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Ranking the Nightmares
How bad could 2024 get?
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1. Damon Linker
Over the last couple weeks I’ve been having a variation of the same discussion with multiple people: Would DeSantis ‘24 be worse than Trump ‘24?
The answer is a complicated. I could make three different cases for you:
DeSantis would be better than Trump.
DeSantis would be the same as Trump.
DeSantis would be worse than Trump.
Let’s take them in order.
Better than Trump. In some ways, DeSantis would likely be less dangerous. For instance, I do not imagine that he would order an armed mob to storm the Capitol in an attempt to hang his vice president and disrupt the counting of electoral votes.
Low bar? Sure. But also—it’s not nothing!
The same as Trump. Whatever his personal preferences, DeSantis would be subject to the same pressure every Republican politician is these now: Their voters want authoritarianism.
What does that mean in practice? Let’s just limit this discussion just to elections and not governing.
If Ron DeSantis lost the 2024 election, would he attempt an Eastman-style “legal” coup? Whatever his own wishes might be, his voters would certainly demand that he try it. So in order to do the thing that all normal Republicans did up until 2016—concede his loss and wish the next Democratic president well—DeSantis would have to buck his base.
My question: What in the history of Ron DeSantis leads you to believe that he is capable of bucking his base?
Worse than Trump. Which leads us to the possibility that, should he lose, DeSantis could carry out the maneuvers for a “legal” coup more competently than Trump and thus succeed where Rudy, the Pillow Man, and Kraken lady failed.
Damon Linker has started war-gaming all of this and come up with a depressing ranking of scenarios for 2024. Depressing because his best-case scenario is also the least likely:
The best possible but extremely unlikely outcome for the United States would be for the Republican Party to nominate an anti-populist Republican like Rep. Liz Cheney or Maryland Gov. Larry Hogan in 2024. Whether such a candidate or the Democratic alternative won the general election would matter for a host of reasons, and I would undoubtedly side with the Democratic ticket. But the choice would be an ordinary one, with the stakes as low as they were in, say, 1992 or 2012.
A worse outcome would be a Trumpy Republican ending up as the nominee in 2024—this could be DeSantis, Arkansas Sen. Tom Cotton, Virginia Gov. Glenn Youngkin, or any number of others longing to jump into the race—and winning the election outright, by a solid margin in both the Electoral College and popular vote. I wouldn’t vote for any of these candidates over the Democrat and would be highly critical of the new president’s policies, but it would be better for the country (compared to the alternatives below) for the right-wing cultural populist to have a solid popular mandate for what the administration would attempt to achieve.
Somewhat worse than that would be one of these populists winning an extremely narrow victory in the Electoral College while losing the popular vote by an even larger margin than Trump did in 2016 (and came ominously close to doing again in 2020). This would be bad because it would once again call into question the justice of America’s electoral system, which would understandably be accused by liberals and progressives of systematically handing the country’s highest office to presidential candidates who receive fewer votes. The right would respond that we have never conducted a nationwide popular vote contest for president, and they would be correct. But it’s also true that the right would never tolerate the reverse scenario—namely, the system repeatedly rewarding political power to their less popular opponents.
Similarly bad would be for one of these populist candidates to lose the election very narrowly, leading some on the right to raise Trumpian objections to the vote count in the hope of changing the outcome. My instincts tell me that none of the likely Republican candidates would push these objections anywhere near as far as Trump did after the 2020 election, but another round of severe electoral turbulence would be very bad for the country at home and abroad regardless.
Considerably worse than any of those scenarios would be for Donald Trump himself to run again in 2024, win the GOP nomination, and then prevail in the general election to win a second term in the White House—though the marginally better scenario would be for him, too, to win the election outright by solid margins in both the popular vote and Electoral College. Another Trump presidency would be terrible. But another Trump presidency haunted by the specter of electoral illegitimacy would be even worse.
Which brings us to the worst scenario of all: Trump runs, becomes the GOP nominee, and then loses in the general election, but by a narrow enough margin that he once again denies the outcome, prompting fights to break out in several states over vote counting, rules for rejecting ballots, certification of vote totals, appointment of electors, and all the other steps required to pronounce a victor whose legitimacy is broadly accepted across both parties and the electorate as a whole.
Oh, I’m sorry. Did I just ruin your whole weekend? Well, as Jack Reacher likes to say, “Forewarned is forearmed.”
Anyway, you should absolutely read the whole thing and subscribe because Damon’s newsletter is essential reading.
None of the scenarios Damon posits is more likely than the rest put together. If you asked me to pick any one of them versus the field, I’d take the field.
But the two most likely seem to be:
Trump loses by a smaller margin than 2020 and creates another giant post-election fight to overturn the results.
A Trump-like candidate wins the Electoral College, but loses the popular vote, extending what is clearly a minority-rule crisis for the entire system.
Either way: Not great, Bob.
2. Matt Levine
Capitalism is so great:
If you sell nickel futures at a price of $25,000 per ton, and then the price of nickel futures goes up to $100,000 per ton, then in some simple arithmetic sense you have lost $75,000 per ton. If you sold 100 tons of nickel futures, then you have lost more than $7 million. But if you sold 150,000 tons of futures, the math changes a bit; it becomes non-linear and relativistic. If you sold 150,000 tons of nickel futures at $25,000 per ton, and then the price goes up to $100,000, your banks will call you up and say “uh you have lost $11 billion, can you pay that please,” and you will say “I would prefer not to,” and an insane series of events will happen:
The nickel exchange will cancel a bunch of trades and declare that actually the market price of nickel is $48,000 per ton, magically reversing most of your losses.
Then the exchange will call you and say “okay let’s close you out of that trade at $48,000 per ton.”
Then you will say “no, this is still too much money for me to lose, I prefer not to.”
Then your banks will say “well okay how much are you willing to lose?”
You will say “I would close out this trade at $30,000, that’s how much money I am willing to lose.”
Your banks will say “okay fine, we’ll wait for nickel prices to go back below $30,000, meanwhile we’ll just lend you the money to stay in the position.”
Eventually nickel prices will go below $30,000 and you will get out of the trade at a modest loss.
If prices never go below $30,000 then I guess your banks are very sad, but honestly they’re pretty sad about all of this anyway.
I cannot stress enough that this is not how it works if you are a small customer. This is the white-glove treatment that only the biggest customers get. If you are big enough, you get to tell the exchange how much money you’re willing to lose, and the exchange and your banks will make sure you don’t lose more than that.
Here is a wild Bloomberg News story about Xiang Guangda, the Chinese metals tycoon who runs Tsingshan Holding Group Co., who is nicknamed “Big Shot,” and who blew up the London Metals Exchange in March. We talked about it at the time, but this story adds a lot more detail about what Xiang, his bankers and the LME were thinking and doing. It is not pretty! Xiang shorted something like 150,000 tons of nickel somewhere in the $20,000s, and when nickel prices went up to $100,000 he said “no thank you” . . .
If FIFTY BANKERS ever arrive at your office all at once, (1) you have done something terrible but (2) it is absolutely their problem, not yours. . . .
When the LME declared that the price of nickel wasn’t actually $100,000 (as the market said) but $48,000, it broke a bunch of trades and cost some financial traders hundreds of millions of dollars. They were really mad, understandably; several have sued the LME. I was pretty sympathetic to those lawsuits before reading this story, but now, oh man! The LME canceled trades and shut down the market not for some good neutral reason, but because it was bullied by a giant trader who decided that he preferred not to follow the rules, and the LME couldn’t risk the chaos of trying to hold him to the rules. So it put his losses on other people instead, people who did follow the rules and could meet their margin requirements.
The point here I guess is that being responsible and well capitalized and correctly predicting the market price is fine, in financial markets, but it is distinctly second-best. Being irresponsible and undercapitalized but giant is much better. Then you can just tell the market what the price is.
This is yet another variation on the old idea that if you owe the bank $100,000, the bank owns you. But if you owe the bank $100,000,000, then you own the bank.
Seems like a great way to run an economy!
Three cheers two cheers one cheer for capitalism?
It is also another variation on the idea that if you have enough capital, then the rules do not apply to you.
My favorite example of this is Elon Musk, who ignores rules constantly. Then when he gets in trouble, he ignores the consequences. He has pretty much discovered that no one will ever hold him to account for anything for the simple reason that they can’t afford to. His chip stack is like a piece of technology that changes the force of gravity.
For instance, this Twitter deal that Musk just “terminated.” Musk signed a binding agreement. He also repeatedly violated the terms of said agreement. For weeks he publicly mused that he might not honor the agreement. And the response of Twitter was to . . . hope that Musk would do what he was contractually obligated to do. Even if it meant taking a haircut in order to get him to adhere to his contractual obligation.
And now Musk says the deal is off.
The next step is that Twitter has to hope that if they go to court to hold Musk to his obligations then a sequence of events will transpire in which
Twitter is in business long enough to see the lawsuit to the end.
The judge finds in the company’s favor.
Musk can be forced by the government to honor the judgment, even though the government has not been able to force him to honor other penalties it has levied against him.
Here is one fundamental problem with capitalism: If you have enough capital relative to other players in a system, then the rules for the other players are backed by the full-force of the government, but the rules for you are more or less on the honor system.
I like capitalism! Has lifted billions out of poverty and accomplished enormous good! One cheer! But government has roles to play in a free market-ish system and one of them is to make sure that either (a) No players accumulate so much capital that they can short-circuit the rules or (b) The rules are equally enforced.
3. Sam Freedman
Boris Johnson is maybe-probably gone and Sam Freedman is here to bury him:
It’s fitting that the worst Prime Minister this country has ever had is being forced out in such a dysfunctional and undignified way. . . .
That he has stayed until now reflects an unprecedented level of delusion and risks a constitutional crisis in the coming days. No Prime Minister has ever tried to carry on with large numbers of empty Government positions. Parliamentary Bills going through the Commons have had to be suspended because there are no Ministers left to speak to them. But there is also no straightforward mechanism for removing a PM who simply won’t resign. . . .
The bizarre nature of Johnson’s downfall also opens up a whole set of questions about how to get the country through the next month to six weeks while a Tory leadership contest plays out. Usually these exits happen in an orderly fashion with the government still functioning. The deposed PM stays on while the new leader is chosen. Thatcher did this and so did David Cameron and Theresa May. But how could Johnson stay on for six more weeks after all this havoc? And with a quarter of his Ministers gone? It doesn’t seem plausible that he could be left in charge after revealing this level of disdain for his colleagues, and indeed reality.
But there is no mechanism for an interim or caretaker Prime Minister. Someone has to fill the role. . . .
Whoever it is will inherit an absolute mess. There is no political or economic strategy in place. Inflation is rampant, almost the entire public sector is threatening strike action, and recession imminent. The NHS is facing an existential winter – with record waiting lists. Brexit is still not resolved, and the Tory party is nowhere near agreement on how to resolve it. Anyone who wins is going to have to offer tax cuts but squaring those with decade long underinvestment in public services during a recession isn’t possible. The legislative cupboard is almost bare.
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