My Review of John Ireland's "The Death of Trotsky"

 Stalin’s Long Arm

Stalin’s long arm reached into suburban Mexico City in August 1940 to assassinate Leon Trotsky, his former rival for power in the Soviet Union. Here author John Ireland examines how Stalin used his NKVD security service to infiltrate Trotsky’s inner sanctum to allow Ramon Mercader to smash an ice ax into the back of Trotsky’s skull thereby killing him.

Ireland tells us how the mother son team of Caridad Mercader and Ramon Mercader were recruited during the Spanish Civil War. Though both of them were stone-cold communists, they enjoyed the finer things in life. They were aided by Iosif Grigulevich, the NKVD’s super spy who assisted in the plot. (See: https://shulmaven.blogspot.com/2025/05/my-review-of-shaun-walkers-illegals.html )

 

The operation had a very long tail. For example, Ramon Mercador first had to seduce Sylvia Ageloff, a Brooklyn social worker who was the sister of one of Trotsky’s secretaries. It was the connection to Sylvia that enabled Ramon to enter Trotsky’s household.

 

Ireland goes into the background as to how Trotsky, the founder of the Red Army, lost his fight with Stalin. Trotsky was too much of an intellectual to get involved in the day-today nitty gritty of Soviet politics. On the other hand, Stalin coldly and methodically accumulated power to best all of his rivals. (See: Shulmaven: My Amazon Review of "Stalin: Volume I: Paradoxes of Power, 1878 -1928" and Shulmaven: My Amazon Review of Steven Kotkin's "Stalin: Waiting for Hitler, 1929-1941" ) Although, by the time Trotsky was assassinated he had little power being in charge of a very small sect revolving around his personality, Stalin was so paranoid that he feared him as a potential rival. Trotsky wasn’t the only one because during the Purge Trials Stalin finished off his old Bolshevik comrades in the early leadership including Zinoviev, Kamenev, and Bukharin.

 

So how did Trotsky end up in Mexico?  Stalin first exiled him to Turkey and Trotsky moved on to Paris and Soviet diplomacy forced him out. He then went to Norway. From Norway the new revolutionary regime of Lazaro Cardenas in Mexico invited him in. Initially he stayed with the painter Diego Rivera and had an affair with Frida Khalo, Rivera’s wife. Of course this did not please Natalia, Trotsky’s wife.  With so much tension the Rivera household Trotsky moved on to a villa in suburban Mexico City.

 

While there Stalin sent three assassination teams into Mexico. The first attempt failed, but not for the lack of trying; 200 bullets rained into the Trotsky household. The second attempt succeeded. After the assassination Ramon was jailed, a Stalin had no interest in pursuing the remainder of Trotsky’s following.

 

At times Ireland’s book reads like a spy thriller. However, at other times it gets bogged down in minutia. A better editing job would have been helpful. Nevertheless, we get a very real glimpse as of what happened to people who got on the wrong side of Stalin.

 

 

 

My Review of Maggie Haberman's and Jonathan Swan's "Regime Change"

 A Man in Full*

Much has already been written about “Regime Change.” New York Times reporters Maggie Haberman and Jonathan Swan have chronicled the first year of the second Trump administration which they rightly characterized as the start of an imperial presidency. Thus, I don't have much to add. It is an administration loaded with sycophants who are willing to enforce Trump’s retribution agenda. Indeed, Trump is presiding over an historic expansion of executive power that has no parallel in peacetime and has engaged in a pattern of self-enrichment that is without precedent.

 

There are more than a few nuggets in the book such as the use of the situation room, hitherto focused on national security events, to discuss the Epstein affair which for a while, paralyzed the administration. We also learn that Trump aide, Natlie Harper is with him constantly as she runs his Truth Social account and caters to his every whim.

 

Nevertheless, I expected much more from the book, especially from Maggie Haberman who has followed Trump since her days at the New York Post in the early 2000’s. ( See: Shulmaven: My Amazon Review of Maggie Haberman's "Confidence Man: The Making of Donald Trump and the Breaking of America")  In many respects the book reads like a long New York Times article, except most of the sources are on deep background. The authors put you in the room where it happened with direct quotes of the participants without attribution.  Unlike Trump’s first administration, the current one does not leak out of a real fear of retribution.

 

So, we are left with question, who talked to the authors?  Who benefits from the book? I can only guess, but those officials most interested in running for office in 2028 and in protecting their future reputation from the investigations that are sure to come can give us a clue as to who spoke to the authors.

 

My candidates are Vice President J.D. Vance, Secretary of State Marco Rubio, Chief of Staff Susie Wiles, Secretary of the Treasury Scott Bessent, CIA Director John Ratcliffe, and son-in-law Jared Kushner. These folks talked to Haberman and Swan on a situation-by-situation basis. They only spoke when it served their individual interests, par for the course.

 

What Haberman and Swan have done is to give us a good summary of Trump’s first year and it demonstrates his primary motivation is to avenge those who he perceived wronged him in his first term and the investigations that followed. Policy is secondary to vengeance, the accretion of power and self-enrichment.

 

*-With apologies to Tom Wolfe.

My Review of Randall Sullivan's "The First All-Star Game"

 All-Stars

On July 14^th baseball will celebrate the 93rd anniversary of the first All-Star Game to be held in Philadelphia. Here Randall Sullivan recounts the history of how the first All-Star game came to be along with digressions about the history of baseball, the Great Depression, The Negro Leagues, Franklin Roosevelt, Chicago politics, and the gangsters of the 1930’s. As a kid growing up in the 1950’s, I ate, drank, and slept baseball. I read all kinds of sanitized books about the early years of baseball and the great players of that era.

 

As Sullivan notes, the origin of the first All-Star game in 1933 had its roots in the Chicago Tribune and its sports editor, Arch Ward. With the country in depression there was a special need to hype up the 1933 Chicago World’s Fair. The idea came to Ward to have the “game of the century” that would feature the best players in the National and American leagues playing against each other with the players to be selected by a vote of the fans. To pull this event off it required the support of both league presidents, the Kenesaw Mountain Landis, the Commissioner of Baseball, Chicago Mayor Edward Kelly, and the support of President Roosevelt.

 

It worked and it all came together with Connie Mack, the manager of the then Philadelphia Athletics, and John McGraw, the manager of the then New York Giants piloting each team of all-stars. Of course, the great Babe Ruth played for the American League and let his team to a 4-2 victory with a home run.

 

I learned much about the players of that era. They weren’t quite the all-American choir boys, except for the great Lou Gehrig, they were portrayed in the books that I read those many years ago. For example, instead of coming out of an orphanage to play baseball, Babe Ruth was in reform school. He also had a gluttonous taste for food, booze, and women. He was a customer of brothels in every American League city. Nevertheless, after a night of carousing, he was still among the greatest of all time on the field and at bat.

 

My quarrel with the book is that Sullivan goes off on to many tangents that can lose the reader’s interest. Nevertheless, he tells a story of how baseball captured America’s imagination in the 1920’s with Babe Ruth along with Charles Lindberg being the two great celebrities of the Roaring 20’s.

 

Ukraine Goes on the Offensive

 Shulmaven has been commenting on Russo-Ukraine War since 2014 when the Russian “green men” seized Crimea. (See: https://shulmaven.blogspot.com/2014/03/the-ukraine-what-is-to-be-done.html ) The all-out Russian invasion began in February 2022 and if we date the war’s start to then, the Russo-Ukraine War is now longer than the fighting in World War I. Similar to World War I, the battlefield has been stalemated since the end of 2022 with a “no-man’s land” in the east separating the forces and on ongoing Russian drone/missile blitz on Ukrainian cities in the West.

 

However, of late, Ukraine has gone on the offensive with drone and missile attacks reaching into the heart of Russia. Both Moscow and St. Petersburg have witnessed the war coming home. More important, Ukraine has taken out more than 25% of Russia’s oil refining capacity triggering gasoline rationing that Putin was forced to admit last week.

 

Under severe wartime conditions Ukraine has built up the capacity to mass produce long range drones and missiles. What we are witnessing in Ukraine is a revolution in military affairs where ground forces have become immobilized by the fear of drone attacks and that swarms of low-cost drones can overcome Russia’s sophisticated air defenses. No region in European Russia is safe and perhaps we will soon see Ukraine set ablaze the west Siberian oilfields, a course I have long advocated.

 

Russia is now in a box. Instead of their once thought of inevitable victory, it is now slowly losing the war. Putin will have to accept this reality or attempt to widen the War into Poland or the Baltic states. His goal would be to force NATO into pressuring Ukraine to accept its demands. Of course, this high risk strategy could very well bring NATO directly into the war with unknowable consequences.

 

NATO is meeting in Ankara, Turkey next week. I am sure Ukraine will be a major topic of conversation. Given Ukraine’s battle-tested army and its advanced weapons production capabilities, it would seem to me that NATO needs Ukraine more than Ukraine needing NATO. It wouldn’t surprise me that while the meeting is in progress, Ukraine will launch its largest air assault on Russia to date.

Havana on the Hudson - Part 3*

With the results of last Tuesday’s primary victories for the TikTok Jacobins and the enactment of a rent freeze on one million rent stabilized apartments, New York City drove a few more nails into its coffin. The congressional primary victories of DSA members Claire Valdez and Derializa Avila Chevalier along with the anti-Zionist Jew, Brad Lander, defeating Congressman Dan Goldman demonstrated the power of Mayor Zohran Mamdani’s machine. To be sure he was pushing against a hollowed out Democratic Party. Put bluntly the socialist left in the Democratic Party is copying the Tea Party/Trumpian takeover of the Republican Party a decade ago.

 

Of particular note is that Chevalier is a stone-cold communist of the third world variety.  My guess is that she would take what I just wrote as a compliment. She doesn't beleive in prison terms for murderers. Her political support comes not from the Black and Latino populations of her district, but rather from the white intellectual leftists that seem to have found a home in New York City.

 

As expected, the Rent Guidelines Board froze rents on one million apartments under its authority. Because most of the rent stabilized housing stock is old, the likely outcome of a rent freeze would be speed up the deterioration of the buildings. Indeed, the not so hidden agenda of the Mamdani is to bankrupt the existing owners to enable the city to buy up the buildings.  Recall that the city is already the biggest slumlord through its housing authority.

 

While New York City seems to be prospering on the surface and benefitting from the Wall Street bull market, beneath the surface the socialist termites are eating away its foundation. So, just as the speed of the socialist takeover seemed to surprise, so too will the speed of the city’s demise. Havana here we come.

 

*-   See: https://shulmaven.blogspot.com/2025/11/havana-on-hudson-part-2.html

The Fed Turns a Page: Warsh and Greenspan

Kevin Warsh’s first meeting as Fed Chair last week and the death of longtime Fed Chair Alan Greenspan yesterday signaled that the Federal Reserve is embarking on a new chapter in its history. The Fed is now turning a page as it leaves its policies for the first quarter of the 21^st Century behind. Under Warsh the Fed is abandoning its policy of forward guidance and with that the so-called “dot plots” that were introduced in 2012 which presented the forecasts of individual members of the Open Market Committee will soon go by the wayside. As a result, the Fed Put that worked as a floor underneath the stock market since 1987 has been removed. Look for more volatility in stock prices. As if on cue, the stock market is responding today. Over the longer term the four task forces authorized by Warsh, which will include outside members, may end up having a far more lasting effect on the Fed.

 

Ten years ago, I reviewed Sebastian Mallaby’s biography of Alan Greenspan so there is no need to recount his remarkable career here. (See: https://shulmaven.blogspot.com/2016/10/my-amazon-review-of-sebastian-mallabys.html ) In a nutshell a kid from the Washington Heights neighborhood of Manhattan rose to become the conductor of the global economic orchestra as I wrote then. Both Henry Kissinger and Henry Kaufman, my old boss at Salomon Brothers came from the same neighborhood. Something must have been in the water.

 

I met Alan Greenspan twice as an outside consultant to the Federal Reserve Board. The first time was in December 1991, when the Fed invited a group of real estate experts to discuss the then ongoing meltdown in commercial real estate. Greenspan listened and maintained a sphinxlike expression. Two days later he announced an inter-meeting 100 basis point cut in the discount rate and a 50-basis point cut in the federal funds rate. He obviously took seriously my comments and those of others on the gravity of the situation.

 

The second time was in December 1996 when the Fed called in several Wall Street equity strategists and few academics including Robert Shiller. The topic was whether or not the roaring bull market in stocks was getting out of control. A few days later Greenspan gave his famous “Irrational Exuberance” speech. When the formal meeting was over, I sat with him and a few others at a small table over lunch. There he gave me a marked-up copy with his autograph on “Comments on Credit,” Salomon Brothers weekly publication on the credit markets and the economy. He noted a small error. When I got back to the office I gave the copy to Robert DiClemente, the author of the report. Bob was flabbergasted that Greenspan read his work in such detail and he immediately had it framed. One of the secrets to Greenspan’s success was that he was very meticulous. He knew every data point in most economic series, both current and historical.

 

Under Greenspan’s leadership the Fed helped lead the U.S. economy into an extended period of moderate growth, with low unemployment and low inflation. Along the way he rescued the stock market after the 1987 crash giving rise to the Fed Put, organized the rescue of Long-Term Capital Management 1997, the Asian crisis of 1998. The whole period form 1982 -2007 was known as “the great moderation.” Unfortunately, it came crashing down with the financial crisis of 2008. Just as in the days of ancient Rome, a slave in the chariot of a conquering general would warn that all glory is fleeting, the ghost of Hyman Minsky should whisper in the ear of every Fed chair that “stability leads to instability.” I think Warsh understands that and let us hope he won’t be a slave to President Trump.

 

All that said, Alan Greenspan was a giant in the world of central banking. May his memory be a blessing.

The Purim War- Part 8: Trump Capitulates

 As we noted in a prior post, Trump is completely transactional and has no loyalty to his ally Israel. (See: https://shulmaven.blogspot.com/2026/06/the-purim-war-part-7-israel-learns.html ) Little did we realize at the time how craven Trump would be with his capitulation to Iran. Trump has gone from “unconditional surrender” to practically whatever Iran wants. The 14-point Memorandum of Understanding (MOU) leaves open Iran’s nuclear program and enables them to continue their ballistic missile program. Indeed, the MOU calls the termination of the war in Lebanon without mentioning Hezbollah and without Israel being a signatory to the deal. Recall Israel entered the war cheek by jowl with the U.S. in the most coordinated inter-allied cooperation since World War II.

 

Perhaps more troubling is that Iran is now given sanctions relief to sell its oil on the market thereby funding the regime that is now desperate for cash. Although the deal keeps the Strait of Hormuz to be free from tolls for 60 days, it leaves open the very real possibility of tolls going forward. This is in complete contradiction to international law and America’s long held position on freedom of the seas. (See: Shulmaven: The Purim War- Part 5, Deadlock in the Strait of Hormuz* )

 

Put bluntly, in exchange for temporarily opening the Strait of Hormuz, which was wide open prior to the war, Iran has conceded nothing. To be sure, if Iran fails to move forward on eliminating its nuclear capacity, the U.S. reserves the right to resume the war.  Trump has threatened this, but his threat has zero credibility with the midterm elections just around the corner. What we have ended up with is something worse than Sherman-Malley-Obama-Biden deal of 2015.

 

In 1938, just after the Munich summit with Hitler, Winston Churchill called out Neville Chamberlain with the following:

 

   “You were given the choice between war and dishonour. You chose dishonour, and you will have war.”

 

I fear that instead of peace, Trump has set the stage for the next Iran War in the not-too-distant future.

My Review of Liaquat Ahmed's "1873: The Rothschilds. the First Great Depression......"

A Good Deflation

Liaquat Ahmed of “The Lords of Finance” fame has written a new account of the long depression of the last quarter of the 19^th Century. To me, Ahmed mixes up depression with deflation. A depression signals a massive decline in aggregate output, which did not happen and a deflation signals a sustained decline in the price level, which did happen. I have covered some of the ground here in two prior reviews (See:  https://shulmaven.blogspot.com/2016/02/my-amazon-review-of-robert-j-gordons.html and https://shulmaven.blogspot.com/2017/09/my-amazon-review-of-richard-whites.html )

In the late 1860’s Europe witnessed a great railroad boom that was interrupted by the Franco-Prussian War of 1870. France was required to pay a huge indemnity to the newly united Germany. Instead of being a burden, it turned out to be a boon as the Rothschild banks, who are featured prominently in the book, fund the payment with two massive bond issues. Money came out of the woodwork from all over Europe to buy the bonds and that lead to a surge in economic activity leading to a boom in lending to eastern Europe and to Latin America. It all came unglued when the Vienna stock market crashed that rippled into Germany. Sixty years later a bank failure in Vienna would also deeply impact Germany, but to a far greater extent. In the U.S. the trigger was the collapse of the Jay Cooke & Co. banking operation that financed the Union during the Civil War and became undone with the failure of the Northern Pacific Railroad. 

 

According to Ahmed the crash was exacerbated by Europe moving away from a bi-metallic standard (gold and silver) towards a full gold standard. Similarly in the U.S., the Coinage Act of 1873, later known as “The Crime of 1873” limited the use of silver coinage. With the U.S. and Europe operating under the straitjacket of the gold standard, money in circulation declined and a deflation ensued. Indeed, in the U.S. both leaderships of the Republican and Democratic parties supported hard money

 

All of this was going on against the backdrop of improved global transportation which lowered shipping costs worldwide. For example, both the Suez Canal and the U.S. transcontinental railroad were completed in 1869. Later in the 1870’s and especially in the 1880’s there were huge advances in farm and industrial mechanization. Thus, if other things being equal, prices should have fallen and fall they did.

 

The wholesale price index fell from 140 in 1870 to 116 in 1878, a decline of 2.3% a year. Prices continued to fall and did not bottom until 1899 at an index level of 81. Thus, for the entire period prices declined at an annual rate of 1.9%. This price deflation obviously wreaked havoc for indebted farmers, triggering a populist revolt across the prairie. Their cause was to allow for unlimited silver coinage to expand the money supply and increase prices. Of course, the urban workers would have issues with this.

 

In Europe the political climate darkened with moves against free trade and the creation of the modern version of antisemitism partly tied to the Jewish Rothschild banking family. Indeed, the term “antisemitism” was coined in the Germany of the 1880’s. Further exacerbating the sour mood was the level of opulence of the bankers and industrialists of the gilded age.

 Although there were depressed conditions on the farm, industrial production boomed. There was only a modest decline in U.S. industrial production between 1873 and 1876, but by 1880 industrial output was one third higher than the decade before and it would double in the 1880’s. Industrial production was aided by the surge of immigrant workers flooding into the country from eastern and southern Europe. This explosive growth in industrial activity is the opposite of a depression. Further, in 1879 three major inventions would soon change the world: the incandescent light bulb, the telephone and the internal combustion engine.

 

By the end of the century gold discoveries in South Africa and Alaska eased the monetary pressure and prices started to increase. The deflation was over, but not before the hard money McKinley would defeat the soft money Bryan in the 1896 presidential election.

 

Although I come to a different conclusion than Ahmed, I do recommend his book. He brings insight into the popular feelings of the day, and you get a sense of the people and personalities of that era. 

The Purim War- Part 7* - Israel Learns a Lesson about Trump

Israel is learning a lesson about Donald Trump. Put bluntly, Trump has no loyalty and is completely transactional. Thus, it should not come as surprise that Trump pressured Netanyahu to call off his second and massive strike against Iran in retaliation to a missile attack on northern Israel over the weekend. It seems that Trump, contrary to “The Art of the Deal,” wants a deal with Iran more than Iran does.

 

Of course, it goes without saying that the U.S. and Israel have different interests with respect to Iran. To Israel Iran is an existential threat while to the U.S. Iran is more of a problem to be managed, shades of Obama/Biden. Moreover, Hezbollah’s presence in Lebanon represents a direct threat to Israel, while to Trump, Lebanon is a sideshow. Thus, from Israel’s point of view any Iran deal that leaves Hezbollah with a free hand in Lebanon is a bad deal for Israel.

 

As a result of Trump’s actions, Netanyahu is between a rock and a hard place. His room to maneuver is limited and he might be forced to accept a deal not of his liking or face an aid cut-off from the U.S. The alliance that began with high hopes last June has become very fragile and is on the verge of shattering.

*-See: https://shulmaven.blogspot.com/2026/05/the-purim-war-part-6-cracks-in-home.html

My Review of Sebastian Mallaby's "The Infinity Machine: Demis Hassabis, Deep Mind......."

 The Prophet of AI

 

Sebastian Mallaby, Council on Foreign Relations fellow, tells us the story of artificial general intelligence through the life of Demis Hassabis, the founder of Google’s Deep Mind. The story is not limited to Hassabis as Mallaby discusses his rivalry with Sam Altman’s OpenAI and Mark Zuckerberg's Meta. Along the way we meet venture capitalist Peter Thiel and Elon Musk. Mallaby also goes into great detail as to how AI works and how AI agents can hallucinate and go rogue. Thus, in a way the book is primer on AI.

 

Hassabis is the son of immigrants to North London, with a Chinese Singaporean Mom and a Greek Cypriot father. As a child he was chess prodigy and was a champion by age 13. From chess Hassabis moves on to gaming, first a player and then as a successful designer. He gets degrees from Cambridge in physics and neuroscience which gives him an excellent background to pursue his interest in AI.

 

He forms Deep Mind in 2010 with the support of Peter Thiel and other venture capitalists. There he and his colleagues do pioneering work in deep learning and reinforced learning. In 2014 Google bought out Deep Mind for $650 million, making Hassabis worth $134 million. His interest is not in money but rather pursuing the science of artificial general intelligence. Their models became experts at the highly complicated game of Go, so much so that they defeat the world champion in a globally televised event in Korea.

 

The reinforced learning technique used for GO was then used to detect the shapes of proteins using their Alpha Fold model. This innovation is hugely important in the drug discovery process, so much so that Hassabis along with his colleague John Jumper win the Nobel Prize for chemistry in 2024.

 

One of Hassabis’ colleagues at Deep Mind was Mustapha Sulayman, another immigrant son from North London. Sulayman was very concerned about AI safety, so much so that Google delayed releasing its early AI models to the public. After an intital misstep, Google's Gemini has become a world beater. However, when Open AI released ChatGPT, the competitive juices began flowing and the safety issues were put on the back burner. Ultimately Sulayman ended up heading Microsoft’s AI efforts. In a strange quirk of history, we now two immigrant children from North London running the AI efforts of two of the major players in the field.

 

Mallaby hardly mentions Dario Amodei, the head of Anthropic, which is fast becoming an industry leader. Amodei was at OpenAI and then left to form his own company. Anthropic is the developer of Claude which is fast becoming the AI model of choice in the enterprise. My guess is that Mallaby did not have the time to interview or understood the significance of Amodei in the AI race. That aside Mallaby has written an important book on what is becoming a revolution in how we approach the world around us.

American Politics has gone Batshit Crazy

On the eve of the 250^th anniversary of the signing of the Declaration of Independence, American politics has gone completely batshit crazy. Where the Republican leadership spent millions of dollars only a few weeks ago pillorying the highly flawed Texas Attorney General Ken Paxton in Senate primary, they are now falling over themselves to support him. It no longer matters that he has been investigated for securities fraud, been impeached by his own party and that is wife is divorcing him over his adultery.

 

On the Democratic side leading Democrats continue to support Graham Platner, their preferred Senate candidate in next week’s Maine primary. Those leaders choose to ignore the fact that Platner is a Jew-hating neo-Nazi who has a habit of sexting a half dozen women while still being married. Several years ago, Anthony Weiner’s New York City’s mayoralty campaign collapsed over his infamous dick-pix.

 

What is going on? It seems that the hatred of MAGA-Republicans for their Democratic counterparts overwhelms any sense of decency and the Democrats hatred of the MAGA-Republicans, if anything, is greater than the Republican hatred of them. Of course, the polarizer-in-chief, Donald Trump has set the tone for the divisions in our land. However, I would caution to note that Trump is the product of something that has been brewing in our politics for a long time.

 

My guess is that the infighting we are now witnessing is reminiscent of the religious wars of the late Middle Ages. Thus, if we are in a religious war where politics has substituted for religion, compromise is impossible. Recall that our founders wanted to separate religion from the state, but the fanatics in both parties are now making that difficult causing our founders to turn over in their graves.

My Review of Adrian Woodridge's "The Revolutionary Center"

Liberalism Under Siege

Adrian Wooldridge, formerly political editor of The Economist and now an opinion columnist at Bloomberg, has offered up a history of liberal political thought from Montesquieu to John Stuart Mill and on to Hayek, Keynes, and Friedman. That liberalism faces attacks to today from the authoritarian Right and the identitarian Left reminiscent of the 1930’s. (See: https://shulmaven.blogspot.com/2023/11/reliving-1930s-part-5.html ) And it goes without saying that the concept of free speech is now under a withering assault. Wooldridge wants to reclaim liberalism’s revolutionary history that brought freedom and prosperity to much of the world. Thus, you can call him a revolutionary centrist, and the world truly needs hm today.

 

For whatever reason, too many people have abandoned the basic tenets of liberalism which include freedom of thought, a free market, room for heterodox views and the removal of obstacles to self-development. In short, Wooldridge believes in a meritocracy that offers a ladder up for those folks who have been left behind.

 

In terms of government liberalism stands for the separation of powers as articulated by the U.S. Constitution. He quotes Lord Acton about power corrupting, and we are getting a real-life lesson with the antics of Donald Trump.

 

Wooldridge sees three strands of liberalism today. The first being neoliberalism with its faith in markets to solve society’s problems. Second, managerial liberalism, which is characterized by an elite consensus coming out of Davos, the universities, and the NGOs. The third form is progressive liberalism which exalts rights over responsibilities especially for groups. I would not call this liberalism.

 

Wooldridge offers political solutions reanimating liberalism. He moves to the right and the left at the same time by calling for higher taxes, antitrust enforcement of the tech companies, immigration restrictions, and a return to merit-based admissions to the universities. He also doesn’t believe that Muslim fundamentalism is compatible with liberalism. If the Muslim population of Europe can’t be integrated into the broader society Europe will (is) be in a world of hurt.

 

To me the solution is in governing, not only in making political compromises as necessary as they are. In order for liberalism to succeed, it has to govern successfully. That means a wholesale repudiation of the “blue model” that now governs most of America’s large cities. The high tax-low service model of the blue cities and today’s U.K. for example, is forcing voters to move towards the authoritarian right and to the socialist left in the U.S.

 

We are living in a time where the horseshoe theory of politics holds as both the right, and the left ending up in opposition to the liberal order that has served us well for of these years. It is a real shame, and it is very disheartening. Wooldridge points us a way out of this malaise.

The Trump Train Runs into a Wall

I am writing this while the U.S./Iran negotiations are in a state of flux, but make no mistake, the Trump train ran into a wall last week. His $1.8 billion “anti-weaponization” slush fund sparked outrage among Senate Republicans. So much so, that Trump’s all-important immigration funding reconciliation bill had to be pulled from the Senate calendar. Meantime Speaker Mike Johnson recessed the House because he lacked the votes to stop a war powers resolution on the Iran War.

 

Although Trump tactically succeeded in defeating Louisiana Senate incumbent Bill Cassidy, he strategically failed by making an enemy of him for the remainder of his term. He along with North Carolina Senator Tom Tillis will remain thorns in his side for the rest of the year. Those two along with Senators Susan Colllins and Lisa Murkowski means that Trump no longer has a working majority on a host of issues that will soon come before the Senate. Further exacerbating the situation is that Trump connived with his own Treasury Department to cease all tax audits on his and his family’s tax returns. The stench grows by the minute.

 

Adding impetus to the revolt was Trump’s endorsement of the ethically challenged Ken Paxton in the Texas primary over incumbent John Cornyn. Cornyn is one of the most well-liked senators in the Republican caucus. Should Cornyn go down this week, he too will likely join Tillis and Cassidy as a thorn in Trump’s side. Even if Cornyn surprises and wins, Trump will not be able to count on him as a supporter.

 

One last thing should the Iran deal go the way many are now speculating, Trump risks the support of Senators Cruz, Graham, and Wicker, among others. Any deal that looks like what the Obama appeasers Wendy Sherman, Bob Malley and Ben Rhodes would have produced will ignite a firestorm in the Republican caucus. Stay tuned.

 

 

Reality Catches up to the Bond Market

Bond yields soared on Friday with the !0-Year U.S. Treasury yield rising 14 bps to 4.6%. Meantime the yield on the 30-Year Treasury hit 5.12%, its highest since 2007. Globally it was the same story, as Japanese yields are at their highest level since 1997 and government disarray in the U.K. is sending yields soaring there.

What’s going on? Three critical factors are coming together: rising inflation, government deficits, and an AI capital spending boom. Triggered by soaring oil prices caused by the Iran War, the U.S. consumer price index (CPI) is now 3.8% over year ago levels, and the producer price index (PPI) is now 6% over the same period a year ago. To be sure, core inflation at the CPI level is lower at 2.8%, but the core PPI is now running at a high 5.2% rate. More concerning is the likelihood that over the near-term, inflation will move higher, not lower. This clearly is not an environment for rate cuts.

Second, huge fiscal deficits are the order of the day. The U.S. continues to run a $2 trillion deficits around 7% of GDP, and with tariff refunds and higher defense spending it will go higher. Although the rest of the G-7 is doing much better, ex-U.S. the G-7 is running a deficit of 2.4% of GDP.

Last, the AI boom in the U.S. is sucking capital in from all over the world. Witness Alphabet’s recent $60 billion global offering. Here are the AI companies that used to supply capital to the rest of the world; they are now massive users of capital. Hence real rates have to increase and in the short run the massive expansion of data centers will put upward pressure on the price of inputs, ranging from memory chips to electrical equipment and construction labor.

 

This is the environment that incoming Fed Chair Kevin Walsh is facing. It is hardly an environment to cut rates. Indeed, with the two-year note now yielding 4.08%, well above the current midpoint of the Federal Funds rate of 3.63%, the market is now pricing in a rate hike. Those who say that Warsh will follow Trump’s orders to cut rates will soon be disabused of that notion. Kevin Warsh does not want to be remembered as the Fed chairman who looked inflation in the eye and blinked.

 

Finally, it is important to recognize that the recent rise rate is taking place in the context of a structural bond bear market. (See: https://shulmaven.blogspot.com/2025/01/we-are-in-early-stages-of-bond-bear.html ) Bond bear markets, just like bond bull markets last a long time. The last bond bear market lasted 35 years, from 1946 – 1981. We are now only in the sixth year of the bond bear market that began in 2020, when the 10-Year U.S. Treasury Bond bottomed at 0.56% in August of that year. So, buckle up, we are still early in a very long cycle.

My Review of G. Edward White's "Robert H. Jackson: A Life in Judgement"

 My Favorite Supreme Court Justice

Robert Jackson is my favorite Supreme Court justice. Here University of Virginia Law School professor G. Edward White brings to life one of the finest legal minds of the 20th Century in a detailed biography of his professional and personal life.  Unlike the current court which is dominated by snooty lawyers from Harvard and Yale, Jackson did not go to college, and he attended Albany Law School for only one year.  He read the law with a local lawyer which enabled him to pass the Bar Examination. We went on to become a leading public utility lawyer in New York.

 

Jackson grew up in a Democratic family in Jamestown, New York. Democrats were few and far between in western New York; Franklin Roosevelt, a rising politician took notice of him. When Roosevelt was governor, he asked Jackson to join the Public Service Commission, but he declined. Although Jackson represented most of the utility interests in western New York, he was so respected that consumer advocates supported him.

 

Roosevelt convinced him to come to Washington, first to the Internal Revenue Service and then to the Justice Department. He managed the high-profile Mellon tax case and helped write the Public Utility Holding Company Act of 1936. Later as Attorney General he helped draft the destroyers for bases deal and the Lend Lease Act. In late 1941 Roosevelt appointed him to the Supreme Court.

 

Most observers thought that Jackson would be a rubber stamp for New Deal laws and generally hew to an activist liberal position. That was not to be the case. However, in Wickard v. Filburn (1942) Jackson writing for a unanimous court declared that the Agricultural Adjustment Act of 1938 applied to a small farmer planting corn for his own use and hence was in violation of the Act. To me this stretched the power of Congress to regulate interstate commerce beyond a reasonable limit.

 

Jackson supported the court’s decision in West Virginia Board of Education v. Barnette (1943) which ruled that the state couldn’t compel a Jehovah’s Witness student to say the Pledge of Allegiance on free speech grounds. Simply put, the government can’t compel speech. In Korematsu v. U.S. (1944) Jackson dissented in a case that supported the government’s right to intern Japanese citizens on the west coast as a wartime measure.

 

Professor White brings out the long running feud Jackson had with Justice Hugo Black. They didn’t like each other from the beginning, and it exploded when Black refused to recuse himself in Jewel Ridge Coal v. United Mine Workers (1945). Black’s former law partner was the attorney for the mine workers and Black was one of the authors of the Fair Labor Standard Act of 1938 which was what the case was about. On a broader level he philosophically disagreed with Black’s and also Douglas’ result-oriented view of decision making. Jackson started at the bottom and worked his way up, while Black and Douglas started at the top and worked their way down to support their conclusions.

 

In 1945 Jackson took leave of the court, to become the Chief Prosecutor at the Nuremberg War Crimes Trials. Indeed, practically on his own, he created the full panoply of procedures that the tribunal would adopt. His goal was to bring justice to the Nazi war criminals with a modicum of procedural safeguards. Thus, it was far from a show trial.  Indeed, Nazi leader Hermann Goering actually tripped up Jackson during his examination. No matter, Goering committed suicide in his cell. To Jackson, his time at Nuremberg was the highlight of his career. He witnessed the obstinacy of the Soviet justices making him deeply suspicious of their motivations and the Nazi rise to power taught him to be very suspicious of authoritarians of all stripes.

 

Jackson return to the court in 1946. In perhaps one of his most important dissents in Terminiello v. Chicago (1949) he noted that the constitution is not a suicide pact. More specifically he wrote “…it will convert the constitutional Bill of Rights into a suicide pact.” Thus, he was not free speech absolutist in the tradition of Justice Black. He noted that “there was no unlimited freedom for dangerous speech.” That opinion, yet again, demonstrated what a fine legal writer he was.

 

In the late 1940’s and early 1950’s the Supreme Court got caught up in the growing Cold War tensions with the Soviets and the fear of communism domestically. Jackson supported the Smith Act and sustained the conviction of the leading members of the Communist Party in Dennis v. U.S. (1951). Later in 1953 he supported the conviction and the execution of the Rosenberg’s in the atomic spying case. (Rosenberg v. U.S. (1953)) White brings out the perfidy of Justice Douglas in his supporting the execution, but wanting to dissent to show off is civil liberties bona fides.

 

My favorite Jackson opinion is his in Youngstown Sheet and Tube v. Sawyer (1952), the steel seizure case. Here Jackson enunciated the rule concerning presidential power versus Congress that stands to this day. He divided the question into three parts. The first is where the president is strongest when he “acts pursuant of expressed or implied authorization of Congress.” Second where “Congress has not given or denied authority” is sort of a “twilight zone.” Third, the president is weakest when “he takes action incompatible with the expressed of implied will of Congress.” In case of the last, the courts should strictly scrutinize the presidential act. Jackson’s rule today is directly applicable to the current controversy over the War Powers Act.  Just to note Youngstown was about the domestic powers of the presidency, while the War Powers Act is concerned with foreign policy which gives the president more leeway.

 

The last major case Jackson dealt with was Brown vs. Board of Education (1954), the famous school desegregation case. Initially Jackson was ready to rule against Brown, and White goes through several detailed drafts where Jackson ultimately changed his mind. While the case was being deliberated Jackson suffered a heart attack. He was thinking about writing a separate concurring opinion questioning, in part, the decision, but was talked out of it by Justice Frankfurter.

 

Jackson died soon thereafter at the relatively early age of 61. Had he lived another decade, he along with Justice Frankfurter (See: Shulmaven: My Amazon Review of Brad Snyder's "Democratic Justice: Felix Frankfurter..........." ) could very well have functioned as a braking influence on the Warren Court. Jackson wanted to avoid political questions (i.e., redistricting), and he believed that the court was moving in the same direction as the Lochner and anti-New Deal courts of the 1930’s by substituting their personal values above the constitution. My guess is that had the court taken that path it would be far less controversial than it is today.

 

Robert Jackson was a legal giant. It is a shame our society seems incapable of producing someone like him today. Perhaps the current Justice Amy Coney Barrett, a Notre Dame graduate, comes closest to him.

The Redistricting Melee

Donald Trump started the redistricting melee by calling on Texas to undertake an unprecedented mid-census congressional redistricting to create five additional Republican seats. California Democratic Governor Gavin Newsom responded in kind by calling a successful referendum to redistrict California to create an additional five Democratic seats and the partisan war was on. It came crashing down for the Democrats in Virginia this week when their Supreme Court ruled their redistricting referendum unconstitutional. That plan would have created four more Democratic seats. Along the way Trump unseated candidates in Indiana's Republican primary that opposed his redistricting plan for the state.

Then of a sudden the U.S. Supreme Court declared parts of the Voting Rights Act of 1965 unconstitutional paving the way to redistrict a host of Black (Democratic) seats across the South. Tennessee and Louisiana have already acted. Further, by 2028 elections there will be a raft of redistricting across Democratic and Republican states. I don't know who the ultimate winner will be, but I do know the American voter will be the loser. Simply put voters should choose their politicians, not the other way around.

Meantime after being down in the dumps all year, the Republican Party now has some spring in its steps. To me their optimism and the Democrats pessimism is premature. Why? In a wave election, and if there is to be a wave, it will be the Democrats that sweep and instead of helping, redistricting will hurt because it dilutes a party's strength where it was presumably strong.(See: https://shulmaven.blogspot.com/2018/07/gerrymandering-wont-save-republicans-in.html ) Second, I would hope that the electorate gives a big F-You to both parties by voting Republican in California and Democratic in Texas. It maybe too much to hope for, but I fear that both parties are now circling the drain. We need something new.

The Purim War - Part 6, Cracks in the Home Front*

Although America’s blockade of the Persian Gulf is working causing oil storage problems in Iran, an implosion of its economy and a collapse of its currency, severe cracks in the home front have emerged. The 60-day clock of the War Powers Act has run out, and President Trump’s approval rating, with gas prices up nearly 50%, has declined to 37%, according to the latest poll. Indeed, beyond the wackos on the Right and the Left who are rooting for Iran, it seems that voices of the liberal establishment are implicitly supporting an Iranian victory. Why? Their hatred of Trump overwhelms all considerations of America’s security interests in the middle east region.

 

So, where do we go from here? Trump’s novel interpretation of the War Powers Act arguing that direct fighting between the U.S. and Iran ceased in early April, means that should hostilities resume a new 60-day clock would start. The ball is now in Congress’ court, but I would note Congress did nothing in 2011 when President Obama engaged in hostilities in Libya for six months. Further, every president since Nixon have has stated that the act is unconstitutional; it looks like we will once again be headed to the Supreme Court on the issue of executive power.

 

Meantime, Trump, and Chinese leader Xi are scheduled to meet in less than two weeks. This meeting has been postponed before, and it may yet be postponed again. Nevertheless, my guess is that meeting or no meeting, Trump will execute the new military plan to attack Iran’s infrastructure as a means to coerce Iran to yield on its nuclear program.

 

Beneath the surface the dynamics of the middle east are changing before us. The UAE is leaving OPEC and there seems to be a budding alliance between the UAE and Israel. Israeli troops are on the ground in the UAE to assist in its first ever deployment of its iron dome air defense system outside of the country.  Thus, it would be a foreign policy blunder of the first order for the U.S. to fail to achieve its fundamental war aims.

* See: Shulmaven: The Purim War- Part 5, Deadlock in the Strait of Hormuz*

AVB/EQR Merger: A Target on Their Backs

REITland is abuzz following a Bloomberg story that apartment behemoths AvalonBay and Equity Residential are talking merger. Such a tie-up would create an $80 billion apartment colossus. From an economic point of view, given the large geographic overlaps and the potential for large G&A savings, the merger would make a great deal of sense. In addition with the RealPage settlement both AVB and EQR lost the ability to engage in collusive practices. So instead of using RealPage, the new REIT would no longer have to collude; it would be one entity. 

However, from a political point of view, it would place a target on the back of the new entity. With high rents becoming a political flashpoint, populist politicians would place everything it does under a microscope and it would be continually harassed. Thus, if I were in the boardroom, I would think long and hard about the potential merger.

My Review of Barry Eichengreen’s "Money Beyond Borders"

 All Glory is Fleeting

U.C. Berkely economics professor Barry Eichengreen opens his history of global currencies with the “Nixon Shock” of 1971 which broke the dollar’s link to gold. (See my previous review of this event at Shulmaven: My Amazon Review of Jeffrey Garten's "Three Days at Camp David..........." ) I also reviewed a much lighter version of what Eichengreen discusses here earlier this year. ( See: https://shulmaven.blogspot.com/2026/01/my-review-of-david-mcwilliams-history.html )

 

Professor Eichengreen, the author of “Golden Fetters,” on the workings of the interwar gold standard, is a serious scholar of international monetary affairs. Here he is writing against the backdrop of a weakening U.S. dollar where the role of the U.S. dollar’s pivotal role in in the global monetary system is being called into question. This is far from the first time a preeminent international currency has been called into question. Eichengreen goes back in time to Athenian silver coins, the Roman denarius, the Florentine florin, the Dutch guilder, the Spanish “pieces of eight,” and the British pound sterling. All had their day in the sun and then faded away.

 

Although there were many idiosyncratic reasons for their demise, there were several common factors involved. The currencies lost their panache because of either internal or external political weakness and the willingness to engage in a debasement policy. Furthermore, as we moved closer to the modern era, Eichengreen notes that there has to be a credible lender of last resort. For example, as trade moved from the Mediterranean to the Atlantic the florin became less relevant and as British power outstripped that of the Netherlands, the guilder lost its relevance.

 

In discussing the rise and fall of currencies Eichengreen goes into great detail about the trading arrangements of the Florentine bankers who had correspondents across Europe at a time when communication was based on the speed of a horse. He also discusses the critical role of the Spanish Potosi silver mine in Bolivia that made Spain wealthy and it flooded Europe with liquidity. He also discusses how Britain’s Baring Brothers and Hope and Company of the Netherlands funded Thomas Jefferson’s Louisiana Purchase.

 

Now getting back to the fate of the dollar the question is how long will its “exorbitant privilege,” in the words of French finance minister Valerie Giscard d’Estaing, last? The privilege enables the U.S. to borrow in its own currency all the while remaining a safe asset for both private and public sector institutions. In 1971 the world said no more, but after a devaluation the dollar became even more prominent in the global monetary system. So, if the “Nixon Shock” didn’t break it, what would? To Eichengreen, even with all of the U.S.’s current domestic and international troubles there remains no alternative. I am sure the British and the Dutch had similar thoughts, but someone whispering in the ear of Secretary of the Treasury Scott Bessent, should tell him that all glory is fleeting.

The Purim War- Part 5, Deadlock in the Strait of Hormuz*

With the Iranians continuing to prevent shipping from leaving the Persian Gulf and the American Navy blockading the entrance to the Strait of Hormuz, it looks like fighting will resume after the ceasefire ends on Wednesday. To be sure the U.S. delegation is now enroute to Islamabad to negotiate; it remains to be seen if the Iranians will show up. Further it is not clear whether or not the Iranian team can bind the Revolutionary Guard (IRGC) to accept any terms they agree to. From the outside it looks like there is a division between the political and military factions of the government.

 

As we noted last week it is untenable for the U.S to accept Iranian control of the Persian Gulf and for Iran to maintain its uranium enrichment program. ( See: Shulmaven: "Millions for defense, but not one cent for tribute" ) Thus unless there is a change of heart on the part of the IRGC, a resumption in the fighting seems inevitable. A harbinger of that occurred today with the U.S. seizing an Iranian flagged ship in the Indian Ocean. Indeed, should the fighting resume, it will be taken to a more destructive level than we have seen thus far.

 

Thus, the party goers in Friday’s financial markets are likely to suffer a hangover when trading resumes on Monday.

 

*-See: Shulmaven: The Purim War - Part 4, The Ceasefire Fog*

My Review of Odd Arne Westad's "The Coming Storm: Power, Conflict......"

 War Clouds on the Horizon

In a previous blog I noted that we are living in a prewar era analogous to the runup to the start of World War II. (See: https://shulmaven.blogspot.com/2023/11/reliving-1930s-part-5.html ) Here Yale historian and global affairs professor Odd Arne Westad argues that a more appropriate analogy would be that of the prewar period approaching World War I. In many respects his argument parallels that of Graham Allison’s Thucydides Trap where the rise of China is inducing fear in the United States that has the potential to make war inevitable. ( See: https://shulmaven.blogspot.com/2017/08/my-amazon-review-of-graham-allisons.html ) Instead of the Balkans being the hotspot in the pre-1914 world, today we China-Taiwan, Israel-Palestine, Russia-Ukraine, and Pakistan-India. Anyone of which that could put the great powers in play.

 

In the pre-World War I era it was the rise of Germany that was threatening Britain, but Westad goes further by stating the bipolar world of the Cold War is over, and, in fact, we are now living in a multi-polar world with many strong regional actors such as India, Türkiye, Brazil and Iran.  He further analogizes that Russia is the Austria-Hungary of our day by being China’s junior partner. Similar to our time, the pre-World War I era was characterized by rising nationalism and a growing dissatisfaction with globalism. Fear and resentment were the motivating forces of the era. Sound familiar? 

 

My problem with Westad’s book is that he doesn’t offer real solutions, but who can, to the U.S.-China antagonism and for the regional hotspots. Because the book was written prior to the current Iran War, which has the potential for a great power conflict, Westad doesn’t have much to say.  There is also little discussion on the current revolution in military affairs involving drones and artificial intelligence which is greatly influencing the diplomatic chessboard. That said, if pre-World War I is the appropriate analog, we are in for trouble.

 

"Millions for defense, but not one cent for tribute"

 The American delegation to the Iran War peace talks in Pakistan this weekend should take to heart the words of Congressman Samuel Sewall of Massachusetts in 1798 when he shouted out “millions for defense, but not one cent for tribute.” Those words were said in response to French Foreign Minister Talleyrand’s request for a bribe before negotiations would begin to end the quaisi-naval war with France in the so-called "XYZ Affair." 

The United States was only 24 years old and was standing up to the great power of France. We can do no less today with respect to Iran. Simply put, the delegation consisting of Vice President JD Vance, Jared Kushner and Steve Witkoff should put the Iranians on notice that no tribute will be paid by ships passing through the Strait of Hormuz.” Full stop. 

 

The delegation should also remember the first words of the Marine hymn, which begin with “from the halls of Montezuma to the shores of Tripoli…”  Tripoli being the focus of the Barbary Pirate Wars of the early 1800’s. (See:https://shulmaven.blogspot.com/2026/04/the-purim-war-part-4-cease-fire-fog.html) President Thomas Jefferson had no qualms about fighting the Barbary Pirates and certainly the Trump Administration should show the same fortitude in fighting the modern-day Iranian pirates.

The Purim War - Part 4, The Ceasefire Fog*

The rally in the stock and bond markets and the collapse in oil prices is signaling that the Purim War is all but over. That, indeed, may be true, but we are a long way from a final settlement and there is a nontrivial chance that fighting will resume.  In fact, both sides have already reported ceasefire violations. We will know more this weekend when the U.S. and Iranian negotiators meet in Pakistan.

In the meantime, ships aren’t traversing the Hormuz Strait, and it looks like Iran wants to set up a tollway. Should that happen, it would represent a severe challenge to “freedom of navigation” on an international waterway, a concept that the U.S. went to war three times in its history. (War on the Barbary Pirates, The War of 1812, and World War I) If Iran prevails on this issue, it could rightly claim, that despite its enormous tactical defeat, it won a significant strategic victory enabling it to hold the global oil market hostage.

Although President Trump has stated that Iran will give up its enriched uranium and end its nuclear program, this hasn’t been confirmed by word and deed by the Iranians. Remember that ending the Iran nuclear program was the primary goal of the war to begin with. We will learn much on this point in a few days.

 

As we previously noted Israel would take the opportunity to take care of its unfinished business in Lebanon. ( See: https://shulmaven.blogspot.com/2026/02/the-purim-war.html ) As we speak Israel is pounding Hezbollah in Lebanon and both the Iranians and the Pakistanis are saying Israel’s war in Lebanon are part of the overall cease fire. Both the U.S. and Israel believe that it is separate issue.

 

Thus, the way I see it, the war is far from over with the ultimate winner being determined by the Hormuz and nuclear issues.

 

*- See: https://shulmaven.blogspot.com/2026/03/purim-war-part-3-end-game.html