MacroVoices: Putting Your Hand Up and Saying No More Doesn't Make the World Comply

Contents

1. Did the voters vote the war away?
2. He runs the same test on tariffs
3. Where the chain breaks
4. The market is reading a different story, and there is a mechanical test
5. How I plan to use this one
6. A few other things worth keeping
7. Worth a look
8. The one thing to take with you

Draw the bow that is strongest; use the arrow that is longest. To shoot the rider, shoot the horse first; to take the band, take its chief. There is a limit to the killing, and every state has its own borders. If invasion can be stopped, what need is there for slaughter?

—— Du Fu, “Before the Frontier, No. 6” (Tang, c. 8th century; my own translation)

MacroVoices episode 557 was published on 5 November 2026, with Erik Townsend hosting Rabobank global strategist Michael Every on what the Democratic sweep of both the House and the Senate means for markets and geopolitics. Every’s claim in one line: voters saying they want no more war does not stop war from arriving, and Congress stripping out tariffs does not buy cheaper energy or a stronger America. The reference readings are oil down roughly $18 from Friday’s high to the day after the count, and the dollar index at 101.18. He is explicit about the condition attached: the near-term variable sits in the window before the new Congress is seated in January, and his base case for months has been that Trump escalates with Iran inside that window.

Did the voters vote the war away?

Both chambers changed hands, an anti-war majority is heading to Congress, the Middle East file looks ready to be closed — and oil has obligingly fallen for two days. What makes this episode worth the time is how Every handles that intuition.

He does not try to predict whether the war stops. He runs a reverse test instead: assume you get what you asked for, assume America really does put its hand up and say it is done with the Middle East, and then ask one question — do you end up in the world you wanted?

His answer is no, and the reason rests on an old line: power abhors a vacuum. If America withdraws, the region does not quieten down by itself. Iran gets a chance to fill the space, with Russia, China and North Korea standing behind it; Israel, seeing no partner left, moves to hold the line itself; Turkey may read the moment as its opening to extend its own Middle Eastern footprint. Having laid out all three paths, he says that on none of them is there a short-term argument for lower energy prices: the region is either run by America’s geostrategic rivals, or destabilised by several powers racing to fill the vacuum.

He does not oversell the leverage Congress holds, either. The power of the purse is real, but he says the more pertinent point sits elsewhere: a Middle East war is hard enough to win anyway, and it is far harder when you are fighting a political war at home without the backing of Congress. So from the new Congress onwards, America is a greatly constrained geopolitical actor.

He runs the same test on tariffs

This is the stretch I most wanted to write down, because it connects an argument about trade policy to the material basis of hegemony.

Post-election, people have started asking whether Congress claws the tariffs back. Every does exactly what he did with the Middle East: assume Congress passes anti-tariff legislation, assume a few Republicans help, assume the veto even gets overturned — he calls that not totally impossible but unlikely — and then what?

Step one is unambiguous: removing tariffs lowers costs, undeniably. It also removes revenue from a government already struggling to raise it.

Step two is the price. Tariffs are simultaneously the lever for re-industrialisation. His formulation is that, as neomercantilist history shows, aside from throwing subsidies at industry — just as expensive, expensive in a different way — tariffs alongside other industrial policy are pretty much the only route by which a country grows manufacturing back.

Step three runs the chain into the military. A de-industrialised America pays for that vast military-industrial complex with what? And that complex is the material condition for being the global policeman, the hegemon. So removing tariffs amounts to pressing the accelerator on the decline of American hegemony. He adds the timescale: this would not happen in five minutes, but project the dots forward and the direction is visible.

Step four is the hardest line in the episode. He says leaving the hegemon’s role is no painless exit through the gift shop, no life as an isolationist peacenik flashing the peace sign at everybody while enjoying cheaper prices. Access to some resources is zero-sum, and America could end up much worse off than it is now carrying the high cost of that complex. He also declines to make it a binary, noting there are other ways of doing things than the last forty years’ version.

Having priced the cost, he offers what he considers a logical exit, flagged as hypothesis only: Trump strikes a bargain — I will drop some tariffs, but I keep the ones on China and the ones on transshipment through China, and I offer the same deal to others, Europe for instance. Europe is close to introducing aggressive tariff legislation against China of its own, so why not share one external tariff and tariff each other less? He says this is what he read Trump as attempting with the USMCA and across the Americas (Canada the holdout in the first, Brazil in the second), extended to a far broader bloc. If it lands, the world sits in two blocs quickly. If it does not, things get both interesting and messy.

Where the chain breaks

He puts the failure conditions on the table himself, so I do not have to hunt for them.

The first is winning fast. He supplies the counter-example: Venezuela was over in two or three days with minimal bloodshed and Americans had little objection to it. So what turns opinion is intervening and not winning, or not winning quickly. If Iran can be wrapped up fast, most of the “anti-war opinion binds the hegemon” chain comes loose.

The second is subsidies. He lists them as the other route and only says they cost as much. That concedes tariffs are not the sole instrument — if subsidies can pass politically, tariffs lose a rung of their irreplaceability.

The third is half a clause he drops in passing: with or without AI helping to keep labour costs down. If automation makes manufacturing pencil out in high-wage countries, the necessity of tariffs as the lever moves with it.

The fourth is the courts. A collision between Congress and the president over war powers goes to the Supreme Court, and he says its reading cannot be predicted. Rule the executive power complete and nothing is binding; rule that Congress can stop it and the signal the world reads is a 1920s-style isolationist America. The consequences point in opposite directions, which is why his own conclusion is that this is very hard to price.

There is one more layer in the probabilities he assigns. Israel reaching for nuclear weapons he calls an extremely fat tail; a third party actually taking power he puts at 0%; Congress clawing back tariffs he rates unlikely. So what he hands over reads more like a list built by elimination: walk every comfortable-looking exit and see which one actually goes through.

The market is reading a different story, and there is a mechanical test

The market’s reading over those two days is easy to follow: a blue sweep means the president is constrained, means the wars wind down, means the risk premium can leave. So oil fell roughly $18 from Friday’s high to the day after the count, gold bounced from an oversold position back above $4,000, and equities climbed back toward the 50-day moving average.

Every’s verdict on that move is that it contains more optimism than realism. He says he does not see the dove of peace flying past with an olive branch in its beak.

The market desk later in the show supplies something more useful than a verbal judgement: if the macro regime had genuinely changed, oil would not be the only thing moving. The dollar index is still sitting in its pre-election range, the two-, ten- and thirty-year yields have not moved meaningfully, short-term rates have not moved. Bond traders are not convinced. Oil travelling $18 on its own while rates and currencies hold still is the mark of a risk premium repricing; a regime change leaves a different mark, and it shows up in three markets at once. That segment compares this oil move to Liberation Day in equities — assume the worst, discover days later it was not that bad, bounce back.

He runs Russia-Ukraine through the same logic and comes out with escalation more likely than settlement. A deal needs America standing behind it and needs both sides willing. Russia will look around and do a calculation: why concede now, when Trump will be weaker in six months and the bargain gets harder? Erik adds a supply-side mechanism here that I think is the most usable line in the episode: strike refineries anywhere in the world and global refining capacity falls, so crack spreads stay elevated for years after the war ends. The show used an American refiner as an example of that mechanism, and the mechanism is the point, with no view on anyone either way.

How I plan to use this one

The news sounds this good and the price agrees — can I trust it? I have walked into this one myself. Twice in 2024 I read “someone in politics has started dealing with this” straight through as “this gets better”, and found three months later that it was one more line on an agenda. So I plan to keep Every’s reverse test on hand: assume this good news lands in full tomorrow, does the result I actually want follow by itself? Which steps are missing in between, and whose hands is each one in? He walked it twice, Middle East and tariffs, and both times it jammed in the same place.

The second one is separating noise from structure. The approach here does not need inventing: find the second and third markets that would have to move at the same time. Oil moves, dollar still, yields still — that is a single market adjusting its risk premium; three moving together has the shape of a regime change. My own semiconductor holdings take the same treatment: when a policy tailwind shows up, go look at whether the adjacent markets responded too.

A few other things worth keeping

• The data centre moratoria bind: several states are pausing new builds and Democrats frame it as the remedy for high electricity bills. Every says the trouble is that certain people see this as a national security question — if it is national security, America is handing the lead to China; if the water, copper, chips and electricity were never there to begin with, some of it was going to be washed out anyway.
• Erik’s counter-intuitive observation: electricity bills are the problem Democrats care about, nuclear buildout is the remedy, and yet nuclear and uranium names were dragged down with the AI trade and fell harder than the index. The piece of Every’s answer I kept: whoever has electricity has power, and China has lots of it.
• On Israeli nuclear use he lands on extremely fat tail. His reason is that in the early stages of the 1973 Yom Kippur war Israel genuinely feared being wiped off the map and Prime Minister Meir still did not reach for the button; and if the US-Israeli military relationship does part ways, Israel goes looking for new allies, India among them, and India would not be thrilled to see it brandishing nuclear weapons.
• Gold had dropped close to $900, just under 20%, over the two months before the vote, oversold enough that it only needed a trigger. The view on the show is that this bounce lacks the weak dollar, lower rates and central bank easing that sit behind real bull markets.
• He is blunt on the third-party question: a very clear possibility of one emerging, and a 0% probability of it getting anywhere near power.
• The dart I enjoyed most: lottery off federal land so young families can homestead and build ten new cities outright, wiring the top-down geopolitical plan down to affordability, the most personal issue on the list. He calls it throwing darts, while noting the darts were handed to him by the administration itself.

Worth a look

• MacroVoices episode 557, published 5 November 2026, the source for this piece
• Rabobank’s research site (for clients) and Michael Every’s public posts on LinkedIn
• Economic history on neomercantilism and the role of trade protection in industrialisation, to test the premise that tariffs are the main route back to manufacturing
• Public research on Israeli nuclear decision-making during the 1973 Yom Kippur war
• Constitutional discussion of the War Powers Resolution and past disputes over presidential use of force

The one thing to take with you

Assume first that you won, then ask whether the thing you actually wanted follows.

The value of this episode is in that order. Every never guesses whether the war stops or whether the tariffs get repealed; each time he grants the wish first, then looks at what the world is like three days later — and that world is usually not the one the vote was meant to buy. The Middle East path arrives at a power vacuum. The tariff path arrives at not being able to afford the military-industrial base. Intent can be changed by one vote, and material conditions do not travel with the ballot.

Something I have tried that works outside investing too. Pick one thing you are currently pushing for, or currently pushing against — the process at work you want killed, an arrangement at home you want cancelled, a long commitment you want out of. Write two sentences. First: if you got your way tomorrow, who does the thing that process was doing, on the third morning. Second: who is that person, and do they know about it. Write the two and leave them; when the day comes, take them out and check your answer.

Raw Markdown

This article is an educational discussion of investment method. It is not advice to buy or sell any individual security, offers no target prices, and does not analyze any current holding. Investing carries risk; make your own decisions or consult a qualified professional.