Markets firm as Trump sloughs Jacksonian trappings

From WaPo:

President Trump outlined a revised vision for the U.S. war in Afghanistan on Monday, pledging to end a strategy of “nation-building” and instead institute a policy aimed more squarely at addressing the terrorist threat that emanates from the region.

“I share the American people’s frustration,” he said. “I also share their frustration over a foreign policy that has spent too much time, energy, money — and, most importantly, lives — trying to rebuild countries in our own image instead of pursuing our security interests above all other considerations.”

But Trump provided few specifics about his policy and how much the U.S. military commitment in the region would increase as a result, insisting that conditions on the ground would determine troop levels and strategy.

Trump’s decision to further commit to the nation’s longest war, rather than withdraw, reflects a significant shift in his approach to Afghanistan since taking office and marks a new willingness to take greater ownership of a protracted conflict that he had long dismissed as a waste of time and resources. As a candidate, Trump denounced Afghanistan as a “total disaster” and railed that the costly conflict in Central Asia drained enormous resources at a time of more pressing needs at home for American taxpayers.

The oration included this introduction:

By following the heroic example of those who fought to preserve our republic, we can find the inspiration our country needs to unify, to heal and to remain one nation under God,” he said. “The men and women of our military operate as one team, with one shared mission and one shared sense of purpose.’

They transcend every line of race, ethnicity, creed, and colour to serve together and sacrifice together in absolutely perfect cohesion. That is because all service members are brothers and sisters. They are all part of the same family. It’s called the American family. They take the same oath, fight for the same flag, and live according to the same law.

Markets immediately firmed on this with DXY and S&P futures up. It’s not because Afghanistan matters.

Rather, markets are soothed by seeing Trump as a team player, at last playing to equality. Moreover, adding troops to Afghanistan, however you spin it, is not in the Jacksonian way that was led by Steven Bannon in the White House. As previously explained:

Through his work at The National Interest, it was Australia’s Owen Harries who did much to define the dominant and competing traditions of American foreign policy that offer better insights into the Trump phenomenon.  Harries and his contributors identified two predominant schools of thought. The first was Wilsonianism, an idealistic ideology derived from President Woodrow Wilson that saw American ideals of democracy and capitalism as the best hope and future for the world. It is internationalist, interventionist and alliance-driven. The second school was Jacksonianism. Derived from President Andrew Jackson, it is a “realist” ideology that saw merit in domestic focus and the celebration of the common man. It is martial, honor-bound and rights-driven but is only dragged kicking and screaming into foreign wars (for more read Walter Russell Mead).

For the past century, Wilsonianism has dominated American foreign policy with only fits and starts of Jacksonian rebellion. Through two world wars and many regional skirmishes, America has remained largely committed to the creation of a global liberal order, (some might say empire), oscillating between bouts of fantastic idealism and realpolitik but by and large shaping the world in its image.

However, today that continuum has been disrupted. America has elected a thoroughly Jacksonian President in Donald Trump with his “America First” doctrine, and the cracks that that creates for the global order are widening fast.

…In a world now thoroughly shaped by Wilsonian liberalism, the new Jacksonian order is a paradox. It will increase conflict as it seeks less. It will reduce war as it postures for more. It will shrink prosperity as it seeks to raise it. It will suck the US towards any region it seeks to abandon.

Trump remains a Jacksonian president but his Administration is fast turning Wilsonian. One has to seriously question whether the great narcissist will hold out for his former supporters in anything but name.

Ironically that’ll mean more wars and higher markets.

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