Clive Crook

Europe is apparently waking up to its new place in the world. Disdained, insulted and bullied by its former American protector, its leaders are asking where they go from here. Is their future one of accelerating decline — a new “age of humiliation,” as my colleague Adrian Wooldridge argues? Or might recent events spur a radical and long-overdue reset?

President Trump’s extraordinary gamble in attacking Iran and risking a wider conflagration in the Middle East dials up the economic hazards facing the US economy from “very high” to “extreme.” The point is, this new stress compounds a series of other severe pressures already facing the economy, which is now even more unlikely to emerge unscathed.

I’ve long thought that calling Adam Smith the father of economics seriously understates his significance. In some ways he was indeed the first economist, and The Wealth of Nations, published 250 years ago this week, was indeed the discipline’s seminal text. But his ambitions and insights extended so much further than the dismal science as now conceived. In many ways, his modern followers, intent on narrowing and thereby desiccating the field, have let him down.

Global fragmentation appears to be well underway. The astonishing shift in US foreign and economic policy is a primary cause, but the picture is far from simple and implicates many other factors. How to make sense of this teeming disorder? Where will these shifting forces lead the world?

Few any longer dispute that America’s public debt is growing unsustainably and that, sooner or later, the task of reining it in will be unavoidable. Oddly, this presumption of inevitability has bred a kind of complacency. In the end, whether we like it or not, the problem will have to be solved. Therefore, it will be solved. So what’s the hurry?

The Supreme Court has come to matter far more in US politics than it should, far more than its inventors ever intended. Today it stands at the center of controversy after controversy, dominated by conservatives ruling on intensely political questions and advancing a clear partisan agenda. When Democrats next control Washington, they’ll weigh the need to pack the court and switch its allegiance from conservative to progressive. Blame the court itself for this gathering constitutional storm.

New Federal Reserve Chair Kevin Warsh’s biggest problem, beyond a doubt, is the president who chose him. Donald Trump wants much lower interest rates — “1% or lower” — regardless of economic conditions, and he isn’t shy about saying so. Warsh’s stated views will constantly be judged not by whether they make sense on the merits but whether they comply with what he might or might not have told the president to get the position.

President Donald Trump’s second term marked an extraordinary shift in US trade policy – from qualified support for rule-based multilateralism to its outright repudiation. At a stroke, the Liberation Day tariffs broke every promise on trade the US had made to its economic partners, declaring that the US would no longer be abused and undermined by the global system it had designed and led.

If all that’s holding the United Kingdom back is the country’s mood, then the arrival of Andy Burnham as prime minister might improve its prospects. Briefly. If the remedy also requires some particle of coherence and clarity about what the government needs to do, the prognosis is grim. The contradictions and absurdities that he’s ventured so far are remarkable even by the standards of modern British politics.

A new age of geoeconomics appears to have dawned — one in which trade policy bows to the demands of strategic rivalry rather than the promise of mutual advantage. Is this shift a belated recognition of reality or a historic mistake? I’d say mostly the latter.