Advertisements

What’s Good for General Motors …

Being the hard-nosed and hard-hearted sorts of old-fashioned conservatives who embrace Adam Smith and Milton Friedman and their red-in-tooth-and-claw school of laissez faire capitalism, we’ve always voted against those damned Democrats for fear they’d arrogantly think they could run our incomprehensibly multi-trillion dollar economy better than the free markets comprised of the free men and women  who actually make it happen. Now we’ve got a Republican president who arrogantly thinks he better knows how to run both big and small corporations better than the executives who have made them successful, however, and at the risk of being called Republicans in Name Only we can’t say we like that any better.
The constantly feuding President Donald Trump’s latest feud is with the iconic and still-formidable General Motors Company, where the brains behind the operation have decided that their long-term fortunes require them to shut down five plants and lay off 14,000 workers in the United States, which Trump would prefer they not do, and he’s threatening whatever punishments he has at hand if they go ahead and do it. Most of those plants and workers are in some of the industrial midwest states that provided Trump his improbable electoral victory based on his promises he would protect manufacturing jobs, so we can well understand his political calculations, but Trump’s underlying economic theory is not so obvious.
General Motors’ explanation is that by shutting down those five plants and laying off those 14,000 workers they can reinvest the money they’re currently losing in more efficient plants with workers building more profitable products in the scarily looming days of self-driving cars and other high-tech automotive gizmos, and that if they don’t the whole company and all of its workers might eventually be out of business. We don’t know any more about the automotive industry than Trump seems to, but given General Motors’ long tradition of existence to its workers and customers we’re inclined to believe its executives have a better grasp of the company’s situation than we or Trump have. We’ve long observed that success of capitalism involves some creative destruction, and this looks like one of those situations.
We have sincere sympathy for those 14,000 thousand workers and everyone in those five communities that will see a major segment of their economy shut down, even if they don’t affect our non-existent political careers, but we’d hate even more to see the rest of General Motors’ hard-working employees eventually be put out of work in a futile effort to sustain an unsustainable status quo. We’ll always remember how our beloved Boeing executive Dad used to agonize over the layoffs he was sometimes forced to make to keep that company the world-beating entity it is today, Life is undeniably tough in the red-in-tooth-and-claw free market world, yet it does seem to get better over the long run, and so far we haven’t found any damned Democrats or damned Republicans who can credibly claim to make it better yet.
So far this Trump fellow’s meddling in the economy strike us as arrogantly intrusive as anything that even a self-proclaimed socialist such as Sen. Bernie Sanders or any damn Democrat might have done if they’d had the chance. Republicans used to complain that Democrats wanted to choose the winners and losers, but Trump’s trade wars have provoked retaliatory tariffs and thus chosen the steel-making sector of the economy over the steel-using sector that includes General Motors, the coal-mining industry over the many industries that would prefer to use less expensive and more environmentally-friendly sources of energy, and he also prefers the mom and pop Main Street retailers over an e-commerce giant offering better prices whose owner also happens to own that troublesome Washington Post. So far it’s worked out well enough, but recent trends and ancient history suggest it won’t last forever.
Trump is still feuding with the iconic and steel-buying Harley-Davidson motorcycle company, which shifted some work to Europe to get around Trump’s trade war with that entire continent, and now he’s threatening tariffs that would raise the cost of the Apple Computer Company’s hugely popular designed-in-America but made-in-China I-Phones by a hundred bucks or so, which probably won’t play well with young voters.  Apple dominates the huge high-tech sector of the American economy that has lately been taking a beating on the stock markets, which was helped wipe out all of the last year’s overall stock market gains, so the threat strikes us as both economics and bad politics.
Trump is currently blaming the stock market’s recent swoon on the guy he appointed to be Chairman of the Federal Reserve Board, which has recently nudged interest rates up slightly to a point that’s still far lower than historic norms in response to what Trump boasts is the great American economy ever, but we trust that the Fed knows more about monetary than Trump or we do. The inflation rate is a full 11 points or so lower than the worst we’ve seen since way back in the ’70s, but it is outpacing the modest gains in wages that Trump likes to brag about, and the Fed seems to be acting according to the time-honored economic principles that the free market has mostly thrived on. Lower or at least steady interest rates would be a short-term gain for the president, especially after two trillion dollars of debt that’s been racked up by his administration despite the best American economy ever, but in the long run we’ll better trust better than Trump the time-honored economic principles and the creative destruction of the free markets.
Nowadays that makes us Republicans in Name Only, and we have no faith any damned Democrat would do any better than Trump has, so for now we don’t have much say in the matter. Those immutable laws of economics and their awesome market enforcements are more powerful than  anything n the universe anything but God, however, and General Motors and Harley-Davidson and the Federal Reserve Board still hold some significant sway, and we expect they will eventually prevail over such puny forces as Trump or those damned Democrats.

— Bud Norman

Advertisements

Rainy Days and Mondays

Monday was a gray and rainy day here in the middle of America, with all the right lanes of Wichita’s streets flooding on our drive home from chores, and judging by the news we read in our nice dry office once we arrived home things were desultory all over.
That awful Omarosa Manigault Newman woman was still in the news cycle, which does no good for anybody. She’s the former reality star who got a high-level gig in the White House when her reality show co-star President Donald Trump was elected, but was fired by chief of staff John Kelly and is now described as a “low-life” by Trump because of the tell-book she’s about to publish. On Sunday’s “Meet the Press” she released a surreptitiously recorded tape of Kelly’s heavy-handed firing in the top-secret “Situation Room,” which made everyone involved look bad, and on Monday she released another surreptitiously recorded tape of Trump himself telling her that hated to hear about her firing, which is also embarrassing for all involved. She claims to have further surreptitiously recorded conversations with the president’s daughter and son-in-law and other high-ranking Trump administration officials, which we don’t doubt, and expect it will make all involved look bad.
Back east on Wall Street all the stock market indices were down again, and so far as we can tell that’s mostly because of the Turkish government’s fiscal irresponsibility and general craziness. Due to long-ago Cold War exigencies the increasingly Islamist Turks are full-fledged North Atlantic Treaty Organization members, and although they’re not fully-fledged European Union members they’re a big enough chunk of the western world’s economy that their impending bankruptcy is roiling the global markets. We’d happily blame it all on the once again “Sick Man of Europe,” but in this case Trump has congratulated Turkish President Recep Tayyip Edorgan on his recent promotion to de facto Islamist dictator, and is nonetheless waging war on both Erdogan and America’s democratically-elected leaders, and for now no one looks good in this stock market swoon.
Meanwhile, back in the U.S.A. Trump was meeting with the “Bikers for Trump,” and backing their improbable call for a boycott of Harley-Davidson motorcycles, which has lately been forced to shift some manufacturing to export markets as a result of Trump’s trade wars. The oh-so-polite Washington Post was shocked to notice that some of the self-proclaimed “outlaw bikers” had some pretty sexist patches on their leather and denim jackets, and showed up at the White House on their beloved Harley-Davidson “hogs,” and that also doesn’t make anyone look good.
There’s some good economic news, what with the low unemployment rate and rising wages, but if you look closer there’s a dark cloud inside that silver lining. Job creation has actually slowed since the last 16 months of the hated administration of President Barack Obama, and those long-delayed increases in wages have thus far been outpaced by a conspicuous uptick in the inflation rate, which in bi small part to do with all those tariffs Trump has imposed. The federal deficit is as high as it was when the evil Democratic triumvirate of Obama and Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi were running things in the aftermath of ’08 financial meltdown, and for now only the Democrats give even a hypocritical damn about it.
Trump’s former campaign manager Paul Manafort is still on federal trial regarding tax evasion and bank fraud charges, too, with Trump’s former deputy campaign manager Roger Stone providing some of the damning testimony so far, and Manafort will soon face another federal trial regarding his failure to register as a foreign agent for a pro-Russian Ukrainian government during the campaign. Federal Bureau of Investigation agent Peter Strzok was fired for his anti-Trump “tweets” to the woman he having an affair with with during the presidential campaign, which gave the pro-Trump media plenty of reason to talk about their version of the real “Russia thing” scandal, but given all the extra-marital scandals and outraged “tweets” from the president that also looks bad for everyone involved.
Worse yet, the damned Democrats seem even crazier. They’ve got self-proclaimed socialists running in various districts, and a lesbian Native American mixed martial artist nominated up in Kansas’ third congressional district, and “antifa” terrorists making the white supremacists look placid during the ongoing race riots popping up around the country, and so far they’re still clinging to that awful Pelosi woman. There’s even talk of nominating a porn star’s lawyer for the presidency, on the grounds that he’s an audacious reality star and “at least he fights,”and that so far he’s gotten the better of  of the president who paid off his client,  and in this day and age it might well prove a winning argument. A sane and centrist Democratic party might stave off disaster long enough for a revived Republican party to set things right, as far as we’re still concerned, but on this gray and cloudy it seems a remote possibility.
The floods are reportedly far worse back in Pennsylvania, where our parents happily lived for a few decades until they returned to Kansas a couple of years ago, and as always we acknowledge that things are tough all over. The local forecast calls for another rainy day today before we get back to another hot and sunny Kansas summer day on Wednesday, and those poor kids who have to start another dreary school day on the unconscionably early next Monday will surely appreciate that. We’ll hold out hope, too, but no one comes out looking good in the end.

— Bud Norman

Trump Takes on Harley-Davidson

Harley-Davidson has long made the motorcycles of choice for American cops, criminals, and male middle age crisis sufferers, and ranks with Louisville Slugger baseball bats and Fender electric guitars and apple pies as one of America’s most all-American products. Nonetheless, President Donald Trump now regards the company as one of his  enemies in the world trade war he’s waging.
It all started with Trump imposing punitive tariffs on imports from the European Union, which predictably resulted in the EU imposing retaliatory tariffs on certain industries in the states that cast their electoral votes for Trump in the last election. Wisconsin was one of those states, and the Milwaukee-based manufacturer of the only significant American motorcycle was hit with tariffs that would raise the cost of their product by than $2,000 in the company’s second-biggest market, which predictably resulted in Harley-Davidson’s announcement that it would avoid the tariffs by building motorcycles for the European market in Europe.
Which predictably resulted in a series of “tweets” by Trump denouncing the company as un-American, threatening to impose new taxes “like never before” on it, and predicting its American customers will soon go bankrupt as its customers go elsewhere.
All of which, of course, is balderdash. Harley-Davidson’s decision to build motorcycles in Europe is the predictable self-interested economic response to the predictable consequences of Trump’s ill-advised trade war, which seems pretty American to us, and we’d note that Trump and his favorite daughter have long had the products they peddle manufactured in other countries for far less necessary reasons. Presidents are restrained by the Constitution from levying taxes on their political enemies, and even if Trump persuaded Congress to do so it would be a bill of attainder that is explicitly unconstitutional and downright un-American. If Harley-Davidson’s proudly American customers do decide to choose another motorcycle to show their solidarity with Trump, they’ll almost certainly wind up buying a German or Japanese model and paying much more for it because of Trump’s tariffs.
Pretty much everything about Trump’s trade war against the world is similarly stupid. Those employed in the steelmaking industry might benefit, but those employed in the more numerous steel-using industries are going to take a hit and anyone who buys a Harley-Davidson motorcycle or anything else made with steel is going to wind up paying much more for it. The Kansas wheat farmers and airplane-makers around here who rely on lucrative export markets to get by are going to take a hit from all the retaliatory tariffs, too, and so will all sorts of workers in all sorts industries that don’t need Trump’s protection and aren’t in his favor.
The post-World War II order that everyone agreed to at Bretton Woods and established a global market doing business with the Yankee dollar as the reserve currency unit has brought about an unprecedented era of global peace and prosperity, and despite all the ups and undeniable downs along the way America is also better off. Trump is convinced that by his sheer Nietzche-an power of will he can negotiate the rest of the world into cutting up the post-war world order goose and giving America all the golden eggs, though, and he seems to have persuaded a significant number of fans that he can.
At one of his continuous campaign rallies on Tuesday in West Columbia, South Carolina, Trump got big laughs by insulting an outgoing Republican South Carolina congressman and a dying Republican Senator and former Republican presidential nominee who haven’t been properly obeisant to the president, as well as a couple of late-night television comedians who constantly lampoon him. He also got big cheers for promising an escalated trade war against Germany, which he blames for selling more cars in America than America sells in Germany and thus creating a trade deficit, which he considers an unforgivable offense, even though everybody runs a trade deficit with somebody, which is how the world works.
The crowd loved it, even though the biggest employer by far in the nearby and thriving town of Greenville is Bavarian Motor Works, which is as iconically German as Harley-Davidson is iconically American. Those low-paying sweat-shop textile mill jobs South Carolina used to get by on have long since been outsourced to even the lower-wage and less-regulated countries where Trump and his favorite daughter have their branded neckties and women’s apparel made, but the state is by far better off with BMW running its biggest factory in the state, and why those rally-goers have more faith in Trump than the post-war world order that has brought them such peace and prosperity is hard to explain.
We have no particular affection for Harley-Davidson motorcycles, as their customers regularly interrupt our conversations on the local taverns’ outside drinking areas with their loud flatulence, and the last time we rode a motorcycle was decades ago and on one of those Japanese “rice burners,” but we’re now rooting for this iconic American brand and the rest of the world in their war with Trump.

— Bud Norman