After one year

 Today, for the first time in our history, the United States has a president who has no understanding of the political and intellectual principles that have always defined our nation and that enabled us to survive the great crises of 1861-5 and 1929-45.  The government that the Framers bequeathed to us demands respect for established procedures and precedents.  As our first presidents repeatedly reminded us, that government depends upon mutual respect--which Lincoln maintained even during the Civil War--and upon a commitment to principles bigger than any of us as individuals.  And from the beginning we have tried, with intermittent success, to rely upon known facts to analyze what threatened our nation and how to meet that threat.  Both Lincoln in 1861-5 and FDR in 1940-45 based the great wars they fought on the need to preserve democracy--Lincoln to defend it against the domestic threat of rebellion and FDR to protect it from lawless regimes abroad.  In both of those cases the enormous physical and material sacrifices the nation made to secure victory reaffirmed faith in our institutions, and after 1945 in particular that victory led to measures that improved the lives of tens of millions of Americans, not least in recognition to the sacrifices they had made.  When William Strauss and Neil Howe wrote The Fourth Turning in the mid-1990s they expected to see a similar drama enacted in the next 20 years or so. That has not happened and it looks to me as if it will not happen.

More than any other man ever elected President, Donald Trump has devoted his life to the pursuit of great wealth, fame, and influence.  The first few decades of his business career revealed him to be a man of very erratic judgment, but he compensated for his failures by creating a robber baron persona with the help of an ever-cooperative media.  He built a internationally well-known brand, and that seems to have allowed him to escape ruin during several bankruptcies because he convinced his creditors that his enterprises would do better if they remained associated with his name.  He had developed the technique that he has relied upon as president: reshaping reality with a steady stream of boasts of his own greatness that kept the myth of Trump the great businessman alive.  He insisted that he could do things that lesser men never could.  In the 2000s, when he had exhausted most of his credit with the financial community, he brilliantly turned to television, where he could play the role of managerial genius in a safe environment.  Full disclosure: I think that I watched the first two seasons of The Apprentice myself.  He never impressed me as a manager at all, but he was evidently an effective  performer.

The Apprentice also flattered Trump's self image of omnipotence and invincibility--the characteristic that now defines his second presidency.  He and his devoted team identify and solve every problem saving the nation, including some that we did not know that we had.  He maintains this image, of course, by creating an alternative reality based upon alternative facts.  Our now-stagnant economy is growing at astonishing rates, our 2.7 percent inflation doesn't exist, we enjoy unprecedented respect around the world, huge investments are flowing into the United States, etc., etc., etc.  At the personal level this technique suggests some emotional desperation, a complete inability to admit failure of any kind.  It must be very exhausting to be Donald Trump, and the strain is showing.  

Trump has always loved publicity, and early in his career as a builder he impersonated a publicist to plant favorable stories about himself in major media outlets.  He still has a symbiotic relationship with the media--including his most bitter enemies within it--as shown by its newest obsession, the gift that keeps on giving, the Epstein files.  Our leading newspapers turn out a steady stream of stories about Trump policies going badly and setbacks in the federal courts, reflecting their unshakable belief that someone so at odds with everything they believe simply cannot succeed.  They are not, however, a real threat to his power.

Tariffs rank with illegal immigration as Trump's highest, most sincere policy priorities.  He sees the federal government as his own corporation and cannot resist taking advantage of the revenue-raising opportunities that tariffs provide.  Tariffs and the threat of tariffs are also helping his minions arrange investment deals, which if they bear fruit will surely benefit some of his political allies.  Trump's crypto sales are a new and unrivaled means of turning his brand into cash.  Yet the tariffs have already had disastrous impact upon some economic groups, led by farmers, and they may have more.  They must contribute to inflation which is a real problem.  While our major institutions have obviously failed to convince one-half of the American people that Trump is irretrievably evil, our voters will never surrender their constitutional right to punish their political leadership for poor economic performance.  That remains the most powerful dynamic in American politics, and November's off-year elections showed that it is alive and well in red states and blue states alike.  Yet a Democratic victory in the House elections eleven months from now will only create more chaos in Washington, and new impeachment resolutions will not do any good.  And if Trump's health failed him, it's hard to believe that J. D. Vance would reverse any of his policies. 

Trump's rise is more of a symptom than a cause of our national calamity.  The degradation of our public life, the irresponsibility of our media,  the decline of our educational system, and above all the decades-long assault upon authority of all kinds have combined to make him possible.  Lincoln and FDR led the nation through great crises by mobilizing it to solve enormous problems: disunion and slavery in Lincoln's case, and economic crisis and world war in Roosevelt's.  Our leadership has repeatedly failed to rally the nation to solve our own economic and political problems, and Trump now denies that any economic problems exist.  He has risen to the presidency twice because he knew how to take advantages of our society's weaknesses.  We do not know how, and when, they will be overcome.  It is probably too late for another Lincoln or FDR to reverse these trends, even if one were on the horizon.  The  heroic period in US history that began with FDR and lasted through Reagan is definitely over--but it still belongs to our heritage, and always will.

What has happened to journalism. . .and academia. . .and Hollywood

 I am vacationing, but a substack I get pointed me to this remarkable article about changes in the job market in journalism.  I had already witnessed the parallel changes in academia--where they have also extended to the highest levels.  I would not be pointing you to this article were it not so well-documented.  I'll be back with something of my own next week.

Europe and the United States in Times of Crisis

 Sometime during the 2000s--I think it was around 2005, but it could have been a little later--I was invited to give a talk at a conference in Berlin.  (I have forgotten the details.)  The Bush Administration was already turning away from the legacy of the New Deal, and I already doubted that Democrats would be able to reverse that trend.  I gave a talk reflecting some of themes of my article on the great Atlantic crises of the 18th, 19th and 20th centuries, which I am linking here.  It focuses on the interplay of political developments in the United States on the one hand, and Britain, France, and Germany on the other.  In the crisis of the late eighteenth century, the United States invented modern democracy, while Britain emerged with an even stronger aristocracy and France and other continental states mixed monarchy with bureaucracy.  In the crisis of 1854-71 (approximate), the victory of the North in the Civil War not only preserved democracy in the United States--the goal Lincoln defined throughout the Civil War--but gave democrats in Europe a tremendous boost, creating governments incorporating universal male suffrage (or something fairly close to it) in Britain, France, and Germany.  The 1929-45 crisis of the twentieth century continued that process an created an alliance of democratic nations based on the rights of labor and welfare states.  By the time I gave my talk in Berlin, the United States was clearly moving in a very different direction at home, and I urged my European audience to make sure that their nations preserved the democratic welfare states that had grown up in the last half century or so, no matter what happened across the Atlantic.

Late last week the Trump Administration issued its first National Security Strategy.  These documents can be very important.  In 2002 the Bush Administration issued one announcing that the US government would wage preventive war against any hostile state threatening to acquire nuclear weapons.   That strategy was implemented in Iraq--where it turned out that the nuclear threat no longer existed--and the Bush Administration had hoped to implement it against Iran and North Korea as well. This year the Trump Administration, working with Israel, did execute it against Iran.  There are many interesting aspects to the new Trump Administration strategy.  A key section on the Balance of Power is equivocal and somewhat self-contradictory, pledging on the one hand to "prevent the global, and in some cases even regional, domination of others," while adding, "The outsized influence of larger, richer, and stronger nations is a timeless truth of international relations."  The section on the Western Hemisphere defines a "'Trump Corollary' to the Monroe Doctrine"--"We will deny non-Hemispheric competitors the ability to position forces or other threatening capabilities, or to own or control strategically vital assets, in our Hemisphere"--which adds nothing new to traditional policy, and it says nothing, mercifully, about the President's stated desire to make Canada the 51st state, and doesn't refer to the "Gulf of America" or to possible regime change in Venezuela.  It reaffirms a US military commitment to Taiwan.  The most striking portion of the strategy document discusses the subject of my Berlin talk: the political relationship of the United States and Europe.

In astonishing words, the strategy document flatly rejects key policies and beliefs of all the major contemporary European governments and calls explicitly for their replacement by Europe's new rightwing parties.  This begins with a discussion of Europe, the US, and the Russia-Ukraine War.  While declaring a goal of enabling Ukraine's "survival as a viable state," it also rejects allowing Ukraine in NATO and blames the Europeans for the continuation of the war within a most original analysis of where Europe is and where it is going.  (Since I last posted two weeks ago the Trump Administration has backed away from its pro-Russian demands upon Ukraine, but we cannot predict what will come next.)

"Continental Europe has been losing share of global GDP—down from 25 percent in 1990 to 14 percent today—partly owing to national and transnational regulations that undermine creativity and industriousness.

"But this economic decline is eclipsed by the real and more stark prospect of civilizational erasure. The larger issues facing Europe include activities of the European Union and other transnational bodies that undermine political liberty and sovereignty, migration policies that are transforming the continent and creating strife, censorship of free speech and suppression of political opposition, cratering birthrates, and loss of national identities and self-confidence.

"Should present trends continue, the continent will be unrecognizable in 20 years or less. As such, it is far from obvious whether certain European countries will have economies and militaries strong enough to remain reliable allies. Many of these nations are currently doubling down on their present path. We want Europe to remain European, to regain its civilizational self-confidence, and to abandon its failed focus on regulatory suffocation.

"This lack of self-confidence is most evident in Europe’s relationship with Russia. European allies enjoy a significant hard power advantage over Russia by almost every measure, save nuclear weapons. As a result of Russia’s war in Ukraine, European relations with Russia are now deeply attenuated, and many Europeans regard Russia as an existential threat. Managing European relations with Russia will require significant U.S. diplomatic engagement, both to reestablish conditions of strategic stability across the Eurasian landmass, and to mitigate the risk of conflict between Russia and European states."

The document rejects "writing off" Europe in favor of changing the direction of European politics so as to prevent "certain NATO members" from becoming "majority non-European" within decades. It specifically recommends "cultivating resistance to Europe's current trajectory within European nations."  This can mean only one thing: promoting the advent to power of the new right in Europe, including Nigel Farage's Reform Party in Britain, Marine Le Pen's National Rally Party in France, and the Alternative for Germany led by Alice Weidel.  In previous eras the US government resisted the advent to power of Communist parties in states like Italy and France, but never before has it endorsed the victory of opposition parties.  And the question, it must be said, is whether the Trump Administration might be on the side of history in setting this goal.  The latest opinion poll in Britain shows the Reform Party with 31 percent support, compared to 20 percent for the Conservatives, 14 percent for the governing Labour Party, 18 percent for the Green Party and 11 percent for the Liberal Democrats.  In France Jordan Bardella (who has replaced the convicted Le Pen) and the National Rally Party show 36 percent support, more than the next two more traditional candidates combined (Emile Macron cannot run again.)  In Germany the latest poll shows the Alternative for Germany with 26 percent support compared to 25 percent for the Christian Democratic Union and 36 percent total for three left wing parties, the Socialists, Greens, and Left Party.  (All polls listed in Wikipedia.) The traditional German parties in particular have been pulling together to try to keep the AfD (its German acronym) out of power, drawing public criticism from Vice President Vance early this year.  The National Security Strategy effectively endorses those parties as candidates for national leadership in our oldest allies.  The prospects of Farage and the Alternative for Germany still look pretty bleak to me, but the National Rally is solidly established as the second leading party in France and the Macron government has become very unpopular.  

This could turn out to be parallel to the last two great Atlantic crises, when Europe did follow the US lead.  The Trump Administration is leading a revolt against our bureaucratic state, based upon impartial principles, to create a non-regulatory government dedicated to helping enterprises of all kinds thrive in return for their financial support. Bureaucracy is indeed stronger in continental Europe, at least, than it has been in the United States, and it is drawing the same kind of resentment. That was what led to Brexit just a few months before the first election of Donald Trump.  

I learned many decades ago to distinguish a nation's government from its people, as the diplomatic documents of the early and mid-20th century invariably did.  The Trump Administration--the government of the United States today--has already lost popularity among the American people and they may well repudiate it in 2024 and 2026, but not before it has made drastic changes in our government's relationship to our society and to its foreign policy abroad.  It has officially embarked upon a completely new course in Europe.  I hope that European governments will rise to the occasion as most of them failed to do 90 years ago.

The Munich moment

 After a year of wildly oscillating statements from President Trump regarding the Russia-Ukraine War, Trump, acting through his personal envoy Steve Witkoff, has definitely emerged as the Neville Chamberlain of our time.  It's time to review the historical parallel.

In 1919 the Treaty of Versailles took significant territory away from Germany and awarded it to Poland, while other treaties left the German-speaking regions of the Austro-Hungarian Empire in a new vastly reduced Austria and in the new state of Czechoslovakia, which was dominated by the Czechs, its largest ethnic group.  In the wake of the treaty France attempted to play the role that the US played in Europe beginning in 1948--it signed alliances with Poland, Rumania, and Czechoslovakia in an attempt to contain the new Germany within its new borders.  Great Britain held aloof from those alliances.  It took 14 years for a new German government, Hitler's, to embark upon the mission of undoing the Versailles treaty borders.  After five years of rearmament, Hitler managed to bring Austria into the Third Reich through political pressure.  He then demanded better treatment for the German minority in Czechoslovakia--a pretext to create a conflict with the Czech government that would allow him to attack and destroy that nation and bring both the German and Czech-inhabited parts of it into Germany.

France, sadly, knew that they could not fight on behalf of Czechoslovakia without Britain.  Neville Chamberlain had taken over as British Prime Minister in 1937.  He desperately wanted to avoid another European or world war, and by the end of that year he had made clear to Hitler that he would allow changes in frontiers to prevent one.  He sent a British cabinet member to mediate between the Czech government and its German minority, but Hitler had ordered the Sudeten German leader to keep raising his demands so that they could not be satisfied.  With  Europe on the brink of war in September 1938, Chamberlain flew to Germany to meet with Hitler at Berchtesgaden, and agreed to the German annexation of the border territories inhabited by Germans.  Chamberlain then persuaded the French and the Czechs to agree to this as well.  Two more meetings at Bad Godesberg and then Munich--where Hitler met with Chamberlain, Mussolini, and the French Premier--led to that result.  The border territory also included the Czech fortifications and what was left of Czechoslovakia was defenseless. Six months later, Slovakia seceded and Hitler took over and annexed the rest of what is now Czechia.  That territory sat out the Second World War, and when the Allies won, a restored Czech government expelled its three million Germans into Germany.

The peaceful defeat of the USSR in 1991 corresponds to the defeat of Germany in 1918.  The USSR gave way to a much-reduced Russia, shorn of the Baltic States, Belarus, the Caucasus and Central Asian republics, and most of all, Ukraine, which surrendered its nuclear weapons in exchange for security guarantees, but never managed to join NATO.  Russia, like Germany after 1919, suffered very severely economically from its defeat and the collapse of its regime, and it took just 8 years, not 14, for Vladimir Putin, a man dedicated to restoring Russia's former greatness, to take power.  Putin began, we have learned, by staging a fake terrorist attack that killed dozens of Russians as a pretext for resuming the war against Chechnya.  He managed to turn Belarus into a satellite and briefly bring a pro-Russian leader to power in Ukraine.  That government, however, fell, and in 2014 he simply annexed Crimea--an excellent parallel, it now occurs to me, to Hitler's Anschluss with Austria.  He also started a rebellion in eastern Ukraine, and in 2022 he invaded Ukraine without warning.  At that moment I suggested here that NATO should seriously consider getting into the war then and there.  I am not aware of a single other person to make that suggestion, but NATO, led by the United States, provided Ukraine with critical economic and military aid, and Finland and  Sweden joined NATO.  Ukraine quickly rolled back the initial Russian gains but could not mount a successful counterattack and now is very slowly giving ground in a war of attrition.  An invasion of Russian territory around Kursk--an excellent strategy--unfortunately had to be abandoned.

As peace has been discussed, the key issue has become clear: will Ukraine remain an independent nation?  Russia insists that it must not--and the deal that Witkoff has drafted gives into that demand.  The deal gives Russia all the territory that it has occupied, and more.  It would require Ukraine to change its constitution so as to renounce NATO membership and forbid NATO troops from entering Ukraine.  It will severely limit the size of the Ukrainian army.  Like the Munich agreement, it includes only the vaguest security guarantees for what will be left of Ukraine.  If Ukraine accepts it, it will take only a few years for Russia to destabilize its government and proclaim the need for Russian troops to restore order, as Hitler did in what remained of Czechoslovakia in March 1939.

Donald Trump, playing the role of Chamberlain, has given Ukraine one week to accept the deal.  The rest of NATO finds itself in the role of France in 1938.  If it tells Ukraine to fight on, as the Baltic States and Poland, at the very least, certainly want to do, it will have to assume the responsibility of providing all necessary assistance, which will not be easy.  They will also have to assume the risk of war with Russia.  Whatever decision the British, French and Germans make, this is a turning point in modern European history.  There is no longer a United States government across the Atlantic willing to help with their defense.  

An odd mixture of people, it seems, will support the 28-point plan to end Ukrainian independence.  Here is historian Niall Ferguson, drawing the ire of former chess champion and activist Gary Kasparaov:

"The best is the enemy of the good. Contrary to recent press speculation, the draft 28-point plan for peace in Ukraine is in fact a reasonable basis for negotiations. Journalists can gripe about it as they griped about the 20-point Gaza plan. But wars are not ended by op-eds."

This is not too surprising.  Ferguson bizarrely established his reputation as an historian with his book The Pity of War, which argued that Britain in 1914 should have allowed Germany to win the First World War.  A lifelong resident of different parts of Oceana, he now seems willing to share the world with Eurasia and Eastasia and abandon the 1945 dream of a world of truly independent states.  That is also the policy of the current government of the United States, which has no respect for sovereignty within our own hemisphere.

Ukraine, unlike Czechoslovakia in 1938, has made it clear for four years that it has what it takes to defend its independence, and has fought heroically under very impressive leadership.  Russia also lacks a quick path to victory, as long as Ukraine gets enough assistance.  Sadly, the United States has abandoned the role that it played for a century.  This is a danger and an opportunity for the great nations of Europe.

Why Mamdani?

 I personally believe in highly taxed and regulated capitalism, not thorough-going socialism, and I regret that Zohran Mamdani has not abandoned all of the very woke positions he took a few years ago when they were so fashionable.  I would however have voted for him if I lived in New York City and I think his election is an important milestone in American life.  Far more than the career of Bernie Sanders or Alexandra Ocasio-Cortez, his victory in the nation's largest city reflects the political impact of the economic changes of the last few decades.  He may not have the best solutions to the problem in mind, but he is determined to face it head on.

Back on May 2, 2014, when I was nearly a year into retirement and No End Save Victory had just come out, I published the first of four blog posts here on Thomas Piketty's new book,  Capital in the 21st Century.  Reviewing what I wrote, I was struck by the breadth of his research, his knowledge of history, and his intellectual ambition, but most of all by the simple mathematical insight around which he had built the book.  Under capitalism, he showed, the natural tendency is for capital to grow more quickly than the economy as a whole.  I have never read Marx's original Capital but I have the impression that Marx had said the same thing, and he was right.  Piketty showed, too, that the United States and other western countries had overcome this tendency in the middle of the 20th century thanks to the consequences of the two world wars and the Depression, which had led among other things to almost confiscatory high marginal tax rates.  That era came to an end just as I was reaching adulthood, however, and the natural tendency of capitalism took over, making the rich richer while the lower half of the population stood still.  And that trend has had extraordinary economic and political consequences.

It makes perfect sense, therefore, that Mamdani won half the vote in the world's most capitalistic city.  Although the financial and real estate barons of New York are losing ground relative to the tech giants of the West Coast, they still dominate much of economy and our politics.  The crisis in higher education over the last two years has shown that they are the  ultimate authority over our universities as well, and they have enormous influence over some aspects of US foreign policy.  The economy those elites created helped give us Donald J. Trump.   Their wealth has pushed real estate prices in New York and other major metropolitan areas to undreamed of heights.  When I read Piketty, I had bought the property I live in in suburban Boston less than two years earlier, and Zillow tells me that it is now worth more than twice as much as it was then.  At that time the median US household income was $53,657.  Today it is $83,730, leaving my property considerably less affordable than it was then.  If one corrects the current median income figure for inflation, it becomes $61,206 in 2014 dollars--an increase of 1.27 percent per year.  During that period GDP growth has averaged 2.52 percent a year--almost exactly twice as much.  The rest of that GDP growth, presumably, has been turned into capital, which is held by relatively few people. Piketty was right.

Hysterical financial interests are now warning that the superrich will leave New York because of Mamdani's victory.  I am only speculating here, but I am not certain that would hurt the average New Yorker.  It could depress the housing market, but that is what New York needs to make it more affordable.  When the superrich ran General Electric and General Motors they created more ordinary jobs when they did better, but now it seems the superrich are at least as likely to reduce ordinary jobs as to create them--a trend that will become clearer as AI and robotics make new advances.  (See Bezos, Jeff.)  At least since Reagan we have been hearing from the leadership of both parties that economic growth benefits us all.  The lower half of the population knows better.  

And not only the lower half.  Harvard and MIT assistant professors can no longer afford single-family homes around here.  Two-career professionals see one salary eaten up entirely by childcare.  Etc.  Mamdani built his campaign around a simple message:  our economy is making life impossible for too many of us, and this can't go on.  That is the message that Barack Obama, Joe Biden and Kamala Harris refused to emphasize, and the problem they did nothing about.  Donald Trump, meanwhile, inhabits a fantasy world in which we have no inflation (it's 3 percent, not 0, at the moment), and job creation is at undreamed of levels (it is actually quite slow and getting slower.)  He will do nothing about the underlying problem.

For a long time now I have been pessimistic about the growth of the new aristocracy and its consequences.  The trends we have lived with for the last half century may well have gone too far to reverse now.  But I am glad that the electorate of our largest city resoundingly delivered the message that this must not go on.  I don't know what Mamdani will actually be able to do to try to reverse the trend, but I wish him well.