What the Scandals Obscure

All the news lately is about the Democrats’ increasingly rapid rush to impeach President Donald Trump for all sorts of increasingly plausible reasons, and that might well redound to Trump’s benefit. There’s always an outside chance it all turns out to be a “deep state” conspiracy that vindicates the president and exposes all his enemies, and for now it’s distracting attention from some worrisome economic news.
You might have never heard of the Institute for Supply Management’s manufacturing index, but the stock markets watch it closely enough they took a dive on Tuesday when it reported that for the second consecutive month the manufacturing sector of the economy was in contraction, this time more severely than the month before. Farm bankruptcies are lately up, too, along with farm suicides, and growth in both the overall American economy and the interconnected global economy is clearly slowing, with several big and important national economies already in recession.
Which is bad news for assembly line workers and farmers and stockholders and eventually everyone else in the entire world, but it’s also very bad news for Trump. Despite three years of unrelenting scandals and outrageous “tweets” and deliberate provocations Trump has generally stayed above 40 percent in the public opinions because the grow domestic product and stock markets were up and the unemployment was rate low. The trajectory wasn’t much higher than it had been during the last six years or so of the hated administration of President Barack Obama, but it gave Trump and his talk radio apologists something to brag about, so all the die-hard Trump fans and a lot of the more reluctant supporters were willing to put up with all the rest of it.
All the rest of it is pretty hard to put up with, though, at this point even for the die-hard fans, and harder still if Trump can’t run for reelection on the boast of the the greatest economy ever. He won his first Electoral College victory despite losing the popular vote by three million or so because of the Republican party’s longstanding hold on the prairie and southern states and a mere 70,000 votes spread around the usually Democratic Rust Belt states of Pennsylvania and Wisconsin and Michigan, where they bought into his promises that he’d revive the agricultural and manufacturing sectors. Neither are faring at all well at the moment, many economists fear the service sector will be dragged down along with them, and if current trends continue for another 13 months Trump might well lose to even the looniest left nominee the damn Democrats might come up with.
There’s a strong argument to be made, after all, that Trump’s unilaterally waged trade war against most of the world is the primary cause, or at least has something to do with it. The tariffs have raised prices on foreign goods not only for the Wal-Mart customers but also for the manufacturers of everything that requires foreign parts, which is a lot stuff, which is bound to be bad for business. Of course the retaliatory tariffs have essentially barred America’s farmers from the lucrative global markets they’d come to rely on, but Trump boasts that “I sometimes see where these terrible, dishonest reporters will say ‘Oh Jeez, the farmers are upset.’ Well they can’t be too upset, because I gave them $12 billion and I gave them $16 billion this year.”
Of course Trump didn’t reach into his own pocket for that sum of money, which is more than Obama spent on the automakers’ bail-out, which at the time outraged all the farmers and the rest of Republican party, but we expect a lot of farmers will be mollified, along with a lot of laid-off factory workers, even if they still come out on the short end of the stick. Part of Trump’s appeal to these voters is his shared hostility toward the pointy-headed know-it-alls from the coasts who want to take away their semi-automatic rifles and reconfigure the ethnic makeup and sexual orientation of America, and they’re willing to endure the pain while Trump delivers the greatest trade deals ever.
>He’s not yet delivered one, though, and at this point he seems unlikely to strike one in time for reelection. The Chinese dictatorship can endure its people’s hardships more easily than an American president with a pesky free press and upcoming election ever can, and being stereotypically inscrutable Asian types they regard the next 13 months or so as a mere blink of the eye, whereas Trump likely sees it as a hellish eternity. Trump is still feuding with the European Union and the Brexit-ing British, along with most of South America and Africa and all the Asian countries that used to be on board with a Trans-Pacific Partnership treaty aligned against China, until Trump pulled out of the Obama-era pact. Restoring mutually beneficial trade among the nations seems out of reach for the next 13 months or so, much less the greatest trade deals ever.
The smart money on Wall Street seemed to think so on Tuesday, and we expect that the factory workers and farmers will also notice if Trump’s grandiose promises aren’t kept. There’s no longer any semblance of a free market Republican party and none of the damn Democrats are willing to abandon their traditional protectionist instincts and thus don’t have much to say about it, as they do seem more preoccupied with reconfiguring the ethnic makeup and sexual orientation of the country, so we’ll sit on the sidelines and see how it all turns out. If the economy isn’t rosy come election day, the rest of it will smell very bad.

— Bud Norman

Oy Vey, That Stock Market

These days our interest in the stock markets is mostly academic, but the past several days have been quite interesting nonetheless. Pretty much everywhere the stock markets are panicking, and suddenly the most alarmed pundits are surpassing even our usual gloom and doom.
The Dow Jones Industrial Average took a catastrophic 1008-point plunge Monday before a roller coaster rally reduced that to a still dire drop of more than 588 points, which is about 3.7 percent of the market’s total value lost in a single day, which is enough for some pundits with a economic stake in their reputations to advise people to invest heavily in bottled water and canned foods. Our own reputation for economic prognostications is of negligible value, as we won’t even pretend to know what the hell is going on out there, but for what it’s worth we’ll go on record to say that it apocalyptic predictions sound plausible enough to us.
Maybe it’s just that early 1008-point plunge that’s got us fretful. We’re old enough enough to recall a time with the DJIA measured in four digits, and when a three-digit drop dominated the next day’s headlines, so a three-digit drop has a scary sound to our ears even in this age of a Dow so many thousands ahead of even the Reagan days. That 588-point closing plunge even seems frightening, especially after the previous week of steep decline, and there’s little elsewhere in the news to provide reassurance that this is just one of those occasional dips in the inevitable road to prosperity. The popular explanation is that the Chinese economy, which might or might not be the world’s first largest economy depending on which method you believe, is suddenly going from vastly overstated good fortune to probably overstated decline and that the rest of the world is running the numbers and realizing that as a result they’ll fall far short of the promises that have been made to their restive peoples. The rest of the world is mostly the United States, which might or might not be the world’s first largest economy, depending on which method you believe, and the European Union, which is by all accounts a solid third in the pecking order, even with Greece’s ongoing catastrophe and all the the other brewing problems with that misguided project to meld fissiparous Europe into one state and economy, and the Latin American economies that have lately seen a plunge in the value of their currency, and the African states that are so dysfunctional they barely rate a mention in the stock market news, and the Asian countries that are overwhelmed by the Chinese, so the global situation doesn’t seem at all encouraging.
We have some faith in our fellow citizens that they’ll still be able to provide the products and services they’ve made their lives’ work, so that the bottled water and canned goods aren’t the next shrewd investment, but we have little faith in any of the governments and we’re still pretty gloomy and doomy. The communist Chinese method of mandating by law that by power of the gun the economy will continue to climb no matter how many ghost cities they build is proving powerless against the almighty market forces, the United States’ and European Union’s method of simply printing enough money to pay of all the promises is proving just as ineffectual, and the rest of the world is of course entirely hapless. The inevitable fact that ghost cities and printed money and false promises of government-engineered property aren’t enough to sustain a global economy seem to have reached their conclusion.
Those Dow Jones Industrial Averages were always overstated, to our admittedly unreliable thinking, by all all the quantitative easing of free money that had nowhere to go in a zero body yield world except the stock markets. All of the eye-popping numbers the markets produced seemed wildly incongruent with an economy that had a record lows in labor participation and declining wages and the scant job claims outstripped by immigration, and the current panic seems more in line with the reality of the actual situation. Although we don’t recommend investing in bottled water and canned goods we don’t expect any good news about the economy soon.

For those who insist on a silver lining we we will note that the economy should soon its rightful place among the pressing issues of the day, and that the public will not be inclined to buy any arguments for the status quo.

— Bud Norman