Reuters attributes this to be somehow a personal flaw in Walsh.
Pretty sure Jerome Powell, the previous chair, would have done exactly the same thing. In fact Jerome Powell is still in the Fed and participated in this decision.
I think the article makes a good case why the difference in chair matters
- ending forward guidance
- confusing wording around what the target is now (pce vs “other stuff”)
- The fact that he was appointed specifically to not raise rates
None of the applies to Mr. Powell whom the market seems to have put a great deal of trust in
Speaking as a non-American, and without the lens of partisan politics, it seems incredibly obvious to me that
Kevin Warsh < Jerome Powell < Janet Yellen
... in terms of credibility as an economist, with Ben Bernanke one step to either side of Powell depending on how much you feel he was a victim of circumstances in the 2008 crisis.
That said, the current problems in the US economy are entirely out of the control of the Fed and all to do with the current administration's policies (mainly the war vs Iran driving commod vol and the on-again off-again trade tariff shuffle driving fx vol) and the long-term deficit position driving rate curve shenanigans. The AI and private credit bubbles are just adding to the anxiety. All of this ultimately feeds into domestic inflation and job market malaise.
The bond market generally doesn't take shit from anyone and it's not surprising to me that bond investors are not impressed. None of that is on Warsh.
What caused the second recession in Europe was a decrease in energy supply. Country that depended the most on the North sea or North Africa oil and gas exports suffered the most.
We still live under the constraints of our world, and energy availablity is a big one.
As everyone should know by now, the US government runs a massive deficit, that is the difference between tax receipts (and other income) minus expenses. The current US public debt is hovering around $40T and the annual deficit is pushing toards $2T.
A lot of that $40T was borrowed at lower interest rates but let's assume for argument's sake that it was borrowed at 5%. That's $2T in interest alone every year. There's a huge difference between adding $2T in debt at 5%+ every year vs 1-3%.
The Fed has auctions to sell its debt. That market clears at a certain interest rate so if the market isn't buying the debt the rate the Fed pays has to go up. That's what's happening here.
What's driving this is that inflation is above the ~2% target. Well above, actually. There are generally two ways of tackling high inflation: with monetary policy (ie raising interest rates) and with fiscal policy (by raising taxes). Modern US administrations (both parties) have completely abandoned any pretense of ever raising taxes. That was the appropriate solution during the inflation shock of 2020-2022. Some European countries did this with a corporate windfall profits tax (eg Spain). The US did not.
The problem is that since housing is such a huge part of consumer spending, higher interest rates mean higher mortgage rates, which means higher housing expenditure, which means higher inflation. Now luckily most mortgages in the US are 30 year fixed so this is slow to respond and only really affects new mortgage. Other countries aren't so lucky.
But the big drivers in inflation are soaring grocery costs and energy costs. Energy costs, particularly diesel, is a massive driver of inflation. The rise in groceries since Covid has completley outpaced inflation while real wages have fallen. There's only so much more inflation the American consumer can take. Household savings rates are already very low so there's very little in the way of a buffer to absorb higher costs.
This is all being exacerbated by the disastrous war in Iran and the war in Ukraine. Russia had been a net exporter of diesel until recently as Ukraine has damaged an estimated 40% of Russian refining capcity. Refineries in the Gulf have also been taken offline. There's been a loss of over 1 million barrels per day in refining capacity. This is somewhat paradoxically why crudel oil prices are relatively low given all that's going on: because crudel oil is mostly useless unless it's refined. Destroy refineries and demand for oil goes down. But the demand for refined petroleum products goes up, way up [1].
It should be noted that China has essentially saved the world economy up to this point [2]. The closure of the Strait of Hormuz blocked the passage of ~20 million barrels per day of crude (plus 20-30% of the world's natural gas plus fertilizer plus helium). The inflation shock of 2020-2022 occurred because we lost "only" 10 million barrels. But China seemingly cut their imports by 5M. Saudi Arabia diverted 5-7 via the East-West pipeline to the Red Sea. The US has been draining the strategic reserve and so net we've only lost a few million barrels per day. That's temporary. the SPR has hit historic lows not seen in 40 years and it can't get much lower without risking a collapse of the salt caverns it's stroed in in Louisiana. Nobody knows if and when that'll happen because we've never done this before.
The backdrop for all this is that there has been a decades-long effort at this point to essentially loot government coffers in the US. More tax cuts for the top 0.01%. The Western world in general has reached a breaking point where land hoarding and wealth need to be taxed or society as we know it will actually break down. I'm not being hyperbolic. Currently, there's no concern for that from the looters because upheaval means war, which means more weapons sales. Also, free movement of capital means the wealthy believe they can just flee.
For context, a mere 10 years ago the US total public debt was ~$16T. It's 2.5x'ed in a decade and only going to get worse unless something drastically changes.
Warsh was put in to cut rates for political purposes. The best he can do is to hold rates steady because they really should go up in an environment where we aren't going to raise taxes.
As for Iran, it's been clear since at least April, that this is an unmistakable and undeniable total strategic defeat for the US and there is no way out other than to surrender. This event will be written about in history books as a turning point in the world order that was designed by the US, for the US after 1945. We are entering a new era. This is going to redefine US relationships all over the world.
American fixed 30y mortgages actually make interest rate policy much less effective, in theory.
In most countries with normal mortgages, raising rates fairly immediately transmits through to the rest of the economy, because it affects the mortgage market. This isn't true in America, because everyone quite reasonably is able to get these insane mortgage products with literally no downside risk - if rates go up, you don't pay more. If they go down, you refinance at minimal cost.
Agree to disagree on the tax issue. The way you've framed it is fairly inflammatory, but happy to have a discussion about it. The reality is that as much money as rich people have, the middle class have a whole lot more. Every country with large government spending has broad, high taxes on the entire population, not just the rich.
I earn a reasonable income, but the reality is even though I live alone and don't really think about where I spend my money finances are good. I could quite easily save a fair bit more than I currently do if I wanted to.
My experience won't align with everyone, but it is enough for me to feel somewhat dismissive of people who say life sucks. At some point, if you aren't earning enough and/or spend too much, that's on you. Some of the people I know of who complain about finances feel they should not have to care about their spending, or have "luxuries" that are actually very expensive (going out drinking alcohol is a big one where I'm at). The reality is anything that takes human Labor in a developed economy is very expensive.
The interesting thing is, US media, US social media driven by Big Tech algorithms, Google Search, nytimes, reddit, Social newsfeeds of students, teens, teachers is not exposing this at all. It feels like we are self-contained information exposure bubble too. Only a physical visit outside of US, and looking at the information from outside of US will give a picture of the mistakes being made here.
The national debt was in the news a lot in the 90s and 00s and the sky didn't fall. Now both parties have decided they don't care, and I'm sure they'll find other things to blame when growth shrivels etc.
Don't overlook quantitative easing. Introducing more money into a monetary system has a significant inflationary effect on the money that was already present.
Also, housing costs don't statically climb as interest rates go up. A decrease in market price makes up for most of the difference.
And somehow this situation is all Joe Biden's fault, and Trump is still going to fix it, any day now.
A very significant amount of American voters believe this. To this day. And their belief in this is still being reinforced by the vast majority of the "mainstream media" which they believe is left-biased, which hasn't been true for very many years at this point.
This is why we are fucked and there is no way out of this that doesn't involve existential threat to our current society.
I understand the point you're making about blind devotion to Trump but the reality is that Biden is not free from blame here, in four ways:
1. Trump in his first term created the Abraham Accords that directly contributed to the genocide that has since happened (by excluding Palestinians from the process). Biden did not reverse any of that because he is an avowed Zionist;
2. Trump blew up the JCPOA that sought to include Iran in the international community for really no reason than to please his donors, particularly his biggest donors, Sheldon and Miriam Adelson, who are also avowed Zionists. This was an Obama-era deal and part of me is convinced that Trump blew it up simply because it had Obama's name on it. Biden of course did not reinstate it;
3. Trump blew up energy markets in 2020 with the disastrous OPEC deal he made in June that created the inflation shock of Covid. Biden quietly went to MBS to get him to increase oil output. He refused. Biden said nothing. He absolutely could've waved a very big stick to get MBS to change course here, notably by threatening arms shipments; and
4. The so-called "bear-hug strategy" following October 7 set the stage for everything that's happening now. At any point in the last more than a year of his term, Biden could've ended that conflict with a phone call. He did not because, again, he is an avowed Zionist. That both emboldened Israel to drag the US into the Iran war and also was a key factor in the Democrats losing the 2024 presidential election although I'm not actually convinced we'd be in a vastly different situation had Kamala won (eg [1]).
US foreign policy is surprisingly uniparty.
Oil is good for business because it's good for war. It's also why we don't have major investment in renewables. As this article put it, nobody goes to war over a solar panel [2].
Oh, I'm not exactly a huge Joe Biden fan. I just think it is ridiculous that nobody "on the right" calls Trump on using him as a universal scapegoat for everything as we continue to fumble into an economic situation that Trump is consistently actively making worse.
I think Biden did manage to enact some good domestic economic policy in a tough political environment, but in addition to everything you pointed out that I agree with he obviously should have stepped aside for the 2024 election long before he did and his decision to nominate Merrick Garland for Attorney General will be seen as one of those history book moments of very high consequence in the fall of an empire (assuming we have legitimate history books in this future).
Plenty of blame to go around for many Democrats here for both the fact that our disastrous foreign policy is, as you've said, uniparty, and also their fecklessness and early boosting of the whole Trump project in 2016 (because they believed he would be easier to beat than the other Republicans) did a lot to set all of this in motion.
A mugger stabs your friend and runs off. They are bleeding out. You do nothing. That’s what he’s saying. The fact is Biden did nothing to prevent this. Including not locking the fucker up. Not stacking the Supreme Court after the Ginsberg shitshow.
There are a lot of people that do not know what to do.
There are also wounds that you can't really do anything about without hospital. (internal bleeding?!)
The funny thing is, as analogies go, here the friend tells you to bugger off because of israel and tells the mugger to come back and help him... mugger stabs him some more
>The so-called "bear-hug strategy" following October 7 set the stage for everything that's happening now.....Biden could've ended that conflict with a phone call.
Both sides have been preparing for the conflict for decades. The bomb that the US used to bomb Iran's nuclear facilities, the GBU-57A/B MOP, began development in the early 2000s[1]. Iran has long supported the Houthis, who have been attacking Saudi Arabia, a key US ally in the Middle East and one of the main suppliers of oil to the West. Iran has been the major competitor to the US, or even the West, for a long period of time. Oct 7 is just a trigger point, like the Sarajevo assassination was the trigger point of WW1.
> Trump blew up the JCPOA that sought to include Iran in the international community for really no reason than to please his donors
Indeed, a few of the US allies in the Middle East, like the UAE, Saudi Arabia, as well as Bahrain, expressed concerns over the Iran nuclear deal[2].
We are entering a critical point in time, where Western civilization may not dominate the world anymore like it did for the past 300 years. There will be a lot of instability, though a lot of people fail to recognize that and are underprepared.
Zionism can be both the nationalist movement for making Israel a Jewish state as well as the interpretation that such a movement is inherently colonial and racist.
So Zionism for Israelis might just mean "we support and advocate for a Jewish state in the land of Israel" which also includes two-state solutions but it can mean "we are a colonial and ethno-religious racist state" to the ones being displaced by the movement (like Palestinians).
> At any point in the last more than a year of his term, Biden could've ended that conflict with a phone call. He did not because, again, he is an avowed Zionist.
No he could not have. Israel has been a contentious ally for the US, especially while a Democrat has been POTUS because they are actually independently capable of supporting themselves and have their own internal economy and military industrial complex.
The relationship between the United States and Israel started with us(The United States) peeling them off of USSR support in the late 60s[1], and if we abandon them they will either go it on their own or find another ally who has interests in the region due to oil still being important.
Biden as a representative of the United States had leverage over Israel, but not such complete control that he could just call Netanyahu and demand and end the war and have that be done with.
You can argue all day long, but at the end of the day, the US has immense ability to exert pressure on Israel, starting with withholding UNSC vetoes.
The Biden admin pulled no levers whatsoever. On the contrary, it went to great lengths to cover for a genocide that it was aware of. This admin will be part of the history books, but not in a good light :)
> ... US has immense ability to exert pressure on Israel, starting with withholding UNSC vetoes.
You are 100% correct on this. That does not however mean they have the ability to end a war in one phone call
> The Biden admin pulled no levers whatsoever.
This is incorrect. Biden tried to constrain Netanyahu and did shit like making the pier to deliver aid to the Palestinians. Netanyahu responded by snubbing Biden and giving a speech to the Senate instead.
I am generally anti Israel as the nation because I believe they have been a shit tier ally who feels free to fuck around in our elections with no remorse, but acting like we had the ability to force them into actions they didn't want, without using military force, is fucking ridiculous.
Again, I think they are a piss poor ally, largely because they will not work with us, and that is largely because they have the ability to operate independently and utilize that ability constantly. If we got rid of any dependence on oil I would say fuck the whole region because every state there is in a competition over who can be the biggest assholes to us, with the possible slight exception of Jordan, and I cage that claim because I only know a decade or two of their history in relations with us and honestly mostly because one of their kings wanted to be in star trek so bad he got a spot as an extra, which implies some level of agreeing with our values.
Thank you for your comments. In short, it's complicated. The other piece which you didn't mention that other people bring up is cutting off the 4B-8B in military aid to Israel. In the past that might have given the US more leverage, but Israel has a 700B GDP economy now - they don't need that aid to buy weapons. The aid the US sends just ends up back in the US economy, and keeps Israel from buying arms from China.
No, it is not. The US has the power to sanction entire states & cut them out from the global banking system overnight. Look at what Cuba has suffered for daring to oppose the US.
> but Israel has a 700B GDP economy now
That would mean shit if the country is sanctioned and its leaders declared persona non grata. South Africa was similarly quite powerful, but when you’re reliant on Western backing and integration, existing as a pariah state is not a sustainable position to be in.
Adding to this, US foreign and military policy is increasingly chaotic, so other countries are quietly disengaging, and tariffs are slowly unravelling the US’ trade relationships. The American people voted for Trump twice: Trumpism is now an established thread in US politics, and the rest of the world is taking steps to insulate itself from the coming turmoil.
China should increase the import pace especially after the US strategic reserve depleted.
Considering that despite Chinese saving, US and EU are more interested doing another trade war.
They are slowly elastic. The only way to speed up the re-pricing is a recession where people lose their jobs and are forced to sell. Otherwise, it's mainly young people entering their first house phase that get impacted - which is exactly what we've seen.
> This is all being exacerbated by the disastrous war in Iran
No, why? US is an exporter, not importer of oil, so any price increase of crude oil is good for US. Maybe not consumers, but government (Venezuela had literal amine while exporting a lot of oil and honoring all of the international debt payments). So US must have more money to service its international debt.
>> US is an exporter, not importer of oil, so any price increase of crude oil is good for US.
It is good for US oil producers, who have indeed been making money hand over fist exporting oil at a premium. It certainly it not good for anyone else.
> There are generally two ways of tackling high inflation: with monetary policy (ie raising interest rates) and with fiscal policy (by raising taxes).
While this is the orthodoxy, it should be obvious it is nonsense.
The idea that we must curtail production in order to reduce inflation is so incoherent that it damns the professional court economists who have spread it far and wide.
Not Hacker-y enough I think; dropped to third page from first. Now rank 79, +108 points, 42 comments, +3hr
Thanks for the link, hope they figure it out.
Reuters attributes this to be somehow a personal flaw in Walsh.
Pretty sure Jerome Powell, the previous chair, would have done exactly the same thing. In fact Jerome Powell is still in the Fed and participated in this decision.
I think the article makes a good case why the difference in chair matters - ending forward guidance - confusing wording around what the target is now (pce vs “other stuff”) - The fact that he was appointed specifically to not raise rates
None of the applies to Mr. Powell whom the market seems to have put a great deal of trust in
Maybe I missed it, but did Walsh explicitly say it's tariffs and the war driving inflation? There's a reason Trump was fighting with Powell.
https://www.reuters.com/markets/us/powell-says-tariffs-keepi...
Jerome Powell would’ve communicated in a mealy mouthed and confusing way that was meant to appease Trump?
I’ve had quite enough of Trump’s “meritocracy”, personally.
Speaking as a non-American, and without the lens of partisan politics, it seems incredibly obvious to me that
Kevin Warsh < Jerome Powell < Janet Yellen
... in terms of credibility as an economist, with Ben Bernanke one step to either side of Powell depending on how much you feel he was a victim of circumstances in the 2008 crisis.
That said, the current problems in the US economy are entirely out of the control of the Fed and all to do with the current administration's policies (mainly the war vs Iran driving commod vol and the on-again off-again trade tariff shuffle driving fx vol) and the long-term deficit position driving rate curve shenanigans. The AI and private credit bubbles are just adding to the anxiety. All of this ultimately feeds into domestic inflation and job market malaise.
The bond market generally doesn't take shit from anyone and it's not surprising to me that bond investors are not impressed. None of that is on Warsh.
Look at outcomes, not just words. Bernanke made a correct prediction that the rate had to stay low and that it wouldn't result in high inflation.
Meanwhile, the ECB started raising the rate once the economy stopped crashing. And that promptly caused the second recession in Europe.
What caused the second recession in Europe was a decrease in energy supply. Country that depended the most on the North sea or North Africa oil and gas exports suffered the most.
We still live under the constraints of our world, and energy availablity is a big one.
As everyone should know by now, the US government runs a massive deficit, that is the difference between tax receipts (and other income) minus expenses. The current US public debt is hovering around $40T and the annual deficit is pushing toards $2T.
A lot of that $40T was borrowed at lower interest rates but let's assume for argument's sake that it was borrowed at 5%. That's $2T in interest alone every year. There's a huge difference between adding $2T in debt at 5%+ every year vs 1-3%.
The Fed has auctions to sell its debt. That market clears at a certain interest rate so if the market isn't buying the debt the rate the Fed pays has to go up. That's what's happening here.
What's driving this is that inflation is above the ~2% target. Well above, actually. There are generally two ways of tackling high inflation: with monetary policy (ie raising interest rates) and with fiscal policy (by raising taxes). Modern US administrations (both parties) have completely abandoned any pretense of ever raising taxes. That was the appropriate solution during the inflation shock of 2020-2022. Some European countries did this with a corporate windfall profits tax (eg Spain). The US did not.
The problem is that since housing is such a huge part of consumer spending, higher interest rates mean higher mortgage rates, which means higher housing expenditure, which means higher inflation. Now luckily most mortgages in the US are 30 year fixed so this is slow to respond and only really affects new mortgage. Other countries aren't so lucky.
But the big drivers in inflation are soaring grocery costs and energy costs. Energy costs, particularly diesel, is a massive driver of inflation. The rise in groceries since Covid has completley outpaced inflation while real wages have fallen. There's only so much more inflation the American consumer can take. Household savings rates are already very low so there's very little in the way of a buffer to absorb higher costs.
This is all being exacerbated by the disastrous war in Iran and the war in Ukraine. Russia had been a net exporter of diesel until recently as Ukraine has damaged an estimated 40% of Russian refining capcity. Refineries in the Gulf have also been taken offline. There's been a loss of over 1 million barrels per day in refining capacity. This is somewhat paradoxically why crudel oil prices are relatively low given all that's going on: because crudel oil is mostly useless unless it's refined. Destroy refineries and demand for oil goes down. But the demand for refined petroleum products goes up, way up [1].
It should be noted that China has essentially saved the world economy up to this point [2]. The closure of the Strait of Hormuz blocked the passage of ~20 million barrels per day of crude (plus 20-30% of the world's natural gas plus fertilizer plus helium). The inflation shock of 2020-2022 occurred because we lost "only" 10 million barrels. But China seemingly cut their imports by 5M. Saudi Arabia diverted 5-7 via the East-West pipeline to the Red Sea. The US has been draining the strategic reserve and so net we've only lost a few million barrels per day. That's temporary. the SPR has hit historic lows not seen in 40 years and it can't get much lower without risking a collapse of the salt caverns it's stroed in in Louisiana. Nobody knows if and when that'll happen because we've never done this before.
The backdrop for all this is that there has been a decades-long effort at this point to essentially loot government coffers in the US. More tax cuts for the top 0.01%. The Western world in general has reached a breaking point where land hoarding and wealth need to be taxed or society as we know it will actually break down. I'm not being hyperbolic. Currently, there's no concern for that from the looters because upheaval means war, which means more weapons sales. Also, free movement of capital means the wealthy believe they can just flee.
For context, a mere 10 years ago the US total public debt was ~$16T. It's 2.5x'ed in a decade and only going to get worse unless something drastically changes.
Warsh was put in to cut rates for political purposes. The best he can do is to hold rates steady because they really should go up in an environment where we aren't going to raise taxes.
As for Iran, it's been clear since at least April, that this is an unmistakable and undeniable total strategic defeat for the US and there is no way out other than to surrender. This event will be written about in history books as a turning point in the world order that was designed by the US, for the US after 1945. We are entering a new era. This is going to redefine US relationships all over the world.
[1]: https://rbnenergy.com/market-data/3-2-1-crack-spread
[2]: https://www.theatlantic.com/economy/2026/07/china-iran-usa-o...
American fixed 30y mortgages actually make interest rate policy much less effective, in theory.
In most countries with normal mortgages, raising rates fairly immediately transmits through to the rest of the economy, because it affects the mortgage market. This isn't true in America, because everyone quite reasonably is able to get these insane mortgage products with literally no downside risk - if rates go up, you don't pay more. If they go down, you refinance at minimal cost.
Agree to disagree on the tax issue. The way you've framed it is fairly inflammatory, but happy to have a discussion about it. The reality is that as much money as rich people have, the middle class have a whole lot more. Every country with large government spending has broad, high taxes on the entire population, not just the rich.
This is not uniquely American. Here in the Netherlands we also have fixed interest rates for long periods. Usually for 20 years.
So you don't buy the POV the middle class is squeezed out of existence, almost?
Not really.
I earn a reasonable income, but the reality is even though I live alone and don't really think about where I spend my money finances are good. I could quite easily save a fair bit more than I currently do if I wanted to.
My experience won't align with everyone, but it is enough for me to feel somewhat dismissive of people who say life sucks. At some point, if you aren't earning enough and/or spend too much, that's on you. Some of the people I know of who complain about finances feel they should not have to care about their spending, or have "luxuries" that are actually very expensive (going out drinking alcohol is a big one where I'm at). The reality is anything that takes human Labor in a developed economy is very expensive.
The interesting thing is, US media, US social media driven by Big Tech algorithms, Google Search, nytimes, reddit, Social newsfeeds of students, teens, teachers is not exposing this at all. It feels like we are self-contained information exposure bubble too. Only a physical visit outside of US, and looking at the information from outside of US will give a picture of the mistakes being made here.
The national debt was in the news a lot in the 90s and 00s and the sky didn't fall. Now both parties have decided they don't care, and I'm sure they'll find other things to blame when growth shrivels etc.
Even before then it was widely discussed. There was even a Schoolhouse Rock song, “Tyrannosaurus Debt”.
Don't overlook quantitative easing. Introducing more money into a monetary system has a significant inflationary effect on the money that was already present.
Also, housing costs don't statically climb as interest rates go up. A decrease in market price makes up for most of the difference.
But Warsh wants to unload the Feds balance sheet so this is very much in agreement with his policy.
And somehow this situation is all Joe Biden's fault, and Trump is still going to fix it, any day now.
A very significant amount of American voters believe this. To this day. And their belief in this is still being reinforced by the vast majority of the "mainstream media" which they believe is left-biased, which hasn't been true for very many years at this point.
This is why we are fucked and there is no way out of this that doesn't involve existential threat to our current society.
I understand the point you're making about blind devotion to Trump but the reality is that Biden is not free from blame here, in four ways:
1. Trump in his first term created the Abraham Accords that directly contributed to the genocide that has since happened (by excluding Palestinians from the process). Biden did not reverse any of that because he is an avowed Zionist;
2. Trump blew up the JCPOA that sought to include Iran in the international community for really no reason than to please his donors, particularly his biggest donors, Sheldon and Miriam Adelson, who are also avowed Zionists. This was an Obama-era deal and part of me is convinced that Trump blew it up simply because it had Obama's name on it. Biden of course did not reinstate it;
3. Trump blew up energy markets in 2020 with the disastrous OPEC deal he made in June that created the inflation shock of Covid. Biden quietly went to MBS to get him to increase oil output. He refused. Biden said nothing. He absolutely could've waved a very big stick to get MBS to change course here, notably by threatening arms shipments; and
4. The so-called "bear-hug strategy" following October 7 set the stage for everything that's happening now. At any point in the last more than a year of his term, Biden could've ended that conflict with a phone call. He did not because, again, he is an avowed Zionist. That both emboldened Israel to drag the US into the Iran war and also was a key factor in the Democrats losing the 2024 presidential election although I'm not actually convinced we'd be in a vastly different situation had Kamala won (eg [1]).
US foreign policy is surprisingly uniparty.
Oil is good for business because it's good for war. It's also why we don't have major investment in renewables. As this article put it, nobody goes to war over a solar panel [2].
[1]: https://www.aljazeera.com/news/2024/10/8/kamala-harris-says-...
[2]: https://www.theenergymix.com/no-one-goes-to-war-over-a-solar...
No comment on the points you made, but thanks for the article No One Goes to War Over a Solar Panel' was a good read.
Oh, I'm not exactly a huge Joe Biden fan. I just think it is ridiculous that nobody "on the right" calls Trump on using him as a universal scapegoat for everything as we continue to fumble into an economic situation that Trump is consistently actively making worse.
I think Biden did manage to enact some good domestic economic policy in a tough political environment, but in addition to everything you pointed out that I agree with he obviously should have stepped aside for the 2024 election long before he did and his decision to nominate Merrick Garland for Attorney General will be seen as one of those history book moments of very high consequence in the fall of an empire (assuming we have legitimate history books in this future).
Plenty of blame to go around for many Democrats here for both the fact that our disastrous foreign policy is, as you've said, uniparty, and also their fecklessness and early boosting of the whole Trump project in 2016 (because they believed he would be easier to beat than the other Republicans) did a lot to set all of this in motion.
I can't understand the logic behind party A did something, and then blame party B for not undoing it.
Not everything is a simple ctrl-z, and the blame lays squarely on who implemented it.
A mugger stabs your friend and runs off. They are bleeding out. You do nothing. That’s what he’s saying. The fact is Biden did nothing to prevent this. Including not locking the fucker up. Not stacking the Supreme Court after the Ginsberg shitshow.
> They are bleeding out. You do nothing
There are a lot of people that do not know what to do.
There are also wounds that you can't really do anything about without hospital. (internal bleeding?!)
The funny thing is, as analogies go, here the friend tells you to bugger off because of israel and tells the mugger to come back and help him... mugger stabs him some more
I hear you, but I really don't want the government flip flopping every 4-8 years on policy.
"stuck in the past" vibes vs making progress
>The so-called "bear-hug strategy" following October 7 set the stage for everything that's happening now.....Biden could've ended that conflict with a phone call. Both sides have been preparing for the conflict for decades. The bomb that the US used to bomb Iran's nuclear facilities, the GBU-57A/B MOP, began development in the early 2000s[1]. Iran has long supported the Houthis, who have been attacking Saudi Arabia, a key US ally in the Middle East and one of the main suppliers of oil to the West. Iran has been the major competitor to the US, or even the West, for a long period of time. Oct 7 is just a trigger point, like the Sarajevo assassination was the trigger point of WW1.
> Trump blew up the JCPOA that sought to include Iran in the international community for really no reason than to please his donors Indeed, a few of the US allies in the Middle East, like the UAE, Saudi Arabia, as well as Bahrain, expressed concerns over the Iran nuclear deal[2].
We are entering a critical point in time, where Western civilization may not dominate the world anymore like it did for the past 300 years. There will be a lot of instability, though a lot of people fail to recognize that and are underprepared.
[1] https://www.twz.com/air/gbu-57-massive-ordnance-penetrator-s... [2] https://www.aljazeera.com/news/2018/5/9/world-leaders-react-...
edit: if you're going to down vote, at least explain why my news articles are incorrect.
Are down voters saying Trump/Biden should let the provisions expire?
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On JCPOA, many of the critical provisions had pending expiration dates by this time [0] [1] and re-negotiation needed to happen again anyways.
Obama kicked the can down the road and Trump/Biden needed to provide the next kick.
[0] - Jan 2026, the limits on the types of centrifuges expire. Jan 2031, quantitative nuclear limits expire (enrichment ceiling).
[1] - https://www.armscontrol.org/act/2017-10/news/iran-nuclear-de...
How is this not a total nonsequitur from the parent thread??
"he is an avowed Zionist"
What exactly do you mean when you say Zionist?
I believe they're referring to when Joe Biden said "I am a Zionist."
What did he mean then? Israel exists as a Jewish state so I really don't know what people mean when they say it.
Zionism can be both the nationalist movement for making Israel a Jewish state as well as the interpretation that such a movement is inherently colonial and racist.
So Zionism for Israelis might just mean "we support and advocate for a Jewish state in the land of Israel" which also includes two-state solutions but it can mean "we are a colonial and ethno-religious racist state" to the ones being displaced by the movement (like Palestinians).
Using the same word for two completely different things is very confusing.
Also the Arabs took the land from the Byzantine empire in the 7th century AD.
Your analysis will be downvoted, but it is absolutely spot on. One day, everyone will always have been against this.
One day, everyone will always have been against this
This is a very insightful book, highly recommend.
> At any point in the last more than a year of his term, Biden could've ended that conflict with a phone call. He did not because, again, he is an avowed Zionist.
No he could not have. Israel has been a contentious ally for the US, especially while a Democrat has been POTUS because they are actually independently capable of supporting themselves and have their own internal economy and military industrial complex.
The relationship between the United States and Israel started with us(The United States) peeling them off of USSR support in the late 60s[1], and if we abandon them they will either go it on their own or find another ally who has interests in the region due to oil still being important.
Biden as a representative of the United States had leverage over Israel, but not such complete control that he could just call Netanyahu and demand and end the war and have that be done with.
And that's not even getting into whatever the fuck you mean by " ... he is an avowed Zionist" [1]https://en.wikipedia.org/wiki/Soviet_Union_and_the_Arab%E2%8...
You can argue all day long, but at the end of the day, the US has immense ability to exert pressure on Israel, starting with withholding UNSC vetoes.
The Biden admin pulled no levers whatsoever. On the contrary, it went to great lengths to cover for a genocide that it was aware of. This admin will be part of the history books, but not in a good light :)
> ... US has immense ability to exert pressure on Israel, starting with withholding UNSC vetoes.
You are 100% correct on this. That does not however mean they have the ability to end a war in one phone call
> The Biden admin pulled no levers whatsoever.
This is incorrect. Biden tried to constrain Netanyahu and did shit like making the pier to deliver aid to the Palestinians. Netanyahu responded by snubbing Biden and giving a speech to the Senate instead.
I am generally anti Israel as the nation because I believe they have been a shit tier ally who feels free to fuck around in our elections with no remorse, but acting like we had the ability to force them into actions they didn't want, without using military force, is fucking ridiculous.
Again, I think they are a piss poor ally, largely because they will not work with us, and that is largely because they have the ability to operate independently and utilize that ability constantly. If we got rid of any dependence on oil I would say fuck the whole region because every state there is in a competition over who can be the biggest assholes to us, with the possible slight exception of Jordan, and I cage that claim because I only know a decade or two of their history in relations with us and honestly mostly because one of their kings wanted to be in star trek so bad he got a spot as an extra, which implies some level of agreeing with our values.
Thank you for your comments. In short, it's complicated. The other piece which you didn't mention that other people bring up is cutting off the 4B-8B in military aid to Israel. In the past that might have given the US more leverage, but Israel has a 700B GDP economy now - they don't need that aid to buy weapons. The aid the US sends just ends up back in the US economy, and keeps Israel from buying arms from China.
> In short, it's complicated.
No, it is not. The US has the power to sanction entire states & cut them out from the global banking system overnight. Look at what Cuba has suffered for daring to oppose the US.
> but Israel has a 700B GDP economy now
That would mean shit if the country is sanctioned and its leaders declared persona non grata. South Africa was similarly quite powerful, but when you’re reliant on Western backing and integration, existing as a pariah state is not a sustainable position to be in.
Adding to this, US foreign and military policy is increasingly chaotic, so other countries are quietly disengaging, and tariffs are slowly unravelling the US’ trade relationships. The American people voted for Trump twice: Trumpism is now an established thread in US politics, and the rest of the world is taking steps to insulate itself from the coming turmoil.
You’re right about a lot of this but there’s no evidence of trade slowing down. US exports are actually accelerating https://fred.stlouisfed.org/series/IEAXGS
I expect that this is mainly due to AI and hardware. The US is about to lose its status as the world’s biggest agricultural exporter to Brazil.
Wrong metric. We saw a significant drop in _imports_ until the policies were ruled unconstitutional.
China should increase the import pace especially after the US strategic reserve depleted. Considering that despite Chinese saving, US and EU are more interested doing another trade war.
Believe it or not...calls.
Higher interest rates mean buyers can afford less house for the money. House prices go down. Boomers get mad.
You're sure house prices are elastic here?
They are slowly elastic. The only way to speed up the re-pricing is a recession where people lose their jobs and are forced to sell. Otherwise, it's mainly young people entering their first house phase that get impacted - which is exactly what we've seen.
> This is all being exacerbated by the disastrous war in Iran
No, why? US is an exporter, not importer of oil, so any price increase of crude oil is good for US. Maybe not consumers, but government (Venezuela had literal amine while exporting a lot of oil and honoring all of the international debt payments). So US must have more money to service its international debt.
What happens to the local price of oil if you are able to export the oil at a much higher price?
>> US is an exporter, not importer of oil, so any price increase of crude oil is good for US.
It is good for US oil producers, who have indeed been making money hand over fist exporting oil at a premium. It certainly it not good for anyone else.
> There are generally two ways of tackling high inflation: with monetary policy (ie raising interest rates) and with fiscal policy (by raising taxes).
While this is the orthodoxy, it should be obvious it is nonsense.
The idea that we must curtail production in order to reduce inflation is so incoherent that it damns the professional court economists who have spread it far and wide.