I’d like to pretend that the long silence since my last proper post — that was November last year — has been due to the long queue of contributions we’ve been briskly working through, but truth be told, I’ve been sulking.
Sulking. Not depressed, fearful, angsty, or anxious. Sulking is really the only word for the tenor of my thoughts after the election of Trump and its aftermath. Not schoolyard sulking directed at jeering victors, but a deeper sort of philosophical sulking directed at the universe. For forcing me to think once more about things I thought I was done thinking about in my twenties. Things that I didn’t particularly enjoy thinking through the first time around, but believe I got roughly right and, more importantly, out of my system. Things that are fundamentally uninteresting to me, despite their importance to others who are less fortunate or more masochistic.
While I am not particularly coy about my political sympathies (or rather, antipathies) elsewhere, I like my politics to be illegible on this blog. When I write about matters societal, I like to tack between conceptual models and narratives a couple of levels of abstraction below politics and ideology.
Unfortunately, we may be headed into a future — a subprime presidency — where maintaining such a healthy creative distance from politics becomes impossible even in the best case. Fortunately, I’m beginning to find that philosophical sulking is not an entirely infertile state of mind.
Losing versus Loserdom
The peculiar mix of melancholia and choleric that is sulking, alloyed with some philosophical discipline and epistemic hygiene, has many advantages as a baseline stance in a hostile ideological environment. It certainly beats premature commitment to predictable paths of active “resistance” that may inadvertently play right into the hands of an adversary.
And sulking has a basic advantage as a natural first response: denying to the victors the compliant cooperation of someone who has gracefully accepted the scripted role of loser in a particular kind of stylized eternal conflict.
The key to this feature of sulking is an observation Kissinger once made about guerrilla warfare, which also holds for artful political opposition: the conventional army loses if it does not win. The guerrilla wins if he does not lose. To not lose is to resist being turned into a loser in the aftermath of a loss. It is an act of intellectual resistance to being cast in a role chosen by the victor, before it is anything else.
Victors jeer and goad not just for schadenfreude, but because cementing any sort of victory requires institutionalizing loss into loserdom: a temporary condition turned into enduring societal role.
For this to work, victors have to convince vanquished opponents that their loss is not just a temporary condition, subject to reversal in future contests, but divine proof of the deep wrongness — moral and material — of their world-views. Until chagrin is fully converted to contrition, and perhaps further into gratitude, repudiation of old false gods, and full-blown Stockholm syndrome, victory is insecure and the victor cannot rest easy.
So to sulk is to engage in the most basic kind of guerrilla action: to refuse to be coaxed and bullied into the idea that I lost is equivalent to I was wrong. There are more active kinds of guerrilla action (including plenty of peaceful and law-abiding ones), but sulking is the beginning of any kind of non-cooperation or active comeback effort.
So how should we diehard liberal cosmopolitans productively and generatively sulk our way through what might be the better part of a decade of resurgent global illberalism?
The core of the challenge is taking the torch to the idea that the Trump administration is good for business. The hopes of the Trump administration for a compliant, cooperative population of losers rests on the notion that this foundational myth can be a self-fulfilling prophecy.
Sulking Towards Dystopia
Between apocalyptic scenarios of a Korean missile crisis and a Trump tweet combining to spark World War III, and the grievance-fueled fever-dream of a Great-Again America, there lies a band of highest-likelihood scenarios that we can characterize as a subprime presidency.
The term is something between a broad metaphor and a literal assessment of how economic conditions are being narrativized by a business media desperately eager to believe that all is well, and that there is nothing to see in Washington, DC.
To feed that need, a narrative appears to be growing, based primarily on the apparent indifference of markets to the political drama since the election, that the Trump administration might end up being the most business-friendly in decades.
I’ve heard that specific phrase — most business-friendly administration in decades — from multiple people, in multiple conversations in the last couple of months. It has become what we dishonest media types call a “thing.” It has thingness written all over it.
The administration is of course anxiously feeding this narrative, via signals such as the appointment of Gary Cohn, former President and COO of Goldman Sachs, as Chief Economic Advisor, and trading on the reputation of Peter Thiel.
And I’m not imagining things. Multiple independent sources have confirmed my suspicion that more than half of top business leaders have already bought into this narrative. And half the rest, I suspect, are sympathetic to it.
And yes, I think they’re all wrong, even though they’re all much richer than me.
When you spend almost all your working hours in a corporate business environment, wheeling and dealing in pleasantly appointed conference rooms, your view of the world largely mediated by neat slide decks and spreadsheets, it is easy to ignore signals from all sources besides the stock market.
Even in Silicon Valley, where much of my consulting work is concentrated, and overt support for the Trump administration is rare (largely because it would be unpopular with high-value employees, and a costly tactical error in the always-desperate existential competition for talent), closet support is higher.
So either the market is incorrectly pricing the political risks of a Trump presidency, or the developing resistance is overwrought and hysterical. Which is it?
I of course, don’t have a clue. I am about as qualified to provide detailed commentary on the mysterious movements of the S&P 500, the deeper meanings of VIX, and the collapse of the TPP, as Donald Trump is for the Presidency. Perhaps there will be a significant market correction, as some hedge funds appear to be betting. Or perhaps we’ll see the sunny times continue for four to eight years, with Trump gleefully taking credit, regardless of devastation is wrought at non-market loci like the EPA or Syria.
But as I listen to the bull case for the Trump administration, my bullshit meter is ringing non-stop. This tweet from my favorite new twitter account captures the typical output from my bullshit meter when I listen to yet another sunny narrative grounded primarily in stock market signals.
A subprime presidency is a useful metaphor to frame the case that the bull case is in fact bullshit. By this metaphor, the Trump administration is political capital asset class that promises returns it lacks the capacity to deliver, and poses a risk of serious contagion to other, healthy kinds of political and social capital.
A Slumlord Political Economy
Less than two months in, the Trump administration is already incurring such a high cost for basic political survival, and exacting such a heavy toll from civil society, that you should be doubting its ability to guarantee a stable environment for a thriving economy.
Its ability to actually deliver a return on political investments for businesses, through implementation of favorable economic policies, and avoiding forced movement on unfavorable ones, is moot.
And the contagion of eroding credibility is already spreading outwards from the White House, to institutions such as the judiciary and the intelligence community. Even Congress, an institution whose credibility the average American might have thought could not sink lower, is beating that expectation. And of course, the media — a category within which this blog sometimes wanders — is being relentlessly hammered by the bearish pressures of the Fake News bogeyman.
Critics on the far Left, driven by fears of a fascist turn in American politics, have been focusing on the argument that the rise of fascism in 1930s Germany was not accompanied by a market decline.
This, however, is a lousy argument.
That the market has historically not reliably responded to the rise of fascism does not mean such risks are necessarily serious. In fact, early signs suggest that checks and balances against fascist tendencies at least, are working. Though others have been analyzing the analogies more carefully, a checked-and-balanced Trump is more Berlusconi than Hitler, and probably not the kind of truly radical game-changing force that Papa Bannon and Putin are hoping for.
The stronger argument is this: the market doesn’t properly or completely price the positive value of a healthy civic environment (aka “administrative state” to use Bannon’s term), or the risks the lack of such an environment poses to economic performance.
The problem isn’t the dark futures themselves, but the unaccounted costs that must be incurred to avoid them: costly insurance mechanisms designed for acute and exceptional crises being turned into routine management mechanisms to contain an administration in a chronic state of self-inflicted crisis. Systems designed for managing acute stress in the body politic being deployed to manage chronic stress. The arteries of public institutions getting rapidly clogged by plaque from resistance, or worse, being taken over by cancerous internal tribes with a natural leaning towards illiberalism (a particular risk with any public agency authorized to exercise force).
The externalities that are not being accounted for by the market have to do with precisely these accumulating invisible social costs: the damage to check-and-balance institutions from being used as routine control mechanisms, and the cost to citizens from being in a constant, exhausting state of heightened vigilance and political activation.
The latter costs are already obvious to anybody who watches indicators besides the stock market. In the part of the economy driven by creative labor, the toxic effects of the political environment on employee morale are already unmistakeable. A few businesses, such as CNN, may have been energized by a renewed combative spirit. Most are being slowly drained.
A friend remarked, after noting one of my particularly dyspeptic Twitter rants, that he’d like to send me to politics rehab.
Unfortunately, it’s not just me. You can’t send half the population to politics rehab and program them to cheerfully ignore the political environment for four to eight years, while the other half waits for steel and mining jobs to return and driverless trucks to be banned. You can’t expect the former to remain ideal employees, motivated and creative, working for the Greater Glory of Shareholder Returns, while ignoring the endless screaming of their inner precious snowflake. And you can’t expect the latter to not get mad when impossible promises are abandoned.
Institutions and people being slowly drained by the low-grade chronic stress add up to only one kind of economy: a slumlord economy. One presided over by an administration whose effectiveness is rapidly declining to developing-country levels, even as incentives for extractive economics — cronyism, corporatism, and outright kleptocracy — rapidly strengthen.
So yes, the Trump administration is good for businesses: slumlord-economy businesses based on profiteering, expropriation of public goods, and general exploitation of the most vulnerable.
Not wealth-building businesses. Not the kinds of businesses that powered America to greatness.
It takes a peculiar mix of Ayn-Rand Libertarian naivete, suspension of compassion, and lack of exposure to the toxic economic-damper effects of ineffective, neopatrimonialized governments, to mistake the trajectory we are on for “business friendly.”
The Anatomy of Business-Unfriendliness
To invest in the political asset represented by a new administration, businesses or other special interests must believe that access to lawmakers will be meaningful, that favorable policies will be effectively pursued, and unfavorable ones limited to cosmetic gestures.
In addition, investment represents an operating assumption that usually does not need to be stated: that the administration will be capable of maintaining a stable business environment. That normal expectations of law and order, enforceable contracts, a trusted banking system, and the sanctity of courts, will be met.
The political class, of course, can and does betray business expectations to serve other interests. Theodore Roosevelt for instance, famously betrayed the expectations of the business world in his populist turn towards trust-busting and labor.
The risk with the Trump administration though, is not that its policy priorities, awful as they are, might shift to even worse ones. The risk is that its high political survival costs, and damage inflicted on the institutional and civic environment, will leave it incapable of actual administration. It is a political insurgency, elected primarily on a mandate for spiteful destruction and vengeance against “elites” (a large, ambiguously defined class that appears to include anyone with any kind of expertise), making an implausible promise that it can not only learn to govern, but actually wants to.
All the core premises in the “business friendly” thesis are dubious, and in each case, the source of uncertainty is Trump himself.
In an administration where survival depends on frequent demonstrations of loyalty to an insecure leader rather than competence, where appointees must scramble to continuously fit policy to match the latest angry tweet, access to senior levels of the administration is of dubious value.
To believe that policies the business world would favor, such as thoughtful deregulation, will be pursued, is to believe that a President who likes to harangue private corporations and intimidate universities with threats to “cut off funding” will willingly give up powerful mechanisms of control.
To believe that business-unfriendly policies, such as a retreat to nineteenth-century protectionism, will not be pursued, despite signs such as the retreat from the TPP, is to believe that Trump is willing to betray his base to favor new friends from the Davos set who rejected him for years.
Unlike a hypothetical “normal” president with the same stated economic policy objectives, Trump is forced by both temperament and circumstances to work to destabilize the business environment.
Shaping policy through tweeted responses to perceived slights is entirely rational for Trump: it helps keep an activated base angry and growing. As Eric Hoffer noted in The True Believer, this is the crucial priority for populist leaders of mass movements. Trump cannot afford to cede the media spotlight, or allow his restive base to calm down. Both of these are basic necessary conditions for a healthy business environment. To consolidate power, Trump’s primary allegiance has to be to his base rather than to the business-as-usual coalition of special interests. His best hope for an impactful presidency is that the base will grow in strength and energy to the point that he can afford to betray all others, his new best friends at Goldman Sachs and ExxonMobil included.
This is a subprime presidency not just because it does not have the capacity for effective administration, but because it has no incentive to develop such a capacity, with or without the supposed resistance of a Deep State.
Law and order? This is a President whose campaign rested on the use of the term as a dogwhistle to white voters, and apparently has to navigate serious internal conflicts to say something halfway decent about the desecration of graveyards.
Enforceability of contracts? Trump has a business history of vendors having to sue in order to get paid, and leaving business partners in the lurch.
Reliable banking system? This is a President who thinks sovereign default is a perfectly reasonable policy option and appears unclear about whether a strong or weak dollar is good for the economy (not that I know either, but his job actually requires him to have a reasoned opinion on the matter).
Sanctity of courts? He has already used reversals in court to erode his supporters’ trust in the judiciary. To Trump supporters, the judiciary is already nothing more than a hotbed of wild-eyed judicial activism.
Worse, the coterie with the most visible influence on the President not only does not share the priorities of the business world, but is openly working to prioritize illiberal social objectives over economic growth. Steve Bannon for instance, famously claimed that between ⅔ and ¾ of Silicon Valley CEOs are Asian (the correct figure is closer to 14% across all executive ranks) and that “a country is more than an economy, we are a civic society.” By which he appears to have meant a white nation, willing to pay economic costs to create and maintain an illiberal society.
Bannon’s particular approach towards this goal, hobbled as he is by such inconveniences as an immigration policy that is no longer defined in racial terms, is to “deconstruct the administrative state.” Or as David Brooks put it, in uncharacteristically blunt terms for the eminence grice of conservative apologetics, “privatize compassion, nationalize intimidation.” Or as Trump’s own Secretary of Defense, General Mattis, once famously said, “If you don’t fully fund the State Department, then I need to buy more ammunition.”
This is of course, not theory. Even as agencies such as the CBP (Customs and Border Protection) and ICE (Immigration and Customs Enforcement) are acquiring a beefy new political presence, the EPA (Environment Protection Agency) has acquired one of its worst enemies, Scott Pruitt, as its leader. He is tasked with perhaps the most damaging act of “deconstruction” on the menu. Elsewhere, public schooling has also been entrusted to one of its deadly enemies, and the State Department, of course, is already the site of much deconstructionist devastation.
To the wishful thinkers and soft-headed romantics of business and economics (there is no romantic idealist like a Ferengi romantic idealist) who aren’t paying attention to the details, all this sounds like a pleasant second tranche of Reaganesque deregulation. The Madness of King Donald at the center of it all is noise to these business romantics, not signal.
To anyone else, there is no way to put “business-friendly” lipstick on this pig. It is unapologetic social illiberalism and nascent neo-corporatism in business-libertarian skin.
…Said the Scorpion to the Frog
To believe in the business-friendly just-so narrative based on the flimsy evidence of the stock market is to be the frog in the fable of the scorpion and the frog. It is simply in the nature of the scorpion to sting and betray the frog (whether that frog is the business sector or Pepe the smirking 4chan darling), whatever the incentives for cooperation might be. Lest you forget this important basic truth, I made up a mnemonic couplet.
Make America Great Again,
said the scorpion to the frog
While Donald Trump himself does not appear to be a fascist (or much of anything ideologically), business growth is a distant fourth priority for him — after the feeding of his own narcissism, the need to consolidate power by keeping the base activated, and the pursuit of illiberal social policies to retain the support of the Steve Bannon White Nationalist faction. The narrow economic objectives that might align with these priorities are not the pluralist kind that lead to inclusive growth, but the extractive kind that Daron Acemoglu and James Robinson identified as the cause of state failure in their classic, Why Nations Fail.
The case for the “most business-friendly administration in decades” is specious wishful thinking at best, but the potential for long-term damage to the business environment, with costs spread across decades, is very real.
The smartest thing a business can do is the obvious thing: hardening defenses against the rising tide of illiberalism being fostered by the Trump administration to ensure its own costly and damaging survival, and rejecting scorpion-to-frog cooperation overtures.
The alternative to buying into the political stock of a subprime presidency is Bill Janeway’s formula for surviving four to eight years of what promises to be relentlessly illiberal political turbulence: cash and control.
Cash and control — maintaining a strong cash position and decisive control over businesses — is the corporate equivalent of philosophical sulking.
It means being prejudiced and skeptical by default towards any narrative that pretends gutting the institutions of civic society, while fanning the flames of illiberalism, can be “good for business.”
It means the null hypothesis is the one you get if you take even Donald Trump’s wildest ravings both literally and seriously.
It means refusing to buy the line that a decidedly selective “deconstruction of the administrative state” accompanied by huge winks to a rising tide of domestic and global illiberalism is the same as an orderly deregulation crafted by economists.
And yes, it means adopting sulking as a baseline stance of non-cooperation, until you can think of a better one.
For eight years, if need be.