Tag: Economy
A stronger American still fumbles
President Biden made a farewell appearance at the State Department yesterday. As a former Foreign Service officer, I’m of course delighted that he did this. It is especially important and timely because the Department now faces Donald Trump’s threat of loyalty tests and mass firings.
Biden’s understandably directed his remarks at justifying what his Administration has done on foreign policy. So how did he really do?
The bar was low
Certainly Biden can justifiably claim to have strengthened America’s alliances. The bar was low. Both in Europe and Asia the first Trump Administration had raised doubts. Allies could not depend on Washington’s commitment to fulfill its mutual defense obligations. Biden’s claim that compared to four years ago America is stronger because of renewed and expanded alliances is true. He is also correct in claiming he has not gone to war to make it happen.
The extraordinary strength of the American economy is an important dimension of this strength. Voters decided the election in part on the issue of inflation. But the Fed has largely tamed that and growth has been strong throughout. Manufacturing is booming, including vital semi-conductor production. Investment in non-carbon energy sources has soared. The defense industrial based is expanding.
Biden is also correct in asserting that America’s antagonists are worse off. Russia has failed to take Ukraine because of the US effort to gather support for Kyiv. Iran and its allies in Gaza, Lebanon, and Syria are weaker. Only the Houthis in Yemen are arguably stronger than four years ago.
China is facing serious domestic economic and demographic challenges. But I don’t know why Biden claims it will never surpass the US. On a purchasing power parity (PPP) basis, it already has, though obviously per capita GDP in China remains much lower.
Some claims gloss over big problems
Biden is rightly proud that there is no longer war in Afghanistan, but he glosses over the chaotic withdrawal. He also doesn’t mention the failure of the Taliban to keep its commitments.
He vaunts progress on climate change, but without acknowledging that the goal of keeping global warming below 1.5 degrees centigrade will not be met.
Biden talks about infrastructure in Africa. But not about its turn away from democracy, civil wars in Sudan and Ethiopia, and the unresolved conflict in Libya.
He urges that Iran never be allowed to “fire” a nuclear weapon. That is a significant retreat from the position that Iran should never be allowed to have one.
Biden mentions the impending Hamas/Israel ceasefire. But he says nothing about Israel’s criminal conduct of the war in Gaza. Nor does he blame Israel’s right-wing government for the long delay in reaching a deal.
Biden’s legacy
At the end, Biden seeks to bequeath three priorities to Trump: artificial intelligence, climate change, and democracy. He no doubt knows that Trump isn’t going to take the advice on climate or democracy. He might on artificial intelligence, as his Silicon Valley tycoons will want him to.
Sad to say, Biden’s legacy will lie in other areas. Fearful of nuclear conflict with Russia, he failed to give Ukraine all the support it needs to defeat Russia. He was reluctant to rein in Israel for more than a year of the Gaza war. He failed to stop or reverse the Iranian and North Korean nuclear programs. America is stronger than it was four years ago, but it has not always used that strength to good advantage.
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Thanksgiving anxieties are justified
Today is the autumn pause the United States calls Thanksgiving. It is pretty much the most popular holiday across the entire population, marked by people of all religions and ethnicities. Unlike so many other American holidays, it is mainly noncommercial. We gather with family and friends for a giant afternoon meal to say thanks for whatever blessings have graced us.
I’m fine
We are in Savannah this year with two sons, two granddaughters, and two grandsons. We’ll go soon to a cousins’ beautiful house on the marshes outside of town for the traditional family feast. We’ll eat and drink as much as we all like. The generations will meet, the youngest for the first time, or refamiliarize themselves. We are, so far as I know, a prosperous and happy family. The family quarrels that plague some Thanksgiving dinners will be, thankfully, absent.
That said, I can’t help but note that I will not be content. The election result is a good part of the reason. While my personal welfare is not at stake, I fear for my country and its less fortunate citizens and non-citizens.
The economic risks
It is hard not to notice that the risks ahead are great. The current economic recovery began in 2009 under President Obama. President Trump’s botched reaction to the COVID-19 epidemic interrupted it, but it got back on track with President Biden. The growth trajectory has passed its 15th year. We are overdue for a recession, even disregarding the announced policy choices of the new Administration.
President Trump’s re-election makes one all but certain. His insistence on raising tariffs and expelling immigrants will re-ignite inflation. The Fed will have to slow or even reverse the decline it has begun in interest rates. Trump’s announced effort to shrink the Federal government will fail to reach its goal of cutting $2 trillion. But whatever layoffs the new Administration achieves will contribute to unemployment. The budget cuts will also slow the economy.
The social risks
While the economy slows, the new Administration will be cutting holes in the social safety net. Abolishing the Obamacare subsidies for health insurance isn’t going to happen. But the Republican Congress will seek to reduce them. It will also try to limit access to Medicaid, which provides health services to the poor. Trump won’t cut Social Security benefits, but he will try to raise the age of eligibility. Trump will aim to extend the tax cuts he introduced in 2017, which favor upper incomes. That will also be fine with me, but it still isn’t right.
He will also further limit abortion and LGBTQ rights and make education more Christian, less liberal, and less public. These are the essential demands of his evangelical base.
The political risks
Trump wants to prosecute his detractors. His two nominees for Attorney General are people who would gladly do that. Even unfounded investigations will cost Democrats and journalists both time and money. Such investigations will help him keep political opposition from growing. The Supreme Court’s decision to give official presidential acts with immunity will help to unshackle his worst impulses. With the two Houses of Congress under Republican control, he has little to fear from that corner.
Trump will want to appoint more Supreme Court justices, to guarantee continuation of the Republican majority. Justices Alito and Thomas can be expected to retire so that he can name younger clones. Press speculation suggests Trump wants a new FBI director. This despite the fact that the one he appointed in 2017 would normally serve ten years.
Trump’s re-election will embolden his base. It will continue to gerrymander House districts, limit voting rights, and destroy diversity programs. The goal will be to make those who hold power in America as white and male as possible. That is already clear in the Cabinet he has been naming.
Foreign policy
Trump’s future course in foreign affairs is more difficult to predict. The President has a great deal of latitude in foreign policy. Trump’s appointments so far are a mixed bag. Marco Rubio as Secretary of State and Michael Waltz as National Security Adviser are well within the normal political spectrum. So too is Ukraine envoy Keith Kellogg. He is an advocate of giving Ukraine what it needs to reach a satisfactory negotiated settlement with Russia.
None of those are friends of Russian President Putin. But Tulsi Gabbard is. If confirmed, she will be Director of National Intelligence. Teamed with a very partisan John Ratcliffe at CIA, Trump can be assured of no resistance from the intel community.
Trump’s choice of Mike Huckabee, an evangelical stalwart, as ambassador to Israel guarantees a pro-Netanyahu policy. On Palestinian issues, including Gaza and the West Bank, we should expect Trump to be even more pro-Israel than Biden.
On lots of other foreign policy issues, there are few indications. Waltz is a China hawk but it is not clear what that will mean for the American commitment to Taiwan. In the past, Trump has been a “maximum pressure” guy on Iran. But what that might mean now that Iran is a nuclear threshold state isn’t clear.
The State Department will no doubt suffer a serious purge as well as a massive voluntary exodus of talent. But will that liberate Trump to do as he pleases? Or will it limit capabilities and lead to focus on future issues? Hard to tell.
Bottom line
Trump menaces many of the values I am grateful for. Thanksgiving anxieties are justified.
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Americans, welcome to the 4th Reich!
J. F. Carter, US Army (ret LTC) 1968-1992, United Nations (ret D-1) 1992-2009, and European Union (ret D-1) 2009-2011, writes:
I hope I am wrong. But if Trump and his acolytes implement even 1/3 of the promises and projects he has set forth in Project 2025 and otherwise supported, the USA, as we knew it, will become a dying ember. He will sacrifice our honor, pride and principles on his transactional altar.
His isolationist foreign policy will relegate the US to a bit player to be ignored or pushed around.
Ukraine and Taiwan abandoned
Ukraine and Taiwan will be the first victims of his failure to stay resolute.
Imagine The Greatest Generation refusing to come to protect the sovereignty of European and Asian nations during World War II. Our nation would not have risen to the pinnacle of its success and power had our forefathers not accepted their responsibilities. They would have been guilty of sacrificing the lives of tens of millions of people due to sheer cowardice.
The ripple effect
Failure to back Ukraine and Taiwan will lead to further Russian encroachments. These will include Moldova, Georgia, and the Baltics. They will also affect Central Europe as well as Chinese control over Taiwan and the South China Sea.
Our EU and Asian allies will lose all confidence in our nation. He will unchain Israel. The reaction by the surrounding countries will fan the flames of a regional conflict. Trump’s transactional approach will bring about another Balkan conflict leading to a Greater Serbia aligned with Russia.
Russia rescued
Putin and gang are breathing a huge sigh of relief. They are congratulating themselves for their flood of misinformation and disinformation pushing voters toward Trump. What a reversal of fortunes, just as Putin and Russia were facing economic and political disaster.
Some might welcome an end to the fighting between Russia and Ukraine. But remember, that the Russia violated the terms of the Minsk Agreements of 2014-2015. Putin used that agreement as a temporary pause to relaunch his second invasion of Ukraine in 2021. Any future agreement would allow Russia to rebuild to attack not only Ukraine but also Moldova and Georgia.
The domestic agenda: (in)justice
For those more interested in Trump’s domestic agenda, read the provisions of Project 2025, which outlines his plans. They essentially would undermine the foundations of our democracy and economy.
– Perhaps the most venal proposal is to replace professional civil servants in the government with party hacks. This is the case in Russia, China, Hungary, and other authoritarian regimes. Trump will use executive authority to impose personnel in the Departments of Justice, State, and Defense as well as the FBI and National Security Agency. There will no longer be any professional objectivity. He will sacrifice to party loyalty, reminiscent of German Nazis and Russian/Chinese Communist Party control.
– Trump will use such control to persecute anyone who opposes him. These are the people he calls the “enemy within,” an oft used Nazi tactic in the 1930s and 1940s. He would go after Liz Cheney, Adam Kinzinger, General Milley, and others. His likely pick for US Attorney General has already suggested that New York State Attorney General Trish James be sent to prison.
Trump is likely to replace Supreme Court Justice Thomas with Eileen Cannon, a judge for the District Court of Florida. She slow walked and created obstacles to Trump’s prosecution for illegal possession of classified documents. Trump may be able to walk away from his 34 cases of felony fraud as we as the charges of sexual assault. Equal justice before the law does not seem to apply to Trump.
Trump has said he will pardon those found guilty of federal crimes associated with the January 6 riot, which he fomented.
The domestic agenda: the economy
– The economy was one of the major reasons for Harris’ defeat, though the US economy out-performed all other major industrialized nations after the epidemic. The public focused however on short term inflation issues rather than the longer term picture.
The Trump economic policy will bring pain to all Americans. His tariffs will make you pay $2600 more per year for consumer goods. Not to mention the impact on our national debt.
The domestic agenda: immigration
If that doesn’t kill our economy, then his plan for mass deportations will. The immediate cost is some $80-250 billion a year, not to mention destroying labor required for agricultural fields, hospital care, and other lower level jobs. These folks also contribute to your Social Security. These costs, plus Trump tax cuts, will add trillions to the national budget and debt. How will he pay for it? Watch health, social security and education come under the hatchet! If you thought Covid was bad, wait until RFK Jr becomes Secretary of Health.
– Beware the presence of the “eminence grise” Elon Musk, whom Trump is expected to make his efficiency czar. Of course, efficiencies can and should be sought. However, with the fox in charge of the chicken coop, expect the Department of Education to be a victim, as well as Health and Welfare and Social Social Security.
– Directly related is my concern about the rise of plutocracy and the new oligarchs. Usually, we think of Russian oligarchs and their outsize influence on national politics. The Supreme Court ruling, Citizens United, empowered the ultra wealthy by allowing unlimited money to go into Political Action Committees. This directly undermines the principle of one person, one vote. With few exceptions, the oligarchs drive economic decisions without due concern to the average citizen. Musk now censors opinions on X that don’t match his views. With the high tariffs on China, his Tesla stocks will sky rocket.
The domestic agenda: society and environment
– Women, minorities and youth will be relegated to second class citizens. Women have fought back and won some abortion case issues in some states. Yet the misogyny and racism of MAGA will grow and The Handmaiden’s Tale might not be just an apocalyptic story.
– Let us not forget the environment. Trump will reverse whatever progress we have made. Air, land and water pollution will get worse, affecting our health and that of the rest of the world.
Angrier and more aggressive
Of course, I could be wrong. Trump might listen to his better angels. He might negotiate peace agreements in the Middle East and Balkans. He might actually compromise on some domestic issues and be inclusive of others.
But forgive me, if I doubt it. The doubts are based on his previous performance, which relied on divide and rule, attacking “others,” and undermining the rule of law and foundations of our government. He has gotten angrier, more aggressive, and more racist.
I, therefore conclude with a line from the Monk TV series. I may be wrong, but I don’t think so.
There will be buyer’s remorse. Americans, welcome to the Fourth Reich!
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Stevenson’s army, February 18
– WaPo book review tells how anti-tax movement captured GOP
– WaPo columnist sees value in Washington books
– CRS has new background paper on the budget process
– Brookings has a debate about Ukraine policy
– I like DARPA and wish DOD would do more OTA. Here’s background on the approach.
– Pakistani official admits election rigging
– Fred Kaplan skewers Tucker Carlson
—
My SAIS colleague Charlie Stevenson distributes this almost daily news digest of foreign/defense/national security policy to “Stevenson’s army” via Googlegroups. I republish here, with occasional videos of my choice. To get Stevenson’s army by email, send a blank email (no subject or text in the body) to stevensons-army+subscribe@googlegroups.com. You’ll get an email confirming your join request. Click “Join This Group” and follow the instructions to join. Once you have joined, you can adjust your email delivery preferences (if you want every email or a digest of the emails).
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Stevenson’s army, February 8
– From Netanyahu
– From Senate GOP
– From House GOP
– From Cong. McCaul on Derek Chollet
– Ukraine worries, says NYT
– WaPo sees troop shortage in Ukraine
– Politico tells where money would go
– CBO says deficit is shrinking
– NYT updates us on Ecuador
– Ian Bremmer says Chancellor Scholz is “toast”
—
My SAIS colleague Charlie Stevenson distributes this almost daily news digest of foreign/defense/national security policy to “Stevenson’s army” via Googlegroups. I republish here, with occasional videos of my choice. To get Stevenson’s army by email, send a blank email (no subject or text in the body) to stevensons-army+subscribe@googlegroups.com. You’ll get an email confirming your join request. Click “Join This Group” and follow the instructions to join. Once you have joined, you can adjust your email delivery preferences (if you want every email or a digest of the emails).
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The sun is not setting on the US
Pantelis Ionomou asked “has the sunset of the West begun?” My own answer to this question is “no.” But that requires some explication.
The problem is real
There is no doubt but that electoral autocracies are rising while liberal democracies are declining:
The question is whether this trend will continue, where, and for how long.
2024 will see an unusual number of elections, including in big countries. Two merit particular attention: the US presidential and Congressional contests and India’s parliamentary election. The Economist rates both as “flawed democracies,” though India’s is more flawed than America’s.
Prime Minister Modi is favored to win another parliamentary majority, perhaps with a reduced number of seats. The big question is whether he will use a new mandate to further restrict Indian democracy. I wouldn’t bet against that. Modi has turned many of India’s Hindus against its massive Muslim population, the largest Muslim minority in any country on earth.
The US is particularly important
In the US, polling suggests that former President Donald Trump has a good chance of returning to the White House. As in India, the odds are he would use a second term to do additional damage to American democracy. Trump has pledged to use the Justice Department against political opponents and fire large numbers of experienced and law-abiding civil servants. He has even claimed in court absolute immunity for actions taken as president, including assassination of a political opponent. He has also avowed the intention to use dictatorial powers on “day 1” to close the border and drill, presumably for oil and gas:
The question is whether Trump will win in November against Joe Biden.
It will be tight
I doubt it. He will certainly not win the popular vote, which he lost by 7 million in 2020. It is hard to imagine any New Yorker or Californian who voted for Biden last time around who will turn out to vote for Trump this time. But one of America’s democratic flaws is its presidential election procedures. Its 18th-century constitution gives the presidency to someone who wins a majority of votes in the Electoral College, regardless of the popular vote. There it is state “electors” who determine the outcome.
Each state gets a number of electors equivalent to its number of members in Congress (plus three for the District of Columbia, which is not a state). This indirect system favors smaller states since all states (but not the District) have two members of the upper house, regardless of population. It enables a candidate with strong support in less populous states to win.
Trump has that going for him. Without it, the Republicans would be permanently out of power, or forced to change their politics. They have lost the popular vote in all but one election (2004) since 1992.
The 2024 election will come down to a contest in only a handful of states. Pennsylvania, Michigan, and Wisconsin are particularly competitive. Polling shows Biden trailing Trump in the first two, as well as in the Nevada, Georgia, and Arizona “battlegrounds.” If this polling pans out, Biden is toast.
But don’t count Biden out
So why do I think the US will not continue in that direction? Polling is notoriously unreliable this far out from an election. Many of the current polls are showing improbable shifts of minorities away from Biden, whose record on their issues is far better than Trump’s. They may be signaling unhappinesss with being taken for granted, but in the polling booth I don’t know many traditional Democrats who will make the mistake of voting against their own interests.
Muslim Americans are particularly important in Michigan. All the Arabs I know (none of whom are in Michigan I should note) are deeply disappointed in Biden’s unqualified support for Israel’s war on Gaza. Ditto my Bosnian Muslim friends with his policies both in Gaza and in the Balkans. But they will in November face a choice between Biden, who has at least tried to moderate Israel’s approach and steer it towards saving Palestinian lives and establishing a Palestinian state, and a profoundly Islamophobic, race-baiting Trump. Last time around, Trump completely abandoned Palestinian concerns, moved the US embassy to Jerusalem, and gave Prime Minister Netanyahu far more unqualified support than Biden has done.
The polling is also showing a surprising shift of Black voters to Trump, but women are heading in the other direction. This is despite record low unemployment among Blacks and a narrowing of the gap with whites. Biden has appointed an unusual number of Black judges and other officials, as well as an unprecedented number of women. Young people would like a younger candidate than Biden. But Trump is only a few years younger. He is also more addled than Biden:
Trump’s white supremacist and anti-abortion advocacy may not loom large today. But any decent electoral campaign on Biden’s part will remind the electorate of both.
Trump will be a crook and Biden’s economy will look good
I hardly need even mention the many criminal indictments and civil cases against Trump, some of which will result in ignominous outcomes for him before November. He will likely be a convicted felon by then. He will also have lost control of many of his businesses. That won’t deprive him of his base, which is oblivious to his wrongdoing and convinced he is being persecuted, but it will repulse some independents and encourage at least as much turnout among Democrats as among Trumpistas.
The Republicans are pursuing Biden’s son Hunter, but they haven’t really pinned anything unknown on him. Nor have they connected their allegations to the President.
The continuing strength of the American economy, which is going uncredited to Biden among much of the citizenry, has been a problem for him. It has caused high inflation, increased interest rates and home prices, and pushed up gasoline prices. But many of these important consumer issues will be in the rear-view mirror by November. Another ten months should bring inflation close to the Fed’s 2 per cent target, enabling reduction of interest rates. Gasoline prices are not likely to rise much as the economy softens a bit. US energy production is higher than ever and gasoline prices are falling. Interest rates appear to have peaked and consumer confidence last month jumped.
Bottom line
Absent any big surprises between now and November, Biden is far more likely to be gaining than losing against Trump in the key states. I can’t be sure it will suffice. But I am more hopeful than discouraged. The sun is not setting on the West, at least not in the US.
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