Education, Politics, United States

The US administration’s attack on universities is an affront to democracy

AMERICAN UNIVERSITIES

IN the authoritarian playbook, enfeebling universities is an early move in the state seizing control. It has been studied eagerly by the likes of Viktor Orbán in Hungary. Authoritarians and one-party states centrally target universities with the aim of restricting dissent. There are instances now, too, where scholars of influential universities in America, such as Yale, are leaving the US for other countries such as Canada because of the political climate and the battle that is escalating over higher education.

It is not merely because universities are often bastions of liberal attitudes and hotbeds for protest. They also constitute one of the critical institutions of civil society; they are a bulwark of democracy. The Trump administration is taking on judges, lawyers, NGOs, and the media: it would be highly surprising if universities were not on the list. They embody the importance of knowledge, rationality, and independent thought.

The evidence is now clear to see. In a typically brazen move, Donald Trump has accused Harvard of being a threat to democracy, and has become one of his administration’s top targets. The US government is attacking diversity, equity, and inclusion efforts, and says it is tackling the failure of universities to root out antisemitism – a claim that is widely challenged. While most Trump supporters are unlikely to take issue with cutting billions of dollars of public spending on wealthy elite institutions, it has to be recognised that much of that money goes to scientific and medical research that enriches the US as a nation and benefits vast numbers of people who have never ventured near an Ivy League university.

The administration’s shocking demands of Harvard include federal oversight of admissions, the dismantling of diversity programmes, the curtailment to recruitment of international students “hostile to American values”, and the compelled hiring of “viewpoint diverse” staff.

Harvard has commendably chosen to fight back. Its president, Alan Garber, insists the university will not surrender its independence or relinquish its constitutional rights. It is suing the government over the freeze on $2.2bn in federal funding, part of a threat to withhold $9bn. That is encouraging others to speak out. More than 150 university presidents have signed a joint letter denouncing “unprecedented government overreach and political interference”.

Many have pointed out that the world’s richest university can afford to stand firm thanks to its unrivalled $53bn endowment and sympathetic billionaire alumni. Nonetheless, that same prestige and power is what has made it the primary target: force it to fold, and weaker institutions will follow. It’s worth noting that Harvard toughened its position after faculty, students, and alumni pushed hard for it to do so, warning that concessions would only encourage the administration. Columbia acquiesced to an extraordinary list of demands but some $400m of withheld funding has yet to be restored, and the administration is reportedly seeking to extend control over the university.

Troubling, because whatever comes of Harvard’s lawsuit, this is an administration that has already chosen to ignore court rulings. It may step up its assault, by revoking charitable status and clamping down on international students. Still, Harvard is fighting back not just because it can, but because it must. In doing so, it is defending not only academic freedom, but democracy more broadly. It will inspire others to do the same.

Standard
Europe, Russia, Ukraine, United States

US-Russian bilateral talks on Ukraine: Europe is alarmed

UKRAINE

DONALD Trump’s latest attack on Volodymyr Zelensky, and the US administration’s last-minute snub of London peace talks, is the clearest evidence yet that what matters to Mr Trump is not Ukrainian sovereignty and safety, nor the transatlantic alliance, but a deal with Vladimir Putin. The US president says an agreement is close, with Washington recognising annexed Crimea as Russian with Moscow conceding little if anything in return. For Mr Trump, it is Ukraine’s president who is once again harming negotiations by saying he will not recognise Russia’s control.

Putin is fervent in his desire to maximise Russian interests, attentive to every detail, adept in negotiations, and strongly believes that time is on his side. Trump does not care about the outcome as long as he can claim he has ended the war. He has little interest in the detail and has a habit of handing over the prize at the start of the process.

Just prior to the 2022 full-scale invasion, Trump described Russian aggression towards Ukraine as “genius”. His administration is also now abandoning efforts to hold Moscow accountable for war crimes. He holds a grudge against Mr Zelensky, and believes Putin would “keep his word” on a peace deal. Above all else, Trump is in a hurry. Having pledged before coming to the White House for his second presidency that he could end the war “in 24 hours”, he wants something to boast about as he nears the end of his first 100 days in office.

After so many deaths and so much devastation, no one wants peace more than Ukrainians. Kyiv understands that there will be no magical restoration of territorial integrity, but the indications are that it is ready to negotiate, not to surrender.

JD Vance, the US vice-president, has a simple answer: it is time for the two sides to “either say yes or for the US to walk away from this process”. US military aid to Ukraine is already reaching its end, intelligence could soon follow, and Washington could also restrict arms purchases even if Europe was willing and able to fund them to the extent needed.

Putin has played an expert hand so far, throwing expediency to the cause at opportune moments – as with the offer of an “Easter truce”, which did not halt attacks. His most recent gambit is reportedly to offer to cede claims on Ukrainian land that Russia does not actually control – concessions that Trump will undoubtedly laud. He does not want a European “reassurance force” in Ukraine, said to be part of the US proposal, but may also conclude that its significance would be limited without a US security guarantee.

The timing of the US plans, as well as demeaning Europe’s diplomatic efforts – meaning London’s discussions were downgraded – reinforces the European understanding that a US-brokered deal may be a beginning, not the end, for Russian ambitions. But such a grotesquely one-sided, imposed agreement would encourage territorial aggression elsewhere too. It isn’t surprising that Putin sees Europe as an obstruction and prefers bilateral talks. It should continue to alarm and appal us that the US, too, now sees its old allies as the problem, and not part of any solution.

Standard
Banking, Economic, Government, IMF, Politics, Society, United States

Trump’s economic agenda collides with fragile financial systems

FINANCIAL ECONOMY

THE International Monetary Fund (IMF) is renowned for its rational level-headedness and is the calmest of all the global institutions. But when these usual and calm ideals are abandoned by technocrats to sound the alarm on the political roots of global financial instability, it’s time to pay close attention. The IMF is warning of a non-negligible risk of a $1tn hit to global output, as Donald Trump’s erratic “America first” agenda (part oligarchic enrichment scheme, part mobster shakedown) collides with a perfect storm of global financial vulnerabilities.

Such a shock would be equivalent to around a third of that experienced in the 2008 crisis, and would be felt in a much more fragile and politically charged environment. This time, the crisis stems not just from volatility in the markets, but from the politics at the heart of the system governing the US dollar. The IMF’s latest Global Financial Stability Report sees the danger in Trump’s trade policies, especially his “liberation day” announcements, which have pushed up America’s effective tariff rate to the highest in over 100 years.

The IMF has given notice to investors that Trumpian instability was taking place as US debt and equities – especially tech stocks – were overvalued. It cautions that hedge funds have made huge bets that have gone sour, requiring them to sell US treasuries for cash and potentially deepening the chaos in bond markets. Ominously, the IMF draws the comparison, first made by the analyst Nathan Tankus, with the “dash for cash” in 2020 during Covid. Then, the Federal Reserve rescued US treasury markets directly. Developing nations, already grappling with the highest and real borrowing costs in a decade, may now be forced to take on even more expensive debt just to cushion the blow from Trump’s new tariffs, risking a much feared “sudden stop” in capital flows.

At the heart of this chaos stands the US, the very country met to uphold the global financial architecture. Troubling, too, is the warning from Columbia University who have wondered whether the markets had begun to “sell America” after US long-maturity bond prices fell precipitously. The thinking is that markets were no longer responding to economic fundamentals but to politics as a systemic risk factor. In this case: Trump’s tariff threats and his increasing political pressure on the Fed’s chair, Jerome Powell.

Trump’s relentless attacks on the Fed chair have only added to capital flight from US equities, bonds, and the dollar itself. The money is fleeing to safe havens such as gold. Some of the loss has been clawed back, but at what cost? Investors aren’t just nervous about inflation or growth – they’re hedging against political chaos. That might explain the seemingly divergent IMF messaging: blunt systemic warnings in its report versus the soothing market-facing comments from a senior official at the IMF’s press conference. This is central bank diplomacy. The institution is signalling that it is worried while trying not to spark a self-fulfilling panic in treasuries and the dollar.

The real issue and concern here is not technical dysfunction in treasury markets or the mechanics of the Federal Reserve, which are the underpinning and bedrock of the global financial system. It’s about the politicisation of the monetary-fiscal nexus under a Trump regime that is fundamentally hostile to the norms of liberal-democratic governance. When even the dollar is no longer a safe haven, what – or who – can be?

Standard