The Coup Economy

 

 

I.

 

Trump won 2020, and that is easy enough to prove.

 

The re-election of a president in the United States is achieved by different means than the re-election of a prime minister in Canada, the UK, Australia, and other countries of the Anglosphere; for the electoral victory of an American presidential candidate of the incumbent party is determined by certain of the American states and, in addition, by the change in the incumbent party's popular vote. Given that, if we are to look at the 30 presidential elections that took place from 1900 to 2016, we can use a simple formula to determine which candidate won.

 

To understand the rule, we need to go back nearly a hundred years, when the pattern was set in the 1928 presidential election; in that year, Herbert Hoover, who became the Republican presidential candidate after Calvin Coolidge declined to run for re-election, won in a landslide, and the party’s popular vote was greater than that of 1924. In the electoral college count, Hoover won 444 electoral college votes to Alfred 'Al' Smith's 87, and of the states that Hoover won, three of them - Ohio, Florida, and Iowa - would prove to be the most decisive in future years. After 1928, the principle became this: if the presidential candidate of the incumbent party wins the three states of Florida, Ohio, and Iowa, and if the incumbent party increases its popular vote, then the candidate wins. The principle holds true in the re-election of Roosevelt in 1936, Eisenhower in 1956, Johnson in 1964, Nixon in 1972, Reagan in 1984, Clinton in 1996, and Bush 43 in 2004.

 

Nixon's narrow loss in 1960 may be the exception that proves the rule: after all, he did win Ohio, Florida, and Iowa. But the numbers from election to election differed: when measuring the Republican popular vote of 1960 against that of 1956, we see a slight drop. In 1960, the electorate felt little enthusiasm towards either candidate and hardly seemed to favour one above the other; in the popular vote, Kennedy beat Nixon by less than 120,000 votes. But this is typical: administrations rarely win a third term, because after two terms, they become stale and worn out. Like the 2000 race, the 1960 was dull and listless, the two candidates bland and mediocre.

 

Supposing, then, that we knew nothing about the past 31 US presidential elections except for two pieces of information - which candidate of the incumbent party seeking re-election won the states of Ohio, Florida, and Iowa, and which candidate of the incumbent party increased or reduced the party's popular vote. Working off these two pieces, we must conclude that Trump won 2020. He won Ohio, Florida, and Iowa; and his popular vote increased by 12 million - the largest increase in American history.

 

But Biden was inaugurated. Why? We only need cast our minds back to the peculiar circumstances of 2020. The entire world - or rather, the elite of the world - was gunning for the Americans who voted for Trump in 2016. The re-election of Trump could not be permitted. And so, we learned in the days and weeks of counting after election night that Biden - a senile incompetent and a nasty old man lacking in charm - was the most popular American presidential candidate of all time, winning more votes than Roosevelt or Reagan. And we learned that manufacturing votes and falsifying election results is not against the law. The police, the courts, the secret police (that is, the FBI), and the Department of Justice itself - all did nothing, for the elite sections of the American state had turned against Trump. But when a head of state is deposed by an elite stratum that is lacking in popular support - that, by definition, is a coup d'état. Biden was selected, not elected; he was installed. Thirty or forty years ago, Americans would have called such a constitutional arrangement a 'dictatorship', Americans being always quick to condemn such things, and in the times gone past, a country that prevented 'free and fair' elections and permitted a 'dictatorship' to exist would have been subject to American sanctions - and perhaps even American bombing, if the sanctions were not working.

 

2024, then, is no ordinary election. After nearly four years that have been marked by a lack of what Bush 43 would have called 'freedom', the American electorate must decide whether power is to be retained by the Biden junta or relinquished. And what makes 2024 even more different is the turning of American politics towards what Carl Schmitt called the political. A distinction is now made between the friend and the enemy. Trump and the 74 million Americans who voted for him in 2020 have become the enemy - the inner enemy. Schmitt's disciple Yockey writes in Imperium (1948):

 

This organic right to determine the inner enemy is not always exercised in the same manner. It may be open: arrest, sudden attack, shooting down at home, butchery in the streets. It may be concealed: drawing up of punitive laws general in their terms but applying in fact only to one group. It may be purely formless, but nonetheless real: the ruler may attack verbally the individual or group in question. Such a declaration may be used only to intimidate, or it may be a method of bringing about assassination [italics mine]. It may be economic pressure — such a tactic is naturally the favorite of Liberals. A “blacklist” or boycott may destroy the group or individual.

 

It matters not that the US Constitution makes no room for the political. Yockey, an American and a lawyer, understood that the American Constitution does not stand in the way:

 

It goes without saying that the exercise of such a right has no connection whatever with any written “constitution” which purports verbally to distribute the public power in a political unit. Such a “constitution” may forbid such a declaration of inner enemy, but units with such constitutions have never hesitated in need, and have often invoked such procedure independently of need.

 

All of this could have been avoided. In 2017, Trump and the Republicans failed to take advantage of the Republican majority in the House of Representatives, an opportunity that could have been exploited: the Republicans could have rammed through draconian legislation that would have secured future elections. Postal votes, early voting, voting machines, same-day registration, and the Democrat Party practice of extending the counting of votes for days, weeks, months on end - all could have been banned, and voter ID and a clean-up of the electoral rolls could have been rigorously enforced. The stamping of serial numbers on ballots could have been made compulsory, and to ensure maximum attendance, election day could have been made a nationwide public holiday. Such laws would have brought elections in America in line with those of the First World; indeed, even some Third World nations – Thailand, for instance – have surpassed America when it comes to enforcing elections that are free, fair, and transparent in the best classical liberal tradition. Properly applied, electoral reforms would have guaranteed a second Trump term, and on that point, even the respectable conservative or centrist would agree.

 

We can contemplate the road not taken. In an alternative timeline, Trump takes up a second term in 2021, and towards the end of 2024, does what Biden should have done in 2019, which is, shuffle off into retirement. After Trump's departure, the 2024 election would have been a bland and colourless affair, much like the 1960 and 2000 elections. Perhaps the two candidates would have been DeSantis and Newsom.

 

But let us return to the present. The irony is that through their actions, the Democrats have almost ensured a third Trump electoral win and a second Trump term, but this second term, of course, is not a given; possibly, the Democratic Party will follow the example of Maduro in Venezuela in 2024 and use trickery, fraud, and force to 're-elect' the candidate of the incumbent party. But the difference is that the Chavez-Maduro regime has been in charge of Venezuela for a quarter of a century, and it has had plenty of time to practice; whereas some freedom still exists in America, and unlike the Maduro and Putin regimes, the Biden regime has not won complete ascendancy. More importantly, the mood of the American nation has changed since 2020.

 

But let us suppose that, even though the national mood has changed, Americans are willing to let the Democratic Party get away with it again. According to the polls, the election will be close, and this is precisely what the Democrats want - a result that approaches a tie. Perhaps the presidency will be decided by a single state - Pennsylvania, for example - and only after days, weeks, months, of counting ballots. In this scenario, which is the optimum one for the Democrats, all the newly counted Pennsylvanian ballots will favour Harris; America and the world will be astounded by how popular Harris is as a candidate. Trump will ‘lose’, and respectable conservatives will plead with Republicans to accept the election results. Wiseacres on the Right will tut-tut and say that Trump would have won if only he would have followed their advice; Trump ran a poor campaign, and they would have done so much better. Trump pandered to minorities and liberals excessively, and Trump ignored the white American working-class…

 

As we know, in 2020 the Democrats pulled off the above trick in not one state but five, and they got away with it because the American people let them get away with it. Even though it is true that in 2024 the ground has shifted, the Democratic Party still possesses great advantages, of which I can name three. The first Democratic asset is the media, which is completely owned by the Democratic Party - or is it the other way around? (Rush Limbaugh often wondered aloud: is the media a wing of the Democratic Party or is the Democratic Party a wing of the media?). The second advantage is the Democratic Party's ability to falsify election results, and the third is the informal right of veto, which is used to strike down any president not to the liking of the Democrat / media complex. In most political systems, including the American, rights of veto are traditionally accorded to the minority by the majority out of a sense of fair play, but over the course of the past eight years, we have been treated to the spectacle of a minority abusing that right. And even outside America, we can find instances of the same abuse. Thailand's Constitutional Court, which represents the monarchy and the army, reserves for itself the right to oust elected governments, dissolve political parties, and ban ministers – even prime ministers - from politics.

 

But in other respects, going into 2024 the Democratic Party is seriously disadvantaged. The most grievous burden is the ideological vacuousness of the Biden-Harris regime or the clique that stands behind the regime. The clique is comprised of journalists, washed-up Hollywood celebrities, respectable conservatives, disgruntled academics, and misanthropes of the sort that attempted to assassinate Trump twice. Ideologically, the clique stands on neither the Left nor the Right, and none of the members hold to any real intellectual and moral convictions: all that drives them is hatred of one man.

 

The irrationality and emotionalism of the anti-Trumpers has not prevented the anti-Trump movement from building a political theory, however. The first point of the new doctrine is that the 2020 coup was not a coup; the second, that the coup was 'democracy', as is the right of the minority to veto a choice made by the majority; the third, that anyone who opposed the coup, as Trump did in the dying days of his first term, was endangering ‘democracy’; and the fourth, that the outcome of the 2020 coup - the installation of the Biden-Harris regime – binds the American people and lasts forever and ever, like a marriage vow. It is not subject to revision, and questioning it has now become in the eyes of the media a crime in itself.

 

We can understand why it is that the anti-Trump clique so firmly insists that there was nothing untoward about the 2020 election: to admit to wrongdoing would be to undermine the legitimacy of the Biden regime. It stands to reason that they will not bend on this point, and even if God Himself to come down from the heavens and reel off the true number of votes for Biden and Trump in Fulton County, Georgia, they would still not bend. But this obstinacy places them in an unusual and difficult position. Those who are familiar with the history of England in the 17th century and America in the 19th know that an extreme obduracy and unwillingness to compromise can lead to civil war. To an extraordinary degree, attitudes hardened in the Trump years, and it was in this time that American journalists entered the realm of what Schmitt calls the political; they stopped being journalists and started being politicians.

When one is confronted by the political, one is tempted to respond in kind. What the Bidenites have done to others can be done to them, once the shoe is on the other foot - as they are beginning to realise.

 

When mulling over all this, I see that I could write two essays. One would be political, the other would avoid the political - that is, it would instead talk about inflation, interest rates, the stock market, taxes, and growth in GDP.

 

I think a discussion of the political economy is far more needed now, because even if Trump succeeds in overcoming his Schmittian enemy, he will still need to patch up a country that is in a shambles: that is, he will need to shift from a wartime presidency to a peacetime. Lincoln won the Civil War, but the victory left the country in ruins. Long after the end of the war, America returned to prosperity and became a great power only after two crucial steps were taken: the wartime income tax was abolished in 1873, and the US dollar was fixed to gold - at the pre-war rate of $USD20.67 an ounce - in 1879. These measures ushered in the Gilded Age, the American counterpart of the European Belle Époque. To judge by Trump’s recent statements, we can glean that Trump wants to return not to the monetary policy of the Gilded Age but to the fiscal: Trump has declared several times that the income tax ought to be abolished and that tariffs be relied upon to generate revenue. This shows that Trump is thinking ahead, that he is looking past his possible inauguration. But he is best advised to pay attention to the monetary as well as the fiscal policy of the Gilded Age, because the increase in inflation and decrease in value of the US dollar against gold may prove to be his undoing, even after all his enemies are vanquished.

 

II.

 

For thousands of years, gold has performed three main functions. It has served as a medium of exchange, allowing the easy summing up of the worth of one good that is to be exchanged for another good, and it has served as a unit of account – for example, the value of a nuclear submarine or a packet of cigarettes can be measured as a fraction or a multiple of an ounce of gold. Closely related to these two functions is a third: gold works as a store of value. Gold never loses value, which is why it has been used as money for thousands of years. Daily the dollar price of an ounce of gold goes up and down - mostly up these days - but these shifts mark the fall or rise in value of the dollar against gold, not the other way around. Gold is the constant and the dollar is the variable. During the Civil War, America floated the dollar, and the dollar gold price doubled, shooting up to $USD40 an ounce: the dollar had lost value against gold, that is, it had devalued. When America returned to gold fourteen years after the end of the war, the gold-dollar price revalued, and went back to the pre-war parity of $USD20.67 an ounce. There it stayed, until Roosevelt devalued the dollar in 1933: after the devaluation, it took $USD35 to buy one ounce. The motive behind the devaluation was that in the midst of the Great Depression, Roosevelt wanted a weaker currency and higher prices. Forty years later, another president devalued for much the same reason. In 1970, gold cost $USD35 an ounce, and in 1980, nine years after Nixon had broken up Bretton Woods and taken America off the gold standard, gold cost $USD850 an ounce. And as could be expected, by 1980 American inflation had reached levels not seen since the Civil War.

 

The supply-sider John Tamny has written an article imploring the next president to pay attention to the gold signal. In 2020, Tamny notes, only $USD1700 was needed to buy one ounce of gold, and in 2024, over $USD2700 is needed. Most of the depreciation occurred in mid to late 2024; at the start of the year, gold cost $USD2000 an ounce, and the way the dollar is heading, we may be soon looking back at early 2024 as the good old days.  

 

As to why the dollar has lost value, Tamny blames lack of demand. Like the value of any other commodity, the value of the dollar increases or falls with excess demand and supply, and if the amount of dollars in circulation exceeds the appetite for dollars, then the value of the dollar will fall. Tamny speculates that the demand for dollars has slackened because of the threat of international turmoil - the threat of a war with Iran, Russia, China - or because of Trump’s tariff policy, which Tamny believes is destructive.

 

Fortunately, this monetary problem can be solved easily. The Federal Reserve needs to sell things, like bonds for instance, and when it receives payment for a sale of, say, $USD100 million worth of bonds, it should take that $USD100 million and dispose of it. The Federal Reserve should destroy money - much like Superman setting fire to piles of currency with his heat vision - until the US dollar regains its value and falls back to $USD2000 an ounce.

 

 

It is only then that the prices of commodities will decline. At the moment, they have reached a two-year high:

 

 

III.

 

But wait, are not the American stock market indexes - the DJIA, the NASDAQ, the S&P 500 - hitting record highs? Yes, but we are seeing (to use economist's jargon) nominal increases and not real: we must adjust the gains for inflation, which is to say, we must divide the indexes by the price of an ounce of gold.

 

The chart of the DJIA divided by an ounce of gold tells a sad story: the gold Dow has declined to its lowest level since 2020:

 

 

Scrutinising it, we see that the decline started around February 2024, which is when the gold dollar price began its rapid climb to $USD2700 an ounce. If we peer closely, we see a tiny rally - nothing more than a brief spurt - in July, when Biden dropped out of the race, and after that, the gold Dow resumed its descent.

 

If a Trump presidency meant good things for the market, we could expect the gold Dow to shoot up as the likelihood of a second Trump term increased, but this has not happened. Having said that, I predict that if the Biden-Harris regime is shown the door in November, then the market will rally - it will stage a relief rally - because while the market feels lukewarm towards Trump, it despises Biden-Harris. But whether the relief rally turns into a bull market remains to be seen. So far, November 2024 looks promising: if you examine the chart carefully, you will see an uptick.

 

In order to understand the market’s ambivalence towards Trump, we must look to the America of a hundred years ago, when the Republican Party won three successive presidential elections on a platform of curtailing immigration, keeping the dollar fixed to gold, and cutting taxes (the top rate of income tax was reduced from 77% to 25%). Fifty years later, Republicans had abandoned two planks of the platform: Nixon had hiked taxes and taken America - and the world - off gold. The injurious effects of the latter compounded those of the former: inflation pushed Americans into higher and higher tax brackets, because the income tax schedule was sharply progressive. By the eighties, it became clear that the sensible thing to do would be to cut taxes and fix the dollar to gold once again; Reagan, following the same course of the Republicans of the 1920s, cut taxes nearly to the same extent as Calvin Coolidge, but he never restored the gold standard, even though anecdotal evidence suggests that he was amenable to a restoration. Today, any talk of returning to a gold standard and fixed exchange rates is derided by journalists and economists alike as quackery.

 

After Reagan, the supply-siders had won the argument – in the Republican Party at least – on fiscal policy but had lost on monetary policy. And this is where Trump steps in. A Republican throwback, Trump sympathises with the Republicans of a hundred years ago who favoured high tariffs. To his credit, he is willing to go along with the 1920s Republican party line on taxes, and he agrees enthusiastically with the party line on immigration, but when it comes to the party line on gold and fixed exchange rates, he is indifferent. If anything, he seems to be of a mind that a weak dollar will boost exports. This is an old dogma that will not die, and like a good many such dogmas, it is immune to disproof. None of the advocates of a weak currency think to look at the evidence; the export industries of Venezuela and Zimbabwe, for instance, hardly benefited from weak, if not worthless, currencies.

 

So, if the market were to score the two presidential candidates of this year’s election, it would grade Harris as being bad – extremely bad – on taxes, fair to medium on tariffs, and bad on money; it would grade Trump as good on taxes, bad on tariffs, and bad on money. The market needs to perform what the statisticians call weighting: does bad tariff policy outweigh good fiscal policy?

 

The matter is further complicated by the introduction of taxes that are not traditionally considered to be taxes: the residents of Springfield, Ohio, and Aurora, Colorado, are labouring under the immigrant tax or what I call the Great Replacement tax; the Haitian immigrants – or more accurately, the Haitian invaders – dwelling in Springfield do not ‘create jobs’ and ‘boost economic growth’; they are a net drain. Economics is meant to improve life, but the free-market liberals who tout immigration and the Great Replacement have lost sight of that, and canny politician that he is, Trump has not lost sight. The success of Trump – or Roosevelt, for that matter – shows how the American electorate can favour a candidate who is bad, even appallingly bad, on fiscal and monetary policy but good or at the least passable on everything else. The electorate, like the market, performs its own complex calculations, and after a lengthy ratiocination, spits out a verdict that is simple and binary, a yes or a no.

 

IV.

 

In 2024, Trump may win the election but may not be allowed to take up the presidency once more. After 2020, we understand how this could happen, but the question is, how do we know in advance which candidate will win the election? The polling in the state of Ohio tells us. Ohio is unique in that in most elections, the candidate who wins Ohio wins the presidency. This is true of 2000, 2004, 2008, 2012, and 2016 – and for 28 out of the 30 elections from 1900 to 2016. The exceptions were 1960, a peculiar election discussed above, and 1944. In the latter, Roosevelt won his usual electoral college landslide, winning 432 electoral college votes to 99, so one could not characterise it as close like 1960 or 2000; 1944 remains an anomaly. In every election except for 1944 and 1960, Ohio has served its purpose as the ultimate bellwether state, and perhaps because Ohioans are more average-American than most Americans. On election eve in 2024, all the polling indicates that Trump will take Ohio easily, like he did in 2016 and 2020. Under normal ‘democratic’ conditions, America would be contemplating another Trump term.