Renewed optimism about Europe. The USD: an exorbitant privilege or an exorbitant burden? MAGA’s line of fire turns to universities. The failure of modern liberalism. Meta’s methods revealed.

QUOTE OF THE WEEK

“A warning in advance: universities in America are about to be put under pressure of a kind that no one who studies or teaches in America has ever experienced before.” (Anne Applebaum)

ARTICLE OF THE WEEK

Simon Nixon, There Are Plenty of Reasons to Be Optimistic About Europe
(Bloomberg, 14 March 2025)
For years, European economies have been described as crippled by high taxes, high energy prices, outsized debts and excessive regulation. But Trump has galvanized action to such an extent that Europe could at last address its longstanding and intractable challenges. Three developments stand out. (1) The German fiscal bazooka could revive the country’s economy, with a positive knock-on effect on other EU economies. (2) The recent geopolitical shock will likely spur deeper European integration, particularly on security. (3) It will also revitalize the relationship between the UK and the EU. Revived optimism comes with many caveats, but hopefully, centripetal forces will prevail over centrifugal ones (gifted article, 5-7 min).
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Raghuram Rajan, Trumponomics’ Exorbitant Burden
(Project Syndicate, 11 March 2025)
According to Donald Trump, America runs large trade deficits and struggles to compete in manufacturing because foreign demand for US financial assets has made the $ too strong. But as Rajan makes clear, the argument is unconvincing – the Trump administration is wrong in claiming that the $ attractiveness is an “exorbitant burden” rather than an “exorbitant privilege”. Why? (1) The timing is off. (2) The US doesn’t run a uniform trade deficit (with a deficit in goods but a net surplus in services, which suggests comparative advantage at work). (3) Any excess demand for US Treasuries from the rest of the world should show up in a huge excess premium for US bonds. Yet, this is not the case (the US Congress spends as it wishes, relying on the rest of the world to buy Treasuries to fund what domestic revenues cannot cover). To sum up: the traditional view that the US runs chronic trade deficits because it overspends, owing largely to its fiscal deficits, is probably true (7-8 min, metered paywall that may require prior registration).
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Anne Applebaum, ‘First, they came for Columbia’
(Substack, 18 March 2025)
During a week when Donald Trump has intensified a multipronged assault on some of America’s elite (and not so-elite) institutions, Applebaum’s “open letter” is a salutary reminder of what is at stake. “The attacks on Columbia, along with the assault on other universities, have an even broader purpose: They are designed to intimidate hundreds of other academic institutions in America. The point is to make every university afraid to offend the administration; to make academics self-censor; to make students wary too, conscious that something they might say on campus could trigger a MAGA social media campaign or cuts to their university’s funding” (metered paywall, 6-8 min).
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Mike Konczal, The Abundance Doctrine
(Democracy – A Journal of Ideas, Spring 2025)
This is a review of two influential books that just came out: “Abundance” by Ezra Klein and Derek Thompson and “Why Nothing Works: Who Killed Progress – and How to Bring it Back”, by Marc Dunkelman. Interestingly, the authors are liberals who take on the biggest political issue everybody now talks about in the US: how can one of the richest countries on earth be saddled with second-rate infrastructure and endemic housing shortages? Both argue that the US government now moves much more sluggishly than in the past and attribute this problem to a broader ideological dysfunction within left-liberal and Democratic coalitions. Their response: modern liberalism became too obsessed with saying no—and can learn to say yes again (metered paywall, around 10 min).
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Steven Levy, Meta Tries to Bury a Tell-All Book
(Wired, 14 March 2025)
Another book review. “Careless people” – a takedown of Meta by one of its former senior executives “who was in the room, and on the corporate jet, when stuff happened—and she claims that things were worse than we imagined.” Indeed. The callousness of the company’s leaders seems to know no bounds (metered paywall, 6-8 min).
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