The international environment of 2026 has forced governments to reconsider assumptions that seemed relatively comfortable only a few years ago. The continuing war in Ukraine, the U.S. operation in Venezuela, the war involving the United States, Israel, and the Iranian regime, severe disruption in the Strait of Hormuz, tensions across the Taiwan Strait, and renewed arguments over European defense have all changed how political leaders evaluate power, credibility, and risk. These events are interconnected not because they form part of a single conflict, but because every government watches what happens elsewhere and updates its expectations about what allies and adversaries are willing and able to do.
This makes prediction particularly dangerous. I do not believe that we can identify a predetermined year in which Xi Jinping will necessarily decide to use force against the Republic of China on Taiwan, any more than we can assume that Donald Trump’s willingness to employ American power in one theater tells us exactly what he will do in another. Political leaders operate with incomplete information. They can misunderstand their opponents, exaggerate their own capabilities, underestimate economic consequences, or correctly identify a problem while choosing the wrong sequence of policies to address it. The fundamental question is therefore not whether political leaders make mistakes. They inevitably do. The more important question is what happens after they make them.
This is one reason I continue to prefer liberal democracy, constitutional limits on power and decentralized institutions to authoritarian political systems. Democracy does not reliably select the wisest leader, nor does it guarantee economically sensible policies. American history provides abundant evidence to the contrary. Its deeper advantage is that political mistakes remain contestable: leaders can be removed, policies can be reversed, courts and legislatures can constrain executives, opposition parties can reorganize, and ideas rejected by one generation of voters can survive long enough to be reconsidered by another. Democratic correction is frequently slow and can itself overshoot. Yet a system that permits correction has an important advantage over one in which an increasingly narrow leadership circle determines not only policy but also which information is politically safe to communicate.
Democracy Is Not a Machine for Producing Correct Decisions
It is easy to romanticize democracy by looking only at its successes. That would miss the point. Democracy’s institutional strength becomes clearer when we examine its failures.
American politics since the Second World War has repeatedly moved between different understandings of government, markets, national security, and America’s role in the world. These movements have sometimes been dramatic. A policy direction that appears politically dominant in one decade can be challenged in the next, while ideas that seem electorally dead can return in modified form many years later. This political “pendulum” is not always efficient, and it does not always move toward a theoretically optimal position. Sometimes society corrects too little; sometimes it overcorrects. But the possibility of reversal matters.
Dwight D. Eisenhower provides one useful postwar benchmark. His administration was hardly libertarian: it retained important New Deal institutions, expanded Social Security and built the Interstate Highway System. Yet Eisenhower generally placed greater emphasis on fiscal restraint than many later presidents. Federal expenditure as a share of GDP fell from 20.4 percent to 18.4 percent during his presidency, three of his eight budgets were in surplus, and most of the 1950s combined robust growth with inflation generally at 2 percent or below. His “Modern Republicanism” was explicitly a middle course rather than an attempt to abolish the post-New Deal state.
John F. Kennedy offers a different example. Economically, Kennedy supported a substantial reduction in taxation to encourage growth, although the legislation was completed after his assassination. In foreign policy, the Cuban Missile Crisis demonstrated the importance of presidential judgment under extraordinary uncertainty. Kennedy rejected both passivity and the immediate military options some advisers advocated, choosing a naval quarantine while preserving channels for negotiation. The eventual settlement removed Soviet offensive missiles from Cuba, included an American pledge not to invade Cuba and, secretly, the later removal of U.S. Jupiter missiles from Turkey. Yet Kennedy’s presidency also included the disastrous Bay of Pigs operation. A president capable of learning and exercising restraint in one crisis could have made a serious mistake in another.
That distinction is essential to how I think political leaders should be evaluated. Presidents are not packages that must be accepted or rejected in their entirety. Military success does not prove that a president’s economic policy is correct; a good tax policy does not make a poor foreign-policy decision wise. Political analysis becomes intellectually lazy when admiration for a leader turns into an obligation to defend everything that leader does.
Johnson, Goldwater and the Long Road to Reagan
The transition from Kennedy to Lyndon B. Johnson illustrates how quickly policy can change even within the same political party. Johnson’s presidency produced so-called historic civil-rights legislation that deserves to be distinguished from the economic questions surrounding the Great Society. At the same time, his domestic agenda expanded the federal government’s role through the Great Society and War on Poverty, while the escalation of the Vietnam War produced enormous military, fiscal, and political costs. The Miller Center appropriately describes the Johnson presidency as marking a “vast expansion” of national government in domestic affairs.
The 1964 election is particularly revealing. Johnson defeated Barry Goldwater, the libertarian Republican presidential candidate, in one of the largest electoral landslides in American history. If we had frozen American political history in November 1964, it would have been easy to conclude that Goldwater’s arguments for smaller government, lower taxation and stronger resistance to Soviet communism had been decisively rejected by the American electorate.
But democracy did not freeze in 1964.
Goldwater lost the election; his ideas were not prohibited from competing again. Ronald Reagan’s televised address on Goldwater’s behalf, A Time for Choosing, became a major moment in Reagan’s own political development. The Reagan Presidential Library describes the speech as a pivotal turning point: Republican leaders took notice, Reagan successfully ran for governor of California two years later, and the political movement that had suffered a crushing presidential defeat continued to organize.
This is one of the clearest examples of what I mean by democratic correction. The voters themselves can be wrong—or, more cautiously, they can reach a judgment that later generations of voters substantially revise. Correction does not have to occur at the next election. It may require a decade of disappointing policy results, intellectual debate, political entrepreneurship and generational change.
Richard Nixon’s election in 1968 was part of the reaction to the disorder of the late 1960s, but Nixon should not simply be described as an economic precursor to Reagan. His administration itself employed substantial economic intervention, including wage and price controls and a temporary 10 percent import surcharge in 1971. Expansionary policies, the oil shock, and other factors contributed to the severe inflationary problems of the 1970s. In other words, electing a Republican did not automatically produce a free-market correction.
Nixon was more consequential in foreign policy. His opening to Beijing was not an act of geopolitical charity. It was embedded in triangular diplomacy designed to exploit the Sino-Soviet split and improve Washington’s leverage against Moscow. Official U.S. diplomatic records explicitly describe the emerging strategy as developing relations with Beijing partly to create a counterweight to the Soviet Union; the announcement of Nixon’s visit also increased Soviet interest in a U.S.–Soviet summit.
That episode remains relevant today. International cooperation should rarely be understood as one country generously “helping” another. States cooperate when interests overlap. Saudi Arabia may prefer a weaker Iranian regime for reasons that have little to do with affection for Washington. European governments may want American military engagement while simultaneously disagreeing with Washington on trade. The United States may support partners because doing so advances American strategic interests. Alliances are strongest when we understand these incentives rather than disguising them behind sentimental language.
Carter, Reagan and Why Correction Is More Complicated Than Elections
The economic crises of the 1970s further changed American politics. High inflation, oil shocks and weak growth challenged the confidence that governments could fine-tune the economy through conventional demand management. Jimmy Carter’s presidency became associated politically with this environment, and the Iranian Revolution and hostage crisis intensified perceptions of American weakness abroad.
Yet historical accuracy requires us not to turn Carter into a caricature merely because Reagan later defeated him. Carter supported important deregulation in airlines, trucking, and railroads, and his energy reforms included deregulating oil and natural-gas prices. Those measures contributed to increased supply in the 1980s. Carter also appointed Paul Volcker as Federal Reserve chairman in 1979; the monetary tightening to defeat inflation began before Reagan entered the White House.
This is precisely why political history should not be reduced to partisan mythology. Reagan benefited from corrections that had already begun under Carter, even as Reagan offered a much clearer political rejection of the economic direction associated with the previous decade.
Reagan nevertheless represented a genuine ideological realignment. His administration sharply reduced marginal income-tax rates, pursued deregulation and articulated a much more skeptical view of the economic role of government. The top marginal individual income-tax rate fell from 70 percent when he entered office to 28 percent by the time he left, while the expansion beginning in 1983 produced strong growth and falling unemployment during much of the remainder of the decade.
I regard much of this direction positively, but the same policy-by-policy standard must also be applied to Reagan. His administration substantially increased defense spending, which was necessary to confront the Soviet threat to the free world at the time to some degree, did not fundamentally reform major entitlement programs, and ran large fiscal deficits. A commitment to lower taxation is not sufficient to create limited government if expenditure is not correspondingly constrained. The Reagan experience therefore reinforces, rather than weakens, the broader point: even a president whose political and economic philosophy I broadly admire should not be exempt from critical analysis.
More important is the longer historical sequence. The distance between Goldwater’s defeat in 1964 and Reagan’s victory in 1980 was sixteen years. Ideas can lose elections without disappearing. Political movements can learn. Voters can revise their judgments. What looked like an overwhelming rejection in one period can become part of another period’s governing consensus.
That process is messy, but I would rather live with the messiness of competing ideas than the apparent neatness of a political system in which the ruling authority decides which ideas may compete at all.
Clinton, Bush and the Fact That Parties Can Learn—and Unlearn
Bill Clinton provides another reason not to describe democratic correction as Republicans correcting Democrats. By the 1990s, important parts of the Democratic Party had themselves adapted to the political and economic environment created by the preceding decades. Clinton supported NAFTA, signed welfare reform, and governed during a period of fiscal consolidation. The federal budget moved into surplus in the late 1990s, with BEA data recording surpluses of approximately $69 billion in 1998, $126 billion in 1999, and $236 billion in 2000.
Clinton was obviously not a Reagan Republican. That is not the point. The interesting phenomenon is that political competition can change the opposing party. A successful policy idea does not remain the property of the party that first championed it. The opposing party can appropriate it, modify it, and incorporate it into a different political coalition. In that sense, democratic learning occurs not only through alternation in office but also through ideological adaptation within parties.
The expansion of international trade during this period also illustrates a broader principle. The international division of labor does not eliminate geopolitical rivalry, and it would be naïve to assume that economic integration automatically produces liberal political institutions. Nevertheless, deeper trade raises the opportunity cost of conflict. Economic interdependence can therefore create incentives for peace even when it does not transform the political character of the participating states.
George W. Bush then demonstrates that correction is reversible. Bush reduced taxes, a policy that from a free-market perspective can be defensible, but the tax reductions were not matched by equivalent reductions in expenditure. Entitlement and discretionary spending increased, while the wars in Afghanistan and Iraq imposed additional fiscal costs. The federal budget moved from surplus into substantial deficit: BEA data record a deficit of roughly $157 billion in 2002, rising above $400 billion in 2004.
This is why I sometimes find the political language of “small government” insufficient. A government does not become small merely because it taxes less. If it spends considerably more than it collects, the bill has not disappeared; it has been shifted into borrowing, future taxation, or monetary and fiscal pressures elsewhere.
Democratic correction therefore does not follow a straight line. A correction can produce an overcorrection. A successful reform can be partially undone. A party can learn and later forget. Voters can replace a bad policy with another bad policy. None of this disproves the value of democratic correction. It demonstrates why correction must remain an ongoing process rather than a historical destination.
Trump: Direction Is Not the Same as Policy Consistency
This history shapes how I evaluate Donald Trump today. I find neither unconditional admiration nor unconditional condemnation intellectually useful. Trump has correctly identified several problems that political establishments had previously underestimated. European governments should assume greater responsibility for their own defense. Authoritarian regimes should not conclude that the United States has lost the willingness to use power. Excessive regulation can suppress entrepreneurship and investment, and high taxation can weaken incentives for productive activity.
The problem is that identifying several problems correctly does not automatically make the resulting policy package coherent.
Trump approaches politics partly with the mentality of a businessman who wants visible results within a limited period. That can produce energy and decisiveness. It can also create a sequencing problem: everything becomes urgent at the same time. Foreign policy, tariffs, inflation, tax reductions, defense commitments, industrial policy, welfare proposals and alliance negotiations can then interact in ways that undermine one another.
Europe is a good example. I agree with the underlying argument that European NATO members should carry a greater share of the defense burden. Europe cannot indefinitely expect American taxpayers to underwrite its security while governments treat defense expenditure as a residual category after domestic political promises have been satisfied. But if Washington simultaneously needs European cooperation on Russia, Iran, and other strategic challenges, escalating trade conflicts with its closest allies can weaken the very coalition it wants to strengthen.
Canada presents a similar contradiction. In September 2026, the Trump administration escalated its trade dispute with Canada by directing steps to remove Canadian-origin goods from U.S. federal procurement schedules. Protectionism toward close allies should therefore be evaluated not only as trade policy but also by its opportunity cost to broader strategic cooperation.
This is where a comparison with Reagan can be useful, provided that it is framed as a counterfactual rather than a claim that we know exactly what Reagan would do today. A Reagan-style approach might also demand greater European defense responsibility while placing greater emphasis on economic integration and freer trade among allies. “Peace through strength” does not require abandoning the gains from the international division of labor.
There is also an internal economic contradiction in simultaneously presenting oneself as a defender of limited government while proposing large new transfers. Trump recently proposed a $5,000 payment to every adult American if Republicans retain Congress. Payments to roughly 240 million adults would cost around $1.2 trillion, far exceeding current tariff revenue and potentially adding substantially to an already large federal deficit. Whatever its electoral appeal, a transfer of that magnitude should be judged by the same fiscal standards that free-market economists would apply to a Democratic administration.
This is why political economy should come before party loyalty. If Democrats propose an economically damaging intervention, I will criticize it. If Republicans do the same, changing the party label does not change the economics.
Iran, Energy and the Return of Geopolitical Economics
The 2026 war involving the United States, Israel and the Iranian regime makes these questions more urgent. The initial military operations demonstrated formidable American and Israeli capabilities, and it would be surprising if Beijing were not studying the lessons for its own military planning. Deterrence depends partly on what an opponent believes you can do, and recent American operations have altered those beliefs.
But the war also demonstrates the limits of military power. Seven months after the conflict began on February 28, the economic consequences remain severe. Shipping through the Strait of Hormuz has at times fallen dramatically below prewar levels, while Brent crude moved above $108 per barrel on September 15 amid renewed attacks and supply concerns. Before the war, the strait handled roughly one-fifth of global crude and LNG movements.
The consequences have reached Mainland China directly. High prices following the Iran conflict pushed mainland Chinese crude imports to decade-low levels and forced refiners to draw heavily from inventories; LNG imports in Mainland China and India have also fallen to multi-year lows amid disruption to Gulf exports.
This is precisely why energy economics cannot be separated from geopolitics. I recently discussed inflation with students and asked them to look beyond the headline number. Energy quickly emerged as one of the central variables. Looking back at the inflationary episodes of the 1970s makes the connection even clearer: wars, revolutions and supply disruptions in the Middle East can rapidly enter European and American households through petrol, electricity, transportation and production costs.
The lesson for Beijing is consequently more complicated than “America attacked Iran; therefore Beijing is deterred.” American military power may strengthen deterrence, but the Iranian regime has simultaneously demonstrated that a weaker actor can impose considerable economic costs by threatening critical transportation routes and energy infrastructure. Beijing can study both lessons.
Strategic learning is rarely one-directional.
Taiwan and the Cost of Miscalculation
This brings the argument back to the Taiwan Strait. I remain skeptical of attempts to convert military planning scenarios into deterministic predictions that Xi Jinping will attack the Republic of China on Taiwan in a particular year. Defense planners need scenarios and deadlines. Public analysis should not confuse those scenarios with knowledge of future political decisions.
The conditions influencing such a decision are constantly changing. Ukraine matters. Iran matters. American elections matter. Japanese defense policy matters. Taiwan’s own willingness and ability to defend itself matter. Mainland China’s economic situation matters. The credibility of American deterrence matters. Above all, what Xi and the senior CCP leadership believe about these variables matters.
That last point is crucial because wars can begin through miscalculation even when the initiating government does not expect a long war. Leaders may believe an opponent will not fight, an alliance will fracture, sanctions will fail, domestic resistance will collapse, or a military operation will end rapidly. If those assumptions are wrong, a supposedly manageable operation can become a catastrophe.
Taiwan’s security therefore depends partly upon ensuring that Beijing never concludes that military coercion would be cheap. American and allied capabilities matter for that reason. So does Taiwan’s own defense. The purpose of credible deterrence is not to create war but to alter the expected cost-benefit calculation before war begins.
At the same time, deterrence must leave room for communication. Strategic ambiguity and unpredictability can sometimes increase an adversary’s caution, but unlimited unpredictability can also produce misunderstanding. Strength without communication can generate escalation; communication without credible strength can invite opportunism. The difficult task is to combine both.
Xi Jinping and the Problem of Correcting an Authoritarian Leader
This is where the institutional comparison becomes unavoidable.
I do not argue that authoritarian governments are incapable of competent decisions. Quite the opposite: concentrated authority can sometimes act rapidly, coordinate resources, and pursue a policy over long periods without electoral interruption. If the decision at the top is correct, this can look extraordinarily efficient.
The danger appears when the decision is wrong.
Under Xi Jinping, foreign-policy decision-making in Mainland China has become more centralized. Chatham House describes a transition from a more pluralistic process involving ministries and agencies toward a system in which Xi and senior CCP leadership exercise much greater control over foreign affairs. This does not mean every decision is made by one individual; specialized institutions, provincial authorities, and state-owned enterprises still possess information and influence. But the direction of institutional change toward stronger Party and top-level control is well documented.
The question is therefore not whether Xi is intelligent. Intelligence does not eliminate uncertainty. Nor is the question whether American presidents are more intelligent. American history has supplied more than enough evidence that they can make disastrous mistakes.
The relevant question is institutional: what happens when the leader is wrong?
Research in International Security provides a useful framework. National-security institutions that encourage information sharing and competitive bureaucratic dialogue can reduce miscalculation because leaders receive higher-quality information. Fragmented or siloed systems can instead encourage officials to manipulate information so that it conforms to leaders’ prior beliefs, increasing the risk of escalation based upon inaccurate assessments.
Hayek’s insight into dispersed knowledge is useful here, but it should not be stretched into a mechanical analogy between markets and foreign policy. The broader insight is one of epistemic humility: information exists in many places, while decision-making authority exists in far fewer. The more political incentives discourage uncomfortable information from moving upward, the greater the danger that apparent decisiveness masks informational weakness.
A liberal democracy does not solve this problem. It creates more opportunities to expose it.
Opposition politicians can attack a strategy. Legislatures can investigate. Journalists can publish failures. Scholars and think tanks can challenge official assumptions. Courts can constrain executive actions in relevant domestic contexts. Elections can remove the government. Former officials can criticize their successors. States and other institutions can resist federal policies. None of these guarantee wisdom, and all can become partisan or dysfunctional. But together they prevent the state from possessing only one officially permissible interpretation of reality.
An authoritarian system can move faster precisely because many of these obstacles are absent. That is an advantage until the direction of movement is wrong.
Then speed becomes a liability.
Correction Is a Process, Not an Event
American history also warns us against assuming that correction occurs automatically. Goldwater’s ideas required sixteen years to move from overwhelming presidential defeat to the Reagan revolution. The inflation of the 1970s survived multiple administrations. Carter initiated reforms that Reagan inherited. Reagan’s successes coexisted with fiscal weaknesses. Clinton absorbed parts of a market-oriented consensus despite being a Democrat. George W. Bush combined tax cuts with spending growth and renewed large deficits.
The lesson is not that history inevitably moves toward smaller government. It plainly does not. Nor is it that voters always learn the correct economic lesson from a crisis. They do not.
The advantage is narrower but still profound: political error is not institutionally final.
A society can reconsider.
This is also why different democracies will not always correct in the same direction or at the same time. European voters may move rightward while American voters later return a Democratic administration to Washington. Canada may choose a different economic or foreign-policy mix from the United States. Electoral cycles are not synchronized, and citizens in different countries can interpret the same geopolitical event differently.
That has happened repeatedly in the history of the transatlantic relationship. It will happen again. Alliances therefore need interests and institutions strong enough to survive temporary ideological differences among governments.
Europe Must Decide What It Is Willing to Pay For
Europe faces a particularly uncomfortable version of this problem. For decades, many European societies combined extensive welfare commitments with relatively low defense expenditure, partly because the United States supplied a disproportionate share of the Western security umbrella.
That model is becoming increasingly difficult to sustain in a world of Russian aggression, instability in the Middle East, threats to energy routes, and growing strategic competition in the Indo-Pacific. Europeans cannot simultaneously demand strategic autonomy, extensive social expenditure, inexpensive energy, low taxes, minimal defense burdens and a permanent American security guarantee without confronting trade-offs.
Economics does not disappear because the issue is national security. Scarcity remains scarcity.
This does not mean Europe should obediently follow every American president. Quite the contrary. A Europe capable of defending itself would possess greater freedom to disagree with Washington. Strategic autonomy without military and economic capability, however, is rhetoric rather than autonomy.
The United States should not treat European allies merely as targets for economic pressure. If Washington wants Europe to become a stronger strategic partner, freer economic exchange among allies can reinforce rather than undermine that objective. Security cooperation and the international division of labor need not compete.
What 2026 Should Teach Us
The events of 2026 provide no final answer about Trump, Xi, Iran or Taiwan. They provide information, and every government will interpret that information differently.
Trump’s willingness to use American power may strengthen deterrence. The prolonged costs of the Iranian conflict may simultaneously remind Americans of the limits of military intervention. The disruption of Hormuz exposes Mainland China’s energy vulnerability while also demonstrating how a weaker military actor can impose costs on a stronger one. European governments are learning that security cannot be outsourced indefinitely. Beijing is observing American capabilities, while Washington is trying to understand how Beijing interprets them.
This is precisely the environment in which political judgment matters most.
My preference for liberal democracy and limited government does not come from believing democratic politicians are morally or intellectually superior. Eisenhower, Kennedy, Johnson, Nixon, Carter, Reagan, Clinton, Bush and Trump provide too much variation for such a claim to be credible. Some made excellent decisions and serious mistakes within the same presidency.
The case for a free political order is stronger precisely because human beings are fallible.
If leaders were omniscient, concentrating political power might be efficient. If governments always knew the correct economic policy, political competition might seem wasteful. If presidents could accurately predict every military consequence, institutional constraints might appear unnecessarily slow.
But leaders are not omniscient. Knowledge is dispersed, incentives matter, and uncertainty cannot be abolished. That is why markets need competition and why political power needs limits.
Democracy’s visible disorder is therefore not always a weakness. Sometimes it is the sound of a society discovering that it was wrong.
The American experience from Goldwater to Reagan, from Carter’s reforms to Reagan’s realignment, from Clinton’s fiscal consolidation to the renewed deficits under George W. Bush, demonstrates that correction can take years and that it never remains permanently secured. One generation can repair a mistake and the next can create another. The political pendulum can move too far in either direction.
Yet I would still prefer a system in which the pendulum can move.
For the Taiwan Strait, that distinction may ultimately matter more than many forecasts of exactly when a conflict might begin. The greatest danger is not simply that Xi Jinping might want war. It is that a highly centralized leadership could incorrectly conclude that war would be short, inexpensive and successful, while institutions capable of challenging that conclusion prove too weak to correct it. Conversely, Washington must ensure that its own confidence in deterrence does not become complacency and that unpredictability does not become incoherence.
Peace therefore requires strength, but strength is not enough. It requires accurate information, institutional competition, economic resilience, credible alliances and political leaders willing to discover that some of their assumptions are wrong.
The most important test of a political system is not whether it makes mistakes. Every political system does.
It is whether the system can recognize a serious mistake, permit people to say that it is a mistake, replace those responsible when necessary, and change direction before the consequences become irreversible.
That is not political neutrality. It is one of the strongest arguments for a free society.
Copyright Notice: This article is the intellectual property of its author. If you wish to reproduce or share it, you must clearly indicate the original source and provide proper attribution. Unauthorized copying or distribution without acknowledgment is strictly prohibited.
How to Cite this Article (APA 7th edition)
Wang, H. H. (2026, September 20). When Democracies Get It Wrong: Political Correction, Presidential Judgment, and an Uncertain World
William Wang 