The National Intelligence Bulletin is a weekly look at domestic systems disruption, and threats to social, political, economic, and financial stability in the United States. This report is available each week for Intelligence subscribers.
In this National Intelligence Bulletin…
- InFocus: Sustained escalation in political warfare
- Removal of political guardrails increases risk of reaction
- Continued voting turmoil risks future election integrity
- Carlson on Trump, Democrats, and the future of America
- Various information coming from Democrats
- Toll Brothers: Housing slowdown occurring
- Economic/Financial Watch commentary
- And more…
InFocus: This week I highlight what’s going on in Wisconsin and North Carolina as examples of how our domestic conflict is accelerating.
First, in Wisconsin, which is always politically contentious, the Republican-controlled state legislature is set to limit the ability of an incoming Democratic governor from overturning Republican policies. In North Carolina, election results could end up being voided after voting irregularities and allegations of Republican voter fraud. (Democrats in Congress are threatening that they won’t seat the Republican victor over those allegations, and the Republican candidate said he would support a new election if those allegations proved true. Results are up in the air, to say the least.) The media pitches in with their own accusations that Republicans are rule-bending and removing guardrails that protect the electoral and political system.
Priority Intelligence Requirements
PIR1: What are the new significant indicators of disruptive political, social, or cultural conditions or events?
PIR2: What are the new significant indicators of threats to economic or financial stability?
PIR1: What are the new significant indicators of disruptive political, social, or cultural conditions or events?
Major Trends:
- Ongoing political instability due to high stakes political warfare
- Removal of political guardrails increases risk of reaction
- Continued turmoil risks future election integrity
- Simmering social grievances based on race, class, and political ideology contributing to sporadic violence
- Ongoing culture war features information operations and economic warfare
Continued turmoil risks future election integrity
Accusations of ballot harvesting — the ‘legal’ practice of allowing a third-party to collect a ballot on one’s behalf and drop it off at a polling station — in California may be to blame for Republicans’ disastrous showing in last month’s election. The California law may have been exploited to allow voter fraud. [source] And in North Carolina, election results in the 9th District may be overturned after what are apparently serious accusations of voter fraud. The Republican candidate says he’s open to holding another election if the fraud is real, and the North Carolina state GOP chair appears to believe that accusations are true. [source]
What’s not in dispute is that some districts in the last election are still being disputed. And the appearance of voter fraud, combined with actual cases and the statistics that point to voter fraud, could have long term consequences on election integrity. Florida’s debacle is a prime example that could cast suspicion or doubt in future election cycles. So far, voters have proved to be resilient, if last month’s election turnout is accurate; indicating that some faith remains in the voting system. But overall, the potential for civil unrest and violence over contested elections, fraud, or disenfranchisement is more likely than voters abandoning the electoral process.
Carlson on Trump, Democrats, and the future of America
A couple weeks ago I noticed New Right influencer Mike Cernovich souring on President Trump, asking his mostly Trump-supporting followers whether or not they were tired of defending their president. This week, in an interview with Swiss magazine Die Weltwoche, Fox News host Tucker Carlson also appeared to grow tired of being a cheerleader. Carlson admits that he hates President Trump’s boastful nature and that the president hasn’t followed through on his promises, despite nearly two years in office. “His chief promises were that he would build the wall, de-fund planned parenthood, and repeal Obamacare, and he hasn’t done any of those things,” Carlson says, adding that President Trump isn’t capable of delivering on his promises. “I don’t think he understands the system. I don’t think the Congress is on his side. I don’t think his own agencies support him… I’ve come to believe he’s not capable of it.” Carlson continues: “[H]e knows very little about the legislative process, hasn’t learned anything, hasn’t surrounded himself with people that can get it done, hasn’t done all the things you need to do so. It’s mostly his fault that he hasn’t achieved those things.”
Tucker Carlson admits that he doesn’t favor populism, but does add that “Populism is what you get when your leaders fail. In a democracy, the population says this is terrible and they elect someone like Trump.”
Going in another direction, Carlson says that Democrats like incoming Rep. Alexandria Ocasio-Corez, a democratic socialist from New York, are “the future”; presumably of the party, if not the country. Speaking about social and economic changes following the industrial revolution, Carlson says, “You’re seeing the exact same dynamic play out today, we have another, as I said, economic revolution, the digital age, which is changing how people work, how they make money, how families are structured. There is a huge reaction to that, of course, because there always is, because normal people can’t handle change at this pace. People are once again crying out for some help. They feel threatened by the change. What bothers me is that there is no large group of sensible people asking, how can we buffer this change? How can we restrain it just enough, not to stop it, but to keep people from overreacting and becoming radical?”
As for violence, Carlson says he doesn’t believe a revolution is close. “I don’t think that we’re anywhere near an outbreak of civil war, armed violence between two sides for a bunch of different reasons… What you don’t have, prerequisite for revolution, violent revolution, is a large group of young people who are comfortable with violence and we don’t have that. Maybe that will change.” (Analyst Comment: There is absolutely a growing sense on the Far Right and Far Left that violence will be a necessary part of political movements in the future. Their willingness to carry out armed violence may be up for debate, but the rhetoric supports violence as a plank of political platforms.) “What I see happening most likely is a kind of gradual separation of the states… Technology is the driver of the change, so sweep aside the politics, the fundamental fact about people is they can’t metabolize change at this pace because as an evolutionary matter, they’re not designed to, they’re not… You know [people say as they get older]? ‘Things are too different. This is not the country I grew up in. I don’t recognize this.’ All people hate that. It doesn’t mean you’re a bigot, it means you’re human. Unless you want things to fall apart, become so volatile that you can’t have a working economy, you need to get a handle on the pace of change. You have to slow it down… [Immigration is] central because nothing changes the society more quickly or more permanently than bringing in a whole new population… The Chinese would never accept this pace of demographic change not simply because they’re racist, though of course, they are, but that’s not the point. The point is because they don’t want their society to fall apart because they’re in charge of it. The childlike faith that we have in America, and America is the worst at this, that all change is good and that progress is inevitable and if something is new and fresh and more expensive, it’s got to be better.” [source]
Various information coming from Democrats
In a tongue-in-cheek comment this week, Democratic strategist Donna Brazile was asked how many Democrats were running in the 2020 primary. She said “30”, and Hillary Clinton wasn’t going to be among them. Regardless, out of that field of 30, Democrat strategists believe they should be able to find a candidate who can adopt a left wing version of the populist sentiment that propelled Trump to victory, while focusing on the economy to send a message to voters that he or she can do better things for the country than President Trump, and beat him at style and compassion. That’s one potential path going forward, especially for outgoing Rep. Beto O’Rourke (D-TX), who just secured a major Obama donor this week. Chicago financier Louis Susman says, “It’s time to pass the torch to a new generation. I have nothing against the Bidens and Kerrys of the world and all of these senators that are looking at it, but I think the Beto example is what inspired people and what we are going to need.” O’Rourke, who lost his Senate bid to Sen. Ted Cruz (R-TX) last month, recently met with former president Barrack Obama. And speaking of the new generation, in a tweet this afternoon, incoming Rep. Ocasio-Cortes (D-NY) threatened Donald Trump Jr. with a subpoena over his joke to her about eating dogs under a socialist economy. “I have noticed that Junior here has a habit of posting nonsense about me whenever the Mueller investigation heats up. Please, keep it coming Jr – it’s definitely a ‘very, very large brain’ idea to troll a member of a body that will have subpoena power in a month.” [source] Lastly, talk about radical political change continues, most recently with retired representative John Dingell (D-MI), the longest serving Congressman in history at 59 years, penning an opinion piece for the Atlantic in which he calls for the abolition of the electoral college. Dingell also takes aim at the coming Senate imbalance:
“My friend Norm Ornstein, a resident scholar at the American Enterprise Institute, sees a demographic shift coming that will effectively transform us into two countries… There is a solution, however, that could gain immediate popular support: Abolish the Senate. At a minimum, combine the two chambers into one, and the problem will be solved. It will take a national movement, starting at the grassroots level, and will require massive organizing, strategic voting, and strong leadership over the course of a generation.” [source]
(Analyst Comment: The “Abolish the Senate” movement is going to be a real movement the closer we get to the coming Senate imbalance. If the current demographic trend continues, the most populace 15 states — holding 70% of the country’s residents — will have 30 senators, while the remaining 35 states — holding just 30% of the residents — will have 70 senators. Democrats point to that as being very undemocratic, while ignoring the deliberate difference between the House and Senate. The House represents the People’s interests and the Senate represents the states’ interests. This plan is not immediately viable, but there’s a developing grassroots movement that Dingell says will be required for any chance at abolishing the senate. And as long as the Republicans can use majority Senatorial powers to stymie uncontested Democratic powers, Democrats are likely to pursue a plan that diminishes that power. Abolishing the senate gets them there.)
PIR2: What are the new significant indicators of threats to economic or financial stability?
Significant Developments:
- Trade war with China poses risk to U.S. farmers and manufacturers, emerging markets
- Unsustainable national debt to increase due to trillion dollar budget deficits in 2019+
- High potential for an economic recession around 2019-2020 that causes significant financial disruption
- Rising interest rates are moderating economic growth
Toll Brothers: Housing slowdown occurring
Toll Brothers CEO Douglas Yearley write in a fourth quarter earnings report that, “In November, we saw the market soften further, which we attribute to the cumulative impact of rising interest rates and the effect on buyer sentiment of well-publicized reports of a housing slowdown.” Toll Brothers, whose new home contracts dropped by 13 percent in the past year, is one of the country’s largest home builders. While Yearley does point out current positive economic factors that he says supports long term demand, many of those factors (like historic unemployment and “wealth creation in the stock market”) would be at risk if concerns about an economic slowdown and recession materialize. [source]
Economic/Financial Watch
Over the weekend, President Trump and Chinese president Xi Jinping met in Argentina and came to an agreement over two things. The first is that the Chinese will label fentanyl, a highly addictive opioid contributing to a national crisis, as a controlled substance. It means that the Chinese may actually work towards preventing the manufacture and distribution of the drug into the United States. The second agreement is ‘non-escalation’ in the trade war. That means no increases in tariffs for 90 days while a negotiation framework can be developed by both sides to bring an end to the trade war. As a part of that agreement, China reportedly will increase its purchases of U.S. agricultural products, in addition to other steps to promote cooperation between the U.S. and China. [03 Dec]
This morning, there’s lots of talk about a flattened yield curve. An inversion of the 10-year Treasury yield and the 2-year Treasury yield has been a solid indicator of a recession on the horizon, and we got pretty close yesterday. The 10-year sits at 2.964 this morning, and the 2-year is at 2.825. There was a crossover of the rising 2-year over the 3-year and 5-year yields, which is potentially a warning for the 10-year. Overall, it means that investors see greater risks over the next two years. It’s also a cyclical process, which is why this indicator tracks so well with recessions. [04 Dec]
These economic/financial briefs appear each morning in the Early Warning intelligence report. You can sign up for this email on your My Account page.
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