Mr. Trump Tear Down This Alliance

NATO is obsolete.  Donald Trump made this argument back on the campaign trail.  Yesterday, in his typically hyperbolic manner, he dressed down the organization for its hypocrisy over its mandate, which is to counter any aggression from Russia.

But, the potential threat of a Russian invasion of Europe is nil.  And, literally, everyone involved in this farce of a summit knows this.  So, Trump was right to call out the hypocrisy, but wrong about how to solve it.

Attacking Germany over the Nordstream 2 pipeline is nonsense.  Trade, especially energy trade, stitches economies and peoples together.  But to Trump energy is different.  Energy is a defense issue.

As such, it should be tightly controlled and only deployed to the benefit of those he approves of (or is allied with) against those he doesn’t (China). The Free Society Laurence M. Vance Best Price: $12.00 Buy New $19.95 (as of 12:35 EST - Details)

And this is what is fundamentally wrong with geopolitically-dominant thinking.  Everything gets reduced to the metaphoric chess board.  People stop thinking about their individual needs and can only think in terms of nations and governments.

And it makes it easy for authoritarians like Trump, Vladimir Putin, Angela Merkel and all the rest to push the public’s buttons, openly stoking people’s in-group/out-group bias against their own best interest.

This is ultimately what allows for equally odious people like Donald Trump and Angela Merkel to achieve and maintain power.  NATO is obsolete because the thinking behind why it is necessary is obsolete.

It’s not Russian aggression that everyone has to be worried about, it is the aggression of those who have to this point mismanaged everything they were empowered to take care of in the first place, i.e. the very politicians at the meeting.

The US has subsidized European social welfare states by outsourcing their defense.  We, in turn, empowered a corporatocracy built around selling increasingly unnecessary weapons back to them under the false rubric of the evil Russians.

Trump’s position about NATO members not ‘paying their fair share’ is beside the point.  NATO’s budget would be far better spent contracting Russia to build the Nordstream 2 pipeline itself than bullying Italy into buying another tank it doesn’t need.

This is nothing more than him trying to turn an obsolete NATO into yet another Keynesian job creation program.

“Buy more of our over-priced, under-performing crap like the F-35 (a plane that should be considered treason by any rational metric of the term) so we can destroy even more precious capital while everyone goes broke issuing more debt to keep the party going a little while longer.”

In Trumpspeak however, this comes out as “Jobs.  Yuge jobs!”

It would be better, in the end, to just give the engineers rocks to throw at windows the assembly team builds.  At least there wouldn’t be the massive waste of raw materials.  Glass is recyclable after all, though not profitably.

His real complaint, however, is on an imbalance of trade between the US and Europe.  This is something he can’t fix without giving up the very source of the power he’s wielding with reckless abandon right now, the US dollar’s status as the world’s reserve currency.

Triffin’s paradox is real for the country that issues the currency that liquefies world trade.  And for that to occur, that country must run a trade deficit to issue more currency.  Dollars go out, goods come in.

The trade deficit is an accounting anomaly, and as Martin Armstrong consistently points out, can be manipulated by the interplay between it and the country’s current account. The Road to Freedom an... Author Peter B. Bos Check Amazon for Pricing.

The question isn’t the amount of money going out it is the value for that money in the goods received for it.  In that respect, the only economic respect that matters, the US gets paid handsomely.

The endless preening and virtue signaling by dead-ender politicians trying to justify their existence while mouthing the will of the lobbyists and rentier-class financiers who stand behind him is worse than nauseating.

It is culturally and psychologically destabilizing.  Resistance to change by the bureaucracy is on daily display on both sides of the pond.  From the Peter Strzok hearings to Theresa May’s betrayal of Brexit, none of these people want their ox gored while they continue to live at the expense of others for their benefit, not those they supposedly serve.

Trump has a real opportunity to quell his critics on the left and from libertarians like me to remake the way the business of geopolitics is done when he sits down with Putin next week.  His performance at the NATO summit was, as always with him, three steps forward and two steps back.

He’s needs an unfettered five-k jog in Helsinki.

And that means cutting through the nonsense, stopping the demagoguery and getting down to the real business of putting our own houses in order.  And that means for Trump, regardless of the agreements he gets from his European counterparts, to pull the US out of NATO, to tear down this alliance that is an albatross around the neck of everyone who lives under the weight of it.

Reprinted with permission from TomLuongo.me.