Cochrane on the US as a banana republic

Lots of people view my posts on the US becoming a banana republic as being slightly hysterical. Those readers might want to check out John Cochrane’s new post. While I don’t recall him using the term “banana republic”, his depiction of American political dysfunction is even more nightmarish than anything I’ve written.

PS. Bloomberg has a new piece out describing the unintentional side effects of trying to ban TikTok or WeChat:

TikTok’s collection of user data might be a legitimate U.S. national security concern given the relationship of Chinese companies to their government, but at least there is some degree of accountability. Just wait until there are millions of young people running malware-infested apps. Trying to side-load sanctioned apps is like trying to get a drink in the Prohibition era, when nobody could know whether that bottle of moonshine was diluted with paint thinner or some other poison.

TikTok has over a hundred million users, many of whom are young and ambivalent toward the current U.S. administration. The war on drugs should teach that any attempt to prohibit a popular and addictive activity sends the illicit thing underground while encouraging shady enterprises to spring up.

PPS. According to Matt Yglesias, Ben Thompson strongly dislikes like the TikTok deal. (Commenters told me I needed to listen to Thompson on tech issues.)



17 Responses to “Cochrane on the US as a banana republic”

  1. Gravatar of Christian List Christian List
    21. September 2020 at 14:11


    Many thanks for the link to Cochrane.

    I do not find his post nightmarish or hysterical, quite the opposite, it is sober and analytical. This is exactly the kind of analysis I have always wanted from you. Do you see the differences?

    Your blog posts on this topic usually begin with a link to an example of Trump’s behavior, followed by an angry comment from you on what a “banana republic” the US has become. That’s about it.

    Cochrane skips this part, and partisan, but relatively meaningless terms like “banana republic” are avoided as much as possible. In fact he tries to avoid any unnecessary partisanship and emotionality.

    Instead, he provides the desired rational analysis that finally explains the behavior of both parties plausibly, and then he even provides possible solutions. This is just perfect and very well written.

    As far as his economic analyses are concerned, I don’t think Cochrane can keep up with you, but this political analysis by him sounds really good. Well, no one can be brilliant in every field.

  2. Gravatar of Benjamin Cole Benjamin Cole
    21. September 2020 at 15:19

    I got a kick out of John Cochrane’s dystopian nightmare of revolutions, fires and riots after our next national election. Armed left-wing and right-wing mobs facing off in the streets!

    Maybe so. Perhaps the lesson of a Portland is that even a minute sliver of the population can disfigure commerce, civic life and discourse, if allowed.

    Cochrane, in Palo Alto, is pondering extensive home-security measures.

    And that is Palo Alto! Imagine life in a Los Angeles, a Chicago or New York after the botched national election throws the country into incurable turmoil.

    Make sure to wear a face mask, while looting and shooting, to limit the spread of C19.

  3. Gravatar of Benjamin Cole Benjamin Cole
    21. September 2020 at 15:37

    By the way Scott Sumner has a interesting post on Abenomics over at Econlog, where I have been canceled and cannot comment.

    I will not contest Sumner’s views on fiscal stimulus, as in macroeconomics no debate is ever finished and no debater is ever wrong.

    However, when pondering Japanese GDP of the last several decades, one must also contemplate the size of the Japanese population and also the number of hours a typical Japanese works.

  4. Gravatar of ssumner ssumner
    21. September 2020 at 15:48

    Christian, So John Cochrane avoids terms like banana republic, and instead describes realities that look exactly like banana republics? OK, I can accept that.

    And I assure you that Cochrane’s economic analysis can “keep up with me” the question is whether I can keep up with him! (Not always.)

  5. Gravatar of Christian List Christian List
    21. September 2020 at 20:18


    name it whatever you like but banana republic is just profane.

    Cochrane describes the norm (before democracy) in a precise way, perhaps he has read Carl Schmitt.

    Then he presents an analysis of the rational motivations of both sides, while maintaining a critical distance himself, and after that he presents well thought-out approaches to solutions.

    All of this is not quite the case with you. Your last assessment basically consisted of “I see modern conservatives as crafty villains, and modern leftists as well meaning fools”. – That’s not quite Cochrane’s level and raises some eyebrows.

    You can probably compare your economic analysis skills better than me, so I don’t want to disagree with you here, but my suspection is that you are downplaying your role here and that you are just being humble in this respect, for example because of your modest character and your good upbringing resp. manners. I mean really, what else can you say in such a situation? An ego like Krugman would say he demans another Nobel Prize, but that is not your style.

  6. Gravatar of mbka mbka
    21. September 2020 at 21:28

    Re: Cochrane,

    truly nightmarish. The logic of banana republics though suggests a different outcome: when an incompetent rabble rousing president-elect fans riots and disorder, the military eventually steps in and deposes the whole political class, replaces it by a ruling military council to “simplify the political process away from chaos and towards competent rule”, and promises fresh elections and a return to constitutional rule within “a very short time”.


    Cochrane has no good and obvious fix. Obviously, at least one party, maybe both, does not want any such a fix or else the problem would not exist in the first place. No constitutional guarantee, rule, law, or agreement has any use, as long as all parties do not agree on the underlying values. The underlying values of the US have been (pretty much forever) that it’s the rule of law, not the rule of men (or women). Process must be respected. The law must appear to have won at all times. Trump and his party have opted out of that value system and have declared a win at all cost value system for themselves, where might is right. This is a clash of values, where Trump and his people have clearly indicated that they will ignore the law whenever it suits them. In fairness, increasingly, Democrats share that view too. All of this means that the values that the US was built upon are abandoned. [BTW re: earlier discussion on civil war generals, of course they were traitors in that value system because they reneged on their oaths and on all the rules of transition. Secession would have needed to be negotiated according to process, just like Brexit was.]

    The whole thing is depressing of course because what Cochrane wrote is at once obviously correct / prescient / possible, and at the same time it shows how many in the US public or even the political class do not know the purpose of democracy and what it needs to endure. They act as if the rules could be broken whenever inconvenient and seem to be genuinely unaware of their function. Reminds me of Friedrich Hayek’s, or more recently, Joseph Henrich’s views on culture and tradition. In essence, don’t change culture too quickly – you may not know what it’s for. It likely evolved for a purpose no matter how inane it may look like.

    In a further irony, the ones destroying the American Republic right now (it’s not a democracy!) by ignoring its most basic values are often the ones most loudly complaining about the, in their eyes, deficient value systems of immigrants.

  7. Gravatar of Benjamin Cole Benjamin Cole
    22. September 2020 at 01:56


    Scott Sumner posits monetary policy is king.

    Can we attribute China’s excellent 2020 economic performance to the People’s Bank of China?

    What policies has the PBoC followed in 2020 leading to such stellar results?

    And don’t say, “Oh, the CCP fixed C19.” Thailand never even had C19, and its economy suffered.

  8. Gravatar of Benjamin Cole Benjamin Cole
    22. September 2020 at 02:39

    OT add on:

    “Federal Reserve Chairman Jerome Powell, in prepared remarks that he will deliver Tuesday before the House Financial Services Committee, said the U.S. economy “will recover fully from this difficult period” but more fiscal stimulus will be needed to prevent long-term damage from the coronavirus pandemic.”


    If Scott Sumner is correct, we have a Federal Reserve Chairman who does not understand basic macroeconomic outcomes of basic fiscal and monetary policies.

  9. Gravatar of Willy2 Willy2
    22. September 2020 at 05:20

    – The US becoming a banana republic ??? The US is already a banana republic !!! But it took Trump to become president to make me see the reality. And it turns out that it morphed into one over the previous 1 or 2 decades.

  10. Gravatar of Lizard Man Lizard Man
    22. September 2020 at 17:05

    Polls show that the military is the most respected and trusted institution in the US.

  11. Gravatar of mbka mbka
    22. September 2020 at 17:13

    Lizard Man,

    that’s well possible, and in many countries with corrupted politics, the population initially welcomed military coups. But power corrupts, and a military government has unchecked power, so they tend to get very corrupt very quickly. Military leadership style doesn’t convert well to civilian rule. And, a politicized military would immediately split that support and respect for it in half.

  12. Gravatar of Mark Z Mark Z
    22. September 2020 at 22:24

    mbka, I think the US military today can be expected to support the legitimately elected government, which is why any scenario where, say, Trump just decides not to leave despite losing ends with him being escorted from the White House.

    The real issue with this election is that we weren’t prepared for the implications a pandemic has for voting, and the question of which mailed in votes count (a problem ambiguated further by court rulings that contradict the letter of the law like in Pennsylvania) may create a situation each candidate has a decent claim to being the legitimate victor. Especially bad if it comes down to tied 4-4 vote in the Supreme Court, because what do you do after that? Or if Trump appoints a new justice and it’s 5-4 in his favor. That also could get ugly for obvious reasons.

    I guess the ‘banana republic’ point may be that if this has happened 20-30 years ago, the ‘elites’ would’ve been able to sit down and hash something out, but today they wouldn’t be able to.

  13. Gravatar of Carl Carl
    23. September 2020 at 09:27

    @Mark Z
    You wrote:

    I guess the ‘banana republic’ point may be that if this has happened 20-30 years ago, the ‘elites’ would’ve been able to sit down and hash something out, but today they wouldn’t be able to.
    I don’t think this is a systemic problem. A non narcissistic President would realize that the most important issue we face in this election is the protection of the election process itself and not whether he gets re-elected. And if he did, he could take reasonable steps even now to secure that. Instead he’s spending his time ginning up his base to challenge the results. Imagine the difference if he were spending his time instead focusing on the safeguards we have in place, the process for adjudicating the results and making assurances that he would respect the results of the process.

  14. Gravatar of ssumner ssumner
    23. September 2020 at 12:12

    Carl, Exactly.

  15. Gravatar of Christian List Christian List
    23. September 2020 at 12:15


    First of all he provides a good analysis, which is really rare these days. This is the basic prerequisite for any solution attempt. If you can’t even name the problems (hello Scott), you won’t solve them.

    He is also not afraid of criticism that is not quite in line with the mainstream:

    1) The mail ballot, as it currently stands, is a big problem.

    2) The right won’t take their fight to the streets in violent protest. They might be upset about creeping socialism and all, but that is a policy difference. There aren’t many right wingers in the big cities and the right is very old. When was the last mass right-wing protest in BLM dimensions? Was there ever one? These are all conspiracy theories. The right in Western countries is completely incapable of such a protest, for demographic and other reasons.

    3) Understanding motivations is key. Trump can literally lose everything. Even a “moderate” commentator like Scott has been developing a vile taste for blood since 2016. Many influential people want to actually charge Trump and put him in prison for many years. Unfortunately, one has to assume that the left will actually go through with this.

    If Biden was smart, he would offer Trump a deal behind the scenes. Trump himself was most surprised by his election in 2016, his motivation seems to be rather limited from the beginning. If he was offered a good deal, he might even lose on purpose; at least he would accept the result and refrain from legal action. So he has to literally fight for his freedom. A person who is driven into a corner like that will do everything to get out of that corner.

  16. Gravatar of anon/portly anon/portly
    23. September 2020 at 12:20

    “While I don’t recall him using the term “banana republic”, his depiction of American political dysfunction is even more nightmarish than anything I’ve written.”

    Well, there’s always the “Claudius” view:

    (I’m here to reassure, as always).

  17. Gravatar of mbka mbka
    23. September 2020 at 16:57


    you didn’t really address the main point I tried to make – that besides various procedural issues that may exist, Trump created a fundamental force of destruction of republican and democratic values (these adjectives being used in the common sense and not in their political connotation). Cochrane hints at it as well. In this yes he follows the Nazis and Carl Schmitt, in simple terms, might is right. And as long as at least one side is committed to ignore values, you can’t fix the procedural problems because there will be no trust.

    “Understanding motivations is key. Trump can literally lose everything. Even a “moderate” commentator like Scott has been developing a vile taste for blood since 2016. Many influential people want to actually charge Trump and put him in prison for many years. ”

    That’s the 3rd world dictators’ problem. They can’t leave office normally because their misdeeds are so many that they will never be safe once out of power. Trump may not have done comparable things, though he’s done enough. He showed enough disregard for once sacred US values, example, that the electoral process is untouchable. Even back in 2016 he hinted he won’t accept a loss. He is doing unspeakable things such as singling out specific firms for threats, actual shakedowns, or distribution of perks. No, not just Chinese firms. Amazon anyone? This IS the kind of politics the old “3rd world” used to have and only now is growing out of. Pure tyranny. No law. Government acts as the president’s personal servant. The US degenerates right into this condition, thanks to Trump. He now fears, quite rightfully, the he will be paid back in kind and that his successors, especially the ones he harmed, won’t respect the process either.


    yes, the elites exist exactly for that purpose, and if you don’t have them, there is chaos. That’s why populists attack the elites first, because they’re competent. Once the competent class is removed and replaced by sycophants, it becomes much easier to tell the people whatever they want to hear instead of what is true. Tocqueville for example believed that the function of the aristocracy was to provide a buffer between king and people, in a way, and to restrain the king’s power. And that the disempowerment of the aristocracy under France’s later Louis kings was the true seed of revolution, the possibility of absolute power, which the revolution would achieve more than the kings: absolute power by a (supposedly) democratic government, unrestrained by tradition, older values, or balancing political classes. The genius of the US founding fathers was that they understood that problem (and… they preceded Tocqueville), and created the checks and balances system. Oh and the deep state, or in Europe, the administrative class, unelected, and not replaced between governments, has that function too – to create constancy, and to make sure politicians can’t do too much harm.

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