Banana republic watch

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.



19 Responses to “Banana republic watch”

  1. Gravatar of Gene Frenkle Gene Frenkle
    19. September 2020 at 10:15

    The Phillips curve made sense when the first law of thermodynamics played an outsized role in our economy…but now that we are moving to a period in which we have more or less solved our energy issues we can have a strong economy without energy prices getting high and undermining our energy intensive consumer spending economy.

    With respect to the near future and hitting inflation targets Keynes suggests burying jars of money for people to find or building pyramids to create jobs…I wouldn’t do those things because I think we have a much better excuse to get money into the bank accounts of certain Americans—pay reparations to descendants of American slaves! I believe racism is the reason we haven’t already paid reparations…but on some level it works to our country’s advantage because 2021 is the ideal time to finally pay reparations because it would be excellent stimulus and help all Americans as a rising tide lifts all boats.

  2. Gravatar of Sean Sean
    19. September 2020 at 11:42

    My guess is gridlock and other checks and balances makes it often difficult for our legislature to function. ObamaCare is a prime example. The bill can neither be repealed or reworked in congress which means the Supreme Court gained the power to dictate our health care system. Any minor flaw that doesn’t pass constitutional muster can have the whole law struck down since the legislature is incapable of fixing it.

    But yes both sides are guilty of ruining our political system. Trump has hurt a lot. But the left using violence as a political tool has hurt a lot too.

  3. Gravatar of JP Koning JP Koning
    19. September 2020 at 11:55

    I’m a Canadian. I consider myself to be reasonably informed. And I have no idea who serves on the Canadian supreme court. (I do know the names of all the US Supreme court justices.)

  4. Gravatar of Skeptical Skeptical
    19. September 2020 at 12:20

    Just another step towards Low Trust….

    For posterity: If the GOP succeeds in pushing this nominee through –

    1) within 10 years the # of Supreme Court Justices will not be 9
    2) the number of States will not be 50

    To add to the rest of my predicts:

    1) SATs/any objective performance criteria effectively banned/gone from college admissions by 2030
    2) ‘Rona deaths under 250k as of end of Nov 2020 in the US using death certs, not excess
    3) no widely available vaccine (>50M inoculated) in US until at least Jan 2021
    4) Biden wins the popular vote by > 2%
    5) Biden wins the electoral college if mail vote counts are not stopped via court order
    6) bilateral trade China/US & China/EU is higher in 2030 than 2020 despite much hollering otherwise
    7) no sanctions against China with any bite (reduces bilateral trade > 10%) by 2030
    8) no police union in a democratic controlled municipality is disbanded over BLM in 2020 or 2021
    9) no statistically significant decline in police homicides in any dem controlled municipality from 2019 to 2021
    10) homicide increase YoY from 2019 to 2020 using data from largest 50 cities in US

    Feel free to ridicule if/when these don’t come true

  5. Gravatar of Ray Lopez Ray Lopez
    19. September 2020 at 12:25

    Sumner makes two fundamental errors in his post.

    First: ” 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.” – Not true. In fact in banana republics the courts have very little power and are routinely ignored.

    Second: “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.] ” – the opposite is true; suppose Chavez wanted to make himself dictator for life. Does that mean a law saying there would be term limits would exempt Chavez? Absurd. Once again our host, an otherwise good guy, flunks basic logic.

  6. Gravatar of msgkings msgkings
    19. September 2020 at 12:41


    If I’m not mistaken, the US Supreme Court has far more power than the courts in most other governments. It’s only in the US that it’s an “equal branch” with the executive and the legislature. So that’s a big reason why it’s such a hotly contested organization.

  7. Gravatar of ssumner ssumner
    19. September 2020 at 12:43

    JP, Interesting, that was my impression too.

    Skeptical, Reasonable predictions. I favor making DC a part of Maryland.

  8. Gravatar of Benjamin Cole Benjamin Cole
    19. September 2020 at 15:25

    There’s nothing wrong with changing terms limits, as long as the change doesn’t apply to the current occupant of the office–Scott Sumner

    Xi “Banana-King” Jinping has made himself president for life.

  9. Gravatar of ee ee
    19. September 2020 at 18:46

    One way to add some stability to the Supreme Court and both houses of Congress would be to require supermajorities to pass anything. Eg 6/9 in the court or 55 or 60% in Congress. That way a single seat moving around isn’t as decisive, and if you do get a decision it reflects a stronger consensus. The Senate has been moving away from requiring supermajorities. I won’t hold my breath.

  10. Gravatar of Christian List Christian List
    19. September 2020 at 19:00

    What definitely is missing in the US are term limits for federal judges. Ginsburg was in office from 1993 to 2020, which is simply far too long.

    Trump got lucky that he can appoint a total of three new federal judges, which in itself would not be a problem, but since there are no term limits, we are getting caught up in this intense partisan, jazzed-up banana republic madness every time a federal judge dies.

    And while we’re at it, age limits should be introduced as well.

    The same applies to presidents. Scott said Trump is not running against SJW, but against Biden. That’s true, but Biden seems too old, too senile, too fragile. One does not get the impression that he has the SJW or even large parts of his own base under sufficient control.

  11. Gravatar of Postkey Postkey
    19. September 2020 at 23:01

    I’m ‘amused’ that you ‘all’ think it matters?
    “Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism. “

    Look, look, over there, {bread and circuses}.
    Don’t look here at the US ‘plutocrats’ and the M.I.C., there is nothing to see!

  12. Gravatar of Tim Worstall Tim Worstall
    20. September 2020 at 02:55

    One thing I’ve always liked about the US system is pay for politicians. For Congress and the President at least. Sure, it’s possible to raise the amount being paid to them. But this Congress votes on it and it comes into effect for the next.

  13. Gravatar of Michael Rulle Michael Rulle
    20. September 2020 at 04:50

    There is nothing particularly unusual about the specific opinions you expressed in this essay—-I agree with them in fact (although your TikTok obsession is odd—didn’t the Govt agree on an Wal-Mart/ Oracle deal? They may have extracted money—-but the government extracts money in far worse ways than that from all of us). However, I don’t really understand ——or more specifically, I really disagree——with your need to squeeze your arguments into the “Banana Republic” meme. First it is kind of idiotic—-there is no real operating definition of a Banana Republic in any scientific way that I am aware of.

    Perhaps if you increased your criticism of our tax and regulatory rules, which I am pretty sure you have plenty——it would be more educative.

    Packing Supreme courts sucks——getting rid of filibuster sucks——we already have a 2 term rule for 75 years——-executive orders suck. Tax rates suck. Congressman going in poor and coming out rich sucks. Presidents too. So yes, plenty of junk. Letting crowds burn down buildings suck. But as sucky as it all is, it ain’t Cuba, Bolivia Russia , China most of Africa, and its not Germany either—-how long has Merkel been prime minister?

    Forget your meme—attack the issues directly.

  14. Gravatar of ssumner ssumner
    20. September 2020 at 07:07

    Ben, That’s why Trump likes him so much.

    Christian, You said:

    “That’s true, but Biden seems too old, too senile, too fragile.”

    That’s an odd complaint to make about Biden, who seems like Pericles compared to Trump. Trump’s been senile his entire life.

    Tim, Good point.

    Michael, You said:

    “They may have extracted money—-but the government extracts money in far worse ways than that from all of us)”

    I suggest you stick to commenting on issues that you know something about

  15. Gravatar of bill bill
    20. September 2020 at 14:47

    And if Biden becomes President but McConnell is still leader of the Senate? What should be done if McConnell won’t let any Supreme Court nominee be voted on?

  16. Gravatar of Christian List Christian List
    20. September 2020 at 19:19

    That’s an odd complaint to make about Biden, who seems like Pericles compared to Trump. Trump’s been senile his entire life.


    I agree that Trump is too old as well.

    To the senile part, these are simply his views, as you correctly say, he has always had these views.

    Biden, on the other hand, has noticeably decreased mentally, he was much fitter in the past.

    Not to mention the subject of control. Trump is always described as senile, at the same time it is commented that he has this immense, even absurd, control over his base. You yourself liked to give several examples several times. This does not go well together.

    With Biden I don’t have the feeling that he has much of his base under control. Groups like the SJW have their own agenda and in the end they do what they want.

    Coming to the third point, the GOP has the image of being a party of the elderly anyway, they probably represent an above-average number of pretty old voters.

    The Democrats, on the other hand, have the image of a younger party. The youth orientates itself towards them, and here an overaged candidate has a much stronger negative connotation.

    Sanders was able to compensate for this, because he has always maintained the image of being an outsider, a rebel, an anti-elitist. Biden does not have this image, he is just a really old and you can hardly be more elitist than him.

  17. Gravatar of Postkey Postkey
    21. September 2020 at 03:34

    “Trump is not the most evil thing about the US government. He’s not even in the top ten. Getting rid of him will keep all the most evil things about the US government in place while letting you enjoy a pleasant state of psychological compartmentalization over brunch. That’s all.”

  18. Gravatar of bill bill
    21. September 2020 at 08:00

    Can you elaborate more about court packing? The constitution does not set a size for the supreme court. If the Senate wants to vote to change the size of the court, what should be done?

  19. Gravatar of ssumner ssumner
    21. September 2020 at 09:59

    Christian, Biden’s always been like this, even decades ago. Not sure what you are talking about.

    As for Trump’s control over his base, what’s the point?

    Bill, I’ll do a post on court packing in the near future.

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