Today I called a long-time friend who stills lives in New York City. I tend to see him whenever I’m in New York and the last time was in mid-December when I met with him and another mutual friend. We spent a full four hours at lunch having a wonderful time talking about our days in the trenches at Bear Stearns Asset Management, back what is now eighteen years ago. That’s a long time. It’s as long as Kim and I have been married and I can barely imagine a time when Kim and I weren’t together. This friend and I share two specific attributes, neither of which we each tend to advertise for various reasons. To begin with, we are both retired/unemployed, which means we have a good deal of time on our hands to dig into issues that interest us and we are no longer gainfully employed. You might recall that another friend gave me a cap a few years ago that said “Wait a minute, let me over-think this”. This extra time on our hands is a big contributor to that whole over-thinking modus operandi. Then, there is the fact that we are both blessed with having been the beneficiaries of excellent Ivy League education. Between the two of us we have five Ivy League degrees, representing four of the seven Ivy League schools. You all know my story that I have a BA in Government and Economics from Cornell as well as an MBA in Finance from Cornell. My friend has a BA in Economics from Dartmouth, an MIA in International Business from Columbia and an MBA in Finance from Harvard. By any standard, that makes the two of us both over-educated, privileged and highly likely to over-think almost anything, but especially things with a geo-political and global macroeconomic flavor (his long-time boss was Sir James Wolfensohn, who ended up being the ninth president of the World Bank)
We spent our long conversation yesterday talking not so much about the horrible things that the Trump Administration is doing in its early days in office, but rather the underlying reasons why it was happening and why these moves are more logical, although hugely disappointing, outcomes than many of us have been prepared to admit heretofore. It was strangely as though we had been in each other’s head in our recent thought processes and the various examples we shared with one another did nothing but further reinforce our thinking and concerns. I spoke of the Marc Andreessen interview in the Times and why he believes that the Silicon Valley shift towards Trump was less about self-interest and greed in the face of a likely new King of the Hill (Trump), and more about the extreme and unproductive blowback business leaders in Silicon Valley had suffered during the radicalized DEI moments following the George Floyd protests. This overdone situation was seen as undermining capitalism in an unexpected place and made those business leaders rethink their support for liberal ideology altogether.
Meanwhile, my friend had developed another logical thesis to explain what he sees is happening in the breaking away of Europe from its strong historic ties to the United States. Many of us who have grown up feeling very attached to Europe (I’m less talking about the vacationland of Europe and more about the allies who we fought next to during the European Campaign of WWII and who we bonded with through NATO in the ensuing Cold War era) are gob-stopped that there is talk by the Trump Administration about not living up to Article 5 of NATO and not supporting Ukraine fully in its war resolution with the aggressor Russia. The weak sauce arguments that Trump’s declarations of the U.S. overspending on the defense of Europe and the concomitant underspending by the EU countries on their own defense, is just a churlish Monopoly-loving real estate tycoon’s negotiating rant are wearing thin. As Europe has ratcheted up its defense spending to fill in for the American gaps, and as it has done so specifically for Ukraine’s defense against Russia, a very real European threat rather than a theoretical future threat, those rants look far less silly. My friend put the icing on that thought cake by saying that the U.S.’s decades-long subsidy of European defense, an outdated holdover from the days of a war-torn Europe, has enabled European countries to sponsor increasingly generous welfare states that makes American seem like a piker to its own citizens as it props up these generous European programs characterized by lengthy holidays, generous retirements and medical coverage and, the ultimate slap in the face, better longevity than enjoyed by Americans. Any sentiment that protecting Europe is in America’s best interest gets quickly lost in that cafe-lounging and La Dolce Vita imagery. For hard-working Americans who don’t summer on the Cote d’Azur, that gripe formed early on, but now I was hearing it from a fellow liberal elite who’s father was French and who spent some of his pre-college schooling in Switzerland. And, or course, he was speaking to someone who went to prep school in Rome, so this was perhaps the last stop on the logic argument train.
These examples were also bringing to mind the conundrum in the Middle East. My friend is of Jewish origin, though not highly religious, and while he is generally pro-Israel, he was amongst the majority of American Jews that find Netanyahu’s right-wing hawkish coalition to be a less than productive path to a lasting peace. We watched the hard-left progressives in our country side, as they tend to, with the Palestinian cause, as Israel pushes forward its economic, technological and “never-again” cause through the hard work of turning a desert into a modern state (with lots of American support). The strange bedfellows of the Republican congress, many of whom may also support the folks in Charlottesville that chanted “Jews will not re[place us!” from their tiki-torch parade route, make this Israeli support kluge hard to understand. Trump supports Saudi Arabia, the Emirates and Qatar, but they support a two-state solution (especially one where they don’t have dirty their hands with real Palestinians), which, of course, Trump’s best bud Bebe, does not endorse. I watched the progressives go anti-Biden for not stopping the slaughter in Gaza and yet, the nose they helped bite off their face is what put their true arch-enemy, Trump into power. Go figure.
I’m not sure that either my friend or I have yet come up with any answers for all of these head-scratching issues and perhaps that is the best argument for those who think tearing everything down and starting from scratch is the best solution. But, of course, the rest of the world is not as focused on overthinking as we are. They are all about getting to the top of the hill that America has occupied for so long and then figuring out the details later. So the Trump solution now seems to be to let his sycophantic minions like Rubio, Hegseth and Vance go out there and solve this geopolitical and global economic set of problems. With the early stumbles made by all three as they start traveling the world on behalf of Trump and supposedly America, its hard to say how effective they will be and, perhaps more importantly, how long they will each last before their consciousness puts them fatally cross-wise with Trump. And now I see that my old pal and golfing buddy of the President, Steve Witkoff, is the next unelected, unconfirmed representative of the American people, first in settling out the Middle East conflict and now in settling up the Ukraine situation…which means settling out America’s relationship with Europe writ large. If you thought Jerrod Kushner was a light-weight, wait until you see Steve Witkoff. I met Witkoff fifteen years ago when trying to work out bad real estate deals in New York and Florida. He was a successful lawyer, turned real estate mogul (billionaire), who was among the less serious business people I met during those real estate developer days. He was the guy around whom lots of Miami and Las Vegas wild and crazy nightlife swirled. He maneuvered those days following the Great Recession with bravado and lots of partying, which is probably what got him tight with Mr. Mar-a-Lago. The thought of him solving the world’s most challenging problems is beyond shocking, but who knows? Comparing notes among liberal elites isn’t helping much, so maybe a ruthless, hard-charging deal-maker working for an even less grounded ex-deal-maker will work. Not a particularly good bet, but then, what is these days?