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*

Some Thoughts on Trump's National Security Strategy

Earlier this week the Trump Administration released its updated National Security Strategy. (See: https://www.whitehouse.gov/wp-content/uploads/2025/12/2025-National-Security-Strategy.pdf ) Needless to say that given the howls that went up, it was far from being universally applauded, especially in Europe. Europe is rightly concerned that the era of having a NATO umbrella over the continent is over. However, given earlier commentaries coming from Vice President Vance, in particular, the document should not come as a surprise. Trump’s policy of selling out allies and cozying up to adversaries is all there in black and white.

I have three preliminary thoughts on the strategy. First, it is harkening back to the America First of 1939-1941. It focuses in on hemispheric security to the exclusion of Europe and just has America First leader Charles Lindbergh was open to a modus vivendi with Nazi Germany, here we have America open to a condominium with Putin’s Russia. It certainly does not bode well for Ukraine and for that matter Israel. Further, the strategy puts policy muscle behind Trump’s Caribbean buildup against Venezuela. To the Trump Administration Latin America is now part of an American economic zone.

Second, there is the strong smell of Yalta in the document. Instead of Roosevelt and Stalin dividing up Europe, we now have Trump, Putin and especially Xi dividing up the world into spheres of interest. The glue holding the deal together is economic self-interest. Where Taiwan fits into this over the longer term is very ambiguous.

Third, there are some hard policy realities behind the document. Europe has the ability to defend itself against Russia; it only lacks the will. Russia remains bogged down in Ukraine after more than three years of war indicating it is not as strong as once thought. If Ukraine can hold its own against Russia, so too can a much larger Europe.

What perhaps pissed off Europe the most was that the document called out its “civilization decline.” Unfortunately, that is the reality, and Europe has to recognize that advanced welfare states cannot run a policy of open borders without severe consequences. Simply put, in a generation Europe will not be the Europe of history. Net net, the policy calls for the U.S. to be an offshore balancer with respect to the world outside of Latin America. (See: https://shulmaven.blogspot.com/2025/08/my-review-of-andrew-lamberts-no-more.html )

Donald Trump (National Socialist*)

President Donald Trump is nominally a Republican, but in reality, he is putting us on the road to an American version of the national socialism of the 1930’s. Domestically he is attempting to seize the commanding heights of the economy by taking ownership positions in Intel and U.S. Steel and by taking a 15% cut from NVIDIA’s sales to China. ( https://shulmaven.blogspot.com/2025/07/on-road-to-serfdom.html ) Remember that under national socialism businesses remain under private ownership but are under the control of the government. This is a far cry from capitalism. 

 

Further Trump is challenging the independence of the Federal Reserve by demanding the removal of Lisa Cook from the board for allegedly committing mortgage fraud. How did this come about? His minion Bill Pulte, the director of the Federal Housing Finance Agency, pulled the mortgage of files of Lisa Cook as well as the files from such Trump adversaries as New York Attorney General Letitia James and Senator Adam Schiff. Let us be clear, this was no accident and soon the IRS and other federal agencies will get into the act.

 

To enhance his powers domestically Trump has appointed his cronies in the Justice Department, the F.B.I., the regulatory agencies and on the courts. Indeed, one of his private attorneys, Todd Blanche is now a deputy attorney general, and another, Eric Bove, was just confirmed to the Court of Appeals. Perhaps more serious is that he has purged a host of officers in the military and the CIA who might be more loyal to the constitution than to him. A defining feature of national socialism is loyalty to the leader, not to the law.

 

In keeping with his national socialist tendencies Trump is in the process of establishing a 150,000-member national police force in the form of Immigration and Customs Enforcement (ICE) officers. These officers could at the stoke of a pen be empowered to engage in broader law enforcement activity and unlike the military they would not be subject to the strictures of the Posse Comitatus Act of 1878. Indeed, Trump seems to be using the military in violation of that act anyway. Meantime many U.S. citizens have been caught up in the roundup of illegal immigrants.

 

Internationally Trump through his tariff policies is attempting to turn the open economy of the United States into more of an autarky where domestic production would be sheltered from international competition. In imposing his tariff regime Trump ignored Congress which has near exclusive power over tariffs and taxation. Trump has now lost twice the courts on his tariffs; and it will soon be up to the Supreme Court to rule on them. Further Trump has imposed punitive tariffs on our allies all while cozying up to dictators Putin and Xi. This all part of the national socialist playbook. It might be stretch, but could there be a Trump, Putin, Xi axis?

 

All the while the moral eunuchs of the Republican Party have either cheered Trump on or silently acquiesced. ( See from 2019:  https://shulmaven.blogspot.com/2019/02/the-republican-moral-eunuchs-and.html ) Similarly, fearful of retaliation, the business community has remained silent and bowed to his wishes. Thus, in eight short months Trump has seized control of a good part of the economy and the security apparatus of the state.

 

To be sure this not the first time the U.S. experimented with national socialism in peacetime. In 1933 President Roosevelt used the National Industrial Recovery Act (NIRA) and the Reconstruction Finance Corporation (RFC) to take control of a good part of the economy. Fortunately, the NIRA was declared unconstitutional in 1935 and the RFC withered away. Let us hope the Supreme Court does the same thing to Trump’s tariffs.

 

Later in 1971 President Nixon imposed a system of price, wage, rent and dividend controls on the entire economy. Nixon also used the IRS against his enemies and spied on his political opponents. The Nixon controls expired in early 1973 and he was impeached in 1974. Say what you will about Nixon; he respected the process. I doubt that can be said of Trump. In 2009 President Obama temporarily took control of the banking and automobile industries.

 

To conclude Trump is in the process of creating an American version of national socialism. I am not going to use the polite words of state capitalism or American Capitalism with Chinese Characteristics. Forewarned is forearmed!

 

*- The reference to national socialism is derived from Germany’s Nazi Party. The official name of the Nazi Party was Nationalsozialistische Deutsche Arbeiterpartei  or NSDAP which in English is the National Socialist German Workers Party. The Italian version of national socialism was called Partito Nazionale Fascista, PNF which in English is the National Fascist Party.

The Unravelling

 

The world as we have known it for the past 30 years is over. The era of low inflation, ever-falling interest rates, ever-rising stock prices, globalization, and geopolitical stability among the major powers is unravelling. Russia’s invasion of Ukraine has signaled that a new Cold War is upon us and making things worse was the Xi-Putin communique at the Beijing Olympics which marked the beginning of a renewed authoritarian alliance against the West. What this means is defense spending is going to ramp up bigtime with inflationary consequences.

 

The COVID pandemic has taught us that globalization and just-in-time inventory processes have made supply chains far more fragile than we had thought. As a result, higher buffer stocks and the moving of production closer to final demand will increase economy wide costs.  The inflationary process is being exacerbated by the rush to decarbonize the economy with its attendant underinvestment in oil and gas.  As they say, short term pain for long term gain. We are also relearning that reckless fiscal and monetary policies can bring about the high inflation we are now experiencing. It seems that Milton Friedman and his ideas about money are being resurrected from the dead.

 

Domestically there are too many eerie parallels to 1940 America where the Charles Lindberg America First group linked up with the Communist Party to oppose U.S. intervention in support of beleaguered England. Just the other day showboating lefties Alexandra Ocasio Cortez and Cori Bush linked up arm and arm with the right-wingers Paul Gosar and Matt Gaetz seeking Congressional preauthorization before sending troops in support to Ukraine, a move that President Biden said is off the table. And, of course, we have Tucker “Tokyo Rose” Carslon singing Putin’s praise every night on Fox.

 

This witch’s brew means inflation will remain higher for longer, a secular bear market for bonds, a very volatile stock market and as ugly as our politics are today, it will get worse.