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When it comes to Wall Street’s recent flurry of 2020 forecasts, most banks – perhaps with the notable exception of SocGen – agree that the first half of next year will be more of the same smooth sailing for US equities observed for much of 2019 (if not the violent rotations we witnessed below the surface that crippled quant returns this year).

Where where the consensus goes downhill and things gets stormy, is the outlook for the second half of 2020, whose dominant feature will be the November presidential election. And few are as concerned about what the second half of next year may bring than JPMorgan. The bank, which has been steadfastly bullish stocks – and in retrospect correctly so, if for all the wrong reasons (for example, JPM’s bull thesis was predicated on economic growth, not its inverse, and certainly not the barrage of global rate cuts and the Fed’s launch of QE4), retains its cheerful forecast for the first half of 2019, but when it comes to the second half of 2020, not even JPM’s chief equity strategist, Mislav Matejka warns that the “negatives could begin to materialize” and the market might start to discount these some time in the second half of 2020.

Among the factor listed by Matejka are that US politics could become a lose-lose proposition, and trade uncertainty, as well as hard Brexit risk, could come back. Worse, in a striking admission, none other than the largest US bank admits that next year, the “Fed’s credibility might start to be questioned,” as earnings overshoot their trend, while rising credit concerns could come to the fore.

Finally, while JPMorgan repeats that it has “consistently” argued that one should not expect the next US recession ahead of the presidential elections, it then spoils the ending, and in previewing what happens after next November, says that “the odds of a recession might go up significantly.”

** *

We will spare readers the cheerful side of JPM’s year ahead forecast as it is a repeat of many themes covered here previously by the “bullish” JPM and instead focus on the gloomier aspects of the bank’s year ahead predictions, as those are decidedly new and represent a reversal to JPM’s years of relentless optimism.

The first notable item is the US election road map

According to JPM, both the US election and US politics in general, could become a dominant issue relatively soon, as the Democratic nomination process will be heating up towards the end of Q1.

 

As JPM notes, “we might end up with two candidates who are potentially on the extreme ends of the political spectrum. The exhibit above compares the policies of a select number of Democratic candidates and president Trump, based on our interpretation of published policies and public comments. The divergence of policy proposals between the different  Democratic candidates is probably as extreme as the comparison between Trump’s policies and that of any of his Democratic adversaries.”

Of the prominent Democratic candidates, Biden’s nomination is likely to be seen as more market favourable than a Warren nomination, but at the same time the probability of Trump winning vs Biden could be seen as smaller than the probability that he beats Warren.

The key point here, is that the US politics could end up looking like a “lose-lose” proposition for the markets in the runup to and post the US elections according to Matejka. To summarize the possible outcomes, we might either have 2nd Trump’s term, but with the return to confrontational China stance, as he will not be constrained by the markets anymore, or we might have a shift to less equity friendly tax and regulatory regime, in the event of a Democrat victory.

The risk of trade uncertainty escalating again, post the current truce

JPM’s base case over the past months was that Trump will be compelled to move towards a truce with China, given what were the rising risks to the economy, and in particular to the US consumer. The risk is that the current improving sentiment with respect to trade doesn’t hold for too long, and that potentially re-elected Trump resumes his aggressive stance.

An inflecting credit cycle

Some of the credit indicators will soon be turning into a headwind for equities, as we move through 2020.

Notably, G4 credit standards appear to be tightening for both the businesses and for the consumer of late. One typically  sees tightening standards ahead of the downturns.

Corporate leverage is surging

US corporates have been levering up over the past years, with median US company net debt-to-equity ratio at the record highs.

Why is this a risk? Because “if the credit markets weaken, this could reduce the pace of corporate buybacks.” Because where would we be without buybacks…

Economic indicators are looking decidedly late-cycle

The US cycle is now officially the longest one since the WW2, and some of the cycle indicators appear to be rolling over. One such indicator is that job opening rate appears to have peaked. This is what usually happens ahead of the downturns.

Earnings have significantly overshot the trendline

Another key JPMorgan concern is that US profits are now starting to appear stretched vs their long term trendline.

Here Matejka notes that one of the arguments that kept him bullish all this time was the finding that US profits don’t tend to peak for the cycle before they significantly overshoot their long term trend. The size of these overshoots was on average of the order of 20-30%. The current overshoot is at 19%

Profit margins have peaked, which typically bodes negatively for the longevity of the expansion cycle

As we noted recently when discussing real, operating profits, one doesn’t usually have a recession before US profit margins, as measured by NIPA, peaked. The lead-lag between margins peak and the next recession was sometimes very significant.

However, as of this moment, JPM finds that “we are now in unchartered territory”, with US profit margins appearing to have peaked in Q3 ’14, leading to the longest lead-lag on record, and counting…

… while a key profit margin proxy – a difference between the output prices and the input costs – appears to be deteriorating further.

* * *

Putting it together, JPM concedes that while “the time is likely approaching when one should be contrarian again”, this time around through turning bearish vs presently growing consensus bullishness, the bank still thinks that “one should not cut risk-on trades too early, as the bear capitulation, which is currently under way, could have legs.” The only question is when does someone, or something, pull the rug from under the market’s melt-up, triggering what even JPMorgan now see as a coming, and long overdue, day of reckoning for the markets

Authored by Michael Snyder via TheMostImportantNews.com,

If you want to waste your life, a great way to do that is to spend tens of thousands of hours watching television. Today, it is so difficult to get people to leave their homes and get active in their communities, because most of us are absolutely glued to one screen or another. After a long day at school or a hard day at work, most of us understandably want to relax, and from a very early age most of us have been trained to turn to the television as our main source of relaxation. But of course there is great danger in allowing anyone to pump thousands upon thousands of hours of “programming” into our minds.

More than 90 percent of the “programming” that we consume is controlled by just a handful of exceedingly powerful corporations, and those corporations are owned by the elite of the world. So when you endlessly consume their “programming”, you are willingly being bombarded by news and entertainment that reflects their beliefs, their values and their agendas. They openly admit that they are trying to shape the future of society, and up to this point they have been extremely successful.

Unfortunately, we live at a time when most people need television or some other insidious addiction to take their minds off of the gnawing emptiness that they feel deep inside of them. As I was doing some research the other day, a comment that someone posted on an Internet message board really struck a chord with me…

As a kid life seems so amazing and you can dream of big things and have faith. The older you get it seems the world tries to take away your faith. I have had 8 jobs in my life starting in high school and I’m just sick of this ****. I’m lucky to make 100 a day . I know that’s poverty level. But I manage. But thinking ahead I have to do this every day for the next 30 years . How the hell do you guys and gals cope with reality.

I’m on empty.

I want out.

In just a few sentences, this individual summed up what millions upon millions of Americans are feeling.

The harsh realities of modern society have absolutely sucked the life out of so many people around us, and the vast majority of Americans are barely getting by and are living lives of quiet desperation.

If television allows them to forget about their troubles for a while, it is understandable why so many use it as a crutch.

But do we have to watch so much of it? One recent survey found that the average adult will watch more than 78,000 hours of television over the course of a lifetime…

Television has become such a common part of all of our lives that most don’t even think about just how much time they spend staring at their TV screen. Of course, all of those hours are undoubtedly adding up, and a recent survey of 2,000 British adults finds that the average TV viewer will watch an astounding 78,705 hours of programming (movies, sports, news, etc) in their lifetime. That’s a whole lot of screen time that may have been better spent on more productive endeavors.

On a day-to-day basis, the average adult watches TV for three-and-a-half hours, amounting to 1,248 hours each year.

I know that some of my readers will point out that this was a British survey, but the truth is that Americans actually watch even more television. The following comes from Wikipedia…

In the US, there is an estimated 119.9 million TV households in the TV season 2018/19.

In 2017 alone, an average U.S. consumer spent 238 minutes (3h 58min) daily watching TV.

Those numbers are absolutely staggering. And when you break them down further they become even more alarming. In the first survey that I mentioned above, the researchers actually discovered that the average person “will watch 11,278 different TV series”…

The survey, commissioned by LG Electronics, broke down those numbers even further and concluded that the average adult these days will watch 3,639 movies at home, and 31,507 episodes of TV during their lifespan. As far as different programs, the average person will watch 11,278 different TV series as well.

Are there really 11,278 television series worth watching?

I would think that you would have to go really deep into the well to watch that many, but apparently that is what many people are doing.

Of course I am not entirely against television. For example, I think that “Poldark” is an absolute masterpiece. But everything should be done in moderation.

The fact that we are endlessly watching so much television could help to explain why our society has become so “dumbed down”. Yesterday, I discussed a recent study that found that 15-year-old U.S. students are about four grade levels behind 15-year-old Chinese students in math.

I bet those Chinese students are spending a lot more time studying and a lot less time watching television.

At this point, America has truly become an “idiocracy”.

For example, have you heard what the hottest new toy for this holiday season is?

It is actually a “fart launcher” that allows children to blast foul smelling air at one another. The following comes from the New York Post…

Toy insiders and wincing parents tell The Post that the Buttheads Fart Launcher 3000 — a Nerf gun-like gadget that shoots farts instead of darts — is topping off kids’ wish lists this year.

“This is my worst nightmare,” mom Angie Wong, the 42-year-old founder of the private Facebook group Brooklyn Moms, tells The Post. She recently caved and got the gas-blasting gizmo for her 5-year-old son, Will, and 7-year-old daughter, Maddie. “I can see that thing [being] used on my face one unsuspecting morning.”

Of course a “fart launcher” is not the end of the world, but as I document regularly in my articles, there are literally thousands of signs that the fabric of our society is coming apart all around us.

If our society continues to degenerate at this rate, there is only one way that our story can end.

Sadly, most people seem to think that everything is going to be just fine, because that is what their televisions are telling them to think.

Most of us are willingly plugging ourselves into “the matrix” for multiple hours every day, and so it shouldn’t be a surprise that most of us see the world the way that the elite want us to see it.

If you want to start making positive changes in your life, breaking free of your addictions is one of the most important things that you can do.

And at this point, for many Americans watching television is one of the most insidious addictions of all.

EVs were once thought to be the unlimited silver lining behind an automotive industry that has all but collapsed into severe recession in China. 

But now, it’s looking like Beijing isn’t so excited to help sustain the EV niche of the market anymore, according to the Wall Street Journal. 

And Beijing’s ambivalence is starting to show up in the numbers. EV sales fell off a cliff after June of this year, when the government slashed purchase subsidies. From July to October, sales of new energy cars were down 28% from the year prior. 

Many buyers prior to this had purchased vehicles in anticipation of the subsidy cut, which makes the sales “hangover” even worse. But the drop, on its own, still suggests that demand could be waning under the surface without government incentive. EVs are still priced above conventional cars when they are not stapled to a government subsidy. 

Luxury EVs have buyers in places like Shanghai and Beijing, partially because they are exempt from the country’s license plate rationing in these areas. But restrictions on convention ICE cars are now starting to relax as the government continues to seek ways to end the country’s auto recession. Shenzhen and Guangzhou increased their license-plate quota in June and other cities may do the same.

Bernstein analyst Robin Zhu predicts that ride sharing and taxi companies accounted for about 70% of EV sales in the country and that they could represent a large portion of the remaining demand, as they have less sensitivity to subsidy cuts. 

But Beijing hasn’t given up on EVs entirely. It still wants one in four new cars sold by 2025 to be electric, according to a draft of its 15 year plan released this week. This raises its previous target released two years ago. EVs currently only make up about 5% of the country’s market. 

Subsidies are unlikely to come back, however, to meet this target. The government is now aiming for “quality instead of just quantity”, noting that subsidies would be more costly than they were a few years ago, when the market was smaller. Instead, Beijing will spend the money on building out its infrastructure, like its charging stations. 

Maybe Tesla could take a hint from this idea…

Regardless, automakers will continue to push out EVs in China, even if they aren’t profitable. The same is expected to happen in the EU. Beijing, similar to Brussels, requires a certain percentage of cars to meet new energy requirements, which could cause a glut in the market. 

One last shred of demand hope comes from channel stuffing actually comes from the automakers themselves, many of whom are setting up their own ride sharing networks. With this being the case, the “ride” for the EV market looks like it could be bumpy and grim going forward…

Four years after learning their longtime spokesman was a giant pedophile, Subway has suffered yet another embarrassment after a Canadian court threw out a $210 million lawsuit against journalists who tested the company’s meat, only to discoer that Subway chicken contains as little as 42.8% actual chicken.

In February 2017, the Canadian Broadcasting Company’s Marketplace DNA tested six different pieces of chicken from five fast food restaurants – finding that poultry from A&W, McDonald’s, Tim Hortons, and Wendy’s contained between 88.5% and 89.4% chicken DNA.

Subway?

53.6% for their oven roasted chicken contained actual chicken, and 42.8% of their chicken strips. According to the CBC, the rest of it was soy protein, according to VICE.

Needless to say, Subway was a little upset – filing a $210 lawsuit against the CBC, claiming the study was “recklessly and maliciously” published and that the DNA test “lacked scientific rigor.”

The company claims lost customers, lost reputation, and that they had lost a “significant” amount of sales according to the report.

“The accusations made by CBC Marketplace about the content of our chicken are absolutely false and misleading,” the company said after the report was published.

Nearly three years later, the suit has been tossed.

But at the end of November, the The Ontario Superior Court threw Subway’s lawsuit out, ruling that the CBC’s program was an example of investigative journalism, and was protected under an anti-SLAPP (“Strategic Lawsuits Against Public Participation”) statute that “encourages individuals to express themselves on matters of public interest,” without the fear that they’ll be sued if they speak out. (John Oliver covered SLAPP lawsuits and how they’re used to stifle public expression on a recent episode of Last Week Tonight.) –VICE

“The Marketplace report dealt with the ingredients of sandwiches sold by popular fast food chains. It relayed the results of DNA tests performed by the Trent laboratory, which indicated that two types of Subway chicken products contained significantly less chicken DNA than other products tested,” wrote Justice E.M. Morgan in his ruling.

“Furthermore, the Marketplace report raised a quintessential consumer protection issue. There are few things in society of more acute interest to the public than what they eat. To the extent that Subway’s products are consumed by a sizable portion of the public, the public interest in their composition is not difficult to discern and is established on the evidence.”

VICE notes, however, that Justice Morgan did note that Subway’s claims had substantial merit because their own testing revealed just 1% soy filler, not the 40% claimed by the CBC.

The CBC stands by their results, and hired their own expert to vouch  for the lab’s testing.

Subway told VICE in a comment after publication:

Statement from Subway Restaurants:
“The case has not been dismissed in its entirety, and this decision does not validate the tests performed by Trent University. In fact, the judge’s opinion states: ‘The record submitted by Subway contains a substantial amount of evidence indicating that the Trent laboratory tests were of limited or no value in determining the chicken content of Subway’s products,’ and ‘…there is considerable evidence that suggests the false and harmful nature of the information conveyed to the public in the Marketplace report.’

The CBC Marketplace story at issue is wholly inaccurate and built on flawed research, which caused significant harm to our network of Franchise Owners. In 2017, two independent laboratories in Canada and the U.S. found our chicken to be 100 percent chicken breast with added seasoning, verified that the soy content was only in the range of 1 percent, and contested the testing methodology.

The quality and integrity of our food is the foundation of our business, and we will continue to vigorously defend Subway ® Franchise Owners against false allegations such as those made by CBC’s Marketplace program. We are reviewing the recent decision by the Ontario court and are confident in the ability to continue our claims against Trent University while an appeal against the CBC is under review.”

Investors searching for “green shoots” in the global manufacturing sector might not discover them in Brazil.  

Brazil’s auto industry trade group Anfavea reports vehicle production plunged 7.1% in November, on a YoY basis. 

Anfavea said 227,455 vehicles (light vehicles, trucks, and buses) were produced last month, versus 244,771 over the same period the previous year. For the first ten months of the year, vehicle production increased 2.7% from 2,702,306 in 2018 to 2,774,484 in 2019.

The trade group said the number of vehicles exported from Brazil continues to decline.

November vehicle exports were down 7.9% over the year. For the first ten months, vehicle exports plunged 33.2% over the prior year.

Brazil is one of the top five automakers in the world. The sector has struggled in the last several years as a synchronized global downturn gained momentum.

Brazil almost entered a recession during 1H19, mostly due to a manufacturing slowdown, could register below-trend growth as soon as 1H20.

The global macroeconomic situation across the world and in Brazil is so troubling at the moment that Ford had to close its plant in Sao Paulo. 

As a result of the downturn, Anfavea has said production in Q4 has fallen so sharply that three fewer working days have been seen for laborers in factories. 

Last week, we noted that the global auto industry continues to deteriorate, namely due to broke consumers after a decade of low-interest rates and endless incentives. 

We said, “the auto slowdown has sparked manufacturing recessions across the world, including manufacturing hubs in the US, Germany, India, and China. A prolonged downturn will likely result in stagnate global growth as world trade continues to decelerate into 2020.”

As shown in the chart below, global car sales have crashed at a rate not seen since the last financial crisis. 

A global economic rebound depends on the auto industry, with no turn up visible, it’s likely the global economy will continue to decelerate into 2020. 

 

Authored by Mac Slavo via SHTFplan.com,

Twitter has written “shadow banning” aka, censorship, into their new terms.  The platform will now intentionally “limit the visibility” of some users. Expect those who dissent from the official narrative to be the ones censored.

Critics have accused Twitter of censorship for quite some time now.  But this time, it’s official. The company has admitted they will attempt to silence those critical of the ruling class. According to RT, the news terms will be taking effect in January of 2020. While the new terms don’t look like much to write home about, some tweaks to the language could have larger repercussions for users, limiting their reach behind the scenes without their knowledge.

Last year, when I spoke to Twitter reps, they lied and gaslight us about their targeted manipulation of people’s tweets. Now it’s in their new TOS. https://t.co/dti7FSd1v6 nu, @RubinReport, we’re waiting for an alternative pic.twitter.com/W2LBYma3lU

— David Reaboi (@davereaboi) December 4, 2019

“We may also remove or refuse to distribute any Content on the Services, limit distribution or visibility of any Content on the service, suspend or terminate users, and reclaim usernames without liability to you,” the new terms state.

The social media giant is telling users that it reserves the right shadow ban or “throttle” or censor certain accounts. And it is not clear on what basis will it make those decisions, although we guess (based on their past which is rife with censorship) that accounts that aren’t parroting the government’s official narrative will be on the list.

While Twitter has previously insisted point-blank “we do not shadow ban,” in the pre-2020 terms the company split hairs between shadow banning and “ranking” posts to determine their prominence on the site, and acknowledged deliberately down-ranking “bad-faith actors” to limit their visibility.

In January 2018, conservative media watchdog group Project Veritas published footage showing Abhinov Vadrevu, a former Twitter software engineer, discussing shadow banning as a “strategy” the company was at least considering, if not already using. “One strategy is to shadow ban so you have ultimate control. The idea of a shadow ban is that you ban someone but they don’t know they’ve been banned because they keep posting and no one sees their content,” Vadrevu said. “So they just think that no one is engaging with their content when in reality, no one is seeing it.”

The new terms will make shadow bans an official policy, all but guaranteeing continued cries of bias and censorship from the platform’s many critics will be silenced.

Since the recent collapse of the Intermediate-Range Nuclear Forces (INF) treaty, the world has witnessed a hardening of positions on the part of the US, Moscow, and some European powers, also as the ‘Open Skies’ treaty is on the White House chopping block. And it goes without saying that these treaties are designed to prevent the kind of Cold War arms race which nearly took the world to the brink of nuclear annihilation, thus many analysts fear once removed there’s no putting the lid of a major arms race back on. New START, which is the landmark nuclear arms reduction treaty signed by the two superpowers in 1991 and took effect in 1994, is set to expire in February 2021, which would be a mere weeks after the next presidential inauguration.

A little over a month ago the Russian Foreign Ministry declared of the potentially soon to be expired pact: “The ball is now in the Americans’ court”; however, on Thursday Putin made a significant overture and is apparently holding out an open hand, lest this final major arms reduction treaty joints the dust bin of history like the INF.

“Russia is ready to immediately, as soon as possible, before the end of the year, extend the New START treaty without any preconditions, so that there would be no double, triple interpretation of our position later. I’m saying this officially,” the Russian president pointed declared according to Interfax. 

Addressing a Russian defense meeting, he explained further that he hopes to avoid a new arms race with the United States, and vowed to in good faith refrain from deploying intermediate and shorter range missiles there where there are none.

“Russia is not interested in triggering an arms race or deploying missiles where there are none,” Putin said. He also invited the US and European countries to join a Russian proposed moratorium on such new deployments and weapons. So far only France has greeted the proposal positively. Indicating the offer is conditional, he warned, “No reaction from other partners followed. This forces us to take measures to resist the aforesaid threats.”

He also took Washington to task for prematurely quitting the INF while attempting to falsely place blame on Russia for being in violation for years. “There is nothing to support this stance. Nevertheless, such attempts are being made,” he concluded, in statements reported by TASS.

Some analysts in the West agree with him. As The American Conservative’s Daniel Larison recently observed, “Refusing to renew the treaty is the same as killing it, and the US will be to blame for the collapse of the last limits on the biggest nuclear arsenals on earth.”

Authored by Ryan McMaken via The Mises Institute,

It’s becoming more and more apparent that the United States will not be going back to “business as usual” after Donald Trump leaves office, and it is easy to imagine that the anti-Trump parties will use their return to power as an opportunity to settle scores against the hated rubes and “deplorables” who dared attempt to oppose their betters in Washington, DC, California, and New York.

Certainly, this ongoing conflict will manifest itself in the culture war through further attacks on people who take religious faith seriously, and on those who hold any social views unpopular among degreed people from major urban centers. The First Amendment will be imperiled like never before with both religious freedom and freedom of speech denounced as vehicles of “hate.” Certainly, the Second Amendment will hang by a thread.

But even more dangerous will be the deep state’s return to a vaunted position of nearly untrammeled power and obeisance from elected officials in the civilian government. The FBI and CIA will go to even greater lengths to ensure the voters are never again “allowed” to elect anyone who doesn’t receive the explicit imprimatur of the American intelligence “community.” The Fourth Amendment will be banished forever so that the NSA and its friends can spy on every American with impunity. The FBI and CIA will more freely combine the use of surveillance and media leaks to destroy adversaries.

Anyone who objects to the deep state’s wars on either Americans or on foreigners will be denounced as stooges of foreign powers.

These scenarios may seem overly dramatic, but the extremity of the situation is suggested by the fact that Trump — who is only a very mild opponent of the status quo — has received such hysterical opposition. After all, Trump has not dismantled the welfare state. He has not slashed — or even failed to increase — the military budget. His fights with the deep state are largely based on minor issues.

His sins lie merely in his lack of enthusiasm for the center-left’s current drive toward ever more vicious identity politics. And, of course, he has been insufficiently gung ho about starting more wars, expanding NATO, and generally pushing the Russians toward World War III.

For even these minor deviations, we are told, he must be destroyed.

So, we can venture a guess as to what the agenda will look like once Trump is out of the way. It looks to be neither mild nor measured.

If the effort at preventing any future Trumps succeeds, it will signal essentially the final victory over so-called “Red State” America.

And then what?

In that situation, half the country may regard itself as conquered, powerless, and unheard.

That’s a recipe for civil war.

The Need for Separation

So long as most Americans labor under the authoritarian notion that the United States is “one nation, indivisible” there will be no answer to the problem of one powerful region (or party) wielding unchallenged power over a hapless minority.

Many conservatives naïvely claim that the Constitution and the “rule of law” will protect minorities in this situation. But their theories only hold water if the people making and interpreting the laws subscribe to an ideology which respects local autonomy and freedom for worldviews in conflict with the ruling class. That is increasingly not the ideology of the majority, let alone the majority of powerful judges and politicians.

Thus, for those who can manage to leave behind the flag-waving propaganda of their youths, it is increasingly evident that the only way to avoid a violent conflict over control of the national government is breaking the United States up into smaller pieces. Or at least decentralizing power sufficiently to allow for meaningful autonomy beyond the reach of federal power.

As I’ve noted in the past, this notion has long been gaining steam in Europe, where referendums on greater local autonomy are growing more frequent.

And conservatives are increasingly seeing the writing on the wall. Among the more insightful of these has been Angelo Codevilla. In 2017, Codevilla, writing in the Claremont Review of Books, laid out a blueprint for local opposition to federal power and noted:

Texas passed a law that, in effect, closes down most of its abortion clinics. The U.S. Supreme Court struck it down. What if Texas closed them nonetheless? Send the Army to point guns at Texas rangers to open them? What would the federal government do if North Dakota declared itself a “Sanctuary for the Unborn” and simply banned abortion? For that matter, what is the federal government doing about the fact that, for practical purposes, its laws concerning marijuana are being ignored in Colorado and California? Utah objects to the boundaries of national monuments created by decree within its borders. What if the state ignored those boundaries? Prayer in schools? What could bureaucrats in Washington, D.C., do if any number of states decided that what the federal courts have to say about such things is bad?

Now that identity politics have replaced the politics of persuasion and blended into the art of war, statesmen should try to preserve what peace remains through mutual forbearance toward jurisdictions that ignore or act contrary to federal laws, regulations, or court orders. Blue states and red states deal differently with some matters of health, education, welfare, and police. It does no good to insist that all do all things uniformly.

And by 2019, the need for separation was becoming more urgent. Last week Codevilla continued in this line of thinking:

[A]fter the 2020 elections ordinary Americans will have to deal with the same dreadful question we faced in 2016: How do we secure and perhaps restore our fast-diminishing freedom to live as Americans? And while we may wish for help from Trump, we have to look to ourselves and to other leaders for how we may counter the ruling class’s manifold assaults now, and especially in the long term…

The logical recourse is to conserve what can be conserved, and for it to be done by, of, and for those who wish to conserve it. However much force of what kind may be required to accomplish that, the objective has to be conservation of the people and ways that wish to be conserved.

That means some kind of separation.

… [T]he natural, least stressful course of events is for all sides to tolerate the others going their own ways. The ruling class has not been shy about using the powers of the state and local governments it controls to do things at variance with national policy, effectively nullifying national laws. And they get away with it.

For example, the Trump Administration has not sent federal troops to enforce national marijuana laws in Colorado and California, nor has it punished persons and governments who have defied national laws on immigration. There is no reason why the conservative states, counties, and localities should not enforce their own view of the good.

Not even President Alexandria Ocasio-Cortez would order troops to shoot to re-open abortion clinics were Missouri or North Dakota, or any city, to shut them down. As Francis Buckley argues in American Secession: The Looming Breakup of the United States, some kind of separation is inevitable, and the options regarding it are many.

It is notable that Codevilla’s strategy is not marked by grandiose gestures of independence or a yearning to re-create the glorious military victories of the days of yore. Such were the mistakes of the Confederates in the mid-nineteenth century.

Interestingly, Codevilla’s more sensible approach shares quite a bit in common with the strategies recommended by Hans-Hermann Hoppe in his essay “What Must Be Done.” The idea is to assert local control and refuse cooperation with federal policymakers. But with restraint. Hoppe writes:

It would appear to be prudent … to avoid a direct confrontation with the central government and not openly denounce its authority or even abjure the realm. Rather, it seems advisable to engage in a policy of passive resistance and non-cooperation. One simply stops to help in the enforcement in each and every federal law. One assumes the following attitude: “Such are your rules, and you enforce them. I cannot hinder you, but I will not help you either, as my only obligation is to my local constituents.”

Consistently applied, no cooperation, no assistance whatsoever on any level, the central government’s power would be severely diminished or even evaporate. And in light of the general public opinion, it would appear highly unlikely that the federal government would dare to occupy a territory whose inhabitants did nothing else than trying to mind their own business. Waco, a teeny group of freaks, is one thing. But to occupy, or to wipe out a significantly large group of normal, accomplished, upstanding citizens is quite another, and quite a more difficult thing.

Some will be unable to break out of the mindset that the United States must forever be governed by a singular national policy. They will insist any attempt at decentralization of this sort must necessarily result in violence.

Writing at The American Conservative, Michael Vlahos, for example, appears unconvinced that violence can be avoided. But even he concedes the violence is unlikely to take the form of mass bloodshed as seen in the 1860s:

Our antique civil wars were not bound to formal rules, yet somehow they held to well-etched bounds of expectation. American society today has very different norms and expectations for civil conflict, which certainly will constrain how we fight the next battle.

Today’s America no longer embraces a national landscape of an industrial-lockstep battlefield (think Gettysburg, D-Day). Our next civil war — as social media so eloquently reminds us — will enact its violence on a battle campus of equal pain, if less blood.

Many devotees of perpetual federal supremacy, of course, won’t admit even this. Any attempt at decentralization, nullification, or secession is said to be invalid because “that was decided by the Civil War.” There is no doubt, of course, that the Civil War settled the matter for a generation or two. But to claim any war “settled things” forever, is clearly nonsense.

It is true, however, that if the idea of a legally, culturally, and politically unified United States wins the day, Americans may be looking toward a future of ever greater political repression marked by increasingly common episodes of bloodshed. This is simply the logical outcome of any system where it is assumed the ruling party has a right and a duty to force the ways of the one group upon another. That is the endgame of a unified America.