Negotiating from Weakness: The Plight of the European Union

To go to much effort to construct an economy on the scale of an empire only to refer instead to the economies within such a union, whether the E.U. or U.S. is to pay excessive homage to an ideology that can be termed Euroskeptic and anti-federalist, respectively. To refer to economies in one union and the economy in the other is just one means by which an ideology can distort a person’s reasoning and perception without the person being conscious of the underlying logical inconsistency. Such an inconsistency is incurred not only in “having it both ways” in the E.U. being a common market even as the states are referred to as economies even though many share a currency and thus a central bank, but also in referring to the federal system as if it were a mere “bloc,” or “network.”  In all of these cases of ideological word-games, the E.U. itself is minimized and thus implicitly marginalized from within. With Russia invading Ukraine and Israel eviscerating the Muslim residents of Gaza, self-marginalization for ideological purposes is indeed costly. Even referring to the federal official who is in charge of foreign policy as a “high representative” is implicitly denigrating and thus counter-productive to the E.U. being able to stand up to Putin and even Netanyahu in 2025.

The full essay is at "Negotiating from Weakness."

The E.U. as a Bystander on the Global Stage: A Self-Inflicted Wound

Why has the E.U. been sidelined amid the military tensions in the Middle East? The answer lies with the E.U.’s federal system, rather than the size of its economy or of its population. The E.U. certainly could have more geopolitical sway abroad were it not for a vulnerability being exploited within its own federal system. The vulnerability stems from a refusal by some state officials to recognize and respect the qualitative and quantitative differences between the federal and the state levels of the E.U. Specifically, when the governor (i.e., chief executive and/or head of state) of a state operates as if a federal-level official, especially that of a federal president, the authority of the actual federal president is undercut, hence weakening that person’s ability to convince the heads of foreign governments to include the E.U. president or foreign minister in multilateral negotiations centered on the Middle East, for example. Even unconsciously, foreign leaders may say to themselves, why should we respect the president of the E.U. if she is so easily upstaged by the leader of an E.U. state who is acting as if he were president of the European Commission?  To speak with one voice, and to be able to speak for the E.U. rather than just one state thereof, an E.U. official must be the speaker. Macron of the E.U. state of France cannot speak for the E.U., but Von der Leyen could, provided her space is respected by the governors of the states. This is not to say that this is the only reason why the E.U. has been sidelined from negotiations on Middle East warfare; rather, my contention is that this reason is typically overlooked due to the Euroskeptic ideological delusion that the E.U. does not have a federal system of government even though since 1993, governmental sovereignty has indeed been split between the states and the Union. Perhaps the underlying question here is whether continuing to clutch at the anti-federalist ideology is worth the E.U. continuing to be weakened unnecessarily from within, and thus sidelined from international negotiations that do not center on Europe. Making such blind-spots transparent is indeed a valuable occupation, even if it can be infuriating to people whose interests and ideology are served best if societies look the other way.

In June, 2025, Claude Moniquet, a European formerly in the field of intelligence, told a journalist that the E.U. had been left “sitting on the sidelines” as Israel pummeled Gaza and commenced a bombing in Iran.[1] “Europeans have been pretty much excluded from all major diplomatic manoeuvres around the war in Gaza or the war in Lebanon,” he added.[2] So even though the president of the E.U.’s executive branch, Ursula Von der Leyen, wrote on 13 June 2025, “Diplomatic efforts are crucial to preventing further escalation,” after having spoke with Israel’s president, Isaac Herzog, words are just words if they are from the sidelines rather than after having been dealt a hand of cards at the power-table.[3] I submit that the irrelevance of Von der Leyen’s words is partly due to Emmanuel Macron of the E.U. state of France having “stolen the thunder” by putting himself up as speaking for the E.U. on Gaza.

For instance, during a three-hour televised interview in early May, 2025, Macron said that Europe should consider sanctioning Israel over the humanitarian situation in Gaza, where “hundreds of thousands” were thought to be “facing starvation.”[4] Even though he was understandably frustrated by the lack of sanctions at the federal level, the president of France had no place to speak for Europe, as he was not an E.U. official at the time. To be sure, the thorny problem of the principle of unanimity in the European Council and the Council of Ministers on foreign-policy matters was a factor in the E.U.’s internal-weakness at the federal level, but Macron’s proper orientation was to contend that France should consider sanctioning Israel, if this had not already been done. Indeed, Macron said publicly on 30 May 2025 that France could harden its position on Israel. “The humanitarian blockade is creating a situation that is untenable on the ground,” he said.[5]

Yet two weeks later, Macron was visiting Greenland to represent Europe’s—not just France’s—objection to U.S. President Trump’s desire to make Greenland a U.S. territory. “The situation in Greenland is clearly a wakeup call for all Europeans,” he said as if he were president of the E.U. rather than the governor of an E.U. state.[6] This manner of situating the French president may seem harsh, but I submit that I have properly stated his role from the vantage point of the E.U. and particularly in terms of its federal system, wherein states are both qualitatively and quantitatively distinct from the federal level officials and governmental branches. Von der Leyen could have spoken for E.U. citizens rather than merely residents of the state of France were she to have visited Greenland, but Macron relegated such an opportunity for the E.U., and thus the collective clout that it potentially could have that a state could not. There is a cost, in other words, in a state official refusing to apply self-control when going into the spotlight is tempting. Were the U.S. president to try to invade Greenland, the E.U. president would have more economic clout than France could have with which to pressure Trump to cease and desist in his imperial designs.

This photo, from Euronews.com, illustrates Macron's usurption and how this impacts how the actual E.U. Commission president (pictured on the right) is viewed from abroad as compromised or weakened as a result..

Admittedly, involving state officials in foreign policy is arguably one way in which the E.U.’s federal system is a better case of federalism than the top-heavy American counterpart, but such involvement requires also giving E.U. officials, especially its (executive branch) president and foreign minister, enough authority with which to block state leaders from stealing the show on the societal stage. Although the U.S. had taken the doctrine of federal preemption of state action too far, some preemption would be justified in the E.U., especially as the governors do have a formal role even at the federal level in the European Council and through their ministers in the Council of Ministers on foreign policy. The proclivity to go beyond those federal institutions conflicts with the roles of the E.U. president and foreign minister in being able to lead the E.U. on foreign policy. A similar case of state overreach occurred when the prime minister of Italy sought to manipulate representatives in the European Parliament, which represents E.U. citizens rather than states.  Likewise, a governor of one of the republics in the U.S. can justifiably pressure a U.S. senator representing that governor’s state at the federal level, but the House representatives even in districts located in that state serve the U.S. citizens in those districts rather than the state government.

In short, political overreaching should be guarded against for a federal system to function optimally, such that benefits internationally from collective action at the federal level can be realized while the cultural and ideological interstate differences can be accommodated by there being policy domains retained by the state governments. Stealing the limelight of someone else is not conducive to a federal system being able to work both internally and as a political unit to the outside world. Put bluntly, if France’s Macron wants so to be president of the E.U., let him go through the process of candidacy at the end of Von der Leyen’s second term rather than usurp her role before then.

---

1. Jeremy Fleming-Jones, “Europe Left on Diplomatic ‘Sidelines’ in Israel Iran Conflict,” Euronews.com, June 15, 2025.
2. Ibid.
3. Ibid.
4. Gavin Blackburn, “Macron on ‘Crusade against Jewish State,’ Israel Says Following Criticism of Gaza War,” Euronews.com, 30 May 2025.
5. Reuters, “France May Toughen Stance on Israel If It Continues Blocking Gaza Aid, Macron Says,” Reuters.com, May 30, 2025.
6. Emma De Ruiter, “Macron Reaffirms Support for Greenland during Visit Ahead of G7 Summit,” Euronews.com, 15 June, 2025.

Nationalism at Eurovision: A Lack of Vision

The inherent retentiveness of conservatism benefits a society because it need not “reinvent the wheel” in “starting from scratch,” as resort can be made to customs that have been efficacious. Unfortunately, conservatism can easily be in denial as to the need for adaptation to changes whether in geopolitical institutions or in culture. The advent of the European Union as a federal system of dual-sovereignty has been easy fodder for conservatism’s proclivity of denial with regard to very new things. Eurovision, too, was an invention beyond even the European Union, and thus also of the post-World-War-II history of integration meant in part as a check on the full-blown nationalism that had twice decimated Europe in the twentieth century. So it is problematic that the EBU, the organization behind the Eurovision Song Contest, has made so many category mistakes involving Europe in favor of nationalism.

The full essay is at "Nationalism at Eurovision."

An Analysis of the 2024 U.S. Presidential Election: On a Party's Self-Serving Elite

The 2024 U.S. Presidential election warrants a post-partem analysis, not so much to affix blame, but primarily so the electorate might grasp the perils when the elite of a political party refuses to apply self-restraint in order to keep the party-wide platform and campaign speeches from reducing to the elite’s own favorite ideology even though it is not held by a significant number of the “rank and file” members (i.e., voters), not to mention independents. In other words, running a massive political party to serve the ideological agenda of what Bertrand Russell calls “the inner ring” can cost a party dearly on election day. I contend that this applied to the Democratic Party, which had become a center-left party still dependent on its non-college, working-class, members, whose cultural values were not necessarily progressive. To be sure, substituting managerially-oriented political calculation for visionary leadership and broad policy proposals that are based on principles rather than particular political interests can easily be perceived generally as small, especially in the context of the horrific military attacks against civilians in Ukraine and Gaza. It is paradoxical that Harris lost working-class voters who were socially conservative, and thus “anti-woke” (e.g., against men in women’s bathrooms and playing in women’s sports) even as she lost some liberals who believed that Harris, in explicitly stating on The View that she would not deviate from Biden, was too timid in standing up to Russia’s Putin (e.g., by withholding long-range missiles) and Israel’s Netanyahu rather than enabling the horrific military crimes against humanity with continued shipments of weapons as if the UN’s court were irrelevant to international law.

I begin with the immediate historical context of center-left parties. The parties on the left in the U.S. and E.U. shifted to the center in the 1990s and 2000s. The parties were able to pick up moderate voters, but at the risk of losing ideological distinctiveness (from the center-right parties), and thus their raison d’etre in terms of broad principles and policies.  The 2024 U.S. Presidential election can be fit within the broader shifts since the 2000s that have rendered center-left (rather than far-left, or even socialist) parties less successful in elections. Bill Clinton brought the Democratic Party closer to the center in part due to the losses of Edward Kennedy in challenging the center-left Jimmy Carter in 1980 and of Walter Mondale in challenging Ronald Reagan in 1984. The party’s political elite paid attention to these losses, which went down like lead balloons, and Bill Clinton was a result of the ensuing effort to move the party closer to the political center. Crucially, both he and Barak Obama were able to win with support from the middle class (i.e., labor), which was still primarily voting on the basis of economic interest, including redistribution.

Then, two shifts began that caused the Democratic Party’s working-class, relatively conservative, faction to gradually peel off. The first shift can be described as a negative reaction to the increasingly business-friendly aspect of the party moving to the center. Historically, center-left parties in North America and Europe were critical of capitalism and wanted to constrain it. In reaction to the financial crisis of 2008, however, center-left parties let go of the even more important role of constraining capitalism that had frozen up from within due to uncorrected increased market volatility.

In the E.U. state of Greece, for example, the Syriza Party campaigned against austerity measures during the state’s legislative election in 2015 by promising to renegotiate the state’s bailout agreements. However, just after winning the election, the party’s head, Prime Minister Alexis Tsipras, accepted the existing austerity conditions in spite of there having recently been a referendum in which the Greek citizens overwhelmingly rejected those very conditions. Considering that the austerity resulting from the government’s required budget-cuts was especially harsh on the working class, Tsipras’ betrayal in going along with the creditor-beholden E.U. state of Germany doubtlessly cost the center-left party votes and Tsipras was ultimately defeated (though strangely, after being reelected again).  

In the U.S., Barak Obama entered the office of federal president in 2008 at the worst of the financial crisis, and he stocked his administration with plenty of folks from Wall Street. It is no coincidence that Obama went along with financial bailouts for the banks without conditions, even in terms of putting ceilings on the bonuses of the banks’ executives. Considering that they had displayed incredibly bad judgment in over-leveraging their respective banks by packaging and even buying bonds based on risky sub-prime residential mortgages, the bankers not only did not deserve bonuses, but arguably should have been fired as a condition of getting the funds appropriated by Congress and those created by the Federal Reserve Bank. Instead, the culpable bankers received hefty bonuses out of the TARP money provided by the U.S. Treasury—money that was supposed to be lent out to stimulate the economy so the working class would not suffer from traumatic unemployment. It was not lost on the Democratic Party’s non-college working-class segment that the incompetent but wealthy bank executives got bonuses in the political elite and the financial elite being cozy. Ironically, it was not until the first Trump administration that Treasury issued checks to every American.

Unfortunately, the trajectory of the partial unraveling of the Democratic Party is not so simple, for it was not only the growing perception that the party had joined de facto with the Republican Party in siding with corporate America at the expense of workers that caused the latter to gradually but steadily peel off from the center-left party—after having asked, perhaps, what was still left about the Democratic Party.

Firstly, structural changes in the economy also had an impact. Economic inequality was increasing, and workers could see that the Democratic Party had done nothing substantial to stop even the increase. That the party had missed an opportunity to come up with its own, alternative economic policies with which to differentiate itself from the Republican Party was especially important because the Democratic Party had moved closer to the center, and away from the wing associated with U.S. senators Bernie Sanders and Elizabeth Warren.  

Secondly, another structural change, not economic in nature, also had an impact. Since 2000, a shift towards identity/cultural grievances had been occurring in the middle class wherein a gradually increasing number of voters have been less interested in economic redistribution than in opposing the “woke” ideology, which is centered on legalizing rights of certain groups of Americans based on group-identity. Historically, religious wars in Europe had been based on the premise that group-identity is primary in human consciousness; race riots share that assumption. The failure of the Democratic Party to constrain the excesses of capitalism during the financial crisis may be a factor in this shift away from economic distribution, as increasing numbers of working-classed voters came to realize that both major parties had become bought and paid for by the business sector through its political campaign contributions and promises of executive jobs. Regulatory capture of the regulator agencies by the regulated companies is but one result of the inordinate influence of business in government.

The shift in the American working-class voting increasingly on social issues affected the Democratic as a wedge. The “woke” ideology in favor of defunding the police, transsexual rights (i.e., men in women’s bathrooms and sports), reparations for Black Americans, sanctuary cities wherein illegal immigrants are legally protected, university “cancel culture,” such as in mislabeling pro-human-rights protests as antisemitic, and diversity programs gripped the political elite of the party and its left-wing more generally even though Kamala Harris did not emphasize “woke” planks in her speeches. Meanwhile, the “anti-work” political reaction had been gaining speed since at least 2015 among the non-college-educated working folks. This reaction viewed the gay “rainbow” flag as a cult symbol that was being imposed seemingly everywhere, and was viscerally opposed to transsexual men being able to play in women’s sports and use women’s locker rooms, the notion that illegal immigrants somehow had a right to be in the U.S. even though they had committed a crime in entering the country illegally, the proposal that even people living paycheck to paycheck should be taxed more to pay for reparations to Black people, and that certain words could no longer be spoken or written in college courses and even in political protests. Indeed, protests against Israel had practically been banned at many universities, including Yale, where 47 pro-human-rights students were arrested by private university police employees, and Harvard, which had turned Harvard Yard into a preemptive police presence by September, 2024. So much for academic atmosphere and academic freedom; non-academic employees with guns were in charge as scared academic administrators looked on as if proud mice.  My point is that Harris didn’t have to say anything “woke” on the campaign trail; non-college educated workers in the Democratic Party had by then viewed their party’s elite as very “woke” indeed. 

It can be argued that in having no internal check or self-restraint, the party's political elite had pushed the “woke” ideology too hard and too far (and perhaps, most importantly, too fast), and thus naturally had prompted a political reaction against both the elite itself and its favored ideology. That is, the political elite of the Democratic Party refused to constrain itself from pushing its mandatory ideology even though it was clear, or should have been clear without the blocking self-centeredness, that non-college-educated workers, especially in small towns, would bolt. Even with the mistaken assumption that the working class would still vote on an economic basis, the fact that the anti-woke movement was gaining steam should not have been missed or so easily dismissed for being illegitimate. Presumptuousness can indeed be blinding or distortive, as can the underlying self-centeredness and primitive desire to use power to enact one’s own ideology. This is ultimately why Donald Trump was able to win in spite of his own voters acknowledging that he was admittedly a flawed man.

The elite of a political party does its party a disservice by stubbornly pushing whatever ideology that elite loves, as if it were a fact of reason and thus should be imposed on detractors whether they like it or not, rather than applying self-discipline and a little humility to back off the ideology so as to retain the socially-conservative workers for the sake of governing to constrain capitalism. The ancient Confucian scholar, Xunzi, points to “a degree of self-restraint and even virtue, namely trustworthiness ,” as one reason why a hegemon, a ruler who is not as virtuous as is a sage (i.e., a wise and virtuous person) but is more virtuous than is a vicious tyrant, can be “a strong and successful ruler.”[1] Even though a hegemon “is not committed to moral cultivation of himself or those he rules,” applying the virtue of self-restraint, such as channeling away one’s instinctual urge to promote one’s own preferred ideology over others in a political party, can make a ruler successful (and not tyrannical) anyway.[2] The political elite of the Democratic Party could have benefited from this ancient lesson. That an increasing number of voters in the working class were more interested in voting against the societally interlarding “woke” ideology and especially its demands than in voting for economic redistribution means that the self-centered and haughty ideological stubbornness of the Democratic political elite really costed Harris votes.

Thirdly, even given the ongoing shift among working-class Democrats toward voting on the basis of cultural issues, economic pressure from the price increases, especially in gas and groceries, even after the temporary bump from supply shocks and higher transportation costs during the pandemic, prompted a significant number of voters in the middle class (and poor), which is especially vulnerable to price increases on necessities such as food and transportation, to vote on the basic of their bank accounts.

Harris’s promise to reduce grocery-store prices rung hollow because Biden had failed to do it and she said she would not differ from Biden on policies. Even given the trend in the working class to vote on the basis of social over economic issues, the center-left party erred in failing to recharge its historic mission to constrain the excesses of capitalism. Pledges to use federal anti-trust law to break up the meat-producer and grocery-chain concentrated rather than competitive industries would have differentiated the party from Trump’s rightward shift of the Republican Party. Even the Democratic Party, in accepting so much corporate money from lobbyists, was susceptible to enabling rather than lessening the tendency of markets to consolidate—to go from competition, by which food prices would have gone down after the supply shocks during the pandemic, to just a few giant companies with enough market-power to hold prices high and even convince consumers to expect even higher prices in the expectation of inflation as inevitable. As my academic advisor at Yale, who was an Episcopalian priest, once said, “If you must sin, then sin boldly!” Andrew Jackson and Teddy Roosevelt would not have lost much time translating that advice into political terms in terms of bold policy in place of political calculation and capitulation to even the private powers behind the proverbial throne. Unfortunately, neither Biden nor Harris was a Jackson or Roosevelt.

Fourthly, as for the shock that many “far-left” Democrats and even some independents had after the election that a convicted felon and narcissist had just won the popular vote (as well as the Electoral College), the explanation for Trump’s success with labor is not only due to the reasons I have just discussed, but also because Trump was very wealthy and bold in a way that vote-maximizer politicians usually are not. That these personal attributes could possibly “trump” the man’s flaws, such as admitting that he could get away with touching women sexually without their consent, allegedly pressuring Georgia to come up with more votes for him, and allegedly prompting a mob to riot through Capitol Hill as electoral votes were being counted by Congress on January 6, 2021, would shatter the ideological view held by the Democratic Party’s elite on what matters in a presidential character. Indeed, the nature of the alleged crimes may actually have augmented or strengthened Trump’s stature to working-class voters, given that their paradigmatic criteria for leadership differed so from those of the political elite (of both parties!).

Whereas America’s political elite and the left-wing of the Democratic party believed that voters should vote at least in part based on whichever candidate is most wise and virtuous, Trump himself might counter that the masses vote instead on the basis of wealth and being bold even in speech as well as action, rather unlike the typical people-pleasing politician, such as Bill Clinton and Barak Obama. Taking into consideration the fact that the level of education (college versus no-college) had been the single best indicator during the arduously long campaign “season” of which candidate a voter favored, it is likely that the criteria valued by the working class differed paradigmatically from the criteria valued by college-educated voters, including the political elite. Unconsciously, the elite of the Democratic Party projected its own paradigm of character-leadership onto how the non-college-educated laborers of the party’s “rank and file” see things. This can explain why even the criminal charges against Trump did not dint his base.

According to Adam Smith in his text, The Theory of Moral Sentiments, “the great mob of mankind are the admirers and the worshipers . . . of wealth and greatness.”[3] These two things are contrast to wisdom and virtue, which the masses “are perhaps incapable of even discerning.”[4] I don’t think Smith is being fair to the “masses” here, but his main point concerning the different criteria is important for college-educated Americans to grasp. Like people outside of a political (and economic) elite, Smith eschews “the proposition that people of superior wisdom and virtue possess a title to rule.”[5] He maintains that birth (family) and wealth are more visible and certain to the masses than are virtue and wisdom.[6] Wealth and greatness, Trump doubtlessly could have said during his 2024 campaign, “are my two middle names.” By “greatness,” even as he applied the adjective to the country itself in terms of its potential, consists not only of wealth, but also the kind of strength that is bold rather than timid, or limited to political calculation at home and abroad. Thinking that they too could someday be rich and admiring bold people, working-class voters could very well have loved him for being both. Again, the shift away from being concerned with redistribution to wanting to push back against the presumptuously encroaching, passive aggressive antagonistic “woke” advocates means that Trump’s “offensive” statements were viewed by the working-class as a plus rather than a minus in terms of character. In other words, few labor-union members would be likely to quote from Aristotle’s Ethics to insist that a virtuous person is necessary to put into effect Trump’s policies.

As for Trump’s pathological lying, the heads of the Democratic Party were hardly blameless in falsely claiming that Harris had been selected as the nominee in an “open, bottom-up” process. With a hundred days to go before election day, the party had time for a primary, which could have been set to take place forty days out, with the general election following after sixty more days. In the same year, the E.U. state of Germany set an election just sixty days after a scheduled no-confidence vote at a time in which that vote was just a month away. To claim that Harris’ chances were diminished by having only a hundred days fails to recognize that the year-plus long campaign season for U.S. president was excessively long. Lacking in boldness in terms of proposed policies was more of a hindrance than just having a hundred days. In other words, she had more than enough time to distinguish herself by departing from Biden’s policies, especially given his unpopularity for not going far enough in terms of a variety of areas. In fact, Harris’ lack of boldness took votes away even from the left-wing of the Democratic Party!

Going on the basis of political calculation, or “the political reality,” based on the presumed power of AIPAC (American Israeli Political Action Committee) in U.S. politics, produced political timidity just as cowering to corporate interests, even of the oil and food industries, presented Harris as a politician rather than as a leader. Leadership does not operate by calculation, but by broad principles. Whether those principles are standing up to an aggressor ravaging through Gaza rather than enabling him by being in favor of continuing to supply weapons to his military, or enforcing market competition (and a windfall-profits tax) rather than suggesting that the government give Americans money to spend in the oligarchic grocery chains that would feel free to raise prices even more rather than cut prices to compete for buyers, boldness of policy can be appreciated even more when it involves standing up to entrenched political and economic interests that have turned squalid in part because of the U.S. Government.

Management differs from leadership in part because management is narrowly focused and incremental rather than being oriented to formulating and promoting a vision of society in ideal, paradigmatic terms. I submit that both Biden and Harris were managerial in nature, whereas Ronald Reagan can be studied in terms of providing a vision (e.g., “Government is the problem.”). To be sure, not every vision that a political leader espouses is ethical. Hitler, for example, provided a vision of a strong Germany without weakness enervating the country from within. That vision can be challenged ethically both in regard to how Hitler conceptualized strength and weakness, and his government officials could be challenged for how they implemented Hitler’s vision by literally exterminating what they saw as weakness from the country and even in trying to free up living space for Germans from the U.S.S.R.—Hitler having promised Hindenburg that Communists would be eliminated within Germany, which in turn could mean going after the source further east.

What to a working-class Trump voter was boldness was viewed by some Harris voters and the Democracy Party’s elite as fascist. The claims that democracy was in the balance may have been fueled in part by the fact that Trump working-class voters tended to value wealth and political boldness over wisdom and virtue. To people who value or follow political calculation to minimize political risk, a candidate not speaking as a politician and advocating bold policies would of course be viewed with fear.

It is possible, even ironic in this case, that representative democracy can be put at risk by a cleft or division existing between a party’s elite and a significant part of its “rank-and-file” base. To be effective electorally and in sync with democracy itself, the elite of a party needs to remember that its perspective is not necessarily that of the whole of the party, and if the respective perspectives do indeed differ, the elite needs to exercise some self-constraint in place of self-centeredness and a self-assumed mandate to impose, ideologically, even on the party’s membership. In short, a party’s elite needs to put that membership first if electoral success is desired as a means to being in power.  The refusal to exercise self-restraint deserves to be voted against. Trump’s lack of self-restraint in his use of vitriol against his “enemies,” which included anyone who criticized him publicly, and even in his use of lying habitually to get out of trouble was in line with the boldness atypical of politicians that the working-class valued in a leader, whereas Harris’ lack of self-restraint regarding highlighting aspects of “wokeness” and in not standing up to big business and Israel worked against her. Not that Trump would stand up to big business, for he himself was a part of it, and not that he would stand up to Netanyahu (or Putin), but all that Trump too may have appealed to greatness-as-strength as construed and valued by enough of the the non-college-educated working-class voters.

1. Eric L. Hutton, “Introduction,” in Xunzi: The Complete Text, Eric L. Hutton, trans. (Princeton, NJ: Princeton University Press, 2014), p. xxviii.
2. Ibid.
3. Adam Smith, The Theory of Moral Sentiments, Ed. D. D. Raphael and A. L. Macfie (Oxford: Oxford University Press, 1976), I. iii.3.2.
4. Adam Smith, The Theory of Moral Sentiments, Ed. D. D. Raphael and A. L. Macfie (Oxford: Oxford University Press, 1976), VI.ii.I.20, quoted by Peter Minowitz, Profits, Priests, and Princes: Adam Smith’s Emancipation of Economics from Politics and Religion (Stanford, CA: Stanford University Press, 1993), p. 42.
5. Peter Minowitz, Profits, Priests, and Princes: Adam Smith’s Emancipation of Economics from Politics and Religion (Stanford, CA: Stanford University Press, 1993), p. 44.
6. Ibid., p. 45.

Global Geopolitical Risks: Is Wall Street Hypersensitive and Reductionistic?

The Dow dropped 140 points in August 5, 2014 on a rumor that the Russian military is about to invade eastern Ukraine. Three days later, amid hints of de-escalation and the end of troop “exercises” on the Ukraine border, the Dow gained 186 points. Three days later, as Russia’s president approves a deal wherein the Russian OAO Rosneft and the American ExxonMobil can begin drilling a $700 million well in the Arctic Ocean, the Dow gains 16 points.[1] Are stock analysts and Wall Street investors really so hypersensitive to day-to-day changes in geopolitical risk? It may be simply that such news sells.

Just because to events are correlated in that they both occur at the same time does not necessarily mean that one caused the other.  According to the eighteenth-century philosopher David Hume, we think we have a better grasp on causation than we actually do. In the case of positive correlation between two events, a third one could be behind both—rather than one of the correlated events causing the other. In general terms, causation may be much more complex than the human brain is naturally inclined to accept.

In the case of the changes in the Dow cited above, many analysts held at the time that a “plunge in geopolitical risks related to the Ukraine-Russia crisis leads to a rally in U.S. stock prices.” Yet how “micro” can we take such a change to be? Do rumors and hints coming out of Moscow really have such power to reverberate throughout Wall Street? If so, stock analysts and investors may have a proclivity to minimize or simply not see the tremendous inertia that the geopolitical status quo enjoys. To be sure, significant events do happen. A century before, on August 4, 1914, Britain entered World War I, the war to end all wars only to prompt Adolf Hitler into political action.

Additionally, analysts may be inclined to develop an “either/or” perceptual framework that ignores the gray areas in sizing up the relative importance of multiple geopolitical hot spots around the world. Some analysts dismissed the negative impact of the escalating fighting in Iraq and Israel even as the American press was full-blown into yet another obsession on them. The Markets in New York and Illinois may indeed have been “shrugging off” the detrimental impacts of the American bombing in Iraq and Israel’s in Gaza because the Middle East as USA Today reported at the time. Yet even though Russia can have a clear economic impact on Europe, which in turn could hamper the American economy, neither the E.U. nor U.S. is indifferent to possible impediments to oil coming out of the Middle East. Russ Koesterich, the chief investment strategist at BlackRock, said as much in maintaining that the American markets would be higher if it weren’t for the increase in geopolitical risk in the Middle East.

Interestingly, however, Koesterich also stressed that “other issues are also weighing on stocks, including elevated valuations in the U.S. market, renewed economic weakness in Europe, concerns about an earlier-than-expected interest rate hike by the Federal Reserve and recent weakness in the high-yield bond market.” It is easier to reduce the cause to one, and point the finger squarely at the particular military conflagration having the most direct line, or seemingly so, to the economies in the West, than to go back to the hackneyed, even banal, myriad of domestic usual suspects. The human brain yearns for simplicity even when the actual causation process is more complicated, and the media dutifully comply.

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[1] All quotes are from Adam Shell, “If Russia Sneezes, Wall St. Gets a Cold,” USA Today, August 12, 2014.