The War on Water Pressure

I was not invited to the meeting where the left coordinated their war on water pressure. Sadly, then, it was over before I even knew it was happening.

One of those American executive orders (and gosh we’re getting tired of those, even from the other side of the world) to – seriously – make showers great again.

I was not the only one to think that this might have been a joke. I used three different browsers to get to the white house website to check.

Turns out, the left’s war on water pressure was over even before it even really began. Dammit.

So much is happening, and so much of it is contradictory, that whiplash is now just Tuesday. My prevailing (and perverse) hobby is to follow the live blogs on business and market matters and the mood is getting downright meh. But a kind of pissed off meh.

The relentless change started as stupid, but now it is getting boring. Every day a new set of journalism, here on substack and across the media, conducts analysis that tomorrow might be irrelevant.

This post is a rather superficial attempt to grasp what is evidently ungraspable, in the present moment. Warning: there might be sanewashing, who knows. And apologies, I intended to post this a couple of weeks when it was fresher. But events, y’know?

Is it the end of neoliberalism?

Undoing what we can surely not really call the ‘left’s’ war on water pressure smells, at first, like classic (if melodramatically articulated) neoliberalism. Too much wet, red tape when all we want is a decent shower. Get rid of the regulations, who cares about preserving water, the richest AI peddler, almond farmer or that member of the family who takes so long to masturbate in the shower that there is no hot water for anyone else. This is neoliberalism, winners can have it all.

But is it neoliberalism?

Gary Gerstle says

…neoliberalism’s career has been marked as much by heterodoxy as orthodoxy, by its capacity to make individuals as different as tech hippies and Ronald Reagan, as dissimilar as Barry Goldwater and long-haired university students who wanted to bring down “the system,” feel as though they held the key to unlocking a future of untrammeled personal freedom.

Mmm. Making showers great again. (Ok now I’ve linked this to wanking that sounds quite rude…but still on brand for the orange fella). Fits this, doesn’t it? And so, in keeping with the ‘Trump is just a continuation of neoliberalism’ cluster of thinkers, the shower heads thing holds.

And yet, Gerstle again:

Donald Trump and Bernie Sanders were inconsequential political figures during the order’s 1990s heyday. That the two became in the 2010s the two most dynamic forces in American political life provides the best evidence that the neoliberal order was losing its hold. It was no longer constraining political choice….During the neoliberal heyday, protectionism was a dirty word, not to be uttered by those pursuing high political office. Now it is favored by many on the right as well as on the left.

Quinn Slobodian, taking a more intellectual (than political) history stance, sees the present moment as a result of a split in neoliberal ideas. Neoliberalism still reigns, but it is divided.

And what a schism it is.

But. Remember back to Yanis Varoufakis’ Global Minotaur, in which he described the twin deficits of the United States. First, the budget deficit, allowing US Treasury Bonds to act as the safe offset to riskier financial activities. So that the demand for more US government debt was literally making money (and the finance world) go around. Second, the trade deficit, sending endless US dollars overseas to stabilise the globalise economy. The price? Imperial-level tribute flowing into Wall Street.

Powered by America’s twin deficits, the world’s leading surplus economies (e.g. Germany, Japan and, later, China) kept churning out goods that Americans gobbled up and then sent almost 70% of the profits, in the form of capital flows, to Wall Street which, at the speed of light, turned them into cheap loans, investments and, of course, a nice ‘little’ earner for the bankers themselves. Through this prism, everything seems to make more sense: the rise of financialisation, the triumph of greed, the retreat of regulators, the domination of the anglo-celtic growth model; all these phenomena that typified the era suddenly appear as mere by-products of the massive capital flows necessary to feed the twin deficits of the United States.

This was not real stability though – and came crashing in the 2008 Global Financial Crisis. It was then artificially propped up, of course. And then propped up further (a lot further) during Covid. And then in February 2022 it stopped (well, it is complicated, but basically). Finally (sort of) we might see the consequences of the end of the material structured driving neoliberalism. Maybe that is what is going on now.

Is it the end of a central role for USD? And globalisation?

So let’s say the US trade deficits were about sending dollars into the global system, keeping the US dollar as the global currency that in turn props up Wall Street, what is all this reversal of the trade deficit thing all about?

Helen Thompson and Tom McTague, via their These Times podcast, suggest that undermining the value of the dollar is the plan. The dollar is overvalued because lots of people need it, ‘cos of how it is the global reserve currency. That makes for de-industrialisation with the US because it costs too much to buy ‘Murican stuff. And from there apparently it is a slippery slope to opioid crisis or something.

Obv the orange fella says he wants to keep the dollar’s dominance, but which he reckons can be paid for by other countries who now buy American rather than export there.

There was also some talk about undermining the current role of treasury bonds as global safe asset – which they are, of course, because of the ‘exorbitant privilege’ of being the reserve currency ie. government debt could technically be paid by printing money. And though that is unlikely, it acts as a guarantee and makes the bonds, safe. Well, until now. Maybe. More about the plan for treasuries in a bit.

Trump has to drive down the debt because otherwise he can’t maintain the tax cuts for the wealthiest people, says Helen Thompson.

But hmm. Is this also the purpose of the Strategic Bitcoin Reserve? That is, tariffs are there to end one side of the twin deficits, and this is there to end the other? Or is it related to the Trump and Musk’s visit to Fort Knox (did that happen in the end?) and their suspected plan to ‘liberate’ the gold reserves (also with the extra bitcoin?) for making more gain (aka the persistent personal enrichment thesis for what is going on), or else to devalue the dollar via that route ie. ‘OMG there’s less gold than we were told’, leading to a drop in the dollar.

Shrugs.

What about this whole Liberation Day business? Now the tariff thing looks less wholesale than it did, doesn’t that mean ending the trade deficit also won’t work?

This is why the cause of the apparent backflip(s) (multiple and counting) on tariffs matters. The first backflip was the Bond Vigilantes back in charge of the world’s ‘greatest democracy’ (extraordinary when you have to rely on those guys). Or that targeting China was the plan all along.

Then there is the personal enrichment thesis. Based on recent stock market chaos, at least part of the plan sure looks like selective inflows to the portfolios of people who magically have advance warning of political announcements that change the market’s direction.

The endgame, if there is one? Not sure.

Or maybe it isn’t even about the orange guy. A couple of years ago Perry Mehrling thought “the next few years will be a little rocky because we are now coming into the disciplined phase of this system”. Though the present moment, surely, is not just cyclical, or even merely (the first time surely we would say ‘merely’ for c.1979-82ish) an equivalent to the Volcker Shock?

Is it the end of American military hegemony?

Remember in the distant days before all this tariff shit that there was all the stuff pressuring Europe into funding their own military stuff and not relying on the American security guarantee. Leaders brought in and smiley stuff on camera (except for poor Zelensky ofc) with all sorts of threats that eventually led Germany to overturn its austere ways and buy its own guns?

Might be related to the other twin deficit business. From a paper in November 2024:

The US dollar’s status as the global reserve currency is perhaps more closely tied to America’s military power — and perceived likelihood of prevailing in conflicts — than previous economic analysis has accounted for.

Back to those treasury bonds, there was talk about forcing countries to whom the US has previously offered a security guarantee to hold these as 100 year zero interest bonds to make them pay for American military presence – but also with no security guarantee. In response, Germany and others are re-arming – which Helen Thompson reckons might have been the goal.

This is hardly demilitarisation, or, one suspects heading towards world peace.

And it is definitely not the end of American imperialism: there is still the whole buying Greenland business. The logic is rather closer to building a wall and making Mexico pay for it.

For decades the world has let this imperialism slide in exchange for a few things – security guarantees, USAID, that sort of thing. For now there is a lot of scrambling to keep something resembling the status quo, including Murica’s place in the world. But it is hard to imagine it staying that way indefinitely.

Here in Australia we still have to relinquish, y’know, whatever we would otherwise do with $368 Billion of our own money for some vague possibility of a submarine or two sometime, one day. One suspects hypothetical submarines are not actually the thing we are buying.

Is it the end of liberal democracy?

A combination of the failure to enforce the rule of law in relation to Trump’s illegal activities and the tendency of the law courts to uphold egregiously wrong shit is surely spelling an end to the wide-eyed, even sometimes saccharine faith in liberal institutions to work universally in the interests of a democratic population.

In Jacobin, Daniel Bessner points out that what seems extraordinary is actually pretty consistent with the ways America’s liberal institutions have worked. On the arrests of Badar Khan Suri and Mahmoud Khalil:

Tragically, arrests like these have many precedents in US history; the arrest and deportation of legal residents and even citizens — oftentimes for political radicalism — has been a recurring feature of American politics for a long time.

Then there’s the oligarchical power, linked not only to a wider version of the personal enrichment explanation for this regime, or technofeudalism/technofascism, but also to wider patriarchal white supremacy.

Turns out even the end of the left’s war against water pressure is part of the story of undermining democratic institutions.

This is Alan Kohler, whose article is not behind a paywall (unlike Noah Feldman’s original).

It’s not really about showers, wrote Feldman, but an attempt to gut the Administrative Procedure Act (APA) of 1946, which is currently being used by federal courts to block Trump’s unlawful actions.

Feldman writes that this is a direct, overt violation of the law and contradicts the very reason that the APA exists. If the Supreme Court lets him get away with it, another judicial guardrail against a Trump autocracy will fall away.

Remember, he stacked the Supreme Court in his first term.

Remember that to impose the tariffs on April 2, Trump declared an emergency under the International Emergency Economic Powers Act of 1977, which gives him the power to bypass Congress for an emergency “originating outside the United States”.

The “emergency” that allowed him to up-end the global trading system and end 80 years of US-led stability is merely the existence of trade deficits, which his executive order says indicates “a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and US trading partners’ economic policies that suppress domestic wages and consumption”.

If that’s an emergency, anything is.

Of all the things that may be coming to an end, the left’s war on water pressure seems clearest.