Getting What We Deserve
There can only be one TOP STORY this day.
#1 - Democracy is the theory...
that Common People know what they want and get it...good and hard. (HL Mencken)
The country has repudiated Donald Trump. Can't say we didn't see this coming. For once, the polls were spot on.
Historically, the party in power loses ground in the midterm election. But... Republicans were shellacked. And low turnout among Republicans can't be blamed. No doubt a confluence of factors led by Trump hatred provoked the Blue Tsunami. How much did other issues beside TDS matter? Was it ICE? Was it gas prices that skyrocketed because of a war Trump said we'd avoid? Was it AI? We can all agree, Trump's behavior didn't help.
I still find it incredible candidates like El-Sayed in Michigan, Jackson in Maine, Flanagan in Minnesota and the most unbelievable, Talarico in Texas, not only won but convincingly. What are people thinking? Oh I know...anybody but Trump or the Republicans. Shows the profound depth of antipathy for this President.
So now what? Trump will use the veto to protect gains in border security and energy superiority. But many things will be at risk...
Our ability to stay ahead in AI. Preventing Iran from obtaining nuclear weapons and the ballistic missiles to deliver them here. The desperate need to refurbish and modernize our military. Our standing in the world. Surely this is a glorious day in Tehran, Moscow and Beijing for it gives great hope that we shall return to the feckless days of Joe Biden when bullying America was far easier. And forget about all hope of getting the debt under control or tackling the looming Armageddon in Social Security and Medicare.
The question really is will anything get done between now and the election in 2028? Far more likely the country will remain paralyzed. After all, besides executive orders, how much does Congress pass any way? Will the newly elected socialists fall in line with mainstream Democrats (if there are any left) so as to consolidate power in their drive for the White House next cycle?
There is one sliver lining. In the last eight midterms where the President's party lost control of the Senate, the House or both, the stock market WENT UP. 13% on average. Goes to show you what the financial markets think of our government. School kids squabbling in the yard. Just don't let them break anything. Wall Street seems to love it when government can't "fix" anything.
We knew turning this battleship around after four years of Biden/Harris would be difficult. But didn't think it would be sunk in the process. It is little wonder our enemies remain confident that Americans will jump ship when the going gets tough.
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Sadly, Governing Systems Matter.
Despite the "Nine Scariest Words", it's the governing system that makes the biggest difference in our lives. I wish it weren't so, but facts say differently.
Throughout history, numerous scholars have sought to determine why some nations are so much better off than others. Was it geographical advantage? Inherent cultural nature? Innate intellectual superiority? Educational quality?
Turns out none of these pass the “silver bullet” test.
If they did, explain why life is so much better in Nogales, AZ than across the border in Nogales, Mexico? In South Korea than North? Or Singapore then Indonesia? Why is Western Europe in such decline?
As much as I would like to, once again, pay homage to President Reagan’s historic axiom, “The nine scariest words in the English language are…I’m from the government and I’m here to help”, clarification is warranted.
Perhaps, it is most informative to think of governing institutions in terms of how economic behavior is directed. Think of government as being either “extractive” or “inclusive”
Extractive governing systems pry benefit from prosperous groups within society and redistribute to it others. Leaders resist development or wealth-sharing because they are fundamentally self-interested and power driven.
Inclusive governments facilitate power-sharing among numerous groups within society yet maintain a centralized framework to ensure rule of law and security of the society as a whole.
Extractive governments consolidate power and discourage the cornerstones of prosperity…meritocracy and creative disruption. Inclusive ones encourage competition and reward individual achievement. As importantly, they stay within their lane. And therein lies our biggest problem.
So, though it saddens me to say, governments must stay. They must, however, be watched scrupulously. In our case, the signs of decline are foreboding. Government is too large, too expensive. The legal system is obtrusive and increasingly politicized. The incentive to excel for both individuals and private enterprises has been short-circuited by excessive regulation, self-obsessed politicians and irresponsible media. Unfortunately, Trump had made government seem more officious than ever. At least Biden stayed out of sight.
Oh, oh. Doesn't that bring us full circle to the Nine Scariest Words? Sorry.
Once a nation can no longer be trusted, things decline. I fear America is losing everyone's trust to enforce its laws and its social contracts regarding... Social Security, Medicare, Military Security, Equal Opportunity and Religious Freedom. Even Repaying its Debts and Maintaining the Value of its Currency.
Energy Security
The Iran war has triggered the largest energy crisis in history, or so the conventional wisdom says. Epochal stuff — but only half-true, because oil is only half the story.
Thanks to the shale revolution and an enviable geological endowment, US and Canadian natural gas consumers are dodging the economic fallout of the Iran conflict. For America, long worried about its reliance on foreign fossil fuels, it’s an embarrassment of riches.
While European and Asian consumers are now paying north of $30 per million British thermal unit for their gas, US buyers pay around $3 per mBtu. Last week, US gas prices briefly touched a two-year low of $2.5 per mBut — in the middle of an energy crisis. Canadian costs are even lower, at about $1.5 per mBtu.
The price difference between gas in Europe and Asia versus North America, reaching now a ratio of 12 times, has never been wider; not during the 2022 gas shock following the Russian invasion of Ukraine, nor in 2011-2012 after the Fukushima nuclear accident, which forced Japan into gas to keep the lights on.
Natural gas: The United States and Canada have abundant domestic supplies, insulating their consumers from some of the international price shock.
Oil exports: American producers can sell crude and refined petroleum into markets facing shortages.
LNG exports: US natural gas producers benefit from international demand for alternative supplies.
Competitive advantage: Countries dependent on Middle Eastern energy are more exposed to supply disruptions and higher prices.
Why this matters: The United States is not just benefiting from higher energy prices. Its relatively insulated natural-gas market gives American consumers and industries an advantage over countries that rely heavily on imported energy.
Don't forget all this when the regulations start flying again.
China's Navy
China has three aircraft carriers, with a fourth on its way that Western experts believe will be nuclear-powered. They’re part of the world’s largest navy, which now has a battle force of more than 400 ships and submarines, according to official U.S. numbers seen by The Wall Street Journal. That means China’s fleet is around 35% larger than the American Navy by hull count. It is one of the largest peacetime naval buildups in modern history.
On any given day, as many as 100 of China’s navy ships are out on some of Asia’s busiest trade and transportation routes—pressuring rivals and training for a potential conflict with the U.S. The larger and more sophisticated vessels in its fleet also routinely push further out into waters long dominated by American forces. The Chinese navy’s rise has been powered by the country’s rapid emergence as a colossus in shipbuilding and as the biggest sea-trading nation.
The End...for now
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