The link below presents my talk at the UCLA Anderson Forecast discussing the outlook for the financial markets in 2025. The link opens with my talk, but you can scroll to the beginning to view the entire forecast program.
https://www.youtube.com/live/rbpRv5pt5OE?feature=shared&t=3075
When to Hold’em, When to Fold’em*
Maria Konnikova arrived in the United States in 1988 at age four, the daughter of Russian-Jewish immigrants. She succeeds academically graduating from Harvard and earns a Ph.D. in social psychology from Columbia. However, academic life was not for her, and she worked as a TV producer and a writer.
Along the way she encountered John von Neumann’s and Oscar Morgenstern’s classic “The Theory of Games and Economic Behavior.” John McDonald’s later popularized that book with his “Strategy in Poker, Business & War.” Immediately she became hooked by poker where she can apply her background in social psychology at the game table. She enlisted poker star Erik Seidel to be her mentor in 2016 with the goal of becoming a professional poker player within a year. For a complete novice at the game, this is an act of extreme chutzpah.
Poker involves luck, strategy, probability theory, skill, and the ability to deceive and read other players while maintaining, as they say a “poker face.” It means having the ability to pick up psychological clues about the behavior of competing players.
Her game is No Limit, Texas Hold’em. She leaves her Brooklyn apartment most weekdays to play online in Hoboken, New Jersey where online gambling is legal. As the saying goes. How do you get to Carnegie Hall? The answer is “practice, practice, practice.” Instead of Carnegie Hall her goal is to get to the World Series of Poker in Las Vegas. That she does and she goes on to Monte Carlo and Macau.
She succeeds and within two years she became a very successful poker player. It was not easy, especially for a woman, where 97% of the players are men. She puts up with all kinds of harassment on her way to reaching her goal. She also learned how applicable the skill set needed for playing poker has all kinds of applications in her daily life. For example, when and how to ask for a raise.
Maria Konnikova is a remarkable woman, and I highly recommend her book. Nevertheless, I would have liked to know who staked her for the necessary entry fees and antes, and the travel expenses associated with attending the events. It also would have been helpful to have illustrations of the poker hands she discusses in the book. These are mere quibbles.
*-Apologies to Kenny Rogers
The First America First
With Donald Trump’s victory America First as foreign policy is yet again being thrust into the limelight. Thus, it is important to understand its origins making University of Texas historian H.W. Brands new history of the first America First movement is especially timely. Brands views America First through the lens of the shadow war between Franklin Roosevelt and Charles Lindbergh with the latter being the most prominent proponent of America First.
There is not much new in the Roosevelt side of the equation, but Brands, at least for me plows new ground on Lindbergh by carefully researching his diaries and speeches from the late 1930’s to America’s entry into the war in December 1941. What I learned was that Lindbergh was a foreign policy realist in understanding the decadence of 1930’s Britain and the weakness of France. In his view Germany was the rising power in Europe, so much so that it would overwhelm both Britain and France.
He believed that with adequate military preparedness the United States would be able to fend off any cross Atlantic attack from a Europe under the auspices of Nazi Germany. Roosevelt, on the other hand was far more clear-eyed in understanding what a Nazi dominated Europe would mean for the security of the United States. From 1939 his globalist vision pushed the United States for war with Germany. Indeed. within the space of a few weeks between late December 1940 and early January 1941 Roosevelt called on America to become the arsenal of democracy and then articulated his Four Freedoms.
Although losing the public relations battle Lindbergh plowed ahead in attacking Roosevelt and his interventionist policies. He reached a dead-end with his infamous Des Moines speech in September 1941 when he, echoing Nazi propaganda, called out the Roosevelt, the British and the Jews for leading America into war. There was near universal condemnation of his speech and for both Lindbergh and America First it was downhill from there.
Beneath his realpolitik there was his underlying racism against Jews and the non-white races. He viewed the war as dividing the white world, when instead it should have been focusing on the dangers coming from the non-white world, no matter that Germany was allied with Japan.
Unfortunately, there are too many similarities to the world of Trump and the world of Lindbergh. America can’t stand aside today in a very dangerous world, but as Brands noted in 1941 the U.S. was the dominant economic power in the world; this is no longer the case. This makes the case that the most important task before us is to strengthen our economy.
I have a theory that the coming holiday shopping season will be strong. The recent consumer confidence surveys highlighted the fact that Republicans, with Trump's victory, feel much better about the economy and conversely the Democrats have become more pessimistic. My sense is that the Republicans will shop till they drop out of joy and the Democrats will be engaged in the time tested cure of retail therapy. Net. Net. We have the makings for a strong shopping season.
After lying to its viewers about inflation, the border and the mental acuity of President Biden and going gaga for Kamala Harris it now faces a collapse in viewership, and more importantly a significant change in its corporate structure. Today MSNBC's parent Comcast announced that it will spin off most of its cable networks into a new entity. Significantly that new entity will exclude NBC and its news division which means that MSNBC will no longer have access to NBC's worldwide network of reporters.
Thus the new MSNBC will consist of commentators and news readers that won't have the imprimatur of NBC news. Thus it won't be able to cover breaking news about weather events, wars, campaign events and domestic disturbances. Simply put the network does not have the reportorial staff, unlike its sister company CNBC which has reporters covering business verticals and an international presence.
Indeed, without NBC News, MSNBC, won't hold a candle to Fox News, CNN and Bloomberg News, all of whom are global news organizations. Thus in order to be competitive it will have to staff up at huge cost. Some of that cost will be borne by the overpaid on-the-air talent, something that is long overdue.
For my previous commentary on MSNBC see: https://shulmaven.blogspot.com/2012/11/my-letter-to-comcast-ceo-brian-roberts.html and https://shulmaven.blogspot.com/2014/03/the-comcast-whores-of-msnbc.html
Biden’s Wars
Washington Post writer Bob Woodward has chronicled every president since Bill Clinton. In this book he focuses on Biden’s three wars, Afghanistan, Ukraine, and Gaza. Unfortunately, he fails to discuss the most electorally significant war that was a result of Biden’s open border policy. Although not characterized as a war, the invasion/arrival of 10 million illegal/undocumented immigrants at our southern border seemed like a war to those Americans living in the Southwest and later to those living in the cities where they were bussed to.
Woodward glances over the debacle in Afghanistan where Biden’s chaotic withdrawal from that country permanently reduced his poll standing. I have yet to see who was fired for allowing this to happen.
Biden initially does much better with Ukraine. Here we witness the actions of Secretary of State Antony Blinken, National Security Advisor Jake Sullivan and Secretary of Defense Lloyd Austin seamlessly performing as a team. Of course, it is my guess that those three were Woodward’s sources for what happened. Benefitting from excellent intelligence the team warns Putin and notifies Ukrainian President Zelensky that Russia was about to invade. The public release of the intelligence was unprecedented, and it helped prepare Ukraine and the American people for what was to lie ahead.
Contrary to expectations in the West, Ukraine survived the initial Russian assault and then began a counter offensive aided by U.S. weaponry. It is here where the Biden team fails. Instead of going all-in with all kinds of offensive weapons, the team dilly-dallies preventing Ukraine from pressing its advantage. As a result, the stalemate we have now ensues. The Biden rationale for going slowly was the fear that Russia might introduce nuclear weapons into the conflict. Although plausible, we don’t have any Russian sources to back this conjecture up.
After the October 7, 2023, attack on Israel by Hamas, Biden goes all-in in support of Israel, and he visits the country a few weeks after. However, after the casualties start rising in Gaza the administration starts going soft. This is highlighted in the July 1924 meeting between Vice President Kamala Harris, now a presidential candidate, with Israeli Prime Minister Benjamin Netanyahu. While being supportive and diplomatic with Netanyahu in private, she stuns the Israelis with a very strong public statement critical about how Israel is fighting the war and the casualties in Gaza it is causing. That along with a slowdown in certain arms deliveries to Israel, highlighted the growing breach between the Biden White House and Netanyahu.
In all three cases it seems to me that Biden’s strategy was to “end wars” not to win them. (See: https://shulmaven.blogspot.com/2024/05/joe-no-win-biden.html) This strategy ended in disaster in Afghanistan, and it is certainly not helping in Ukraine and Gaza.
There were two widely reported scoops coming out of Woodward’s book. The first being that Trump supplied Putin with Covid testing kits when they were scarce in the U.S. and second Army Chief of Staff Milley calling Trump a fascist. There was third one, not so widely reported where Biden demonstrated significant mental decline at a Silicon Valley fundraiser in June 2023, a year before his disastrous debate performance. The country would have been saved a lot of anguish if this were reported earlier.
Woodward’s book is a helpful guide to understanding the Biden years, but it is far from definitive. We learn more as his staffers write their own memoirs in the years to come.
Mole Hunters
Retired CIA officer David McCloskey has written another pager turner. In this novel he captures the bureaucratic back-stabbing culture of the CIA as only an insider can do. His protagonist is the gutsy curly headed five foot tall, Artemis Aphrodite Proctor. She is a veteran of tours in Afghanistan and Syria and was the architect of a botched operation in Singapore where CIA officer John Joseph is kidnapped by the Russians and his Russian asset is killed. This failure forces her out of the CIA.
Simultaneously two other operations go awry with a key CIA asset in Russia assassinated. She rightly believes that there is a mole in the house and when Joseph is released in a spy swap, they join forces to hunt down the mole. Joseph is also exiled from the CIA, so they are acting as private citizens, albeit highly skilled citizens in the dark arts of the CIA. I learned that the official mole hunters in the CIA are known as the dermatology department.
On the other side we see an aging SVR officer, Rem Zomov, working as hard as he can to protect is asset operating at the highest levels of the CIA. The title refers to the executive floor at CIA headquarters in Langley, Virginia.
Zomov orders a hit on Proctor and Joseph using an illegal couple on Dallas to do the dirty work. In shades of the hit TV series “The Americans” we find them to be a mild-mannered suburban couple blending into the north Dallas milieu.
McCloskey takes his adventure from northern Virginia, to Orlando, where Proctor is now improbably working at her cousin’s alligator park, to Las Vegas and ultimately on to France. There is much more to the story, but I ended up troubled by the bureaucratic infighting and petty jealousies that plague an organization dedicated to protecting us.
Shulmaven did not cover itself with glory this year. We thought Harris would win because she would be successful in casting Trump as the incumbent. (See: Shulmaven: The Turning Point in the Election and Shulmaven: A Realigning Anti-Incumbent Election) She obviously failed in that task. We also thought that the Democrats would retake the House, which is still possible, but unlikely. Our Senate call had the Republicans ending up with 52 seats: they ended up with 53.
What we did get right was that the election would signal a major realignment in American politics. We wrote “Simply put, the Republican Party, by eating into the Democrats hold on Black and Latino voters, has put together a broad multi-racial working-class party with a strong populist bent. This is a far cry from the business and country club-oriented party of two decades ago. Lurking behind all of this is an ever-widening gender gap.”
We also wrote: “At least to me, if Harris loses Pennsylvania, her biggest mistake would be not picking Governor Josh Shapiro as her running mate (See: Shulmaven: Kamala Harris Fails Her First Test with VP Pick) and her failure to counter Trump’s attack on her position supporting federally paid for gender reassignment surgeries.” Both of these points were spot on. Finally, we noted: “I also have a hunch that the election might not be as close as the polls suggest. It is equally likely that either candidate will receive more than 300 electoral votes.”
Harris lost because her one-billion-dollar campaign and the near full support of the propaganda arms of the state, were insufficient to overcome the underlying fundamentals of the race which were:
1. Inflation is the graveyard of administrations.
2. 70% of voters thought we were on the wrong track.
3. The Biden-Harris Administration had a 40% approval ranting.
4. She failed to counter Trumps ads attacking her support for federal funding for gender assignment surgery for prisoners and immigrants held in custody.
5. Her much-vaunted ground game was over-rated.
Further she made two unforced errors. She failed to appear at the Al Smith Dinner and didn’t accept Joe Rogan’s invitation to appear on his podcast.
Perhaps most interesting the election, contrary to earlier thinking, where women fearful of losing their reproductive rights would drive turnout, instead turnout was driven by a wave of noncollege educated men of all races. It is this group that is driving the realignment towards the Republican Party. Also, of note in the deep blue states of New York, New Jersey and Virginia, Trump’s share of the vote surged. The blue governing philosophy is failing. Net Net. The Democratic Party is in a world of hurt relegating itself to be the voice of a cloistered college educated elite led around by its nose by the mainstream media and the boorish snobs of the faculty lounge.
History will likely record that October 27th, the date of Trump’s Madison Square Garden rally, was the turning point in the 2024 presidential election. The vitriol he spilled that night sent the message, “enough is enough.”
Something similar happened on September 11, 1941 when America First leader Charles Lindbergh made a viscous antisemitic speech in Des Moines, Iowa. It was widely criticized and signaled the end of his organization.
Put very bluntly, Trump lost the election with his Madison Square Garden ego trip.
I normally write my election outlook on the weekend before the election. (See my earlier commentary: Shulmaven: The State of the Presidential Race) However, this year, because of my travel schedule I am hesitantly putting it out now. When historians 20 years from now look back at the 2024 election they would note that a major political realignment between the two parties took place. (See: Shulmaven: Political Realignment is Here) Simply put, the Republican Party, by eating into the Democrats hold on Black and Latino voters, has put together a broad multi-racial working class party with a strong populist bent. This is a far cry from the business and country-oriented party of two decades ago. Lurking behind all of this is an ever-widening gender gap.
On the other hand, the Democrats have picked up voters from hitherto high-income business oriented suburban Republican voters, especially women. The Democrats are now firmly the party of the elites buttressed by Black and single women voters. The union-oriented lunch pail Democrat is a relic of the past. The Democrats are the party of women, and the Republicans are the party of men.
Part and parcel with the realignment is that the county is moving towards Trump on many issues, specifically on trade, immigration, and crime. Witness Democratic Senator Bob Casey praising Trump on trade. In contrast the country is moving towards Harris on the potent issue of abortion. It remains to be seen which dominates. What is really surprising is that the race is so close given that nearly all of the propaganda arms of the state are firmly in the Harris camp.
Further the global electorate including ours is in anti-incumbent rage. (See: Shulmaven: Incumbents Beware) This is crucial for both Trump and Harris. Whomever the electorate perceives to be the incumbent will lose. That is why Biden had to drop out. To be sure Harris is the incumbent vice president, but we have been living in the age of Trump for nine years. My guess is that the electorate will not want to witness another four years. The problem for Harris is that she is too tied to Biden, and she has yet to articulate a clear vision of the future. Her closing argument is that Trump’s narcissistic criminality has to be stopped.
The electoral college arithmetic for both candidates is challenging. For example, if Harris holds the “blue wall” states of Pennsylvania, Michigan, and Wisconsin, and picks up the one electoral vote coming out of Omaha, Nebraska she will hit the 270 electoral vote magic number. However, if she loses one of those states, she going to have to make it up in North Carolina, Georgia, Arizona, and Nevada. Given today’s polls, which is doable, but difficult. At the end of the day the key to a Harris victory is her ground game. She has paid staff and volunteers everywhere, while Trump’s campaign is sorely lacking in this regard. At least to me, if Harris loses Pennsylvania, her biggest mistake would be not picking Governor Josh Shapiro as her running mate (See: Shulmaven: Kamala Harris Fails Her First Test with VP Pick) and her failure to counter Trump’s attack on her position supporting federally paid for gender reassignment surgeries.
I also have a hunch that the election might not be as close as the polls suggest. It is equally likely that either candidate will receive more than 300 electoral votes. Stranger things have happened in the last two weeks of the election and if there is going to be a wave, I would give the edge to Harris. Recall that the polls were wrong in 2016, 2020 and 2022.
In keeping with my anti-incumbent thesis, I think the Democrats will retake the very dysfunctional House and end up with a majority of around 10-12 seats. On the other hand, the Democrats will lose the Senate with the Republicans ending up with 52 seats. Although most Senate Democrats are leading in the polls there are too many targets of opportunity for the Republicans.
Most disappointing about the election is that two particularly critical issues, the elephants in the room, are not being discussed. The first is the out-of-control deficit spending of both parties that putting the U.S. on the path of have highest debt/GDP ratio in history and the underspending on defense that will put our country at grave risk in the years ahead.
1854: The Hinge Year on the Road to Civil War
Historian David Brown
has given us an important and very readable book on how the events of 1854 set
America on course to our civil war. The critical event was the passage of the
Kansas-Nebraska Act which broke the Missouri Compromise of 1820 by allowing the
territories north of 36 degrees 30 minutes latitude to decide for themselves
whether or not they wanted to allow slavery under the doctrine of popular
sovereignty. Prior to that enactment slavery was prohibited in most of the Louisiana
Purchase. The notion of popular sovereignty was first introduced by Senator
Stephen Douglas in the 1850 compromise that brought California into the Union,
but, allowed for the New Mexico and Arizona Territories to vote on whether or
not they wanted slavery. Stephen Douglas would then build on the 1850
compromise to champion the Kansas-Nebraska Act.
The notion of popular
sovereignty seems quaint today, but I would note we are yet again living with this
on the issue of abortion. The overturning of Rowe v. Wade returned the question
of abortion to the states where each state would determine how it deals with
this question.
Leading the charge
against the Kansas-Nebraska Act was Free Soil Party Senator Salmon P. Chase.
Chase would go on to help found the new Republican Party in 1854, become
Lincoln’s Secretary of the Treasury, and then become Chief Justice of the
Supreme Court. His leadership on this issue established him as a national
figure and the issue brought Abraham Lincoln out of his successful law practice
into the national limelight. The growing chasm between north and south was
occurring against the backdrop of rising industrialization and a growing
abolition movement. It would become a battle between free labor and slavery.
So great was the controversy
over the act, that the Whig Party would collapse as the northern Whigs could no
longer countenance being in the same party as the southern Whigs. Most of the
northern Whigs became Republicans and the Democrats solidified their position
in the South and picked up those northern Whigs who didn’t become Republicans. The
reason why the act passed was because the slavery-oriented Democratic Party was
at the height of its power controlling the presidency and both houses of
Congress. Indeed the New Hampshire native Franklin Pierce was the last Democratic
president to receive a majority vote for president until Franklin Roosevelt in
1932.
Brown brings into the
mix Harriet Beecher Stowe of “Uncle Tom’s Cabin” fame published in 1852, Henry
David Thoreau and his “Walden Pond” (1854), and Harriet Tubman’s underground
railroad. All of this was going on in and around 1854. Further, in 1854 the
full ramifications of the Fugitive Slave Law, part of the 1850 compromise, was
being felt in the North, especially Massachusetts.
David Brown gives us
a very real sense of our country heading towards civil war. Unfortunately, the
parallels for today are more than disquieting.
There are many dates that are seared into our memory. President Roosevelt, responding to the Japanese attack on Pearl Harbor, called December 7th, 1941,” a date which will live in infamy” and demanded a declaration of war against Japan. December 7th,1941, resonates with me because that was that was the day my Dad proposed to my Mom in Central Park. Four days later Hitler asked for and received a declaration of war from the Reichstag against the United States. Sitting in the audience cheering him on was Amin al-Husseini, the Grand Mufti of Jerusalem. Yes, the antagonism between Jews and Palestinians predates 1948 and 1967. Indeed, well before 1941.
On September 11th,
2001, Al-Qaeda crashed two airplanes into the World Trade Center towers and one
plane into the Pentagon, killing nearly 3,000 people. I witnessed the attack on
the towers from across the street.
Today, we memorialize
another date, October 7th, 2023, Israel’s, and World Jewry’s day of
infamy. On that day 1200 hundred people in Israel’s Gaza envelope died and 240
were kidnapped by the Hamas terrorists. To put this event into perspective 1200
dead in Israel is equivalent to 40,000 dead in the United States.
Now, a year later, a
war rages on in Gaza and Lebanon testing whether Israel, a light unto the
nations, can remain true to its founding as a democratic home to the Jewish
people. It is a war where about 725 soldiers, who in the words of Abraham
Lincoln “gave the last full measure of devotion.”
It is my hope that
“these dead have not died in vain.” (Again, from Lincoln) Just as our Civil War
can be viewed as the second American revolution, so too can Israel’s war in
Gaza and Lebanon be viewed as its second war of independence. And it is my hope
the war will midwife a new generation of Israeli leadership that will have the
wisdom to rise above the country’s divisive internal politics and find a path to
seek peace with its neighbors.
Sherlock Holmes in His Majesty’s Service
Nicholas Meyer has reincarnated himself as Arthur
Conan Doyle. His 1974 “The 7% Solution” was a bestseller and later a motion
picture. From there he has written several novels in the tradition of Sherlock
Holmes. His latest involves his hiring by Britain’s MI-6 at the height of World
War I in 1916. His mission is to obtain a secret telegram sent by the German
foreign office to Mexico’s president Carranza. The mission would challenge a
younger Holmes and Watson, but here we see them it what is likely to be the
last case of their lives.
Of course, any reader with a knowledge of history
would realize that the telegram in question is the Zimmermann Telegram where
Germany offered help to Mexico to seize most of what it lost in the Mexican War
of 1848, namely Texas, Arizona, and New Mexico. Britain needed to expose the telegram in order
to bring America into the war.
In order to complete their mission Holmes and Watson
journey to Washington D.C., and Mexico. In Washington they meet up with Alice Roosevelt
Longworth, Teddy’s youngest daughter, who was having an affair with the German ambassador.
This part is not true, but she did have an adventurous sex life and had a long
running affair with Senator William Borah. Her husband Nicholas would be
Speaker of the House from 1925-1931. Alice is helpful in that she puts Holmes
on the trail to Mexico.
In Mexico, with the aide of a communist housekeeper,
Holmes comes up with the telegram and escapes Mexico via a British destroyer
sent especially for him and Watson. Along the way there are attempts on Holmes’
life on the ship to the U.S., in Washington D.C., and in Mexico. It seems that
the Germans were not oblivious to his mission.
I had a lot of fun reading this book. It was a pleasure
to catch up to the great detective as Meyer does Doyle justice.
The Fire Beast of Fort MacMurray
Journalist John
Valliant tells the horror story of the great fire that engulfed Fort MacMurray
in May 2016. It was truly a beast that acted like a conquering army as it
burned most of this city of 90,000 to the ground. Fort MacMurray is the home of
the Canadian oil sands industry where oil is mined in the form of bitumen that
requires huge energy inputs to process it. Hence it requires oil prices in
excess of $60/barrel to be profitable. Although high in cost, it does not require
any exploration costs, because the location of the deposit is known.
Valliant has really
written three books in one. The first comes from eyewitness accounts of how the
fire enveloped the city as brave firefighters and citizens fought a near
hopeless battle. Remarkably the city was evacuated with minimum casualties.
Here we see heroism in action.
The second is a
history of climate science going back to the 1700’s. He particularly pays
attention to boreal forests, like the one that surrounds Fort MacMurray, that
have become exceptionally stressed in a hotter world. In May 2016, the temperatures
rose to above 80 degrees and the humidity dropped to a desert-like 12 percent.
In that environment any small spark could and did ignite a conflagration. Thus,
in a hotter world the boreal forests of Canada, America and Russia are all set
up for great fires in the future. Indeed, the release of the stored carbon
resulting from the fire has the potential to undo much of the progress being
made in decarbonizing society. This clearly is not a hopeful conclusion.
The third book is a
screed attacking the oil companies and the “petroscene” age they brought about.
He recounts the oil industry’s early research into climate change and then their
campaign of denial. I think he overdoes it. Valliant also seems to look with disdain
at the vehicle heavy lifestyle of the oil workers. With incomes of around
$200,000 a year, the workers had the wherewithal to multiple cars and trucks
and all-terrain vehicles, not a bad lifestyle for the Canadian working class.
Nevertheless, the
main message of the book is that we will be living with great forest fires in
the future and more fires in the wildland urban interface neighborhoods which are
prevalent in the American west.
Last week’s 50 basis point cut in the federal funds rate to 4.875% served up a “coup de whisky” to the stock market. Those words were spoken in July 1927 by Benjamin Strong, President of the New York Fed to Charles Rist, the Deputy Director of the Bank of France at secret central bank meeting on Long Island.* Much like today the U.S. economy was humming along, but Britain was rapidly losing gold. To take the pressure off the British Pound, Strong and several other regional banks cut the discount rate from 4% to 3.5%.
In response an already
strong stock market was off to the races and would double over the next two
years. That move put the roar in the roaring twenties. Although today’s
circumstances are far different, but not so different; the economy is at roughly
full employment, real GDP has likely grown at a 3% clip over the past six
months, and inflation remains moderately above the Fed’s 2% target. Nevertheless,
just like 1927 stocks roared in response to new highs.
The Fed’s move and it
signals of further cuts of 100-150 basis points over the next nine months, is a
bright green light for the stock market as investors now believe that the risk
of recession is off the table and faster growth will ratify the very optimistic
profits estimates for next year. I don’t think that we will repeat the late
1920’s blow-off but further new highs in stock prices appear likely.
Interestingly the
yield on longer maturities increased. Why? On the margin the 50bp cut will
increase both growth and inflation. The lower short-term interest rates will
support corporate borrowing and auto finance. Housing, on the other hand, won’t
be helped all that much because mortgage rates responding to higher long rates
actually increased. That will force house buyers into variable rate paper.
The real risk in the
Fed’s move is that inflation will not be as quiescent as it now believes.
Simply put, the rate-cutting cycle that the market is banking on might be cut
short.
* For a full discussion of this event see Ahamed, Liaquat, "The Lords of Finance" (New York: The Penguin Press, 2009) pp. 290-304
Reagan v. Evil Empire
On March 8, 1983, President Ronald Reagan spoke
before an evangelical conference where he called out the Soviet Union as “the
focus of evil in the modern world.” This became known as his evil empire
speech. Although he was roundly criticized for his choice of words, Reagan was
dead right. University of Texas professor and former national security aide to
George W. Bush, William Imboden rightly focuses on the ideological content of
Reagan’s foreign policy which became known as the Reagan Doctrine in his deeply
researched history.
Although known as a super-hawk during his
career, Reagan’s goal was to seek peace through a negotiated surrender of the
Soviet Union. In this task he succeeded and along the way he liberated Eastern
Europe and started the process of reducing the huge stocks of nuclear weapon
controlled by the U.S. and the Soviet Union.
Reagan’s policy was that of peace through strength.
He orchestrated a huge arms build-up and started the Strategic Defense Initiative
(Star Wars) which scared the living daylights out of the Soviet Union.
Listening more to Andrew Marshall Office of Net Assessment in the bowels of the
Pentagon than the CIA, he understood that the Soviet economy was far weaker
than previously thought. (Shulmaven:
My Amazon Review of Andrew Krepinevich's and Barry Watts' "The Last
Warrior: Andrew Marshall and the Shaping of Modern American Defense
Strategy") Simply
put, the Soviets couldn’t keep up.
Inboden covers the shaky start of the
administration where both his national security advisor and Secretary of State
were fired. While looking to meet with the Soviets, three of their leaders died
on him, Brezhnev, Andropov and Chernenko. But once Gorbachev came into power
the way was open for both of them to achieve Reagan’s longstanding goal of reducing
nuclear weapons. Reagan was aided by having A-players in his administration.
These would include William Clark, George Schultz, James Baker, Jeanne
Kirkpatrick, Paul Nitze, Colin Powell, and George H.W. Bush. It is sad that
today A-players in today’s Washington, D.C. are few and far between.
Reagan really did care about human rights. He
consistently supported the rights of Jews in the Soviet Union to emigrate. He
worked hard to end the dictatorships in Chile, Taiwan, the Philippines, and Korea.
He learned the lesson from Iran and Nicaragua, that right wing dictatorships despite
being allied to the U.S., were brittle. Hence, he supported the transition to
democracy among many of our allies.
Throughout his administration Reagan had the
support of Margaret Thatcher, Helmut Kohl and especially of Yasuhiro Nakasone
of Japan. He viewed Japan as our most strategic ally. He also received advice
from Richard Nixon, mostly good, some bad; and Russia expert Suzanne Massie who
came up with the “trust but verify” policy.
Inboden does not sugar coat the Iran/Contra
scandal that nearly brought down his administration. How these presumably smart
people got sucked into doing an arms for hostages deal with Iran and then using
some of the proceeds to illegally fund the Nicaraguan Contras. You couldn’t
make up the comedy of errors involved in this fiasco.
Inboden’s history of Reagan’s foreign policy
sheds new light on this one of our most consequential presidents. It is well
worth the read.
No Knockout, but a Clear Win for Harris
Although Vice
President Kamala Harris did not “float like a butterfly, sting like a bee” in
the words of Muhammad Ali, she clearly won last night’s debate. She came off as
a cool and accomplished leader who many would see as presidential. In contrast
Trump came off hot as the angry old man that he is. It is OK to show flashes of
anger on television, but it is very hard to sustain anger for a full ninety
minutes.
Harris was consistently
forward looking, while Trump was looking back to the past. In a way Harris came
off more as a challenger than Trump did. It was quite a trick for the sitting
vice president to come off as the change candidate. On substance she was at her
best in discussing abortion and weakest when talking about her changed
positions. Here the ABC moderators failed in not following up on her radically
changing views. They also failed in not focusing on the foreign policy and
military challenges facing our country. It was Trump’s failure in not taking
this fight to Harris. In a real sense, just like Biden two months ago, Trump lost
the debate more than Harris won it.
Finally, to put a
cherry on top of the cake, Taylor Swift endorsed Harris as soon as the debate
ended.
Over the past two months the Democrats have risen from their severely depressed state of being in mourning over Joe Biden to an exalted manic state hailing Vice President Kamala Harris as their new savior. Last week’s very successful convention cemented Harris’ leadership in the party, and she is now a small favorite to win the election in November. However, I would caution that the current manic phase can quickly turn once again to a depressive state.
The most important
thing that happened at the convention was what did not happen. As many feared,
including myself, the convention did not turn out to be a rerun of 1968. It
went off flawlessly and Harris came out of the convention as a forward-looking
optimist as opposed to Donald Trump’s backward-looking pessimism. Indeed, somehow
the sitting vice president became the candidate of change and Donald Trump
became the de facto incumbent. As I wrote in July, this will be the year of the
anti-incumbent and if Harris can maintain her image as challenger she will win.
( See: Shulmaven:
Incumbents Beware )
Further buttressing her position is that the propaganda organs of the state (ABC, CBS, NBC, MSNBC, CNN, Washington Post, New York Times, Facebook, and TikTok) gushed over her acceptance speech. (See: Shulmaven: America's Party Line ) So craven have the mass media been is that their unqualified support for Harris has yet to pass the test of a single interview. In fact, Time magazine did a hagiographic cover story on her without an interview, truly unprecedented.
Meantime Harris’
economic proposals have drawn criticism from even normally left-of-center
quarters. Her proposals for price caps on groceries, rent control and a $25,000
tax credit for new home buyers make little sense. Of course, Trump’s proposals calling
for mass deportations, tariffs on all imports and executive branch control over
the Federal Reserve are zanier than what Harris has proposed.
The critical tests
for Harris will come when she actually has to do real interviews and the
September 10th debate with Trump where she is the presumptive favorite.
If Harris is to maintain the mantle of change, she will have to successfully
answer the following question: On, what policies do you differ with President
Biden? My guess is that she will be hard pressed to answer that question which
will leave a big opening for Trump.
Shanghai Dreams, Shanghai Nightmares
This is the third
historical novel by Joseph Kanon I have reviewed. (See: Shulmaven:
My Amazon Review of Joseph Kanon's "Defectors: A Novel" and Shulmaven:
My Amazon Review of Joseph Kanon's "Leaving Berlin: A Novel" ) Here the scene shifts from Europe to Asia
where journalist Daniel Lohr is escaping 1939 Berlin via first class passage
from Trieste to Shanghai. We learn later that Lohr had ties to the Comintern
which would become useful. On the ship he as an affair with Leah Auerbach,
another Jewish escapee from Vienna. Auerbach is received in Shanghai by a Jewish
welfare agency aiding refugees from Europe. Also, on the boat was a Col.
Yamada, a member of the Japanese secret police. We will see much more of him as
the novel progresses.
Lohr’s trip was
financed by his Uncle Nathan, a mobster from Berlin and the United States. He bailed
from the U.S. after crossing the Mafia. Uncle Nathan puts Daniel in charge of
running his new casino, The Gold Rush. He soon realizes that Nathan has
partnered with two rival Chinese gangs in this venture that would ultimately
put him in a crossfire.
As with his other
novels Kanon gives us a real feel for the smells and the depravity of Shanghai as
the international concessions await the full occupation of the Japanese. We
also get a sense of the intrigue between the Japanese, the gangs, Chiang Kai-Shek’s
government, and the rising communist movement. As with his other novels, Kanon tells
the story with style and grace.
A Literate Runaway Slave on the River
Percival Everett has
written an alternative version of Mark Twain’s “The Adventures of Huckleberry
Finn.” Instead of Huck being the central character, the protagonist is Jim, the
runaway slave. While Jim in public speaks like a slave, in private he is James,
a very literate man who communes with the likes of Locke, Rousseau, and
Voltaire. He has to keep himself from speaking like a man of letters because
his owners and the public at large would become very suspicious.
The original
Huckleberry Finn took place around 1840, Everett’s takes place in 1861. Similar
to the original novel much of it takes place on a raft on the Mississippi
around Missouri. We watch Huck and Jim fish, float on their raft, and run from
slave hunters. The dangers on the river are apparent through unpredictable currents,
river traffic and boats burning. Through it all Jim remains focused on his
mission to free his wife and daughter who were sold to a slave breeder.
Through Everett we
witness the everyday horrors of being enslaved. There are whippings, rapes, and
the daily indignities of kowtowing to their masters. To me the book started
slow, but after a while I caught up with its rhythm and humor and became thoroughly engrossed in
the adventure.
In a recent article in The Free Press Niall Ferguson wrote that “We’re All Soviets Now.” (See: https://www.thefp.com/p/were-all-soviets-now) Among the notions he discussed were our gerontocracy elite, declining health care for the average citizen abetted by alcohol and opiods, and the rise of the DEI apparatchiks. However, he left out another crucial factor. In America we have a party line that appears little different from the days of Pravda and Izvestia.
All you have to do is
to look at the shifting party line on the Democratic nominee for president. Six
months ago, President Biden was at the top of his game and fully capable of
serving another four years. Then of a sudden in June, he was a doddering old
fool who had to go. Once Biden withdrew there was to be a contested
mini-primary, but in a day or two Kamala Harris became the anointed one. It
would be enough to get a dedicated Kremlinologist’s head spinning.
With the exception of
Fox News and a few heterodox media outlets, the media now speaks as one by
being all-in for Harris and through it all Donald Trump, the new Trotsky, has
to remain in exile from power. Although being anti-Trump remains the media’s
lodestar, I would not be surprised that with respect to Kamala Harris, the
fickle party line will yet again shift a few more times.
A Man of Action
Where is Paul Nitze
when we need him? Paul Nitze engaged in national security policy for every
president from Roosevelt to Reagan. The lesson he learned from Pearl Harbor
carried through his entire career and that was in order to defend the United
States, the United States had to be stronger than any potential aggressor. His
policy was the essence of peace through strength.
James Wilson’s
biography fully discusses Nitze’s professional career from being an investment
banker in the 1930’s to being a tribune in the highest councils of government
on national security affairs. Nitze
modeled himself on what he called “men of action.” They included his first boss
Clarence Dillon, Navy Secretary James Forrestal, Secretary of State Dean
Acheson and presidents Harry Truman and Ronald Reagan. While working for
Clarence Dillon at the Dillon Reed banking firm Nitze was involved in putting
together the Cal-Tex agreement which sent middle eastern oil to Asia and the
financing of the Triboro Bridge.
As war clouds loomed
in 1940 Nitze followed his mentor at Dillon Reed, James Forestal into
government. He could well afford to work in government because of his wife’s
wealth and his own personal investments. During World War II he worked on the
strategic bombing survey and after the war he found himself at the State
Department working under George Kennan. In 1950 he succeeded Kennan as the Director
of Policy Planning. There he authored the now famous NSC-68 memorandum which called
for a massive defense build-up wrapped in American values. The build-up would
come with the onset of the Korean War a few months later.
In the mid-1950’s he
would switch parties and became a Democrat because of his disagreement over
Eisenhour’s massive retaliation strategy and his thinking was very influential
in the Kennedy campaign of 1960. Nitze was in the room when during the height
of the Cuban missile crisis. Nitze thought Kennedy’s policy only worked because
the U.S. had superior forces relative to the Soviet Union. That advantage would
erode away in the 1960’s and turn into a severe disadvantage in the 1970’s.
Though now a Democrat, Nitze participated in arms control negotiations under
Nixon. He was respected by hawks across the aisle.
When not in
government during the Nixon-Ford era he found a home at the Johns-Hopkins
School for Advanced International Studies, which is now named after him. His
interns there included Richard Perle and Paul Wolfowitz who would soon become
real players in the Reagan Administration and beyond. His contribution to the
arms debate in the 1970’s was his leading role in the Committee on the Present
Danger which anteceded the Reagan military build-up of the 1980’s.
Reagan hired him as an arm control negotiator and in 1982 he had his famous walk in the woods with his Soviet counterpart, Kvitsinsky. Although nothing came of it at the time, it was a percussor of all of the arms control agreements that would follow. In the 1980’s Nitze was far too suspicious of Gorbachev and overestimated Soviet strength. He didn’t realize how much the Soviets feared Reagan. ( See: Shulmaven: My Review* of Sergey Radchenko's "To Run the World: The Kremlin's Bd.........." )Nitze wasn’t perfect, but he got most of the big things dead right. Further his brittle personality kept him from being either Secretary of Defense or Secretary of State, although he served admirably in both departments. Wilson has done us a real service in writing Nitze’s biography at this time. We surely need someone like him today.
Kamala Harris picking Minnesota Governor Tim Walz as her VP cemented her identity as a San Francisco Bay liberal. She also demonstrated that she will have no backbone when it comes to standing up to the noisy and sometimes antisemitic Left of her party. By not picking Governor Josh Shapiro of Pennsylvania she lost all credibility in her election year conversion in support of fracking and by not picking Senator Mark Kelly of Arizona she lost her credibility on securing our southern border.
In picking Walz she got a big spending liberal who dawdled while Minneapolis was burning during the George Floyd riots of 2020 and his signing of an executive order in support of gender affirming care for minors she got a candidate who is to the left of Europe's social democrats on this issue. Oh, and one more thing, Walz only received 52% of the vote in his reelection in heavily Democratic Minnesota in 2022.
Harris had a real opportunity to move to the center with her VP pick. She failed miserably in this task and gave Donald Trump and the Republicans the best news they have had since Joe Biden left the race. If the Democrats had hopes of attracting Nikki Haley voters to there cause, those hope were dashed today.
Original Sin
Maurice Isserman, a
man of the Left and a history professor at Hamilton College, has written an
important history of the American Communist Party. Isserman tells two stories:
one of misplaced idealism of those who supported labor rights and civil rights
in support of a socialist America and the other of a group of Americans who
bowed to every wind coming out of Moscow. The latter is the original sin of
American communism by blindly following the party line coming out of Moscow
which twisted its members into pretzels.
From the beginning in
1919 the American Communist Party was subsidized by “Moscow gold” to 1989 when
Gorbachev finally cut them off. Isserman thoroughly recounts the changes in the
party line from calling for outright revolution, supporting existing trade
unions to supporting dual unionism, and with the rise of fascism in Europe
working in a broad coalition of leftists to form the popular front. All that
would come to an end with the Hitler-Stalin Pact in 1939 calling World War II a
capitalist war until the Soviet Union was invaded in 1941. Of course, during the 1930’s American
communists refused to believe that there was mass starvation in Ukraine and
looked the other way as the purge trials in Moscow led to the deaths of their
former heroes. Along the way we meet Woody Guthrie, Pete Seeger, Paul Robeson
and Dashiell Hammett, among others affiliated with the party.
If there are heroes
in the book, they are those communists who helped build the CIO, Earl Browder,
and Dorothy Healey. Browder, who as
leader of the party, actually changed the party to a political association to
make it easier to participate in the normal political processes. However, his
reforms went array when Moscow criticized him via what was called the Duclos
letter in 1945. Within a year he was expelled. Isserman underplays the Duclos
letter because it was a harbinger of the Cold War to come. His other hero was
Los Angeles communist Dorothy Healey who was also a reformer, be she stayed
with the party through Khrushchev’s 1956 speech condemning Stalin, the Hungarian
revolt, and the Soviet invasion of Czechoslovakia in 1968. She wouldn’t leave
the party until 1972. This highlights the fact how hard it was for long-term
members to quit; their whole lives were bound up in it. As an aside I was once
acquainted with Healey.
I have three
criticisms of Isserman. The first is that although he discussed the use of
party members in the Soviet spying apparatus, he doesn’t show how deep the
penetration was in the New Deal and in the role of the Rosenberg spy ring. He wrote that
rank and file members were oblivious to the secret work those communists were
involved in. I don’t think they were that naïve.
My second criticism
is that he underplays the role of the Comintern’s American Commission which
Stalin actually chaired. Theodore Draper, in his “American Communism and Soviet
Russia” highlighted its importance. Simply put, under the orders of Stalin,
such leading communist officials as Jay Lovestone, Benjamin Gitlow, and Bertram
Wolfe were purged. That sent a message to the American party that the knee must
be continually bent towards Moscow. Thus, there would be no Titoist party in
America, meaning the party could not adapt to the unique conditions in America.
Third he doesn’t
fully cover the Henry Wallace campaign in 1948, a campaign that run entirely by
the Communist Party. ( See: Shulmaven:
My Amazon Review of Benn Steil's "The World that Wasn't: Henry Wallace and
the Fate of the American Century" ) Today we would call that foreign election
interference.
Those criticisms aside, Isserman has written an important book about a movement that enthralled more than a few Americans and far more fellow travelers. In a very real sense, the taint of Soviet Russia has haunted the American Left for decades. Isserman tells us in a very interesting way what went wrong.
In 2016 and 2018 I authored two blogs on the coming realignment of American Politics ( Shulmaven: The Coming Political Realignment and Shulmaven: The Coming Political Realignment: Part II ) I believe the realignment I spoke of then and in subsequent related blogs is now here. The recent Republican convention once and for all buried the Right Hamiltonian* roots of the party and firmly made it over into a rightwing populist party combining the 19th century Jacksonians and Know Nothings into one 21st century coalition. Consistent with that, the party renominated Doanld Trump for president and JD Vance for vice-president. The party is now firmly isolationist, anti-free trade, anti-immigrant, pro-entitlements, and in many respects anti-Wall Street and above all “anti-woke.”
Prior to his withdrawal
from the race, Joe Biden was veering sharply to the left with calls for
national rent control, more student debt relief, medical bill relief and
restructuring the Supreme Court. No longer a Left Hamiltonian, Biden was moving
in the direction of a new social democratic party with policies along the lines
of Elizabeth Warren and Bernie Sanders. My guess is that Vice-President Kamala
Harris who as of today seems the likely Democratic nominee, will pull the party
in same direction Biden was headed with an even greater emphasis on identity
politics. Afterall, she grew up in the
hot house of far-left San Francisco Bay Democratic politics.
Now, where does that
leave the Right Hamiltonians of the Republican Party and the Left Hamiltonians
of the Democratic Party. For the time being they are without a home.
Furthermore, the mood of the electorate seems to be very anti-establishment which
will make it very difficult for the Hamiltonians of both parties to gain traction.
However, it is likely that either political party will unfortunately drive our
country into a ditch, making it likely that in 2028 a merged Hamiltonian Party
will come to the fore. That will either be within the Democratic Party sans its
social democrats or as a centrist third party.
*- I broadly define Right
Hamiltonians as those who would use the power of government to support business
and Left Hamiltonians who would use government to support labor. Both wings are
internationalists.
Frightened of Risk
The essence of capitalism is risk taking, but over the
past forty years or so both governments and the public at large are frightened
of risk. With governments and central banks following a low or even zero
interest rate policies and with the fiscal taps wide open at the sign of the
slightest disturbance in the economy, capitalism no longer functions as it should, according to Ruchir Sharma, chair of Rockefeller Capital Management.
As a result, we now live in a world of zombie companies
that should have purged in recessionary environments and because of very low
interest rates we have the giant corporations swallowing the smaller and more
dynamic businesses. Further instead of investing in new projects, the low
interest rate environment encourages share buybacks and financial engineering
at a time when the economy needs real engineering. As a result, the growth in
productivity has collapsed.
Thus, in exchange for less volatility in the overall
economy, real growth has slowed, and capital flowed into the financial markets.
As Hyman Minsky noted many years ago, stability leads to instability, hence the
crisis in 2008 and the crisis that likely lies ahead of us.
Sharma notes that over the past 40 plus years the growth
of government has inexorably continues. Even under the Reagan and Thatcher
regimes, governments continued to grow, taking an ever-larger share of the economy,
and piling debts upon debts. Sharma argues the ball and chain of debt has been
one of the reasons behind the tepid growth among the developed economies.
Sharma’s thesis made a great deal of sense up until 2022.
Why? The zero-interest rate environment ended in 2023 with dramatic rate hikes
in most of the developed world, and yet the economy did not mis a beat.
Deficits remained extraordinarily high and the higher rates, save for parts of the
real estate sector, have yet to see a surge in bankruptcies.
Sharma would like to have us return to an era of a smaller state sector and a more relaxed policy towards recessions. Perhaps all good in theory, but the public would not stand for it. There is the rub!
The Rise and Fall of Soviet Foreign Policy
Johns Hopkins
professor Sergey Radchencko has given us a deeply researched and encyclopedic book
on Soviet foreign policy from 1944 – 1991 from the point of view of the Soviet
leadership. He gets into the heads of Stalin, Khrushchev, Brezhnev, Gorbachev,
and their foreign policy minions. The Soviet leadership faced the tension among
three incompatible goals of maintaining its revolutionary ideology, the need
for security and its search for legitimacy among the nations, especially the
United States.
He starts off with
Stalin as the ultimate European focused leader whose “percentages agreement”
with Churchill in late 1944 opened the way for Soviet control over Eastern
Europe. He argues that Stalin did not initially want to Sovietize the Eastern
Europe economies until he witnessed the failure of the French and Italian
Communist parties to win electorally in the mid-1940’s. I don’t really buy that
because the hardening of the Soviet position occurred while the war was still
going on. Further, Radchenko fails to mention the Duclos letter to the American
Communist Party in April 1945 criticizing its softness which signaled a
hardening of the Soviet position worldwide.
What Stalin
envisioned in 1945 was that Russia, as in 1815, would be part of a new Concert
Europe that would run the continent. Hence Soviet power would be viewed as
legitimate. Russian actions in Poland, Czechoslovakia, and Berlin soon stripped
away any sense of legitimacy, and in response NATO was formed. What I found
fascinating was that anglophiles in the foreign ministry, Maksim Litvinov (ex-foreign
minister and ambassador to the U.S.) and Ivan Maisky (ex-ambassador to the
U.K.) played leading roles in developing Stalin’s European policies.
In Asia Stalin did
not believe that Mao would succeed and for a time played the nationalists off
against Mao’s communists. Mao accepted Stalin’s leadership as a junior partner.
He would not feel such obedience under Khrushchev. In Iran Stalin was very cautious
and he withdrew his forces from northern Iran thereby selling out the local
communists who supported him.
Khrushchev was far
more reckless. In Europe he ignited a Berlin Crisis, n caused a nuclear war
over missiles in Cuba, and was an early supporter of Third World
revolutionaries. Russian influence had to be reckoned with throughout the world.
All the while the Soviets were building up their missile and nuclear
capabilities in a direct challenge to the United States. This was crucial to
Khrushchev because he sensed the unfairness of the United States having military
bases surrounding the Soviet Union while he couldn’t have bases close to the
United States. Hence, the big play in Cuba.
Khrushchev’s 1956
speech denouncing Stalin sent ripples throughout Communist Parties around the
world triggering revolts in Poland and Hungary. While Chairman Mao respected
Stalin, he had no such respect for Khrushchev and hence the long simmering
Chinese jealousy towards Russia began to boil.
The split with China
would widen to even include military action and a break in diplomatic relations
with the Soviets and the opening of relations with the U.S. after the Nixon
visit in 1972. In 1978 Deng Xiaoping
took power and embarked China on a capitalist road to prosperity. His goal was
modernization, but as early as 1982, after he realized that the U.S. would
stand by Taiwan, China gradually began its drift back towards Russia. In fact,
two weeks before the 1989 Tiananmen massacre China resumed diplomatic relations
with Russia. Thus, it should not be surprise to see Putin’s Russia and China
cozying up in recent years.
In 1964 Brezhnev
replaced Khrushchev and simultaneously accelerated the nuclear arms race and
sought détente with the United States. In making arms deals with Nixon,
Brezhnev at once lowered the risk of a nuclear holocaust and achieved the
legitimacy he sought from the United States. One of the most powerful vignettes
in the book is that Radchenko recounts that at the height of the 1973 Yom Kippur
War Nixon was asleep and drunk and Brezhnev was zonked out on sleeping pills.
The decision over war and peace was thus made by Kissinger and Andropov.
Brezhnev’s failing
health later in the 1970’s was emblematic of sclerosis seizing up in the Soviet
economy. Even allowing for Soviet gains in Africa, Soviet power was falling
under the weight of its weakening economy. That economy would be put to the test
with Reagan’s military buildup in the early 1980’s. Simply put the Russian
leadership went into panic mode fearing they could not keep up. If you learn
one thing from this book, it is that Reagan’s foreign and defense policies
brought the Soviets to their knees.
Gorbachev tried to
turn things around with his glasnost and perestroika, but the Soviets were too
far gone. To ease the pressure on the economy he made a series of arms control
deals with Reagan and Bush thereby legitimizing his country and he cut loose Eastern
Europe because the economy could no longer afford to subsidize its satellites.
Gorbachev was a
proponent of the Gaullist notion of a Europe from the Atlantic to the Urals. He
called it “Our Common European Home.” It
was too late. Radchenko notes that there were discussions about limiting NATO’s
reach in Eastern Europe. However, not commitments were reduced to writing and
thus under Clinton NATO expanded to the borders of Russia.
One last point the
Soviet Union had two diplomats who were survivors, and they appear throughout
the book. Andrei Gromyko was a power from 1945-1988 and Anastas Mikoyan was a
major player from 1935-1966. It was though them that Soviet foreign policy has continuity
and historical memory. Radchenko has written an important book, and it will be
useful in gaining insights into how Putin’s policies are both a continuation
and a departure from the history he has outlined.
*- I am engaged in a dispute with Amazon about my ability to post reviews on their site. Amazon alleges that I have gone afoul of their community guidelines. Amazon is very difficult to communicate with so dear readers if you have a way of weighing in with Amazon, please do.
President Joe Biden looked like a doddering old man and Donald Trump lied through his teeth at their debate last night. Neither one was edifying and most important neither one talked about the future further confirming the public's suspicion of both candidates. The Democratic Party talking heads are in full blown melt down calling for Biden to withdraw from the race leaving the way open for a new nominee. This will not happen unless leading Democratic office holders follow the lead of the pundit class.
However even if Biden steps down, there is a fly in the ointment. Because the Democratic Convention occurs on Aug 19-22 two weeks after the Ohio filing deadline of August 7th, the plan was for the convention to electronically nominate Biden prior to the deadline. Now if Biden steps down and the Democrats have an open convention to select a new nominee, that nominee will not be on the Ohio ballot, thereby conceding the state to Trump. Further, without a presidential race in Ohio, it is likely that the veteran Democratic Senator Sherrod Brown would go down to defeat. Thus the Dems would be between a rock and a hard place.
