The Week of April 9th, 2018

Care

1.  Losing the battle and the war

Paul Ryan’s early retirement suggests the GOP is now the party of Trump

A square peg in a round hole may evoke the miracle rescue the Apollo 13 crew maneuvered in 1970 in the mind of the American public. But after Paul Ryan’s Wednesday announcement declaring he will not seek reelection, perhaps the better imagery is now Mr Ryan, the Speaker of the House Representatives, attempting to fit his brand of conservatism in the party of Trumpism. Always a reluctant leader of the House, Mr Ryan, once the Republican Party’s golden boy, was never long for the job. Indeed, whispers circulated last fall he was considering stepping down from the position after this term. Several months later, that is now confirmed. Mr Ryan says he will continue his position through January, although some wonder if he will last that long as a lame-duck Speaker. Generally speaking, the power of leaders, a thankless job, has been drained thanks to the rise of social media, outside money, and polarization. Notably, Mr Ryan has also said he will not run for public office again, distressing those who thought he was gearing up to run for governor or even president.

Mr Ryan’s impending retirement portends several things, both for the upcoming midterm elections and beyond. First, it does not bode well for the GOP come November. A leader typically will not step down on the brink of positive elections. The blue Democratic wave some analysts speak of may become a self-fulfilling prophecy: Mr Ryan’s announcement will both induce other waffling Republican lawmakers into retirement while also keeping potential candidates on the sidelines. Neither promises good things for the GOP electorally. Second, the GOP is now due a leadership scramble. The front-runner is thought to be Kevin McCarthy, Mr Ryan’s current number two in the House and Mr Ryan’s preferred replacement. However, his last attempt at Speakership was derailed before it even began thanks to rumors of an extramarital affair. If he falters, Steve Scalise, the current GOP vote-counter, looks poised to lead the Republicans forward. One last domino to fall is what position these men will be running for. It takes 218 votes to become Speaker of the House; half plus one of the caucus is required to lead the party. If Democrats win back the House this fall, running to lead the minority party may be less appealing.

2. More of the same

Hungary’s illiberal prime minister wins another term

On April 8, Hungary’s right-wing party Fidesz won a two-thirds majority and another term for controversial Prime Minister Viktor Orban. Although the Hungarian elections could not have been rigged, by virtue of the nation being an EU member, the cards were undeniably stacked in favor of the incumbent Fidesz party. 106 of the 199 parliament seats were single-member first-past-the-post constituencies, where a large number of candidates made winning much easier for Fidesz. Additionally, Douglas Wake of the Organization for Security and Cooperation in Europe, an international liberal rights group, said that there was an “ubiquitous overlap between government information and ruling coalition campaigns” as many posters were placed warning citizens about immigrants by the government in the name of public safety.

Mr Orban has come to be seen as the poster child for a xenophobic and inward-looking movement sweeping the former Communist countries of East Europe. Indeed, much of his platform revolves not around ideas but on demagoguery and the scapegoating of immigrants. Drawing particular ire is Hungarian billionaire George Soros. Some observers compare the situation to that in Poland, with the growing control of the illiberal Law and Justice Party (PiS) that has been in control since 2015. However, while many of the undemocratic reforms have been met with pushback in Poland, Hungarian citizens have done no such thing. The recent election will give the party the potential to change its constitution to give themselves control over courts and other appointments.

Hungary is most concerning insofar as it registers fears about the European Union project and the idea of inclusiveness that has been so pivotal to the West in the post Cold-War era. European leaders will need to make the hard decision as whether subsidizing Mr Orban’s antics is a worthwhile endeavor or if Hungary is a lost cause.

3. Operation Car Wash

Brazil’s former president turns himself in

On April 7 Luiz Inacio Lula da Silva turned himself in to begin serving a 12-year corruption sentence, marking a stunning fall from grace for the country’s most popular former president who left office after overseeing rapid economic growth and rising prosperity for much of Brazil’s population. The decision was handed out by Brazil’s highest court, the Supreme Federal Tribunal, which also denied Lula, as he is known everywhere, request to remain free during the appeal process. Lula claims this is a political move aimed at keeping him off the ballot in the coming October elections. Dilma Rousseff, Lula’s supporter and presidential successor who herself was ousted over illegal budgetary movements, claims that the courts acted in an expedited fashion because they fear their rulings would be overturned.

The arrest is shocking because Lula is of one the most venerated politicians in Brazilian history. Affectionately called “Lula” by his supporters, the  widely popular president left office with an 80% approval rating. He was, and still is, known and admired for his anti-poverty initiatives like Fome Zero (Zero Hunger) and Bolsa Familia (Family Allowance). Former US president Barack Obama once called him the “most popular politician on Earth.” His contributions to the socialist Worker’s Party (PT) left such an indelible footprint that, in an act of solidarity, PT politicians in Brazil’s National Congress have requested to include Lula in their parliamentary name. He remains the front runner in the upcoming election, despite remaining in jail, testament to his massive popularity.

Lula’s arrest is part of a larger string of investigations into high-level corruption called Operation Car Wash. The investigation, which began in 2014, was started by a small group of prosecutors and judges and has blossomed into “one of the biggest and most complex corruption investigations in South American history.” It has made some people democratic heroes; for example, federal judge Sergio Moro, who was responsible for mandating Lula’s warrant.

However, after two years of intensive investigating, some people are beginning to doubt the massive scope of Operation Car Wash. Lula’s charge is just the latest issue causing many to worry about the potential destabilizing effects of the wide-ranging investigation. Some have argued that the rapid purging of high-level Brazilian officials, both public and private, may have negative economic ramifications. While it is uncertain whether or not Lula’s arrest will prove that the road to justice can be rocky, there is no doubt that a national conscience has been shaken by the fall of one of its greatest political stars.  

4. Cleaning house

Donald Trump dismissed three prominent White House officials in the most recent wave of firings to shake his protean and seemingly chaotic administration

On April 9, John Bolton, George W Bush’s former UN Ambassador, is now the president’s top security advisor, taking the post from Lieutenant-General H.R. McMaster. According to sources inside the Trump administration, Mr McMaster clashed with the Mr Trump over troop levels in Afghanistan and Syria. The former advisor’s demeanor also annoyed the president, who chafed at Mr McMaster’s reported tendency to lecture Mr Trump on policy issues. Mr Bolton, who became well known during the 2000s for his unwavering support of the Iraq war, has a hawkish outlook on foreign policy. He has publicly supported cancelling the Iran nuclear deal and advocated for preemptive military strikes against both Iran and North Korea. Mr Bolton has gotten off to a shaky start as four members of the National Security Council, including Mr McMaster’s deputy Ricky Waddell, have announced their departures.

Mr McMaster’s dismissal wasn’t the only source of turmoil in the Trump administration over the past several weeks. Veterans Affairs Secretary David Shulkin, a political moderate who came under attack from some Republicans, was fired in favor of Ronny Jackson, a medical doctor and Mr Trump’s White House physician. Dr Jackson has no experience in positions of bureaucratic responsibility, yet will be expected to run the 360,000 strong VA workforce. Mr Trump also expelled deputy FBI Director Andrew McCabe, who he lambasted in a tirade on Twitter, two days before Mr McCabe’s scheduled retirement. The administration alleges that McCabe disclosed confidential information to journalists concerning the FBI investigation into Hillary Clinton’s emails. Mr McCabe contends that he was fired because he was a corroborating witness to former FBI Director James Comey’s allegations about the president’s conduct.

5. Giving currency

China announces it will begin paying for oil in yuan

China stunned the world market at the end of March by announcing that it would begin paying for imported oil with its own currency, the yuan, instead of the dollar as much of the rest of the world does. This move represents a major test for the historically unstable yuan; nonetheless, it shows that the Chinese Communist Party is confident enough in the long-term stability of its currency that it is willing to risk internationalizing the yuan on such a massive scale.

Though in its earliest stages, with a pilot program expected to roll out in the second half of 2018, the market for oil futures has already reacted; when trading for the ‘PetroYuan’ began on March 26, the demand for Chinese oil futures increased exponentially. This reaction was expected, as March 26 was also the first time non-Chinese were allowed to trade in Chinese commodity markets.

China’s decision to target oil, the world’s most traded commodity, first in its efforts to internationalize the yuan, is significant. In 2017, the nation surpassed the US to become the largest importer of crude oil. Furthermore, most oil companies in China are owned by State Owned Enterprises, so China’s government has a direct economic stake in the outcome of this move. If successful, this plan would set a precedent for future shifts in how China pays for commodities in other industries. If the yuan proves able to rival the dollar in oil payments, there is no reason why it will not be able to do so in other industries dominated by the dollar.

Don’t Care

0. Spending for a new cabinet

More unseemingly stories for Trump’s most-senior aides

In late 2017, Secretary of Health and Human Services Tom Price faced a spending scandal and was ultimately fired as a result. The secretary was found to have spent over $300,000 while conducting government business, including regularly chartering private jets. Treasury Secretary Steven Mnuchin was caught a few months later requesting a $25,000 military jet ride to kick off his honeymoon, while Secretary of Housing and Urban Development Ben Carson was recently found to have spent $31,000 on a dining set for his office. This week a new spending scandal surfaced around Environmental Protection Agency Director Scott Pruitt, who is being accused of extravagant spending after awarding promotions to several aides, traveling first-class on government business, and insisting on a personal security detail 24/7.

This pattern of reckless spending by Trump officials adds even more issues to an already scandal-prone administration. While these expenses are insignificant when compared to the dozens of billions of dollars these men administrate, the principle that even the highest officials in government cannot use the people’s money for themselves is worth defending, even against marginal abuse. As Mr. Trump continues his perpetual cycle of firing and replacing senior staff, he will hopefully manage to compile a cabinet with a modicum of self-restraint.  

David Gernon, Jason Frankel, Sophie Chen, Edmund Bannister, Daniel Sacks, and Jose Trejos contributed to this report.