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Checks, Balances, and other Trump Woes

President Donald Trump seems cocksure he could singlehandedly make America great again if only certain pesky people would get out of his way, but he’s finding that’s not the way things work in America or the rest of the world. The courts and the Congress and various other institutions have their own ideas about what to do, and are increasingly willing to assert themselves without fear of Trump’s “tweets.”
One of the peskiest institutions is the Federal Reserve Board, a stubbornly independent quasi-governmental body that plays an outsized role in the American economy by setting interesting rates and therefor determining monetary policy. Fed chairman Jerome Powell is Trump’s handpicked appointee, but like many another handpicked Trump appointee he’s greatly disappointed the president, in this case by very gradually raising the historically low interest rates and slightly easing the unprecedentedly voluminous money supply. Given the low-unemployment and chugging-along-well-enough economy that Trump routinely boasts about that’s what the Fed is supposed to do, according to the prevailing and usually reliable economy theory, but Trump would prefer the easy money that keeps the economy and stock market setting records he can brag about until the hyperinflation comes along during a future Democratic administration.
Trump has tried to solve this problem by packing the Fed’s board of governors with more compliant appointees, but the latest two have failed been forced to drop out..
One was Herman Cain, the former Godfather’s Pizza chain boss who ran for the Republican presidential bar in ’12 on a catchy “Nine Nine Nine” economic plan that somehow concluded that nine was the perfect number for the national income tax and business tax and sales tax, and even before a couple of extramarital sex scandals chased him out of the race most Republicans had concluded that despite his business success and master’s degree in business and knack for catchy slogans Cain didn’t much know about economics. Once it became clear he wasn’t going to get affirmed by Congress, Cain withdrew his name for consideration for the Fed Board.
Trump appointee Stephen Moore has also withdrawn his name from consideration, although for different reasons. The damned Democrats who control a majority in the House and are only slightly behind in the Senate didn’t like Moore’s long history of undeniably sexist public statements about uppity women playing basketball, nor his habit of making arguably racist jokes while on microphone, and a sufficient number of the slight majority of Republicans in the Senate were so put off by his utter lack of any discernible qualifications for the job that they risked the wrath of Trump’s “tweets” Moore has said on camera and written in print that he favors a return to the gold standard, which economists on both the left and right sides of the sensible mainstream consider crazy talk, and when confronted with that in his confirmation hearings Moore took the Trump-ian way out and insisted that he’d never said or written any such thing, so that didn’t go well
Meanwhile Trump’s Attorney General didn’t show up for his scheduled testimony before the House Judiciary Committee on Thursday, the White House and its various executive agencies are similarly resisting Congress’ very extensive efforts to exercise its constitutional oversight powers about a wide range of Trump’s ongoing businesses, which will all be eventually settled in those pesky courts that don’t always rule in Trump’s favor, despite Trump’s serendipitous efforts to pack the Supreme Court.
Gasoline prices are also rising, despite all the “fracking” that’s going on and Trump’s chummy relationship with the unctuous king of Saudi Arabia. Trump’s greatest trade deal ever with Canada and Mexico to replace the worst-ever North American Free Trade Agreement is also facing a bipartisan tough fight in Congress despite the slight Republican majority in the Senate. There still seems to be a worry about North Korea’s nuclear weapons program, despite Trump’s love affair with Kim Jong Un and his assurances we can all sleep soundly at night. The damned Democrats have some pretty fair questions to ask Barr about his rose-colored-glasses handling of the pretty darned damning Mueller report, and the Democrats are calling on Mueller himself to sort it out in public testimony, and we expect that to take up much of the coming news cycles.
Which is mostly fine by us. We don’t think any of these damned Democrats know any better, but we’ve seen enough of Trump to root for any established institutions that might restrain him. So far as we can tell, the hated establishment and its usual way of doing things is more reliably right than Trump.

— Bud Norman

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What Goes Down Must Come Up

After Wednesday’s brutal day on America’s major stock markets President Donald can no longer brag about their record highs, but if he wants to attempt a complicated and counter-intuitive argument he can claim some credit for the rosy economic conditions that have caused the recent swoon.
The markets tanked because the Federal Reserve Board now intends to slightly raise the artificially low interest rates that fueled the markets’ record run, which is because by now they’ve successfully brought the economy to below full employment and a potential 4 percent growth rate in the gross domestic product, and for now it’s more worried about an inflation rate that’s slightly outpacing the long-awaited wage increases that have lately occurred. According to the perverse logic of the stock markets, good news is bad news, just as back when high unemployment and low GDP growth were bringing interest rates down and raising the indices up bad news was good news.
All of this damnably good news started shortly after the big financial meltdown of ’08, which was caused by the subprime mortgage social engineering of President Bill Clinton’s administration but came to fruition in the final days of President George W. Bush’s administration. Bush and most of the Democrats and Republicans in Congress — including both both of the party’s presidential nominees — responded with a big bailout of some major banks that annoyed people on both the left and the right, and the Fed started printing money at a rate that alarmed any conservative old enough to remember the hyper-inflation of the ’70s. In retrospect, though, the center-left and center-right compromise seems to have more or less worked.
The economy was already officially out of recession by the time President Barack Obama was elected by a scared-to-death electorate and passed a pork-laden “stimulus package” through the overwhelming Democratic majorities in Congress, and after that a historically slow recovery slogged along on the easy money the Fed was printing. We’re still convinced that Obama’s anti-business regulatory and tax policies slowed the recovery, and that only the Fed’s foolhardy money-printing sustained it, but after a scared-to-death electorate elected a Republican majority in the House of Representatives in the “tea party” wave of ’10 there were no more “stimulus packages” or other major interferences and thus things improved slightly. As much as we still disdain Obama-nomics and hate to give the guy credit for anything, we have to admit that during the last two years of Obama’s presidency the economy was on a clearly upward path.
By the time a scared-to-death-of-something-or-another electorate gave an electoral majority to Trump, the unemployment rate was a respectable 4.8 percent and the GDP was growing at a not-great-but-not-bad 3 percentage points or so. As much as we disdain Trump’s trade wars and attempts to restore the coal-driven and low-tech economy of the ’50s, and as much as we hate to give the guy credit for anything, we also have to admit that economy has been on pretty much the same upward trajectory ever since Trump’s inaugural speech promise that “The American carnage ends right here, right now.” Trump’s exceedingly business-friendly regulatory and tax policies have no doubt helped, and his stupid trade wars and economic nostalgia haven’t yet hurt much, and by now the economy is rolling along at a rate we can’t blame the Fed for applying some slight pressure to the brakes.
Trump is already grousing about it, though, as he’d much rather be bragging about record stock market highs and new land speed records in economic growth and how nobody has ever seen anything like it. As much as we hate to give the guy credit for anything, we have to admit it’s another brilliant political ploy. If your stocks are down it’s because of that damned fellow who’s Chairman of the almighty Fed, that quintessentially quasi-governmental institution that actually runs everything according to all the leading “deep state” conspiracies since the days of President Andrew Jackson, and has nothing to do with Trump, who is surely an innocent bystander and fellow victim.
Trump did in fact appoint Jerome Powell as the chairman of the Fed, and Powell was confirmed by a Republican Senate, but so was Attorney General Jeff Sessions appointed by Trump and confirmed by a Republican Senate, and for now both are suspected conspirators in a “deep state” plots to overthrow Trump. Those smarty-pants know-it-alls at the Fed have a darned convincing case for raising the prime interest rate to a few notches lower than historical norms, tough, and if it keeps the economy chugging along at a optimal if not the-greatest-anyone’s -seen rate without inflation we’re sure Trump will be glad to claim the credit, and boast about how great it could have been if only he had been in charge. At this point the labor market is tight enough that further economic growth will require an increase in immigration, and Trump should also be grateful if the Fed spares him that dilemma.
These days our only interest in the stock market is in the long run, and over that dreary amount of time it’s survived the Great Depression and Stagflation and the Dot.com and subprime bubbles, and it’s even survived Obama and we figure it will probably survive Trump. We give some of the credit to those smarty-pants know-it-alls at the Fed, but most of it to all those anonymous schmucks who get up every morning and go to some office or factory or shopping mall and make the decisions and do the work that keeps our still mostly-free economy slogging along through good times as well as bad times.

— Bud Norman