Vladimir Putin’s Wish List

Let us assume that the allegations of links between Russia and the Trump campaign are nonsense.  Grant that all that Donald Trump and his campaign have been doing are wholly motivated by Trump’s own plans and interests.   Can we then come up with some explanation or strategy behind Trump’s actions?

Let’s begin by being clear about Vladimir Putin’s world-view.  Putin’s chief strategic problem is that Russia is pinned between two giant militaries: China and NATO.   The latter is an alliance extending to Russia’s borders that combines the strength of Europe with the U.S. — the nation with the world’s largest and most technologically advanced military, and which is about to embark on a $1 trillion modernization of its nuclear arsenal.  Putin’s chief aim has therefore been to weaken or dissolve NATO by creating divisions within Europe and between Europe and the U.S.  For years, Putin has pressed the case that because the Cold War is over and Russia has no designs on Europe, NATO is now obsolete and should be ended, just as the Warsaw Pact has been.  His main goal is to sow distrust between the U.S. and its NATO partners and to destroy European unity.  If possible, it would also be helpful if the U.S. would back off its plans to update its nuclear arsenal and the extremely expensive competition that would trigger.

What else could Putin wish for to improve Russia’s geopolitical situation?  First would be for the U.S. to lose interest in the Ukraine, accepting the validity of Russia’s claims and actions there.   Second would be for the U.S. to pick a fight with China in the Pacific, to distract both the U.S. and China from Russia’s sphere of interest in the former U.S.S.R and the Middle East.  This is especially important as China’s “new silk road” investments in the Indian Ocean and Central Asia would impinge on Russia’s historical sphere of influence.  Finally, the icing on the cake – though long out of reach – would be if in the Middle East the U.S. would accept Russia’s position that all that matters is stabilizing governments, even if they are authoritarian, corrupt, and criminal human rights violators, and if the U.S. and Israel together would become so blatantly aggressive against Palestinians that it would stir up Arab nations and the U.N. against both Israel and the U.S., giving Russia a situation that it could leverage to gain influence throughout the region.

For its economy, Russia’s major problems are that American and European sanctions are biting, that its energy industries desperately need external financial and technological investments, and that it is being overtaken by the rapid rise of China, which is gaining international influence by its increased investments and trade throughout the world.  The solutions that Putin desperately desires are to have sanctions lifted without having to give up any important strategic or geopolitical gains, and also to get foreign investment to help grow and modernize its oil and gas industry.    Weakening or breaking up the European Union would help to undermine sanctions and weaken the European economy; and if the U.S. and China engaged in a trade war, that would weaken both of their economies as well.

Of course the U.S. remains Putin’s most significant adversary.  It is the richest and most powerful, and its institutions and history – in support of democracy, human rights, political freedoms, leaders accountable to law, an independent press and judiciary – stand in opposition to everything that Putin maintains to remain in power.  Thus Putin needs to weaken the U.S. and undermine its institutions to achieve his goals.  To that end, Putin would like to see disunity among America’s political leaders, its intelligence agencies undermined, and its free media lose their legitimacy and credibility as a source of factual information.  Ideally, the U.S. would adopt policies toward Russia that ignore Russia’s actions toward other nations and the conflict between American values and the Russian political system, and simply seek cooperation on bilateral issues.

Now that we know Putin’s goals, we can look more clearly at Trump’s actions and see how they differ from Putin’s agenda.  Since last summer, when Trump had clinched the Republican nomination, here are some of his statements and actions.  To review:

  • Last summer, while the Trump campaign generally stayed out of the drafting of the Republican party platform, they intervened strongly on one and only one issue – they “steam rolled” an attempt to put language in the platform criticizing Russian actions in Ukraine and promising aid to Ukraine’s military. Evidently, getting any mention of Ukraine out of the Republican platform was more important to the campaign than language on taxes, education, or health care.
  • In August, when questioned about Putin’s intentions in Ukraine by George Stephanopoulos, Trump’s response was hyperbolic: “He’s not going into Ukraine, OK, just so you understand. He’s not going to go into Ukraine, all right? You can mark it down. You can put it down. You can take it anywhere you want.”   Why would Trump make such an extreme and wholly inaccurate defense of Putin’s Ukraine policies?
  • In choosing his foreign policy team, Trump picked a Secretary of State with no prior government or diplomatic experience but whose most notable accomplishments include negotiating energy deals with Russia, and who has long-established relationships with Putin and Igor Sechin, the current CEO of the giant Russian oil firm Rosneft. Trump also chose a national security advisor who was paid to appear on Russia’s propaganda TV network and who has fixated on Islamic terrorism to the exclusion of any wider strategic view.  That advisor’s first policy-related call was to Russia’s ambassador to exchange Christmas greetings and plan a meeting for Trump with Putin.   Trump could hardly have made two major foreign policy appointments more pleasing to Putin if Putin had picked them himself.
  • Trump has repeatedly praised the United Kingdom for its vote to exit the European Union, calling it a great move and saying that he expects other countries to exit as well. Trump has met with and lauded Brexit leader Nigel Farage, and promised to fast-track a US-British trade pact to facilitate a “hard” exit.
  • Trump has sharply criticized the EU as a vehicle for Germany and attacked Germany’s chancellor, calling her policies on refugees a great mistake. He has even said there is no difference in his trust in the leader of Germany – the lynchpin of our NATO alliance – and Putin, and that his trust in the former might not last.  He has called NATO “obsolete” and said the U.S. should not honor its NATO obligations since some NATO members are not paying their fair share.
  • Trump has challenged the one-China policy, which has been the foundation of Sino-U.S. relations for decades. He has also talked about starting a trade war with China, calling them the worst cheaters and threatening massive tariffs, even raising the idea of using Taiwan as a bargaining chip in trade negotiations, something that China rejects as an existential threat.
  • Trump has refrained from any criticism of Russian actions in Ukraine, Syria, the Balkans, or eastern Europe. His nominee for Secretary of State, in his confirmation hearings, said that Trump had not even discussed Russia policy with him.
  • Trump has defended Russia against the conclusions of all U.S. intelligence agencies that Russia meddled in U.S. elections.   In doing so, he has impugned and criticized the credibility and objectivity of U.S. intelligence agencies, and has attacked political leaders on both sides of the aisle.
  • Trump and his team have repeatedly criticized mainstream U.S. media, calling them purveyors of fake news, while accepting as truth the propaganda on Clinton and himself put out by the National Enquirer, Breitbart, and other highly politicized media. They have thus undermined the idea that there is any difference between objective reporting and political propaganda, and that the U.S. has any reporting that can be regarded as objective and conveying factual news.
  • Trump appears to be planning a meeting with Putin as one of his first meetings with foreign leaders, with the goal of a deal in which the U.S. would drop sanctions in return for an agreement on reducing nuclear weapons.   Such a deal is remarkable in that it would give Putin two things he desperately wants – ending sanctions for his interventions in Ukraine and the U.S. elections, and ending the prospect of competition with an upgraded U.S. nuclear arsenal.  In return, Russia would have to give up nothing at all on Ukraine, Syria, cybersecurity or any other issue that it cares about.  One might say that it appears as if the goal of a nuclear pact – which is something that Putin desires for his own purposes – is being used as a pretext for the lifting of sanctions.
  • In regard to Israel, Trump has proposed moving the U.S. embassy in Israel to Jerusalem, and has chosen an ambassador to Israel who supports increasing settlements in Palestinian areas and is skeptical of any peace agreement or two-state solution. These policies promise to escalate Israeli-Palestinian tensions, distracting attention in the Middle East from Russian support for Syria’s dictator Hafez al-Assad, and inviting further condemnations of the U.S. in the United Nations and the Middle East.

We should dismiss the notion that Trump or his campaign had links to Russia or any financial or other motivations for his actions.  We are then left with just the list of Trump’s statements and actions to speak for themselves.

The problem then is that Trump’s actions, even before taking office, appear like the fulfillment of a long wish list of Vladimir’s Putin’s most desired goals.  Even Trump’s continued refusal to release his tax returns – which might have made sense during a campaign when his opponents might seek to use them – seems pointless now that he is the President-elect.   Why not end suspicion and criticism by releasing them now, when there is no longer anything to lose?

Unless, of course, there is.  For as Trump’s actions and statements continue, it is harder and harder to see them as anything but the fulfillment of a very lengthy wish list for the Kremlin.  On a wide range of issues, Trump has so far given Putin everything he could have dreamed of.  Trump may be wholly innocent of any links or pressure from Russia.  But it is becoming devilishly difficult to find any explanation of the actions listed above in which such actions are primarily a defense of America’s strategic interests and support American values and goals.

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Fake News, Real News — It’s all news now.

After a campaign in which Donald Trump promised to lock up his opponent for crimes that the FBI now says she never committed, Trump himself is facing an uncomfortable turn of the karmic wheel.

It 2016, Donald Trump and his team did all they could to blur the lines between truth and false news, and to create a cloud over Clinton by mixing smears based on allegations and investigations that proved groundless with wholly fake news of even more serious crimes, tossing the core American principle of “innocent until proven guilty” out the window.

When fake news sites ran stories that Hilary Clinton was involved in a pedophile sex ring being investigated by the FBI, and other stories linking her more generally to sex crimes, some of these were re-tweeted by Trump’s National Security Advisor designate General Michael Flynn and his chief of staff (Flynn’s son).   Breitbart News, which was run by Donald Trump’s chief strategist Steve Bannon until last summer, ran an essay just three days before the election titled “Hilary Clinton Should be in Jail, not the White House,” giving an extensive list of her “crimes” and asserting that “Clinton would already be in jail as the head of an international crime syndicate if she were not being protected by the media establishment and Obama’s political operatives in the Department of Justice.”

Trump himself said that Clinton would be jailed for her crimes if he was elected, and encouraged his supporters in chants of “lock her up” at political rallies.  After extensive Congressional investigations into her conduct as Secretary of State and FBI investigations into her emails found no evidence of criminal acts, Trump continued to insist on her guilt and claimed that Clinton’s exoneration was evidence of a government conspiracy against him.

Now it is Donald Trump’s turn to be caught in the real/news fake news conundrum and the miasma of allegations vs. facts.   BuzzFeed has released 35 pages of memos that purportedly report on interactions between Trump and Russia that go back many years.  The memos provide details about Russia’s direction of a campaign to release hacked emails through Wikileaks to harm Clinton.  In addition, the memos claim that Russia has material to blackmail Trump, that they have pressured him to adopt pro-Russia policies on Ukraine, and that the Trump campaign and Russian intelligence shared information.

Is this real news or fake news?   The main claim in the memos, dated to July of last year, regarding a top-level Russian effort to use hacked information to promote Trump’s election win, has now been verified in extensive investigations by U.S. intelligence agencies.  Other claims in the memos, regarding contacts between Russian sources and Trump campaign advisors, have in fact been under investigation by the FBI.

While some of the claims in the memos seem fantastic, their overall story is plausible; indeed the main theme of Russian interference in the U.S. election has now been proven.  All that remains is to determine whether there was any collusion between the Russian effort and the Trump campaign.

There is at least some indication that there was. Two days after the election, Russia’s deputy foreign minister Sergei Ryabkov stated that his government had maintained contacts with Trump’s team throughout the campaign: ‘“I cannot say that all, but a number of them maintained contacts with Russian representatives,” Mr. Ryabkov said.” But this was quickly denied by the Foreign Ministry, who said that all that happened was that the Russian ambassador in Washington had reached out to American politicians and supporters of Trump to obtain information on Trump’s positions.

Indeed, the dismissals of any possible election interference and any contacts between the Trump campaign and Russia by both sides have been vehement, if not hysterical.  Russian officials dismiss the very idea that they might have used cyber-attacks to support Trump as too ridiculous to even consider; instead they seek to put the blame on anyone else, even rogue US agencies.   Trump has called BuzzFeed, which released the memos, “a failing pile of garbage”  and called their contents an utter fabrication.  Whenever the subject of Russian hacking is raised, instead of following the time-tested politician’s mode of denial – “I am innocent of these charges and I am confident a full and thorough investigation will completely clear me of any wrongdoing” – Trump or his surrogates insult the messenger, impute the story to spiteful losers, make extreme denials, and urge that the story simply be dropped.

Yet Trump himself spent almost five years pursuing far more weakly supported allegations that President Obama’s birth certificate was falsified.   The FBI spent over a year looking into Hilary Clinton’s emails, and it took almost two years to complete the investigation into Richard Nixon’s cover-up of criminal activity in the Watergate building.   The allegations of Trump-Russia collaboration are no less worthy of thorough investigation.

The principles followed by the Trump team during their campaign – that all allegations of criminal actions should be widely publicized, that guilt should be presumed and pronounced while waiting for supporting evidence to emerge, and that any formal investigations of alleged crimes should be treated as evidence of guilt – may be uncomfortable when turned against them.   However, they have only themselves to blame for setting that standard.  The allegations in the BuzzFeed memos are sufficiently serious that the American people have a right to an independent and thorough investigation as to whether they are falsehoods manufactured simply to damage Trump, or if some portion of them can be verified as accurate.  Such an investigation may be a distraction for the Trump presidency, but it is no less necessary.  Our nation survived the Watergate investigation and it will survive a Kremlingate investigation.

What we may not be able to survive is an environment where fake news is allowed to thrive, on either side of any political divides.  Nor can we survive any effort by the government and especially the U.S. President to chastise news organizations, suppress news investigations, and replace serious investigations into the implications of intelligence findings with simple dismissals.

If President-elect Trump is confident that the BuzzFeed memos are garbage, and that the Russian hacking was both completely unconnected to himself and his campaign and had zero impact on the election, then he should welcome a full and thorough investigation of the matter.  That investigation should seek to understand why Russia thought it could be effective in hacking U.S. political organizations and in utilizing that information to advance their goals.  It should thoroughly search for any links between this Russian effort and anyone connected with any U.S. political party or campaign or other organization that might have enabled or encouraged it.  It should examine how the Russian effort was carried out and why it succeeded.  And it should thoroughly vet the various claims in the BuzzFeed memos or any other plausible explanations for recent events to separate facts from fiction.

If the President-elect is correct in his confidence, then the only possible casualties of such an investigation would be the impunity of Russia in acting against America, and the credulity and influence of false news.   Those are both outcomes that should be welcomed by the administration and by all Americans.



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Lies, Fights, and Deals

Although Donald Trump has not yet been sworn in as President, we already have a pretty good idea how he will act in office.  This is because he has already begun acting as the leader of the United States, particularly in regard to defense and foreign policy.

What we have learned is that we have elected someone who enjoys being a bull in the delicate china shops of international diplomacy.  So far we have seen Trump antagonize China by taking a phone call from the President of Taiwan; he has suggested that the U.S. needs to increase its nuclear weapons capacity; and he has urged the U.S. to move its embassy in Israel to Jerusalem (which would in practice endorse Israel’s claim that all of Jerusalem is its capital, rather than a matter still to be negotiated with Palestinian leaders).  All three moves would overturn decades of U.S. policy.  Trump has also castigated Boeing for cost over-runs on Air Force One using made-up figures for those costs, and then castigated Lockheed-Martin for cost over-runs on the F-35 fighter plane, threatening to drop the project and seek an alternative fighter plane from – Boeing!  This despite the fact that eight other nations are deeply involved in the planning and contracting for the F-35 fighter.

Trump has picked a fight with the U.S. intelligence community by disputing their evidence that Russian government cyber-warriors acted to damage his political opponents.  All this comes on top of his campaign suggestions that NATO members do not automatically deserve full US support.

In sum, it has been a breathtaking run of aggressive changes in U.S. policy in less than 60 days since the election.  What might we see in Trump’s first 100 days when he actually starts operating from the Oval Office?

One measure that seems clear is that Trump will launch an all-out series of trade wars to seek advantages for the U.S., with the immediate goal of reducing the U.S. trade deficit. His appointments for trade and commerce have essentially declared war on China in their published writings.   This too would reverse decades of U.S. trade policy that has treated open international trade as a win-win proposition, instead viewing international trade as a zero-sum game where it is important that the U.S. be the “winner” and never suffer being a “loser.”

If there is a single strategic vision that has been evident in Trump’s campaign and in his post-election actions, it is his oft-voiced view that the world is divided into “winners” and “losers.”   Trump hates losing, and fancies himself a “winner” in business, and now in politics.  Winners get the prerogatives of higher status, and the power to seek further goals while losers deserve to be left behind.  However, being a “winner” means seeking out contests and winning them in order to demonstrate who is a winner and who is not.  And since winning is all-important, the means to achieve a win and then flaunt the victory do not matter.   Lying, misrepresenting one’s acts, taking advantage of help from enemies, abandoning allies, abrogating past agreements, are all perfectly OK if they help achieve a win or can be used to claim a victory.

Not by chance, these are the tactics of authoritarian leaders in general.  They are the tactics used by Vladimir Putin, another “winner” who Trump clearly admires.  We have now entered a new era in world politics, one reminiscent of the 1930s, in which countries have turned to “strong leaders” – Xi Jinping in China, Putin in Russia, Recep Tayyip Erdogan in Turkey, Abdel-Fattah el-Sisi in Egypt, Viktor Orban in Hungary; Rodrigo Duterte in the Philippines – to rescue their countries after periods of crisis.   The 2016 election shows that enough Americans judge that the U.S. has also been through a crisis – involving the terrorism and military costs from 9/11 through the wars in Afghanistan and Iraq and Syria; the bank frauds, corruption, and housing losses in the 2007-2009 Great Recession; the impact of immigration, automation, and globalization on the work and status of the middle class;  and the health care crisis embodied in the surprising decline in U.S. life expectancy and the particularly marked increase in deaths among rural communities and middle-aged whites – to elect a strong leader to rescue the U.S.

What will it be like living in a world of strong leaders all seeking to show that they are winners?  It will likely be a world of lies, fights and deals, with each leader seeking to press their advantages to justify their personal power.   That, as we have seen in the 1930s, is a dangerous world.  At best, it will be a world in which democracy, the rights of minorities, liberal freedoms and truth itself will be under constant assault; at worst it will be a world of constant international confrontations and wars.

What can be done to keep democracy safe from these dangerous tendencies?

First, human rights, democracy, and truth must be defended at home, within the Western democracies, and abroad.  This means that the platforms from which people obtain information – whether it is Twitter, Facebook, and Google or cable news networks – must be held accountable.  Laws should permit state and federal prosecutors and private citizens to sue these actors for disseminating falsehoods as a crime against the public, thus making them responsible for monitoring and correcting the false information spread through their platforms and broadcasts.

Second, when Trump follows his inclination to treat murderous authoritarian leaders as counterparts with whom he will negotiate, he needs to be reminded that he must be careful about giving cover or approval to actions such as the genocidal slaughter of civilians in Aleppo or the seizure of territory by aggression in Ukraine.  He needs to be careful that his deals do not strengthen leaders whose methods and goals challenge the core values of the United States.

Third, Trump needs to be urged to consider the important role of the “loyal opposition” in democracies.  Those who disagree with him – Democrats or technical experts – should not be dismissed as “losers,” because politics is not just like business.  The government is responsible for the welfare of all Americans, and that means lasting success requires taking into account the views and interests of different groups and seeking the broadest possible compromises, not just aiming for narrow victories.  As even the Democrats now know all too well, policy victories (in the environment or trade) in which tens of millions of Americans still regard themselves as “losers” are no victories at all.

Trump’s basic tendencies are clear, but they are also risky.  It will be a Presidency of lies, fights, and deals.  It is up to the rest of us to make sure that America’s key values – democracy, honesty, decency, and respect for all citizens and their needs – what we used to call “the American way” –remain intact.


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Cuba and Castro

One of the last great revolutionary leaders of the 20th century has passed away.   One may hesitate to call Fidel Castro “great” – but whether you admire or revile him, no one can deny that he exercised global influence over a generation of revolutionary leaders, from Latin America all the way to Africa, and managed to keep his small nation in defiant opposition to the United States for over half a century.

As an expert on revolutions, I can offer some perspective on Castro as revolutionary leader.  He was not a monster like Stalin or Mao, who blithely embarked on policies that slaughtered or starved tens of millions and dismissed the costs.   Rather, Castro came to power and ruled as an idealist who believed he was rescuing the Cuban people from the harsh exploitation of early 20th century capitalism, in which American companies reaped much of the profit generated by Cuba’s economy, while Cuban men labored like slaves on sugar plantations and women turned to prostitution to support themselves.   Unlike the Russian and Chinese Communists, who fought their way to power in bloody civil wars that tore their countries apart for many years, Castro and his revolutionary guerillas were a small force that played cat and mouse with the army of the Cuban dictator Fulgencio Batista.  Their achievement was to just survive and win popular admiration, until Batista’s own apparent disregard for his people and his nation, and his dependence on his U.S. patrons, led both his army and the Cuban people to abandon him, allowing Castro’s forces to take over the island.

Once in power, Castro was embraced as a nationalist hero.  When Cuban refugees tried to persuade American President John F. Kennedy to support their effort to take back the island, promising that Cubans would rally to their side and desert Castro, the result was one of the unmitigated disasters of U.S. diplomatic history.  The promised defections never materialized, and the invasion forces at the Bay of Pigs were sent packing.  But one of the results was to ensure that Castro would always see the United States as his dire enemy.  Already leaning toward communism as a way to bring equality and hoped-for economic betterment for ordinary Cubans, Castro forged ever stronger-ties with the Soviet Union and became a champion of communist and anti-American guerilla movements and governments around the world.

Of course, Castro’s imposition of a communist system on Cuba strangled rather than strengthened the economy.  Castro’s early policies provided some widely-admired gains, as his barefoot teachers and investments in health care gave Cubans universal literacy and one of the highest levels of doctors per capita in the world.  Unfortunately, both gains were squandered, as Cuba’s socialist economy provided no opportunities for the newly-literate to become successful entrepreneurs, and Cuba’s medical personnel were sent around the world as a way to gain support and earn hard currency.

As the oppressiveness of communist party rule and the stagnation of what had been Latin America’s most advanced economy became apparent, Castro had to deal with rising voices of opposition.   He dealt with them harshly.  Even old comrades were imprisoned, and thousands of opponents were executed.  As in other communist regimes, there was no freedom of press, speech or assembly.  But Castro’s rule was more frustrating than dangerous for ordinary Cubans.  After the years of the murderous Batista regime, which sent death squads throughout the countryside and sold nearly half the economy to American interests, Castro’s regime was seen as a significant improvement.   As one Cuban émigré put it to me – “Castro is like changing a wife-beating husband for one that is kind but lazy and cannot keep a job.  At first, you are grateful just not to be beaten every day.  But eventually, you do start to wonder when your economic situation will ever improve.”

The best hope for such improvement will come from the integration of Cuba into the global economy, with new opportunities for foreign investment, trade, travel, and migration.  This is the path that President Obama and Cuban leader Raoul Castro, Fidel’s brother, are embarking on, however hesitantly on the part of the latter.   Some may hope that such actions will accelerate after Castro’s passing – but it is almost certain that insulting Fidel’s memory and attacking his legacy will have no positive effect on his brother.   What we have learned from the last fifty years is that Cuba’s government will not be forced or bullied into changing its ways; rather it may shift gradually if Cuban are treated with the respect and dignity that they believe Castro’s revolution – even if it did nothing else – earned for their country.


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Trumponomics — Will it help or hurt?

Some hopeful commentators, even liberals like Paul Krugman, have expressed the hope that Donald Trump might enact some good economic policies, of they kind they have advocated.  This includes a vigorous spending program on infrastructure, tax reforms to simplify and reduce tax burdens, and deregulation.

All of that would be good, but as always, the devil is in the details.  How would these policies be financed?  What trade-offs will be made (there is never a free lunch)?  And who will benefit most from the changes?

The answer to the latter question is already quite clear: the proposed tax reforms direct most of their benefits to the top 0.1%.  This is the only group that will benefit from ending the inheritance tax, and the group that will gain the most from Trump’s proposed personal income and corporate tax cuts.  Such cuts will do little to actually boost the economy, as the rich who benefit will put most of their gains into asset acquisition, which as we have seen for the last ten years produces asset inflation but little economic growth.

The infrastructure spending program, if it is to be effective in creating jobs and boosting the economy, would have to be massive, spending somewhere between .5 and 1 percent of GDP.   But where would the funds for that come from?  The Federal government only gets and spends about 20% of GDP, so such a program would be a 5% increase in Federal spending.  Yet the Republicans in Congress have said they want to increase defense spending as well as cutting taxes.  What room will there be for a large infrastructure program unless massive cuts are made elsewhere (and cuts in health care, education, and regulation are already being contemplated — things that are the most vital to ordinary Americans)?   America already has a substantial debt, and large liabilities for medicare and social security for a very large and fast-aging cohort of baby boomers. Some have projected that Trump’s budget plans, like those of G.W. Bush and Ronald Reagan before him, will simply sink the government under debt (few fans of President Reagan know or care that he was responsible for the greatest increase in US Federal debt, in percentage terms, in U.S. history since WWII).  A modest increase in the U.S. debt is certainly sustainable, but large increases just as spending on the elderly is set to increase will likely crowd out other needed spending.

Corporations are already sitting on massive piles of cash because they do not see opportunities for profitable investments in job-creating activities.  The type of people who have withdrawn from the labor force or feel underemployed — older workers on disability, workers without high-level craftsman skills, and young high school graduates looking for white-collar work — will not benefit from infrastructure construction projects.  Unlike in the era of rapid growth, today’s youth cohorts are no larger nor better educated than the generation they are replacing.  Rebuilding our roads and bridges may be necessary to prevent further clogging and decay of our economy’s arteries, but is not likely to transform the labor market or return us to 1960s and 1970s levels of economic growth.

In addition, Trump’s protectionist trade policies seem certain to hurt growth; that will likely offset any short-term gain from higher government spending.

What the U.S. economy needs is higher spending aimed at raising the productivity of average workers — education, investment incentives for hiring workers, trade deals to boost exports.  And that spending needs to be financed by taxes that allow the government to manage its debts.  Some of that could come from creating a separate Federal capital account; some could come from a value-added tax on consumption; some could come from a more progressive tax system.

But the Trump plan has none of these features.  It is instead an exact repeat of the G.W. Bush plan of higher debt, higher military spending, and policies aimed to increase the returns on financial and capital investments that benefit the very rich.  We know how that ends.  But it seems we are headed that way again, and full throttle.

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Why Trump Won

Many explanations have been offered for why Donald Trump won the election.  He didn’t — the reality is that Clinton lost, and why is not hard to understand.  My account below will be published in Russia Direct.  Feel free to share, but if you do so please note that this is from that publication.

Why Trump – Why Not?

Jack A. Goldstone.  Forthcoming in RUSSIA DIRECT

Elites across the U.S. and the world are puzzled by the election victory of Donald Trump.  They should not be – it is no more surprising than the fall of one more domino in a line that has already toppled half a dozen others.

Trumps’ victory follows the victory of the Brexit vote, and the rise and popularity of anti-liberal, nationalist leaders in the Philippines, Turkey, Hungary, and of course Russia.  Around the world, the rising polarization of wealth, the anger of those being left behind and trapped in the decline of social mobility are venting their anger at what they perceive as selfish elites.

The data make clear that there was no huge outpouring of support for Donald Trump. He received 59.7 million votes overall; slightly less than Mitt Romney received in 2012 (60.9 million) and a hair more than John McCain received in 2008 (59.6).   Trump defeated Clinton because she failed to generate as much enthusiasm as President Obama, who received 65.9 million votes in 2012 and a whopping 69.3 million votes in his first election in 2008.   Large numbers of people who voted for Obama in earlier elections either stayed home (as with many of the Bernie Sanders voters) or voted for Trump.

In the electoral college, the results were a surprise only because of overconfidence by Democrats and the biased judgements of urban-based elite media and commentators (plus polls that skewed toward urban voters).  But a quick glance at the state and county maps of Republican and Democratic voting makes the outcome very clear.  In the major cities where global finance and high technology has enriched the economies, and large numbers of the highly educated and higher-income households are located, voting went Democratic; in the rural areas dependent on the domestic economy, and particularly those hurt by the financial downturn since the Great Recession and by stagnant incomes, voting was overwhelmingly Republican.  (I took a long drive through rural Virginia and North Carolina the week before the election – Trump/Pence signs were visible everywhere, but hardly any Clinton/Kaine signs could be found; and Virginia is the state where Tim Kaine had been governor and is currently U.S. Senator.)

Overall, the electoral college results were clear:  as has usually been the case, the Northeast and West coast states went Democratic, while the southern and mountain states went Republican.  The crucial swing states were those in the upper Midwest – from western Pennsylvania and Ohio through Iowa, Wisconsin and Michigan.  All of these were states that had voted for Obama in the previous two elections, but all of them went to Trump in 2016, giving him a large victory in the electoral college.

The key swing voters in these swing states were the “white working class” — whites who had not attended college.  These were the groups who felt the most pain in the late 2000s as their savings and homes crashed in value, while the high-paying union jobs that had been the foundation of their communities and their prosperity continued to fade away.  In 2012, they voted strongly against Mitt Romney, who was seen as exactly the kind of predatory elite private equity trader who had enriched himself by closing factories and shipping jobs abroad.  But in 2016, they voted strongly against Hilary Clinton, who was also seen as representative of the Wall Street elites who had engineered bailouts for bankers and gotten rich themselves, while the white working class struggled to survive.  Trump, in comparison, was seen as a self-made man who had no patience for political correctness, who would not give special favors to minorities and immigrants, and who would “make America (meaning their America, of small town Midwestern communities) great again.”

This group of voters are now neither Democrats nor Republicans; rather they are supporters of anyone who promises to pay attention to their needs and shake up the system that they feel has neglected and scorned them.  They supported Bernie Sanders in the Democratic primaries, and Donald Trump in the Republican primaries.

The real question we should be asking is not why Trump won the election; it is why so many voters rejected mainstream politicians from BOTH the Democratic and Republican parties, and voted for insurgents who aimed to overthrow the establishment of their parties and the nation.  In short, why were so many voters willing to support what amounted to a revolution against politics-as-usual, a revolution aimed at blowing up the status quo?

The answer to that question is easily revealed in the graph shown below.


In this graph, from the St. Louis Federal Reserve Bank, the upper blue line shows the growth in America’s economy.  To be more specific, it shows the real (adjusted for inflation) level of GDP per person.  This grew rapidly from 1993 to 2000, suffered a brief pause in the recession of 2001-2002 (the dot.com bust), then continued to rise strongly to 2007.  It again paused and dipped for the Great Recession of 2007-2009, but then rose again, reaching an all-time high in 2014.

One would expect that in a fair and open free market society there would be a strong relationship between rising national income and rising household income.  Certainly there would be some increase in inequality as the benefits of growth would not be spread fully equally, but on average one would expect that as society as a whole grew richer, the people of that society would grow richer as well.

This was the case from the end of World War II all the way to the 1990s.   But as shown by the bottom red line in the figure – which tracks the real median household income in the US – for the last 15 years that expected relationship has failed.  Over this period, the median household income has dropped; household income stopped rising in tandem with national economic growth from 1999 to 2007, first remaining flat even as the economic grew, then dropping by ten percent after 2007, even as the overall economy returned to steady growth.

There are a number of words to describe this state of affairs, but the obvious ones that leap to mind are “unfair,” “unjust,” and “intolerable.”   No doubt most of the US population has not been poring over graphs like this one – they don’t know the data or the trends. But what they do clearly see and resent is that highly visible pockets of the economy are enjoying strong economic growth; it is visible in New York, San Francisco, Seattle, Denver, Los Angeles, Houston, Miami, and Chicago.  These and other centers of design, finance, and professional life are thriving and driving a growing economy.   But the median households across the country – especially in rural areas and former manufacturing centers – are being left out of this growth; instead their incomes are falling.   Some people blame immigrants; others blame globalization or sending jobs abroad.  Economists and media pundits often blame technological advances for leaving uneducated workers behind.  But for many households with stagnant or falling incomes watching the rising wealth of the bankers, executives, and urban professionals, the result that matters is a hatred of the elites who have manipulated the rules of the game to favor themselves and capture all the fruits of national economic growth.

The result is not all that different from what happened in East Germany for households who received TV images of the quality of life in West Germany, and increasingly realized that they were being left behind.  The East Germans felt that their leaders had betrayed them; those leaders lost all legitimacy, and they were abandoned in what became a revolutionary movement that quietly toppled the communist regime.

American has always had high inequality; that is not the issue.  In the past, high inequality was combined with two elements that composed the “American dream.”   First, while some attained enormous wealth, average incomes rose as well.  Not everyone would become a Rockefeller or Ford, but everyone could expect a rising income over their lifetimes if they worked hard.   Second, the path for mobility was open to all – anyone with the luck, brains, or business talent could strike it rich and move to the top of the income hierarchy.   That opportunity was fueled by an open frontier in the 19th and early 20th century, and by a huge increase in public education and professional and white collar jobs from the 1960s to the 1990s.  In those years, those with the ability and effort could put themselves through a good public college and get a professional or government job with excellent income and solid benefits.  Parents from the lower and working classes whose children could be encouraged to be disciplined and hard-working could count on their children being able to get an outstanding education and achieve high levels of professional success.

In the last twenty years, both these elements of the American Dream have been stripped away.  Average incomes have stagnated then declined, even though the overall economy has grown.  In addition, avenues to social mobility have dried up.  Funding for public universities has plummeted, and costs have skyrocketed compared to working-class incomes.  The number of professional and white collar jobs has grown only slowly, and those positions are increasingly taken by the children of well-to-do parents who can provide superior pre-school, private, and college educations, connections that lead to valuable internships, and pathways to top jobs.  A 2015 PEW study of social mobility in the U.S. states that “the United States is very immobile. The persistence of advantage is especially large among those raised in the middle to upper reaches of the income distribution.”

As the American Dream is what legitimized the high level of inequality and the position of elites in the eyes of the average working family, the erosion of that dream has undermined the legitimacy of today’s elites.  Instead, a substantial number of Americans want to “take down” the selfish and privileged elites that they see running Washington D.C. and betraying them.  These people responded with wild enthusiasm to Donald Trump’s promise to “drain the swamp.”

In sum, the income patterns in America over the last 15 years made it inevitable that sooner or later an uprising would occur against the ruling establishment.  Whether it drew from the left (Bernie Sanders’ supporters) or the right (Trump supporters) or both, an anti-elite movement was going to gain traction.  Yes, there are bigots, racists, sexual aggressors and xenophobes among Trump supporters, given that Trump himself has shown these characteristics in his speeches and actions.  But these are not the groups that pushed Trump to the Presidency.  If not Trump, it would have been another populist who, sooner or later, would have overcome an opponent from the hated elites.

Throughout history – as I have shown in my own historical research (see the new edition of my book Revolution and Rebellion in the Early Modern World, forthcoming from Routledge next month) – whenever selfish elites monopolize economic growth and produce a polarization of incomes, the result is a loss of legitimacy and the rise of insurgent movements to overturn the social order that is no longer providing expected routine benefits.  Since the 1990s, the US has been repeating these conditions.  The surprise should not be that Donald Trump (or someone like him) was elected President.  The surprise should be:  why did it take so long?



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Be very afraid

Dear Friends,

I have now returned from my 9 months in Hong Kong, where my plans to start a new program in public policy — what would have been HK’s first School of Public Policy — came apart in the face of mainland Chinese actions to suppress political engagement in Hong Kong’s universities.  As we have since seen, China has eroded the rule of law and government autonomy in Hong Kong.  But this is just part of a global trend, what I would call the growth of the global “strong man’s club” of leaders who put their personal programs above the law, trading on a strong nationalist and xenophobic ideology to win popular support for extreme actions against minorities and opponents.

The club now includes Xi Jinping in China, Vladimir Putin in Russia, Recep Tayyip Erdogan in Turkey, Abdel Fattah el-Sisi in Egypt, Rodrigo Duterte in the Philippines, Viktor Orban in Hungary — and in the latest development, Donald Trump in the U.S.

There is good reason to be concerned about what this means for democracy; I stand by my warning published three weeks ago in Canada: http://www.theglobeandmail.com/opinion/how-trump-would-reshape-america/article32374019/

Whatever one thinks of specific policies voiced by the Trump camp, the real danger is to the very institutions that undergird our democracy — rule of law (including innocent until proven guilty), a free and accurate media, checks and balances within government, and an independent and non-ideological Supreme Court.  We should all work to preserve these elements after election of a president who has never known checks and balances, never had to work within a system that he did not control and dominate, and never — even in winning the highest office in the land — had to make the compromises typically required for effective policy-making.

I do hope that President Trump will govern in a different spirit than candidate Trump campaigned.  He may well do so.  But while hoping for the best, it would be sensible to prepare for a difficult time for democracy both at home and abroad.



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