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Banana republic watch

Summary:
With each passing day, the banana republicization of America becomes more pronounced. 1. Here’s the FT discussing the disgraceful attempt by the US government to extort money from TikTok: After a process in which potential risks to national security have become mingled together with personal political interests, analysts say the battle over TikTok is another example of the Trump administration setting an unstable playing field for companies wishing to do business in the US.“We may even be going beyond what emerging markets do” to protect economic interests, says Saikat Chaudhuri, executive director of Wharton School’s Mack Institute for Innovation Management. “It’s really extreme and unacceptable for the leading democracy and what’s supposed to be a tech leader and an

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With each passing day, the banana republicization of America becomes more pronounced.

1. Here’s the FT discussing the disgraceful attempt by the US government to extort money from TikTok:

After a process in which potential risks to national security have become mingled together with personal political interests, analysts say the battle over TikTok is another example of the Trump administration setting an unstable playing field for companies wishing to do business in the US.

“We may even be going beyond what emerging markets do” to protect economic interests, says Saikat Chaudhuri, executive director of Wharton School’s Mack Institute for Innovation Management. “It’s really extreme and unacceptable for the leading democracy and what’s supposed to be a tech leader and an example for how free markets can work.”

One person close to the negotiations characterised the sale of TikTok as “driven by politics and greed”.

2. Meanwhile, the media (both left and right) is increasingly full of stories predicting chaos after the election. I don’t know if there will be chaos (I’m a bit skeptical), but that’s not the point. You don’t see those sorts of fears expressed in non-banana republics.

3. The Supreme Court has been excessively politicized for quite some time, but now things are reaching a hysterical pitch. Here’s a project for a grad student. Count the number of articles discussing the debate over US Supreme Court picks over the past few decades, and compare with the number of articles in the entire rest of the developed world that discuss controversies over their Supreme Court picks. I follow the news pretty closely and the only time I can ever recall reading controversies over Supreme Court picks is in banana republics such as Latin America and parts of Eastern Europe, or in the US.

Here’s one area where the Dems are also to blame, with some pundits advocating “court packing” should Biden be elected. Even the overwhelmingly Democratic Congress of 1937 rejected FDR’s shameful (and authoritarian) attempt to reduce America’s three branches of government down to two. (Yes, it goes without saying that the GOP is shameless on this issue as well.)

Take a look at how things were done before America became a banana republic:

Section 1. No person shall be elected to the office of the President more than twice, and no person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once. But this Article shall not apply to any person holding the office of President when this Article was proposed by the Congress, and shall not prevent any person who may be holding the office of President, or acting as President, during the term within which this Article becomes operative from holding the office of President or acting as President during the remainder of such term.

[emphasis added]

In non-banana republics, a principled argument for or against against term limits would exempt the current occupant of the office. [In this case, the GOP-led initiative exempted Truman A principled argument for a bigger Supreme Court would gradually phase in the expansion, to begin in the term of the following president, not the current occupant of the office.

People sometimes ask me, “What’s wrong with changing the constitution to allow a Putin or a Chavez to serve more than two terms?” There’s nothing wrong with changing terms limits, as long as the change doesn’t apply to the current occupant of the office. There’s nothing wrong with increasing the size of the Supreme Court, as long as it doesn’t allow the current president to engage in court packing.

Here’s a general rule. When thinking about how much power you want to give an executive, think about how you’d feel if that power were held by Hitler, Stalin, Pol Pot, or Mao. If the leader were that bad, would you rather the leader be in charge of a Russian-style executive or a Swiss-style executive? Procedural issues come before everything else.

4. Here’s another example.

5. And here’s another:

Then the agreement collapsed. The breaking point, according to four people familiar with the discussions: Mark Meadows, Mr. Trump’s chief of staff, insisted the drug makers pay for $100 cash cards that would be mailed to seniors before November — “Trump Cards,” some in the industry called them.

PS. I have a piece on AIT at The Hill.

PPS. Good to see a growing awareness that the Fed needs to do more QE.

PPPS. Unemployment insurance data is completely useless.


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Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

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