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That Darned Inverted Yield Curve

The bond market has an inverted yield curve, a fancy term which means that the returns on two-year bonds exceed the returns on ten-year bonds, which means that the smart money is seeking safe haven from a coming storm. In plainer terms, an inverted yield curve has always been a reliable predictor of a looming recession.
Combined with some other distressing data about business investment and manufacturing hiring and economic downturns in such important countries as Great Britain and Germany and China, the news spooked Wall Street so bad that all the stock markets dropped by more than 3 precent with Dow Jones Industrial average having it’s worst day in decade. The three major American stock indexes have dropped a full 7 percent over the past three weeks, the Asian and European and South American markets are similarly panicked, and you can only imagine the anxiety its causing President Donald Trump.
Trump can and surely will still brag about the unusually low unemployment rate and how economic growth has been chugging along at a slightly better rate than the previous six years of the Obama administration, but for now he can’t brag that despite all his faults he’s delivered the greatest economy ever. For now he’s on “twitter” blaming Federal Reserve Chairman Jerome Powell for not more aggressively cutting interest rates, but Trump appointed Powell, whose policies have been in the long term interest of the country rather than the short-term political advantage of Trump, and the smart money isn’t buying it even the rubes in the red MAGA ball caps do.
The smart money seems to think that Trump’s trade wars and deficit spending and petty feuds with longtime allies and trading partners is largely responsible for the mess. When Trump retreated from his threatened increase on tariffs with China on Tuesday the stock market had a good day, which was quickly erased by Wednesday’s carnage, and it’s increasingly clear that the trade wars have taken a toll on the global economy. The Chinese economy has slowed, but given that it’s either the biggest or second biggest in the world that hasn’t helped global economic growth, and given that Trump’s good buddy and Chinese dictator Xi Jinping doesn’t have to worry about a recession during a reelection, So Trump’s not likely to win the greatest deal in the history of the world by election day. The British economy seems in recession due to its “Brexit” from the European Union, which Trump heartily and needlessly endorsed, the German government is blaming a recent economic downturn on Britain’s “Brexit” and a global economic downturn due to frayed trade relations, so the silver lining in the looming storm clouds is hard to find.
We’re not panicked, at least not yet, as the unemployment rate is still low,  but there are reasons to worry. During the last recession, the worst since the Great Depression, a Republican president and a Democratic Congress agreed on a controversial bail-out bill that was hated by both the far left and the far right, but won the endorsement of both major party presidential nominees. In retrospect we begrudgingly admit it might have averted a catastrophic economic meltdown, and note a couple of years later a Democratic president and Republican Congress didn’t get in the way in the longest economic expansion in America’s history, but we worry that such bipartisan solutions aren’t at all possible in the current political climate.
America carefully coordinated its monetary and other economic policies with our allies and trading partners during the last global recession, which might well have averted the worst of it, but that’s harder to envision happening these days. Trump has been antagonistic toward allies, obsequious toward enemies, and is not going to save the day with the greatest deal ever made.
Trump is not entirely to blame, of course. Adding to the world’s economic anxiety is an eye-popping 50 percent drop in the Argentine stock market after one of those Latin American socialist crazies got elected president, and Trump is right to argue that several of the Democratic contenders for his job are just as bad. If the economic excrement hits the fan between now and election day, the Democrats will happily place blame where blame is due but won’t do anything to bale out the country to the political benefit of Trump. None of our longtime allies seem interested in helping Trump, either, except for a few fellow populist and authoritarian nationalists.
Still, we’ll hold out hope for the best and leave it to Trump to worry about the worst. If he can’t run for reelection on the argument that for all his faults he’s wrought the greatest economy ever he’s in bad shape, as he he’s not very popular and has a lot of faults to overlook. We’ll also hold out hope that the damned Democrats don’t nominate some Latin American socialist crazy who would make things even worse, and for all our short-term worries we’ll place our long-term faith in the resiliency of the America’s still more or less free market economy and the eventual genius of the American people.

— Bud Norman

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A Trump Retreat in the Trade War

The stock markets were all up on Tuesday, mostly due to President Donald Trump backing off his threats to impose the further tariffs on Chinese imports that have lately been dragging the stock markets down. Trump is loathe to admit a mistake, but he hates a slumping stock market even more.
By backing off his threat of another 10 percent tariff on $300 billion of such popular Chinese imports as cellphones and laptop computers, at least until the Christmas buying season is well underway, lest retail sales suffer, Trump has tacitly admitted that all his talk about how the Chinese are paying the billions of dollars in tariffs rather than the American consumer was pure balderdash. He won’t openly admit it, of course, and his die-hard fans will indulge him the fiction, but the smart money in stock markets and the rest of the world know the score.
Trump somehow became President of the United States on the argument that he wrote “The Art of Deal,” and that as the world’s greatest negotiator he would deliver the greatest trade deals in the history of the world, but for now he’s more intent on maintaining a slow but steady economic status quo. This makes it harder for him to deliver on his promise of that greatest trade deal ever with China in time for his reelection day, as he has clearly blinked in these high-stakes negations and the Chinese are stereotypically wily enough to notice, but if the stock markets are up and the unemployment rate is down ob election day the die-hard fans won’t mind.
This all comes as the brutal Chinese dictatorship is brutally cracking down on pro-democracy protestors in Hong Kong, which Trump cares little about and rightly assumes that most of the voters in America care even less about. and he is not going to express any indignation about that. Trump claims that his very close friendship with Chinese dictator Xi Jinping is the reason that Sino-American relations are going so swimmingly, and he’s not one to let a brutal crackdown on pro-democracy protestors get in the way of a such a beautiful friendship.
November is a long ways off, and the next November even longer off, and there’s no telling how things might be by then. We’ll hold out hope that economy will be chugging along at a slow but steady rate, prepare as best as we can for the worst, and not expect that Trump or any damned Democrat will strike the greatest deal ever made.

— Bud Norman

Casualties of the Trade War

Trade wars are harder to assess than military wars, where you can tell who’s winning and losing by such metrics as ground gained or lost and casualties inflicted or suffered. The stock markets are probably the best indicator of how a trade war is going, and lately they indicate that President Donald Trump’s trade war with China is not going well.
When the Dow Jones Industrial Average hit a record high on July 15 Trump took full credit, but we don’t expect he’ll assume any responsibility for the 2.9 percent drop on Monday nor the 6 percent drop since the record high. The huge sell-offs in nearly every sector of the economy have clearly been a response to the tariffs Trump had imposed on Chinese imports and the retaliatory tariffs China imposed on the considerable exports America’s agricultural and aviation and other high-tech industries relied on selling to the first or second largest economy in the world. China has also signaled it will resume manipulating its currency to gain a foreign trade advantage, Trump has urged via “tweet” that the Federal Reserve Board retaliate by artificially weakening the dollar, and so far the smart money isn’t buying Trump’s assurances that America is going wind up with the greatest deal in the history of the world.
We can’t claim to be smart money, but we’re longtime observers of geopolitics and global trade and domestic political pressures, and we figure the smart money is right to be worried. Trump claims to have a Nietzschean will to power and personal rapport with Chinese dictator Xi Jinping that will soon result in that greatest deal in the history of the world, but he went bankrupt several times in the casino business despite house odds and he’s clearly in the inferior position in these asymmetrical negotiation.
Trump’s trade policies are inflicting severe damage on China’s economy, but his good buddy and brutal dictator Xi needn’t worry about that. He doesn’t have to face reelection, the repressed Chinese press isn’t going to make a fuss about an economic downturn, protesters will be cowed from gathering on the streets, the country’s privately held businesses will try to stay privately held, and in keeping with China’s ancient traditions Xi’s looking well past the current spat and a hundred or so years down the road.
Trump, on the other hand, has to deal with the daily headlines from that pesky free press and independent Fed and powerful companies and restive farm state Republicans and the rest of our democratic process, and he never thinks beyond the next news cycle. As much as he clearly envies his dear friend Xi’s dictatorial powers, Trump is obliged to appease the gods of the stock market and public opinion. There are just 15 months until the next presidential election, which is a blink in the eye of a Chinese dictator and an eternity to an American president, so between now and election day we don’t expect Trump to deliver to America the greatest trade deal in the history of the world.
The best case scenario is that Trump agrees to a desultory return to the status quo, with China making some slight concessions in their undeniably unfair trading practices, and Trump’s die-hard fans calling it the best trade deal in the history of the world. The smart money won’t be impressed, but given how crazy the Democrats are these days Trump might yet win reelection if the stock markets are slightly up and the unemployment rate remains low.

— Bud Norman

The News on a Cold and Snowy Kansas Night

Kansas was cold and snowy on Tuesday, not to mention the ongoing official national state of emergency, so we hunkered down at home and read up on the latest news. None of it, alas, was the least bit warming.
We read all the way to the end of a very lengthy New York Times account of President Donald Trump’s long efforts to thwart the various investigations in his businesses and campaign and transition team and inaugural committee and administration, and found it all too believable. There’s bound to be something in such a long story that will eventually will require a correction, but the general gist of it, that Trump doesn’t like anybody asking questions he’d rather not answer, and is willing to resort to ruthless and arguably constitutional methods to stop it, by now seems undeniably true.
Over at The Washington Post there was a story that speculated Director of National Intelligence Dan Coats will be the next defenestrated administration official, and we hated to hear that. Coats was a longtime Senator from Indiana who served on the Senate’s intelligence committee, a former ambassador to Germany, and is widely considered one of the last of the wise old foreign policy hands who tried to restrain the Trump’s worst gut instincts. He’s joined with the rest of the intelligence community in publicly disagreeing with Trump’s dubious claims about North Korea and Iran and the Islamic State and the threat at America’s southern border, and Trump clearly does not like his advisors disagreeing with him, so the Post’s speculation seemed plausible enough.
None of which was quite so depressing as the damned weather, or a certain sense that there’s nothing to be done about any of it.
What the Trump critics call “obstruction of justice” the Trump apologists call “fighting back,” and even if that Times story had run as long as the history books that will eventually be written it wouldn’t have changed anybody’s mind. Trump fans don’t want answers to those pesky questions anymore than Trump does, and they also share the president’s preference for his set of facts about North Korea and Iran and the Islamic State and the threat at America’s southern border. Trump’s critics and more noisome administration officials seem to have more factual facts on their side, but lately that doesn’t seem to make much difference.
On the other hand the stock markets were slightly up, and local forecasts call for above-freezing highs temperatures in the coming days, and the sports pages had reports from baseball’s spring training. Spring always eventually arrives, and although that usually brings tornados and other severe weather to this part of our great country we’re always happy to see it.
The truth always eventually arrives, too, and we expect that despite the best efforts of Trump and his apologists we will someday read the results of all those various pesky investigations in lengthy news stories and even longer history books. Our guess is it will be the equivalent of a Kansas tornado on the great plains of American history, but that’s what it takes to get the lazy hazy crazy days of summer around here, and there’s nothing we can do about that.

— Bud Norman

Welcome to the Actual New Year

Today is the actual first day of the new year, no matter what the calendar says. Anyone who can takes the official if fake first of day January off from the time and space continuum, for darned good reason, and procrastinates at least until today what sooner or later needs to be done. Everyone’s back on the job of getting through another year starting today, unless you’re one of those federal employees temporarily furloughed by the latest partial government shutdown.
That’s just one of the dreary stories that civic-minded citizens will be obliged to read about in the coming days and weeks and months, although it will probably at least the next several 24-hour news cycles. President Donald Trump has vowed he won’t sign anything keeping the government fully funded that doesn’t pay billions for the big and beautiful wall running across the Mexican-American border that he promised his voters, the Democratic majority that’s to be installed in the House of Representatives tomorrow morning won’t be inclined to pass anything that includes any funding for even a small and ugly border barrier, and we expect a bad start to the new year for all those federal employees.
The stock markets reopen today, too, and we’ll not venture any guess about that how turns out. There are stock markets all over the crazy planet, each reacting to their own internal craziness as well as the craziness elsewhere, but on the other hand the American economy is still on a sluggish but upward trajectory and the unemployment rate is still low and the resulting interest rate increases are well within historic norms, but on yet another hand there are trade wars and all sorts of other populist uncertainties afoot. In any case, we’ll hope for the best and expect the worst.
Meanwhile, on the domestic political news front we civic-minded citizens are obliged to follow, there’s already enough pent-up news to fill a year. The special counsel’s investigation into the “Russia thing” surely will shortly start announcing more subpoenas and indictments and guilty pleas, the newly-installed Democratic majorities on all those House investigative committees will no doubt begin making their own trouble, and all the “fake news” will make hay of it. Along with the ongoing scandals about alleged trysts porn stars and Playboy playmates and all the resulting alleged campaign law violations, as well as the other scandals and hubbub-causing “tweets” that can be counted on, we expect this to be a busy year for for Trump’s apologists.
The rest of the world doesn’t offer much hope, either, with the Russian-Iranian-Syrian axis poised to take control of a big chunk of the Middle East, Trump-ian populist and protectionist and unabashedly nationalist movements gaining power around the globe, and the weenie sort of semi-socialistic parties resembling America’s current Democratic are faltering elsewhere. For now Trump is relying on an acting Secretary of Defense with no military experience, following the resignation of the four-star general who told the public that his four decades of immersion in foreign policy led him disagree with Trump’s gut instincts about America’s international alliances, and for now we’re inclined to worry that the four-general is right.
Even so, we’ll hope for the best and know for sure that things could be worse.
The temperatures didn’t top the low-30s today here in Kansas, by the time we dropped by Kirby’s Beer Store after sunset for a procrastinating swig before another damned year the wind chill was down in the teens, and oh how we hate this time of year. Except for a bearded and burly and very friendly bartender and a charmingly crabby old homosexual there was no one else to enjoy the cranked-up if ratchety old furnace, but we were soon joined by three rather short and squat and heavily-adorned but somehow attractive in a young hipster sort of way women and a young hipster man, who introduced themselves as the evening’s band, whose name we already forget. Hoping to show them the gracious hospitality one can expect at Kirby’s Beer Store and Wichita and Kanas in general, we asked where they were from, and they replied that they lived in North Dakota. In that case we didn’t feel obliged to apologize for the bad weather, as the wind chills are  in the minus-20s up there, and they all remarked about how balmy they found it down here.
Better to begin our new year here rather than in North Dakota, we suppose, and we certainly wouldn’t trade places with Trump.

— Bud Norman

On the Night After Christmas

Here’s hoping you all had a merry Christmas, or at least a merrier one that President Donald Trump seems to have had. For Trump, who was forced by public relations reasons to forestall a planned golfing vacation at his ritzy Mar-a-Lago resort in sunny south Florida, it wasn’t so much a Christmas as it was a “Festivus.”
Fans of the classic “Seinfeld” sit-com will recall that “Festivus” was a holiday the George Costanza character’s cranky father invented as an alternative to Christmas, and was devoted to the “airing of grievances” and “feats of strength.” Our cranky president spent most of Christmas Eve and Christmas airing a wide variety grievances via “Twitter” and a rare Christmas news conference, about everything from the damned Democrats to the special counsel investigation into the “Russia thing” to the alleged idiot that Trump appointed to chair the Federal Reserve, and trying his best to convince the public the he’s far stronger than any of them.
Although we try our best to ignore the news on Christmas Eve and Christmas, we read and watched enough that we were not convinced.
The third partial government shutdown of Trump’s first two years in office looks bad enough that Trump felt compelled to remain in frigid Washington rather than enjoy the sunny climes and opulent golf course at Mar-a-Lago, and the Democratic majority that’s soon to be installed in the House of Representatives has no apparent incentive to cave to the unpopular president’s demand for five billion dollars of funding for his unpopular campaign promise of a big and beautiful wall along the entirety of America’s border with Mexico. Partial government shutdowns are also unpopular, and although Trump is now blaming this one on the Democrats the “fake news” networks can gleefully replay the very real video of Trump recently bragging to the Democratic leaders in Congress that he’ll take all the credit for this one. Trump is already saying that he doesn’t need a wall across the entire Mexican border, and is talking about “steel slats” rather than the 30-foot-tall concrete and rebar structure he once envisions, and concedes that the Democrats can call it a mere fence if they want, and he’s pretty much given up on the campaign promise that Mexico will happily pay for it,
The former Federal Bureau of Investigation director and decorated Marine combat veteran in charge of the “Russia thing” probably isn’t much intimidated by Trump’s “tweets,” either, so we expect that will continue to vex Trump well into the next year. Trump’s remaining Republican allies in Congress are increasingly disinclined to protect Trump from that, too, and have increasingly little incentive to do so.
Our best guess is that the stock markets will continue their recent swoon when the reopen today, and that the Fed chairman Trump appointed and can’t fire without causing a political and economic crisis probably won’t be budged by any presidential “tweets.” The Fed has recently nudged the prime interest rate toward historical norms, but the markets are also spooked by the Trump trade wars that have raised the cost of a steel-slat border barrier by 25 percent, and the inevitable cyclical slowing of the global economy that won’t be helped if the central bank of the all-important American economy is perceived as acting in the short term political interests of an unpopular president, so once again Trump doesn’t seem to be negotiating or “tweeting” from a position of strength.
Starting today Trump will be dealing with all this with an acting Attorney General, an acting defense secretary, an acting secretary of the interior, an acting chief of staff who’s moonlighting on the job while running the Office of Management and Budget that’s overseeing the partial shutdown of the government, no ambassador to the the United Nations or South Korea at all, and an understaffed White House legal team responding to all the subpoenas that the “Russia thing” investigation and the incoming Democratic House majority will surely be serving in the coming weeks.. This isn’t likely to reassure the markets or Trump’s already skeptical international and domestic allies, but Trump’s die-hard fans can still reassure themselves that at least he fights.

— Bud Norman

On the Lull Before Christmas

According to longstanding American political tradition the final days of a lame duck Congress and the last few days before Christmas are supposed to be a slow news cycle, but in the age of President Donald Trump’s newfangled conservatism such longstanding American traditions have been jettisoned. Thursday brought news that Trump’s defense secretary has resigned in apparent protest of Trump’s derided-by-almost-everyone decision to withdraw a small but effective force from Syria and Afghanistan, Trump and his remaining allies in the temporary Republican House majority are threatening to force government shutdown over Trump’s derided-by-almost-everyone insistence on a big beautiful wall along the Mexican border, and largely as a result the stock markets had yet another dreadful day instead of the traditional “Santa Claus rally.”
The resignation of Defense Secretary and former four-star Marine general James Mattis struck us as the most worrisome development of the day. Despite the “Mad Dog” nickname that Trump seemed to love, Mattis was well regarded by both the center-left and center-right consensus that had successfully guided through the Cold War and has done about as well as can reasonably be expected with the resulting and relatively low-level wars against Islamist terrorism, and his departure leaves him pretty much without any of those wise old hands.
Flynn resigned from his post in record-setting time after being charged with felony perjury charges and making admission to administration that he’d lied about his contacts with Russian officials, and he’s currently awaiting sentencing from a judge who has openly wondered in court why he’s not being charged with treason given all the credible accusations of undisclosed shady dealings with the Turkish and Russian governments, despite the special counsel investigation into the whole “Russia thing” pleading he should get no jail time because of his cooperation, which also doesn’t look good for Trump. He was replaced by McMaster, who didn’t last much longer, reportedly because Trump was annoyed three-star general’s know-it-all attitude during the daily briefings. The post is now held by John Bolton, a President George W. Bush holdover from the late and lamented Republican establishment who’s a bit more aggressive about American internationalism that even our Reagan-esque tastes would prefer, but he’s also advised against Trump’s Syrian withdrawal and might be on the way out.
The four-star chief of staff Kelly has also been pushed aside, reportedly in part because he didn’t get along with Trump’s favorite daughter and son-in-law, and he will temporarily be replaced on a moonlighting basis by acting Office of Management and Budget Director Mick Mulvaney,  who will also be charged with deciding which agencies should be shut down in case of a partial government shutdown. Whatever advice Trump might be getting from the son-in-law in charge of everything from Middle East peace and the opioid crisis and re-inventing the federal government, and whatever  remains of the rest of his staff about domestic policy, the unpopular president has apparently committed to an unpopular partial government shutdown over Christmas to get a few billion in funding for his unpopular idea of a big beautiful wall along the entire Mexican border, and we don’t see that turning out well. In a few weeks the House of Representatives will install a significant Democratic majority with no political or ideological reason to fund Trump’s big beautiful border wall, much of the slight Republican majority in the Senate is already in revolt over Trump’s withdrawal from Syria and other foreign policy matters, political realities almost always prevail, and without any generals or wise old hands backing him up he seems in a weakened position.
The stock markets seem to agree, given their recent dour mood, and although Trump can plausibly partially blame that on the damned Federal Reserve Board chairman he did appoint the guy, and after what looks to be losing year on the exchanges, which can also be plausibly blamed on the yet-unwon trade wars Trump had declared on our erstwhile allies, but for now Trump  can no longer brag about delivering the best economy ever. No one’s currently predicting a recession, and we’re certainly hoping for one, but the best that all establishment forecasters are predicting is the same sort of slow but steady economic growth that has been the bipartisan norm over the decades. Perhaps Trump will eventually prove smarter than all those multi-starred  generals and economists and the newly-elected Democrats in the House of Representatives and all of us old-fashioned Republicans, as well as  the Syrian and Russian and Iranian dictators, but for now only the true believers who still shot up at the ongoing rallies  in those “Make America Great Again” ball caps seem to be betting on it.

— Bud Norman

Merry Christmas, President Trump

President Donald Trump is currently comfortably ensconced at his ritzy Mar-a-Lago resort inn balmy southern Florida, where his Secret Service protectors and most essential administration aides are charging their high-priced room and board to the federal budget, but he doesn’t seem in a holiday spirit.
Even in sunny southern Florida the special counsel investigation into the “Russia thing: keeps racking up indictments and convictions and guilty pleas, other federal jurisdictions are investigating other matters, and by the time the upcoming Democratic House majority is installed and begins its congressional investigations Trump’s businesses, presidential campaign, transition team, inaugural committee, and subsequent administration will all be under severe scrutiny, So far Trump’s hapless legal team has yet to come up with any explanation for any of it that doesn’t admit that Trump made arguably legal hush money payments to a porno performer and Playboy playmates and was doing some previously denied dealings with the Russian government during the past presidential campaign, but despite the best efforts of the right wing talk radio hosts and other Trump apologists it does not portend a Merry Christmas and Happy New Year for Trump or America.

Meanwhile the Stock Markets are tanking, for a panoply of reasons that are reasons that aren’t entirely the fault of either Trump and his stupid trade wars or the Federal Reserve Board chairman he appointed and now blames, and although we’re not predicting a recession we don’t think Trump will be able to brag about creating the best American economy ever for the foreseeable future. A lot of Trump’s minority of fans have been willing to overlook whatever this various various investigations might plausibly come up with so long as the their stock portfolios swelled, but Trump’s Republican party lost the last House elections by an astounding nine million votes, with women voters in general and the suburban vote in general abandoning him in droves, and anything less than the great economy of the history of America is even more worrisome than all those criminal investigations that Trump’s legal team can’t currently answer.

— Bud Norman

The Day After the Funeral

The stock markets and the special counsel investigation into the “Russia thing” and the rest of the news took a day off on Wednesday for the funeral of former President George H.W. Bush, but the pause offered little respite for current President Donald Trump.
In keeping with its classy ways the Bush family invited Trump to attend the state funeral at the National Cathedral, although they didn’t grant him the traditional eulogy that sitting presidents give for past presidents, and to his credit Trump was on his best behavior. He was clearly uncomfortable, though, sitting next to the former president he had falsely accused of being unqualified by virtue of a foreign birth, and the former president he had falsely accused of lying America into a war, and the former First Lady he has long vowed to lock up, as well another former president he has called the second-worst ever. Worse yet, Trump had to sit through several speakers praising Bush’s war heroism and expert statesmanship and gentlemanly demeanor and and genuine compassion for others and self-effacing sense of humor, and perhaps contemplate how even his most die-hard fans won’t be able to say the same at his own inevitable funeral.
Worst of all, Trump surely knew that the stock markets and the special counsel investigation and the rest of the news all resume today, and that it’s not likely to make him look good.
The rest of the world’s stock markets were open for business on Wednesday, and were just as panicked about Trump’s trade war with China as the American markets were on Tuesday, and today probably won’t bring that greatest-ever deal that Trump has promised with China. Trump might yet bully the all-powerful Chinese government and its formidable economy into submission, but for now the stock markets aren’t betting on it.
The mainstream media that used torment Bush for his mostly forgotten missteps spent most of Wednesday heaping praise on his war heroism and expert statesmanship and gentlemanly demeanor and everything else they suddenly miss about a bygone era of compassionate Republican conservatism, but they also found some time to speculate about some scary developments in the special counsel investigation of the “Russia thing.” Trump’s former campaign foreign policy advisor and short-lived administration national security advisor, the former three-starArmy Gen. Michael Flynn, has pleaded guilty to some serious felonies and stands credibly accused of several more, and on Tuesday it was revealed in open court that the special counsel is recommending no jail time partly because of the defendant’s long and distinguished military record but mostly because he’d been a genuinely repentant and very helpful witness in three ongoing criminal investigations. Special counsel Robert Mueller is a decorated Marine veteran of the Vietnam War himself and is no doubt taking Flynn’s undeniably distinguished pre-Trump career into account, but we doubt that Flynn would have gotten such a sweet deal without providing some pretty damning testimony along with documentation to back it up, so it will be interesting to see what Trump “tweets” about it today.
Trump is already “tweeting” some controversial “tweets” about his longtime lawyer and former campaign manager and a longtime pal with a very unsavory reputation dating back to the Nixon days, and his namesake son and favorite daughter and son-in-law are also caught up in “Russia thing” stories, and it’s getting harder for all but the most die-hard Trump fans to dismiss it all as “fake news.” The rest of the news, from the Korean peninsula to the soon-to-be-installed Democratic majority in the House of Representatives, is similarly foreboding. Trump might yet strike that artful deal that makes America great again, but for now both ourselves and the smart money aren’t betting on it.

— Bud Norman

Casualties of the Trade War

Trade wars are good and easy to win, according to one of President Donald Trump’s most famous “tweets,” but the smart money on Wall Street seems to disagree. The Dow Jones Industrial average plummeted a scary 799 points on Tuesday, the other major stock market indices dropped a similar 3-plus percent, and the clear cause was Trump’s apparently ongoing trade war with China.
After a dinner meeting with Chinese President Xi Jiping at the G-20 gathering Argentina on Saturday Trump announced that he’d won such majors concessions from China as huge agricultural buys from American farmers and eliminating any tariffs on American-made automobiles, and was therefore prepared to pause a trade war that has thus far proved disastrous for both countries, which led to big stock market gains on Monday. By Tuesday the Chinese were denying they’d made anything like the extraordinary concessions that Trump had bragged about, Trump’s economic policy advisors were walking most of it back, and Trump himself was “tweeting” that “President Xi and I both want this deal to happen, and it probably will. But if not remember, I am a Tariff Man.” A later “tweet” shouted that “We are either going to have a REAL DEAL with China, or no deal at all – at which point we will be charging major tariffs against Chinese product being shipped into the United States.” Despite the poor grammar, the “tweets” clearly communicated that the trade war continues, and won’t be easily won, so the smart money on Wall Street responded accordingly.
On our way home from an evening chore we heard one of the right-wing talk radio talkers say that Trump had nothing to do with the stock market drop, and he somehow blamed it on the Apple and Boeing companies instead, but Trump and his apologists always find someone else to blame. We’re more inclined to believe the smart money opinion of the JPMorgan financial juggernaut, which told its investors in a trading note that “It doesn’t seem that anything was actually agreed to at the dinner and White House officials are contorting themselves into pretzels to reconcile Trump’s tweets (which seem if not completely fabricated then grossly exaggerated) with reality.” We’re not impressed much by JPMorgan’s prose style, either, but it does clearly communicate the truth of the matter.
Trump’s apologists would do better to argue that China’s trade policies well deserve an aggressive response, as they do indeed charge unfair tariffs and make the theft of American intellectual property a condition of doing business with American companies and benefit from the slave wages paid to many of China’s workers, but it’s harder to argue that Trump is winning. As bad as China’s trading policies might be, Trump was claiming full credit for a booming stock market and rising commodity prices when he declared the trade wars with China and most of the rest of the industrialized world, so he can’t dodge blame for things going downhill ever since. Trump’s bad habit of doing his end zone dance before he reaches the goal line make him look the more ridiculous to the American public and on the world stage every time, and harder for him to make that great deal he’s always promising. China’s dictator Xi doesn’t doesn’t have to worry about public opinion, and although world opinion doesn’t favor him it does take him seriously, and China’s economy is either the biggest or second-biggest in the world, depending on how you figure it, and prematurely boasting about the concessions you won from him probably isn’t the best negotiating strategy with a wily Chinese leader and his traditional Chinese obsession with saving face.
The sort of low-key and culturally-sensitive and behind-the-scenes negotiations that might have yielded improved trade relations between China and a formidable American economy and steadfastly principled  and experienced American president aren’t Trump’s style, however, and for now we expect more tariffs and “tweets” and stock market downturns. In the long run Trump might yet get the greatest deal ever with his bull-in-a-china-shop approach, if you’ll forgive the culturally insensitive cliche, but on Tuesday the smart money wasn’t betting on it.

— Bud Norman