Is the West’s future really so gloomy?


December 23, 2018

Is the West’s future really so gloomy?

by Dr. Fareed Zakaria

https://fareedzakaria.com/columns/2018/12/20/is-the-wests-future-really-so-gloomy

Emmanuel Macron has been the great hope for those who worry that global politics is being dominated by populism, nationalism and racism. In his presidential campaign last year, Macron was able to rally France around a message of reform and multi-lateralism, staying firmly wedded to the European Union and other international alliances and institutions. Last month, he brought together 65 world leaders for a major gathering dedicated to global governance.

Image result for Macron and yellow movement

Now Macron has been humbled by the “yellow vest” street protests. He was forced to backtrack on some of his reforms and adopt new budget-busting subsidies in an attempt to mollify the mob. And there is the mess in Britain as it keeps trying (and failing) to Brexit; Italy’s budgetary woes; and the embrace of illiberal democracy in Hungary and Poland. It all adds up to a depressing picture of Europe and the West.

But are things really so gloomy? As Politico’s Matthew Karnitschnig points out, support for the E.U. is at its highest level in decades. And on closer examination, while the forces of populism continue to surge in some places, the story of the past few months has mostly been one of pushback. Consider Poland and Hungary, in many ways the poster children for the populist-nationalist movement. In Poland, efforts to reshape the country’s Supreme Court ignited massive national protests, and Europe’s high court ordered that the move be reversed. On Monday, Warsaw complied.

Image result for Prime Minister Viktor Orban

Prime Minister Viktor Orban of Hungary

 

In Hungary, Prime Minister Viktor Orban’s latest authoritarian steps — changing labor law and judicial authority — have also triggered widespread protests, uniting the nation’s opposition forces as never before. The street rebellion has the feel of a generalized opposition to the ruling party, which has predictably used tear gas on the mostly peaceful protesters, decried them as anti-Christian and accused George Soros of organizing the whole affair.

In France, news of Macron’s demise is premature. Yes, his poll numbers are way down, but voters still prefer him to the far-right Marine Le Pen by a wide margin. He has a five-year term, his party controls the legislature, and most analysts agree that his reforms are inevitable if France is to compete for investment and generate growth. He may end up a one-term president, but he will still have spearheaded the most important changes in France in a generation.

In Italy, the new coalition government had introduced a populist budget that promised a universal basic income and early retirement, only to meet the steely opposition of the E.U. And it was the populists who blinked. This week, Rome retreated from those measures and announced a budget conforming to the guidelines set by Brussels. It feels like a flashback to 2015, when Greek populists were compelled to enact the very program they campaigned against.

Image result for Prime Minister May in crisis

Britain’s May Prime Minister is caught in a political maelstrom

“Proponents of Brexit sold the country a fantasy that it could get the benefits of access to the European Union’s market without the costs of having to obey its rules. As time passes, more and more Britons are coming to realize that they cannot have their cake and eat it, too.”–Fareed Zakaria.

Britain remains more complicated, but the basic story is that every time the country comes close to actual Brexit, it pulls back, appalled by the costs. Prime Minister Theresa May has tried to do a soft Brexit, and while the compromise has earned her the scorn of the hard-line Brexiteers, they cannot topple her. Perhaps they don’t want to because then they would be saddled with May’s impossible task. Proponents of Brexit sold the country a fantasy that it could get the benefits of access to the European Union’s market without the costs of having to obey its rules. As time passes, more and more Britons are coming to realize that they cannot have their cake and eat it, too.

And finally, look at the United States, where a president who proudly embraces populism and nationalism reigns. In November, the Democratic Party had its strongest gains in the House of Representatives since the Watergate wave of 1974. President Trump has faced additional resignations from important members of his administration — some under ethical clouds, others tired of the chaos. Most significant, there are now 17 separate investigations into Trump and his associates, some of which have already produced indictments. And that does not include the series of congressional inquiries certain to begin once the Democrats take control of key committees in the House. For two years, Republicans have ruled Washington, giving them control over all information from government sources and all powers of subpoena and oversight. That ends Jan. 3.

I don’t mean to minimize the populist wave that is still coursing through the West and other parts of the world. But concern should not give way to despair. There are many people in every country who oppose the politics of anger and identity. They are also strong. They need to run fast but not run scared.

(c) 2018, Washington Post Writers Group

 

Good Riddance to 2018


December 23, 2018

Good Riddance to 2018

Those who oppose democracy, the rule of law, and multilateralism have had a good year. But there have also been signs suggesting that those who uphold these principles have not lost the will to fight back.

MADRID – Sadly, 2018 will not be remembered as a year of political and diplomatic success. Though the international order had already begun to erode in 2017, the global political environment became downright chaotic, combustible, and hostile this year. That is no coincidence, as these are perhaps the three adjectives that best describe the United States under President Donald Trump.

Since January 2018, when the Trump administration announced tariffs on imported solar panels and washing machines, the year has been marked by an escalating “trade war,” waged primarily – but not exclusively – by the US against China. The ongoing tariff disputes have seriously undermined the World Trade Organization and deepened mutual distrust in Sino-American relations.

Image result for Xi

 

For its part, China this year eliminated presidential term limits, raising fears that President Xi Jinping’s so-called new era will end the period of collective leadership ushered in by Deng Xiaoping’s reforms, which were themselves a corrective to Mao’s cult of personality. This move could also herald a further deviation from Deng’s trademark foreign-policy restraint.

Similarly, Russian President Vladimir Putin was reelected in March, to no one’s surprise. Under Putin, Russia has been re-emerging as a geopolitical force. And yet, its economy is essentially stagnant, owing in part to its excessive dependence on hydrocarbons. In the absence of growth, Putin has relied on foreign policy to shore up his domestic popularity.

For example, Putin’s campaign press secretary welcomed the British government’s response to the nerve-agent attack on Sergei and Yulia Skripal, because it may have mobilized Putin’s supporters in the run-up to the presidential election. And the Kremlin’s recent decision to blockade Ukrainian ports in the Sea of Azov may also have been designed to boost Putin’s domestic approval rating, among other goals. The danger now is that both the US and Russia will cease to implement the 1987 Intermediate-Range Nuclear Forces Treaty, posing a new and acute threat to Europe in particular.

 

Meanwhile, the Middle East has continued to serve as a battlefield for some of the world’s most violent conflicts. Though the Islamic State (ISIS) has continued to lose ground, it is far from defeated – contrary to what Trump has claimed – and the death toll in Syria’s civil war continues to climb. Likewise, the humanitarian calamity in Yemen has deepened, though negotiations that ran aground in 2016 have at least resumed and made some progress. In Afghanistan, what is widely regarded as the longest-running war in US history continues, and it is estimated that the Taliban now controls more territory than at any time since their government was overthrown in 2001.

Despite some recent developments in the aforementioned conflicts, the underpinnings of the Trump administration’s general strategy in the Middle East remained intact in 2018. The US has reaffirmed its support for the axis of Israel, Saudi Arabia, and the United Arab Emirates, which it regards as a bulwark against Iran. In May, the Trump administration moved the US embassy in Israel to Jerusalem. That same month, it abandoned the 2015 Iran nuclear deal and announced an abusive re-imposition of extraterritorial sanctions, which reflects the increasing .

Moreover, by siding with the Saudi government over his own intelligence agencies in the of journalist Jamal Khashoggi in October, Trump has made clear that opposing Iran and purchasing US arms is one of the quickest ways to his heart. The result of his broad approach to the Middle East has been to empower military hardliners throughout the region. In fact, Israel and Iran this year engaged in their first-ever direct military encounter.

 

Trump has also contributed, in one way or another, to the advance of populism around the world in 2018. In Latin America, Mexican President Andrés Manuel López Obrador (AMLO) and Brazilian President-elect Jair Bolsonaro have shown that “populism” can encompass diverse ideologies. While both claim to speak for “the people” against “the elites,” the leftist AMLO was elected partly as a rebuke to Trump, whereas Bolsonaro embraces a Trump-like brand of right-wing nationalism, and enjoys the support of many Brazilian elites.

Image result for crazy trump

Trump has also contributed, in one way or another, to the advance of populism around the world in 2018. In Latin America, Mexican President Andrés Manuel López Obrador (AMLO) and Brazilian President-elect Jair Bolsonaro have shown that “populism” can encompass diverse ideologies. While both claim to speak for “the people” against “the elites,” the leftist AMLO was elected partly as a rebuke to Trump, whereas Bolsonaro embraces a Trump-like brand of right-wing nationalism, and enjoys the support of many Brazilian elites.

The Russian philosopher Aleksandr Dugin, often regarded as one of the Kremlin’s main ideologues, argues that “populism should unite right-wing values with socialism, social justice, and anti-capitalism.” This “integral populism,” he believes, is perfectly illustrated by Italy’s current governing coalition, which comprises the anti-establishment Five Star Movement and the nationalist League party.

In October, Italy’s government instigated a conflict with the European Union (which has fortunately subsided) by proposing a budget that defied EU fiscal rules. Italy’s leaders justified their policies in the name of an outdated interpretation of “sovereignty,” one similar to that of the United Kingdom’s Brexiteers, whose haphazardness has left the UK’s future shrouded in uncertainty.

There were a few positive developments in 2018. Certainly, the easing of tensions between the US and North Korea, and the even deeper rapprochement between North and South Korea, should be welcomed. Much credit belongs to South Korean President Moon Jae-in, who used the occasion of the Winter Olympics in Pyeongchang to reach out to North Korean leader Kim Jong-un. Trump’s subsequent turn toward diplomacy – which led to his historic summit with Kim – should also be applauded, though his administration has yet to achieve anything more than symbolic progress toward denuclearization of the Korean Peninsula.

Image result for MBS

The result of the US midterm elections was also good news. Democratic control of the House of Representatives means that, from January 2019, there will be more checks on Trump’s policies. And there have been welcome developments in the Republican-controlled Senate, where a recent resolution condemning Saudi Crown Prince Mohammed bin Salman for the murder of Khashoggi, and another to end US support for the Saudi campaign in Yemen, passed with bipartisan support.

Image result for Merkel and Macron

In Europe, the prospects for 2019 will depend primarily on three factors: Brexit, German Chancellor Angela Merkel and French President Emmanuel Macron’s push for EU reform, and the European Parliament election in May. In each case, one hopes that the supporters of democracy, the rule of law, European integration, and multilateralism will prevail.

Those who oppose these principles have had a rather good year. But they would be mistaken to think that those who uphold them have lost the will – and the ability – to cultivate a spirit of cooperation and harmony.

*Javier Solana was EU High Representative for Foreign and Security Policy, Secretary-General of NATO, and Foreign Minister of Spain. He is currently President of the ESADE Center for Global Economy and Geopolitics, Distinguished Fellow at the Brookings Institution, and a member of the World Economic Forum’s Global Agenda Council on Europe.

 

 

The new dividing line in Western politics


December 16, 2018

The new dividing line in Western politics

by Dr. Fareed Zakaria

 

https://fareedzakaria.com/columns/2018/12/13/the-new-dividing-line-in-western-politics

Image result for fareed zakaria

For Stephen K. Bannon, the way to create an enduring populist majority is to combine forces on the left and right. That’s why he was in Italy this year, where parties representing those two sides joined together in a governing alliance. That’s why Bannon hopes to lure some of Sen. Bernie Sanders’s (I-Vt.) supporters away from the Democratic Party. But the next place we might be watching the rise of a new left-right populism is France.

Image result for Macron

The Trio under political pressure come 2019

Thus far, the “yellow vest” protests in France have lacked a party, structure and leadership. But lists of demands have been circulating. At their heart is an unworkable fantasy, such as a constitutional cap on taxes at 25 percent, coupled with a massive increase in social spending. What is striking about these manifestos is that they combine traditional wish lists from the left and right. No wonder, then, that nearly 90 percent of people who back the major far-left and far-right parties view the movement favorably, compared with only 23 percent of people in President Emmanuel Macron’s centrist party.

The “yellow vest” uprising has also spread to Belgium, where the fragile governing coalition has collapsed, largely over the issue of immigration. But there again, the protests have the feel of generalized discontent coming from left and right. Just as in France, the United States and Britain, the movement appears to be a rural backlash against urban elites.

The fissure between relatively better-educated urbanites and less-educated rural populations appears to have become the new dividing line in Western politics. “Outsiders” feel ignored or looked down upon and feel deep resentment toward metropolitan elites. It’s part class, part culture, but there is a large element of economics to it as well.

The Brookings Institution has shown that since the financial crisis of 2008, 72 percent of the gains in U.S. employment have accrued to the country’s top 53 metropolitan areas. To understand the structural division this causes, keep in mind that all U.S. cities together contain 62.7 percent of the country’s population but occupy just 3.5 percent of the land. The Wall Street Journal has pointed out that the fate of urban vs. rural America has been turned on its head. In 1980, cities were dysfunctional, crime-ridden and struggling to keep residents from leaving. Today they are thriving, growing and relatively safe, while rural areas are racked with problems. This urban-rural chasm is also true in France, Italy, Britain and many other Western countries.

And it’s likely to get worse. Research by economists Daron Acemoglu and Pascual Restrepo suggests that the use of robots does in fact reduce employment, by about six workers for one machine. Further, Acemoglu and Restrepo find that, in the United States, robots have been largely deployed in the Midwest and South. Although metro areas usually have rich and growing creative and service industries, rural America is less likely to be home to centers of technology, entertainment, law and finance. If you go to a rural part of the Midwest, typically the main sources of employment are government and health care (which is also partly funded by the government).

People in these areas are often described as being irrational at the ballot box. In the United States, they vote for a party that promises tax cuts for the rich and benefit cuts for the working class (i.e., them). The New York Times’ Thomas Edsall points out that the 2017 Republican tax law essentially subsidizes companies to automate. In Europe, contradictory proposals are adopted from the left and right. But this might simply reflect a more generalized anxiety, a blind search for someone who promises them a better future.

Image result for Tom Brokaw’s 1998 book “The Greatest Generation”

Tom Brokaw’s 1998 book “The Greatest Generation” is packed with stories of non-college-educated men who lived far from big cities. This was the “real America.” Similar regions across France were once called “la France profonde.” Today they are places of despair.

Image result for Yuval Harari’s new book, “21 Lessons for the 21st Century,”

In Yuval Harari’s new book, “21 Lessons for the 21st Century,” the Israeli historian points out that the three most powerful 20th-century ideologies — fascism, communism and democratic capitalism — put the ordinary person at the center, promising him or her a glorious future. But today, we seem to need a handful of brainiacs who will, with computers and robots, chart the course for the future. So in France, in Britain, in the United States, the ordinary person, who doesn’t have a fancy degree, who doesn’t attend TED Talks, who doesn’t have capital or connections, will reasonably wonder: Where does that leave me?

To that question, no one has a good answer.

(c) 2018, Washington Post Writers Group

 

 

NY Times Book Review: Looking Back@Crash of 2008


August 11, 2018

CRASHED

By Dr. Fareed Zakaria

How a Decade of Financial Crises Changed the World
By Adam Tooze
706 pp. Viking. $35.

Steve Bannon can date the start of the Trump “revolution.” When I interviewed him for CNN in May, in Rome, he explained that the origins of Trump’s victory could be found 10 years ago, in the financial crisis of 2008.

“The implosion of those world capital markets has never really been sorted out,” he told me. “The fuse that was lit then that eventually brought the Trump revolution is the same thing that’s happened here in Italy.” (Italy had just held elections in which populist forces had won 50 percent of the vote.)

Adam Tooze would likely agree. An economic historian at Columbia University, he has written a detailed account of the financial shocks and their aftereffects, which, his subtitle asserts, “changed the world.”

Image result for fareed zakaria

If journalism is the first rough draft of history, Tooze’s book is the second draft. A distinguished scholar with a deep grasp of financial markets, Tooze knows that it is a challenge to gain perspective on events when they have not yet played out. He points out that a 10-year-old history of the crash of 1929 would have been written in 1939, when most of its consequences were ongoing and unresolved. But still he has persisted and produced an intelligent explanation of the mechanisms that produced the crisis and the response to it. We continue to live with the consequences of both today.

CreditTyler Comrie; Photograph courtesy of GSO/Getty Images

As is often the case with financial crashes, markets and experts alike turned out to have been focused on the wrong things, blind to the true problem that was metastasizing. By 2007, many were warning about a dangerous fragility in the system. But they worried about America’s gargantuan government deficits and debt — which had exploded as a result of the Bush administration’s tax cuts and increased spending after 9/11. It was an understandable focus. The previous decade had been littered with collapses when a country borrowed too much and its creditors finally lost faith in it — from Mexico in 1994 to Thailand, Malaysia and South Korea in 1997 to Russia in 1998. In particular, many fretted about the identity of America’s chief foreign creditor — the government of China.

Yet it was not a Chinese sell-off of American debt that triggered the crash, but rather, as Tooze writes, a problem “fully native to Western capitalism — a meltdown on Wall Street driven by toxic securitized subprime mortgages.”Tooze calls it a problem in “Western capitalism” intentionally. It was not just an American problem. When it began, many saw it as such and dumped the blame on Washington.

In September 2008, as Wall Street burned, the German Finance Minister Peer Steinbruck explained that the collapse was centered in the United States because of America’s “simplistic” and “dangerous” laissez-faire approach. Italy’s finance minister assured the world that its banking system was stable because “it did not speak English.”

 

In fact this was nonsense. One of the great strengths of Tooze’s book is to demonstrate the deeply intertwined nature of the European and American financial systems. In 2006, European banks generated a third of America’s riskiest privately issued mortgage-backed securities. By 2007, two-thirds of commercial paper issued was sponsored by a European financial entity.

The enormous expansion of the global financial system had largely been a trans-Atlantic project, with European banks jumping in as eagerly and greedily to find new sources of profit as American banks. European regulators were as blind to the mounting problems as their American counterparts, which led to problems on a similar scale. “Between 2001 and 2006,” Tooze writes, “Greece, Finland, Sweden, Belgium, Denmark, the U.K., France, Ireland and Spain all experienced real estate booms more severe than those that energized the United States.”

Image

Credit Sonny Figueroa/The New York Times

 

But while the crisis may have been caused in both America and Europe, it was solved largely by Washington. Partly, this reflected the post-Cold War financial system, in which the dollar had become the hyper-dominant global currency and, as a result, the Federal Reserve had truly become the world’s central bank. But Tooze also convincingly shows that the European Central Bank mismanaged things from the start.

The Fed acted aggressively and also in highly ingenious ways, becoming a guarantor of last resort to the battered balance sheets of American but also European banks. About half the liquidity support the Fed provided during the crisis went to European banks, Tooze observes.

Before the rescue and even in its early stages, the global economy was falling into a bottomless abyss. In the first months after the panic on Wall Street, world trade and industrial production fell at least as fast as they did during the first months of the Great Depression. Global capital flows declined by a staggering 90 percent. The Federal Reserve, with some assistance from other central banks, arrested this decline. The Obama fiscal stimulus also helped to break the fall.

 

Tooze points out that almost all serious analyses of the stimulus conclude that it played a significant positive role. In fact, most experts believe it ended much too soon. He also points out that large parts of the so-called Obama stimulus were the result of automatic government spending, like unemployment insurance, that would have happened no matter who was president. And finally, he notes that China, with its own gigantic stimulus, created an oasis of growth in an otherwise stagnant global economy.

The rescue worked better than almost anyone imagined. It is worth recalling that none of the dangers confidently prophesied by legions of critics took place. There was no run on the dollar or American treasuries, no hyperinflation, no double-dip recession, no China crash.

American banks stabilized and in fact prospered, households began saving again, growth returned slowly but surely. The governing elite did not anticipate the crisis — as few elites have over hundreds of years of capitalism. But once it happened, many of them — particularly in America — acted quickly and intelligently, and as a result another Great Depression was averted. The system worked, as Daniel Drezner notes in his own book of that title.

Image

A trader on the floor of the New York Stock Exchange in February 2009. CreditJames Estrin/The New York Times

 

But therein lies the unique feature of the crash of 2008. Unlike that of 1929, it was not followed by a Great Depression. It was not so much the crisis as the rescue and its economic, political and social consequences that mattered most. On the left, the entire episode discredited the market-friendly policies of Tony Blair, Bill Clinton and Gerhard Schroeder, disheartening the center-left and emboldening those who want more government intervention in the economy in all kinds of ways. On the right, it became a rallying cry against bailouts and the Fed, buoying an imaginary free-market alternative to government intervention.

Unlike in the 1930s, when the libertarian strategy was tried and only deepened the Depression, in the last 10 years it has been possible for the right to argue against the bailouts, secure in the knowledge that their proposed policies will never actually be implemented.

Bannon is right. The crash brought together many forces that were around anyway — stagnant wages, widening inequality, anger about immigration and, above all, a deep distrust of elites and government — and supercharged them. The result has been a wave of nationalism, protectionism and populism in the West today. A confirmation of this can be found in the one major Western country that did not have a financial crisis and has little populism in its wake — Canada.

The facts remain: No government handled the crisis better than that of the United States, which acted in a surprisingly bipartisan fashion in late 2008 and almost seamlessly coordinated policy between the outgoing Bush and incoming Obama administrations. And yet, the backlash to the bailouts has produced the most consequential result in the United States.

Tooze notes in his concluding chapter that experts are considering the new vulnerabilities of a global economy with many new participants, especially the behemoth in Beijing. But instead of a challenge from an emerging China that began its rise outside the economic and political system, we are confronting a quite different problem — an erratic, unpredictable United States led by a president who seems inclined to redo or even scrap the basic architecture of the system that America has painstakingly built since 1945.

How will the world handle this unexpected development? What will be its outcome? This is the current crisis that we will live through and that historians will soon analyze.

Dr. Fareed Zakaria is a CNN anchor, a Washington Post columnist and the author of “The Post American World.”

Follow New York Times Books on Facebook and Twitter, sign up for our newsletter or our literary calendar. And listen to us on the Book Review podcast.

 

A version of this article appears in print on , on Page 1 of the Sunday Book Review with the headline: The Aftershocks.

The British History of Brexit


August 1, 2018

The British History of Brexit

by
My main worry is the loss of the chance for Britain to help shape the political future of Europe. The organization Britain will be leaving is far from marching confidently ahead to political union. It is riven with conflict. German Chancellor Angela Merkel is almost as powerless as May; neo-fascists are in, sharing, or close to power in several European countries. Almost the entire weight of the European project rests on the shoulders of French President Emmanuel Macron. It would have been good to have Britain by his side, rather than drifting out to the Atlantic.”–

It is now all but certain that Britain will leave the EU in March 2019 without a workable divorce settlement. The only question is whether this outcome will be the economic catastrophe that most observers fear.

 

LONDON – Since June 23, 2016, when 52% of British voters backed withdrawing from the European Union, the “Brexit” debate has been tearing British politics apart. Although the Brexit referendum was non-binding, then-Prime Minister David Cameron’s government, expecting a vote in favor of “Remain,” had promised to honor the result. Britain, late to join the EU, will be the first member state to leave it, with the exit date set for March 2019.

Image result for The British History of Brexit

Remainers alternate between blaming Cameron for his recklessness in holding the referendum and his incompetence in managing it, and castigating the Brexiteers for swamping the voters with lies. At a deeper level, the Brexit vote can be seen as part of a transatlantic peasants’ revolt, making itself felt in France, Hungary, Italy, Poland, Austria, and of course the United States. Both explanations have merit, but both ignore the specifically British roots of Brexit.

Britain had stood alone against a Hitler-dominated continental Europe in 1940, the moment of recent history recalled with most pride. Years later, Margaret Thatcher voiced a common British sentiment in her usual emphatic manner. “You see,” she once said to me, “we visit, and they’re there.” Despite former Prime Minister Tony Blair’s stated intention, Britain was never “at the heart” of Europe: it was. In their 42 years in the EU, the British have always been an awkward, Euroskeptical partner. Approval of membership has only briefly been above 50%, and by 2010 was dipping below 30%. A referendum back then most likely would have resulted in an even bigger majority for leaving.

The United Kingdom did not sign the 1957 Treaty of Rome, which joined the EU’s six original members – Germany, France, Italy, the Netherlands, Belgium, and Luxembourg – in the European Economic Community. True to its traditional policy of divide and rule, it organized the seven-member European Free Trade Association as a counterweight in 1960.

But the UK stagnated, while the EEC prospered, and Britain applied for entry in 1963. Britain’s motive was mainly economic – to escape the EEC’s external tariff against British goods, by joining a more dynamic free-trade area. But the motive of preventing the formation of a political bloc was never absent, and ran counter to the European founding fathers’ dream of a political union. In the end, French President Charles de Gaulle vetoed the UK’s membership bid, viewing Britain as an American Trojan Horse.

Remainers conveniently forget that when Britain voted in 1975 to remain a member of the EEC – after joining in 1973 – the referendum was based on the lie that membership had no political implications. In fact, the EU’s founders, especially Jean Monnet, saw ever-deeper economic union as a way to forge ever-deeper political union. In 1986, Thatcher signed the Single European Act (which set the objective of establishing a single market), apparently believing that it was only an extension of free trade in goods to services, capital, and labor.

But Britain’s semi-detached status was confirmed by the Maastricht Treaty of 1992, under which Thatcher’s successor, John Major, obtained (together with Denmark) an exemption from the requirement to join the euro. More obviously than anything preceding it, the single currency was a touchstone of willingness to proceed toward political union. After all, as the events of 2008-9 showed, a common currency without a common government cannot be made to work.

Image result for Theresa May and the Brexit mess

In the wake of the Brexit decision, Cameron’s hapless successor, Theresa May, has been caught between the demands of Brexiteers like her erstwhile Foreign Secretary, Boris Johnson, for “control of our borders” and the fears of the Remainers concerning the economic and political consequences of leaving. She hopes for an exit from the EU whereby Britain would retain the benefits, but avoid the costs, of membership.

This hope is embodied in the government’s just-published White Paper, “The Future Relationship between the United Kingdom and the European Union.” In it, the government seeks an “Association” that would leave Britain within the EU’s external tariff area for all trade in goods made in Britain and the EU, but free to conclude its own free-trade agreements with everyone else.

The single market in services would be replaced by a special agreement allowing EU clients unrestricted access to London’s financial services, while avoiding a common regulatory system. A new “framework for mobility” would aim to continue to “attract the brightest and the best, from the EU and elsewhere,” while curtailing (in unspecified ways) EU citizens’ freedom to work in Britain.

Nothing is more certain than that the White Paper’s jejune attempt to have it both ways will fail to survive serious scrutiny on either side of the Channel. And that means that Britain will leave the EU in March 2019 without a workable divorce settlement. The only question is whether this outcome will be the disaster most observers fear.

I am unpersuaded by the Remain argument that leaving the EU would be economically catastrophic for Britain. The loss of settled EU arrangements would be balanced by the chance for Britain to rediscover its own way, not least in fiscal and industrial policy. Experience suggests that the British are most resilient, most inventive, and happiest when they feel in control of their own future. They are not ready to give up their independence.

Image result for Theresa May and the Brexit mess

My main worry is the loss of the chance for Britain to help shape the political future of Europe. The organization Britain will be leaving is far from marching confidently ahead to political union. It is riven with conflict. German Chancellor Angela Merkel is almost as powerless as May; neo-fascists are in, sharing, or close to power in several European countries. Almost the entire weight of the European project rests on the shoulders of French President Emmanuel Macron. It would have been good to have Britain by his side, rather than drifting out to the Atlantic.

*Robert Skidelsky, Professor Emeritus of Political Economy at Warwick University and a fellow of the British Academy in history and economics, is a member of the British House of Lords. The author of a three-volume biography of John Maynard Keynes, he began his political career in the Labour party, became the Conservative Party’s spokesman for Treasury affairs in the House of Lords, and was eventually forced out of the Conservative Party for his opposition to NATO’s intervention in Kosovo in 1999.

Trump–The Demolition Man and an Upscale Archie Bunker


June 12, 2018

Trump–The Demolition Man and an Upscale Archie Bunker

by John Cassidy@www.newyorker.com

Image result for Trump the demolition man

 

Donald Trump hasn’t changed. The many biases and misconceptions that he has about the United States and its place in the world go back as far as 1990, when an interviewer from Playboy asked him about the first thing he would do if he were elected President. “Many things,” Trump replied. “A toughness of attitude would prevail. I’d throw a tax on every Mercedes-Benz rolling into this country and on all Japanese products, and we’d have wonderful allies again.” A President Trump, he went on, “wouldn’t trust our allies; he’d have a huge military arsenal, perfect it, understand it. Part of the problem is that we’re defending some of the wealthiest countries in the world for nothing . . . . We’re being laughed at around the world.”

This clearly wasn’t a man who had studied much history, beyond perhaps the volume of Hitler’s speeches that his former wife Ivana once claimed that he kept by his bed. He seemed blissfully unaware of how, after the Second World War, the U.S. used its military and economic power to create an open international economic system in which American multinational companies such as Ford, General Motors, and I.B.M. were guaranteed a growing and prosperous market. And he seemed similarly clueless about the role that multilateral institutions like NATO, the G-7, and the International Monetary Fund played in extending and perpetuating American power.

Image result for Trump the demolition man, The Economist Cover

If Trump’s worldview has any consistency, it is as the ideology of a certain type of parochial, embittered, outer-borough New Yorker, an upscale Archie Bunker. The first great misfortune that befell the U.S. and its allies came in November of 2016, when this small-minded parvenu was elected President. The second came earlier this year, when Trump belatedly realized that he didn’t have to surround himself with wiser and more knowledgeable people who could restrain his impulses. He replaced H. R. McMaster, the national-security adviser, and Gary Cohn, the head of the National Economic Council, with John Bolton and Larry Kudlow, two wizened conservative talking heads who both know their role, which is to parrot whatever nonsense Trump comes up with on any given day.

On Saturday, Trump once again made a stunning display of his ignorance. Before departing early from the G-7 summit in La Malbaie, Quebec, to fly to Singapore, he issued a preposterous threat to cut off all U.S.-Canadian trade if the Canadians responded to his imposition of tariffs on Canadian steel and aluminum goods entering the United States by levying similar duties on some American goods entering Canada. At a press conference that Justin Trudeau, the Canadian Prime Minister, held to close the summit, he was inevitably asked whether his government would go ahead with the retaliatory tariffs despite Trump’s barking. “I have made it very clear to the President that it is not something we relish doing, but it is something that we absolutely will do,” Trudeau said. “Because Canadians, we’re polite, we’re reasonable, but we also will not be pushed around.”

In diplomatese, Trudeau’s statement was polite but firm. (He also said that he stood ready to resolve the trade dispute in consultation with Trump.) But when Trump watched, or got wind of, the press conference on Air Force One as he flew to Singapore, he flipped out and fired up his Twitter account, describing Trudeau as, “Very dishonest & weak,” and adding, “Our Tariffs are in response to his of 270% on dairy!” He also said that he had ordered the U.S. representatives on the ground to not endorse the G-7 communique that they had previously agreed on.

Far from trying to talk Trump around, or clear up the mess that the President had created, Bolton and Kudlow made matters worse. On Saturday afternoon, Bolton tweeted out the most talked-about image from the G-7 meeting, in which a seated Trump is being confronted by Angela Merkel, the Chancellor of Germany, and Emmanuel Macron, the President of France. “Just another #G7 where other countries expect America will always be their bank. The President made it clear today. No more,” he wrote.

Image result for trump the economist cover

On Sunday, Kudlow said on CNN’s “State of the Union” that Trudeau “kind of stabbed us in the back,” and added, “It was a betrayal.” Another Trump aide, Peter Navarro, who is a self-styled trade hawk, told Fox News, “There’s a special place in hell for any foreign leader that engages in bad-faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door.”

The invocation of Weimaresque rhetoric to describe a trade dispute with America’s closest neighbor was something to behold. But in geopolitical terms, it wasn’t even the most provocative thing that Team Trump did over the weekend. Before, during, and after the G-7 summit, the U.S. President called for Vladimir Putin’s Russia to be allowed to rejoin the group, and sought to downplay the reason that the country got kicked out in the first place—Putin’s decision, in 2014, to invade Crimea and destabilize eastern Ukraine.

“Something happened a while ago where Russia is no longer in,” Trump said, at a press conference on Saturday. “I think it would be an asset to have Russia back in.” He didn’t dwell on Putin’s aggression further, other than to say that questions about it should be addressed to Barack Obama, who “allowed Russia to take Crimea. I may have a much different attitude.”

Image result for G7 Leaders

Really? At this stage, Trump’s bromance with Putin is so obvious that it has turned into something of a joke. Guy Verhofstadt, the former Prime Minister of Belgium who is now a powerbroker in the European Parliament, tweeted out the viral G-7 photo, and suggested a caption for what Merkel was saying to Trump: “Just tell us what Vladimir has on you. Maybe we can help.” Putin, for his part, said he would welcome a summit meeting with Trump in the Oval Office.

It is possible, of course, that Putin doesn’t have anything on Trump, and that Trump has simply had a lifelong affection for ruthless, authoritarian figures that overwhelms any actual knowledge he may have picked up in the past seventeen months about the benefits of Atlanticism, a liberal trading order, or anything else. Back in that 1990 Playboy interview, in addition to expressing his protectionist beliefs about the economy, he criticized Mikhail Gorbachev for allowing the Soviet Union to break up and praised the leaders of China for putting down the Tiananmen Square demonstrations “with strength.”

This side of Trump—the wannabe strongman—has always been there. But the truly alarming thing is how few restraining influences it now faces. Defense Secretary James Mattis, who has maintained a steadfast support for NATO and the Atlantic alliance more generally, appears to be about the only one left. The Vice-President, the Secretary of State, and the Secretary of the Treasury are all Trump toadies. John Kelly, the White House chief of staff, seems to be a busted flush. The Republican leadership on Capitol Hill is AWOL. And Fox News, which is Trump’s main source of information, is a Trump echo chamber.

And so we go to Sentosa Island, in Singapore, where the North Korean boy autocrat awaits. After Trump’s behavior in the past few days, the world will be watching nervously.

  • John Cassidy has been a staff writer at The New Yorker since 1995. He also writes a column about politics, economics, and more for newyorker.com.

  • Here’s a who’s who of the people pictured (pic above), and where they stand on the trade row that defined the summit.

    1. Donald Trump, US President

    Mr Trump shocked America’s allies – namely the EU, Mexico and Canada – when he recently announced a 25% tariff on imports of steel and 10% on aluminium from these countries. They are all threatening retaliatory measures and the rift overshadowed the summit, leaving the American president isolated at times. Mr Trump departed before the other leaders, and complained that America was “like the piggy bank that everybody is robbing”.

    He then tore into Canadian Prime Minister Justin Trudeau in a pair of tweets, calling him “very dishonest and weak” and attacking his “false statements” after Mr Trudeau reasserted his strong opposition to the US tariffs in a news conference.

    2. John Bolton, US National Security Adviser

    It’s been just three months since he was appointed President Trump’s top security adviser but John Bolton has already made an impact. One of the President’s arguments for the tariffs is on “national security grounds” – a view Mr Bolton has stridently backed.

    3. Kazuyuki Yamazaki, Japanese Senior Deputy Minister for Foreign Affairs

    Promoted to the post in July 2017, he recently led a Japanese delegation to Pakistan and took part in joint talks between Japan, China and South Korea in Seoul about a proposed free trade agreement.

  • 4. Shinzo Abe, Japan’s Prime Minister

    He has come under increased pressure to join retaliatory measures against America’s tariffs. This puts him in a difficult position – he has tried hard to cultivate a warm relationship with President Trump and the two are said to have met at least 10 times since he was elected to the White House.

    5. Yasutoshi Nishimura, Japanese Deputy Chief Cabinet Secretary

    The MP from Japan’s governing party once worked in the ministry of international trade and industry.

    6. Angela Merkel, German Chancellor

    She has been at the forefront of talks to try to resolve differences at the summit, as is clear in this photo. Mrs Merkel apparently floated an idea to set up a mechanism to resolve trade disputes between the US and its allies on Friday. Asked during the summit about her relationship with President Trump, Mrs Merkel said the two leaders did not always agree but could talk to each other: “I can say that I maintain a very open and direct relationship with the American president.”

    7. Emmanuel Macron, French President

    He engaged in a Twitter spat with President Trump over the tariffs hours before the summit – leading some to question whether the blossoming “bromance” between the two was over. Despite this, they were seen to be on good terms, and President Macron’s team said his talks with Trump were “frank and robust”. However, following Mr Trump’s online outburst against Mr Trudeau, the French president issued a statement that “international co-operation cannot be dictated by fits of anger and throwaway remarks”.

    8. Theresa May, UK Prime Minister

    In a telephone call last week, she told President Trump she found the US tariffs “unjustified and deeply disappointing”. But she also struck a more conciliatory tone at the summit, urging fellow leaders to step back from the brink of a possible trade war.

    9. Larry Kudlow, Director of the US National Economic Council

    Mr Trump’s top economic adviser has defended the new tariffs and said his boss should not be blamed for trade tensions. After the summit, Mr Kudlow told CNN that the president and his team had gone to the summit “in good faith” but that Mr Trudeau had “stabbed us in the back” in his news conference.