So this is how it ends — in a whimper wrapped in self-pity and recriminations.

With President Obama on the defensive at his final press conference, Hillary Clinton’s last campaign event resembling a wake, and Electoral College protests ending in total failure and farce, the Democrat Party is limping off the stage and into the political winter.

It was supposed to sit atop the national power pyramid for decades, a new paradigm of liberals, progressives, the young, the old, the unions and blacks, Latinos, Muslims and Asians.

The torch would be passed from Obama to Clinton, a liberal Supreme Court would vastly expand executive power and the regulatory state would enforce climate-change orthodoxy on all industry and elitist dictates on every American. Globalism would be the new patriotism.

But a funny thing happened on the way to one-party dominance: The people who work for a living said no, hell no. Their revolt brings Donald Trump to the White House amid hopes of a revival of the economy and of the American spirit.

Thoroughly beaten, the Dems are at their lowest point in nearly a century. From the White House to Congress to statehouses, they are on the outside looking in.  Are we witnessing their death throes as an organized political party?

The Italian referendum and close-shave Austrian election are symptoms of a continent that may be teetering on the brink of political disintegration.

It’s just possible that an empire may be collapsing before our eyes, as the Habsburg and Ottoman empires did before it, in or around the same neighborhood.

With the rise of nationalist parties in Italy, Austria, Hungary, Poland, the Netherlands, France, Germany and Britain, the possibility that the Brussels union has fomented, rather than suppressed, nationalism can no longer be dismissed.  The European Union may be encouraging precisely what it was founded to avert.

Against this background, it is worth recalling that the leading theory among economic historians for why Europe after 1400 became the wealthiest and most innovative continent is political fragmentation.

Precisely because it was not unified, Europe became a laboratory for different ways of governing, enabling the discovery of regimes that allowed free markets and invention to flourish, first in northern Italy and some parts of Germany, then the low countries, then Britain.

By contrast, China’s unity under one ruler prevented such experimentation.  Just what the mandarins of the EU are doing now.

As the Dow flirts with Trumpian heights of 20,000 on Wall Street, the Shanghai Composite in China has been drifting down for seven consecutive weeks.

It is hard to construct a case that reconciles this split, given the tightly intertwined nature of the world's financial system and the trans-Pacific symbiosis that we call Chimerica. One of these two markets must reverse.

If you are waiting for the next Chinese boom, you have already missed it. The latest 18-month mini-cycle has peaked. The authorities are being forced to tighten. China's $9 trillion bond market is seizing up.

Forty companies have had to cancel or postpone bond issuance this month. Nomura says 24 large firms are in default negotiations, ranging from steel and construction to shipbuilding, chemicals, textiles, and solar.

Beijing let it rip earlier this year with a fiscal deficit of 4% of GDP - a one-off loosening of two to three percentage points that you would expect only in an emergency - and it deliberately stoked a housing bubble in the cities of the Eastern seaboard.

The stimulus was comparable in scale China's post-Lehman blitz, but the effects have been far less because the efficiency of credit has collapsed.  It now takes four yuan of loans to generate one yuan of growth. Since there has been almost no underlying reform, this has merely bought time at the cost of greater imbalances.

Jerusalem. Israeli officials are thrilled with the national security team that US President-elect Donald Trump is assembling. And they are right to be. The question now is how Israel should respond to the opportunity they present us with.

The one issue that brings together all of the top officials Trump has named so far to his national security team is Iran.

During his video address before the Saban Forum (12/04), Prime Minister Binyamin Netanyahu said that he looks forward to discussing Obama’s nuclear deal with the Iranian regime with Trump after his inauguration next month.

Given that Netanyahu views Iran’s nuclear program — which the nuclear deal guaranteed would be operational in 14 years at most — as the most serious strategic threat facing Israel, it makes sense that he wishes to discuss the issue first.

But Netanyahu may be better advised to first address the conventional threat Iran poses to Israel, the US and the rest of the region in the aftermath of the nuclear deal.

There are two reasons to start with Iran’s conventional threat, rather than its nuclear program.

On Fox News Sunday (12/11), with a single incendiary comment on Taiwanese independence, US president-elect Donald Trump has abrogated a central tenet of US foreign policy for the last 37 years and seems to have picked a deliberate fight with China.

Mr. Trump’s language ereyesterday was explicit: “I fully understand the ‘One China policy, but don’t know why we have to be bound by a One China policy unless we make a deal with China having to do with other things, including trade.”  This is a bombshell.

The world’s two superpowers are now heading for a showdown on a neuralgic strategic issue, greatly raising the risk of a trade war and a fundamental breakdown of the global commercial system.

However…there is little that Beijing can do to damage the US without hurting itself far more.  China’s financial options are limited. Veiled threats to detonate a US debt crisis by selling Beijing’s $1.157 trillion of US Treasury bonds, to take just one example, are mere bluster.

So what can China do regarding the wily presidential deal-maker?

The 10-minute telephone conversation between Taiwanese President Tsai Ing-wen and U.S. president-elect Donald J. Trump on December 2  was the first such conversation between a sitting president in Taiwan and a U.S. president or president-elect since Washington broke official diplomatic relations with Taipei in 1979.

The reactions ranged worldwide, from consternation at Trump’s breaking with longstanding policy to hopes for deeper relations between the United States and the democratic island nation.

Most analysis of the call overlooks a crucial component: Tsai’s own calculations and the domestic reaction on Taiwan.  That’s what we’ll discuss here.

As is often the case, little effort was made to analyze why Taiwan’s first female president, in office since May 20 and brought to power in January via democratic election, was willing to place a call that, if Trump picked up at the other end of the line, was certain to spark some controversy.

Even less was said about reactions in Taiwan, particularly its 23 million citizens, who far too often in the rare instances of international attention are denied a voice of their own – as if all of them were little more than insentient subjects to the implacable waves of history or the dictates of decision makers in Washington and Beijing.