The Dictatorship
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 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.
President Donald Trump is giving fragile U.S.-Iran diplomacy “some space” before deciding whether to resume strikes, United Nations Ambassador Mike Waltz said Sunday.
Hours later, however, Trump posted images to social media depicting the U.S. attacking Iran.
Waltz also dismissed concerns over the United States’ diminished munitions stockpiles, even as he conceded that “a lot” of weapons have been depleted, which he said was because of the Russia-Ukraine war and fighting with the Houthis.
“I want to be crystal clear: The U.S. military — and I’ve verified this every which way — has everything that it needs to conduct this campaign as effectively as it needs to be,” Waltz told NBC’s “Meet the Press.”
Waltz’s comments came on the second consecutive day of paused fighting between the United Sates and Iran amid reports of a dwindled U.S. stockpile of Patriot antimissile interceptors, among other munitions.
The New York Times reported Sunday that the depletion of interceptor stockpiles is among the reasons why the administration is wary of resuming major combat operations in a war launched without congressional authorization and which has grown exceedingly unpopular.
But Waltz underscored that the pause in fighting is to allow for an opportunity for peace — not because of an insufficient weapons supply, and warned that those leaking information to the press about the U.S. not having sufficient weaponry “deserve to be in jail.”
“What the president is doing right now, as we’ve seen all along, is giving some talks some space. Talks are ongoing,” Waltz told NBC. “They’re happening at every level, from the more technical aspect of it all the way to the highest levels, of course, within both the Iranian government and the U.S. government.”
He reiterated in an appearance on CBS News’ “Face the Nation” that Trump “is giving diplomacy a chance.”
But even after Waltz publicly touted giving peace a chance, Trump posted several AI-generated images on Truth Social Sunday afternoon depicting the U.S. striking Kharg Island. In one imageTrump is standing on the deck of an Iranian oil tanker with an American flag in hand.
Trump met with top aides on Friday to weigh escalating military action against Iran, according to a senior White House official. On Saturday, the president told a French journalist that he is “absolutely” considering resuming full-scale war with Iran if the U.S. doesn’t “get 100% of what we want.”
Waltz declined to give a timeline for when the war would end.
Meanwhile, Israeli Prime Minister Benjamin Netanyahu said Sunday that if Iran plays any role in attacking Israel, it would be making a “terrible mistake” and that the response would be “very forceful.”
“If Iran attacks Israel – either directly or through proxies, either with ballistic missiles or UAV [Unmanned Aerial Vehicles]’s or killer drones — it will make a terrible mistake,” he said on Fox News’s “Sunday Morning Futures.”“Because our response, Israel’s response, will be very, very forceful.”
Netanyahu, who launched the war with Iran jointly with Trump on Feb. 28, is set to meet with his U.S. counterpart at the White House on Tuesday, the same day he’s scheduled to attend the funeral of the late Sen. Lindsey Graham, R-S.C.
Jake Traylor and Emily Hung contributed to this report.
Erum Salam is a breaking news reporter for MS NOW, with a focus on how global events and foreign policy shape U.S. politics. She previously was a breaking news reporter for The Guardian.
BERLIN (AP) — The suspect in the deadly Berlin Pride attackthat left one person dead and 29 injured was shot and killed by police during a confrontation on Sunday in a suburb of the city, authorities said.
Abdul Ballout, a German citizen with Lebanese roots, was killed following a search that lasted nearly 24 hours after the attack in downtown Berlin. Prosecutors said he had previously sought to join the militant Islamic State group.
Ballout was suspected of driving a van into a crowd near Berlin’s Pride festival Saturday night before apparently stabbing others with a machete in what authorities believe was an Islamic extremist terror attack.
“Everything we see here points to us dealing with an Islamic terror attack,” Interior Minister Alexander Dobrindt said.
Dobrindt put the total number of wounded at 29. The attack occurred a few hundred meters (yards) from a party near the Brandenburg Gate that was supposed to close out the city’s Pride festival.
Ballout was born in Germany, the minister said. His mother was naturalized in 2002, three years before he was born.
Ashley Jump, a 26-year-old U.K. resident, had traveled to Berlin for Saturday’s Pride parade but had left the celebrations before the attack. They returned Sunday to leave flowers at a memorial near the crime scene in support of the LGBTQ+ community.
“They’ll never erase us, we’ll never be gone,” they said. “As long as humanity has existed, we’ve existed. And as long as humanity exists, we will exist. We will not be removed.”
Suspect convicted of ties to Islamic extremism
Ballout traveled to Lebanon in 2025 with the goal of going to Syria to join the Islamic State group, Berlin prosecutors said Sunday.
There, he made contact with several people who were presumed members of the militant group — or at least he believed them to be, prosecutors said. He was arrested in Lebanon last year and sentenced by a military court to three months’ imprisonment for offenses including incitement to religious and sectarian conflict.
He returned to Germany after completing his sentence, where he was arrested at the Berlin airport.
In May, a juvenile court in Berlin convicted Ballout of preparing a serious act of violence endangering the state, as well as publishing Islamic State propaganda on his Instagram account and other charges, prosecutors said.
The court handed down a suspended sentence of 1 year and 10 months in youth custody, which Berlin prosecutors have appealed.
The court said it took Ballout’s months of pre-trial detention in Germany and Lebanon into account. It also said it considered that Ballout had confessed to the crimes, appeared to distance himself from the militant group and no actual threat had ever materialized.
He was released from detention pending the appeal.
Berlin’s Pride festival is one of Europe’s largest LGBTQ+ celebrations
According to police, a white van drove into the Tiergarten park around 10 p.m. and hit several people before colliding with a tree. The closing party at the Pride festivalknown as Christopher Street Daywas ongoing at the time next to the Brandenburg Gate, a short distance away. The party followed a parade with some 80 trucks that had made its way through downtown Berlin earlier in the day.
The attack did not occur at the festival, along its route or at the closing party. Rather, the violence took place a few hundred meters (yards) away on a track in the Tiergarten park. The van drove into a crowd that was likely a mix of festivalgoers and other locals or visitors.
Police said a woman was killed.
On Sunday afternoon, hundreds of mourners gathered at a memorial at the iconic gate. They hugged each other and laid down flowers, candles, rainbow flags and homemade signs, including a cardboard one that said: “the only thing more powerful than hate is love.”
Hundreds of thousands had come to Berlin to celebrate on Saturday, though it’s unclear how many were still at the festival by late evening. It’s one of Europe’s largest LGBTQ+celebrations.
“We are simply stunned by what happened,” said Andre Lehmann, a top official with the main national LGBTQ+ association, LSVD+. “This suspected attack hits the heart of the queer community.”
Amsterdam says it will celebrate freedom in the wake of Berlin attack
Chancellor Friedrich Merz vowed that law enforcement would find the suspect.
“I would like to say this to Christopher Street Day participants here in Berlin but also across Germany: Don’t let yourselves, let us not let ourselves, be intimidated,” he said. “These acts have only one purpose: They aim to divide our society. They want to take away from us the most important thing we have: Namely our openness and our freedom.”
Dobrindt said he expected security measures at other major events in Germany, including Pride events elsewhere, to be reviewed and if necessary significantly strengthened.
Berlin has seen Islamic extremist attacks before. In December, 2016, a rejected asylum seeker from Tunisia plowed a hijacked truck into a Christmas marketkilling 13 people and injuring dozens. He was killed days later in a shootout in Italy.
In February last year, a Spanish tourist was stabbed and seriously wounded at Berlin’s Holocaust Memorial, an attack that saw a Syrian man convicted in March and sentencedto 13 years.
This week, Amsterdam will be hosting World Pride alongside its own annual Pride celebrations. Mayor Femke Halsema said authorities and organizers “are closely monitoring the security situation” after the Berlin attack but aim to prevent any extra measures getting in the way of celebrating freedom and love.
Katy Perry lambasted the Trump administration over the weekend for using her song “Firework” in one of its social media videos about U.S airstrikes on Iran.
The pop star said she was “deeply appalled and angry” over the use of her song in a White House TikTok video featuring bombs exploding set to Perry’s 2010 hit — specifically featuring her lyrics “boom, boom, boom.” A caption on the video, which has more than 6 million views, reads: “Iran has been warned.”
“I did not approve this, I was not asked, and I absolutely do not condone it. I wrote this song to be an anthem of hope, healing, and inner strength for people going through their darkest personal moments,” Perry wrote in an X post on Saturday. “To see a message of self-worth and upliftment weaponized to soundtrack destruction and violence is a complete violation of everything my song stands for. My music is for bringing people together, not celebrating warfare.”
White House aide Kaelan Dorr responded to Perry, saying“This you?” He posted Perry’s own military-themed music video of her song “Part of Me,” in which she’s dressed in combat uniform.
Perry, who is in a romantic relationship with former Canadian Prime Minister Justin Trudeau, is among many other prominent artists who have rebuked the Trump administration for using their music in videos on official accounts.
Kesha publicly admonished President Donald Trump’s administration in March after the official White House TikTok account used her song “Blow” in another video about military action. “Stop using my music, perverts,” she said on X.
The Filipino American pop star Olivia Rodrigo expressed outrage at the Trump administration after it used her song “All-American Bitch” last fall in a video threatening deportations. She responded to the Department of Homeland Security at the time, saying, “Don’t ever use my songs to promote your racist, hateful propaganda.”
While the video is still visible, Rodrigo’s music has been removed.
And last December, Sabrina Carpenter condemned the administration for using her song “Juno” in a video about immigration arrests, which she called “evil and disgusting.”
“Do not ever involve me or my music to benefit your inhumane agenda,” the singer wrote at the time.
Ariana Grandealso posted on her Instagram story last September criticizing the administration over its immigration policyanti-LGBTQ+ messaging and alleged censorship. In response, White House Deputy Press Secretary Kush Desai told her, “Save your tears,” a reference to one of her songs. Last month, after the White House used her song “Bye” in an anti-immigration video on TikTok, she commented“Please do not ever use my music in relation to this barbaric, inhumane, heinous nonsense.”
Trump has repeatedly lashed out at Taylor Swift. The White House poked fun at the mega star earlier this month when shemarried Kansas City Chiefs player Travis Kelce at Madison Square Garden. Its official X account posted photo-shopped images of the venue’s billboards blaring, “TRUMP IS YOUR PRESIDENT.” After she endorsed his opponent, Kamala Harris, in the 2024 election, Trump wrote, “I HATE TAYLOR SWIFT!”
Last year, Trump went after Bruce Springsteenfor insulting the president at a concert in Manchester, England, where the Boss called the administration “corrupt, incompetent and treasonous.” Trump called the Grammy-award winning artist “highly overrated,” writing in part, “Never liked him, never liked his music, or his Radical Left Politics and, importantly, he’s not a talented guy.”
Erum Salam is a breaking news reporter for MS NOW, with a focus on how global events and foreign policy shape U.S. politics. She previously was a breaking news reporter for The Guardian.
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