Signal: Trump v. Everybody, Confusion in Ukraine, and a Kim Burger with Fries

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-Ian

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THE WAR AGAINST ALL

Donald Trump is the first US president since the 1930s to reject the assumption that global leadership serves the US national interest. With today’s imposition of steel tariffs on the EU, Canada, and Mexico, he’s also taking a whole new approach to conflict.

Three quick thoughts:

1. When headed into a fight, US presidents are traditionally quick to highlight the number and reliability of US allies, in part to reassure American voters that friendly governments agree on the need to fight and will share the costs and risks that fight entails. Trump, by contrast, wants Americans (and the world) to know that “friends are for snowflakes.”
2. As Republican Senator Ben Sasse noted on Thursday, Trump is using the same tool — steel and aluminum tariffs — against US allies that he’s using against China, a strategic competitor.
3. He’s ready to go toe-to-toe on trade with Europe, China, Canada, Mexico, and others simultaneously.

Is he right? Will this bold approach to putting America first benefit American workers and the US economy? We’re about to find out.

UKRAINE 2018

On Tuesday evening, Ukrainian Prime Minister Volodymyr Groysman took to Facebook to accuse Russia of murdering dissident journalist Arkady Babchenko in Kyiv. Hours later, Babchenko (pictured above) walked into a press conference to announce that Ukrainian security services had, in fact, staged his “murder” to flush out a Russian hit squad operating in Kyiv.

The government’s story makes little sense — did they really need to fake a murder to catch a would-be killer? — and media organizations have roundly condemned the Ukrainian government for this stunt. But the Babchenko story highlights the confusion, deception, and (often justified) paranoia that still make Ukrainian politics so colorful.

As it happens, your Friday author has just returned from 10 days travelling around Ukraine. A few trip highlights underline other aspects of life in today’s Ukraine: 

Courting Europe: The Maidan, Kyiv’s central square, still features improvised shrines to dozens of civilians killed there during the 2014 protests that ousted then-president Viktor Yanukovych. But the battle-cries heard last weekend came from football fans in town to support Liverpool and Real Madrid at the UEFA Champions League Final. As with last year’s Eurovision Song Contest, Kyiv continues to host major European events in hopes of strengthening ties with the EU.

Urban Promise: We saw countless active construction sites in the capital, the well-preserved pre-Bolshevik beauty of Odesa, and the buzz of young people filling restaurants every evening in Kyiv, Odesa, and Lviv.

Rural poverty and alcoholism: “Ukrainian Sheriffs” is an award-winning documentary that offers a sad and funny account of daily life in the rural village of Stara Zburyevka as Russian-backed militias wage war in the country’s east. Spoiler alert: poverty and alcoholism, not Russians, are the biggest threats. See a trailer here.

Corruption: Yanukovych’s Mezhyhirya palace, where the former president hid his stolen wealth and questionable taste, sits on an estate outside Kyiv. Visitors can enjoy Yanukovych’s hidden mansion, his ostrich enclosure, the reservoir where his men dumped damning documents during the protests, and the guesthouse sauna protesters used to dry them out after Yanukovych fled to Moscow. Unfortunately, corruption is a thing of the present. In 2017, Transparency International ranked Ukraine #130 in the world for corruption, just five places higher than Russia.

Internal tensions: We passed the trade union building in Odesa consumed by fire on May 2, 2014. Russia’s push into Crimea weeks earlier had begun with “spontaneous” pro-Russian demonstrations in Crimean streets. A similar attempt to stir trouble provoked gunplay in Odesa — and 42 pro-Russian protesters burned alive in this building where they sought refuge. Four years later, an investigation of the incident grinds on.

Nationalism: We enjoyed dumplings in an unmarked restaurant in Lviv, which you enter only with a password (Glory to the Heroes!). The maître d’ carries a machine gun, you dine inside a bunker that once housed Ukrainian fighters battling both Nazis and Soviets, and you pay extra to shoot pellets at a picture of Putin. The restaurant, open 24 hours, is pure kitsch, and everyone is smiling, but it reflects an underlying nationalism, particularly in Western Ukraine, that sometimes treats “others” as suspect.

This week’s phony assassination story helps Russians question the credibility of Ukraine’s government and security services, reinforcing a message I heard from Ukrainian friends during my visit: “The Russians want to carve us up, but it’s the corruption and ineptitude of our own leaders that really stand in our way.”

Bottom-line: Too many of Ukraine’s wounds are still self-inflicted.

PUPPET REGIME: IT’S INSAAAANE!

Well folks, the world’s greatest deficit-busting China-crushing Europe snuffing tit-for-tat tariff extravaganza has begun!!! DON’T MISS IT!!! Puppet Regime takes a page from New York City history to explain the topsy-turvy present of US trade policy. DON’T MISS IT. GET IT ALL, PAY IT NOW, MAKE IT GREAT!

EXIT RAJOY

Spain will soon have a new government. Prime Minister Mariano Rajoy has lost a vote of no-confidence in parliament. Given the political upheaval in nearby Italy, it’s natural to wonder whether the news from Spain means more bad news for Europe.

But Spain’s situation is not as alarming as Italy’s. There are several reasons why:

• The no-confidence vote will pass power from traditional center-right (the People’s Party) to traditional center-left (the Socialist Party). Spain has its populists (Podemos) and separatists, but they won’t have the sort of power that the Five Star Movement and Lega are set to wield in Italy.
• Early Spanish elections this year are unlikely.
• While the country’s unemployment remains stubbornly high, Spain’s economy is one of the strongest in the EU and it’s growing much faster than Italy’s.
• The impact of this vote on Catalan separatism is negligible. Even a center-left alliance that includes some Catalan independence advocates won’t persuade Madrid to accept a legally binding independence referendum in Catalonia. And for Catalan independence, that’s all that really matters.

Spain isn’t Italy, but it’s politics will become more turbulent. When he replaces Rajoy, the Socialist Party’s Pedro Sánchez won’t govern from a position of strength. He will inherit a fractured parliament rife with political infighting, and he’ll lead a minority government.

SOUTH AFRICA: MIND THE GAP

In 1913, the so-called Natives Land Act passed huge amounts of South African land from blacks to whites. With the end of apartheid in 1994, the ruling African National Congress (ANC) pledged to return 30 percent of this land to its “previous owners” by 2014. But to maintain investor confidence in the country’s property rights, the government has moved slowly to implement this policy. Best estimates are that, 24 years later, just 10 percent of commercial farmland has been redistributed. Pressure for a dramatic change in policy is on the rise.

As he leads the ANC toward elections next year, President Cyril Ramaphosa has his work cut out for him. The problem extends well beyond land. According to recent data from the World Bank, more than half of South Africa’s population lives below the poverty line. Another 27 percent live at risk of falling into poverty. Just 4 percent are considered wealthy. Just 20 percent of South Africans qualify as middle class. Compare that with 80 percent in Mauritius.

In country after country, in rich states and developing ones, voters have swept aside the political class in favor of outsiders. Ramaphosa, an unelected leader who assumed office after his predecessor’s ouster, will have to find new ways to persuade South Africans, that the ANC, the only ruling party anyone under 30 has ever known, can buck the trend.

WHAT WE’RE WATCHING

Italian contradictions — The populist Five Star Movement and Lega will now form a government after all. As Gabe Lipton wrote for us on Wednesday, they face some very tough choices. Polls indicate that 57 percent of Italians favor both a universal basic income and big tax cuts, promises offered by these two parties. More government spending and less government revenue is a questionable idea for a country with the highest debt-to-GDP ratio of any EU country not named Greece. A new government in Rome doesn’t mean things have gotten any simpler. 

Somali pirates — Incidents of piracy off Somalia’s coast jumped from 16 in 2015 to 27 in 2016 and to 54 in 2017, according to an annual report released by an anti-piracy NGO. The main source of the increase appears to be official complacency — fewer patrols and fewer precautions onboard ships.

Fredie Blom’s bad habit — South African Fredie Blom wants to quit smoking. He’s wanted to quit for a long time. We all know cigarettes can cause health problems, and Fredie blames the devil for his addiction. But we shouldn’t worry too much about his repeated failure to kick the habit, because Fredie Blom is 114 years old.

WHAT WE’RE IGNORING

The Larrea Letter — Billionaire businessman German Larrea published a letter this week warning Mexico’s business community of the risks of electing a “populist” candidate as Mexico’s president. But a new poll this week showed Andres Manuel Lopez Obrador, the obvious target of this letter, with a 26-point lead on his nearest challenger ahead of the one-round July 1 presidential election. That’s probably because voters are less worried about the fortunes of Mexico’s business elite than about issues like security and corruption on which Lopez Obrador polls well. 

The Trump-Kim Summit — President Trump invited Kim Kardashian to the White House on Wednesday to discuss “prison reform,” because… um…

A North Korean Burger Joint? — In a report published this week, CIA analysts argued that North Korea has no intention of giving up its nuclear program, but agency officials also say Kim Jong-un might open a Western hamburger franchise in Pyongyang as a gesture of goodwill toward President Trump. Even if I found myself unexpectedly in Pyongyang and ravenously hungry, your Friday author wants no part of a North Korean Happy Meal.

HARD NUMBERS

40,000:The Trump administration’s steel tariffs could cause the loss of up to 40,000 US auto sector jobs by 2019, according to an estimate from the Council on Foreign Relations. The price of cars is expected to rise along with that of steel, leading to lower projected sales for US manufacturers.

115: Climate change scientists forecast that extreme temperatures of 46°C (115°F) will be five times more likely in the Middle East and North Africa by 2050 than they were in 2000, when temps reached these levels an average of 16 days per year.

68.7: China has overtaken the US in “healthy life expectancy” for the first time. Chinese newborns can expect 68.7 years of healthy life, compared with 68.5 years for American babies. American newborns can still expect to live longer overall — 78.5 years compared to 76.4 in China, but Americans are more likely to spend their later years in ill health.

10: 87 percent of Brazilians support ongoing nationwide trucker strikes in response to higher gasoline prices. But only 10 percent approve of the proposed tax hike and spending cuts needed to meet their demands.

4: As of today, Spain has had four motions of no confidence since its transition to democracy following the death of Francisco Franco in 1975. All three previous votes were unsuccessful.

WORDS OF WISDOM

“I have full confidence in the genius of the Italian people.”

– European Commission President Jean-Claude Juncker, after recognizing that Italians might not like his earlier suggestion that they embrace “more work, less corruption, [and] seriousness.”

This edition of Signal was prepared with editorial support from Kevin Allison (@KevinAllison), Gabe Lipton (@gflipton) and Leon Levy (@leonmlevy). Spiritual counsel from Willis Sparks.