Dutch Uncle

There is an American idiom “talk like a Dutch uncle” meaning “give a severe reproof”. For decades, American presidents have done the opposite with Europe: flattering, subsidizing, and indulging strategic dependency. This week NATO Secretary General Mark Rutte, formerly the prime minister of the Netherlands, talked like a Dutch uncle to the European parliament foreign affairs and security committees:

On my relationship with the President, hey, listen, if somebody is doing good stuff, and President Trump is doing a lot of good stuff, I believe. I know I’m irritating a lot of you again, but I think so, because as I said, also in Davos, the 2% reached by all NATO countries now at the end of 2025 would never, ever, ever have happened without Trump. Do you really think that Spain and Italy and Belgium and Canada would have decided to move from 1.5 to 2%? Italy spending 10 billion more now on defence at the beginning of the year without President Trump? No way. It would not have happened. And do you really think that in The Hague we would have come to the 5% commitment without President Trump? No way. So, I think he is very important to NATO.

[…]

And if anyone thinks here, again, that the European Union, or Europe as a whole, can defend itself without the US, keep on dreaming. You can’t. We can’t. We need each other. And why do we need each other? I tell you, first of all, because also the US needs NATO. And the US is not only in NATO to prevent a mistake after the First World War, not to re-engage with Europe, and then again, the long arm of history reaching out to the US again in the Second World War — as Churchill famously said in his speech in 1941 in the US Congress. They are also in NATO because for the US to stay safe, and by the way, Arctic region is evidence here, they need a secure Arctic. They need a secure Euro-Atlantic, and they also need a secure Europe. So, the US has every interest in NATO, as much as Canada and the European NATO Allies. But for Europe, if you really want to go it alone, and those who you are pleading for that, forget that you can never get there with 5%. It will be 10%. You have to build up your own nuclear capability. That costs billions and billions of euros. You will lose then in that scenario, you would lose the ultimate guarantor of our freedom, which is the US nuclear umbrella. So hey, good luck.

Rutte’s remarks about Trump are mostly a distraction. The real issue is not which American president deserves credit for browbeating Europe, but whether Europe is structurally capable of defending itself at all. As I have said before the question is not whether the U. S. needs Europe. The question is how much does the United States need a Europe that is disinterested in defending itself? There is a deeper problem I won’t rehearse here: for at least fifty years, U.S. policy has implicitly preferred weak allies. That is a policy I strongly disagree with, but it explains much of what we are now seeing.

Multiple U. S. war game exercises have shown that our allies need to be able to sustain themselves for at least a week without U. S. assistance. Are they actually capable of doing that now? That question cannot be answered based on what percents of their GDPs they spend on defense but only on a dispassionate analysis of their defense capabilities.

Sec. Gen. Rutte has given them the address they need. The open question is whether Europe still has the political culture required to hear it.

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Is the U. S. “the Indispensable Nation”?

In the Wall Street Journal James Freeman pushes back against the notion that the United States is not exception:

In the scene from a show called “The Newsroom,” Mr. Daniels is wittingly or unwittingly portraying a self-important and semi-informed media personage. His character dismisses the idea that the U.S. is the greatest country in the world and argues that freedom doesn’t particularly distinguish the U.S. He quickly rattles off an extensive list of other countries where people also enjoy freedom.

What he does not mention is that in every single one of the countries on his list, free people enjoy the protection of the American defense umbrella. The smug character then goes on to make the preposterous suggestion that roughly 180 countries in the world are free, as if it’s the natural state of things and not a blessing paid for with the blood of Americans and other brave people over many generations.

Of course there have also been enormous financial bills to pay. In only one country did free people build an economy large enough to fund the worldwide defense of liberty for decades. This exceptional and indispensable quality of America underlines why the financial health of the U.S. is also indispensable. There is no backstop for us. It’s essential that U.S. government spending is reduced and put on a path toward budget balance not just for Americans but because a collapse of the United States would be uniquely catastrophic for the world. Search history and it’s hard to find happy endings for governments that took on so much debt that interest payments rose above defense spending, as has recently occurred in the U.S.

I think he is actually pushing back on the notion that the United States is not, in Madeleine Albright’s felicitous phrase, “the indispensable nation”. While I think that, technically, our European allies are now capable of defending themselves, I seriously doubt that they can do so without a sharp reduction in their standards of living. More on this subject later.

In living memory only four major powers, by which I mean countries that are capable of projecting power, have had strategic self-sufficiency: the United States, Russia, China, and India. Of those only one has combined strategic self-sufficiency with the absence of persistent, society-wide structural poverty. Unlike Russia, China, and India, the United States has never been structurally poor despite episodes of hardship during recessions.

In that sense, if in no other, the United States is, indeed, exceptional.

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Genetics and Lifespan

I have long maintained that human lifespan could be attributed to different factors in different periods of life:

Birth to teens the most important factor was care—both parental and professional healthcare
Teens to middle age the most important factor was behavior
Middle age and later the most important factor was genetics

It appears that science is increasingly confirming that last part of my hypothesis if this report by David Cox at NBC News can be believed:

A person’s genes play a far greater role in likely lifespan than previously thought, according to a major new study published Thursday in the journal Science.

Using data from human twin studies, an international team of researchers arrived at the conclusion that the genetic contribution to how long we’re likely to live is as high as 55%.

This new finding is strikingly higher than previous estimates, which have calculated the role of genetics in lifespan could range from 6% to 33%. It’s likely to intrigue — and perhaps disappoint — the fast-growing community of longevity influencers and self-described biohackers touting longer lives through supplements and customized drug regimens.

The study authors said they arrived at this very different figure by separating out what they termed extrinsic mortality (defined as deaths from external factors such as accidents, homicides, environmental hazards and infectious diseases) and intrinsic mortality (deaths caused by internal biological factors such as age-related diseases, genetic mutations and the general decline of health with age).

Through treating these two categories of death separately, the researchers said they were able to get a far more accurate estimate of the relationship between genetics and lifespan. It also matches with findings regarding the role of genes in other key physiological traits: Height, body fat distribution and muscle build are all thought to be at least 50% heritable.

As regular readers of this blog may recall I am a student of my family’s history. At present I am older than my father was when he died and older than both grandfathers when they died. I have also outlived one great-grandfather and will soon outlive the other three.

I have no plans of dying in the immediate future but last year I actually felt old for the first time in my life. There may be something to this heredity stuff.

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Missing the Real Challenge

In her Washington Post op-ed Julia R. Cartwright points to a real problem with the Federal Reserve but does not quite reach the greater conclusion she should draw from it. The Federal Reserve’s structure was built in the early 20th century, during the very peak of technocracy when leaders of big corporations preached that the U. S. system of government was old-fashioned and antiquated and should be replaced by, well, themselves. One of the earliest and most influential exponents of this worldview was Walter S. Gifford, then chairman of AT&T, who openly argued that modern society should be governed by professional managers and engineers rather than by the clumsy mechanisms of democratic politics. Ms. Cartwright starts by reflecting on the recent failures of the Fed and the political brouhaha over the Fed during the second Trump Administration and proposes a rules-based system she calls a “monetary constitution”.

She’s right. The deeper implication of her argument is not merely that discretion should be constrained, but that monetary governance itself should be treated as a formally designed socio-technical system rather than an artisanal priesthood. We should have a real-time data collection system coupled to a rules-based expert system with, and this is the part she misses, human beings exerting the ultimate oversight of the system. We have known for decades, since the Taylor Rule was first promulgated, that this was possible and now we have the technology to make it practical.

That isn’t just a problem for the Federal Reserve. An enormous number of companies, government agencies and departments, and institutions would benefit from such expert-systems with mandatory human oversight. The challenges lie in constructing them and convincing people that it’s the right thing to do.

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One Man’s “Civilizational Erasure”

In his Washington Post column Fareed Zakaria quotes JD Vance’s claim that the West faces “civilizational erasure,” which Vance attributes to Europe’s approach to immigration and identity. Zakaria replies that this is a misunderstanding: what truly defines the West is not culture or ethnicity but the gradual limitation of state power: Magna Carta, independent courts, private property, civil society; and that Trumpism represents an erosion of those traditions.

I find this framing problematic, even though I agree with much of Zakaria’s underlying concern.

The problem is that Zakaria accepts Vance’s dramatic civilizational language while quietly redefining what “civilization” means. Vance uses the term in a cultural-historical sense: peoples, continuity, inherited ways of life. Zakaria replaces that with a procedural-institutional definition: courts, rights, constraints on rulers. These are not the same object. Borrowing the rhetoric of “civilizational erasure” while substituting a technocratic definition of civilization is philosophically incoherent.

Once the word “civilization” is taken seriously, a deeper dilemma appears. Either constraints on rulers are essential to Western civilization, or they are contingent achievements. They cannot be both.

If they are essential, then episodes like Germany from 1933 to 1945 or the United States under prolonged emergency governance, are not mere political deviations but civilizational events. In that case, the real problem is not Trump or MAGA, but the inherent instability of modern mass societies, which repeatedly concentrate power despite constitutional forms. Civilizational “erasure” would then be structural and recurrent, not exceptional.

If, on the other hand, constraints on rulers are contingent, historically impressive but fragile, then “civilizational erasure” is simply the wrong category. What we are witnessing is ordinary institutional decay: factional capture, bureaucratic expansion, symbolic law, declining competence. No special metaphysical status for “the West” is required to explain any of this.

Mr. Zakaria wants to occupy an impossible middle ground, limited government as the West’s defining essence, but its repeated collapse as merely incidental. Logically, that position cannot hold.

Where I agree with Mr. Zakaria is that the United States is indeed in serious decline. Where I disagree is in treating this primarily as a Trump-era or even MAGA-era phenomenon. What we are experiencing looks more like forty years of cumulative institutional entropy driven by party polarization, intra-party factional control, and incentive decay across the political class. The erosion is not a betrayal of Western principles so much as the predictable behavior of large bureaucratic democracies under modern conditions.

In that sense, “civilizational erasure” may be rhetorically powerful, but, like a fan-dancers fan, it obscures more than it reveals. The more honest diagnosis is not moral failure, but systemic drift and the unsettling possibility that no modern mass society is capable of sustaining the rule of law indefinitely without sliding toward managerial or factional control.

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It’s Not a Miscalculation

In his Washington Post column Marc A. Thiessen observes:

When Trump took office a year ago, Homan made clear that the administration’s intention was not to carry out “a mass sweep of neighborhoods” but rather to “prioritize public safety threats” by detaining and deporting “the worst of the worst” — those charged with or convicted of serious crimes.

Trump was elected with a mandate to do that. In a New York Times-Ipsos poll just before his inauguration, an 87 percent supermajority said they supported removing all migrants “who are here illegally and have criminal records.” Indeed, 63 percent said they wanted Trump to go further and deport all migrants “who are here illegally and arrived over the last four years” under President Joe Biden, while 55 percent wanted to deport “all immigrants who are here illegally” — period.

Over the past year, Homan has been true to his word: Nearly 70 percent ICE arrests nationwide have involved illegal migrants convicted or charged with crimes, according to the Department of Homeland Security. In states where local officials work with ICE, these arrests have taken place without chaos. For example, there have been more than 88,000 ICE arrests in Texas — the most in the country — largely without incident. But in Minnesota, there have been 10 times fewer arrests but far more violent confrontations.

Why? Because when state and local officials won’t help federal immigration officers target those with criminal records, they have no choice but to go into communities to get them. Since Trump took office, DHS reports that Minnesota has released nearly 470 illegal migrants charged with or convicted of crimes back onto the streets — including those charged with sex offenses against a child, lewd or lascivious acts with a minor, domestic violence, drug trafficking, vehicular homicide, burglary, first-degree aggravated robbery and larceny. In all, DHS says Minnesota officials are refusing to honor more than 1,360 ICE detainers.

That has required ICE to carry out large sweeps resulting in collateral arrests of illegal migrants without criminal records — the very people Frey and Walz are purporting to protect with their sanctuary policies — because, as Homan has made clear, while ICE is focused primarily on those with criminal records, they will arrest anyone they find who is here illegally.

His conclusion is that Democrats are miscalculating. I disagree. Mr. Thiessen assumes this is a policy failure in Democratic-run sanctuary cities. It’s not. It’s a media strategy. This is not miscalculation but a classic media-driven political strategy: maximize visible enforcement, let federal power generate disturbing images, and convert those images into electoral capital. It has been effective in recent memory—consider family separation footage during Trump 1.0. I think that Democrats may be calculating that the bad taste left in the mouths of Americans by ICE’s killing of multiple Americans in Minneapolis and even the poor optics of masked ICE officers using riot-suppression methods in Chicago and Minneapolis could be enough to sway voters to give the party control of the House in the November elections.

That’s supported by a more recent New York Times-Sienna poll that found that while a majority of Americans still approve of immigration enforcement in the abstract a majority disapproves of the way that ICE has been doing its job.

Democrats may be acting rationally within a broken political incentive structure, even while producing bad policy.

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Taxing Billionaires Won’t Cut It

This post is a grievance about the way certain campaign slogans are being used.

Locally we are being deluged with campaign ads from people running for Congress. Several of them have a couple of things in common:

  • They advocate “Medicare for All”
  • They advocate “making billionaires pay their fair share

The form I’m hearing is “X supports ‘Medicare for All’. X supports ‘making billionaires pay their fair share.'” The pairing invites the inference that the first can be funded by the second: we can pay everybody’s healthcare costs without most people paying any more than they are are now simply by taxing billionaires.

The problem with that is we can’t. There aren’t enough billionaires and they don’t have enough income to pay for “Medicare for All”. The estimated cost of “Medicare for All” is $3-4 trillion per year. The estimated aggregate income of all of the billionaires in the U. S. isn’t actually known but it’s estimated as between $300 and $400 billion per year. Even confiscating 100% of billionaire income wouldn’t fund even 15% of the program.

Any serious version of “Medicare for All” necessarily implies large tax increases on the middle and upper-middle class, whether politicians admit it or not.

In addition the ultra-rich are more able than the rest of us to structure their incomes in a way as to avoid paying additional tax. Or they can move. The strategies for accomplishing this are numerous including relocating to low-tax jurisdictions like Ireland or Singapore, exploiting carried interest rules, or using complex trust structures.

At present the effective tax rate paid by the richest people in the country is estimated to be around 24%. I have no objection to its being higher. I think it would be interesting to learn the ways and means those advertising for higher taxes for billionaires plan to accomplish it or what they would deem a “fair share”.

There is also a deeper structural problem, but it is out of scope for this post: in the absence of strong Congressional will to limit the growth of healthcare costs, the very existence of “Medicare for All” would tend to raise those costs. Spoiler alert: not even the most progressive state in the Union has “Medicare for All” which provides some clues on its workability. Vermont tried but ultimately rejected it.

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How Does He Know?

Yesterday in an op-ed in the Wall Street Journal Minnesota Gov. Tim Walz accused the Trump Administration of lying about his state:

The Trump administration’s assault on Minnesota long ago stopped being a matter of immigration enforcement. It is a campaign of organized brutality against the people of our state. It isn’t just. It isn’t legal. And, critically, it isn’t making anyone any safer.

Quite the opposite: Immigration agents have now shot and killed two of our neighbors: Renee Good and Alex Pretti. And there are countless other stories of protesters and bystanders being physically attacked by federal agents, to say nothing of the chaos and violence being unleashed against the targets of these raids, many of whom have done nothing wrong except exist as a person of color.

The pretext for all this is the Trump administration’s insistence that our immigration laws would otherwise go unenforced. This federal occupation of Minnesota is, administration officials insist, about our predilection for releasing “violent criminal illegal aliens” from state custody.

I can’t stress this enough: The Trump administration has its facts wrong about Minnesota.

My question for Gov. Walz is how does he know?

I use the word “lie” with a very specific meaning: the knowing telling of an untruth with the intent to deceive.

For example, Gov. Walz declaims:

Some of the administration’s claims are ridiculous on their face. For example: It claims that 1,360 non-U.S. citizens are in Minnesota prisons. The truth: Our total state prison population is roughly 8,000, and only 207 of them are noncitizens.

The sole means the state appears to use to determine whether someone being held by its Department of Corrections is a citizen is self-identification. Absent documentary evidence of inquiry beyond self-identification, the most reasonable inference is that no such inquiry occurs as a matter of routine practice. That would imply that the DoC only notifies ICE that it is detaining a non-citizen if the detainee identifies himself or herself as a non-citizen.

In other words individuals have every incentive to avoid identifying themselves as non-citizens. In this context self-identification is not neutral reporting; it is a strategic choice made under conditions where disclosure carries clear legal risk including risk of removal from the United States at the end of the prison term.

I don’t believe that Gov. Walz is lying. I think he is equivocating or, at the very least, speaking in ignorance. I am confident that the number of prisoners being held by Minnesota’s DoC is around 8,000. What we can say with confidence is not how many non-citizens are incarcerated in Minnesota but that the state’s own methodology makes confident claims impossible

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Not All Countries Are the Same

The following are empirical measures of trust/social cohesion in a sampling of different countries.

Countries cluster into stable institutional-trust equilibria observable through compliance behavior, enforcement intensity, and institutional design assumptions. The U.S. now clusters with medium-low trust systems rather than high-trust Northern European or East Asian ones.

Indicators Used (Observable / Revealed-Behavior Oriented)
Code Indicator What it measures
TC Tax compliance efficiency Revenue collected vs. owed relative to enforcement effort
IE Institutional impartiality Predictability and neutrality of courts and bureaucracy
RC Rule compliance under low monitoring Compliance where cheating is easy
CE Contract enforcement reliability Whether formal contracts are trusted over networks
ID Institutional design assumption Whether systems presume honesty or evasion

The data used for the TC metric are from IMF and OECD tax-gap studies.as well as Piketty, Saez, Zucman for administrative tax data.
The data used for the IE metric are derived from World Bank Worldwide Governance Indicators and the EU Justice Scoreboard.
The data used for the RC metric are derived from Large-N lost-wallet experiments, fare-evasion and honor-system studies, Fare-evasion and honor-system studies and bureaucratic self-reporting accuracy studies.
The data used for the CE metric are derived from World Bank Doing Business, comparative commercial-law studies, and firm-level contracting behavior.
The JD metric is the least empirical. It is derived from documentation burden, audit frequency, means testing intensity, and fraud-prevention cost ratios. Short version: the Nordic and Japanese systems assume honesty; the U. S. and Italian systems assume evasion.

Institutional Trust Scorecard (0–10; higher = more trust-based equilibrium)
Country TC IE RC CE ID Composite
Denmark 9.5 9.5 9.5 9.0 9.5 9.4
Sweden 9.2 9.3 9.2 8.8 9.2 9.1
Germany 9.0 9.2 9.0 9.0 8.8 9.0
Japan 8.8 8.7 9.3 8.5 9.0 8.9
Netherlands 8.7 8.8 8.7 8.6 8.8 8.7
Canada 8.2 8.3 8.0 8.2 8.0 8.1
United Kingdom  7.5 7.8 7.2 7.8 7.2 7.5
France 7.3 7.4 6.8 7.5 6.8 7.2
Spain 6.8 6.8 6.5 6.9 6.5 6.7
Italy 6.2 6.0 6.0 6.5 5.8 6.1
United States 6.0 6.2 5.5 7.0 5.2 6.0
Greece 4.5 4.8 4.2 5.0 4.0 4.5
Mexico 4.2 4.5 4.0 4.8 3.8 4.3
Brazil 4.0 4.3 3.8 4.5 3.5 4.0
India 3.5 3.8 3.2 4.0 3.0 3.5

When institutional trust is measured via revealed compliance behavior, enforcement efficiency, and system design assumptions rather than opinion surveys, the United States clusters with medium-low trust countries such as Italy, well below Germany, the Nordics, and Japan, and well above Greece or Brazil.

Denmark doesn’t just have generous welfare policies. It has a high-trust equilibrium that makes them administratively cheap and fraud-resistant.

We don’t need to speculate about whether Americans would abuse a large, fast-moving welfare state. We just ran that experiment during COVID. Fraud did not occur at the margins; it occurred at industrial scale.

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Will Anybody Be Listening?

Carine Hajjar devotes her Washington Post column today to an attempt to set the record straight for young Americans about the situation in Venezuela:

One of my first memories of celebrating New Year’s was in Caracas, Venezuela, on a family visit. That trip is a flicker of scenes, as most early memories are. A packed church, a grove of fruit trees, a busy city with mountains in the background, impossible-looking birds with rainbow feathers.

The Venezuela I perceived was one of abundance, even without knowing I was standing on top of the world’s largest proven oil reserves. Oil production at that time was well over 2.5 million barrels a day, and poverty was falling as the popular president Hugo Chávez distributed profits from the nationalized energy industry to the poor.

The short version is that the political-economic model initiated under Chávez, heavily reliant on oil revenues, lacking institutional checks and balances, and prone to rent-seeking, proved unsustainable and collapsed into economic and political crises that have left Venezuela among the most impoverished nations in the region.

Here’s what happened in Venezuela:

  • Hugo Chavez was elected freely by Venezuelans in the hope that he would redistribute Venezuela’s oil wealth from oil companies and rich Venezuelans to the poor.
  • He did for a while.
  • He also redistributed Venezuela’s oil wealth lavishly to himself, his family, and his cronies.
  • Elections became less free and fair over time, with democratic backsliding intensifying under Maduro, contributing to international responses including sanctions.
  • Institutional design failures and policy choices by Venezuelan leaders were the primary drivers of the collapse and Venezuelans chose that.

Economic sanctions were imposed in response to institutional collapse, corruption, and democratic backsliding in Venezuela not the origin of those phenomena.

The decisive mistake young Americans make is treating U.S. sanctions as a primary cause of Venezuela’s collapse. In reality, sanctions were a response to a regime that had already dismantled democratic institutions, hollowed out its oil sector through patronage and corruption, and converted elections into managed authoritarianism. The system Chávez created did not merely fail because of bad leaders; it reliably selected for them. Once institutional constraints were removed, elite capture and economic collapse were not aberrations. They were the predictable equilibrium.

Sadly, I don’t think her target audience will pay much attention.

No system that concentrates power, eliminates feedback, and rewards loyalty over competence can be saved by good intentions or external excuses. That is true whether that system is run by Nicolás Maduro, Hugo Chavez, Joe Biden, or Donald Trump.

I think that only Venezuelans can solve Venezuela’s problems. Whether they’re ready to do that I don’t know. The bad guys are still in charge and I doubt they will relinquish power peacefully. The Trump Administration’s “running things” probably won’t help, either.

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