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Monday, July 20, 2026

20: Trump

Office Hours: What Will Trump Do in Iran NOW? There's no good option, so will Trump take the least bad? .......... Trump’s war with Iran has resumed (it never really stopped). The U.S. is sending more warplanes to the Middle East. Two American service members were killed in an Iranian missile attack on Jordan, and a third is missing. The Strait of Hormuz is again closed. Meanwhile, Mojtaba Khamenei issued his first statement following his father’s funeral, saying “revenge is the will of our nation” and that Iran would act against “criminals whose names are known.” In response, Trump threatened to “completely decimate and destroy” Iran if assassination threats against him were acted upon. ............. How long can Iran continue the war? Its economy appears reasonably stable; it has exported oil sufficient to meet its needs. Its population has become used to sanctions and economic pain, and has no voice, in any event. As shown by its attack on Jordan, as well as those on Bahrain, Kuwait, Oman, Syria, and Qatar, Iran has ample missile stocks and has also become more adept at evading U.S. air defense systems. ............ How long can the U.S. continue the war? America doesn’t have sufficient munitions to maintain the current bombing campaign indefinitely. World oil reserves are almost depleted, which means that continued blockage of the strait will cause even more economic pain. Oil has again topped $90 a barrel. Plus, there are midterm elections to think about.

Trump’s War on the Future, Monetary Edition Trying to punish Brazil for adopting a better payment system ............. Pix is essentially a digital version of the real, Brazil’s currency. As a Federal Reserve report from 2022 said, a central bank digital currency — which is what Pix is — “is analogous to a digital form of paper money.” Brazilian banks are required to offer Pix, which the Trumpists claim gives it an unfair advantage over debit cards and other payment methods. But this requirement is similar, at a fundamental level, to the requirement that all U.S. banks accept dollar notes as deposits and disburse dollar notes on demand, which few people would consider unfair. .................. Who is hurt by the advent of Pix? Brazilians’ ability to cheaply make instantaneous payments from their phones certainly hurts the business of Visa and Mastercard, which are both U.S. companies. But since when is it unfair business practice when companies lose business to a competitor that offers a better, cheaper product? For example, should we shut down the U.S. postal service because it offers better and cheaper mail delivery than UPS or FedEx? Should we shut down PayPal and Venmo because they compete with Mastercard and Visa? ............... Beyond concerns about Visa and Mastercard profits, Trump officials are reportedly concerned that Pix and similar payment systems elsewhere might challenge the international dominance of the dollar. In reality, Brazil is too small a player to make much of a dent in the world payments system. The dollar may, however, face a real challenge if the European Central Bank is able, as it hopes, to introduce a digital euro in 2029. If that happens, it’s not hard to imagine that a significant number of transactions that would otherwise have been made in dollars will be made in digital euros instead. ................. the reason people might switch to digital euros will be because the US won’t be offering an equally good means of payment. Why won’t there be a digital dollar? Not because it’s a bad idea — as Brazil has shown, it would be a very good idea. But there are powerful special interests that oppose any such move. ..............

Last year Republicans in the House passed a bill that didn’t just forbid the creation of a U.S. central bank digital currency; it prohibited any study of the issue by the Federal Reserve. “Don’t even think about parking here creating a digital dollar.”

................ Proponents of this ban claimed to have concerns about how a central bank digital currency would work. But it’s obvious that their real concern is that it would work too well. Crypto interests, in particular, are very worried that consumers who had access to digital dollars would lose interest in stablecoins and other cryptocurrency products, because these products, being risky and awkward to use, would not be competitive with a system that simply lets people make electronic payments in dollars. ............ Brazil’s success is especially galling to crypto promoters because it’s in such stark contrast to the results of another Latin American monetary experiment: El Salvador’s attempt to make Bitcoin a major means of payment. The government of President Nayib Bukele made Bitcoin legal tender and spent large sums trying to promote its use. Yet the effort failed: cryptocurrency never caught on as a means of payment, and the plunge in Bitcoin’s price since last fall has inflicted large losses on El Salvador’s government. ..............

If we can have a digital dollar, why not a public option for health insurance?

.............. the furious opposition to central bank digital currencies reminds me of the Trump administration’s all-out efforts to block development of wind and solar power. In both cases we see political players beholden to special interests — crypto when it comes to money, fossil fuels when it comes to energy — who claim to favor technological progress, but scream “not like that” when a superior technology doesn’t take the economy where they want it to go. ......... using tariffs to punish Brazil for its monetary achievements won’t succeed. Politically, the move will only strengthen Brazil’s President Lula. Economically, the reach of the tariffs will be limited by Trump administration fears about driving the prices of coffee, orange juice, beef and other goods even higher. And as Monica de Bolle at the Peterson Institute for International Economics argues, Trump’s tariffs have on balance strengthened Brazil’s position: “Trade diversion around the globe as a reaction to US tariffs has turned Brazil into an export powerhouse,” with Brazil, for example, capturing much of the Chinese soybean market.

The US and Iran have blown past red lines as they lurch back toward all-out war
Texas Hispanics swung hard to Trump. A new poll shows they’re furious at his deportations. A new survey of Hispanic business owners in Texas shows Democratic nominee James Talarico dominating......... Benny Melendez voted for President Donald Trump in 2024. But since Trump returned to the White House, it has been increasingly difficult for Melendez to run his small construction company in south Texas. He says immigration officers have detained workers at his job sites and while driving his company trucks. Since the beginning of 2025, more than 10 of those workers have been deported.......... The chaos of the past year-and-a-half has convinced Melendez to abandon his support for Trump and Republicans, and instead back the Democrat in this year’s U.S. Senate election, state Rep. James Talarico. .......... “How can we continue voting for someone that is targeting our community?” Melendez said. “There’s no way possible we’re going to support that. No way.” .............. One in five Hispanic business owners in Texas say they’ve had an employee deported in the past year ........... Seven in ten said their businesses had been impacted by Trump’s tariffs. Among those surveyed, Talarico holds a seven-point lead over Attorney General Ken Paxton, the GOP nominee, even though a plurality of the over 1,000 respondents self-identify as Republican. Almost one quarter who supported Sen. John Cornyn in the Republican primary now say they’ll back Talarico, while over half say they’ll back Paxton. .......... Hispanic voters around the country are swinging hard against him, thanks to the Trump administration’s immigration crackdown and the shaky economy. ............ “If you’ve got a small business of 10 people or so, and you get even one person deported, you can imagine what that does to the morale of that business unit and to the fear of the business owner.” .................. The Texas Senate race will be one of the nation’s most watched — and most expensive — this cycle. Early polling shows it in a dead heat: A New York Times/Siena poll released last month showed

Paxton and Talarico tied

. Among Hispanic voters, Talarico led by 32 points. In 2024, Trump won Texas Latinos by 10 points. .................. In a statement, Talarico offered an olive branch to Hispanic voters: “We should be supporting Hispanic small businesses — not crushing them under the weight of high costs and failed immigration policies,” he said. “Here’s my message to Hispanic communities across Texas: if you feel like you’ve been conned, if you feel like you’ve been let down by both political parties, if you feel like politicians aren’t doing anything to lower your costs or fix this broken immigration system — you’ve got a place in this campaign.” ................. “I didn’t like what Biden was doing here on the border,” Melendez said. “But now with Trump, it’s all the opposite, 180 degree change. He doesn’t let us work. He’s taking the best we have.” ............

blockquote class="twitter-tweet">

you can be austere in a bustling city

— Paramendra Kumar Bhagat (@paramendra) July 18, 2026
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