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The Dictatorship

Why Bill Clinton was so afraid of bond traders — and Donald Trump should be too

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Why Bill Clinton was so afraid of bond traders — and Donald Trump should be too

President-elect Donald Trump will sweep into office in January with few formal checks to his power. Republicans control the House and Senatewhile a conservative majority sits on the Supreme Court. For his critics, it’s a dispiriting time.

But as other presidents have learned, there are some checks and balances that aren’t described in your AP Gov textbook.

An unlikely one surfaced recently as veteran Wall Street strategist Ed Yardeni cautioned that investors in U.S. bonds could play a critical role in forcing the incoming Trump administration to back down from its plans for an all-out trade war with everyone from China to Mexico and Canada.

Reviving a term he first coined in the 1980s, Yardeni warned that “bond vigilantes” could take action if Trump’s plans go too far.

Like Batman, these vigilantes only swing into action when the system isn’t working. Instead of putting on a costume and roughing up street punks, though, they simply sell off 10-year government bonds when they think the government isn’t being serious about long-term fiscal policy. That may not sound dramatic, but it can have huge effects, raising the costs of government borrowing and even forcing the Federal Reserve to change course.

There’s a great anecdote demonstrating exactly how serious this threat can be in Bob Woodward’s book “The Agenda,” about the early days of Bill Clinton’s presidency. The Arkansas governor had not yet taken office when he sat down for a briefing on his economic plans. One of his advisers then explained how a lot would depend on whether bond traders thought his plans to reduce the deficit were credible.

“At the president-elect’s end of the table, Clinton’s face turned red with anger and disbelief,” Woodward wrote. “‘You mean to tell me that the success of my program and my re-election hinges on the Federal Reserve and a bunch of f—— bond traders?’ he responded in a half-whisper.”

More recently, bond vigilantes in Great Britain were blamed for the downfall of Prime Minister Liz Truss. After she announced a package of energy subsidies and tax cuts that would be paid for by raising deficits, investors in British government bonds rebelled, causing interest rates to rise and hurting the pound. Truss’ party revolted, and she was forced to resign after just a few months in office, famously outlasted by a slowly rotting head of lettuce.

There’s no risk of something quite so dramatic in the U.S., where bond traders don’t have nearly as much influence due to the strength of the dollar. But Wall Street analysts point to ways in which Trump’s plans to dramatically disrupt the federal government and foreign trade could backfire on him.

If bond traders start to think that deficits are getting too high due Trump’s tax cuts, they could get antsy.

If bond traders start to think that deficits are getting too high due to Trump’s tax cuts and inflation is going to make a comeback due to his tariffs, they could get antsy. If they start selling, the government has to raise interest rates to compensate, borrowing gets more expensive, the Federal Reserve starts worrying more about inflation, local chambers of commerce start nervously calling up their Republican representatives — and suddenly Trump doesn’t have quite so compliant a Congress.

The same dynamic can play out in a number of different ways over the next four years, in part due to Trump’s blunt-force proposals for his second term.

Trump’s plans for mass deportations will be checked by responses from civil rights activists, immigration lawyers, farmers, Democratic state attorneys general, federal judges and foreign officials. His plans for slashing government programs will be balanced by angry constituents, labor unions, government contractors and special interest groups. And many of his plans can be thwarted by sufficient public outrage, especially as lawmakers start looking ahead to the midterms.

Trump has grand plans to remake America. He will succeed in some and fail at others. But in all of them he will face a rule of politics as ironclad as Newton’s third law of motion: Every action he takes will have an equal and opposite reaction somewhere else.

The first response to watch may very well be from vigilante bond traders. But there will be others to come, and often from equally unlikely quarters.

Ryan Teague Beckwith

Ryan Teague Beckwith is a newsletter editor for BLN. He has previously worked for such outlets as Time magazine, Bloomberg News and CQ Roll Call. He teaches journalism at Georgetown University’s School of Continuing Studies.

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The Dictatorship

Azerbaijan Airlines flight carrying 67 people crashes in Kazakhstan

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Azerbaijan Airlines flight carrying 67 people crashes in Kazakhstan
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The Dictatorship

I was twelfth on Nixon’s enemies list. I wouldn’t wish being a sitting president’s enemy on anyone.

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I was twelfth on Nixon’s enemies list. I wouldn’t wish being a sitting president’s enemy on anyone.

With talk of President-elect Donald Trump and his pick for FBI director Kash Patel reportedly assembling an “enemies list” of people to target in their incoming administration, I can’t help reflecting on my own experience being named and targeted in a similar scenario, back in the 1970s.

After serving as administrative assistant to New York City Mayor John Lindsay, I decided to switch lanes. I left City Hall and opened a restaurant called Jimmy’s on 52nd Street with Dick Aurelio, who served alongside me in the Lindsay administration as first deputy mayor. (Journalist Jimmy Breslin was going to invest with us, but he had a television contract at one of the local networks and they didn’t want his name being associated with a gin joint — but we kept the name anyway.)

Suddenly everyone at the bar starts yelling at me, “Sid! They’re talking about you on the TV!”

Located next to the 21 Club, Jimmy’s had a thriving scene with a politically connected crowd. Local elected officials were always in and out the place, including Tip O’Neill, Sen. Jacob Javits and Mario Cuomo, the future governor. Other famous personalities would hang around the bar when they were in town, including political commentator William Buckley. The televisions at the bar were always turned on, and we even had an Associated Press ticker near the door.

In June 1973, the Watergate hearings were being broadcast live. One day, suddenly everyone at the bar starts yelling at me, “Sid! They’re talking about you on the TV!” Then-White House Counsel John Dean had just testified that President Richard Nixon kept an enemies list, and I was No. 12 on that list.

The phones quickly lit up. Every reporter in town was calling the restaurant trying to get ahold of me for an interview. Every TV reporter in New York and beyond, and also my mother.

Breslin gets through to me first. Tells me he wants the exclusive. That I had just become a “national figure.” I worked out some of the details, promised I’d talk to him first, then called back my mother, who was in Florida and immediately asks, “What did you do?! Everyone is calling me saying the president doesn’t like you!” I calmed her down and went back to try to figure out what the hell was going on.

Keep in mind, I am 32 years old at the time, the son of a candy store owner from Queens. And here I am on the enemies list of the president of the United States. It was surreal.

At first, we had a blast with it. That Saturday night we hosted an “enemies’ ball” on the downstairs floor of the restaurant that included those of us who opposed the president. But after some time, it all began to take a turn. Suddenly, the IRS starts investigating me, claiming I owed hundreds of thousands of dollars in taxes in FICA for employee fees. Tack on some late fees and penalties and before you knew it, they were claiming I owed close to a million dollars. The state of New York also came after me. I was accused of embezzling funds by state Attorney General Louis Lefkowitz, who worked closely alongside Republican Gov. Nelson Rockefeller. My friends in the attorney general’s office told me they had no choice. Federal agents showed up at the apartment building of the young woman I was dating at the time. They questioned her doormen and wanted to know about my comings and goings.

Although in many ways it remains my proudest moment, the fallout was difficult to deal with. I became a target of the national government virtually overnight. The force of government coming after an individual like that is not a fun place to be.

Throughout my life I have kept asking myself, how did this all come about? Why me? In a nation of more than 200 million people at the time, why did Nixon see me and Lindsay as a such a threat? For whatever reason they couldn’t get to Lindsay, so they got to me. The next best thing, I suppose.

In the notations I was described on the enemies list as “Lindsay’s top personal aide: a first class S.O.B., wheeler-dealer and suspected bagman. Positive results would really shake the Lindsay camp, and Lindsay’s plan to capture the youth vote. Davidoff in charge.”

It was a bit of a merit of honor for me in the long term, but, man, that period was rough. Eventually, a judge threw out the indictment. I’ve since gone on to live a very full and positive life, and I wouldn’t trade any of it for anything. I think it should absolutely be carved into my gravestone: “He was lucky enough to be on Nixon’s enemies list.”

Still, I wouldn’t wish that kind of trouble on anybody. And I’m not sure anyone who finds themselves on Trump’s list will feel as lucky as I do, this many years on.

Sid Davidoff

Sid Davidoff is the founding partner of Davidoff Hutcher & Citron LLP, chair of their government relations practice and a member of the Economic Development & Tax Incentives law practice. Previously he serving as administrative assistant to New York City Mayor John Lindsay and has represented former New York City Mayor Bill de Blasio as an ex-officio trustee on the Board of Trustees of the Wildlife Conservation Society.

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The new Bob Dylan biopic isn’t a history lesson. That’s OK.

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The new Bob Dylan biopic isn’t a history lesson. That’s OK.

After a seemingly endlessthough occasionally hilariouspre-release media campaign, “A Complete Unknown,” the Bob Dylan biopic starring Timothée Chalamet, is now in theaters. As with any biopic, there are questions about its historical accuracy — both from sincerely curious fans and from nitpicking diehards.

Pay the armchair historians no mind. Yes, the film gets whole swaths of the known story of Dylan’s early days in Greenwich Village wrong, but those gripes are largely irrelevant. Hollywood has long taken artistic license in portrayals of real-life characters; what matters is how a film does it. Director and co-writer James Mangold and his co-writer Jay Cocks may not always stay true to the literal facts, but they nail the look, feel and emotional and artistic arc of Dylan’s life in the early 1960s.

As the film mentions more than once, Dylan himself began his career by creating a biography from whole cloth.

Besides, when I interviewed Dylan in 2022, and asked him how he imagined a young artist might approach weeding through the infinite choices Spotify offers, he told me, “You’d have to limit yourself and create a framework.” With so much information, so many characters and so many diverging stories making up the early days of Dylan’s professional life, Mangold took essentially the same approach, to great effect. While some may quibble, it is, after all, just a movie, not a history lesson.

Elijah Wald, author of “Dylan Goes Electric!,” on which “A Complete Unknown” is based, says he’s untroubled with the artistic license that Mangold took with his work. “The book was optioned almost a decade ago, and was going to start production just as the pandemic kicked in,” Wald says, “but I think it really benefitted from that delay. It would have been a different film. The script would have been different. And Timothee wouldn’t have had those years of absorbing himself in Dylan’s music; of learning to play the guitar and harmonica. It would have been more an imitation, because he wouldn’t have been able to go so deep. All those things add up to a very different film.”

As the film mentions more than once, Dylan himself began his career by creating a biography from whole cloth, and he has continued to fast and loose with his life’s story throughout his career. For writers covering him, parsing fact from fiction has been a fun, if sometimes frustrating task. But thanks to the dogged work of numerous writers, historians and documentarians, the story of Dylan’s early years are pretty well known, including the film’s moment at 1965’s Newport Folk Festival when Dylan strapped on an electric guitar, simultaneously decimating the cultural importance of that gathering of folk purists and essentially inventing the modern rock star.

So why let the facts get in the way of great storytelling, especially if Mangold, Cocks, Chalamet and company capture the feel and the significance of the period so well?

“There were many people who were pivotal people in the Greenwich Village scene who are not there at all; important people like Phil Ochs, Glen Chandler and Tom Paxton, which I found really irritating,” says author David Browne, author of a new history of Greenwich Village’s bohemian music scene. “But wrapping the film up in an almost completely imagined relationship between Dylan and Pete Seeger — because it was easy to make Dylan a disrupter to the Pete Seegers of the world, even though he was just as disruptive to his contemporaries — as well as a love triangle, makes storytelling sense, and I wound up really liking the film.”

Where do you start if you want to know what really happened to Bob Dylan and his fellow folkies — almost all of whom are barely even mentioned in the film — and what led him to abandon the scene that had nurtured him so unceremoniously?

Why let the facts get in the way of great storytelling?

Wald’s own “Dylan Goes Electric!” is an obvious must-read. The narrative at the book’s heart, chronicling the parallel lives of Dylan and Pete Seeger, allowed Mangold to streamline the film’s narrative, dispensing with many of the Greenwich Village characters Dylan befriended (and often exploited) in favor of Seeger as Dylan’s mentor, foil and unwitting nemesis.

And while Dylan’s own 2004 memoir “Chronicles, Volume One” is replete with half-truths, quarter-truths and not-truths, his recollections of his days in Greenwich Village are gripping, detailed and full of characters and anecdotes that capture the time and place perhaps even better than “A Complete Unknown.”

A fantastic complimentary memoir to Dylan’s is artist Suze Rotolo’s “A Freewheelin’ Time: A Memoir of Greenwich Village in the Sixties.” Rotolo was the model for the film’s Sylvie Russo — whose name and character were reportedly fictionalized at Dylan’s own request — but her relationship with Dylan was only a small part of a long and fascinating life. And while her book doesn’t ultimately paint the real-life Dylan in the most positive light, it gives amazing insight into his origin story.

Timothée Chalamet in
Timothée Chalamet in “A Complete Unknown.”Macall Polay / Searchlight Pictures

As for the broader background from which Dylan sprung, the core of Browne’s book, “Talkin’ Greenwich Village,” revolves roughly around the period when Judy Collins, Peter, Paul and Mary and eventually Dylan put the neighborhood on the map for young, aspiring East Coast musicians. Quite literally everyone who has been excised from Dylan’s story as told in “A Complete Unknown” — from artists like Dave Van Ronk and Phil Ochs to Dylan’s early patrons and managers like Carolyn Hester and Terri Thal — are present. And even those who do appear in one form or another in the film become fully realized figures in Browne’s book.

Finally, “Bob Dylan in America” by Sean Wilentz is a great choice for anyone looking for something meaty that places Dylan in the wider context of the culture and the times. Wilentz, who is both an esteemed historian and a true fan of Dylan, also digs deep into the artist’s early inspirations, from the Popular Front to the Beats, which are barely even hinted at in Mangold’s film.

Yes, “A Complete Unknown” may not be completely accurate. Like so many rock ’n’ roll biopics, though, its goal was not historical fidelity, but entertainment and the introduction of an important artist to a new generation. So break out the popcorn, damn the facts, and ask your local cinema to turn up the volume.

Jeff Slate

Jeff Slate is a New York City-based songwriter and journalist. His writing can be found at The New Yorker, Esquire, The Wall Street Journal and Rolling Stone, among others. He tweets at @jeffslate.

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