Geopolitics Trumps the Markets

America led a 30-year hiatus from history. It was nice while it lasted, but it’s over.

That crashing sound you heard in world markets last week wasn’t just a correction. It was the sound of the end of an age.

During the long era of relatively stable international relations that succeeded the Cold War, markets enjoyed an environment uniquely conducive to economic growth.

.. The results were extraordinary. Between 1990 and 2017, world-wide gross domestic product rose from $23.4 trillion to $80.1 trillion, the value of world trade grew even faster, more than a billion people escaped poverty, and infant-mortality rates decreased by more than 50%. The number of people with telephone service grew roughly 10-fold.

This hiatus from history was, by most measures of human flourishing, a glorious era. Now it has come to an end, or at least a pause, and the world is beginning to see what that means.

.. the basic elements of economic globalization appeared firmly in place.

  • Russia, the most obvious challenger to the geopolitical order, was an insignificant and diminishing player economically.
  • And China, notwithstanding its rapid economic growth and its anxiety about American military power, was unlikely to challenge the economic basis of its own success. Geopolitics might have been back, but that wasn’t an issue for markets.

That complacency was misplaced. The return of geopolitics means the basic framework for economic policy has changed. In periods of great-power rivalry, national leaders must often put geopolitical goals ahead of economic ones. Bismarck’s Germany could have saved money buying armaments from Britain, but building a domestic arms industry was worth the cost. If the U.S. is in a serious strategic competition with China, an American president might well be willing to sacrifice some economic growth to banish China from important supply chains.

,, by invoking “national security,” the Trump administration has found a legal basis, with roots in the Cold War and even earlier, to assert sweeping powers over the nation’s commerce. It has upended a generation of U.S. trade policy in a dramatically short period of time.

.. The new era of geopolitics is unlikely to be an era of small government.

.. The Trump administration is

  • reversing some of the regulatory excesses of the Obama era, and
  • the president’s judicial appointees are prepared to rein in the administrative state.

.. A recalibration of the U.S.-China relationship was likely inevitable as the world’s oldest civilization became an economic superpower.

Hillary Clinton, who as secretary of state clashed with Mr. Obama over the need for a tougher approach to China, would not be a popular figure in Beijing if she had won the 2016 election.

Is Tom Cotton the Future of Trumpism?

The junior senator from Arkansas is a hybrid of insurgent and old guard.

At forty years old, Cotton is the youngest member of the Senate

.. when we hear that kind of ridicule, we hear them making fun of the way we look, and the way we talk, and the way we think.”

.. It was, on one level, a breathtaking leap—to equate mockery of a louche New York billionaire with attacks on the citizens of this small, conservative city, which lies across the Arkansas River from Oklahoma.

.. “Next to Trump, he’s the elected official who gets it the most—the economic nationalism.

.. Ben Sasse, of Nebraska, whose term is not up until 2020, said that, by threatening journalists, Trump was violating his oath to defend the Constitution.

.. “The President puts things sometimes in a way that I would not,” he said in early October. “But he was still nominated by our voters and elected by the American people to be our President, and if we want him to accomplish our agenda we need to set him up for success.”

.. From the beginning, Tom could play to both the establishment and the Tea Party. Everyone recognizes he’s got a firm set of conservative principles, but that makes him a polarizing figure. There are a lot of people here, too, who hate him and think he’s the Antichrist. The only thing everyone agrees on is that he wants to be President someday.”

.. To make that next leap, Cotton expresses the militarism, bellicosity, intolerance, and xenophobia of Donald Trump, but without the childish tweets.

.. He and his supporters see Trump and Trumpism as the future of the Republican Party.

.. He was the one who told us about John Kelly,” the former Marine Corps general who is now Trump’s chief of staff

.. after Cotton spoke out against a quick deal to protect the Dreamers, Trump made a formal proposal to Congress that attached many strings Cotton had demanded.

.. Trump gave Cotton a victory on the touchstone issue of his Senate career by decertifying Iran’s compliance with the nuclear-arms deal

.. “Putting aside the issue of technical compliance or noncompliance, it’s clear that the agreement is not in our national interest.”

.. “One thing I learned in the Army is that when your opponent is on his knees you drive him to the ground and choke him out.” In response, a questioner pointed out that killing a prisoner of war is not “American practice.” (It is, in fact, a war crime.)

.. in North Korea, Cotton supports Trump’s brinkmanship with Kim Jong Un

.. one recent report suggested that the President would name him director of the C.I.A. if Mike Pompeo, the current director, were to replace Rex Tillerson as Secretary of State.

.. Cotton would ratify the President’s instincts. He offers Trump a certainty that matches his own

..  “The Democratic Party has drifted away from them,” Tom told me, as his parents sat nearby. “Bill Clinton would be repudiated by his own party today.

.. I wrote against sacred cows, such as the cult of diversity, affirmative action, conspicuous compassion and radical participatory democracy. I wrote in favor of taboo notions, such as Promise Keepers, student apathy, honor and (most unforgivably) conservativism.”

.. The letter combined outrage, overstatement, and savvy politics in a manner that Trump would perfect a decade later.

.. “ ‘God, guns, and gays’—social issues—were driving white conservatives to the Republicans all along

.. It is impossible not to see race as a central element in the fall of the Democratic Party here

.. “It took a black President to bring out the threat.”

.. “I would always say to my liberal white friends, ‘Oh, come on, surely it’s gotten better.’ And they’d say to me, ‘Oh, no, it hasn’t. You can’t believe what white people say about Obama in private—he’s Kenyanhe’s Muslim, they’d call him unprintable racial epithets.’ ”

.. I think a lot of people in Arkansas thought he was ‘uppity,’ to use the old smear.”

.. Cotton also benefitted from enormous outside spending by conservative groups, including some affiliated with the Koch brothers

.. outside groups spent twenty-three million dollars for Cotton, compared with fourteen million for Pryor.

.. Democrats in Arkansas had a special reason to disdain Obama: “It wasn’t because Barack Obama was black, it was because Barack Obama stopped the Clinton restoration.”

.. About three hundred thousand people, which amounts to more than ten per cent of the state’s population, have taken advantage of the law to obtain health insurance.

.. The program is not called Obamacare but, rather, Arkansas Works.

.. “If you live in a big city and you work in an office building, immigration is almost an unalloyed good for you. . . . It makes the price of services that you pay for a little bit more affordable—whether it’s your nanny to take care of your kids for you, or landscaping your yard, or pedicures, manicures, that sort of thing. And you get a lot of exciting new fusion restaurants as well.

“But if you live and work in a community where they have a large illegal-immigrant population

  • that’s straining the public school,
  • that’s clogging up the emergency room when you’re trying to get care,
  • that makes it more dangerous to drive in the roads because people don’t have driver’s licenses or they don’t have insurance,
  • or if they are bidding down the wages or even taking jobs away from you, then it doesn’t look nearly so good,”

.. Most economists believe that immigrants, legal and otherwise, add more to the economy than they take from it, and that their presence in the labor force does not lead to lower wages over all.

.. “He probably knows more about geopolitics than most senators.”

.. In March of his first year in the Senate, Cotton wrote an open letter to the “Leaders of the Islamic Republic of Iran,” which was co-signed by forty-six other Republican senators, warning the mullahs that Congress might undo any agreement they reached with Obama. The letter was denounced by Executive Branch officials as an attempt to interfere in a diplomatic initiative, but Cotton regards it as a triumph.

..  he boasted about the letter

 .. You simply cannot neglect security, and without security there cannot be political compromise and reconciliation, there cannot be good governance, there cannot be economic development, there can’t be anything.”

.. If Rand Paul is the leading Republican isolationist in the Senate, Cotton, in short order, has become heir to the opposing wing of the Party, the one associated with Senator John McCain, whose efforts to increase the defense budget Cotton has championed.

.. But Cotton has gone well past McCain in his swaggering belligerence.

.. “In my opinion, the only problem with Guantánamo Bay is there are too many empty beds and cells there right now,” Cotton said. “We should be sending more terrorists there for further interrogation to keep this country safe. As far as I’m concerned, every last one of them can rot in hell, but as long as they don’t do that they can rot in Guantánamo Bay.”

.. skirted the edge of demagoguery. “I don’t think any Republicans want legislation that is going to let out violent felons, which this bill would do,”

.. Cotton made his name in the Senate in a more personally poisonous way. In his first year, Cotton placed a hold on Obama’s nominations for the Ambassadors to Sweden, Norway, and the Bahamas, because of an unrelated dispute regarding the Secret Service.

.. “There is a point where winning a political battle isn’t worth it.”

.. “How many guys in town can give a speech at the Council on Foreign Relations and also get kudos in the pages of Breitbart? The answer is, one guy.”

.. Cotton has carved out a clear Trumpism-without-Trump agenda:

  • limits on immigration through legislation,
  • deportations, and a wall;
  • longer prison sentences for American convicts and suspected terrorists abroad;
  • a bigger budget for the Department of Defense.

.. The question is whether he has the charisma to sell that agenda to a broader public.