Can We Call This Anything But Piracy?: TUESDAY CHAOS-MONKEY TRUMPISM
Isn't this piracy? What could make it not piracy, other than a congressional declaration of a war to conquer & annex the Strait of Hormuz to the USA? And isn't piracy not only a bad thing...
Isn’t piracy against the law? When the president claims a royal right to tax global commerce over waterways half the world away from America, the rule of law walks the plank.…
I mean: treaties are supposed to be binding, THE LAW OF THE LAND, generating rights, which are then, under the rule of law, enforceable, the same ways other LAWS OF THE LAND are enforceable:
This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding…
There is nothing in the constitution or laws of any state to the contrary except for unlawful Supreme Court declarations without textual or historical authority that the president is a king in anything touching “foreign policy”.
Executive-branch actions in violation of treaties are not “tak[ing] care that the laws be faithfully executed”. I suppose you could cavil over whether nulling them is the court’s business or the congress’s business through impeachment, but the whole Supreme Court power grab starting with John Marshall strongly suggests that it is the court’s business, doesn’t it?
And this is piracy. Which we have agreed to suppress, worldwide:
John Authers: Misunderstanding & Reflexivity <https://www.bloomberg.com/opinion/newsletters/2026-07-14/us-iran-check-the-oil-price-before-pushing-limits>: ‘Henceforward July 14 may also be known for the blocking of the Strait of Hormuz. The US has announced that it will hold up traffic through the crucial waterway starting Tuesday, and levy a 20% charge…. The move amps up uncertainty, and markedly adds to the upward pressure on materials prices. Last month’s Memorandum of Understanding to pause the war between the US and Iran, always ambiguous over exactly who could control the Strait and on what terms, appears now to be a dead letter. The failure has been immediately felt in oil prices, with Brent crude for December delivery now more expensive than when President Donald Trump signed the MOU…
Markets themselves are… not simply responding to… facts… [but] creat[ing] them. Last month, an over-rapid decline in oil prices relieved… pressure… and increased… temptation to misbehave…. Marko Papic…. “The irony of this situation is that oil prices are an independent variable, not a dependent one. Both Iran and the US synchronize their kinetic activity with a particular sensitivity to oil prices themselves. When they are low, kinetic [military] activity ramps up. When oil prices rise, suddenly negotiations are back on the table…” Tina Fordham of Fordham Global Foresight said another period of sustained high oil prices might be needed to persuade the US that Iran can’t be bombed into capitulating, “so in that sense the absence of a major energy shock has provided space for this conflict to re-escalate markedly”…
Brad DeLong here: If the piratical practice of presidents improvising piratical toll‑booth empires in strategic straits half the world away and courts retreating behind self‑execution technicalities is not a betrayal and a constructive repeal of the fundamental design principle of the American constitution that the president is a magistrate to faithfully execute congress-passed laws rather than a king with sovereign powers derived from Divine Right and salus populi suprema lex, it is not clear to me what it could be.
The market reaction is also very interesting. As I understand it, markets have concluded—rightly—that Donald Trump is simply a chaos-monkey, and there is no point in trying to forecast what the hell he will do. In that case, we are more than usually cast into the world Keynes foresaw back in 1936:
John Maynard Keynes (1936): The General Theory of Employment, Interest & Money <https://www.files.ethz.ch/isn/125515/1366_keynestheoryofemployment.pdf>: ‘Classes of investment are governed by the average expectation of those who deal on the Stock Exchange… rather than by the genuine expectations of the professional…. In practice we have tacitly agreed, as a rule, to fall back on what is, in truth, a convention… that the existing state of affairs will continue indefinitely, except in so far as we have specific reasons to expect a change. This does not mean that we really believe that the existing state of affairs will continue indefinitely. We know from extensive experience that this is most unlikely.… Nor can we rationalise our behaviour by arguing that to a man in a state of ignorance errors in either direction are equally probable… [as] our existing knowledge does not provide a sufficient basis for a calculated mathematical expectation….
[This] convention… will be compatible with… continuity and stability… so long as we can rely on the… convention…. An investor can legitimately encourage himself with the idea that the only risk he runs is that of a genuine change… over the near future… which is unlikely to be very large…. He need not lose his sleep merely because he has not any notion what his investment will be worth ten years hence… if he can fairly rely on there being no breakdown in the convention….
It is not surprising that a convention, in an absolute view of things so arbitrary, should have its weak points…
Thus, in the limit, it becomes hopeless to expect the market to in any sense discipline Trump by signaling that his disastrous policies are in fact causing disasters. The market is not going to signal that, since Trump’s announcements are not in any sense policies. Moreover, since there is a very strong and correct expectation that many of Trump’s announcements are intended to spook the market, so that he and his favored can benefit by insider trading on their reversal tomorrow, you would be a fool if you did react to anything Trump says he is going to do until things start blowing up on a large scale.
Words don’t fail me, clearly. But coherent thought definitely does. However, here are a few thiings to think about:
Treaties nullifiable by tweet are not “law”; they are, at best, presidential mood music.
Trump has just legitimized every future regional bully—including China in the South China Sea.
A president who can unilaterally tax world commerce at Hormuz, he has discovered a new, extra‑constitutional prerogative-based revenue power.
George Soros’s concept of “reflexivity” bites here, as markets move on Hormuz news, and those moves then feedback into both Trump’s and Iran’s incentives in ways that keep there from being anything like an equilibrium—or even a homeostasis.
When investors rationally refuse to react to presidential statements, the feedback channel from bad policy to political cost simply snaps. Markets can discipline a government that is foolish; they cannot discipline a government that is both lawless and willing to trade on its own surprises.
Once investors assume reversals are staged for trading gains as a president discovers he can move markets by improvising blockades and can fund his friends by timing the improvisations, investors are complicit if they respond, and fools if they do not—and likely to be wrong no matter what they do.
Oil‑price spikes triggered by presidential piracy act like an off‑budget regressive tax on every oil‑using household on earth.
The most serious piracy is not in the Strait of Hormuz but in the ongoing hijacking of the American constitutional order for kleptocracy.
A United States that has twice elected Trump will never again be able to make any international commitments: in the future we will not have any sort of rule-based international order, but merely states of affairs that balance immediate benefit flows with threats of retaliatory tit-for-tat game-theoretic punishments. The lesson: never again trust an American signature on anything that cannot be enforced against a feral White House by imposing immediate retaliatory pain.
The judicial retreat into “self‑execution” technicalities is a huge deal—it makes “foreign policy” a Divine Right royal prerogative, and the Take Care Clause a pious fiction.
The Hormuz blockade shows how easily “national security” rhetoric is now weaponized into raw rent extraction from global commerce.
The court’s message so far has been that the president may loot treaty obligations today and the judiciary will consider the separation‑of‑powers issues sometime next term.
The signal to ambitious future presidents is clear: if you want more power, do not ask for statutes—create “facts on the ground” and dare anyone to unwind them. Presidential “foreign policy” is defined as everything that touches a customs duty, a blockade, or a sanction, and so the foreign‑policy exception has eaten the Constitution entire.
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This reminds me of Karl Rove's famous statement to Ron Susskind:
<i>“We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality — <strike>judiciously, as </strike> <u>by the judiciary</u>, if you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.”</i>
Agreed on all. A 20% tax would be a strong punishment to his supposed Gulf allies, whose oil and fertilizer would be at a huge price disadvantage. As an amazing concession, he will lower it to 10% as an introductory offer. Even that can get an exception by greasing an itchy palm.
The only way to enforce protection and justify the tax is for US warships to escort commercial ships. That creates a huge incentive for Iran to strike not only the merchant ship, but also the warship. They will figure out how. Video of a sinking US destroyer is worse than boots on the ground. For all the talk, the President is risk-averse in battle.
Iran has agency supported by missiles, drones, satellite intelligence, and Chinese supplies. They can expand the battlefield and the targets at will. Meanwhile, the person who says he has all the cards doesn't know how many are in a pack. We cannot dismiss stupidity.
This reminds me of Karl Rove's famous statement to Ron Susskind:
<i>“We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality — <strike>judiciously, as </strike> <u>by the judiciary</u>, if you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.”</i>
Agreed on all. A 20% tax would be a strong punishment to his supposed Gulf allies, whose oil and fertilizer would be at a huge price disadvantage. As an amazing concession, he will lower it to 10% as an introductory offer. Even that can get an exception by greasing an itchy palm.
The only way to enforce protection and justify the tax is for US warships to escort commercial ships. That creates a huge incentive for Iran to strike not only the merchant ship, but also the warship. They will figure out how. Video of a sinking US destroyer is worse than boots on the ground. For all the talk, the President is risk-averse in battle.
Iran has agency supported by missiles, drones, satellite intelligence, and Chinese supplies. They can expand the battlefield and the targets at will. Meanwhile, the person who says he has all the cards doesn't know how many are in a pack. We cannot dismiss stupidity.