Streetwise Professor

June 30, 2024

The Democratic Party Will Do Whatever Is Necessary to Win. Including Manipulations That Could Bring the Country to the Brink of Rebellion.

Filed under: Politics — cpirrong @ 7:03 pm

Joe Biden’s catastrophic debate performance–if you can call it that–requires no comment from me. All I will say is that the “we’re SHOCKED!” reaction from Democrats and the media (yes, I repeat myself) is the world’s most powerful emetic. These fuckers have known this all along, but they’ve gaslit us non-stop. Well, barely breathing Joe did manage to blow out the flame, and the explosion from the resulting gas leak has been earth shaking.

Right now all of the speculation is whether, but more how, Biden can be discarded like his used Depends.

The obstacles to this are immense.

Can Joe be persuaded–or forced–to quit? Over Jill’s dead body. And do not underestimate the control a grasping, demented wife has over a severely diminished husband. Just look at how she has been front and center ever since the debate ended.

If Joe is somehow defenestrated, what about the nominating process, and the delegates committed to Biden-Harris as a result of the primaries? It is my understanding that Kamala Harris would be slotted in, and she would get the delegates–certainly no one else can. The prospect of her running against Trump is even more frightening to them than letting Joe stagger to November.

And only Biden or Harris can use the massive campaign warchest that has been amassed.

So let’s say they defenestrate Kamala too. Then what? An open convention?

What a spectacle that would be. Bobcats in a bag would fight, bite, and claw less than the likes of Hillary, Newsom, Whitmer, Pritzker, Buttigieg, and whatever other left wing wingnut has presidential aspirations would brawl in the backrooms in Chicago in August.

And how is this process supposed to work? Will it be like selection of the Pope? What color smoke will they use? Who will make up the College of Cardinals?

Whoever emerges from such a process will have NO legitimacy whatsoever. Zero. Zip. Nada.

And this from the Party that constantly lectures us in the most reverent tones about “our sacred democracy” and that warns us in an alarmed voice about the mortal risks posed to it by the possibility that Trump may win a popular election.

And whoever is anointed–they will still be starting from zero money-wise because the Biden-Harris stash cannot be gifted to them.

Look. These fuckers rigged the game in 2020. They rigged the game in 2024. This is their prize. Congratulations! Sorry, no exchanges or returns. You made this tar baby–you’re stuck with it.

If the aforementioned obstacles force them to go with Biden or Harris, they will not meekly stand aside and watch their candidate go down in flames. No. They will open other fronts, no holds barred.

How?

For one–you think you’ve seen lawfare before? Just wait. Against Trump. Against the Republican Party. Against every election-related Republican public official. Against the voting rules in every state.

For another–vote fraud that would make Boss Tweed or Mayor Daley blush.

And I’m sure there are other ways that I am just not twisted enough to imagine. But they are.

The fact is, whatever path the Democrats end up taking it will involve colossal violations of the law and if they actually succeed in getting a Democrat inaugurated in January 2025 (note I said “inaugurated” not “elected”–with this lot those events do not completely overlap) said person will be completely, utterly illegitimate.

That is the real threat to our republican system of government. And that is the kind of thing that could actually spark a rebellion that descends into civil war.

I tend to shy away from apocalyptic predictions about impending civil war. But a party willing to do anything that is necessary to win (and the Democrats are) could truly cause one, especially when, as is the case now, what is necessary would involve gutting every law and norm that has kept partisan strife within reasonable, non-violent bounds for the last 160 years.

June 29, 2024

Gosplan Girl Isabella Weber Wants to Fix Commodity Markets. Be Very Afraid.

Filed under: China,Commodities,Economics,Politics,Regulation — cpirrong @ 12:40 pm

UMass-Amherst associate professor Isabella Weber is a darling of the Eurocrats (and presumably of Davos). Per her own telling, she is a superstar:

Her first book How China Escaped Shock Therapy: The Market Reform Debate is the winner of the Joan Robinson Prize, the International Studies Association Best Interdisciplinary Book Award and the Keynes Price and has been recommended on best book of 2021 lists by the Financial Times, Foreign Policy, Project Syndicate, ProMarket and Folha de S.Paulo among others. The book has been translated into five languages. Isabella has become a leading voice on policy responses to inflation and has advised policy makers in the United States and Germany on questions of price stabilization. For her public policy work she has been profiled in the New Yorker, recognized as one of TIME100 Next, Bloomberg’s 50 Ones to Watch, Germany’s 100 women of 2022 and Capital 40 under 40 and has been awarded the Kurt Rothschild Prize and the 2024 Hans-Matthöfer Prize. For her work on China’s market reforms she has won the International Convention of Asia Scholars’ Ground-breaking Subject Matter Accolade and the Warren Samuels Prize for Interdisciplinary Research in History of Economic Thought and Methodology. Isabella is an Open Society Foundations Ideas Fellow.

www.isabellaweber.com

She is also an idiot.

The evidence for this proposition is profuse: just look at any one of her opeds or articles. Rather than bore you with her corpus, I will just focus on one of her most recent retchings, on a subject that is clearly in one of my lanes–commodity storage, commodity prices, and speculation.

Weber and her co-authors Merle Schulken, Lena Bassermann, Lena Luig, Jan Urhahn (no changing names to protect the guilty on SWP!) recently released a “policy paper” called “Buffer Stocks Against Inflation.” (NB: “policy paper” is a tell for lack of rigor. The tell is quite accurate here). The Guardian shared Weber’s deep thoughts from the paper in a long article. (NB: another accurate tell).

The gravamen of the argument:

Weber’s new paper, published on Thursday, looks at how grain prices spiked in 2022 as Covid snagged supply chains and Russia invaded Ukraine. The price hikes helped to drive record profits for corporations while pushing inflation higher and increasing global hunger. In the paper, Weber and colleagues call for the creation of buffer stocks of grain that could be released during shortages or emergencies to ease price pressures.

The Guardian.

And what is the root of this volatility? Can you say speculation? I knew you could:

Speculation causes prices to swing wildly even though the prices are often detached from the physical reality of the commodity. While Russia’s 2022 Ukraine invasion led to temporary local threats of physical grain shortages, the global supply of grain always remained well above levels to meet demand in the medium term, the paper notes.

The Guardian

The need for a government-run storage system presumes that private storage is inadequate or inefficiently small. Of course Weber et al don’t even attempt to demonstrate this. And no, volatility–including extreme price movements like those following the invasion of Ukraine in 2022 is not sufficient to demonstrate inadequate storage.

Optimal storage is the solution to a dynamic optimization problem. This solution frequently involves “stockouts” when storage is drawn down to near zero. Prices tend to be highly volatile in such circumstances. Recent events in the cocoa market are a near textbook illustration of this. This is a characteristic of an efficient market, though it is all too often taken (by people such as Weber) as prima facie evidence of inefficiency. If you say that, you are betraying your ignorance.

These episodes can be avoided only by holding excessive stocks. This is wasteful because (a) storage is costly, and (b) it means that some resources that are produced are never consumed. Paying money to hold something you never use (and which was costly to produce) is obviously dumb.

Insofar as uncertainty is concerned, inventories are a form of economic shock absorber. Efficient, competitive storage depends on the amount of underlying economic uncertainty. In chapter 5 of my book on storage I show that higher fundamental uncertainty leads to greater storage. Indeed, this model shows that the kind of price movements Weber bewails actually reflect efficient storage decisions.

Specifically, the invasion of Ukraine clearly increased economic uncertainty. The rational response to this is to increase storage of commodities (including corn and wheat) affected by this uncertainty. The only way to increase storage is to reduce consumption. Therefore, the increase of uncertainty alone caused an increase in price over and above the effect of the invasion on output or trade. This creates the outsized price movements that give Weber and her ilk the vapors.

Weber also seems to overlook the fact that government stocks are substitutes for private stocks, and that increased government stockholding will result in decreased private storage. Meaning that government stocks are bigger than the amount by which such a policy increases stocks.

Government stockholding also injects a new form of uncertainty into the market. Private stockholders have to forecast what the government stock policy decisions will be. When will they accumulate stocks? When will they release them? Will the decision be driven by economics or politics? If the latter, political uncertainty is an important consideration. And it could have particularly detrimental impacts on private stockholding. The main benefit of holding stocks is the ability to sell them at a high price under tight supply and demand conditions. Release of excessive stocks by the government during such conditions seriously undermines the incentive for private entities to hold stocks.

There is actually rigorous economic analysis of public storage by actual economists, Brian Wright and Jeffrey C. Williams. They show that public storage can be efficiency enhancing if there is some other sort of “market failure.” Ironically, the market failure that Wright and Williams focused on was . . . government policy, namely price controls. Irony alert! Weber is a BIG booster of price controls.

Wright and Williams also show that the details of government policy and uncertainty about them plague such schemes. One important point that they make is that government storage policies are subject to time inconsistency problems (a la the important work of Kynland and Prescott in the ’70s) (also referred to as subgame imperfection). That is, a government may design an efficient policy but cannot commit to it. Under some circumstances the government will find it desirable (for it!) to deviate from the policy. Thus, the abstract existence of an optimal policy does not mean that it can be implemented in practice. Moreover, trying to figure out when time inconsistency is going to kick in is a source of uncertainty that feeds back to private decisions.

Weber’s writing betrays no contaminating exposure to economic analysis like Wright and Williams’.

In Wealth of Nations Adam Smith pointed out some of the irrationality of government policies regarding storage. In the laws he discussed, English governments thought that private traders were holding excessive stocks, and punished such “hoarders” and “engrossers.” Which obviously undermined the incentive to accumulate inventories in the first place.

Yes, these policies are different from the one that Weber advocates, but they illustrate how political forces lead to highly destructive interference in storage decisions.

Insofar as speculation is concerned, all I can say is: “Really? Not this shit again.” The title of an article wrote in Regulation 14 years ago summarizes Weber to a “T”: “No Theory? No Evidence? No Problem!”

Weber has no theory of how speculation distorts prices or causes excessive volatility. She has no evidence that it does. But no problem! She blames it anyways.

I guess she is proving her green credentials by recycling discredited ideas.

Ironically, Weber does not discuss a prominent example of her preferred policy–Chinese state reserves of commodities like corn, cotton, and pork. To say that his has been like most centrally-planned schemes–that is, an unmitigated cluster-F–would be an understatement. For example, and I hope you are sitting down for this, corn goes bad when you store it too long: in the past China ended up holding vast stocks of dodgy corn. I could go on.

You’d think that a policy paper would include analysis of the recommended policy in practice. In Weber’s case, you’d be wrong.

Looking at Weber’s corpus you will see that all of the disqualifying defects described above are rife. She is a sworn enemy of markets, but her analyses betray zero careful analysis of how markets actually work, or what causes their problems. She is a huge fan girl of government intervention, but never contemplates the possibility of government failure, being instead a slave to the Nirvana Fallacy.

Her latest work on storage is arguably a minor sin compared to some of her other transgressions against good economics. Most notably, she is a major advocate of comprehensive price controls as a means of controlling inflation.

One would not be wrong to call her Gosplan Girl.*

But of course this is why she is a rock star in Brussels. EU bureaucrats run the gamut from dirigistes to full on commies, and gobble up her garbage like it is going out of style.

Which, unfortunately, it is not. Which is why the EU is a stagnant economic wreck which will only get worse if it embraces the deep thoughts of Isabella Weber.

*Izabella Kaminska at The Blind Spot pointed out the Gosplan analogy to me.

June 15, 2024

What, Me Worry? Certainly Not About a Physical Copper ETF

Filed under: Commodities,Derivatives,Economics,Exchanges,Regulation — cpirrong @ 3:48 pm

Javier Blas is in a tizzy about a new ETF that will hold physical copper. He shouldn’t be.

He says:

Might the copper market suffer a similar squeeze [to the Hunt episode of 1980]? Until now, I would have been confident in saying no. But speculators are about to get an easy and completely legal way to dominate the market for the red metal — a development that regulators seem far too relaxed about.

Bloomberg

Why not worry, let alone panic? Many reasons.

First, I don’t know where Javier has been, but this is hardly a new development. There have been physical copper ETFs around for over a decade: I addressed a similar moral panic that erupted when that was introduced. There are also physical ETFs in other metals. The scare scenario has not transpired in all that time.

As I say every time I teach about speculation (as distinct from manipulation), what is necessary for it to distort prices is that it must somehow distort the physical market, that is, distort supply or demand. The doom scenario outlined (“As more money pours into the new fund, more copper will need to be stockpiled as backing”) seems to envision a distortion in supply. Specifically, uneconomically withholding stocks from the market.

First of all, that scenario assumes really dumb money. I mean really dumb. Buying shares in an ETF that will turn around and buy physical copper and add to inventories at a time when inventories should fall (thereby causing spot prices to be too high) means buying high and selling low. Indeed, the market is likely in backwardation under those circumstances, and in that case prices tend to trend down–and everybody can see this. Not a good investment strategy! One almost guaranteed to lose money. Yes, maybe there are lemmings, greater fools, etc., but such people would be perfect short bait. (Though maybe Roaring Kitty will make copper ETFs a meme investment!)

The Hunts (mentioned in the article) are example of how irrational stock building and holding ends in tears. As I joke in class, the Hunts are the poster children for the old joke: “Want to make a small fortune in commodities? Start with a large fortune.” All because they propped up the price of silver by accumulating ever-expanding quantities of physical silver.

Another example that may be even more on point is the International Tin Council, which tried to imitate OPEC in the worst way–and succeeded. Rather than restrict output (a la OPEC) it tried to inflate prices by offering to purchase tin at supercompetitive prices. It ended up accumulating vast amounts of tin in storage, and when the money to keep buying tin ran out the price collapsed and the ITC suffered huge losses–and almost brought the LME down with it. (This is the so-called “Tin Crisis,” not to be mistaken with the LME’s “Nickel Crisis” of 2022).

In my 2012 post on physical metal ETFs, I wrote that one mechanism that would also limit the potential distortionary effects was that if such an ETF were uneconomically maintaining excessive physical stocks, someone could buy shares of the ETF, and tender them in exchange for physical metal, and then liquidate the stocks so obtained. That is, the ETF’s management could not unilaterally withhold stocks from the market.

If you look at the Sprott prospectus, you might conclude that use of that mechanism is highly restricted: there is an option to exchange shares for metal, but it can be exercised only on a semi-annual basis.

However! Elsewhere the prospectus says:

The Trust will have the ability to optimize the value of the Trust through Copper optimization transactions, including the use of futures, warrants, CME or LME warehouse receipts, and other financial
instruments [swaps? options?] to complement the Trust’s Copper procurement strategy, so long asthese transactions provide value to the Trust.

So this isn’t a pure copper piggy bank for shiny pennies or the cathodes you can make them from. If the fund is managed to maximize value, it will trade its physical copper optimally, and reduce stocks when the price signals indicate this is optimal. For example, it could sell inventories outright and replace the copper exposure with futures with deferred expiration dates. Or it could engage in spread transactions that are common on LME, e.g., selling cash and buying three month or 15 month or whatever futures.

In this respect, the ETF is really more analogous to a hedge fund. It’s managers have a lot of trading discretion within the copper space. In this respect it is very different than other commodity ETFs (e.g., the US Oil Fund) which have virtually no discretion.

Indeed, it is my sneaking suspicion that the fund’s restriction on withdrawals of metal is due precisely to the fact that it will essentially be engaged in fractional reserve banking, as it were. That is, its potential obligations to deliver will exceed its holdings of physical metal because its “optimization transactions” will involve accumulation of large paper positions, and its notional tonnage will exceed substantially its actual physical holdings. This restriction is analogous to the restrictions on withdrawals that hedge funds impose on investors–another point of tangency between this ETF and hedge funds.

Furthermore, even if the money is dumb and the managers are too (or are like Scrooge McDuck and just enjoy frolicking in their shiny stash), it can only distort supply to the extent its physical holdings are somehow pivotal, and/or there isn’t a lot of competition among those holding copper stocks. If total stocks should fall by X, as long as enough others collectively hold more than X they can supply that copper to the market even if the Sprott fund ignores the price signal and keeps a death grip on its physical holdings.

As for “cornering,” here Javier is playing fast and loose with a loaded term. The word (and squeeze, also used in the article) connotes manipulation. Manipulation is intentional conduct. Under US law in particular, it is conduct that involves a specific intent to cause “artificial prices.” (The Frankendodd revisions of the Commodity Exchange Act and CFTC regulations issued pursuant thereto have new provisions that arguably weaken the intent requirement, but it remains in Section 9).

Yes, an ETF that can take physical ownership can corner whereas a purely futures ETF that cannot own physical cannot. (I’d also note that a fund that holds ONLY physical metal cannot engage in market power manipulation either, or at least is guaranteed to lose money if it tries). But using the “optimization transactions” in futures to manipulate a market crosses a legal line, and indeed, a line that has been in place for over a century. That is something regulators (and market participants who have private right of action under the CEA) would be very unrelaxed about.

Moreover the incremental manipulation potential posed by this ETF is likely small. Manipulations have occurred in copper, and the industrial metals, from time immemorial. Remember Sumitomo? There have been other though less severe and shorter lasting cases of likely manipulation on the LME in the decades since. The proximate cause of the Panic of 1907 was a copper squeeze. Right now with all of the hedge fund money out there, as well as the big physical players, the potential for market power manipulation is omnipresent. Sprott will be a minnow in this ocean that already has a lot of big sharks.

I also chuckle at this concern about cornering. I excoriated Javier Blas severely for his failure to see that yes, a hedge fund–Armajaro–cornered the cocoa market in 2010. Indeed Javier seemed to have a man crush on the eventually disgraced head of the fund, Anthony Ward (AKA “Chocfinger”). One of my posts suggested they get a room. (Ward’s karma came a few years later when he bet wrong in the cocoa market, and Armajaro–which had taken delivery of enough beans to make billions of Hershey Bars in 2010–was sold for less than the price of one of these).

So I reprise my 2012 Alfred E. Neuman persona: What, me worry? Well, certainly not about a physical copper ETF.

June 11, 2024

A Simulacrum Carrier Symbolic of a Simulacrum Military

Filed under: History,Military,Russia — cpirrong @ 5:52 pm

If Forbes’ David Axe is correct, Russia has finally given up on attempting to resurrect its lone aircraft carrier, the Kuznetsov. Too bad! It’s been a source of material for me for years. Indeed, I think it’s fair to say that I was a pioneer in mockery of the the ship, with posts going back almost 16 years. I was especially fond of pointing out that this naval colossus never left home–although it very seldom left home–without a salvage tug bobbing in its wake. (It only made seven–seven!-deployments in 33 years).

Old Smoky–or was it Old Brokey?–was hardly a big boy carrier even when it was brand spanking new. It used a jump ramp rather than catapults, which seriously limited the capability and carrying capacity of the aircraft it operated. And it operated relatively few aircraft–about 36, of which only 22 were attack/fighter types.

There has been no official announcement of Kuzentsov’s demise. Axe infers its fate from the fact that many of its special-built aircraft (MiG-22KRs) have been deployed to operate from land (including Crimea). But this could just be another manifestation of Russian materiel losses over Ukraine (and domestic accidents, such as yesterday’s crash of an Su-34) forcing it to resort to stopgap measures.

Although the ship is clearly useless, and a money pit, Russia has persisted in keeping it alive. All to give the impression that it is a serious naval power.

Just how pretentious this is is reflected in the current deployment of a Russian “flotilla” (in the words of the FT) to Havana. The “flotilla” consists of one nuke sub, one frigate (the Admiral Gorskov, displacement 5,400 tons), one oiler, and–wait for it!–one tugboat. I guess it could be worse: the FT could have called it an armada. (The media hyperventilating over this pipsqueak squadron has me rolling my eyes).

The Russian navy has been ravaged by a nation without a navy: the Black Sea Fleet has lost about one-third of its hulls, including several of its most capable, to Ukrainian drones (airborne and seaborne) and cruise missiles. It has all but abandoned its former home port of Sevastopol, and scampered to Novorossiysk, essentially abandoning the western Black Sea. And it is reported that yesterday one of its larger combatants suffered severe fire damage in the Barents Sea.

It is a simulacrum of a navy, perhaps intent on living up to the glory of Admiral Rozhestvensky’s Baltic Sea Fleet in 1905.

Not that Russian efforts on land are exemplary. Indeed, looking at the wreckage of the Russian campaign in Ukraine I am hard pressed to find in all of history a worse military performance on any level–tactical, operational, or strategic. Putin has achieved the triple crown of failure.

But he is apparently ebullient nonetheless. According to the Institute for the Study of War he “articulated a theory of victory” in which “Russian forces will be able to continue gradual creeping advances indefinitely, prevent Ukraine from conducting successful operationally significant counteroffensive operations, and win a war of attrition against Ukrainian forces.” Further:

Putin stated that Russian forces aim to “squeeze” Ukrainian forces out “of those territories that should be under Russian control” and therefore Russia does not need to conduct another mobilization wave. Putin asserted that Russian crypto-mobilization efforts are sufficient for this approach and that Russia has recruited 160,000 new personnel so far in 2024 (a figure consistent with reports that the Russian military recruits between 20,000-30,000 recruits per month).

In other words, Putin thinks that suffering 30,000 casualties per month (most of which are KIA or too badly wounded to return to combat) to gain a few kilometers here and a few kilometers there is not just sustainable, it’s the path to victory! (It is highly likely that the “crypto-mobilization” has basically created a steady state where the influx of recruits just balances casualties).

These force generation efforts do not just sweep up unfortunate Russian citizens (disproportionately from non-Russian republics), but also shanghai African students attracted to Russia by promises of a free education. They also attract impoverished Nepalese, Chinese, Bangladeshi, Indian, etc., by dangling promises of lucrative pay–which if they live to collect (highly unlikely) may not receive it anyways. Russia also routinely reneges on promised payments to families of KIA–and even frequently fails to give the supposedly honored dead a decent grave.

And maybe saying “a few kilometers here and a few kilometers there” gives way too much credit. The vaunted Russian attack on Kharkiv initially gained a few kilometers in two mini-bulges, but was stopped after a few days, and in the past week Ukrainian counterattacks have ejected the Russians from most of those paltry gains achieved at disproportionate cost.

Falkenhayn and Pyrrhus stand aside before true greatness.

This is a truly twisted man, perfectly content to reinforce failure after failure, to sacrifice untold numbers, all to satisfy his grandiosity.

Meaning that Russia’s army is a simulacrum as well. There is much angst in Europe over the prospect of Putin launching an attack on some Nato countries, especially the Baltics or Poland. How? With what? To what end–other than an even more catastrophic defeat?

Yes, perhaps Putin is just delusional enough to do it. Or perhaps he will adopt Eisenhower’s advice: “If a problem cannot be solved, enlarge it.” But if he does, it will not solve his problem, except in the way that death solves all problems.

June 4, 2024

At the Threshold of an American Time of Troubles

Filed under: History,Politics,Uncategorized — cpirrong @ 3:03 pm

For they have sown the wind, and they shall reap the whirlwind: it hath no stalk: the bud shall yield no meal: if so be it yield, the strangers shall swallow it up.

Hosea, 8:7

Those words came to mind in the immediate aftermath of the Trump verdict in New York. For it is clear that baleful and long-lived consequences will flow from a trial and conviction that transgressed legal boundaries and common decency: while following it, I was wondering if Judge Merchan was striving to set the record for reversible errors and violations of a defendant’s rights.

Yes, an ill wind has been sown. Who shall reap the whirlwind?

The Biblical quotation suggests that the sowers are the reapers. It is indeed possible that the Democrats generally and the Biden administration specifically will reap in November what they sowed in May (and in fact for many, months before that, and it many places beyond New York): the decision has sparked outrage, and not just among Trump’s existing supporters, or Republicans. But it remains to be seen whether this outrage will outweigh the burden of running for president as a “convicted felon.”

Alas, I believe the entire country will reap what the regime and its apparatchiks have sown, and for many years to come. The by-any-means-necessary use of lawfare has violated all pre-existing norms, and has set a precedent that will cast a shadow over American politics forevermore. There is no going back.

America is now channeling Peruvian dictator R. Benavides: “For my friends, everything; for my enemies, the law!” 

I was always astonished that during the Trump impeachment circuses that the Democrats smugly believed that this could not be used against them. They are similarly smug in their belief that they are immune from the type of lawfare they have waged since Trump left office.

Yes, their entrenchment in the deep, middle, and shallow states (to use the insightful desription of Jeffrey Tucker) does provide some immunity. But once a weapon has been unsheathed by one side, it is inevitable that the other will take it up as well.

2020s Lawfare will be to American politics what poison gas was to combat in WWI.

Lawfare–and especially the weaponization of criminal law–makes politics existential. All restraints are lifted in existential conflicts. We can only go downhill from here.

One of the things that really irked me about the Caesar bio show that I wrote about last week was the lionization of Cato. In fact, Cato was as responsible, and indeed arguably chiefly responsible, for the fall of the Republic which he claimed he was defending against tyranny precisely because he and his faction waged lawfare against their political enemy Caesar, and thereby made politics existential.

Caesar crossed the Rubicon with an army because Cato had ensured that his freedom and perhaps his life were in grave legal jeopardy if he crossed without one. Cato made politics existential for Caesar: Caesar understood that he could continue to exist only by waging civil war. Cato sowed the wind. He, but more importantly all of Rome, reaped the whirlwind.

And that’s where we are now.

The bitter irony is that a common criticism of Trump is that he transgresses American democratic norms. Most of this is in the fevered imagination of his enemies: most of his norm violations have come merely from running his big mouth. That pales in comparisons to the violations of political and legal norms that have become commonplace in the lawfare waged not just against him, but against many in his orbit, and many outside it who have had the temerity to challenge the regime.

Words can’t hurt you: legal sticks and stones certainly can. And if one side picks them up, the other side will inevitably do so.

It is also sickly ironic that a bogus charge of “election interference” (bogus because no actual legal violation of Federal election law was properly charged, and New York has no jurisdiction over this law regardless) is being used to engage in the most flagrant attempt in American history to manipulate a national election.

This betrays a deep insecurity among Biden and the Democrats. A confident president and party would not feel it necessary to stoop to such devices.

Exactly where we go from here is unknown. But it is clear that we are entering an era of existential politics. Such a politics inevitably descends into conflict, chaos, and violence. And frequently to civil war. And when future generations look back, they will know exactly who to blame, and to when the Time of Troubles began.

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