Opening Day in a Closed Country

Yesterday was supposed to be Opening Day for major league baseball, one of those harbingers of spring we always look forward to, but because of the coronavirus that didn’t happen. Instead of poring over box scores, we were reading some grim statistics.
More than 1,200 Americans are dead, new infections are overwhelming the hospitals in several large cities and doubling every three days, a record-setting 3.3 million Americans filed for unemployment benefits in the past month, and most of the country seems to be stuck at home with nowhere to go. The stock markets are up on news of a bill to spend $2 trillion of freshly printed cash to prop up the economy, but it looks to be months before people can safely leave the house and start earning and spending money.
We saw another story that the crime rate is down in much beset New York City, but that’s probably because there are fewer people on the streets to mug. There is other good news out there, but for now every silver lining seems to have a cloud.
Somehow it reminds us of that scene in Ken Kesey’s “Once Upon a Cuckoo’s Nest” where mean Nurse Ratched wouldn’t let the patients at her mental hospital watch the World Series, so they sat in front of a blank television and pretended to watch the game and cheer every play they saw in their imaginations. We’re already going a bit stir crazy ourselves, and spent part of our day envisioning how our beloved New York Yankees would have gone 1-and-O to start another championship season, and later tonight we’ll probably continue imagining that scenario to lull us to sleep.
Here’s hoping that sooner or later things will get back to something like normal, and that most of us will be around for it. Until then, we urge everyone to do the right thing and use your imagination.

— Bud Norman

The Cold Calculations of Here and Now

No one is more eager than we are for the country to get back to something like normal, as this stay-at-home-with-nowhere-to-go social distancing stuff is already driving us quite stir crazy, but we can’t share President Donald Trump’s optimism that he’ll be able to announce all is well and we can all come out of hiding and get back to business as usual by Easter. Easter is just 19 days off, and current trends suggest that by then the coronavirus will be exponentially more widespread than it is now.
Even so, Trump is ignoring the advice of the government’s most expert epidemiologists and hoping that churches will be packed on Easter and everyone will be back at work the next day. He figures Easter is well past the 15-day period he’s been hoping will suffice since he started taking the coronavirus seriously, and adds that Easter is a very important day to him. Trump is what we weekly worshippers sometimes call a “Chreaster,” meaning the sort of Christian who only attends services at Christmastime and on Easter, so we’ll not question the sincerity of his religiosity.
We do suspect, however, that Trump also has other motivations. Shutting down bars and restaurants and theaters and sports and travel and large gatherings while having everyone stay at home is disastrously bad for business, including Trump’s still wholly-owned businesses, as stock market indexes and unemployments claims clearly demonstrate, and Trump had hoped to run for reelection by boasting to the large gatherings at his campaign rallies about the record stock market highs and unemployment lows he had until the coronavirus came along. Continuing the current caution for weeks or even months past Easter might well spare an untold number of deaths, but there might well be severe economic repercussions to prolonging the status quo, and Trump now repeatedly argues that “We cannot let the disease be worse than the cure.”
Trump seems to have learned the phrase from a fellow who appeared on Fox News the night before Trump started using it, and much of the Trump-friendly media are already repeating it to bolster an argument that is coldly calculating yet deserving of careful consideration. An economic cataclysm might very well cause as many deaths and as much human misery as any pandemic, the argument goes, and those costs must be weighed against whatever deaths and misery that might be spared by everyone staying home until the crisis has passed. We weigh the benefits of automobile travel against the bigger-than-coronavirus number of deaths and human misery it causes every year, after all, and as a society have decided in favor of automobile travel, and in times of war and pestilence civilization our society have coldly and calculatingly made all sorts of similarly difficult decisions.
Texas Lieutenant Governor Dan Patrick, who is also chairman of Trump’s Texas reelection campaign, says he’d be willing to risk dying of coronavirus if it meant his grandchildren could inherit Trump’s robust economy, and many of Trump’s supporters seem just as committed to the argument. Still, we don’t find it entirely convincing.
The coldly calculating types can go right ahead and accuse us of being too warm-heated and wimpy, but we weigh heavily the lives lost and human misery that might very well occur if the current precautions are prematurely lifted. We can’t deny the economic repercussions of more prolonged precautions, which are already apparent and painful to everyone, but we’re looking beyond the next news cycle and election day and wondering how the economy might fare after a cataclysmic plague. Yesterday the stock markets reacted to the possibility of a big deficit-spending stimulus package getting passed with the biggest day on Wall Street since 1933, and although that was one of the darkest years of the Great Depression it suggests that big government might once again muddle us through death and human misery as we stay at home and watch out for the old folks.
Trump has a different perspective, though, and from his cold and calculating way of looking at things Easter might well be the best time for the miraculous rebirth of the Trump economy. For now most of the mounting deaths of the coronavirus are predictably in populous urban states that Trump wouldn’t have won in any case, so he can blame their Democratic governments for the death toll, and the minority of the national population in the electoral majority of the states he won last time around are staying at home with nowhere to go despite low local infection and mortality rates and becoming quite stir crazy. Depending on the death tolls and economic data between now and November, which are hard to foresee, it might just work.
For now Trump seems to be discounting the advice of America’s most expert epidemiologists, who have clearly annoyed him with their televised differences of opinion, and is trusting the gut instincts he prides himself on, which has resulted in several casino bankruptcies and numerous other failed businesses and marriages, but has always somehow left him coming out ahead. There’s no telling how it works out for America and the rest of the world, or how the sooner-or-later election between the damned Republican and the damned Democratsis resolved, but we’re holding out hope for ourselves and our families and friends and all of you and yours, no matter what side you take.

— Bud Norman

On the Only Subject at Hand

Try as we might, we simply can’t find anything in the news to write about other than the rapidly spreading coronavirus. Pretty much everyone we run into as we continue to get out and about brings it up, and there’s at this point there’s no avoiding the topic.
Most folks in this hoops-crazy state like to talk sports, especially during “March Madness,” but the coronavirus cancelled both collegiate and professional basketball and will delay baseball and has temporarily shut down sports. Pop culture usually provides something salacious to talk, but right now the entertainment news is all about beloved movie star Tom Hanks and his lovely wife coming down with coronavirus and all the late television comedians doing their jokes about President Donald Trump without studio audiences to laugh along.
The coronavirus is pretty much all that matters for now in the economic news, which has lately been quite awful. The sports industry and school districts are shutting down, and music festivals and business meetings are being cancelled, and entire cities and countries are being quarantined. and travel bans are being imposed, and globalist supply chains are being interrupted, which is not good for the global economy or your favorite hometown business. Stock markets are plummeting, the Federal Reserve Board and the central banks of the other major global economic players are all slashing interest rates to zero and beyond and printing up more money to assuage the markets, and everything indicates that now is the time to panic.
Which of course makes the coronavirus the biggest political story of each passing day, which of course is bad news for Trump. He’s done his best to downplay the coronavirus as no big deal that would soon be forgotten, and even dismissed it as yet another “hoax” to torpedo his presidency, but now that he’s talking about massive government bailouts and travel bans from most of continental Europe he’s conceding that the coronavirus is a pretty big deal, and so far his proposals have not stopped the economic carnage nor quelled a public panic.
None of the damned Democrats seem to have any better ideas, but having been mostly out of power during two of the past three years they can’t be credibly blamed for the current mess, and they have plenty of talking points. According to the consensus opinion of America’s leading experts on this sort of thing, including some who are still on board with the federal government, the country is doing a woeful job of testing its citizens for the disease, and is therefore unable to do other things the country might do if it knew where the corona virus was popping up. Travel bans might be a painful necessity at the moment, but Trump’s European travel band doesn’t extend to Ireland and the United Kingdom, where there have been confirmed cases of coronavirus, and anyone in continental Europe could easily fly to the UK and then to the United States, so the damned Democrats are entitled to wonder if that has anything to do with Trump’s failing golf resorts in those countries.
For now the Democratic nominee seems likely to be former Vice President Joe Biden, rather than self-described socialist Vermont Sen. Bernie Sanders, and we figure that’s also bad news for Trump. Biden is a very boring fellow, which a wary country might well long for come November, but Sanders is kooky enough that Trump might persuade a wary country he could be more destructive than the coronavirus. Biden was vice president during the administration of President Barack Obama, and you can way what you want about his slow-growth policies — we had plenty to say about it at the time — but they did take over shortly after an economic catastrophe and were in charge during eight of those 11 years of Bull Markets that went into Bear Market territory during Trump’s administration. Biden will also have plenty to say about how Trump fired the National Security Council’s pandemic response that the Obama administration had created.
We don’t give much credit to either Obama or Trump for the long run of the Bull Market, but rather credit the ingenuity and resilience of free Americans operating in a free market, trading freely with all the free people of the world. Here’s hoping that not only survives this coronavirus, but also the likes of Trump and Biden, and that there’s something else to talk about.

— Bud Norman

Go Ahead and Panic

The National Basketball Association has indefinitely suspended the rest of its regular season, and the National Collegiate Athletic Association won’t allow any fans to attend its men’s or women’s “March Madness” post season basketball games, so we’re starting to take this coronavirus pandemic seriously. Universally beloved movie star Tom Hanks and his wife have reportedly tested positive for the disease, so apparently no one is safe.
President Donald Trump went on prime time television from the Oval Office on Wednesday to reassure the public that there’s no need for panic, but he also announced he’s banning any travel from European countries for the next 30 days and is preparing to deficit spend billions propping up a suddenly ailing economy, so you can draw your own conclusions based on how much you trust his self-proclaimed very stable genius. From what we’ve seen of it over the past three years, we’re inclined to panic.
Trump was loudly sniffing at the end of every sentence, but he’d been doing that long before anyone had heard of a coronavirus, so we’re not bothered by that, even if Trump has come in contact with with several people who are self-quarantining themselves after coming into contact with people who have contracted the virus. We’re more bothered that Trump fired all of his National Security Council’s experts on global pandemics when he came into office, spent the first weeks of the pandemic claiming it was yet another hoax concocted by his political opponents to make him look bad, so far failed to deliver on a promise of testing for everybody, and has urged people to keep going to work and coming to his campaign rallies even if they have reason to believe they’ve contracted the virus.
Even before anyone ever heard of a coronavirus Trump was eager to restrict any interaction between America and the rest of the world, and the travel restrictions he’s imposed in the wake of the pandemic might well prove sound public policy, but it’s not good for either the global nor the intertwined American economies. Trump has declared himself pleased that Americans will stay in America and spend their dollars here, but as a luxury hotel mogul he should know that America gets more from international travel it spends, and that when basketball games and music festivals and intrastate business meetings and domestic airline flights and cruise ship bookings are being cancelled and supply chains are being interrupted there will be serious economic repercussions.
All the smart money is already panicked about it, with all the major stock exchanges down by 20 points over the last weeks into what is now officially Bear Market territory, after a remarkable 11-year run of Bull Markets, which any Republican will have to admit is eight years longer than Trump has been in office. Trump is urging the Federal Reserve Board to further lower interest rates, which are already pretty much zero, and to keep up the “quantitative easing” of freshly printed money that Republican used to decry, which now have the 2- and 10- and 20- and even the 100-year bond yields at pretty much zero, and is promising to add a few few puny billions of dollars to the nation’s latest $1 trillion dollar deficit to offset all the economic carnage. We’ll find out today and in the coming days how the smart money reacts to that.
Shortly before Trump’s address to the nation, director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci, who seems to know even more about this coronavirus thing than than Trump, warned a House oversight committee that “Things will get worse.”

In any case we’ll hope for the best. We won’t being showing up at anyone’s campaign rallies, as no one seems to know what to do about this, but we will try to show up at the West Douglas Church of Christ and Kirby’s Beer Store, and maybe even watch all the great basketball on our computer or some local tavern’s television. If we’re lucky, life will go on.

— Bud Norman

A Dreary Monday Followed By Yet Another Super Tuesday

Pretty much everyone we encountered on Monday asked how we’re doing, as the friendly folks here in Wichita tend to do, and we were able to cheekily answer that we’re faring better than the stock markets. Most of the people we met got the dark humor in our reply, as they’d heard the news that Monday was an historically bad day on Wall Street.
All three of the major American exchanges suffered at least a 7 percent drop, which comes after a few weeks of alarming declines, and all the smart money on the rest of the world’s markets seems similarly panicked, with no apparent good news on the horizon to turn things around in the near future. The main reason for the dive is the steadily spreading coronavirus pandemic, which has thus far killed only a tiny fraction of the world’s population but already cancelled big events and shut down schools and disrupted global supply chains and currently has most of Italy in quarantine. The markets are also worried that oil prices are plummeting on falling demand and a dispute between Organization of Petroleum Exporting Countries Russia and Saudi Arabia, which can’t agree on an ideal price to fix.
Neither of these developments can be credibly blamed on President Donald Trump, but so far the smart money isn’t betting that he has any solutions. Trump has thus far argued the coronavirus threat is overblown, based on his hunches and natural ability to grasp the science of epidemiology because he had a “super-genius” uncle who taught physics at the Massachussets Institute of Technology, but by Monday he was proposing a slew of government programs and “stimulus” measures redolent of President Barack Obama to prop up the economy just in case. The Federal Reserve Board is on the brink of offering zero interest loans and already printing more money to make up for the trillion dollars of deficit spending by the government, the bond markets are offering pretty much zero return on long or short-term yields, Trump is “tweeting” demands they go even further, and we can well understand why the smart money isn’t reassured.
The worries about the plummeting oil markets are harder to understand. We’re old enough to remember when the OPEC cartel’s price-gouging was the global economy’s biggest worry, and won’t mind a bit if the local gasoline prices fall below $2 a gallon as expected, but it does seem to be a troubling sign for the rest of the global economy. Trump will surely be conflicted about it, as he’s good friends with both the Russian and Saudi dictators and would love to take credit for cheap gasoline, but nothing he might say or do about it is likely to stabilize any of the markets.
Today is another big Tuesday in the Democratic presidential primary races, and the smart money is betting that former Obama-era Vice President Joe Biden will knock self-described socialist and Vermont Sen. Bernie Sanders out of the race, but that won’t help much. The stock markets had a rare good day when Biden took the lead over Sanders after last week’s “Super Tuesday,” but no one’s betting that Biden has all the answers.
It’s all quite desultory, but for now we can tell anyone who asks that we have no symptoms of the coronavirus and are feeling somewhat healthier than the stock markets. Here’s hoping that all of our dear readers are faring at least as well, and that we all make it through.

— Bud Norman

The Smart People Know That What They Don’t Know Can Hurt Them

As a result of good fortune and our own diligent efforts, we’ve come to know quite a few highly intelligent people over our many years. Both of our parents are very smart people in very different ways, the friends they invited to the house also tended to be very smart in various ways that fascinated us as we eavesdropped on the adult conversations, and thus we learned at an early age to cultivate friendships whenever possible with very smart people.
At this point our circle of friends includes all sorts of people, some of them not so bright but endearingly good in other important ways, but also professors at prestigious universities and award-winning authors and journalists and fully-fledged partners at fancy-pants law firms and successful politicians, as well as many artists and musicians and entrepreneurs whose genius hasn’t yet been appreciated. One thing we’ve noticed about very smart people is that they don’t brag about how smart they are, and are more acutely aware than most about how much of the infinite store of possible knowledge that they don’t know.
President Donald Trump has proclaimed himself a “very stable genius,” and has claimed to know more than anybody about everything from taxes and debt to “the awesome power of nuclear” and America’s government and the Bible, and he clearly considers himself the greatest polymath to occupy the White House since at least the administration of President Thomas Jefferson. Which we find worrisome, especially with this coronavirus spreading around the world and spooking all the global stock markets as it inflicts increasing pain on the world economy.
Last week Trump donned a campaign ball cap and visited the Centers for Disease Control, where he boasted that all the doctors he’d encountered were awestruck by his deep knowledge of epidemiology in general and the coronavirus in particular. “Maybe I have a natural ability,” Trump explained, noting that he had a “great, super-genius” uncle who taught at the Massachusetts Institute of Technology. That’s the same uncle who told his nephew that atomic bombs are very destructive, by the way, which is why Trump claims to know more than anybody about “the awesome power of nuclear.” At the same time he admitted being surprised to learn that the normal seasonal influenza is also often deadly, although that’s pretty common knowledge, and even though the flu had killed his uncle’s father and his own paternal grandfather, which the all the press already knew.
All of the very smart people we know would have let the doctors at the CDC who are clearly smarter about epidemiology in general and the coronavirus in particular do all the talking and be in charge, but Trump has his own ways of doing things. He has hunches that the coronavirus isn’t as deadly as the medical experts say, and that it will all be miraculously over come spring, and that although he’s not going to shake any hands and will keep a cruise ship full of American citizens at sea to contain the virus there’s really nothing to worry about. Unless you have complete faith in Trump’s “very stable genius,” it’s not reassuring.
At the same time, there’s all the economic fallout from what might very well prove an over-blown panic about the coronavirus. Mass public events and private vacations are being cancelled, elementary and post-graduate classes are being sent on-line, workforces are being asked to work from home, supply chains between vital countries in the global economy are being disrupted, and stock markets everywhere are tanking. Trump still touts the “best economy” ever but the federal government is running trillion-dollar deficits and the Federal Reserve Board is already damned near to zero on its interest rates, and more worrisomely the bond markets are offering a zero yield, and all the smart people we know about this stuff freely admit they don’t know what to do in case of a possible recession, as deficit spending and lower interest rates and newly-printed money are the usual answer.
Trump might very well propose a stimulus package of deficit spending and quantitative easing of freshly-printed money to keep the economy afloat, much as President Barack Obama did during the last recession, in which case all t he Republicans and Democrats will probably all change sides. We’ll freely admit that we don’t know what to do, and will retain our usual wariness about what all the smart people admit they don’t know, and continue to hope for the best.

— Bud Norman

The Coronavirus and the Real Reason to Be Very, Very Afraid

President Donald Trump has put Vice President Mike Pence in charge of America’s response to the now-pandemic coronavirus problem, and we hope the world’s stock markets will be reassured that at least it’s not presidential son-in-law Jared Kushner running the show. There are new cases of the Chinese-born disease showing up in France and Brazil and here in the United States as well as South Korea and Japan and Italy and Iran, and the disease-fighting sector of the American government has been decimated by budget cuts and staff defections over the past three years, but the Dow Jones only dropped a hundred or so points on Wednesday, so for the moment there’s no real reason to panic.
Trump now argues that the real reason for the six-plus percentage drop in the stock markets this week is all the damn Democrats running for president, and we must admit there might be something to that. The current front-runner in the Democratic race is self-described socialist and Vermont Sen. Bernie Sanders, whose loony-left policies would probably have a more destructively virulent effect on the stock markets than even the coronavirus, and even the most relatively sane and centrist Democrats still in contention are unlikely to inspire any bull markets.
One of many problems with Trump’s argument, however, is its implicit acknowledgement that the smart money is already hedging its bets that any one of those damn Democrats has a chance of beating him in the next presidential election. They’ll all have plenty of arguments against Trump, including his anti-establishment burn-it-down decimation of the government’s disease-fighting apparatus, which is the kind of bone-headed mistake that even the looniest left of the anti-establishment yet government-loving Democratic party would never make. If this coronavirus problem and its stock market woes continues to Election Day despite the best efforts of Pence, even the damndest of the damn Democrats will have the advantage on the issue.
At this point we’re cautiously hopeful that humankind somehow survives the coronavirus, and that America’s free markets will continue to prosper in a scarily global worldwide economy, and that it all ends for the best, whatever that might be.

— Bud Norman

NAFTA, the USMCA, and Maybe MAGA

The big story on Tuesday was the House judiciary committee drawing up a couple of articles of impeachment against President Donald Trump, which the House of Representatives is almost certainly to soon vote for, so you might have overlooked the better news for Trump that the Democrats are also going to soon vote for a north American free trade agreement he has been pursuing called the United States-Mexico-Canada Agreement.
The USMCA is not to be confused with the North American Free Trade Agreement, which Trump has long derided as the worst trade deal ever, even if it does basically retain NAFTA’s basic principle of making North America a more or less free trade zone. Not only has Trump rebranded it with more cumbersome initials, this agreement has some of the same modifications that have been made in all the biannual renegotiations since NAFTA was passed, and enough of them are beneficial enough that Trump is boasting it’s the best trade deal ever. The stock markets were all slightly down on the day, but the reviews from the farm and manufacturing and retailing spokespeople and even the mainstream media were all at least lukewarmly positive.
The impeachment articles overshadowed Trump’s accomplishments, though, and the Democrats also got some good press out of the USMCA. They were able to boast that Trump had made some serious concessions to them about environmental protections and labor rights that some prominent congressional Republicans were grousing about, with House Speaker Nancy Pelosi taunting Trump that “We ate their lunch,” and at the same time demonstrate their willingness to work with Trump on the public’s behalf even as they impeach him.
Both sides deserve some credit for arriving at a deal that least resumes the basic structure of a North American free trade zone that has benefited the entire continent since its inception, and letting America’s farmers and manufacturers and retailers resume business more or less as normal. Neither side will probably make a big deal of it, though, as the deal is not all that great and the credit for it is spread too thin, and this impeachment business will be the bigger story.

— Bud Norman

The Winds of Trade War and Impeachment

President Donald Trump will spend today at a North Atlantic Treaty Organization summit, and it will likely be an comfortable affair for all involved.
The summit is in London, where Trump has not been a welcome guest during his past two visits, and he’s expected to further publicly and bluntly harangue the allies about how much they’re spending on defense, and many of the allies will more privately and politely but forcefully express their differences with his policies regarding Turkey and Syria and Russia and Ukraine and other matters. One of those matters will surely be Trump’s ongoing trade wars with pretty much everybody.
Before jetting off Trump announced punitive tariffs on industrial metals from Brazil and Argentina for their alleged currency manipulations, and issued a threat of up to 100 percent tariffs on NATO member France’s wine and cheese and cosmetics and other fancy French product, apparently in retaliation for passing an internet tax law Trump thinks unfair to American businesses. This comes as Trump continues his brinksmanship with the ruthless dictator running the very importantly enormous Chinese economy, and Trump will probably spend part of his trip publicly grousing about how the European automobile industries are cheating America’s workers.
Trump will continue to boast about how America is once again respected around the world, as the country at long last has a wised-up leader and we’re no longer anybody’s sucker, but it clearly hasn’t helped America’s reputation as a good global neighbor. The military and trade political alliances that have a fairly good job of sustaining peace and prosperity in the post-World War II epoch are strained, and Trump and everyone else seem to be planning for a post-Pax Americana world.
Nor does it seem to have yielded any tangible economic results. The brinksmanship with the ruthless dictator in control of China’s very consequentially huge economy hurtles toward an inevitable brink, none of those greatest trade deals ever have yet been sealed, and so far even the rather minor revisions to the re-branded North American Free Trade Agreement haven’t been ratified by any of the three governments involved. The economy continues to grow at the same 2 percent or so it did back in the bad old days of President Barack Obama, and the stock markets were hitting record highs not so very long ago, but that seems to be in spite of rather than because of Trump’s policies.
The smart money on the stock markets seems to agree, here and around the world, as all the indexes dipped precipitously after his latest trade war escalations, as they always do whenever he does that. This time around the dip was also driven by yet another report on Trump’s beloved manufacturing, which continues for yet another quarter at negative growth. The markets usually recover when Trump announces light at the end of the tunnel and peace with honor, and Trump’s fans stick with him through thick and thin, and even if the allies have no respect for Trump they’re fearful of and dependent on America and usually only object ever so politely, but we worry that it can’t go on forever.
The smart money on Wall Street and all those funny-sounding foreign exchanges is hedging its bets, all those Euro-weenie leaders will be ganging on up on Trump in London, where he’ll need extra security just to get back to the fancy hotel, and those wily Chinese seem unfazed by Trump’s mastery of the deal. They all follow American politics, and know that there’s an impeachment and it’s going badly enough that polls show half the country wants Trump out of office now, and that will likely complicate all his dealings with foreign leaders, no matter how that turns out.
Trump fans love it when he feuds with those Euro-weenies and wily Chinese and the smart money on Wall Street and the “fake news” media and the damned Democrats and all of the rest of the rascals in the globalist “deep state” conspiracy, but we doubt they’re tired of winning yet. The farmers are getting welfare checks that don’t quite make up for the honest money they used to make on the global market, the factory workers are losing jobs in a sinking sector hard-hit by Trump’s steel tariffs, and we worry some damned Democrat and self-proclaimed socialist such as Vermont Sen. Bernie Sanders might convince them they’ve played for the world’s biggest suckers.
Although it’s hard to imagine a happy outcome, we’ll hope for the best.

— Bud Norman

How Goes the Trade War?

The post-Labor Day stock markets were all down on Tuesday, and the conventional wisdom is that it had something to do with the ongoing global trade war that President Donald Trump has been waging. Trump insists that China is getting the worst of it, and promises the Chinese will soon come begging to sign the most spectacular trade deal America ever made, with the rest of world falling in line shortly afterwards, but for now the smart money doesn’t seem to be betting on it.
China’s economy is indeed taking quite a beating in the trade war, but a downturn in the world’s second largest economy doesn’t bode well for the global economic forecasts, and around the world the markets are jittery about that. Even here in fortress America the bond markets are signaling that the smart money is nervous about the domestic economy’s short term prospects, business investment has been declining, a closely watched index of America’s manufacturing output just fell below 50 percent for the first contraction since 2016, and the smart money around the world will surely fret about that,
America is also taking quite a beating in the trade war, and its consumers are paying higher prices for Chinese goods or American-made products with Chinese parts, no matter what nonsense Trump spews about the Chinese paying all the tariffs, and the farmers and aircraft workers here in Kansas are losing vital markets, and so far it seems a trade war of mutually assured destruction. Trump remains confident it’s all soon leading to the best trade deal ever, with a stock market bonanza sure to follow, but for now both we and the smart money aren’t so sure about it.
Trump still boasts of his close personal friendship with the Chinese dictator Xi Jinping, but Xi is a dictator-for-life and Trump is a mere president who has to run for reelection next year, and hopes to run on boasts about the best economy ever, so Xi seems in the stronger negotiating position. Perhaps Trump would have a stronger hand if he were negotiating on behalf of an entire world fed up with China’s undeniably unfair trading policies, but Trump has also chosen to feud about trade with most of the rest of the world, and there’s a reason the smart money isn’t betting on the strategy.

— Bud Norman