Craig Pirrong's Blog, page 6

Trump vs. the Courts

The current clash between the Trump administration and the Federal courts is a boundary war. As I wrote sometime ago, such wars are inevitable due to the fact that the Constitution’s separation of powers reserves domains of authority for each branch, and outlines general principles identifying what those domains encompass, but under particular factual circumstances it is unclear where the boundary lies. Moreover, and crucially, these disputes cannot be resolved on a principled basis because there is inherently no ultimate arbiter between branches under the separation of powers.

Disputes are also inevitable because each branch wants to expand its domain at the expense of the others.

This all implies that conflicts like those currently raging between the executive and judicial branches are power games that will be decided by politics. The administration can exercise the Andrew Jackson option of refusing to enforce or adhere to court edicts. The cost of doing so is political. Thus, Trump’s decisions going forward will be driven by whether he deems that the substantive results of the refusal to recognize the judiciary’s boundary claims outweigh the political cost.

How this will play out is highly uncertain. This is due in part to the fact that there are so many disputes in play that will ultimately have to be decided by the Supreme Court, and there is a lot of unpredictability regarding the order in which cases will reach it, and the particulars of the decisions that are appealed to it.

This makes the game inherently dynamic, and how it evolves will depend on which cases reach the court first. Trump’s political and legal position will be stronger for some cases than others, and this will likely drive his strategy.

For example, the  James E. Boasberg decision in the Alien Enemies Act regarding deporting Venezuelan and El Salvadoran illegal immigrants (and gang members) presents very good possibilities for Trump. Siding with Boasberg would require the Supreme Court to repudiate (or twist beyond recognition) a precedent, Ludecke v. Watkins, which ruled that the president’s power under the Act is almost unlimited. It also relates to matters that are clearly within the executive domain, namely national security and foreign policy.

Moreover, the politics on this are clearly on Trump’s side. A large majority of Americans want these thugs out of the country. The optics of being a judge who sides with foreign gang bangers notorious for the depredations they have wreaked on Americans are very, very bad, and politically Trump wins big by flouting such a jurist.

Meaning that Trump may indeed want to choose to fight this battle first. There is actually a political benefit of telling Boasberg to bugger off, and having this reach the Supreme Court early would put Roberts et al at a big disadvantage due to both the politics (and yes, the Supreme Court does follow election returns, as the old phrase goes) and the legal precedents.

This could be in fact why the administration chose to use the Enemy Alien Act the basis for its deportations, something that has puzzled some who argue that Trump could have deported on other grounds. But that Act clearly relates to a presidential power and the courts are in much greater danger of a boundary violation if they rule against him than would be the case if the deportations were justified on other authorities.

Other cases are far more problematic for Trump. Firing federal employees is less of a clear political win for Trump (though I think that it is still a net political positive), and the legal grounds are more dicey. Refusing to spend money or attempting to claw back money is also probably a net political win but legally chancier, in particular as this would involve the Court arbitrating a boundary dispute between the other two branches, whereas cases like the Alien Enemies involves a dispute between the executive and judiciary, and Trump can argue powerfully that the judiciary cannot decide what falls within its own domain without violating the separation of powers. Trump’s attempt to exert control over “independent” agencies is also legally riskier, and most Americans’ eyes probably glaze over on this issue.

The cost to the Supreme Court also depends on the particular matter before it. The court recognizes that there is a cost to it if the administration exercises the Andrew Jackson option, especially in a case where the public strongly favors the administration on the substance. Not only is its legitimacy contested, but its authority is proven chimerical. It does not want to choose to die on a politically indefensible hill.

(And maybe I should say the “Joe Biden option” instead of the Andy Jack option. After all, Biden clearly flouted the Supreme Court’s decision on student loans. In this regard it is worth noting that Roberts has been conspicuously silent about that even though he was quick to criticize Trump for attacking Boasberg).

There is also the distinct possibility that none of these cases will result in clean decisions that resolve, or attempt to resolve, the underlying issues. The Court can sidestep and fudge, or make decisions that may have a substantive result that benefits Trump but do not draw firm boundaries. Throwing out cases for lack of standing is a standard way of achieving a particular substantive result without coming to grips with the more fundamental issues. What fudges are available will depend in part on the legal arguments the administration makes.

But where there’s a will, there’s a way. My guess is that the Court will look for escape hatches whenever possible, and that Trump will get a lot of hollow victories that do not establish the precedents he clearly seeks.

One likely outcome from all this is that the Court will eliminate, or at least substantially curtail, nationwide injunctions. Thomas and Alito said long ago that they should be eliminated. The onslaught of litigation against the Trump administration has led to an unprecedented use of such injunctions, almost exclusively by highly partisan judges, and in particular in the DC circuit which is clearly hard left.

These injunctions greatly raise the legal stakes, and make it far more likely that the matters will reach the Supreme Court. Simply out of a desire to reduce its involvement in such fraught matters the Court may well decide to eliminate or sharply circumscribe the scope of district courts’ injunctive authority.

In sum, by asserting his view of the domain of his powers under Section II of the Constitution, Trump is in conflict with courts that believe that this encroaches on their domain under Section III. Under the Constitution there is no independent authority who can arbitrate between them, so the ultimate outcome will require one to surrender to the assertions of the other, or come to some mutually unsatisfactory compromise, and do so on the basis of calculations of power and politics, rather than Constitutional principles. This game is very complex for myriad reasons, so predicting its outcome is very difficult. Given the stakes and risks, both sides have incentives to avoid a decisive outcome, meaning that these fights may end with whimpers, rather than bangs.

Add Insufferable Condescension, Hypocrisy, and Stupidity to the List

Some French MP has demanded the US return the Statue of Liberty to France:

French MP demands the US 'give us back the Statue of Liberty'
?? https://t.co/OA2Px6vhlr pic.twitter.com/zGiUPPC2hA

— FRANCE 24 English (@France24_en) March 16, 2025

“We’re going to say to the Americans who have chosen to side with the tyrants, to the Americans who fired researchers for demanding scientific freedom: ‘Give us back the Statue of Liberty,'” he told cheering supporters.

“‘We gave it to you as a gift, but apparently you despise it. So it will be just fine here at home,'” he added.

As we say in Texas:

No? OK then. Fuck off like a good little froggy.

The insufferable condescension, hypocrisy, and stupidity here is off the charts.

For one thing, that was gifted by France in the 19th century because the US was a unique beacon of freedom in the world, not because the US intervened to stop tyrants abroad–most of whom were European, by the way.

In fact, that was an era when the US still largely adhered to John Quincy Adams’ dictums: “The United States goes not abroad in search of monsters to destroy,” and that if the US did so, “She might become the dictatress of the world. She would be no longer the ruler of her own spirit.” Arguably, the erosions in freedom that the United States has indeed experienced in recent years is directly attributable to attempting to remake the world. And those attempts–notably Iraq and Afghanistan–failed miserably in their object.

For another, where is the limiting principle? If we are to confront Russia because it is ruled by a tyrant, why not China? North Korea? Cuba? Venezuela? And on and on and on. There are many monsters abroad. Indeed, arguably most of the world is monstrous.

And as for the hypocrisy: as J. D. Vance bluntly told it to your Eurofaces, Europe today is anti-freedom. Anti-free speech. Anti-personal liberty. Anti-economic freedom. Matthew 7:5 is more than apposite here: “Thou hypocrite, first cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother’s eye.”

As for science and scientists, uhm, U.S. government scientists being fired are hardly (to put it in your language, Frenchy) la crème de la crème. And they were not fired because they stood up for scientific freedom. They were fired because they were not producing anything of value.

Indeed, their main lament is that they are unemployable outside the U.S. government. If they are so wonderful (a) you should be overjoyed because you will soon be blessed with brilliant ex pat science brains, and (b) well no, actually, because they could easily find employment in the U.S. because of their alleged brilliance and the moribund nature of European innovation. Many of these scientists specialized in what they chose because of the demand from government, demand derived from political forces not intellectual or commercial ones. Our money went to paying for their “freedom” to do useless research.

The words of another American ex-president, Eisenhower are also very apposite here:

Today, the solitary inventor, tinkering in his shop, has been over shadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.

The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.

Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

Eisenhower’s warning was ignored, much to our cost as a nation. The current culling is merely a start at undoing the damage caused by the government dominance of science that has occurred over the last 70 years.

Today is the 5th anniversary of Trump’s (much to his discredit) imposition of a 15 day (hah!) lockdown to “stop the spread.” THAT is what government science has given us. We were told to shut up, and “follow the science.” The government science that was a lie from start to finish. The government science that, almost certainly, caused the outbreak in the first place. As the British and German governments concluded at the time (as we are only finding out now).

So yes. The less of that science, the better.

A large part of America, the majority in fact, has no use for lectures from condescending European nitwits and hypocrites. You have no right or reason to judge us. And your diatribes are all the more reason for us to be shed of you, and leave you to your own pathetic devices.

Europe: Insane, Selfish, and Cynical

I was about to write that Europe has lost its mind, but I’m starting to wonder whether it had anything to lose. The meltdown over Trump having the audacity–the temerity!–to try to end the war in Ukraine (or at least bring a respite to the fighting) continues apace. Indeed, it seems to ramp up daily.

One common response to the US insistence that Europe put on its big boy pants and provide for its own defense is to say that well, if the US is going to abandon Europe, Europe should ally with China. Now, many of those saying so are just online midwits and dimwits, but not all of them. Indeed, the UK deep state’s preferred think tank, Chatham House, is flogging the idea:

Donald Trump’s approach to Ukraine is a test for Europe’s ability to adapt to a world of great power politics. To pass it, Europe should reach out to China. https://t.co/RAvcXmKprb

— Chatham House (@ChathamHouse) March 10, 2025

How is this supposed to work, actually? China is going to protect Europe against Russia? You know, the Russia that is in an alliance with China, and which China provides much of the support necessary to keep the war in Ukraine going on? That Russia? Will China base troops in Europe to defend against Russia? Oh, and is China going to put Europe under its nuclear umbrella . . . to deter a nuclear attack by Russia?

So please do tell: just how is China going to replace what the US has provided Europe for the past 80 years?

I’ve heard idiotic ideas in my time, but this is in the running for the most idiotic.

Because it’s not a rational response. Instead, it is adolescent petulance, along the lines of: “Daddy is forcing me to support myself. I’ll show him! I’ll go down on the local fentanyl dealer!”

Go for it. I’m sure that will be awesome, and that China will respect you in the morning!

Europe is also making moves to strengthen its military.

Shot:

The decision to unleash the power of the federal balance sheet to transform Germany’s military and revamp its infrastructure is a watershed moment https://t.co/MZJTtey2ZX

— Bloomberg (@business) March 15, 2025

As detailed by the invaluable Eugyppius, to achieve the “game-changing plan”, German crypto chancellor Merz made an insane deal with the Greens to change the constitution to permit breaking budgetary restrictions. This deal will do little to enhance actual German defense capability, but will throw €100 billion at more climate change unicorns, which will just go to dig Germany’s economic grave even deeper.

Chaser:

German army struggles to get Gen Z recruits ‘ready for war’ https://t.co/ox38cjqHE5

— Financial Times (@FT) March 15, 2025

So even if Germany does defy my expectations and buy some armaments, they won’t have anybody to fight using them. Maybe they’ll buy robots (from Tesla?) with voices like Arnold in Terminator to operate them.

France’s Henery Hawk, AKA Manny Macron, is acting very butch. He is flying the French version of AWACS over the Black Sea, pretending it can replace the intel the US is providing. A portion, boy, only a portion.

But Macron has inadvertently given away Europe’s real motive for not wanting the war in Ukraine to end:

??Europe can send troops to Ukraine without Russia's consent, French President Macron said.

"Ukraine is sovereign. If it asks to deploy allied troops on its territory, whether it accepts it or not is none of Russia's business. When Russia says that the ceasefire will be a… pic.twitter.com/PYklv3sboI

— ?MilitaryNewsUA?? (@front_ukrainian) March 16, 2025

That is, if fighting stops in Ukraine, Putin will move on to attack other countries, so the fighting must go on. In other words, Europe wants to fight to the last Ukrainian because they are petrified at their own impotence. All the while camouflaging their cynicism with lofty statements about protecting Ukrainian sovereignty.

The Baltics, in particular Estonia, have also been very vocal in their demands that “let’s you and him fight to protect me.”

Very revealing. Though as I’ve said repeatedly, if you look at capabilities, their fears are vastly overblown.

And as for the last Ukrainian, it is not hyperbole to say that Ukraine would be a dying nation even without this war. Europe as a whole is a demographic nightmare, and Ukraine is the most nightmarish country of them all:

That 23.8 million forecast decline represents 61 percent of Ukraine’s current population. 61 percent.

To put it bluntly: why should the US, or Europe for that matter, fight Putin over what will soon be a corpse? And why should the US, and the rest of Nato, shackle itself to what is soon to be a corpse, and promise to go to war (under Article 5) to protect it? That didn’t work out well for Germany in WWI with Austria-Hungary.

To me the most telling sign of Putin’s malignity is that he is willing to sacrifice hundreds of thousands of Russians to take control of a terminally ill nation. Especially in light of Russia’s own demographic train wreck, which looks good only in comparison with Ukraine (and some other eastern European nations, notably Poland).

So will hostilities cease soon despite Europe’s wish that they continue? I don’t know, but I can say that Europe’s desires matter not at all, except if they feed Zelensky’s delusions sufficiently to make him to reject reality and refuse any compromise.

Zelensky has–after being reminded through the limited withdrawal of US support of his dependence on America–agreed to the cease fire plan offered by Trump. Putin has publicly said that he will agree too . . . with conditions. In response to which the cry has gone up “See–he isn’t interested! It was dumb to expect otherwise! Why does Trump even bother? It must be because he’s Putin’s poodle!”

Said by people who apparently don’t understand that public statements–especially by the likes of Putin–must be discounted heavily. What matters is what transpires out of view. Trump and Putin will supposedly speak this week. That’s what matters, though the usual bedwetters are saying that this only proves that Trump is Putin’s stooge.

Methinks their real fear is that Trump will bring the fighting to an end, at least for a while.

Putin needs a deal, for many reasons. But he has proven that he is willing to expend lives to gain some concessions. Europe and the foreign policy establishment in the US refuse to countenance any such concessions, including in particular a denial of Nato membership for Ukraine.

But that is a price that the US should be more than willing to pay: indeed, Biden should have offered it in 2021 or 2022, in which case the war might well never have begun in the first place. Again, shackling the US to a Ukrainian corpse-to-be would be all pain and no gain for the US.

If that’s a hill the Europeans want to die on (or more accurately, want the Ukrainians to die on), so be it. The US should not be party to their folly, and their selfish cynicism.

China: Invasion Barges, or Just Argy Bargy?

There have been stories regarding construction of Chinese landing barges presumably for use in an invasion of Taiwan circulating for some time now. There are now pictures:

BREAKING:

China unveiled its new huge ”invasion barges” during an amphibious landing exercise near Zhanjiang.

The barges will make it possible for China to move large amounts of military equipment to a shore without docking facilities.

Ships would dock with barges, unload… pic.twitter.com/2eAXTW4Zrp

— Visegrád 24 (@visegrad24) March 13, 2025

This brings to mind two historical episodes relating to threatened invasions of another island, Great Britain.

The first is Napoleon’s Flotille de Boulogne, constructed starting in 1801. Napoleon ordered the construction of a fleet of hundreds of barges and gunboats intended to ferry a 200,000 man strong army across the English Channel to invade Britain. The plan never came off, because it required France to control the Channel, a dodgy prospect at best due to the dominance of the Royal Navy. Even before Nelson virtually annihilated the French and Spanish fleets at Trafalgar in October 1805, Napoleon realized that the prospects for an invasion were dim (and likely a fantasy), so he left Boulogne and turned east to fight the Austrians and then the Austrians and Russians, a campaign that saw the decisive battles of Ulm and Austerlitz.

The second is Hitler’s plan to invade Britain after the fall of France in 1940. Like Napoleon, he constructed a fleet of invasion barges in France and Belgium to be used in Operation Sea Lion. Whereas Napoleon had to get control of the sea, Hitler had to get control of the sea and air. The Battle of Britain was fought to achieve the air supremacy necessary for a cross-channel invasion. When that battle was lost, Hitler, like Napoleon, gave up his invasion plans and turned east.

These historical events demonstrate that a fleet of barges may be a necessary condition for an amphibious invasion, but they are definitely not sufficient. Successful amphibious invasions, notably D-Day and various American operations in the Pacific in WWII, were mounted by overwhelming forces that controlled the sea and the air. (The Luftwaffe was only able to fly a handful of sorties on D-Day. Japanese air operations were feeble at best in opposition to US landings. The Great Marianas Turkey Shoot before the invasion of Saipan destroyed a desperate Japanese attempt to attack the invaders from the air).

So what matters in Taiwan is not that the Chinese have invasion barges. So did Napoleon. So did Hitler. But they could never achieve the supremacy necessary to make them anything but targets, so they didn’t use them.

And looking at those barges reminds me of the sardonic nickname for US Navy tank landing ships (LSTs): long slow targets. I sure as hell wouldn’t want to be on one.

China will not use them unless it believes it can and does achieve superiority over the Taiwan Strait. Whether it can do so is very much in doubt. Mines, anti-ship missiles, anti-aircraft missiles, and air power (especially if the US intervenes) make any such attempt a very risky proposition indeed.

Meaning that Xi has to answer one question: Do you feel lucky? Well do ya, punk?

China is bellicose, for sure. But whether it turns from argy bargy to launching invasion barges would be a move of daring, and indeed, desperation.

Futures as a (Box Office) Bomb Discovery Mechanism

The travails of Disney’s latest attempt at suicide-by-woke, the Snow White reboot, brings to mind one of the spawn of Frankendodd–the ban on movie box office futures.

In 2008, Howard Lutnick’s Cantor Fitzgerald filed to create the CX Futures Exchange to trade futures on movie box office receipts. Hollywood lost its mind, and in the post-GFC anti-derivatives hysteria and the resulting legislative response, succeeded in getting Congress to include a ban on such futures as one of the many pieces stitched together to create Frankendodd. Thus, such futures joined onions as the only thing that was otherwise legal on which it was illegal to trade futures.

Why was Hollywood so hot and bothered about box office futures? That’s what brings me back to Snow White.

Disney is in a panic because it is widely predicted that the movie will bomb epically at the box office, and in particular since it is Peak Woke, with the wokiest of actresses in the title role. As of now, those predictions are merely conjectures bandied about in the press or in online conversations, and don’t involve anyone putting their money where their mouths are.

But, if there were futures, all of that diffuse information about how bad the movie is, and how badly it will perform, would be crystalized into one number for all the world to see. And the number would have credibility, because the people behind it would have skin in the game. And it would have credibility because the futures would incentivize those with information about the picture to communicate that information to the market via their trades.

Futures would have been a box office bomb detection device.

Without futures, Disney can hope that many people won’t have heard the Hollywood chatter, or will discount it and give the movie a chance. And they can hope that woke reviewers will pump the movie.

Futures would have been a box office bomb detection device. If there were futures, there would be a hard number to communicate objective information about how bad Snow White is. Nobody would attend, and the movie would bomb.

Absent futures, Hollywood can fool enough of the people enough of the time with marketing and propaganda to at least mitigate the revenue disaster of a bad film. With futures, that would be much, much harder. Which is why they successfully importuned the authors of Dodd-Frank to strangle movie box office futures in their crib.

A Cheer and a Half for the White House Office of Shipbuilding

Those of you intrepid souls who have followed this blog for a while know that I’ve been banging on about the pathetic state of US Navy procurement, and especially shipbuilding, for years. It’s therefore encouraging that the Trump administration has prioritized this issue, and created a White House shipbuilding office.

My main reservation is that it promises to address both commercial and naval shipbuilding. To be blunt, (a) US commercial shipbuilding is a lost cause, and (b) a division of effort is likely to mean that neither is likely to do well, especially if (as is likely) the lost cause sucks up disproportionate resources. That would be a tragedy.

A few basic facts.

Most importantly, US naval power has never been heavily reliant on commercial shipbuilding capacity in peacetime. Indeed, the US has always been an also ran in terms of US commercial ship construction. In the 19th and early-20th centuries, Britain dominated civilian construction. The US share was measly. Ditto in the interwar years. Only during the World Wars did US commercial construction represent a majority of hulls built in the world, and immediately after each–and I mean immediately–US commercial ship construction shriveled to virtually nothing.

Thus, clearly the US has never had a comparative advantage in building bulk, liner, or container ships. Never. Even with the sunk investments in shipyards and workforce training, and learning by doing (notably in Liberty ships, for example), US yards could not compete after WWII.

Yet, even with its emaciated (at best) civilian ship production, after WWII in particular the Navy was able to churn out numerous ships of all types, many of them first-of-their-kind, such as large deck carriers, nuclear subs, ballistic missile subs, large amphibious craft and on and on, as well as numerous new classes of conventional types such as destroyers, cruisers, and frigates. The US achieved a 600 ship navy when its share of non-military construction was rounding error:

(Figure from an article “Industrial Policy: Lessons From Shipbuilding” in the Fall 2024 issue of the Journal of Economic Perspectives by Barwick et al that I will return to below).

In brief, a large civilian shipbuilding sector is not necessary for US naval construction to flourish. It is also very hard to identify any synergies whatsoever, and indeed, the sectors would compete for specialized resources (notably labor in coastal regions).

Next, and relatedly, competing in the civilian ship world will be enormously expensive and unremunerative, and for a reason related to the lack of US production today (and for decades past): massive subsidies by other countries.

As the Barwick et al article shows, the demise of UK shipbuilding dominance and the succession of new dominant countries, first Europe, but then especially Japan, South Korea, and China in the post-war period, was due to subsidization and industrial policy by these countries. Japan, Korea, and Japan successively identified shipbuilding as a strategic sector, and threw lavish resources at it. Indeed, it is likely that the Koreans and the Chinese were just imitating the Japanese model.

To beat a subsidy you need a subsidy. And a particularly big subsidy if you don’t have a comparative advantage in the first place–as US history demonstrates it does not. And a really really big subsidy if the leader is subsidizing heavily, as is the case today with China.

Bartwick et al estimate using very clever methods that China has subsidized its shipbuilding industry to the tune of $80 billion. They further estimate that this lavish support has indeed built market share, but not profit. Indeed, they estimate that every $1 in subsidy in China has produced 20 cents in additional industry profit. The world, not China itself, is likely the biggest beneficiary of China’s generosity, through the ability to buy cheaper ships.

“Go for market share not for profit” is usually a very, very, very bad commercial strategy, reminiscent of the South Park Underpants Gnomes:

Subsidize to get market share.????Profit!

Except, of course, profit never comes.

A semi-plausible justification for a market share first strategy is that customers are sticky, and that once you get market share you will have market power over customers who find it costly to switch. But that theory is wildly implausible for big ticket items like ships with sophisticated buyers–as the successive supplanting of British, Japanese, and Korean firms amply demonstrates.

It is a mug’s game to compete with this. The “industrial base” that will result will represent a huge waste of capital that would be far better invested in rejuvenating and expanding the military shipbuilding industrial base. Focus there. That’s where it is needed.

And as I noted above, dividing efforts would be inimical to success in the truly vital area–naval construction. It is an all too familiar phenomenon that reinforcing failure and directing resources to floundering divisions at the expense of successful ones is common in conglomerate enterprises. This is a major justification for spinoffs–to prevent the drowning from dragging down those who can swim. Trying to expand both commercial and naval shipbuilding would be a classic conglomerate mistake, and one with serious national security ramifications.

Don’t do it. The Chinese have bought market share at huge expense and received no real economic benefit. Don’t imitate stupidity out of jealousy. Market share is not value.

So kudos to the administration for recognizing a serious problem and endeavoring to fix it. But I pray that they concentrate on the real problem–naval shipbuilding–and scuttle lost causes–civilian ships.

Eurodelusions

The Europeans are making quite a spectacle of themselves. After years of bashing Trump for daring to demand that they pay for their own defense, they are now freaking out at the prospect that the US is over their mooching. They are alternating between shrieking at Trump for betraying the sacred alliance with Europe and making bold promises to do what Trump has been demanding for years (and which even Obama demanded before that, though less vituperously)–namely, pay for their own damned defense.

The European performance over recent months has reminded me of the rich brat who lives off dad’s largesse, living a nice hippie life with no responsibility, all the while calling dad a Nazi racist imperialist capitalist. Then daddy has enough, and says it’s time for him to get to work and support himself–and to STFU. Which causes the brat to have a breakdown and throw a fit. “Daddy is a big meanie! How dare he cut me off!” As if that’s going to change dad’s mind. If anything, it’s going to confirm dad’s conviction to be shed of the brat. And probably give him a swift kick in the ass on the way out the door.

One manifestation of this European brattishness is their fawning over Zelensky, who has also felt daddy’s wrath. “The bad man was mean to you! We can relate! Let’s have a big group hug! We’ll support you! You can count on us!”

For his part, Zelensky obviously prefers European tongue baths to Trump tongue lashings, so he has been meeting all of the European bigwigs, you know, from countries like Portugal and Slovenia, collecting promises of undying support. (He should interpret the word “undying” to mean “we support you but we aren’t going to die for you”).

Wow. Such powerhouses on your side! What, do you figure if Slovenia puts in a good word Melania will convince Donald to write you a blank check? https://t.co/wsHw0b2akw

— streetwiseprof (@streetwiseprof) March 5, 2025

This is all utterly delusional. Europe cannot come close to making up for what the US provides Ukraine. On Tuesday I wondered aloud whether the US would withdraw intelligence information from Ukraine. This is vital to Ukraine and Europe is utterly incapable of filling that breach.

Is Trump going to "pause" US intelligence support to Ukraine? Is that a threat being made in private, not public? "Pausing" Starlink? Loss of US ISR support would screw Ukraine more than loss of US weapons. No one else can provide it.

— streetwiseprof (@streetwiseprof) March 4, 2025

On Wednesday it did, and Starlink is apparently on the cutting block.

As I conjectured yesterday.

This is the real pressure point. https://t.co/yynEpT0uv4

— streetwiseprof (@streetwiseprof) March 5, 2025

But no worries! The Europeans will replace Starlink with their totes awesome Eutelstat system!

Slower speeds, terminals cost about 80x more and monthly service prices are tripled. Not to mention they depend on SpaceX to get their satellites into space. Sounds like a deal to me. But I will laugh when SpaceX tells them to get bent.

— Richard Mccrary (@RichardMccrar20) March 6, 2025

I’ll laugh harder.

And yes, the threat was made in private. Repeatedly. Trump’s Ukraine emissary, General (Ret.) Keith Kellogg disclosed that “It’s not like they didn’t know this was coming. They got a fair warning. I told them, and they were told last week as well.”

Later Kellogg induced a continent-wide case of the vapors when he said “It’s like hitting a mule in the face with a two by four, you know. You got their attention.”

But apparently not, because Zelensky is still resisting reality, and the Europeans are encouraging him in his delusions that he can fight on without fulsome US support but with European backing.

The Europeans are putting on a brave front, promising to throw hundreds of billions at rearming. Although it’s nice for them to put a price tag on what the US has been giving them for decades, this is yet another delusion.

Germany, under its not yet Chancellor Merz, is moving to break its self-imposed budgetary restrictions in order to splurge on weapons. The EU, France, Germany, and some others are talking of funding a European military. Along with the UK, France is advocating sending troops to Ukraine–despite the fact that Russia has said that it will not countenance this, and that this supposedly stirring commitment is tied to US participation in some form, which is another non-starter.

Macron (who reminds me of Henery Hawk from Looney Tunes) is particularly manic, promising to extend the French nuclear umbrella to the rest of Europe.

Take a drug test. I dare you. https://t.co/bPf0nyYNhf

— streetwiseprof (@streetwiseprof) March 7, 2025

In brief, Europe is having a manic moment. However, I predict that when they come down from their mania, reality will kick in and they will lapse back into their lotus eater lethargy.

The practical obstacles are numerous. First, and most notably, this will force Europe to choose between guns and butter, or more precisely, guns and welfare, pensions, etc. They have time and time again demonstrated what choice they make, and it ain’t guns.

Moreover, especially in the land of King Henery I (he of the 13 percent approval rating who was soundly rejected in the last election–last two, actually), budgetary realities make even a small splurge on armaments unaffordable. And indeed, Henery’s finance minister has already signaled that France will fade the bid:

France’s Finance Minister Eric Lombard said the government is still in the early stages of planning how to finance a boost in its defense spending and investment https://t.co/8Yq1nK4Y0c

— Bloomberg (@business) March 7, 2025

“Early stages of planning.” Yeah, those Leclerc tanks and Caesar SP guns will be rolling off the assembly lines any minute now!

Europe says it’s ramping up its defenses. The ramp’s slope is about 1/10th of a degree.

Another reality is that those making the biggest noise have a track record. Ursula von der Leyen, for example.

Remember: under Ursula's "leadership" as German Defense Minister, the German army trained with painted broomsticks and less than 1/2 of the Luftwaffe's aircraft were operable. https://t.co/kkJPFF02e3

— streetwiseprof (@streetwiseprof) March 7, 2025

Another reality. EU decisions have to be unanimous. Hungary and Slovakia will certainly not go along with a European army, or especially with EU military intervention in Ukraine. And other countries have expressed reservations, along the lines that defense is a national issue, not a collective European one.

Perhaps France and Germany, with an assist from pipsqueaks like the belligerent Baltics, will try to dragoon the rest of the EU to comply with their demands. But if they do, the most likely outcome would be to shatter the EU. And wouldn’t that be ironic? The Europeans stridently claim that Trump is destroying Nato, and they are on a path to destroy the EU.

As an aside, this demonstrates exactly why I have long argued that the willy-nilly expansion of Nato, especially post-1999 was foolish. The more heterogeneous and numerous the participants in an alliance, the less capable it is to take action, especially if a decision to do so must be unanimous. But Europe has had a panting desire to collect the whole set. Be careful what you wish for.

In sum, all of the practical, political, and budgetary realities that Europe now faces militate against their fulfillment of their bold promises to bulk up.

And I don’t know who is a bigger fool for not recognizing this–the Europeans or Zelensky. The former can be excused somewhat, for despite their bed wetting they don’t face an existential threat from Russia or anybody else. Zelensky does, yet between this massive little man ego and his desperation to stay in power (which could literally be existential as well as lucrative) he has chosen to seek succor from those who can’t provide it, and spurn the one who can.

I find the European attacks on Trump and the US to be sickly amusing.

One is that “the US needs allies!!!” Uhm, we need them in Asia, and there countries with a grip on reality (notably Japan) are stepping up: Europe can do fuck all for us there. We don’t need them in Europe, because frankly (interesting word in this context!) Europe is now secondary or even tertiary when it comes to US national interest. And we especially don’t need free loading allies–which the Europeans have been.

Another is that the US is appeasing Russia, and repeating the mistake of Munich, 1938. Uhm, no, for multiple reasons. Most importantly, in terms of capability–which is what matters–Putin’s Russia is not Hitler’s Germany. Geography also matters–a Germany located in the heart of Europe is a totally different problem than a Russia on its far eastern periphery. Those whose stock of historical metaphors is limited to Munich should not be taken seriously, or paid attention to at all.

Then there are some pompous types who claim Trump’s geopolitical calculations are naive:

"The really big problem for President Trump is that Nixonian grand strategy is harder than it looks. To my mind, the probability of a Sino-Russian split must be very low as long as Xi and Putin are calling the shots in Beijing and Moscow. After all, it’s not as if Nixon…

— Niall Ferguson (@nfergus) March 6, 2025

Where to begin? Perhaps this is one part of Trump’s rationale, but it is hardly the most important one. The overriding one is that regardless of what one thinks of Putin and Russia, it is not in the American national interest to get into a war with them–not even a proxy war that absorbs relatively modest resources, let alone a full-out conflict. It is certainly not in American national interest to get into a conflict over Ukraine, sorry. The US (and Europe!) survived for decades when Ukraine was part of a much more dangerous adversary, the USSR. Russia is a declining power that cannot decisively defeat a never was power with 1/5th its population and less than 1/5th of its economy. And if the Europeans can’t deal with that, well that’s a fate they’ve chosen.

America’s preeminent interests are now in Asia, and China is the only adversary that matters right now. Getting bogged down in a war in eastern Europe severely constrains the US’s ability to respond to that threat. Kellogg made this point explicitly:

I’m reminded of what Professor Paul Kennedy from Yale University wrote in a seminal work, The Rise and Fall of the Great Powers, when he noted that great powers historically fail when they involve themselves in strategic overreach. He called it imperial overreach. But I’ll make it simple so you don’t have to buy the book. When a nation is concerned about filling somebody else’s potholes when they have their own potholes, they fail.

If a peace in Ukraine (even a flawed one, as almost all peaces are) and something of a rapprochement with Russia does help cleave Russia from China, that’s gravy. It’s not the main course.

Europe is living in a fantasy land. Trump is hitting them with a reality stick but that has just caused them to invent new fantasies. And Zelensky is buying into them.

That’s their choice. Let them live with it, or die with it as the case may be (especially for Zelensky). We have business elsewhere.

How Do You Say “Screwed the Pooch” In Ukrainian?

Yesterday morning I was composing a post in my head, to the effect that Zelensky had come to Washington to sign a deal that would give Trump the justification for continuing to provide US funds (and weapons) to Ukraine.

Then yesterday afternoon happened. Get me rewrite!

I won’t give the blow-by-blow. If you are reading this you’ve probably already seen several of those. So I’ll just give some reactions and analysis.

The basic conclusion: it was the most idiotic play I’ve ever seen by a national leader in public. Ever. I mean, screwed the pooch doesn’t even come close to describing it.

One administration person said “Zelensky didn’t read the room.” That’s totally wrong. Zelensky acted like he didn’t even know what fucking room he was in. He was in the American White House, with the American president and vice president, in public.

You don’t talk smack about someone in their house with the world watching. Especially is that someone is notoriously thin-skinned and not that well-disposed to you to begin with. (In fact, the bigger the asshole you consider Trump to be, the dumber Zelensky’s stunt has to look). And especially especially if that thin-skinned host holds your fate in his hands. And you don’t wrangle an invitation under false pretenses, as Zelensky did, by claiming that he was there to sign a deal.

Trump has one overriding objective: to stop the fighting. That’s not enough for Zelensky. He repeatedly emphasized that he wants total victory (meaning return of all territories lost since 2014) and security guarantees including Nato membership and US troops in Ukraine.

These things are not in his opportunity set. Not even within hailing distance of his opportunity set. Hell, you can’t see them with the James Webb telescope from where he is.

Zelensky kept emphasizing that Putin started it, that Putin is evil, etc., etc., etc. Which means absolutely fuck all even if totally true (which I believe it is).

In the real world–which Zelensky does not inhabit–cosmic justice is unattainable. Deals with the devil are frequently the best of bad alternatives. Half loaves are preferable to none.

This is why Trump repeatedly told Zelensky he didn’t have the cards to play. This is a home truth, and one that the administration has expressed repeatedly in private, but which Zelensky refuses to accept.

Zelensky and his European and American enablers remind me of the heads of belligerent governments in WWI. They all–all–believed the other side was evil, and was to blame for the war. As a result, they utterly refused to countenance anything but total victory. Though the rational thing to do once stalemate arrived on the western front in late-1914 would have been to negotiate an agreement that would have satisfied no one, they fought on and on and on.

Due to their obduracy, millions died and nations and empires collapsed. And that process and dying did not end in November 1918 or even in June 1919 at Versailles. It kinda sorta ended (but not completely) in May 1945.

What’s more, Zelensky wants a Versailles-like diktat imposed on Russia, including reparations. (He reacted enthusiastically to a question suggesting that Russia pay for the damage inflicted on Ukraine).

Putting aside the wisdom of such a diktat (didn’t work out well for the Allies post-1919, did it?), only a total victor is in a position to impose one. And there is no universe in which that is happening today.

So Zelensky came to DC under false pretenses to make impossible demands, threw a fit when he was told–at first very politely–that they were impossible, and kept up the fit until he made it necessary for first Vance and then Trump to smack him down. And even then he was rude–interrupting, calling Vance by his initials, rolling his eyes, crossing his arms in highly passive aggressive body language, etc.

Frankly, he got off lucky. Trump and Vance would have been perfectly justified in bitch slapping him silly.

Whatever capital he had had with this administration, he lit on fire. Marco Rubio, not a hot tempered type, was obviously furious and at the end of his rope:

I have never seen the man so amped up, let alone for 18 plus minutes straight.

Even Ukraine’s biggest fanboi is over him:

When you've lost Lindsey Graham . . . https://t.co/jKdN3VGKq0

— streetwiseprof (@streetwiseprof) February 28, 2025

All of which is why this was the most self-destructive performance by a national leader that I have ever seen or read about in history. The only way to conclude that Zelensky behaved intelligently is to believe that he wants to self-destruct. Because that’s what he did.

Of course the Europeans immediately rallied to console him. “Oh poor boy! Were those brutes mean to you? Mommy is here for you!”

And maybe that’s Zelensky’s problem–he really believes that. Another reality that appears to escape him is that the Europeans are as useless as tits on a bull. (Ditto if he was playing to the US press, which was the biggest loser of the 2024 election).

Actually, they are worse. They feed his delusions.

Those Europeans-Macron and Starmer-who have pledged troops for Ukraine came to DC and made it plain that pledge would vanish without US troops on the ground. Which ain’t happening. I further note that even the European pie crust promises are conditional on a cease fire, which can only be obtained on terms that Zelensky has rejected.

Why are the Europeans so afraid that Trump is pushing for a cease fire that will not result in Russia’s total defeat? Looking at their public statements, it appears that they are afraid that if that does not happen, Putin will invade their welfare states and plant the Russian flag (or maybe the Soviet one!) on the English Channel, the Bay of Biscay, and the North Sea.

I’ve seen bedwetters before, but this takes the prize. If anything, the war in Ukraine should put such fears to rest, not stoke them. At most the war might say something about Putin’s dreams or intentions of conquest. But it clearly shows that his capabilities to pose any threat to Europe are completely lacking.

At best, Russia is able to make advances of a few kilometers here and there over a front of a couple of hundred clicks against an undermanned and under-firepowered foe. Advances on foot, mind you. Russia’s armor has been all but annihilated. Most of the front is inactive and static because the Russians cannot muster enough force to do anything except make very narrow advances.

And let’s not forget. If the Russian invasion of Ukraine has triggered European nightmares of Soviet advances in 1944 and 1945, those advances were completely dependent on American trucks. Russia has no comparable logistic capabilities today.

Even at the beginning of this fiasco, Russian logistics were shambolic due in large part to very basic problems–like shoddy Chinese tires that blew out after minimal use on bad roads. And those were the glory days! Look now–Russians are using civilian cars and vans, including old Ladas, to transport troops and supplies to the front lines. They have even resorted to donkeys.

Note that the Russians cannot even sustain enough combat power to retake the Kursk bulge on Russian territory.

Fears of Russian military might were overstated in 2022. (Even the vaunted Battalion Tactical Groups–which were obliterated in short order–were optimized for defense; which is perhaps why they failed in the offense). Putin fooled the Europeans (and a lot of Americans) with Potemkin military “reforms.” Anyone who harbors such illusions now is beyond help.

Speaking of the Europeans, a European think tank estimated that it would cost ~$250 billion/year to replace America’s contribution to European defense. Thanks for that estimate of the amount by which we have been subsidizing those free riders for the past 8 decades.

The bottom line is this. Continuing the war in Ukraine is not in American interests. Ending the war is. The president of the United States has the responsibility of advancing American interests. By trying to end the war, even under conditions that do not achieve cosmic justice, and allow an evil actor to pocket some gains and live to be evil in the future, Trump is advancing American interests.

But if he succeeds, he is advancing Ukrainian interests too. Perhaps most of all. This war is destroying that nation and its people, and its continuation will only increase the destruction. Zelensky thinks that recovering blasted regions is in his nation’s interest, regardless of the cost. In that way, he is as much an enemy of the Ukrainian people as Putin.

Taking Trump Literally on Ukrainian Resources is Seriously Stupid

After all this time, you’d think that people would have figured out to take Trump seriously, but not literally. You’d be wrong.

Case in point, Javier Blas’ bloviation about Trump’s proposed mineral deal with Ukraine, which Trump has characterized as a deal for rare earths.

Despite the talk about its huge potential, Ukraine isn’t known to hold any reserves of the main rare earths elements sought after by Trump pic.twitter.com/8Z6pdkKrhp

— Bloomberg Opinion (@opinion) February 19, 2025

Yes, rare earths are what Trump has touted, but that’s not what he’s really after:

Donald Trump’s demand for a $500bn (£400bn) “payback” from Ukraine goes far beyond US control over the country’s critical minerals. It covers everything from ports and infrastructure to oil and gas, and the larger resource base of the country.

The breathtaking expansiveness of Trump’s demands (apparently trimmed back subsequent to that article) is the real story here. Writing that Trump is an idiot because there aren’t ackshually any rare earths in Ukraine totally misses it.

Why does Trump emphasize rare earths? Who knows for sure, but I have some ideas.

One is typical Trump kayfabe, “presenting staged performances as genuine or authentic” (in professional wrestling mainly, but a staple of the Trump method). Rare earths are in the news, primarily because of Chinese dominance thereof. (Not, by the way, because China is uniquely endowed with them, but because the US and the West have outsourced the intensely polluting refining process to China, which has a far higher tolerance for industrial pollution). Although a lot of people know that rare earths aren’t rare, and may know that Ukraine doesn’t have any, that’s not common knowledge. By broadcasting that he’s going to get America’s hands on something commonly perceived to be extremely valuable, Trump can sell his base on continued support for Ukraine despite his early promises to cut it loose.

Another possibility is that this is a head fake. By focusing on a single resource, he obscures his more breathtaking ask (or demand) which stirs concerns among those of his supporters are aware of it. Instead of “Look–squirrel!” he’s saying “Look–rare earths!”

Either way, by taking Trump literally Blas et al are failing to note what they should be taking seriously. Which probably doesn’t bother Trump one bit–and wouldn’t if either of my conjectures that rare earths are a blind or a feint are correct.

For his part, Zelensky reacted with outrage. Never! Colonialism!

At least in public. Marco Rubio–seconded by J.D. Vance–called out Zelensky publicly for duplicity.

What Secretary Rubio is saying here is exactly right. https://t.co/nh2pHzramp

— JD Vance (@JDVance) February 21, 2025

This surprises me not in the least, but it makes me question yet again Zelensky’s intelligence (in the sense of IQ, not information). Arguing with Trump and exchanging insults with him in public on this and other issues (notably the negotiations with Russia) is an incredibly stupid strategy for someone whose fate largely rests in Trump’s hands.

Indeed, the more you think that Trump is an asshole who hates Zelensky, and is looking to sell Ukraine down the river, the more you have to agree that Zelensky should keep his mouth shut, and definitely should not wave a red cape at a raging bull president. Being two-faced with Trump is a recipe for getting both of them ripped off. Or if you are going to be two faced, display the nice one in public and the mean one in private, rather than the reverse as Zelensky is doing.

It would be particularly stupid of Zelensky to pick a fight over non-existent rare earths. Sure Donald, the rare earths are yours! He’d be giving up nothing and potentially gaining something. Picking a fight over nothing is beyond stupid. (That fact alone should have the ackshually crowd questioning whether it’s rare earths that Trump is ackshually after).

It’s really mystifying what Zelensky think he’s accomplishing here. Playing up to the Europeans? Since they are utterly impotent and can’t protect him (not to mention that many including Scholz and Poland have expressed publicly an unwillingness to do so) that would be incredibly foolish. Playing to the anti-Trump element in the US? Equally foolish because at present they are even more impotent than the Europeans.

Maybe it’s just exhaustion or a psychological breakdown, either of which would be understandable given the strain he’s been under for the last three plus years. Or maybe he wants out of a hopeless situation and is creating a pretext for his ouster. Or maybe he’s just an arrogant idiot.

As for the substance of a US-Ukraine deal over Ukrainian resources (other than rare earths), Rubio brings up a point I made several weeks ago on X. Namely, giving the US a major stake in Ukraine would serve as a far more credible bond to secure continued American protection than pie crust promises. Major skin in the Ukrainian game vis a vis Russia aligns American and Ukrainian interests far better than any alternative.

That is not complicated. An American stake produces time consistency. “Commitments”–promises to do things in the future on Ukraine’s behalf–are not time consistent because there would be little cost of reneging on those commitments in the future. You know, sort of like the Budapest Memorandum. You’d think Zelensky would have learned from that experience. Apparently not.

I assert that a major economic stake in Ukraine’s economy would be a far better guarantor of Ukraine’s security than membership in Nato. There is no reason to believe that Nato would not fade Article 5 commitments in the event of a future Russian incursion or subversion.

This is especially true when dealing with a relentlessly transactional man like Trump.

Besides, 50 percent of something is a lot better than 100 percent of nothing. Which is what Ukraine will have if the US walks.

There is considerable room for skepticism about Trump’s approach to Ukraine. But that skepticism should be grounded in something other than snickering about Trump’s supposed rare earth delusions. And for Zelensky turn his comedic talents to insult comedy is suicidal.

Cranial Secondary Explosions in Europe

As I said in the just earlier post, there have been numerous secondary explosions in Europe after Vance and Hegseth carpet bombed them last week. Mostly of this variety:

Kind of entertaining, actually. For a variety of reasons. To put this is dialog form:

US: “We’ve been carrying you Europeans for too long. You need to increase your military spending dramatically and take responsibility for your own defense, especially as it relates to Ukraine and Russia. We’re especially uninterested in defending you if you continue to act contrary to American values relating to free speech, democracy, etc.”

Europe: “How dare you tell us what to do! Since you are going to insult us, fine. We’ll look after our own defense! To arms! To arms! Troops to Ukraine!”

US: “Uhm, OK.”

Maybe Trump is a genius at psychology, using insults to get Europe to do what he wants them to. Genius probably not required though, when dealing with idiots.

Insofar as the commitment to rearm and become self-reliant is concerned, Macron has called an “emergency meeting” with (some) EU heads of government to discuss taking the lead in securing the defense of Ukraine, and boxing bruiser Keir Starmer signaled the UK’s willingness of sending British troops as part of the effort, and the need to enhance UK defense spending. On the pundit side, the FT’s King of the Clueless, Gideon Rachman, has issued a clarion call that “Europeans need to reduce their dangerous dependence on an adversarial America.” I say clueless because it the US has become adversarial precisely because of a determination to rid itself of Europe’s parasitic dependence.

Europeans are talking about the “existential” challenge posed by Trump saying “sayonara” and pivoting to Asia.

The market apparently considers these promises to be at least somewhat credible: European defense stocks have risen on this hawkish rhetoric.

Color me skeptical. Whinging about money being diverted from non-defense areas of government began about 3 seconds after Starmer’s oped was published. Poland’s Tusk immediately squelched talk of deploying troops to Ukraine. And I recall Oaf–excuse me, Olaf–Scholz promising 3 years ago to commit Germany to rebuild its defenses. A promise that has not even started to be fulfilled: if anything, Germany’s military is more moribund today than when he made the promise.

Regardless, that’s their business. You’re on your own, folks! Which is what you’ve been saying you wanted all along, right?

Other cranial secondary explosions relate to Vance’s criticism of Europes anti-freedom, anti-democracy politics. Chancellor Scholz and Vice Chancellor Habeck took umbrage at Vance’s interfering in German politics. Nevermind that both publicly supported Harris and have trashed Trump.

CBS struck a “we’re all Europeans now” pose with a paean to Germany’s censorship state:

CBS: "Is posting an insult a crime?"
German prosectors: "Yes"
CBS: "Is it a crime to repost a lie?"
German prosecutors: "Yes" pic.twitter.com/UABb2ch90v

— End Wokeness (@EndWokeness) February 17, 2025

This was after the MSM’s Queen of Vapidity (quite an accomplishment, given the competition), I Don’t Really Care Margaret Brennan. attempted to tell an incredulous Marco Rubio that ackshually the Nazis came to power because Weimar Germany had weaponized free speech. Who knew! (Ackshually Weimar had restrictions on speech quite similar to those of modern Germany, and in fact banned public appearances by Hitler for some time).

Here’s the bottom line. Europeans are incensed: Americans don’t care. If they defend themselves–great: it’s what Trump has been on about for almost 10 years. If they don’t–oh well: not our monkey, not our circus. If they censor themselves, again that’s their problem. If they censor us, or attempt to throttle our innovation in AI (the subject of another Vance Letter to the Europeans), well we’ll add that to their pile of problems.

Go your own way. And stay out of ours.