tZWRpdW09ZW1haWwmdXRtX2NhbXBhaWduPXdwX25ld3NfYWxlcnRfcmV2ZXJlJmxvY2F0aW9uPWFsZXJ0In0.7bWbRemY2kdgk8QV-RlvU0ZkH6gLwn7JSiV28ZSPwCk" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">over</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> 5% in June – the </span><a href="https://www.axios.com/consumer-price-index-may-inflation-56648b10-e298-4241-8185-d8511321dca5.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">largest</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> year-over-year jump since August 2008 – the inflation that we are seeing is transitory in nature. Lumber has become the case in point. Over the course of the pandemic, lumber prices rose dramatically – apparently due to a </span><a href="https://nebldgsupply.com/strong-demand-and-tight-supply-have-caused-lumber-prices-to-soar/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">combination</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of restricted supply and growing demand as the house-bound masses took on long-delayed home improvements. Then, as supply lines opened up and supply chain bottlenecks eased, </span><a href="https://markets.businessinsider.com/news/stocks/lumber-price-plunge-inflation-temporary-bank-of-england-commodities-boom-2021-7#:~:text=Lumber%20futures%20soared%20in%20the,since%20plummeted%20to%20around%20%24760.&text=In%20the%20US%2C%20year%2Don,5%25%20in%20the%20same%20month." style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">prices</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> have </span><a href="https://www.nytimes.com/2021/06/21/business/lumber-price.html?referringSource=articleShare" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">abated</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. Similar patterns of dramatic year-over-year price increases can be seen in other </span><a href="https://derivativelogic.com/dl-monitor/your-inflation-fears-are-inflated" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">industries</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that experienced supply and demand disruptions during the pandemic, and are now revving back up. Hotel and motel rooms, airline tickets and car rental prices have all jumped up compared to last summer when travel demand fell off a cliff. Energy prices – a major factor in the Consumer Price Index (CPI) – have similarly increased as the economy is bouncing back and people are driving again. A significant year-over-year rise in crude oil prices provides a dramatic case in point. Just over a year ago, in the early months of the pandemic, oil prices fell </span><a href="https://www.cnbc.com/2020/06/16/how-negative-oil-prices-revealed-the-dangers-of-futures-trading.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">below</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> zero for a brief period; there should be no surprise that they have shown dramatic gains on a year-over-year basis.</span></span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But while Republicans are banging the drums about runaway inflation with the hope of stirring popular discontent, the bond markets are not <a href="https://derivativelogic.com/dl-monitor/feds-free-pass-on-inflation-continues">convinced</a>. Market projections of the anticipated ten-year inflation rate are reflected in the </span><a href="https://www.yardeni.com/pub/expectinflat.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">spread</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> between the yields on the 10-year US Treasury Bond and the comparable term Treasury Inflation-Protected Securities (the “TIPS Spread”). Suffice it to say that while inflation fears spiked upward during the spring, market inflation expectations have settled back down, as market concerns have pivoted from inflation fears to indications that the pace of economic <a href="https://www.washingtonpost.com/business/2021/07/19/markets-stocks-today-delta-variant/?wpmk=1&wpisrc=al_news__alert-economy--alert-national&utm_source=alert&utm_medium=email&utm_campaign=wp_news_alert_revere&location=alert&pwapi_token=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJjb29raWVuYW1lIjoid3BfY3J0aWQiLCJpc3MiOiJDYXJ0YSIsImNvb2tpZXZhbHVlIjoiNWJlODQ4ZTU5YmJjMGY0ZDZiZDFmYTE5IiwidGFnIjoid3BfbmV3c19hbGVydF9yZXZlcmUiLCJ1cmwiOiJodHRwczovL3d3dy53YXNoaW5ndG9ucG9zdC5jb20vYnVzaW5lc3MvMjAyMS8wNy8xOS9tYXJrZXRzLXN0b2Nrcy10b2RheS1kZWx0YS12YXJpYW50Lz93cG1rPTEmd3Bpc3JjPWFsX25ld3NfX2FsZXJ0LWVjb25vbXktLWFsZXJ0LW5hdGlvbmFsJnV0bV9zb3VyY2U9YWxlcnQmdXRtX21lZGl1bT1lbWFpbCZ1dG1fY2FtcGFpZ249d3BfbmV3c19hbGVydF9yZXZlcmUmbG9jYXRpb249YWxlcnQifQ.H8FesdJFyS57ODw4c5WWFx8F1EqeH_-blqEP00nyqj8">recovery</a> – at home and globally – is slowing in the face of a rapidly </span><a href="https://www.washingtonpost.com/health/in-this-summer-of-covid-freedom-disease-experts-warn-the-world-needs-a-reality-check/2021/07/17/895be6e8-e58c-11eb-b722-89ea0dde7771_story.html?wpmk=1&wpisrc=al_trending_now__alert-hse--alert-national&utm_campaign=wp_news_alert_revere_trending_now&utm_medium=email&utm_source=alert&location=alert&pwapi_token=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.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.iq7PpLjwjsvhhI-_ktJWt4I6XfO9SOdr5kL6fCezHrg" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">spreading</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Covid-19 Delta Variant and </span><a href="https://www.tennessean.com/story/news/health/2021/07/13/tennessee-halts-all-vaccine-outreach-minors-not-just-covid-19/7928701002/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">vaccination</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/market-updates/on-the-minds-of-investors/how-could-vaccine-hesitancy-affect-the-global-recovery/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">hesitancy</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. The TIPS Spread is currently projecting a ten-year inflation rate just over 2.3%, well below what Mitch McConnell is hoping for.</span></span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">This is not to say that inflation is not a risk, but rather that spikes in inflation</span><span style="font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> as measured by the CPI </span><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">may well be transitory, as Jay Powell insists. The underlying economic myth is that inflation has been under control for the past two decades or more, as inflation in the CPI – which reflects the prices of those things that most people purchase on a day-to-day basis – has </span><a href="https://fred.stlouisfed.org/series/CPIAUCSL" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">poked</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> along at a compounded annual rate of just 2.1% over the past twenty years. During this same timeframe, however, asset price inflation – stocks, bonds, homes, cryptocurrency, etc. – have skyrocketed, with residential real estate </span><a href="https://fred.stlouisfed.org/series/SPCS20RSA" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">prices</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> rising by 3.9% annually – nearly twice the rate of CPI inflation – corporate bonds </span><a href="http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">up</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> 7.8%, and a broad measure of </span><a href="https://fred.stlouisfed.org/series/WILL5000INDFC" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">stocks</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> up by nearly 8.9% annually. </span></span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Inflation in asset prices has been a direct </span><a href="https://www.nytimes.com/2021/06/15/opinion/inflation-federal-reserve-powell-biden.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">function</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of Federal Reserve Bank monetary </span><a href="https://fred.stlouisfed.org/series/FEDFUNDS" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">policy</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, particularly the practice of “quantitative easing” – Fed-speak for printing money to purchase long-term bonds in the open market to force long-term interest rates toward zero – that fueled the global economy recovery from the 2008 financial collapse. Since then, the Fed has </span><a href="https://fred.stlouisfed.org/series/WALCL" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">pumped</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> nearly $7 trillion into the markets, an amount that is equal to nearly 50% of the U.S. </span><a href="https://tradingeconomics.com/united-states/money-supply-m0" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">money</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> supply. While traditional economic theory </span><a href="https://www.forbes.com/sites/johntharvey/2011/05/14/money-growth-does-not-cause-inflation/?sh=1ce3b5bc42f5" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suggested</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that printing money causes inflation, all that new money never made it into the pockets of most Americans, where it might have translated into inflation as measured by the CPI. Instead, it flowed through the financial markets into the accounts of the investor class, where asset price inflation is called by another name: </span><a href="https://www.propublica.org/article/how-the-federal-reserve-is-increasing-wealth-inequality" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">wealth accumulation</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">. </span></span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Like inflation, the problem of crime is in the eye of the beholder. According to a </span><a href="https://morningconsult.com/company/about/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Morning Consult</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span><a href="https://morningconsult.com/2021/07/14/violent-crime-public-safety-polling/?mkt_tok=ODUwLVRBQS01MTEAAAF-RgPvR_9tLp180kvL-zEsSs9dITvfNqDaWeDv2y6vZwzA1xFG1j-Wha-iybwblYjMxZuA26gSa2snEv4d5LyE_D_9HvkuRifN-AyoUw50Dro" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">poll</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> released last week, three-quarters of Americans now believe that violent crime is a major, and growing, problem. However, while this number is roughly the same among Republicans, Democrats and Independents, the perceived cause falls predictably along party lines. Just over half of those polled blame rising crime on the proliferation of “guns on our street” – meaning the problem is one of gun control – while for the other half of those polled, the problem lies at the feet of those pushing to defund the police.</span></span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><span style="font-family: Roboto; font-size: medium;">Although violent crime often grabs the headlines, leading to the broad based concern reflected in the polling numbers noted above, a deeper dive into the Morning Consult numbers suggests that crime is not as much of an issue in most people’s daily lives. While three quarters of Americans suggest that violent crime is a major problem nationally, the problem appears to diminish the closer to home one gets. Only half of those polled – regardless of political affiliation – think major crime is a problem in their state, while the number falls to one-third or less when people are asked about crime in their own community.</span></span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The notion that fear of violent crime is being trumped up for political advantage is reinforced by </span><a href="https://www.gallup.com/corporate/212381/who-we-are.aspx" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Gallup</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> polling on the issue. According to a Gallup </span><a href="https://news.gallup.com/poll/1603/crime.aspx" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tracking</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> poll, people’s fear of crime in their own community is at the lowest level it has ever been since Gallup began asking the question in the 1960s. Its most recent result, 29%, mirrors the response to the same question in the Morning Consult results noted above. As Paul Krugman </span><a href="https://www.nytimes.com/2021/07/12/opinion/covid-big-cities.html?referringSource=articleShare" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">observed</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> recently, despite the increase in homicides nationally, </span><span style="font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“New York is still safer than it was a decade ago, vastly safer than it was 30 years ago, and, for what it’s worth, considerably safer than, say, Columbus, Ohio."</span></span></p><span style="font-family: Roboto; font-size: medium;"><br /></span><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-size: medium;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Mitch McConnell wants his old job back, and knows that independents and </span><a href="https://www.aei.org/wp-content/uploads/2021/07/The-GOP%E2%80%99s-Suburban-Dilemma.pdf?x91208" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">suburban</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> voters hold the key. With his party now completely captive to its </span><a href="https://www.theguardian.com/world/2021/jul/15/kremlin-papers-appear-to-show-putins-plot-to-put-trump-in-white-house" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">mentally unstable</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> leader, and fearing that the 2022 elections will be a referendum on Donald Trump, January 6th, and the GOP voter suppression, he desperately wants to change the subject. Inflation and crime are the best he has been able to come up with. Cheering for bad news would seem to <a href="https://apnews.com/article/c842a0bcecc840628a991092da3e7ce3">suit</a> him well, and – with little else to offer – we can expect it to reach a crescendo in the months ahead. </span></span></p><div><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div><div><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><p style="font-family: Times; font-size: medium; white-space: normal;"><span>ORIGINALLY POSTED TO <a data-cke-saved-href="http://appalled.blogspot.com/" href="http://appalled.blogspot.com/" target="_blank">GRAFFITI</a> BY DAVID PAUL ON SATURDAY, JULY 17, 2021.<br /><br /><em>Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em><br /></span></p><p style="font-family: Times; font-size: medium; white-space: normal;"><span style="font-family: inherit;"><em>Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em> </span></p></span></div></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-81401142484072909742021-07-10T19:52:00.008-04:002021-07-11T09:46:57.508-04:00Ted Cruz wants to shut down the IRS, should Democrats agree?<p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Donald Trump is a tax cheat. He inasmuch as </span><a href="https://www.washingtonpost.com/politics/2021/07/06/how-trumps-claims-being-king-tax-code-could-come-back-haunt-him/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">admitted</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> it at his rally in Florida last week, just days after the indictment of the Trump Organization and its long-time chief financial officer on charges ranging from tax fraud to grand larceny. Returning to the campaign trail, surrounded by his loyal followers, he relished the opportunity to play the common man besieged by faceless bureaucrats, and the complexities of a tax code beyond anyone’s understanding.</span></p><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px;"><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-style: italic; white-space: pre-wrap;">“They go after good, hard-working people for not paying taxes on a company car. You didn’t pay tax on the car or a company apartment…. Or education for your grandchildren. I don’t even know. Do you have to? Does anybody know the answer to that stuff?”</span></p></blockquote><p style="text-align: left;"><span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Of course, Donald Trump is not the common man. Rather, he is emblematic of a culture of tax avoidance – which he once playfully </span><a href="https://www.forbes.com/sites/howardgleckman/2019/05/08/president-trump-as-role-model-avoiding-taxes-for-sport/?sh=e71266f3160e" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">referred</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to as a “sport” – that has been elevated to the modern entitlement of a small, privileged elite. A recent </span><a href="https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">report</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> from ProPublica focused on the extraordinarily low </span><a href="https://www.propublica.org/article/how-we-calculated-the-true-tax-rates-of-the-wealthiest" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">effective</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> tax rate paid by the richest among us. According to that report, over the five years from 2014 to 2018, the 25 wealthiest Americans, as ranked by Forbes magazine, saw their net worth rise by $401 billion. During that period, based on leaked IRS data, they paid $13.6 billion in federal income taxes, or 3.4% of their wealth accretion over that timeframe. </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The ProPublica report was not about tax fraud or grand larceny, it was simply about an income tax system that does not tax wealth that is derived from the growth in stock or other asset values until those assets are sold, when “income” is realized. This is not a matter of tax policy, but rather constitutional law. Few people may realize that when the Constitution was drafted, it did not give the federal government the power to impose an income or other direct taxes, but only indirect taxes, such as sales taxes and import duties. Shortly after the federal income tax was created with ratification of the 16th Amendment in 1913, the Supreme Court </span><a href="https://en.wikipedia.org/wiki/Eisner_v._Macomber#Stock_dividends_vs._cash_dividends" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">ruled</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Eisner v. Macomber</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that the increase in wealth that a person might realize through rising stock values did not constitute “income” subject to taxation under the newly created federal income tax.</span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Such is the law of the land, and it is the reason why Warren Buffett, Jeff Bezos, Michael Bloomberg and Elon Musk – who saw their collective wealth </span><a href="https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">grow</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by $160 billion from 2014 to 2018 – paid only $1.7 billion in taxes during that time period, for an effective tax rate of barely 1%. Under the rules established in the wake of the </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Eisner</span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> decision a century ago, stock wealth (referred to as “unrealized gains”) does not become income subject to taxation unless and until the stock is sold. And then there are the myriad other features of the tax code – from those as simple as the lower tax rate levied against capital gains compared to “ordinary” income, to industry-specific </span><a href="https://www.nytimes.com/2020/10/30/business/trump-taxes-real-estate.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">tax advantages</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> and inter-generational trusts – that can result in the wealthiest taxpayers paying tax rates that are far lower than the rest of us pay as a matter of course. For example, over that five-year period, Michael Bloomberg reported total income – including “realized” capital gains – of $10 billion, yet he paid less than $300 million in federal income taxes, for an effective tax rate of less than 3%. If tax avoidance is a sport, Bloomberg is apparently very good at it.</span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Donald Trump, of course, was not charged by New York State prosecutors with tax avoidance – defined as legal efforts to minimize the amount of taxes one is obligated to pay – but rather tax evasion, which is what happens when someone steps over the line into tax fraud, and a range of other crimes and misdemeanors, up to and including, it appears, grand larceny. And tax evasion is a big deal. According to the conservative-leaning Tax Foundation and the Congressional Joint Committee on Taxation, the “tax gap” – defined as the difference between taxes paid and taxes owed – is now </span><a href="https://taxfoundation.org/tax-gap-tops-500-billion-year/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">estimated</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to exceed half a trillion dollars annually, more than </span><a href="http://gabriel-zucman.eu/files/GLRRZ2021.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">one-third</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of which is owed by the top 1%.</span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-Zcnil6WGQUg/YOoynXrAYdI/AAAAAAAAHZk/BrOTg-ORngMX4uxrtSiEz3CmpVWRCvl2wCNcBGAsYHQ/s960/On%2Bit%2BGH%2Bfor%2BBCN.jpeg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="960" data-original-width="960" height="320" src="https://1.bp.blogspot.com/-Zcnil6WGQUg/YOoynXrAYdI/AAAAAAAAHZk/BrOTg-ORngMX4uxrtSiEz3CmpVWRCvl2wCNcBGAsYHQ/s320/On%2Bit%2BGH%2Bfor%2BBCN.jpeg" /></a></div><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><span style="font-size: 14.6667px;">The entire topic of how taxes are levied, enforced and evaded emerged dramatically into public view over the past few weeks, with an odd confluence of the indictments of the Trump Organization, the bipartisan infrastructure bill making its way through Congress, and the publication by the U.S. Treasury of its annual “Green Book”.</span></span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The publication of the Green Book – where the Treasury lays out its revenue generation blueprint for the coming year – stirred up a firestorm, as it laid out the Biden Administration’s plans to tackle the tax gap and make a dent in tax advantages that have contributed to the massive </span><a href="https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">accumulation</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of wealth by the wealthiest American families. In particular, those plans </span><a href="https://www.jdsupra.com/legalnews/the-biden-administration-s-revenue-7618184/#_edn3" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">contemplate</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> equalizing the tax treatment of capital gains and ordinary income, and forcing the realization of capital gains at periodic intervals within trusts created to pass accumulated wealth – often untaxed – from one generation to the next. </span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Central to the Biden Administration plans is $40 billion of funding in the bipartisan infrastructure bill for expanded IRS enforcement. The IRS is responsible for collecting 95% of federal revenues, and since </span><a href="https://www.cbo.gov/publication/56467" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">2010</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">, its budget has been reduced by 20% in real terms and staffing has been cut by 22%. As a direct consequence of reduced funding, the share of individual and corporate income tax returns examined has </span><a href="https://www.propublica.org/article/irs-now-audits-poor-americans-at-about-the-same-rate-as-the-top-1-percent" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">declined</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by 46% and 37%, respectively.</span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">There was a time when going after tax deadbeats was popular political rhetoric among Republicans and Democrats alike, as an overwhelming majority of Americans – </span><a href="https://www.marketwatch.com/story/is-it-ok-to-cheat-on-your-taxes-the-irs-polled-americans-for-an-answer-11624640822" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">north of 85%</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> according to polling data – disdain those who cheat on their taxes. After all, why should taxes be raised on those of us who pay what we owe to fund needed public services, rather than collected from those who don’t? And more to the point, why should the wealthiest Americans, with all their high-priced lawyers and accountants, be allowed to </span><a href="https://www.theguardian.com/business/2021/jun/08/richest-25-americans-jeff-bezos-elon-musk-tax" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">skate</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by while everyday folks dutifully fill out the short form and pay what the government asks of them. </span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">But that was then, and this is now. If Democrats believed that Republicans – even as they are busy </span><a href="https://www.vanityfair.com/news/2021/03/republicans-are-trying-to-rebrand-themselves-as-working-class-heroes" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">rebranding</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> themselves as working class heroes – were going to sit still in the midst of the uproar among rich GOP donors when the Treasury plans were made public, they were mistaken. Since its publication, Green Book panic has </span><a href="https://www.washingtonpost.com/business/2021/07/07/irs-taxes-budget-conservatives/" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">roiled</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the Senate Republican Caucus. The Coalition to Protect American Workers, an anti-tax dark money group founded by former Vice President Mike Pence’s ex-chief of staff, </span><a href="https://www.kansascity.com/news/politics-government/article252512718.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">took aim</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> at Kansas Republican Senator Jerry Moran – a member of the bipartisan group crafting the infrastructure bill – with an attack ad portraying the legion of goose-stepping IRS </span><a href="https://www.youtube.com/watch?v=4D4ODY55kTk" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">agents</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that would be unleashed across the land by the infrastructure bill.</span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Republican Senators quickly jumped on the issue, mirroring the words of Texas Senator Ted Cruz, who </span><a href="https://www.axios.com/gop-tax-irs-infrastructure-9226b210-051b-46fc-99c5-e1906c82ed2b.html" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">declared</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that </span><span style="font-family: Arial; font-size: 11pt; font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">"Throwing billions more taxpayer dollars at the IRS will only hurt Americans struggling to recover after waves of devastating lockdowns... Instead of increasing funding for the IRS, we should abolish the damn place!” </span><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">None of them sought to explain how cracking down on tax evasion among the wealthiest Americans – who largely cruised through the pandemic year with few ill effects – would adversely impact the rest of the country, but such are the ironies of a GOP that serves the interest of plutocrats even as it positions itself the vanguard of the proletariat. </span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The Wall Street Journal Editorial Board </span><a href="https://www.wsj.com/articles/a-bipartisan-pact-to-supersize-the-irs-11624660100" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">piled</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> on, chastising Republican participation in the IRS funding plan. But even its editorial, which cited the road map for attacking the tax gap </span><a href="https://www.taxnotes.com/special-reports/compliance/shrinking-tax-gap-approaches-and-revenue-potential/2019/11/15/2b47g" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">published</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by economists Natasha Sarin and Larry Summer, declined to offer a substantive critique of the Treasury plan, beyond musing plaintively: </span></p><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px;"><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-style: italic; white-space: pre-wrap;">“But is that plausible [that investment in the IRS will yield more revenue]? It makes little sense that millions of Americans are willfully violating the tax code. The costs are too high if they’re caught. People who make $5 million a year hire lawyers and accountants to exploit legal means in the IRS code to minimize their tax liability.” </span></p></blockquote><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And there’s the rub. The simple truth is that the slippery slope from tax avoidance to tax evasion has been greased by years of slashing funding to the IRS. Over the past decade, the decreased funding and staffing has resulted in an </span><a href="https://www.propublica.org/article/irs-now-audits-poor-americans-at-about-the-same-rate-as-the-top-1-percent" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">80%</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> decline in the chance that the tax return of any given wealthy American will be audited. Accordingly, while the editorial argument might make sense in the abstract, in the real world the economic incentives to tiptoe across the line from tax avoidance into tax evasion have been steadily increased.</span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">And standing there as Exhibit A on the stage in Florida was Donald Trump, a man for whom the sport of tax avoidance appears to have slid easily into tax evasion. However, unlike your average tax cheat, Trump knows that he will have back-up if charges are actually brought against him. If, as he has long suggested, his supporters would turn a blind eye to his shooting someone in the middle of Fifth Avenue, he must surely feel confident that he will be able to weather – if not actually </span><a href="https://www.washingtonpost.com/politics/trump-indictments-political-future/2021/07/01/46553dc0-da9e-11eb-ae62-2d07d7df83bd_story.html?utm_source=rss&utm_medium=referral&utm_campaign=wp_politics" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">benefit</span></a><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> from – indictments for tax fraud and grand larceny, should those be forthcoming. And as long as his supporters continue to stand by him, Republicans in the Senate will be there as well. Pretty soon, no doubt, we are going to see Ted Cruz and others on Fox or the Sunday shows complaining that what the Trump Organization did is no big deal, and that but for the Trump name, none of those indictments would have seen the light of day.</span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">There is a larger issue here, however, than the fate of the IRS funding, the infrastructure bill, or Donald Trump himself. It is the diminishing societal consensus surrounding federal tax policy. On the Democratic side of the aisle, growing wealth inequality and Elizabeth Warren’s call for a wealth tax – buttressed by the ProPublica data illuminating vast disparities in how income is taxed – have raised concerns over the fundamental fairness of the federal income tax system. On the Republican side, the uproar over the IRS funding in the infrastructure bill and the dark money ad attacking Jerry Moran suggest that the line between raising taxes – opposition to which has been a non-negotiable shibboleth in the GOP dating back to the 1980s – and collecting them has become increasingly faint. </span></p><p style="text-align: left;"><span style="font-family: Arial; font-size: 11pt; white-space: pre-wrap;">If there is no longer a consensus across the aisle that even taxes on the books should be collected, it may be time to embrace a fundamental reimagining of what we tax and how. Perhaps when Ted Cruz suggests shuttering the IRS, Democrats should take the idea seriously, and consider how much political capital they want to invest in being attacked as the Party of the IRS. </span></p><p style="text-align: left;"><span>ORIGINALLY POSTED TO <a data-cke-saved-href="http://appalled.blogspot.com/" href="http://appalled.blogspot.com/" target="_blank">GRAFFITI</a> BY DAVID PAUL ON <abbr itemprop="datePublished" title="2017-01-20T11:00:00-05:00"><a data-cke-saved-href="https://appalled.blogspot.com/2017/01/end-of-battle-beginning-of-war.html" href="https://appalled.blogspot.com/2017/01/end-of-battle-beginning-of-war.html" rel="bookmark" title="permanent link">FRIDAY, JULY 9, 20</a>21.</abbr><br /><br /><em>Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em><br /></span></p><p><span style="font-family: inherit;"><em>Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em> </span></p><div><p></p></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-60864599674287345952021-06-05T17:03:00.005-04:002021-06-05T17:12:49.819-04:00Why steal the next election when you can overturn the last one?<div class="separator" style="clear: both; text-align: center;"><div style="text-align: left;"><span><em><span style="font-family: Roboto;">“Tell you what Mr. American Airlines,”</span></em><span style="font-family: Roboto;"> Texas Lt. Gov. Dan Patrick <a data-cke-saved-href="https://www.nbcdfw.com/news/politics/lone-star-politics/watch-lt-gov-dan-patrick-discusses-texas-election-ballot-security-bill/2598206/" href="https://www.nbcdfw.com/news/politics/lone-star-politics/watch-lt-gov-dan-patrick-discusses-texas-election-ballot-security-bill/2598206/">bellowed</a> several weeks ago, after American Airlines and a hundred or so other major corporations pushed back against voter suppression legislation being pursued by Republican controlled state legislatures across the country. <em>“I take it personally. You're questioning my integrity and the integrity of the governor and the integrity of the 18 Republicans who voted for this. When you suggest that we're trying to suppress the vote, you're in essence between the lines calling us racist and that will not stand! That will not stand!”</em></span></span></div><span style="font-family: Roboto;"><div style="text-align: left;"> </div><div style="text-align: left;">It seemed quaint, really. So old school. So George H.W. Bush. A Republican leader worrying out loud about his integrity. The Republican Party is cascading out of control, tumbling faster and faster down the rabbit hole, firmly in the hands of the crazies and the grifters. QAnon and its demonization of Democrats as pedofile communists, <a data-cke-saved-href="https://www.axios.com/hawley-gop-cash-cost-insurrection-aabd9f44-5017-4350-9873-2d0aa7f282de.html" href="https://www.axios.com/hawley-gop-cash-cost-insurrection-aabd9f44-5017-4350-9873-2d0aa7f282de.html">celebration</a> of the January 6th insurrection, and amped up culture wars have become the backdrop for Republican fundraising, as hundreds of millions of dollars are being sucked out of the pockets of the party’s working class base, as corporate donors have walked away in disgust. The GOP’s new rock stars, Matt Gaetz and Marjorie Taylor Greene, have taken their tent-revival populism <a data-cke-saved-href="https://www.economist.com/united-states/2021/05/30/two-of-donald-trumps-staunchest-congressional-fans-take-their-show-on-the-road" href="https://www.economist.com/united-states/2021/05/30/two-of-donald-trumps-staunchest-congressional-fans-take-their-show-on-the-road">show</a> on the <a data-cke-saved-href="https://www.npr.org/2021/05/10/995285714/a-look-at-the-gop-from-inside-a-matt-gaetz-marjorie-taylor-greene-rally" href="https://www.npr.org/2021/05/10/995285714/a-look-at-the-gop-from-inside-a-matt-gaetz-marjorie-taylor-greene-rally">road</a>. And, of course, Donald Trump is set to ramp his <a data-cke-saved-href="https://www.nytimes.com/2021/06/05/us/politics/donald-trump-republican-convention-speech.html?action=click&module=Spotlight&pgtype=Homepage" href="https://www.nytimes.com/2021/06/05/us/politics/donald-trump-republican-convention-speech.html?action=click&module=Spotlight&pgtype=Homepage">rallies</a> back up and begin a revenge tour against all those who have <a data-cke-saved-href="https://www.bloomberg.com/news/articles/2021-06-04/trump-s-rally-revival-leaves-some-in-gop-fearing-a-revenge-tour" href="https://www.bloomberg.com/news/articles/2021-06-04/trump-s-rally-revival-leaves-some-in-gop-fearing-a-revenge-tour">wronged</a> him.</div><div style="text-align: left;"> </div><div style="text-align: left;">Of course, no one says “we want to steal elections” out loud, particularly when they are trying to steal elections. Not these days, anyway. Back in the day, in Dick Daley’s Chicago, or New York, or Boston, or Louisiana, a half a century or more ago, party bosses huddled in smoke-filled rooms to figure out plans for election day. But that was a different world. There’s a reason Trump’s own election fraud commission was quietly <a data-cke-saved-href="https://apnews.com/article/north-america-donald-trump-us-news-ap-top-news-elections-f5f6a73b2af546ee97816bb35e82c18d" href="https://apnews.com/article/north-america-donald-trump-us-news-ap-top-news-elections-f5f6a73b2af546ee97816bb35e82c18d">disbanded</a> in 2018 without issuing so much as a final report. Hatching conspiracies to rig elections – much less executing them – is near to impossible in a world where everyone is an investigative reporter, with a video camera and tape recorder in their back pocket.</div><div style="text-align: left;"> </div><div style="text-align: left;">Dan Patrick has reason to be upset. All he and his colleagues are trying to do is what partisans have done for decades: bend the rules for political advantage. It was a sign of our increasingly racially-charged environment that he ceded the moral high ground in suggesting that their efforts at run-of-the-mill voting suppression makes them a bunch of racists. After all, it is safe to say that Texas Republicans have no problem with Black and brown people voting, as long as they vote Republican. Patrick and his compatriots are not really trying to address pervasive voter fraud as their rhetoric suggests, just pervasive Democrat voting.</div><div style="text-align: left;"> </div><div style="text-align: left;">That problem – pervasive voting and adverse demographic trends– has been a front burner issue for the GOP dating back a half century or more. In 1980, at the dawn of the Reagan revolution, Heritage Foundation co-founder and right-wing icon Paul Weyrich <a data-cke-saved-href="https://www.youtube.com/watch?v=8GBAsFwPglw" href="https://www.youtube.com/watch?v=8GBAsFwPglw">argued</a> that voter suppression was and would continue to be a key to the success of the conservative movement. <em>“So many of our Christians,” </em>he explained,<em> “have what I call the goo-goo syndrome: good government. They want everybody to vote. I don't want everybody to vote. Elections are not won by a majority of people, they never have been from the beginning of our country and they are not now. As a matter of fact, our leverage in the elections quite candidly goes up as the voting populace goes down.”</em></div><div style="text-align: left;"> </div><div style="text-align: left;">Forty years later, and little has changed. Donald Trump raised eyebrows a bit over a year ago when he <a data-cke-saved-href="https://www.washingtonpost.com/politics/2020/05/29/trump-just-said-what-republicans-have-been-trying-not-say-years/" href="https://www.washingtonpost.com/politics/2020/05/29/trump-just-said-what-republicans-have-been-trying-not-say-years/">launched</a> his attack on mail-in voting. Trump didn’t want to make it easier for people to vote, he wanted to make it easier for him to win. And, like Weyrich, he argued that the easier it was for people to vote, the harder it would be for Republicans to win national elections.</div><div style="text-align: left;"> </div><div style="text-align: left;">The issue of voter suppression as a core Republican political tactic reached the Supreme Court earlier this year, in a case that challenged voter suppression statutes that were enacted into law by the Arizona legislature five years ago. During oral arguments in <a data-cke-saved-href="https://www.azcentral.com/story/opinion/op-ed/laurieroberts/2021/03/02/arizona-gop-lawyer-admits-real-reason-wants-election-reform/6895380002/" href="https://www.azcentral.com/story/opinion/op-ed/laurieroberts/2021/03/02/arizona-gop-lawyer-admits-real-reason-wants-election-reform/6895380002/">March</a>, Justice Amy Coney Barrett asked Michael Carvin, the attorney for the Arizona Republican Party, what the GOP’s interest was in the Court’s upholding the voting restrictions. Carvin responded by saying the quiet part out loud:<em> “Politics is a zero-sum game. Every extra vote they [Democrats] get... hurts us. It’s the difference between winning an election 50-49 and losing an election 51 to 50.” </em>Democracy, it turns out, is not the imperative. Winning is.</div><div style="text-align: left;"> </div><div style="text-align: left;">Republicans argue that there is nothing anti-American about voter suppression. <em>“Democracy isn’t the objective,” </em>Utah Senator Mike Lee – a former law clerk for Supreme Court Justice Samuel Alito – famously <a data-cke-saved-href="https://twitter.com/SenMikeLee/status/1314089207875371008?s=20" href="https://twitter.com/SenMikeLee/status/1314089207875371008?s=20">tweeted</a> last October. <em>“Liberty, peace, and prosperity are. We want the human condition to flourish. Rank democracy can thwart that.”</em> Lee’s words became a rallying cry for many on the right, and were mirrored in a number of <a data-cke-saved-href="https://www.nationalreview.com/2021/03/not-everyone-should-be-made-to-vote/?itm_source=parsely-api" href="https://www.nationalreview.com/2021/03/not-everyone-should-be-made-to-vote/?itm_source=parsely-api">essays</a> in April in the <em>National Review </em>(the magazine founded by William F. Buckley, Jr.) that suggested that tightening restrictions on voting was a legitimate <a data-cke-saved-href="https://slate.com/news-and-politics/2021/04/national-review-comes-out-against-democracy-explicitly.html" href="https://slate.com/news-and-politics/2021/04/national-review-comes-out-against-democracy-explicitly.html">defense</a> against leftist Democrat mob rule.</div><div style="text-align: left;"> </div><div style="text-align: left;">The essays walked a fine line, trying to rationalize the kind of voting restrictions long embraced by Republican elites, even as the authors sought to pander to the anti-elite, populist ferver animating the Trump base. In his <a data-cke-saved-href="https://www.nationalreview.com/2021/04/why-not-fewer-voters/" href="https://www.nationalreview.com/2021/04/why-not-fewer-voters/">piece</a> “Why not fewer voters?” Kevin Wilkinson begged the question of who would get to decide who would not be allowed to vote, while Andrew McCarthy <a data-cke-saved-href="https://www.nationalreview.com/2021/04/major-league-baseball-and-the-voting-rights-con/" href="https://www.nationalreview.com/2021/04/major-league-baseball-and-the-voting-rights-con/">argued</a> that <em>“It would be far better if the franchise were not exercised by ignorant, civics-illiterate people, hypnotized by the flimflam that a great nation needs to be fundamentally transformed rather than competently governed.”</em></div><div style="text-align: left;"> </div><div style="text-align: left;">While McCarthy no doubt had the progressive Democrats in mind when he referenced “flimflam” about transforming the nation, a dispassionate observer – should one still exist anymore – might be confused as to whom he was talking about. After all, the election of Donald Trump in 2016 was nothing if not an election that turned on “<em>civics-illiterate people, hypnotized by the [MAGA] flimflam that a great nation needs to be fundamentally transformed.”</em> As to fears of mob rule – Republican riot <a data-cke-saved-href="https://www.nationalreview.com/2021/05/liz-cheney-is-not-the-problem/" href="https://www.nationalreview.com/2021/05/liz-cheney-is-not-the-problem/">revisionism</a> <a data-cke-saved-href="https://www.vanityfair.com/news/2021/04/kevin-mccarthy-now-lying-about-capitol-riot-to-make-trump-like-him" href="https://www.vanityfair.com/news/2021/04/kevin-mccarthy-now-lying-about-capitol-riot-to-make-trump-like-him">notwithstanding</a> – it is hard to argue that in the wake of January 6th that moment hasn’t already arrived.</div><div style="text-align: left;"> </div><div style="text-align: left;">Republican leaders Mitch McConnell and Kevin McCarthy have struggled to craft a clear stance on the voter suppression <a data-cke-saved-href="https://en.wikipedia.org/wiki/Republican_efforts_to_restrict_voting_following_the_2020_presidential_election" href="https://en.wikipedia.org/wiki/Republican_efforts_to_restrict_voting_following_the_2020_presidential_election">movement</a> <a data-cke-saved-href="https://www.nytimes.com/live/2021/05/06/us/joe-biden-news#desantis-florida-voting-law" href="https://www.nytimes.com/live/2021/05/06/us/joe-biden-news#desantis-florida-voting-law">sweeping</a> the country. As a partisan matter, they support anything that improves their electoral prospects. At the same time, they understand that those efforts are feeding off of Donald Trump’s Big Lie, and will ultimately undermine the GOP’s – and their own – credibility.</div><div style="text-align: left;"> </div><div style="text-align: left;">As recently as a few weeks ago, McCarthy and McConnell tried once again to deflect the notion that the party’s submission to Donald Trump is complete, and that his Big Lie is driving events. <em>“I don’t think anybody is questioning the legitimacy of the presidential election. I think that is all over with.”</em> McCarthy <a data-cke-saved-href="https://www.msnbc.com/msnbc/watch/rep-mccarthy-no-one-questioning-the-legitimacy-of-the-2020-presidential-election-111793733612" href="https://www.msnbc.com/msnbc/watch/rep-mccarthy-no-one-questioning-the-legitimacy-of-the-2020-presidential-election-111793733612">told</a> reporters on May 11th. To which McConnell <a data-cke-saved-href="https://twitter.com/HayesBrown/status/1392190813992534023?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1392190813992534023%7Ctwgr%5E%7Ctwcon%5Es1_c10&ref_url=https%3A%2F%2Fwww.msnbc.com%2Fopinion%2Fgop-lies-about-jan-6-are-getting-bolder-more-dangerous-n1267178" href="https://twitter.com/HayesBrown/status/1392190813992534023?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1392190813992534023%7Ctwgr%5E%7Ctwcon%5Es1_c10&ref_url=https%3A%2F%2Fwww.msnbc.com%2Fopinion%2Fgop-lies-about-jan-6-are-getting-bolder-more-dangerous-n1267178">added</a> the next day, <em>“I don’t think anyone on our side has been arguing that [voter fraud] has been pervasive all over the country.”</em></div><div style="text-align: left;"> </div><div style="text-align: left;">No one, perhaps, except the 70% of Republicans who agreed in a recent CNN <a data-cke-saved-href="https://cdn.cnn.com/cnn/2021/images/04/30/rel3e.-.voting.and.elections.pdf" href="https://cdn.cnn.com/cnn/2021/images/04/30/rel3e.-.voting.and.elections.pdf">poll</a> that <em>“Joe Biden did not legitimately win enough votes to win the presidency,” </em>and the even greater 87% who now define truth as being whatever Donald Trump says it is, and believe that voter fraud is a significant problem that must be addressed, despite the testimony of Republican officials, ranging from <a data-cke-saved-href="https://www.bbc.com/news/world-us-canada-55153366" href="https://www.bbc.com/news/world-us-canada-55153366">Bill Barr</a> and <a data-cke-saved-href="https://www.vox.com/2020/11/13/21563825/2020-elections-most-secure-dhs-cisa-krebs" href="https://www.vox.com/2020/11/13/21563825/2020-elections-most-secure-dhs-cisa-krebs">other</a> Trump administration officials to state election <a data-cke-saved-href="https://www.nytimes.com/2020/11/10/us/politics/voting-fraud.html" href="https://www.nytimes.com/2020/11/10/us/politics/voting-fraud.html">officials</a> across the country.</div><div style="text-align: left;"> </div><div style="text-align: left;">Donald Trump has never had patience for the long game, however, and it was hard to imagine that enacting voter restrictions in states across the country, and then waiting several years to see if they worked, was going to suit his timeline. So this week he upped the ante. At a widely-publicized QAnon conference (how painful is it to realize that we live in a country that has QAnon conferences) Trump sycophants Mike Flynn and Sydney Powell fed speculation that some sort of <a data-cke-saved-href="https://www.rollingstone.com/politics/politics-news/michael-flynn-qanon-myanmar-coup-in-america-1176380/" href="https://www.rollingstone.com/politics/politics-news/michael-flynn-qanon-myanmar-coup-in-america-1176380/">coup</a> or election “audits” in Arizona and other states might yet restore Donald Trump to the White House. When that happened, Powell <a data-cke-saved-href="https://www.yahoo.com/news/ex-trump-lawyer-sidney-powell-212750195.html" href="https://www.yahoo.com/news/ex-trump-lawyer-sidney-powell-212750195.html">explained</a> authoritatively, Trump would not get back the days he has missed since January 20th, but rather that a new inauguration date would be set, Joe Biden would be moved out of the White House, and Trump would move back in.</div><div style="text-align: left;"> </div><div style="text-align: left;">No one could have been surprised that the Trump Restoration narrative was a big hit, or that Trump is <a data-cke-saved-href="https://www.nationalreview.com/2021/06/maggie-haberman-is-right/" href="https://www.nationalreview.com/2021/06/maggie-haberman-is-right/">apparently</a> all in for the proposed August <a data-cke-saved-href="https://www.vanityfair.com/news/2021/06/donald-trump-august-reinstatement" href="https://www.vanityfair.com/news/2021/06/donald-trump-august-reinstatement">return</a>. And why shouldn’t he be? That nearly a third of Americans now say Joe Biden did not <a data-cke-saved-href="https://www.washingtonpost.com/politics/2021/04/30/half-republicans-incorrectly-think-theres-evidence-biden-didnt-win-legitimately/" href="https://www.washingtonpost.com/politics/2021/04/30/half-republicans-incorrectly-think-theres-evidence-biden-didnt-win-legitimately/">legitimately</a> win the election demonstrates what he and demagogues across the ages have <a data-cke-saved-href="https://www.jewishvirtuallibrary.org/joseph-goebbels-on-the-quot-big-lie-quot" href="https://www.jewishvirtuallibrary.org/joseph-goebbels-on-the-quot-big-lie-quot">understood</a>: a lie that is repeated often enough will be believed, and the bigger the better.</div><div style="text-align: left;"> </div><div style="text-align: left;">Now that the new, Bigger Lie is out there – that the 2020 election can be undone, and a restoration of the Trump presidency is in process – will a majority of Republicans believe that lie as well? No doubt the QAnon followers will – the <a data-cke-saved-href="https://www.nytimes.com/2021/05/27/us/politics/qanon-republicans-trump.html" href="https://www.nytimes.com/2021/05/27/us/politics/qanon-republicans-trump.html">quarter</a> or more of the GOP who that are firmly in the QAnon camp and <a data-cke-saved-href="https://www.independent.co.uk/news/world/americas/us-politics/hillary-clinton-qanon-borat-blood-b1853638.html" href="https://www.independent.co.uk/news/world/americas/us-politics/hillary-clinton-qanon-borat-blood-b1853638.html">believe</a> Hillary Clinton and other top Democrats are Satan-worshipping pedophiles who drink children’s blood – and perhaps also a fair share of Trump’s evangelical base, despite the <a data-cke-saved-href="https://www.thedailybeast.com/trump-allies-beg-him-not-to-bring-up-august-reinstatement-this-weekend-or-ever?via=newsletter&source=Weekend" href="https://www.thedailybeast.com/trump-allies-beg-him-not-to-bring-up-august-reinstatement-this-weekend-or-ever?via=newsletter&source=Weekend">pleading</a> of some of his evangelical allies that this is a bridge too far. But surely this could be the point on which others say enough is enough. Certainly there are still a large share of Republicans out there who knew all along that Donald Trump was a bad idea, even as they voted for him, and now feel a quiet sense of shame when the subject comes up. We will see.</div><div style="text-align: left;"> </div><div style="text-align: left;">While Dan Patrick is worried about whether people think he’s a racist, and Mitch McConnell and Kevin McCarthy sit in growing irrelevance in the nation’s capital, it is Matt Gaetz and Marjorie Taylor Greene who have their finger on the pulse of the new GOP. They could care less about voter suppression in Texas, or anything else that has a whiff of the real world about it. The Trump Restoration is here and no doubt they want to run with it. Why worry about stealing an election that is years down the road, when the one that just happened is begging to be overturned?</div></span></div><span style="font-family: Roboto;"><br /></span><span style="font-family: inherit;">ORIGINALLY POSTED TO <a data-cke-saved-href="http://appalled.blogspot.com/" href="http://appalled.blogspot.com/" target="_blank">GRAFFITI</a> BY DAVID PAUL ON <abbr itemprop="datePublished" title="2017-01-20T11:00:00-05:00"><a data-cke-saved-href="https://appalled.blogspot.com/2017/01/end-of-battle-beginning-of-war.html" href="https://appalled.blogspot.com/2017/01/end-of-battle-beginning-of-war.html" rel="bookmark" title="permanent link">SATURDAY, JUNE 5, 20</a>21.</abbr><br /><br /><em>Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free."</em><br /></span><p><span style="font-family: inherit;"><em>Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces.</em> </span></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-11439010.post-33619046143469557892021-05-06T21:13:00.008-04:002021-06-05T17:13:28.056-04:00If Texas wants to secede, no one should stand in its way.<p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Allen West is a crackpot of sorts. But he is not just your average crackpot – those folks screaming conspiracy theories about the evils of the federal government from random street corners or congressional seats in Georgia or Colorado – he is the head of the Texas Republican Party. In the wake of the November election and the refusal of the Supreme Court to overturn the vote of the Electoral College, West decided the time has come for the State of Texas and other disgruntled red states to </span><a href="https://abc13.com/secession-texas-to-leave-us-allen-west-gop/8720150/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">secede</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> from the United States.</span></span></p><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><br /></span></p><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Roboto; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">At first blush, it was easy to dismiss West’s comments as just more right wing lunacy. A former Army Colonel, West first came to national attention in 2010 when he was elected to Congress from Florida as a prominent member of the Tea Party movement, only to be denied a second term in large measure because he was viewed as too nasty. But that was a decade ago, and as nasty became normal within the GOP, West rose to his new position of prominence. For Republicans who have bought into Donald Trump’s Big Lie – which at this point is an overwhelming majority of the GOP – talk of secession would seem to be a logical next step. </span></p><div><span style="font-family: Roboto;"><br /></span></div><div class="separator" style="clear: both; text-align: center;"><span id="docs-internal-guid-9dbf69c5-7fff-1279-414e-9a98c752f53c" style="font-family: Roboto;"><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-D2IKAceFsvg/YJSSqWUqbSI/AAAAAAAAHRQ/woVyWI9tpBgvEWs65pcY4v7L7AajEP6uQCNcBGAsYHQ/s1800/Jack.jpeg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1800" data-original-width="1800" height="400" src="https://1.bp.blogspot.com/-D2IKAceFsvg/YJSSqWUqbSI/AAAAAAAAHRQ/woVyWI9tpBgvEWs65pcY4v7L7AajEP6uQCNcBGAsYHQ/w400-h400/Jack.jpeg" width="400" /></a></div></span><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">West was not alone in musing about </span><a href="https://newrepublic.com/article/161023/republicans-secede-texas-wyoming-brexit" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">secession</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> in the wake of Donald Trump’s defeat at the polls. As Trump’s loss was sinking in, conservative media icon Rush Limbaugh </span><a href="https://www.rushlimbaugh.com/daily/2020/12/09/i-still-havent-given-up-on-the-idea-that-we-can-win-back-the-culture/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">raised</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> the issue. </span><span style="font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“I actually think,”</span><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> Limbaugh told his followers in mid-December, </span><span style="font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“that we’re trending toward secession. I see more and more people asking what in the world do we have in common with the people who live in, say, New York?”</span><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> The issue, Limbaugh stressed, was less about politics – whether Republicans would ever have a chance at winning New York – than about culture. Indeed, Republican politics are almost exclusively about culture these days. </span></span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">With the GOP having walked away from its traditional core principles of fiscal conservatism, free trade, and global democratic leadership, keeping trans girls off softball teams, along with voter suppression and the Big Lie, are about the extent of what animates Republican politics anymore. And the frustration is palpable. Whatever the makeup of Congress – and however deeply rooted the advantages given by the authors of the Constitution to rural and right-wing America by the grace of the Apportionment Clause – the ability of the GOP to continue to hold power has offered little solace to Republicans who have seen the cultural move away from them along any number of vectors.</span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">While the nation fought a bitter civil war over unilateral secession by the southern states that found themselves besieged by an increasingly hostile federal government, Abraham Lincoln fully understood that secession was an option legally available to the states. In his First Inaugural Address, he </span><a href="https://avalon.law.yale.edu/19th_century/lincoln1.asp" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">acknowledged</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that secession was possible should the seceding states secure the support of three-quarters of the states as the Constitution requires. And perhaps Allen West is right that the time has come, that the notion of the United States as a single nation no longer serves any overriding public purpose. There is little doubt that our politics have become incapable of addressing the political chasms that divide the country, and that the titanic role that the United States has held as a beacon of democracy in the world at large has been deeply shattered. Perhaps the fabric of our nation – the shared commitment to our founding purpose and creed that has long been presumed to bind us together – has become frayed beyond repair. </span></span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">West and Limbaugh’s appeal to secession as a solution should not be dismissed out of hand. While we can hope that the pendulum will swing back, and that our politics will return to some semblance of normalcy in the near future, if one major political party has determined that accepting the results of elections is too heavy a burden to bear, then that political party has abdicated its most essential responsibility to the nation. If a majority of the supporters of that party, and a sizable minority of the nation, have similarly decided that they are only willing to participate in a game that is rigged to their advantage, then that is a reality that should be taken seriously.</span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Both West and Limbaugh discuss secession as though it is an act that the rest of the country – Blue State America in particular – would necessarily resist. But why should that be the case? Perhaps it is time to engage in that discussion seriously. It may well be that a smaller nation would become more politically manageable. And then there is the simple fact that blue states have and continue to pay a high price for the status quo. </span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">I don’t mean a high price in some moral or metaphysical sense, but in strict dollar terms. Since the creation of the federal income tax following the ratification of the 16th Amendment to the Constitution a century ago, the wealthier and more economically successful states have borne a disproportionately larger share of the federal tax burden, even as those states have had disproportionately less representation in the Congress – in accordance with the Apportionment Clause – that decides how those funds are spent. This dynamic was </span><a href="https://taxfoundation.org/federal-tax-burdens-and-expenditures-state/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">summed</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> up succinctly by the </span><a href="https://mediabiasfactcheck.com/tax-foundation/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">conservative</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> fiscal watchdog group the </span><a href="https://taxfoundation.org/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Tax Foundation</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">: </span><span style="font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“Thanks to a steeply progressive federal income tax, states with higher incomes pay vastly higher federal taxes, payments that are unlikely ever to be matched by federal spending directed to those states. Ironically, most of these high-paying states are the so-called blue states that have generally elected politicians who support a more steeply progressive tax system even though their own constituents bear a greater share of the burden as the code gets more progressive.” </span></span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The Wikipedia </span><a href="https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_income" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">ranking</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> of states by median household income illustrates the alignment of wealth and politics. Among the twenty states with the lowest levels of household income, New Mexico is the only outlier “blue” state. At the other end of the income spectrum, Alaska, Utah and North Dakota are the only “red” states among the twenty wealthiest states. The middle ten states on the list split 50-50, and, notably, include seven states that turned out to be pivotal in the 2020 election: Nevada, Arizona, Georgia, Pennsylvania, Wisconsin, Iowa and Texas. </span></span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The cost to blue state taxpayers of the differential in tax burdens among the blue “donor” states and the red “recipient” states is significant. In 2019, the IRS </span><a href="https://www.irs.gov/statistics/soi-tax-stats-gross-collections-by-type-of-tax-and-state-irs-data-book-table-5" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">collected</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> an average of $9,708 per person in individual income taxes from all of the states. The amounts by state varied widely however, ranging from a high of $16,095 per capita in Massachusetts to a low of $3,650 in West Virginia. That is to say, the average household in Massachusetts paid more than four times as much into the federal kitty as its West Virginia counterpart. In total, thirteen states and the District of Columbia, from the Northeast, Midwest and West Coast – overwhelmingly blue states represented by 23 Democrat senators and three Republican senators – paid substantially more than the average in federal income taxes, while 34, overwhelmingly red states (Texas among them) paid less. </span></span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">It is important to point out to “constitutional conservatives” like Allen West that this disproportionate sharing of the federal tax burden is not what the framers of the Constitution had in mind. The Constitution only gave states the power to levy income taxes, and required that funding from the states to support the federal government be provided equally on a per capita basis. It was the adoption of the 16th Amendment in 1913, allowing for a federal income tax, that changed the fiscal relationship among the states. Over the ensuing century, the burden of funding the federal government has fallen disproportionately on states in the Northeast and Midwest, and ultimately the west coast, where educational attainment and personal incomes across have consistently been higher than in the rest of the country.</span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">The implications in dollar terms to the donor states are huge. In 2019, taxpayers in the State of New York, for example, paid $258 billion in federal personal income taxes, an amount that was $66 billion higher than it would have been had New York contributed on a per capita basis what the average state contributed. That $66 billion, as it turns out, was approximately equal to the entire State of New York General Fund budget that year. Given that reality, would New Yorkers rise up in anger should Texas, Alabama, Mississippi and Arkansas propose to exit the Union, as West and Limbaugh seem to suggest? Perhaps, instead, New York taxpayers would eagerly show them the door.</span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">While breaking the United States up and letting disgruntled red states go their own way might be financially attractive for Blue State America, it would not do much to ameliorate the deep partisan divisions within the country. Unlike in the early 1800s, when the division among slave and non-slave states fell along state lines, the divisions between red and blue America today are as much urban vs. rural, and within communities, as they are state-by-state. According to an </span><a href="https://www.washingtonpost.com/opinions/2021/04/06/capitol-insurrection-arrests-cpost-analysis/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">analysis</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> by University of Chicago political scientist Robert Pape, of the 377 Americans arrested or charged in the January 6th insurrection, a majority came from blue counties that voted for Joe Biden. Rather than being predominantly from deep-red America, Pape observed, </span><span style="font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“by far the most interesting characteristic common to the insurrectionists’ backgrounds has to do with changes in their local demographics: Counties with the most significant declines in the non-Hispanic White population are the most likely to produce insurrectionists who now face charges.” </span></span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Pape’s conclusions mirror those of Vanderbilt political scientist Larry Bartels, who </span><a href="https://www.pnas.org/content/pnas/early/2020/08/26/2007747117.full.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">concluded</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> that the strongest predictor of anti-democratic attitudes among Republicans surveyed </span><span style="font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“is ethnic antagonism—especially concerns about the political power and claims on government resources of immigrants, African-Americans, and Latinos. The strong tendency of ethnocentric Republicans to countenance violence and lawlessness, even prospectively and hypothetically, underlines the significance of ethnic conflict in contemporary US politics." </span><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Robert Pape pointed to two primary drivers of rage among those interviewed: first, the growing embrace of the white nationalist “great replacement” theory, which holds that low White birth rates, combined with mass immigration, are resulting in Whites being supplanted by minorities in the United States; and, second, extensive social media exposure. </span><span style="font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">“Replacement theory,”</span><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> he </span><a href="https://www.washingtonpost.com/opinions/2021/04/06/capitol-insurrection-arrests-cpost-analysis/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">concluded</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">,</span><span style="font-style: italic; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> “might help explain why such a high percentage of the rioters hail from counties with fast-rising, non-White populations.”</span></span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">While red state secession could be a boon to Democrats – consider all that money that blue states are now shipping off to red states, and the ease with which Democrats could control Congress and the Electoral College if Texas and a handful of other states were to exit – it would offer little but a temporary respite from the problems of cultural and political alienation that researchers observe among Republicans. Nor would secession insulate Republicans from the demographic trends that are at the root of their problems. Republican leaders of an independent Texas, for example, would still have to confront the growing political power of urban and suburban communities that already threaten Republican hegemony in the state. </span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">As it turned out, Rush Limbaugh </span><a href="https://www.rushlimbaugh.com/daily/2020/12/10/im-not-advocating-for-seccesion/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">walked back</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> his call for secession before he died. Perhaps he realized the power of his words and felt a patriotic duty as he was dying of cancer to do what he could to hold together the nation that he had done so much over the course of his career to tear apart. Or perhaps, like any half-way intelligent red state taxpayer – Limbaugh lived in Florida, ranked 39th in the Wikipedia household income </span><a href="https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_income" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">ranking</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> – he understood that the fiscal structure of the nation, whereby Red State America lives off the sweat and toil of Blue State America, was too good a deal to kick to the curb in a fit of petulance over one lost election.</span></span></p><div style="text-align: left;"><span style="font-family: Roboto;"><br /></span></div><p dir="ltr" style="line-height: 1.5; margin-bottom: 0pt; margin-top: 0pt; text-align: left;"><span style="font-family: Roboto;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Allen West is undoubtedly a crackpot, but the idea of downsizing the country through secession should not be dismissed out of hand. It may not be the solution that West imagines it to be. Indeed, it may be better for those blue states that stay behind than for the red states that leave. But few can argue that we need to do something to shake up our politics. If the price of fixing the country is letting Texas and a few other disgruntled red states move on, I am OK with that. Texas legislators who are </span><a href="https://abc13.com/texit-texas-independence-referendum-act-nationalist-movement/8640857/" style="text-decoration-line: none;"><span style="color: #1155cc; font-variant-east-asian: normal; font-variant-numeric: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">preparing</span></a><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"> to put a secession referendum on the ballot should have at it, and others should not be shy about following their lead.</span></span></p><div style="text-align: left;"><br /></div><div style="text-align: left;"><p dir="ltr" style="line-height: 1.38; margin-bottom: 12pt; margin-top: 12pt;"><span style="font-family: Arial; font-size: 10pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Follow David Paul on Twitter @dpaul. He is working on a book, with a working title of "FedExit! To Save Our Democracy, It’s Time to Let Alabama Be Alabama and Set California Free." </span></p><p dir="ltr" style="font-family: times; font-size: large; line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 11pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"><span style="font-family: Arial; font-size: 12pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"></span></p><p dir="ltr" style="line-height: 1.38; margin-bottom: 12pt; margin-top: 12pt;"><span style="font-family: Arial; font-size: 10pt; font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;">Artwork by Joe Dworetzky. Follow him on Twitter @joedworetzky or Instagram at @joefaces. </span></p></div></div><p></p>Unknownnoreply@blogger.com0