Year End Potpourri

I don’t normally publish in December, but the rush of events and the fact that I missed a few opportunities during my flood displacement this fall encouraged me to break with custom and briefly comment on a few items.

**In early November we passed the 100th anniversary of the final takeover by the Bolsheviks of Russia’s provisional government, thereby consummating the Russian Revolution.  There was considerable commentary, but I don’t think most of it did justice to the enormity of what that event 100 years ago meant to the world and the legacy it has left.  Most reasonable estimates of the number of victims of communism in the last century are in the range of 100 million, most of them resulting from the leadership and legacy of Joseph Stalin, who, in a Russian poll taken last June was named number one in answer to the question to name the “top ten outstanding people of all time and all nations”, receiving 38% of the vote.  It is amazing to see the popular staying power of a mass murderer and even more so of one of history’s most notorious ideological lies that spawned what was arguably the worst catastrophe in human history.  Just one more reminder that “the end of history” didn’t happen when the Soviet Union collapsed as many observers thought and that constant vigilance is mandatory.

**There is no doubt that foreign policy under President Trump is taking a different direction, one that represents a break from the post-World War II worldview and presidents of both parties since then that has been based on institutions fashioned by the victors in that conflict and a world order enforced by U. S. leadership.  A lot of establishment types are nervous about it, but what did they expect from a candidate who clearly expressed his view that this old order is outdated?  There are a range of views on this transformation.  One camp that can be represented by Robert Zoellick, who has spent a career shaping and sustaining this institutional order under multiple presidents, takes the position that the undermining of this system is mistaken and that the Trump administration’s move toward a “populist” approach is not supported by the American people who, according to polls, tend to favor the current architecture of alliances and institutions.  He and other observers further believe that Trump’s core supporters are moving dangerously toward protectionism and against alliances and a confrontation between nationalists and internationalism.  On the other hand, Walter Russell Mead of the Hudson Institute, while characterizing Trump’s foreign policy as a “high wire” act, takes the view that much of the international institutional network needs updating and that our post-Cold War policies can no longer be politically sustained, that there are new realities, primarily China, that must be dealt with, and that our policy format must be redesigned.  As he writes, “for the forseeable future, foreign policy is going to be less about making dreams come true and more about keeping nightmares at bay”.  As a Bush 43 and Natan Sharansky neoconservative, I share a vision for making dreams like freedom and democracy come true, but I now tend to side with Mead that current realities dictate a more realistic view that will necessitate an updating and restructuring of the institutions of world order and I don’t fear giving Trump his chance to lead this transformation.

**Of significance, Zoellick and Mead agree as do I that Trump does not appear to fully understand the importance of trade policy in building alliances and supporting American security.  Nor does he seem to grasp the basic economics of trade, i. e., that a trade deficit is the converse, or mirror image, of a net surplus of investment capital, which provides the foreign direct investment that our trade partners use to invest in the U. S. to create growth in jobs and domestic product.  So a trade deficit is not necessarily a bad thing, but unfortunately President Trump has used his misunderstanding and his supporter’s ignorance on the basics to unfairly demagogue trade issues.  It is not like a budget deficit; it does not have to be repaid.  This is particularly important in considering the North American Free Trade Agreement (NAFTA), which is arguably the most successful trade agreement in U. S. history.  As Kevin Williamson of National Review has noted so well in a very good essay on the subject, one of the strongest aspects of NAFTA has been the enhancement of economic efficiency, which comes from comparative advantage, another term that Trump doesn’t seem to understand.  The complexities of this concept are enormous, but Williamson notes that one very significant result of NAFTA is that American companies enjoy tremendous benefits from being part of a continental supply chain that is enabled by the agreement and would not otherwise be possible if it were not in place.  Does it need some tweaks?  Sure, most obviously because of updates needed to take into consideration the world wide web and its impact on digital commerce.  But to dismantle it or to make unreasonable demands on Canada and Mexico based on benign “trade deficits” or silly domestic origin rules would, as the Wall Street Journal has noted, be the “worst economic blunder since Nixon”.

**The jury acquittal this week in the Kate Steinle case in San Francisco makes a ridicule of criminal justice and it ranks near the O. J. Simpson murder trial debacle of over 20 years ago in the politicization of a criminal case.  I get the possible confusion in the minds of the jurors about the absence of any motive and the curious way in which the weapon was acquired by the illegal immigrant killer.  But what I don’t get is the fact that he didn’t receive even a conviction for manslaughter and that no evidence was allowed by the judge that explained to the jury his extensive criminal background, the fact that he had been deported five times, his immigration status, or that the city of San Francisco had declined to turn him over to federal officials for deportation.  All things considered, this was simply a political decision in a cultural milieu that produced a jury that was bound and determined not to be cowed by the city’s designation as a “sanctuary city” by the Trump administration.  And this is confirmed by the remarks by the defense attorneys at the post-decision press conference, when they called out the President, Vice President, and Attorney General for their remarks about the case and were critical of those they accused of using this case to foment hate and anti-immigrant commentary.  Political indeed.

**As I write, word comes that the Senate has just passed its version of the Republican tax bill by a 51-49 vote.  So now it’s off to a conference committee to reconcile the House and Senate versions.  Good.  This is a major breakthrough on several levels beyond the fine print in these bills.  This Congress and this administration had to prove that it could do this, that it could tackle a major issue like taxes and do transformational things with it.  It’s been a long time, too long, and people need to see evidence that their institutions are not dysfunctional.  On another level, they also need to see evidence that, particularly with a huge fiscal issue like taxes, their government is not content to accept the notion that this country will succumb to the “secular stagnation” of the past decade, that there are policy responses that can shake us out of these doldrums and give us renewed confidence and faith in ourselves.  So good for us.  Let’s get this completed.  Now, as for the bills themselves, I received a lot of response to my essay last month on the virtues of “supply-side economics”, most of it in the form of pushback on my optimism that it works.  It does and has, but enough of that this month.  These bills, in essence, are about one thing–significant relief in the taxation of capital, which in the long-term, if sustained, should make the U. S. much more attractive to capital, which will translate into investment, higher wages, and jobs.  All the models and other stuff about individual credits, deductions, who gets what, etc., are battles that won’t make any difference without the big item–business and capital tax relief.  As for “paying for” tax rate reductions to avoid higher deficits, these deficits are not about insufficient taxes, they are about over-spending and the urgent need for entitlement reform, which should be the next major project.

**The sexual harassment avalanche has now reached a level that is difficult to get one’s head around to make sense of any of it and I don’t doubt that there is much more to come.  Those of you who have been subscribers for any length of time know that one of my mottoes is “ideas have consequences”, a phrase I borrowed from Richard Weaver, whose major work carries that title.  Recently, in that context, a friend sent me a recent article from Front Page magazine by Bruce Thornton of Cal State and the Hoover Institution entitled “Sow the Free Love Wind, Reap the Sexual Debasement Whirlwind”.  It’s the best I have seen so far on this whirlwind of events.  Thornton’s essential point is that, like many of our social pathologies today, our sexually saturated public culture and the unleashing of sexual predators are the bitter fruit of the free love movement of the 1960s.  As he notes, one has to be of a certain age to remember how things were before that decade and how quickly and significantly our mores were transformed.  And it wasn’t accidental, as he makes clear—“…that change was encouraged by certain species of dubious pop-Freudian psychological ideas that had been combined with left-wing theories of political revolution (see Herbert Marcuse).  This synthesis was predicated on the delegitimization of the ‘bourgeois’ virtues, morals, and values that had created the “false consciousness” empowering capitalist oppression”.  So you get “if it feels good do it”.  Thus sexual liberation became an instrument of political “liberation”, and these two revolutions merged to enable personal liberation in the Marcuse model, which we are living with today in many aspects of our public and civic squares.  There is no telling where this all ends, but it won’t be pretty.

Merry Christmas, Happy Holidays, and best wishes for the New Year!