Trump is performing better than the headlines suggest

Trump has now been acquitted in his second impeachment trial, notching up yet another “first.” Had you scanned the headlines of the New York Times or the Financial Times, you could be forgiven for feeling a modicum of satisfaction amidst the disappointment; Trump got off, but the Republican Party is breaking with him; Trump got off, but his name has been tarnished for good; Trump got off, but is fading into irrelevance in (the surely very tacky) Mar-a-Lago.

The story is a little different if you scroll down.

74% of Republican voters want to see him continue in politics. Only 54% of Americans want him out of politics. I stress only because Trump is, on paper, specifically the paper the NYT is printed on, the most disreputable and tarnished President in recent history.

What about the political establishment, his fellow-travelers? Only seven out of the fifty Senate Republicans voted with Democrats against Trump. Of those seven, three do not have to stand for election for five years, two are retiring, and two – Mitt Romney and Lisa Murkowski – have long built names as the (only) Republican Senators who dare to criticize Trump. Bill Cassidy from Louisiana, one of the seven, has already been censured by Louisiana’s Republican Party.

Much has been made of Mitch McConnell’s statement: “There is no question that president Trump is practically and morally responsible for provoking the events of that day.” A statement he made after having voted to acquit Trump.

All this despite having been banned from Twitter for weeks.

Has Trump’s brand been damaged? Among Democrats and Moderates, yes. Among his base, which encompasses a majority of the Republican Party, probably not.

Are Republicans divided over his future influence? Perhaps in private. For now though, most establishment Republicans have been remarkably reticent to criticize the Teflon Don.

Trump will be the defining question for right-wing politics in the US until at least the mid-terms in 2022. There are a spectrum of possibilities from party moderates neutralising his influence, to Trump retaining control, including a messy collapse into years of internecine war. I suspect Trump will hold the reigns in the short-term. The winner-takes-all electoral system incentivizes party unity, and makes the threat of Trump running as a third-party candidate existential. This will make the mid-term elections in 2022 a litmus test for each faction. I suspect moderates will look for mistakes and failures in the 2022 mid-terms as evidence to try and neutralise him prior to 2024.

Would that we did not have to care about the parochial divisions of an outlandish political party in the United States. Yet, this group has the power to stymie everything from action on climate change, to relief for one of the world’s worst humanitarian disasters.

China’s growing cultural muscle

I tend to discuss China’s growing assertiveness with reference its economy or foreign policy. It’s a pity, because China’s increasingly muscular cultural scene is illuminating. If you want to understand the trajectory of China over the next few decades, it’s vital to observe the stories China tells about itself.

Check out this trailer for the new film ‘The Eight Hundred.’ It is a dramatization of the Battle of Shanghai, a particularly bloody siege in the Second Sino-Japanese war – part of what we would call the Pacific Theatre of World War 2.

A few points to reflect on:

  • The Second World War may be the most dramatized war in modern cinematic history. Were these films your primary source about the war, you would presume its centre of gravity lay somewhere between Omaha Beach and a blitzed out London. The Eastern front, and to an even greater extent, the Chinese theater, are rarely mentioned; I suspect there are more blockbuster films about the American civil war than both combined. One benefit of a thriving film industry in China is that new historical stories will be told.
  • These stories will increasingly be filtered through a nationalistic lens. The FT reports that China’s media regulator required changes to the film, because the troops that fought in the battle were from the Nationalist Kuomintang army. The Nationalists would later fight (and lose) a civil war against the Communists, before retreating to Taiwan.

    Nationalistic depictions of war are not unheard of in Hollywood today (American Sniper was a particularly egregious example), but more often than not, contemporary war films emphasise moral ambiguity, despair, and the senselessness of violence. Based on the trailer, ‘The Eight Hundred’ is more Horace than Owen with regard to: dulce et deocrum est pro patria mori. The trailer ends with the following line:

    “To my dear wife YuZhi, when our kids grow up, they shall join the army to avenge their father. To devote themselves to their country. So that our descendants won’t suffer anymore humiliation.

Geopolitics and the energy transition

From today’s big read in the FT:

But is the geopolitics of energy really about energy?

To link geopolitics and conflict to a particular material thing is to miss the point a little. There is not a fixed set of objects we fight over, such that the sudden super-abundance of one reduces conflict as a whole. Humans have fought wars over salt and spices, cotton and coal. Better shipping routes to the spice islands, or alternatives to coal did not eliminate conflict so much as displace it elsewhere. Tensions arise over the valuable, the scarce, the unevenly distributed (and much else). A geopolitics of carrots is possible should they meet those conditions.

Instead we should be asking, what things and places meets those conditions in a world where energy is super-abundant. What do societies with an abundance of energy make, do, and look like? What will they care about, be willing to risk lives and treasure for? One thing missing from the article is services. Geopolitical thinking is still deeply attached to the material world, but we need to understand how increasingly digital (dematerialised?) and service driven societies change traditional geopolitics (if at all)?

The article outlines some of the new(ish) commodities that will power the renewable revolution, like cobalt and copper. This in turn will shift the geography of geopolitics, perhaps the corridors of electricity transmission will replace the sea-lanes transporting oil (and perhaps I was overhasty in criticizing those who think Eurasia is the future of geopolitics).

Well worth reading!


As always, if you enjoyed this, consider subscribing or sharing

Do economic sanctions work? And a poem by Bertolt Brecht.

A convoy of military trucks speeds past. Armed men are disgorged outside parliament. TVs play patriotic music. Facebook goes down. Men in uniform grace local street corners. People are arrested. The patriotic music is interrupted to announce that General so-and-so is dissolving parliament to protect the constitution/democracy/the people. Condemnation follows from the democratic world.

Image result for military coup in myanmar

There has just been a military coup in Myanmar. In addition to widespread condemnation, the US and some of its allies are also discussing sanctions.

Economic sanctions are an attractive proposition. They apply pressure to the leadership by closing their Swiss bank accounts, and cutting their economy off from the world. The resulting economic decline causes people to vent their frustration at the regime, who then presumably restore the constitution/democracy the people. All this without any shooting or bombing!

Critics argue sanctions often leave the leadership unscathed while the population struggles with rising prices and goods shortages. The people with guns still eat well and live in nice houses, while the rest are pushed into poverty – and they still can’t vote.

What does the research on sanctions say? I’ve read through the papers so you don’t have to.

Here are some key points:

  • It can be difficult to determine if a sanction has worked or not, especially since they are often combined with other policy tools. It can be difficult to disentangle whether the target state changed their behavior because of an economic sanction, diplomatic effort, or the threat of a military intervention? A classic work in the field – Economic Sanctions Reconsidered – argued that between 1914 to 1990, sanctions worked in 40 of 115 cases, for a 34% success rate. Critic Robert Pape argues they incorrectly coded many examples, and the true figure is more like 5 of 115.
  • For Pape, sanctions cause enormous human suffering, and can increase the likelihood of conflict because policymakers “may escalate in order to rescue their own prestige.”
  • What about “smart sanctions,” those that narrowly target elites and their power base? Reviewing the use of specialized financial sanctions against Sudan, Russia, and China, the authors said: “rarely has so powerful a force been harnessed by so many interests with such passion to so little effect.”

    The consensus is that smart sanctions are relatively ineffective, but are an easy political option for countries which want to act, but do not want to go to war, or be accused of causing mass suffering in target countries.

What is the international community to do then? Diplomacy, perhaps through those states best positioned to exert pressure, like China. Humanitarian support, to the degree that it can be provided without simply enriching elites. Otherwise, the outlook is rather grim for those hoping for a quick solution.

In the words of Robert Pape:


Finally, I am reminded of Bertolt Brecht’s famous poem, The Solution, following the 1953 uprising in East Germany

After the uprising of the 17th of June
The Secretary of the Writers’ Union
Had leaflets distributed on the Stalinallee
Stating that the people
Had forfeited the confidence of the government
And could only win it back
By increased work quotas. Would it not in that case be simpler
for the government
To dissolve the people
And elect another?


As always, if you enjoyed this, please consider subscribing or sharing!

China’s Youth

The Economist has a new special report out on China’s youth. It is fully of anecdotes and analysis on: “the jiulinghou, or “post-90s”, a shorthand term for those born between 1990 and 1999. They number 188m—more than the combined populations of Australia, Britain and Germany.

The question lurking beneath the special report is why the jiulinghou show little interest in the liberal ideas that boiled over into Tian’anmen Square only a generation ago. The answer is a combination of renewed national pride, economic growth, repression, and diversion into socially progressive (but politically inoffensive) causes like the environment or LGBTIQ rights.

Its a compelling explanation of the status quo, but one The Economist thinks is unlikely to persist:

The Communist Party has shown a remarkable ability to adapt. Yet its tacit deal appears to be morphing into one that leans more heavily on brute repression and nationalism. If that is the bargain, self-assured young Chinese will at some point balk. Participants in every pro-democracy outburst in China have raised high the banner of patriotism, from 1919 to 1989. This tendency is not lost on Mr Xi, as much a manipulator of nationalism as he is afraid of it. But the party sees a useful distraction in teeth-baring patriotism. One day this may come back to bite it

Two deep assumptions power this familiar call and response. First, that political liberalisation follows economic liberalisation – perhaps we possess an innate urge to freedom. Second, regimes which resist that dynamic are fundamentally unstable.

I’m not so sure. History is surprise, and the more time that passes, the less comfortable I feel with analogies from the past. What would even constitute a falsification of those hypotheses?

I am reminded of a line from Adam Tooze’s chartbook on Chinese state capitalism:

A few other snippets I enjoyed:

Close to one in two red-tourism trips [trips related to China’s communist past] are made by Chinese under 30, says Ctrip, China’s biggest travel firm.

Women in Shanghai marry on average at 29, later than Americans and a jump of six years in a decade. Even in rural areas the age is 25 and rising.

A survey in 2019 by China Youth Daily, a state organ, found that three in four of those born after 1995 think China is “not perfect, but always improving”

Finally there is a Chinese show which look like “who wants to be a millionaire,” where all the questions are about Xi Jinping.

Its well worth reading.

Beware the fair-weather fiscal friend

As I’ve discussed before, a change is in the air for fiscal policy. The FT has done a mea culpa and said “the aim of balancing the budget can, at least temporarily, be dropped.” This is good news for those who have waged the long and lonely war against the fiscal hawks, but I want to urge caution about over-interpreting the new shift in fiscal policy.

There are two ways ideas can shift. First, the assumptions and/or internal logic of an idea can be rejected wholesale; the idea’s core can be negated. Ptolemaic astronomy, which held the Earth was the center of the universe, is gone without reservation, caveat, or condition.

But ideas can also change in a more gentle fashion. The core remains, and where it fails to explain, special caveats, a long list of “buts” “ifs,” and asterisks, are appended. Circumstantial reasons are proposed for why the idea does not work; perhaps the idea only works in “normal times,” and today is not; perhaps it only works when people behave a certain way, and today they are not. At some point, it is presumed, reality will again dance to theory’s tune.

This second type of change is fragile and skin-deep. The special conditions and circumstances can be jettisoned to reveal the original core. If Ptolemaic astronomy were only wrong because we were temporarily passing through a heliocentric phase, we should not be surprised to see its advocates return once they deemed the phase over.

Much of the change in fiscal policy is of this second kind. Exceptionally low interest rates, overextended monetary policy, and a pandemic induced slump are special circumstances that temporarily waive the normal logic, but they do not challenge it. The logic of balanced budgets and restrained fiscal policy still holds in “normal times” (oh those halcyon days!), we are just living through a special period that allows us to temporarily deviate from the optimum.

This colors the attitude of new converts to other parts of the consensus. As the FT’s article makes clear, a temporary shift in circumstances is no reason to change other parts of the consensus, for example changes to central banks are out of the question – “The facts have changed, but not everything else should.”

The danger is these temporary changes can be reversed quickly, at which point the old logic lurking in the background will return in force.

We should not be naïve about these processes being purely fact-based. Facts do not speak for themselves, and interpretation is complex. The US fell below estimates of full employment in 2015, but it took another four years for the Fed to change its approach to unemployment. The FT made much about sensible people changing their minds with the facts, but as Robert Skidelsky’s letter makes clear, the facts haven’t changed, it is only the FT’s interpretation which has.

Low rates, low growth, and low inflation have relaxed many of the distributional and political tensions around macroeconomic policy, and made this entente possible. Subdued inflation has allowed the financial sector to acquiesce to expansionary policy, but do not expect that to last should it pick up again.

Take last week’s fiscal framework from Orszag, Rubin, and Stiglitz (here). While they agreed on what should be done now, they were divided about the post-recovery period – “once we’re at full employment” (never mind that no one knows where it is). Rubin trotted out the warning he has been telling for thirty years, about how out-of-control US debt will cause a crisis of confidence, and a massive currency crisis. Never mind that the opposite has happened. He sounded like the old Marxists, who, when asked why the forces of history had not yet delivered the inevitable revolution, would say “just wait.”

It is a good thing that fiscal policy is experiencing this renaissance, but we should remember that many of its new friends are fair-weather.