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Trump Slump, Capitalism vs. Communism, and Old Man Yells at Claude
Brief
The GoodFellows (Bill Whalen, Sir Niall Ferguson, John Cochrane, and Lt. Gen. H.R. McMaster) convened on July 8, 2026 to diagnose why President Trump’s approval remains stuck in the mid‑30s roughly 534 days into his second term and 118 days before the midterms. The conversation threaded three arenas: politics/leadership style, macroeconomics/markets, and national-security/technology risks. Ferguson opened with a constitutionalist counterpoint — the Founders’ checks and balances, he argued, have largely constrained any “imperial” drift — and later credited Trump’s outsized risk tolerance and America’s economic strength for muting some expected policy harms (he noted U.S. tariffs peaked back to 1930s effective levels last April but did not wreck markets). McMaster and Cochrane agreed that the president’s impulsive decision style and inconsistent communications (Greenland and other examples) undermine his ability to convert policy actions into durable political gains.
The panel dug into the economy: Cochrane called it “trundling along” with unemployment roughly 4–4.2% and continued GDP growth, arguing that deregulation and tax changes have counterbalanced tariff disruption, even as exemptions and cronyism introduce distortions. On foreign policy, the group flagged Cuba as a plausible near-term win for Trump while warning that the Middle East and Ukraine remain dangerous wild cards — discussants described expanding attacks on infrastructure, Russia’s heavy casualties and stretched air defenses (particularly around Crimea), and the unpredictable moment when elite cohesion might break. AI and technological risk dominated the latter half: the panel debated Bernie Sanders’s proposal for a one-time 50% AI tax paid in stock and almost-unanimously rejected government equity with voting power. They also used Anthropic’s Mythos/Fable episode as a case study for cyber risk, urging targeted prudential regulation and strengthened defenses — but cautioning that overbroad prior-review regimes could stifle innovation. The episode moved between agreement (need for better process, targeted AI safeguards) and disagreement (degree of pessimism about Trump, appropriate regulatory sequencing), but consistently returned to the same theme: institutions and incentives — constitutional constraints, market resilience, bureaucratic decision processes, and the right balance of regulation — will determine whether policy risks become political or systemic crises.
Why it matters
Bill Whalen opened the July 8, 2026 episode noting President Trump is 534 days into his second term, with 118 days until the U.S. midterms and a job-approval rating “in the mid to upper 30s” (Whalen).
Key details
- Sir Niall Ferguson argued America’s Constitution and checks-and-balances are constraining Trump’s ‘imperial impulses,’ and said Trump’s risk appetite plus the relative strength of the U.S. economy have blunted some policy downsides — citing that U.S. effective average tariffs returned to 1930s levels in April last year but produced only a short-lived market shock (Ferguson).
- H.R. McMaster attributed part of Trump’s political trouble to a lack of formal decision-making processes and inconsistent, bombastic communications (citing Greenland as an example), and warned of continued Middle East escalation (Iran, Houthis, Strait of Hormuz) that could produce military and economic shocks (McMaster).
- John Cochrane emphasized the macro picture: the economy is “trundling along” with unemployment around 4–4.2% and ongoing GDP growth, where deregulation and tax reforms have offset tariff 'sand in the gears'; he also criticized emerging crony-capitalist exemptions to tariffs (Cochrane).
- On AI policy, the panel discussed Bernie Sanders’s proposed American AI Sovereign Wealth Fund (a one-time 50% tax paid in stock), with John Cochrane calling government equity ownership with voting rights a 'wretched' idea and warning it encourages political interference in firms (Cochrane).
- Panelists raised cyber and safety concerns about frontier models (Anthropic’s Mythos/Fable were discussed): Treasury-level alarms about model misuse were described and the group urged a prudential, risk-focused regulatory approach while warning against blanket prior-review regimes that could choke innovation (multiple speakers, incl. McMaster and Cochrane).