Rodney King 2.0 or a US coup?

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Peter Hartcher is freaking out. SMH.

Trump gave himself the scope to deploy the militia and/or the military “where protests against these [federal] functions are occurring or are likely to occur”. Likely to occur? He once claimed to be a very stable genius, but now, apparently, he is also clairvoyant.

In addition, says his order, “the secretary of defence may employ any other members of the regular Armed Forces as necessary to augment and support the protection of Federal functions and property in any number determined appropriate in his discretion”.

It’s not difficult to see how this could be used as the basis for an authoritarian takeover attempt of the US. Asked a couple of weeks ago whether it was his job to uphold the US Constitution, Trump answered: “I don’t know.”

The Economist is more sober.

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IS THE UNREST in Los Angeles a one-off? Or is it the beginning of a summer of unrest, and of crackdowns by President Donald Trump, who has no patience for protesters in Democratic cities?

So far the protests in Los Angeles are small compared with the city’s previous conflagrations. More than 12,000 people were arrested during the Rodney King riots in 1992. In the past two days the total runs to only 60 or so. But things could get worse. As Angelenos pray for calm and for troops to retreat from their streets, America finds itself at a dangerous moment.

Trump’s reaction is also so far small. During the King riots, 10k armed servicemen of various kinds were deployed to the city to quell the riots.

I don’t know better than anybody else how significant this is nationally. But I will make the point that immigrant labour in California is a much larger issue than in most states.

So, Trump will be making as many enemies of business as he is making friends of workers or xenophobes.

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Remember the TACO. “Trump Always Chickens Out.” He does so because he alienates his base with his policies.

In the case of tariffs, this was corporate America and Wall Street.

In the case of today’s LA riots, it is small businesses and farmers who will be smashed without access to Mexican labour.

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Admittedly, the big impacts on stock prices are not apparent, and California is a democratic state, but what if the same conflict spreads to other Republican border states like Texas )10% of the workforce is immigrant) and Arizona, where immigrant labour is a vital input into small businesses?

Trump does not have a free hand here.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.