Havana on the Hudson

 Zorhan Mamdani, the TikTok Jacobin, upset former governor Andrew Cuomo in New York City’s Democratic Primary making him the odds-on favorite to be the next mayor. Running as a Democratic Socialist, Mamdani’s slick TikTok campaign came across as young and energetic sharply contrasting himself to a Cuomo who appeared ancient. On substance, under the banner of making New York City affordable, he called for the tired old socialist nostrums of rent freezes, increasing business and personal income taxes in the already highest tax city in the country, city-owned grocery stores, free bus service, a $30/hour minimum wage, and for effectively increasing property taxes for white homeowners. His program represents a sure-fire path for New York City to join the failed cities of Chicago and Los Angeles.

 

Contrary from socialist dogma, Mamdani’s base was not lodged in the working class and the African American communities, but rather it came from the young children of privilege who are over-credentialed, underemployed, and housing stressed. Most of them resided in what is called New York’s “commie belt” which runs from western Queens to western Brooklyn. For the most part these hipsters believe that society owes them a good life in New York City. Unfortunately for them, they can’t really afford it, and many live off the largess of their parents. Indeed, with two-bedroom apartments renting for more than $5,000/month, New York City is objectively unaffordable. This is not true of Mamdani whose college professor Dad and movie making Mom are more than comfortable.

 

The underbelly of the Mamdani campaign is its extreme anti-capitalist, anti-colonialist, defund the police, and above all its anti-Zionism themes. As late as this morning Mamdani refused to condemn the term “globalize the intifada,” which means kill the Jews in the diaspora. If that isn't antisemitism, I don't know what is! It is not a surprise that Jeremy Corbyn, the notorious British antisemite, congratulated Mamdani on his election win. Indeed, many of the people who marched in New York’s anti-Zionist parades worked as Mamdani’s shock troops during his campaign.

 

How did this happen? The answer is that both the Democratic and Jewish establishments in New York City are sclerotic. They are pale shadows of their former selves, and it will be difficult for them to rally to oppose Mamdani in the general election, where his most likely opponent would be Eric Adams, the current scandal plagued mayor. However, because the turnout in the primary was low, it is possible that Mamdani’s youth turnout hit a ceiling and that older voters will go to the polls in November in substantial numbers to swamp the TikTok generation. If not, New York City will soon become Havana on the Hudson as its tax base abandons the city.  

My Review of Dan Edelstein's "The Revolution to Come: A History of the Idea from Thucydides to Lenin"

 To the Barricades

 

Stanford Professor Dan Edelstein has written a very academic intellectual history of the idea of political revolutions. To the ancients up to the time of the French Revolution the whole idea of revolution was disturbing. It meant a useless cycle of destruction as society moved from tyrannical to mob rule with nothing being accomplished.

 

From Professor Edelstein I learned of Polybius a Greek historian writing in the time of the Roman Republic. Polybius endorsed the idea of a “balanced constitution” that distributed executive, legislative and judicial power, sounds familiar. His writings greatly influenced the founders of the American republic. Edelstein views the American Revolution as “radical conservatism” designed to “preserve the state.” This produced the American constitution which to the frustration of the extreme right and the extreme left forces policies into the center.

 

All of this changed with the French Revolution where the idea of progress took hold. The belief in progress meant that a revolution could bring about a glorious future and instead of having a balanced constitution it excused dictatorship in the hope that it would bring about a better world to come. To Edelstein, dictatorship was not an exception, but rather a feature of modern revolutions. Starting with Napoleon in 1799, to the Latin American caudillos of the early 1800’s, to Lenin, Mao, and Khomeini.

 

This is a hard book for the lay reader, but for those interested in the idea of revolution it is well worth slogging through.

Trump Crosses the Rubicon

In 49 BCE Julius Caesar crossed the Rubicon in northern Italy thereby declaring war on the Roman Senate. The phrase has since come to mean “passing the point of no return.” President Trump with his B-2 bomber strike on three Iranian nuclear facilities has gone where no president has gone before, including Bush II, Obama, Trump I, and Biden. As a result of this action the middle east has been irrevocably changed, hopefully for the better.

 

It remains to be seen how successful the bombing mission was and to what degree Iran will retaliate. It will take time to do a bomb damage assessment, but the early indications are that the damage was substantial. The key question will be how hard the underground Fordow site was hit. (See: https://shulmaven.blogspot.com/2025/06/israel-and-iran-fog-of-war.html )

 

The bombing raid was coordinated with Israeli strikes earlier in the week that took out Iranian air defenses in southern Iran. With the Iranian nuclear threat presumably removed, Israel prime minister Netanyahu will now have a freer hand to make peace in Gaza. He now may be strong enough to deal with the hard right members of his cabinet.

 

When Julius Caesar crossed the Rubicon, he reportedly said “the die is cast.”  The dice are now rolling in the middle east which means the middle east will look quite a bit different than the way it looked two days ago.

 

One last point, Wall Street’s “TACO trade” (Trump always chickens out on tariffs”) may no longer be valid.  (See:

https://shulmaven.blogspot.com/2025/06/my-ucla-anderson-forecast-presentation.html )   If anything, Trump proved that he is not a chicken.     

My UCLA Anderson Forecast Presentation on the Financial Markets, 6/18/25

 The link to the presentation is below.

https://www.youtube.com/live/Ohq0ClFofyo?t=3174s

Israel and Iran: The Fog of War

 With Iran rushing headlong towards nuclear weapons, last Friday Israel engaged in a pre-emptive strike on Iran’s nuclear programs and its leadership exactly one day after President Trump’s 60-day deadline for a negotiated settlement expired. Iran immediately counter-striked with a barrage of missiles on Israel’s population centers. Since then, the world has been watching successive Israeli air raids on Tehran and Iranian missile attacks on Israel.

 

To Israel this is a war of necessity. Iran has promised to destroy Israel since the Ayatollahs came to power in 1979. Over the years Iran built up its proxy fighters in Gaza, Syria, Lebanon, and Yemen. However, with the destruction of Hezbollah in Lebanon, the removal of the Assad regime from power in Syria, and the degrading of Hamas in Gaza, Israel, for the first time, had a free hand to strike Iran.

 

Israel’s goal is to eliminate Iran’s capability to develop nuclear weapons. To that end it has decapitated much of the program’s leadership and has degraded parts of its facilities. However, Iran’s major uranium enrichment facility is buried 1500 feet below ground at Fordow. It is not clear that Israel has the ability to take out Fordow, which might require U.S bunker-busting bombs. If Fordow remains operational, the war would be a failure.

 

As of this writing it is unclear whether the U.S. will attack Fordow and risk a much wider war in the middle east. Alternatively, if the U.S. does not act, the risk of a nuclear Iran would be far greater. Absent Israel pulling a rabbit out of the hat, the ball is in Trump’s court.

 

What happens at Fordow will determine the course of the war and that will not be televised. Without U.S. support can Israel use special forces in a very risky operation and/or taking out the above ground infrastructure (electric power, water, ventilation) by air that keeps Fordow operational remains to be seen. We know Israel has a presence on the ground in Iran, but it is likely inadequate to overcome the heavily guarded and forewarned Fordow site. Remember, Israel cannot conquer Iran, it is pursuing a limited goal of removing Iran’s nuclear capability and that has to be done quickly because Israel doesn’t have the resources for a long war.

Stay tuned.

My Review of Jake Tapper's and Alex Thompson's "Original Sin"

The Tragedy of Joe Biden

Joe Biden was elected president in 2020 on his being both a moderate and a transition candidate who would serve one term. He failed on both accounts by swerving to the Left under the aegis of Bernie Sanders and Elizabeth Warren and then by declaring himself a candidate for re-election in April 2023. Little did the voters know that as early a 2015 Biden was on the road to cognitive decline that rapidly accelerated in 2022. Much has already been written about reporters Jake Tapper and Alex Thompson, well-sourced, albeit largely anonymously sourced book, so I will limit my comments here.

 

My sense is that had there not been the COVID pandemic in 2020, Biden would have lost. Why? He would not have been able to handle the stress of a national campaign. Because of COVID he ran from his basement and the public hardly saw him. Once elected he was placed in a cocoon by what Tapper and Thompson characterize as the politburo which consisted of four of his top aides. They included Mike Donilon, Steve Ricchetti, Anita Dunn, and Bruce Reed, all of whom had family members working in the administration. Those four along with wife Jill controlled access to Biden and controlled the flow of information to him. For example, Biden never saw polls in Spring 2024 showing how badly he was doing.

 

On many occasions Biden failed to remember the names of long-time acquaintances and because his cabinet and congressional leaders hardly saw him, they were shocked when he appeared distant and fragile at formal events. Indeed, Biden was forced to use a teleprompter at intimate fund-raising events. This all came home to roost when the whole country witnessed his disastrous performance at the June 27^th debate with Donald Trump.

 

In fact, we were forewarned with the Hur report on Biden’s unauthorized possession of classified documents. Robert Hur declined to prosecute because he though a jury would find Biden “a sympathetic well-meaning elderly man with a poor memory.” For that statement Hur was flamed by the politburo, while all of them knew it was true. To be sure, Biden and his inner circle were motivated by the fear that he and he alone could defeat Trump. At the end of the day, they ended up with the worst possible world; Trump being elected and Biden in disgrace.

 

Tapper and Thompson are especially good at describing an almost daily tick-tock of the post-debate events leading up to Biden’s withdrawal from the race. Along the way the politburo was kicking and screaming to keep Biden in the race, but ultimately, they were forced to accept the reality of a debacle in November.

 

Although I think Tapper and Thompson have written an important and very readable book, there are three failures that come to mind. First, far more blame should be put on the compliant press in covering up Biden’s cognitive decline. Second, Jill Biden’s role in this affair in this reading is limited. She knew, but my guess is that she loved the trappings of power. She loved being the first lady and being on the cover of Vogue magazine four times. Third, at a time when foreign policy crises were happening almost daily, there is no discussion as to what Biden’s foreign policy team thought of him. Biden might not have seen his cabinet that often, but he was in constant contact with Secretary of State Antony Blinken and National Security Advisor Jake Sullivan. Different decisions might have been made had we a more alert president. 

My Review of Ron Chernow's "Mark Twain"

 American Original

 

He came into this world with Haley’s Comet (1835), and he left this world with Haley’s Comet (1910), and for a time his star shined brighter than the brightest stars in heaven. In his encyclopedic study of Mark Twain’s life, biographer Ron Chernow follows Twain from the backwater town of his birth, Hannibal, Missouri, to his being feted by the crowned heads of Europe.

 

Born Samuel Clemens from a family of modest means, Twain was a troublemaking kid in his hometown. He rises from being a printer’s devil to holding a highly lucrative job as pilot on the Mississippi River. Twain’s life on and near the Mississippi became the backdrop for his most famous works. His piloting job ended with the start of the Civil War and for a fleeting time he serves in the confederate militia. Recall that Missouri was a slave state and Twain was part of the culture.

 

One of my criticisms of Chernow is that he applies 21^st century mores to 19^th century America. He should remember Genesis 6:9 “Noah was a righteous man; he was blameless in his age.” So too was Mark Twain and Chernow traces his evolution from supporting slavery to becoming a supporter of civil rights for women, African Americans, and his opposition to antisemitism.

 

Twain leaves Missouri for Nevada and then California by working as a reporter. His breakout work “The Celebrated Jumping Frog of Calaveras County” established his reputation as a humorist and writer and leads him to the lecture circuit where his reputation for exaggeration became widely known and appreciated.

 

From there it is onward and upward. He travels abroad and coins the phrase “Gilded Age,” and as a result of a trip abroad he meets through her brother Olivia Langdon and marries her. Langdon is the heiress to a coal mining fortune and the couple sets up housekeeping in her home in Elmira, New York. It is from there that Twain writes “Tom Sawyer” and later “Huckleberry Finn.” Those two works give him a worldwide reputation and travels and lives abroad for many years using Hartford, Connecticut as his base. Unfortunately, Olivia was never in the best of health and his three daughters all die young.

 

Wherever he traveled Twain was treated as a conquering hero, especially in Germany and England. He meets all of the movers and shakers at home and abroad, including Woodrow Wilson Theodore Roosevelt, Nikolai Tesla, and Kaiser Wilhelm II. His political views evolve from being a Southern Unionist, to being a staunch Republican, to being a “mugwump” reformer and later in life he adopts a strongly anti-imperialist worldview. Despite being critical of Theodore Roosevelt, he enlisted his aid in extending the time period for copyrights for the benefit of his heirs.

 

Chernow goes into great detail about Twain’s failed investments in publishing and a linotype machine. In the 1890’s he actually went bankrupt, but he was rescued by Henry Morgan, a Rockefeller partner in Standard Oil. Although Twain sympathized with the downtrodden, his personal lifestyle took on many of the aspects of the gilded age.

 

My primary criticism of the book is its length.  It is 1196 pages including footnotes; way too long, maybe 200 pages too long. Towards the end it became a slog to read.

Stocks too Complacent About the TACO Trade

 Last week brought with it the International Trade Court opinion declaring Trump’s use of the Emergency Economic Powers Act declaring his reciprocal tariffs on all of America’s trading partners to be illegal, the arrival of the new acronym TACO and a breakdown in trade talks with China. Coined by Financial Times columnist Robert Armstrong, TACO stands for “Trump Always Chickens Out.” That was brought home by Trump’s sudden pullback from his 50% tariff on the EU. (See: https://shulmaven.blogspot.com/2025/05/debt-tariffs-and-stocks.html ) When Trump was asked about it at a White House event he reacted very defensively because the one thing a bully can’t stand is being called “chicken.”

While the trade court ruling is being appealed, the Trump team said it would use all of the other powers available to him, of which there are many, to maintain his high tariff wall. On Friday he acted by doubling the tariffs on steel and aluminum from 25% to 50%. That will work as a dagger in the heart of America’s steel and aluminum using industries, namely automobile, aircraft, and machinery. This certainly won’t help Boeing, America’s leading exporter, on its road to recovery. 

The steel and aluminum tariffs will further estrange Canada from the U.S. where its direct exports will be clobbered, and it will make Canadian manufactured autos and parts even more expensive. If Canada weren’t heading for a recession before, it is now.

 

My guess is that in the long run the TACO trade maybe right, but in the short run, Trump will keep tariffs much higher than the 10% the market now expects. Thus, when the 90 day pause on high tariffs rolls around on July 2^nd, a whole new round of high tariffs will be put in place. Just when investors thought it was safe to go back in the water, a dangerous riptide will be pulling away from the shore