In a surprising and sudden move, Trump has signed an executive order that enacts a complete ban of entry into America from citizens of seven countries: Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen. Except for Iran, most of them are or have recently been war zones with three of the countries – Iran, Sudan and Syria – already on the US State Sponsors of Terrorism list.
Restrictions were expected as he promised them during his campaign, but the indiscriminate nature of the ban, combined with its initial application to green card holders, raised questions regarding Trump’s commitment to the rule of law, the competence of his team as well as increased uncertainty on the economy.
The backlash has been considerable, most notably from Silicon Valley. Sam Altman, the president of Y Combinator, called on the tech industry to stand up and they did. CEO after CEO, who in combination control companies worth trillions, contemned the indiscriminate ban. Mike Belshe, the CEO of Bitgo, joined the calls as did the Digital Currency Group and many other bitcoiners.
Our space, of course, is global. Bitcoin is used by Europeans, Arabs, Mexicans, Chinese, Russians, Africans, Americans and everyone in between. All of them are welcomed. The freedom of movement we enjoy, combined with its exchange of ideas, has been one secret ingredient that has given us much prosperity. It is by character we judge, not any other irrelevant quality. This principle has given us great strength with the best example being the welcoming of Einstein who considerably contributed towards the ending of the second world war.
Few, therefore, would find an indiscriminate ban acceptable. Would, for example, Malala Yousafzai, who stood up for women’s rights, be banned if she was born in Yemen? Would the next Einstein be banned even though he obviously poses no danger and might even give us great strength?
The inclusion of green card holders in the ban may indicate that some of the advice Trump is receiving is from incompetent individuals as the way this was implemented has placed his commitment to the rule of law in question and increased uncertainty regarding the way some of his other promises will be implemented.
In particular, some are now wondering whether he will actually really place a 45% tariff on Chinese goods, an act that may send the world economy down tanking. Reflecting the uncertainty, stocks are already down, the dollar is falling, while bitcoin has suddenly gone up by $40.
However, although Trump may be many things, stupid is unlikely to be one of them. The initial strictness of the order, regardless of whether one agrees or disagrees, is a textbook negotiation tactic. The quick removal of green card holders from the ban might make the rest slightly more acceptable. The initial complete ban might make the eventual probable loosening of the rules to take into account exceptions as a more acceptable end status quo.
Moreover, the target itself, despite wide opposition, is a somewhat soft pick to show to Mexico, China and perhaps even ISIS, that he actually means business. They, or any rational observer, can no longer be sure that the 45% tariff or any other of his statements are a negotiation tactic.
Still, a sudden tariff on China would have a very different response. Rather than open letters and some protests, the stock market would probably instantly crash and the economy he promised to make great again would return to recession or worse. As such, it remains very unlikely, but instead of just a negotiation tactic it can now be considered as a realistic threat.
To illustrate, he hasn’t yet said or done anything in regards to China where the economy is concerned, with the exception of repealing the Trans-Pacific Partnership. It is doubtful he will before meeting his Chinese counterpart for talks on how the relationship moves forward.
If we judge impartially, what Trump has done so far is largely in line with what he has promised. For our space in particular, he has frozen any new regulations pending review and signed an order requiring the repealing of two regulations for any one enacted by federal agencies. He has set up a new system to fast-track infrastructure projects as well as imposed a lifetime ban on administration officials lobbying foreign governments and a five-year ban on other types of lobbying.
He did sign an order for the wall, delivering on that promise, even though many, including some of his supporters, do not agree with the building of an actual wall. America could, instead, have a Marshall plan for Mexico, its own neighbor, as it worked perfectly well for Europe.
Most controversially, the indiscriminate nature of the ban is surprising, but it appears to have less to do with immigration or Muslims in general and more to do with perhaps ending this 15 years long war we have been fighting that has cost around three million lives in Afghanistan, Syria and Iraq, including the lives of thousands of Americans, both soldiers and civilians, as well as many European, not to mention the trillions dollar cost.
Towards that end, Trump has signed an order requiring a plan within 30 days to defeat ISIS. The plan should include “recommended changes to any United States rules of engagement.” It does sound terrible and it probably is. Nor do we know whether it would work. If it doesn’t, it would most probably cost him the presidency and his reputation.
Considering the complicated task that Trump faces, from Mexico to China, Europe, Russia and Arabia, bitcoin may continue to attract attention as an easier means of wealth storage and transportation, but Trump shouldn’t be underestimated. He withstood the opposition of the entire media, all of the establishment and even the revolt of his own party during the election campaign and still rose to be the most powerful man in the world mainly because he retained the support of his base and attracted the support of independents.
Retaining such support now may be more difficult as there is no other candidate for comparison, leaving his actions to be judged solely on their own merits. As such, he can scarcely afford shambles like the blanket ban which may benefit bitcoin, but does little to persuade independents who may now be on the fence, waiting for the picture to become slightly more clear. Until it does, bitcoin may rise as Trump continues his first 100 days in power, but, depending on his future statements or actions, it may be a temporary reaction.
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Last modified: March 4, 2021 4:54 PM